-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LCXqMK4LTXCstWgo9KVEgQvY0dkS/mNYJd2yAiVhqIC3+HR5Gl+LqqnATFA0Pef3 /wRm9RpK3NIQzCBh+Jpoew== 0000950129-03-001813.txt : 20030402 0000950129-03-001813.hdr.sgml : 20030402 20030402155747 ACCESSION NUMBER: 0000950129-03-001813 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030331 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZONAGEN INC CENTRAL INDEX KEY: 0000897075 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 760233274 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15281 FILM NUMBER: 03636861 BUSINESS ADDRESS: STREET 1: 2408 TIMBERLOCH PL STREET 2: SUITE B-4 CITY: WOODLANDS STATE: TX ZIP: 77380 BUSINESS PHONE: 2813675892 MAIL ADDRESS: STREET 1: 2408 TIMