================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31,June 30, 2001
Commission File Number 0-20945
ANTARES PHARMA, INC.
A Minnesota Corporation 41-1350192
161 Cheshire Lane North, Suite 100 IRS Employer ID No.
Minneapolis, Minnesota 55441
(763) 475-7700
A Minnesota Corporation IRS Employer ID No. 41-1350192
--------------------------------------------------------------------------------------
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_X No
___----- -----
The number of shares outstanding of the Registrant's Common Stock, $.01 par
value, as of April 11,August 13, 2001, was 8,789,039.8,955,182.
================================================================================
ANTARES PHARMA, INC.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited)
Consolidated Balance Sheets, as of December 31,
2000 and March 31, 2001.........................................................3June 30, 2001...................................3
Consolidated Statements of Operations for the
three months and six months ended March 31,June 30, 2000
and 2001................................................42001.................................................4
Consolidated Statements of Shareholders' Equity
(Deficit) and Comprehensive Loss for the threesix months
ended March 31, 2001 ........................................................5June 30, 2001......................................5
Consolidated Statements of Cash Flows for the threesix
months ended March 31,June 30, 2000 and 2001................................................62001......................6
Notes to Consolidated Financial Statements.............................7Statements...............7
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................................11Operations.....................14
ITEM 3. Quantitative and Qualitative Disclosures About
Market Risk.......13Risk.............................................18
PART II. OTHER INFORMATION 14
SIGNATURES............................................................15......................................20
SIGNATURES..............................................21
2
ANTARES PHARMA, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, 2000 March 31,June 30, 2001
----------------- ---------------------------
ASSETS
Current Assets:
Cash and cash equivalents .........................................equivalents......................................... $ 243,222 $ 8,380,1675,918,895
Accounts receivable, less allowance for doubtful accounts of
$18,000 in 2001 ...............................................2001............................................... -- 390,372790,428
Other receivables ................................................................................................. 408,534 398,019
Inventories .......................................................277,771
Inventories....................................................... -- 487,947523,117
Prepaid expenses and other assets .................................assets................................. 13,165 238,682
------------ ------------187,273
------------- --------------
664,921 9,895,1877,697,484
Equipment, furniture and fixtures, net .................................net................................. 831,541 1,978,1072,480,864
Patent rights, net .....................................................net..................................................... 253,434 582,7461,729,871
Goodwill, net ................................................................................................................... 88,982 6,092,8581,223,607
Other intangible assets, net........................................... -- 2,076,540
Notes receivable and due from Medi-Ject Corporation ....................................... 5,133,296 --
Other assets ..................................................................................................................... 2,374 4,726
------------ ------------10,694
------------- --------------
$ 6,974,548 $ 18,553,624
============ ============15,219,060
============= ==============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable ..................................................payable.................................................. $ 369,177 $ 855,020639,175
Accrued expenses and other liabilities ............................liabilities............................ 646,254 1,295,961851,491
Liabilities to related parties ....................................parties.................................... 321,640 --
Long-term obligations - current maturities ........................maturities........................ 107,815 73,56971,666
Deferred revenue ..................................................revenue.................................................. 1,659,612 1,459,614
------------ ------------1,485,299
------------- --------------
3,104,498 3,684,1643,047,631
Subordinated loans from shareholders ..................................................................... 17,664,020 --
Long-term obligations, less current maturities .........................maturities......................... 67,635 58,168
------------ ------------70,975
------------- --------------
Total liabilities ......................................................liabilities...................................................... 20,836,153 3,742,332
------------ ------------3,118,606
------------- --------------
Mandatorily Redeemable Convertible Preferred Stock:
Series A, $0.01 par; authorized 10,000 shares; 1,1501,200 issued and
outstanding at March 31,June 30, 2001, aggregate liquidation preference
$1,150,000 ....................................................$1,200,000................................................... -- 1,150,000
Series B, $0.01 par; authorized 250 shares; 250 issued and
outstanding at March 31, 2001, aggregate liquidation preference
$262,500 ...................................................... -- 250,000
------------ ------------
-- 1,400,000
------------ ------------1,200,000
------------- --------------
Shareholders' Equity (Deficit):
Common Stock: $0.01 par; authorized 15,000,000 shares:
10,000 and 8,788,8398,953,682 issued and outstanding at
December 31, 2000 and March 31,June 30, 2001, respectively ............ 689,655 87,88889,507
Additional paid-in capital ............................................................................... 1,174,680 35,106,06835,533,616
Accumulated deficit ...............................................deficit............................................... (17,264,463) (21,474,259)(24,240,602)
Deferred compensation............................................. -- (141,312)
Accumulated other comprehensive income (loss) ......................................... 1,538,523 (308,405)
------------ ------------(340,755)
------------- --------------
(13,861,605) 13,411,292
------------ ------------10,900,454
------------- --------------
$ 6,974,548 $ 18,553,624
============ ============15,219,060
============= ==============
See accompanying notes to consolidated financial statements.
3
ANTARES PHARMA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended ------------------------------
March 31,For the Six Months Ended
-------------------------------- --------------------------------
June 30, 2000 March 31,June 30, 2001 -------------- --------------June 30, 2000 June 30, 2001
------------- ------------- ------------- -------------
(as restated, (as restated,
see note 4) see note 4)
Revenues:
Product sales .............................................sales........................ $ -- $ 471,377813,354 $ -- $ 1,284,731
Licensing and product development ......................... 69,301 115,792
----------- -----------
69,301 587,169development.... 186,843 292,799 256,144 408,591
------------ ------------ ------------ ------------
186,843 1,106,153 256,144 1,693,322
Cost of product sales ...........................................sales................... -- 277,714
----------- -----------426,054 -- 719,926
------------ ------------ ------------ ------------
Gross margin .................................................... 69,301 309,455
----------- -----------margin............................ 186,843 680,099 256,144 973,396
------------ ------------ ------------ ------------
Operating expenses:Expenses:
Research and development .................................. 227,574 541,709development............. 182,654 823,828 410,228 1,394,779
In-process research and
development (Note 1) ............................. -- -- -- 948,000
Marketing and sales ....................................... 171,235 258,666sales.................. 401,651 383,709 572,886 644,007
General and administrative ................................ 774,002 1,141,587
----------- -----------
1,172,811 1,941,962
----------- -----------administrative........... 517,411 1,200,865 1,291,413 2,385,040
------------ ------------ ------------ ------------
1,101,716 2,408,402 2,274,527 5,371,826
------------ ------------ ------------ ------------
Net operating loss .............................................. (1,103,510) (1,632,507)
----------- -----------loss...................... (914,873) (1,728,303) (2,018,383) (4,398,430)
------------ ------------ ------------ ------------
Other income (expense):
Interest and other income ................................. 1,126 129,387income...................... 8,070 70,223 9,196 158,184
Interest and other expense ................................ (81,730) (86,112)expense..................... (86,647) (6,747) (168,377) (90,951)
Foreign exchange losses ................................... (71,947) (27,095)
----------- -----------
(152,551) 16,180
----------- -----------gains (losses)...... (48,380) 19,486 (120,327) (7,609)
Other, net........................... -- (33,382) -- 6,136
------------ ------------ ------------ ------------
(126,957) 49,580 (279,508) 65,760
------------ ------------ ------------ ------------
Loss before cumulative effect of change
in accounting principle . (1,256,061) (1,616,327)principle............... (1,041,830) (1,678,723) (2,297,891) (4,332,670)
Cumulative effect of change in accounting
principle .............principle............................. -- -- (1,059,622) --
----------- -----------
Net loss ........................................................ (2,315,683) (1,616,327)loss................................ (1,041,830) (1,678,723) (3,357,513) (4,332,670)
In-the-money conversion feature-preferred
stock dividend (Note 5)............... -- -- -- (5,314,125)
----------- -----------Preferred stock dividends............. -- (50,000) -- (50,000)
------------ ------------ ------------ ------------
Net loss applicable to common shares ............................ $(2,315,683) $(6,930,452)
=========== ===========shares.... $ (1,041,830) $ (1,728,723) $ (3,357,513) $ (9,696,795)
============ ============ ============ ============
Basic and diluted net loss per common
share before cumulative effect of change
in accounting principle .....principle............... $ (.29)(0.24) $ (.99)(0.20) $ (0.53) $ (1.22)
Cumulative effect of change in accounting
principle ............. (.25)principle............................. -- ----------- ------------- (0.25) --
------------ ------------ ------------ ------------
Basic and diluted net loss per common share ..................... $ (.54)(0.24) $ (.99)(0.20) $ (0.78) $ (1.22)
=========== =========== =========== ===========
Basic and diluted weighted average
common shares outstanding .... 4,324,729 7,012,134outstanding............. 4,324,832 8,840,448 4,324,781 7,931,333
=========== =========== =========== ===========
See accompanying notes to consolidated financial statements.
4
ANTARES PHARMA, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY (DEFICIT) AND COMPREHENSIVE LOSS
FOR THE THREESIX MONTHS ENDED MARCH 31,JUNE 30, 2001
(UNAUDITED)
Preferred Stock Common Stock
---------------------------- ---------------------------------------------------------------------------- ----------------------------------------
Series C Permatec Medi-Ject
---------------------------- ---------------------------- ------------------------------------------- ------------------ --------------------
Number Number Number
of of of
Shares Amount Shares Amount Shares Amount
------------ ------------ ------------ ------------ ------------ ------------------ ------- ------- --------- --------- -------
Balance
December 31, 2000 -- $ -- 10,000 $ 689,655 -- $ --
Net liabilities of
subsidiaries assumed by
shareholders -- -- -- -- -- --
Medi-Ject stock
outstanding at date of
share transaction -- -- -- -- 1,430,336 14,303
Exchange of Permatec
shares for Medi-Ject stock -- -- (10,000) (689,655) 2,900,000 29,000
Conversion of shareholder
loans to equity -- -- -- -- --
--
Conversion of notes to
preferred Series C 27,500 275 -- -- --
--
Conversion of preferred
Series C to common stock (27,500) (275) -- -- 2,750,000 27,500
Exercise of stock options -- -- -- -- 2,021 2018,864 159
Stock-based compensation
expense -- -- -- -- -- --480
Issuance of common stock
in private placement -- -- -- -- 1,706,482 17,065
Conversion of preferred
Series B to common stock -- -- -- -- 100,000 1,000
Dividends payable on
mandatorily redeemable
preferred stock -- -- -- -- --
Net loss -- -- -- -- -- --
Translation adjustment -- -- -- --
-- --
Comprehensive loss -- -- -- -- --
--
------------ ------------ ------------ ------------ ------------ ------------------- ------- ------ --------- --------- ---------
Balance March 31,June 30, 2001 -- $ -- -- $ -- 8,788,8398,953,682 $ 87,888
============ ============ ============ ============ ============ ============
[WIDE TABLE CONTINUED]89,507
======= ======= ====== ========= ========= =========
[Table continues below]
Accumulated
Additional Other Total
Paid-In Accumulated Deferred Comprehensive Shareholders'
Capital Deficit Compensation Income (Loss) Equity (Deficit)
----------- ------------ ------------ ------------------------- ----------------
Balance
December 31, 2000 $ 1,174,680 $(17,264,463) $ -- $ 1,538,523 $(13,861,605)
Net liabilities of
subsidiaries assumed by
shareholders (644,725) 2,720,931 -- (1,538,523) 537,683
Medi-Ject stock
outstanding at date of
share transaction 5,475,671 -- -- -- 5,489,974
Exchange of Permatec
shares for Medi-Ject stock 660,655 -- -- -- --
Conversion of shareholder
loans to equity 13,173,497 -- -- -- 13,173,497
Conversion of notes to
preferred Series C -- (275) -- -- --
Conversion of preferred
Series C to common stock 5,286,900 (5,314,125) -- -- --
Exercise of stock options 3,13824,717 -- -- 3,158-- 24,876
Stock-based compensation
expense 1,926158,895 -- (141,312) -- 1,92618,063
Issuance of common stock
in private placement 9,974,326 -- -- -- 9,991,391
Conversion of preferred
Series B to common stock 249,000 -- -- -- 250,000
Dividends payable on
mandatorily redeemable
preferred stock -- (50,000) -- -- (50,000)
Net loss -- (1,616,327)(4,332,670) -- (1,616,327)-- (4,332,670)
Translation adjustment -- -- (308,405) (308,405)-- (340,755) (340,755)
------------
Comprehensive loss -- -- -- (1,924,732)-- (4,673,425)
----------- ------------ ------------ --------------------- ----------- ------------
Balance March 31,June 30, 2001 $35,533,616 $(24,240,602) $(141,312) $ 35,106,068 $(21,474,259)(340,755) $ (308,405) $ 13,411,29210,900,454
=========== ============ ============ ===================== =========== ============
See accompanying notes to consolidated financial statements.
5
ANTARES PHARMA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the ThreeSix Months Ended
-------------------------------
March 31,---------------------------------------
June 30, 2000 March 31,June 30, 2001
-------------- --------------------------- -------------
Cash flows from operating activities:
Net loss .....................................................loss...................................................... $ (2,315,683)(3,357,513) $ (1,616,327)(4,332,670)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization ................................ 103,931 222,616
Lossamortization................................. 193,604 563,323
(Gain) loss on disposal and abandonment of assets ...................assets............. (9,000) 126
In-process research and development........................... -- 126948,000
Stock-based compensation ..................................... -- 1,926compensation...................................... 64,583 18,063
Changes in operating assets and liabilities, net of
effects of business combination:
Accounts receivable ....................................receivable..................................... -- 35,030(365,026)
Other receivables ...................................... 109,674 6,586
Inventories ............................................receivables....................................... 134,016 126,834
Inventories............................................. -- (75,766)(110,936)
Prepaid expenses and other assets ...................... (76,932) (93,614)assets....................... 4,432 (42,205)
Accounts payable ....................................... (125,678) (523,781)payable........................................ 136,617 (739,626)
Accrued expenses and other liabilities ................. (64,380) (124,350)liabilities.................. (69,648) (568,820)
Liabilities to related parties .........................parties.......................... -- 9,302
Deferred revenue ....................................... 990,321 (199,998)revenue........................................ 1,903,478 (174,313)
Restructuring provisions .............................. 111,316provisions............................... (272,306) --
Other .................................................. 3,554 1,423
------------ ------------Other................................................... 5,745 (4,545)
------------- -------------
Net cash used in operating activities ........................ (1,263,877) (2,356,827)
------------ ------------activities......................... (1,265,992) (4,672,493)
------------- -------------
Cash flows from investing activities:
Purchases of equipment, furniture and fixtures ............... (72,889) (61,239)
Purchasesfixtures................ (55,280) (230,022)
Proceeds from sales of equipment, furniture and fixtures...... -- 91,699
Additions to patent rights ................................... (11,341) (82,866)rights.................................... (13,057) (59,267)
Deferred acquisition costs.................................... (360,000) --
Increase in notes receivable and due from Medi-Ject ..........Medi-Ject........... -- (602,756)
Proceeds from sales of equipment, furniture and fixtures ..... -- 91,699
Cash acquired in the acquisitionAcquisition of Medi-Ject, ................including cash acquired............. -- 355,578
------------ ------------------------- -------------
Net cash used in investing activities ................................. (84,230) (299,584)
------------ ------------activities.................................. (428,337) (444,768)
------------- -------------
Cash flows from financing activities:
Proceeds from loans from shareholders ........................ 1,223,876shareholders......................... 2,258,091 1,188,199
Proceeds from sale of common stock ...........................stock............................ -- 9,994,54910,016,268
Principal payments on capital lease obligations .............. (25,582) (99,088)
------------ ------------obligations............... (57,849) (125,768)
------------- -------------
Net cash provided by financing activities ............................. 1,198,294 11,083,660
------------ ------------activities.............................. 2,200,242 11,078,699
------------- -------------
Effect of exchange rate changes on cash and cash equivalents .......... (32,680) (290,304)
------------ ------------equivalents........... 10,879 (285,765)
------------- -------------
Net increase (decrease) in cash and cash equivalents .................. (182,493) 8,136,945equivalents.............................. 516,792 5,675,673
Cash and cash equivalents:
Beginning of period ..........................................period........................................... 674,569 243,222
------------ ------------------------- -------------
End of period ................................................period................................................. $ 492,0761,191,361 $ 8,380,167
============ ============5,918,895
============= =============
Cash paid during the period for interest .............................. $ 81,730168,377 $ 84,20490,951
- ----------
Schedule of non-cash investing and financing activities: See information
regarding non-cash investing and financing activities related to the Share
Transaction in Notes 1 and 5.
See accompanying notes to consolidated financial statementsstatements.
6
ANTARES PHARMA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31,June 30, 2000 and 2001
1. BASIS OF PRESENTATION
The accompanying unaudited 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 generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. The
accompanying financial statements and notes should be read in
conjunction with our Form 10-K and Form 8-K/A filings. Operating
results for the three-monthsix-month period ended March 31,June 30, 2001, are not
necessarily indicative of the results that may be expected for the year
ending December 31, 2001.
In July 2000, Medi-Ject Corporation, now known as Antares Pharma, Inc.
("Antares" or "the Company"), entered into a Purchase Agreement with
Permatec Holding AG ("Permatec"), Permatec Pharma AG, Permatec
Technology AG (each of the foregoing, a company organized under the
laws of Switzerland), and Permatec NV (a company organized under the
laws of the Netherlands Antilles). Pursuant to the Purchase Agreement,
on January 31, 2001, Antares purchased all of the outstanding shares of
the three Permatec Subsidiaries (Share Transaction). In exchange,
Antares issued 2,900,000 shares of Antares common stock to Permatec.
Upon the issuance, Permatec owned approximately 67% of the outstanding
shares of Antares common stock. For accounting purposes, Permatec is
deemed to have acquired Antares. The acquisition has been accounted for
by the purchase method of accounting. The financial statements and
related disclosures that were previously reported asfor Medi-Ject arehave
been replaced with the Permatec financial statements and disclosures.
The operating financial history of Antares ishas become that of Permatec.
As of January 31, 2001, Permatec had two other subsidiaries that were
not part ofsold pursuant to the Purchase Agreement and they are in the process
of being dissolved. All assets and liabilities relating to those two
subsidiaries remain with Permatec and aredid not form part of the Share
Transaction.
Upon consummationclosing of the transaction,Share Transaction on January 31, 2001, the full
principal amount of Permatec's shareholders' loans to the three
Permatec subsidiaries subject towhich were included in the Share Transaction, of
$13,173,497, at January 31, 2001, was converted to equity.
Also on January 31, 2001, promissory notes issued by Medi-Ject to
Permatec between January 25, 2000 and January 15, 2001, in the
aggregate principal amount of $5,500,000, were converted into Series C
Convertible Preferred Stock ("Series C"). Permatec, the holder of the
Series C stock, immediately exercised its right to convert the Series C
stock, and Antares issued 2,750,000 shares of common stock to Permatec
upon such conversion. Also on that date, the name of the corporation
was changed to Antares Pharma, Inc.
7
ANTARES PHARMA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
June 30, 2000 and 2001
1. BASIS OF PRESENTATION (Continued)
The total consideration paid, or purchase price, for Medi-Ject was
approximately $6,889,974, which represents the fair market value of
Medi-Ject and related transaction costs of $480,095.
7
ANTARES PHARMA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 2000 and 2001 For accounting
purposes, the fair value of Medi-Ject is based on the 1,424,729 shares
of Medi-Ject common stock outstanding on January 25, 2000, at an
average closing price three days before and after such date of $2.509
per share plus the estimated fair value of the Series A and B
mandatorily redeemable convertible preferred stock ("Series A and B")
plus the fair value of outstanding stock options and warrants
representing shares of Medi-Ject common stock either vested on January
25, 2000, or that became vested at the close of the Share Transaction
plus the capitalized acquisition cost of Permatec.
The purchase price for Medi-Ject of $6,889,974 was $6,049,546 in excess
of its historical net assets. The Company has engaged aallocation, based on an appraisal by an independent
third-party appraisal firm, to determine the fair value of the Series Awas as follows:
Cash acquired $ 394,535
Current assets 900,143
Equipment, furniture and B
preferred stock and the allocation of the purchase price to tangible
andfixtures 1,784,813
Patents 1,470,000
Other intangible assets 2,194,000
Goodwill 1,276,806
Other assets 3,775
Current liabilities and in-process(2,026,723)
Debt (55,375)
In-process research and development activities. As948,000
-----------
Purchase price $ 6,889,974
===========
Patents are being amortized over periods ranging from six to ten years.
Other intangible assets include values assigned to workforce, ISO
certification and clinical studies and are being amortized over
estimated useful lives which range from five to ten years. Goodwill is
being amortized over a period of ten years.
In connection with the appraisal was not completed prior to the
filing of this 10-Q, an estimate of the purchase price and its
allocation is not yet determinable. Upon completion of the appraisal,
the Company will amend its MarchShare Transaction on January 31, 2001, financial statements to
record the
fair value of the Series A and B preferred stock, intangible
asset amortization and an expected charge forCompany acquired in-process research and development activities.projects having an
estimated fair value of $948,000, that had not yet reached
technological feasibility and had no alternative future use.
Accordingly, this amount was immediately expensed in the Consolidated
Statement of Operations. The fair value of in-process research and
development was determined by an independent valuation using discounted
forecasted cash flows directly related to the products expected to
result from the research and development projects. The discount rates
used in the valuation take into account the stage of completion and the
risks surrounding the successful development and commercialization of
each of the purchased
8
ANTARES PHARMA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
June 30, 2000 and 2001
1. BASIS OF PRESENTATION (Continued)
in-process technology projects that were valued. The weighted-average
discount rate used in calculating the present value of the in-process
technology was 65%. Projects included in the valuation were
approximately 10% to 40% complete and related to ongoing injection
research, mini-needle technology, pre-filled syringes and single-shot
disposable injection devices. The nature of the efforts to develop the
acquired in-process research and development into commercially viable
products consists principally of planning, designing and testing
activities necessary to determine that the products can meet market
expectations, including functionality, technical and performance
requirements and specifications.
2. INVENTORIES
Inventories consist of the following:
December 31, 2000 March 31,June 30, 2001
----------------- ---------------------------
Raw Material $ --- $ 267,535265,178
Work in-process - 98,258-- 73,016
Finished goods - 122,154-- 184,923
------------- -------------
$ --- $ 487,947523,117
============= =============
3. INDUSTRY SEGMENT AND OPERATIONS BY GEOGRAPHIC AREAS
Upon consummation of the Share Transaction, the Company is primarily
engaged inhas one
operating segment, drug delivery, which includes the development of
drug delivery transdermal and transmucosal pharmaceutical products and
drug delivery injection devices and supplies.
These operations are considered to be one segment. The geographic distributions of Permatec'sthe Company's identifiable assets and
revenues are summarized in the following table:
We have operating assets located on two continents as follows:
December 31, 2000 March 31,June 30, 2001
----------------- --------------
Basel, Switzerland $ 6,974,548 $ 1,876,3331,988,950
Minneapolis, Minnesota -- 16,677,291
------------- ------------13,230,110
--------------- --------------
$ 6,974,548 $ 18,553,624
============= ============
815,219,060
=============== ==============
9
ANTARES PHARMA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
March 31,June 30, 2000 and 2001
3. INDUSTRY SEGMENT AND OPERATIONS BY GEOGRAPHIC AREAS (Continued)
Revenues by region of origin are summarized as follows:
For the Three Months Ended
-----------------------------------------
March 31,-------------------------------------
June 30, 2000 March 31,June 30, 2001
-------------- --------------------------- -------------
US $ --17,543 $ 57,768141,236
Europe 69,301 465,935169,300 955,943
Other -- 63,4668,974
---------- -----------------------
$ 69,301186,843 $ 587,1691,106,153
========== =======================
For the Six Months Ended
--------------------------------------
June 30, 2000 June 30, 2001
------------- -------------
US $ 17,543 $ 251,226
Europe 238,601 1,369,656
Other -- 72,440
---------- ------------
$ 256,144 $ 1,693,322
========== ============
4. ACCOUNTING FOR LICENSE AND PRODUCT DEVELOPMENT REVENUES
During the quarter ended December 31, 2000 and effective January 1,
2000, the Company adopted the cumulative deferral method for accounting
for license and product development revenues. The adoption of this
accounting principle resulted in a $1,059,622 cumulative effect
adjustment in the first quarterhalf of 2000.
During the quarterssix months ended March 31,June 30, 2000 and March 31,June 30, 2001, the
Company recognized $69,301$138,601 and $115,792,$123,927, respectively, of license and
product development revenues that were previously recognized by the
Company prior to the adoption of the cumulative deferral method.
5. IN-THE-MONEY CONVERSION FEATURE-PREFERRED STOCK DIVIDEND
During 2000 and 2001, prior to the closing of the Share Transaction on
January 31, 2001, Medi-Ject borrowed a total of $5,500,000 in
convertible promissory notes from Permatec. At the closing of the Share
Transaction, the principal amount of convertible promissory notes
converted to 27,500 shares of Series C.C preferred stock. At the option
of the holder, the Series C wasthese shares were immediately converted into 2,750,000
shares of Antares common stock. As the conversion feature to common
stock was contingent upon the closing of the Share Transaction, the
measurement of the stated conversion feature as compared to the
Company's common stock price of $4.56 at January 31, 2001, resulted in
an in-the-money conversion feature of $5,314,125, which is a deemed
dividend to the Series C preferred shareholder. This dividend increases
the net loss applicable to common shareholders in the Antares' net loss
per share calculation.
10
ANTARES PHARMA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
June 30, 2000 and 2001
6. EMPLOYMENT AGREEMENT WITH ROGER G. HARRISON, PH.D.
Roger G. Harrison, Ph.D., was appointed to the position of Chief Executive Officer of
Antares Pharma, Inc., effective March 12, 2001. The terms of the
employment agreement with Dr. Harrison include an annual salary of
$275,000 and up to 216,000 restricted shares of common stock which will
be granted after the achievement of certain time-based and
performance-based milestones. In addition, if within twelve months of
the
9
ANTARES PHARMA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 2000 and 2001 commencement of his employment the Company sells all or
substantially all of the Company's assets to an unaffiliated third
party, or merges with or into an unaffiliated third party in which the
Company is not the surviving entity, then the Company will pay to Dr.
Harrison either (i) two percent of the aggregate cash securities or
other consideration received by the Company from the sale, or (ii) an
amount, in cash, equal to two percent of the value of the aggregate
cash, securities or other consideration distributed to the Company's
shareholders in the merger; provided, however, that the Company shall
have no obligation to make any payment to Dr. Harrison if he is
employed as the chief executive or chief operating officer of the
acquiring or surviving entity in the transaction.
10In April 2001, 48,000 restricted shares with an aggregate value of
$159,375 and a three-year vesting period were issued to Dr. Harrison.
Compensation expense is being recognized ratably over the three-year
vesting period.
7. NEW ACCOUNTING PRONOUNCEMENTS
In July 2001, the FASB issued Statement No. 141, "Business
Combinations," and Statement No. 142, "Goodwill and Other Intangible
Assets." Statement 141 requires that the purchase method of accounting
be used for all business combinations initiated after June 30, 2001.
Statement 141 also specifies criteria intangible assets acquired in a
purchase method business combination must meet to be recognized and
reported apart from goodwill, noting that any purchase price allocable
to an assembled workforce may not be accounted for separately.
Statement 142 will require that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead tested for
impairment at least annually in accordance with the provisions of
Statement 142. Statement 142 will also require that intangible assets
with definite useful lives be amortized over their respective estimated
useful lives to their estimated residual values, and reviewed for
impairment in accordance with SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of."
The Company is required to adopt the provisions of Statement 141
immediately and Statement 142 effective January 1, 2002. Furthermore,
any goodwill and any intangible asset determined to have an indefinite
useful life that are acquired in a purchase business combination
completed after June 30, 2001 will not be amortized, but will continue
to be
11
ANTARES PHARMA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
June 30, 2000 and 2001
7. NEW ACCOUNTING PRONOUNCEMENTS (Continued)
evaluated for impairment in accordance with the appropriate
pre-Statement 142 accounting literature. Goodwill and intangible assets
acquired in business combinations completed before July 1, 2001 will
continue to be amortized prior to the adoption of Statement 142.
Statement 141 will require upon adoption of Statement 142, that the
Company evaluate its existing intangible assets and goodwill that were
acquired in a prior purchase business combination, and to make any
necessary reclassifications in order to conform with the new criteria
in Statement 141 for recognition apart from goodwill. Upon adoption of
Statement 142, the Company will be required to reassess the useful
lives and residual values of all intangible assets acquired in purchase
business combinations, and make any necessary amortization period
adjustments by the end of the first interim period after adoption. In
addition, to the extent an intangible asset is identified as having an
indefinite useful life, the Company will be required to test the
intangible asset for impairment in accordance with the provisions of
Statement 142 within the first interim period. Any impairment loss will
be measured as of the date of adoption and recognized as the cumulative
effect of a change in accounting principle in the first interim period.
In connection with the transitional goodwill impairment evaluation,
Statement 142 will require the Company to perform an assessment of
whether there is an indication that goodwill is impaired as of the date
of adoption. To accomplish this the Company must identify its reporting
units and determine the carrying value of each reporting unit by
assigning the assets and liabilities, including the existing goodwill
and intangible assets, to those reporting units as of the date of
adoption. The Company will then have up to six months from the date of
adoption to determine the fair value of each reporting unit and compare
it to the reporting unit's carrying amount. To the extent a reporting
unit's carrying amount exceeds its fair value, an indication exists
that the reporting unit's goodwill may be impaired and the Company must
perform the second step of the transitional impairment test. In the
second step, the Company must compare the implied fair value of the
reporting unit's goodwill, determined by allocating the reporting
unit's fair value to all of it assets (recognized and unrecognized) and
liabilities in a manner similar to a purchase price allocation in
accordance with Statement 141, to its carrying amount, both of which
would be measured as of the date of adoption. This second step is
required to be completed as soon as possible, but no later than the end
of the year of adoption. Any transitional impairment loss will be
recognized as the cumulative effect of a change in accounting principle
in the Company's statement of earnings.
As of the date of adoption, the Company expects to have unamortized
goodwill of $1,159,766, and unamortized identifiable intangible assets
of $1,935,588, all of which will be subject to the transition
provisions of Statements 141 and 142. Amortization expense related to
goodwill was $177,963 and $141,397 for the year
12
ANTARES PHARMA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
June 30, 2000 and 2001
7. NEW ACCOUNTING PRONOUNCEMENTS (Continued)
ended December 31, 2000 and the six months ended June 30, 2001,
respectively. Because of the extensive effort needed to comply with
adopting Statements 141 and 142, it is not practicable to reasonably
estimate the impact of adopting these Statements on the Company's
financial statements at the date of this report, including whether any
transitional impairment losses will be required to be recognized as the
cumulative effect of a change in accounting principle.
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
In July 2000, Medi-Ject Corporation, now known as Antares Pharma, Inc.
("Antares") entered into a Purchase Agreement with Permatec to purchase three
subsidiaries from Permatec. Pursuant to the Purchase Agreement, Antares
purchased all of the outstanding shares of each subsidiary. In exchange, Antares
issued 2,900,000 shares of Antares common stock to Permatec. The Share
Transaction was consummated on January 31, 2001, and was accounted for as a
reverse acquisition since Permatec held approximately 67% of the outstanding
common stock of Antares immediately after the Share Transaction. TheEffective with
the consummation of the Share Transaction the financial statements and related
disclosures that were previously reported as Medi-Ject's arewere replaced with the
Permatec financial statements and disclosures. The
operating financial history of Antares will become that of Permatec. Accordingly, operating results of
Permatec are included in the March 31,June 30, 2000 and 2001 financial statements as well
as the results of Antares since January 31, 2001.
The Medi-Ject operations which were acquired by Permatec consisted primarily of
the development, marketing and sale of needle-free injection devices and
disposables. These operations, including all manufacturing and substantially all
administrative activities, are located in Minneapolis, Minnesota and are
referred to below as Antares/Minnesota. The Permatec operations are located
primarily in Basel, Switzerland and consist of administration and facilities for
the research and development of transdermal and transmucosal drug delivery
products. Permatec's operations have historically been focused on research and
development. In the discussion below,past two years Permatec has signed a number of license
agreements with pharmaceutical companies for the historicalapplication of its drug
delivery systems. Permatec generated revenue starting in 1999 with the
recognition of license revenues and commenced the sale of licensed products in
2000. Permatec's operations are referred to below as Antares/SwitzerlandSwitzerland.
Three and the Medi-Ject operations will be referred
to as Antares/Minnesota.
The purchase price for Medi-Ject of $6,889,974 was $6,049,546 in excess of the
book value of its historical net assets. The Company has engaged a third-party
appraisal firm to determine the allocation of the purchase price to tangible and
intangible assets, liabilities and in-process research and development
activities. As the appraisal was not completed prior to the filing of the
Company's March 31, 2001, 10-Q, an estimate of the purchase price allocation has
not yet been determined. Upon completion of the appraisal, the Company will
amend its March 31, 2001, financial statements to record intangible asset
amortization and an expected charge for acquired in-process research and
development activities.
ThreeSix Months Ended March 31,June 30, 2000 and 2001
Total revenues for the three and six months ended March 31, 2000 andJune 30, 2001 were $69,301$1,106,153
and $587,169,$1,693,322, respectively, reflecting increases over the same periods of the
prior year of $919,310 and $1,437,178, or 492% and 561%, respectively. The
increase in the revenues of $517,868, or 747% is primarily the result of product sales in the three and
six-month periods of $445,090,$630,437 and $1,075,527, respectively, attributable to the
Antares/Minnesota injection devices.operations. Antares/Switzerland had no product sales in the
first quarterhalf of 2000 and only minimalcompared with product sales in the three and six-month
periods ended June 30, 2001 due to sales of the
estradiol transdermal patch that started in the fall of 2000.$182,917 and $209,204, respectively.
Licensing and product development fee income increased by $46,491$105,956 or 67%57%, and
$152,447 or 60% in the three monthsand six-month periods ended March 31,June 30, 2001,
respectively, as compared to the prior-year period. Allperiods. The increases are primarily
due to $150,000 of Antares/Minnesota development fee revenue recognized in the
second quarter of 2001. The balance of the licensing and product development
revenue is mainly attributable to recognizing previously deferred revenue on
licensing and product development contracts that were deferred when the Company
14
adopted the cumulative deferral method of accounting on January 1, 2000. In
April 2001, the Company entered into an exclusive agreement to license certain
drug-delivery technology to SciTech Medical Product Pte Ltd ("SciTech") in
various Asian countries with options to other countries if certain conditions
are met. The variation between periodsCompany will receive an aggregate license fee of $600,000 in
milestone payments upon the occurrence of certain events. In addition to the
license fees, the Company will receive a 5% royalty from the sale of licensed
products. At June 30, 2001 approximately $200,000 was recorded in accounts
receivable and deferred revenue in connection with the SciTech agreement. The
deferred revenue is due to passing
certain development milestones that allow the recognition of licensing and
development fees previously received.
11
being recognized into revenue on a straight-line basis over
a 36 month period.
The cost of product sales in the second quarter and first half of $277,714 is$426,054 and
$719,926, respectively, are primarily attributable to injection device and
disposable product sales of Antares/Minnesota.
Research and development expenses, excluding the write-off of acquired
in-process research and development in 2001, totaled $227,574$823,828 and $541,709$1,394,779 in
the three
months ended March 31, 2000second quarter and first half of 2001, respectively.respectively, compared to $182,654
and $410,228 in the same periods of the prior year. The increaseincreases of $314,135$641,174 or
138% is351% and $984,551 or 240% in the second quarter and first half, respectively,
are primarily due to research employee additions at Antares/Switzerland due
tofor
increased research activities and the research costs incurred by
Antares/Minnesota since January 31, 2001.
In connection with the Share Transaction on January 31, 2001, the Company
acquired in-process research and development projects having an estimated fair
value of $948,000, that had not yet reached technological feasibility and had no
alternative future use. Accordingly, this amount was immediately expensed in the
Consolidated Statement of Operations. The fair value of in-process research and
development was determined by an independent valuation using discounted
forecasted cash flows directly related to the products expected to result from
the research and development projects. The discount rates used in the valuation
take into account the stage of completion and the risks surrounding the
successful development and commercialization of each of the purchased in-process
technology projects that were valued. The weighted-average discount rate used in
calculating the present value of the in-process technology was 65%. Projects
included in the valuation were approximately 10% to 40% complete and related to
ongoing injection research, mini-needle technology, pre-filled syringes and
single-shot disposable injection devices. The nature of the efforts to develop
the acquired in-process research and development into commercially viable
products consists principally of planning, designing and testing activities
necessary to determine that the products can meet market expectations, including
functionality, technical and performance requirements and specifications. The
Company expects that the products incorporating the acquired technology will
generally be completed and begin to generate cash flows over the 24 to 48 month
period after the acquisition. However, development of these technologies remains
a significant risk due to the remaining effort to achieve technical viability,
evolving customer markets, uncertain standards and performance specifications
for new products, and significant competitive threats from numerous companies.
15
Marketing and sales expenses totaled $171,235$383,709 and $258,666$644,007 in the three months
ended March 31, 2000second quarter
and first half of 2001, respectively. Thisrespectively, compared to $401,651 and $572,886 in the
same periods of the prior year. The decrease in the quarter of $17,942 or 4% and
increase in the first half of $87,431$71,121 or 51% is12% are both primarily due to a
decrease in outside marketing travel and consulting expenses in
Antares/Switzerland offset by the addition of Antares/Minnesota marketing and
sales expenses since January 31, 2001.
General and administrative expenses totaled $774,002$1,200,865 and $1,141,587$2,385,040 in the
three
months ended March 31, 2000second quarter and first half of 2001, respectively.respectively, compared to $517,411 and
$1,291,413 in the same periods of the prior year. The increaseincreases of $367,585$683,454 or
47% is132% and $1,093,627 or 85% in the second quarter and first half, respectively,
are primarily due to an increase in Antares/Switzerland administrative
personnel and patent write-off costs, plus the addition of Antares/Minnesota general and
administrative costs since January 31, 2001, of $568,763,plus an increase in
Antares/Switzerland administrative personnel, offset by a decrease in
Antares/Switzerland restructuring costs.
Net other income (expense) changed $168,731 from a net expenseexpenses of $152,551$126,957 and $279,508 in
the second quarter and first quarterhalf of 2000, respectively, to a net income of
$16,180$49,580 and $65,760 in the same periods of this year. The second quarter and
first quarter 2001. First
quarterhalf of 2000 waswere primarily composed of currency losses of
Antares/Switzerland and interest expense. The second quarter and first quarterhalf of
2001 other income (expense) iswere primarily composed of interest earningsincome on funds received in our private
placement of equity offset by currency lossesother expenses in the second quarter and interest
expense.expense in the first half.
Cash Flows
Net cash used in operating activities increased by $1,092,950$3,406,501 from $1,263,877$1,265,992 in
the first half of 2000 to $2,356,827$4,672,493 in the first half of 2001. This increase is
due to the higher net loss from operations in 2001, after considering the
cumulative effect of change in accounting principle in 2000, and the net
reduction in current liabilities after private placement equity funds were
received.received in 2001.
Net cash used in investing activities increased $215,354$16,431 from $84,230$428,337 in 2000 to
$299,584,$444,768 in 2001, due primarily to increased capital expenditures in 2001 and
cash loaned to Medi-Ject before consummatingthe closing of the Share Transaction, offset by
the cash balance in Medi-Ject when the Share Transaction was consummated.closed and a reduction
in cash outlays in 2001 for deferred acquisition costs.
Net cash provided by financing activities increased $9,885,366$8,878,457 from $1,198,294$2,200,242
in 2000 to $11,083,660$11,078,699 in 2001 due primarily to the private placement of common
stock equity during the period.
Total2001.
The net change in cash increased $8,319,438$5,158,881 between periods from a net decreaseincrease
of $182,493$516,792 in 2000 to a net increase of $8,136,945.$5,675,673 in 2001.
16
Liquidity
As reflected in the accompanying financial statements, Antares incurred a net
operating loss of $1,632,507$4,332,670 for the quartersix months ended March 31,June 30, 2001. In
addition, Antares has incurred net losses and has had negative cash flows from
operating activities since inception. As further described above, Medi-Ject
Corporation acquired three subsidiaries of Permatec in a transaction accounted
for as a reverse acquisition on January 31, 2001. Upon consummation of this
transaction, 12
subordinated loans of $13,173,497 were converted to equity and the
net liabilities of two subsidiaries, which aggregate $537,683, not purchased by
Medi-Ject, were assumed by Dr. Jacques Gonella. Through March 5, 2001, the
Company has raised $10 million$10,000,000 through private placements of common stock.
Management believes the conversion of subordinated debt to equity and the
raising of private placement funds to provide current working capital, as well
as projected product development and license revenues will provide the Company
with sufficient liquidity well into 2002.
New Accounting Pronouncements
In July 2001, the FASB issued Statement No. 141, "Business Combinations," and
Statement No. 142, "Goodwill and Other Intangible Assets." Statement 141
requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001. Statement 141 also specifies
criteria intangible assets acquired in a purchase method business combination
must meet to be recognized and reported apart from goodwill, noting that any
purchase price allocable to an assembled workforce may not be accounted for
separately. Statement 142 will require that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead tested for
impairment at least annually in accordance with the provisions of Statement 142.
Statement 142 will also require that intangible assets with definite useful
lives be amortized over their respective estimated useful lives to their
estimated residual values, and reviewed for impairment in accordance with SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of."
The Company is required to adopt the provisions of Statement 141 immediately and
Statement 142 effective January 1, 2002. Furthermore, any goodwill and any
intangible asset determined to have an indefinite useful life that are acquired
in a purchase business combination completed after June 30, 2001 will not be
amortized, but will continue to be evaluated for impairment in accordance with
the appropriate pre-Statement 142 accounting literature. Goodwill and intangible
assets acquired in business combinations completed before July 1, 2001 will
continue to be amortized prior to the adoption of Statement 142.
Statement 141 will require upon adoption of Statement 142, that the Company
evaluate its existing intangible assets and goodwill that were acquired in a
prior purchase business combination, and to make any necessary reclassifications
in order to conform with the new criteria in Statement 141 for recognition apart
from goodwill. Upon adoption of Statement 142, the Company will be required to
reassess the useful lives and residual values of all intangible assets acquired
in purchase business combinations, and make any necessary amortization period
adjustments by the end of the first interim period after adoption. In addition,
to the extent an
17
intangible asset is identified as having an indefinite useful life, the Company
will be required to test the intangible asset for impairment in accordance with
the provisions of Statement 142 within the first interim period. Any impairment
loss will be measured as of the date of adoption and recognized as the
cumulative effect of a change in accounting principle in the first interim
period.
In connection with the transitional goodwill impairment evaluation, Statement
142 will require the Company to perform an assessment of whether there is an
indication that goodwill is impaired as of the date of adoption. To accomplish
this the Company must identify its reporting units and determine the carrying
value of each reporting unit by assigning the assets and liabilities, including
the existing goodwill and intangible assets, to those reporting units as of the
date of adoption. The Company will then have up to six months from the date of
adoption to determine the fair value of each reporting unit and compare it to
the reporting unit's carrying amount. To the extent a reporting unit's carrying
amount exceeds its fair value, an indication exists that the reporting unit's
goodwill may be impaired and the Company must perform the second step of the
transitional impairment test. In the second step, the Company must compare the
implied fair value of the reporting unit's goodwill, determined by allocating
the reporting unit's fair value to all of it assets (recognized and
unrecognized) and liabilities in a manner similar to a purchase price allocation
in accordance with Statement 141, to its carrying amount, both of which would be
measured as of the date of adoption. This second step is required to be
completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss will be recognized as the cumulative
effect of a change in accounting principle in the Company's statement of
earnings.
As of the date of adoption, the Company expects to have unamortized goodwill of
$1,159,766, and unamortized identifiable intangible assets of $1,935,588, all of
which will be subject to the transition provisions of Statements 141 and 142.
Amortization expense related to goodwill was $177,963 and $141,397 for the year
ended December 31, 2000 and the six months ended June 30, 2001, respectively.
Because of the extensive effort needed to comply with adopting Statements 141
and 142, it is not practicable to reasonably estimate the impact of adopting
these Statements on the Company's financial statements at the date of this
report, including whether any transitional impairment losses will be required to
be recognized as the cumulative effect of a change in accounting principle.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk Disclosure
Market risk, since December 31, 2000, has been reduced due to the conversion of
subordinated loans from shareholders of $13,173,497 and notes receivable from
Medi-Ject of $5,500,000 into equity plus the infusion of cash from the private
placement of common stock of $10,000,000.
18
Currency Exposure
The Company is subject to foreign currency exposure, primarily with the Swiss
Franc and the Euro. At March 31,June 30, 2001, the Company's exposure to foreign currency
fluctuations is not significant and primarily related to the Company's
translation adjustment to convert its Antares/Switzerland financial information
into U.S. dollars.
1319
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company held its Annual Shareholders' meeting on June 7, 2001.
(c) (1) Two directors were elected to serve for three-year terms:
Affirmative Voting Authority
Name Votes Withheld
----------------------- ----------- ----------------
Dr. Jacques Gonella 7,769,639 28,172
Dr. Thomas Rinderknect 7,769,639 28,172
There were no abstentions and no broker non-votes.
Continuing as directors were James L. Clark, Dr. Philippe Dro,
Franklin Pass, M.D., Professor Ubaldo Conte, Kenneth Evanstad and
Roger G. Harrison, Ph.D.
(2) The grants of time-based and performance-based restricted
stock available to Dr. Roger Harrison pursuant to his
Employment Agreement were approved. There were 7,040,219 votes
for, 44,710 votes against, 14,436 abstentions and 698,446
broker non-votes.
(3) A new Incentive Stock Option Plan for Employees was approved.
There were 7,083,280 votes for, 14,695 votes against, 1,390
abstentions and 698,446 broker non-votes.
(4) A new Stock Option Plan for Non-Employee Directors and
Consultants was approved. There were 7,038,280 votes for,
14,695 votes against, 4,682 abstentions and 698,446 broker
non-votes.
(5) The appointment by the Board of Directors of KPMG LLP,
independent certified public accountants, as independent
auditors of the Company for the year ending December 31, 2001,
was approved. There were 7,794,431 votes for, 1,550 votes
against, 1,830 abstentions and no broker non-votes.
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
Form 8-K was filed on February 15, 2001 and Form 8-K/A was filed on
April 16, 2001, which describe the closing of the Share Transaction and
fileinclude the required pro forma financial statements.
1420
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorizedauthorized.
ANTARES PHARMA, INC.
May 21,August 17, 2001 /s/ Roger G. Harrison, Ph.D.
-------------------------------------------------- ------------------------------------ -------------------------------------
Roger G. Harrison, Ph.D.
Chief Executive Officer
May 21,August 17, 2001 /s/ Lawrence M. Christian
-------------------------------------------------- ------------------------------------ -------------------------------------
Lawrence M. Christian
Vice President - Finance, Chief
Financial Officer and Secretary
1521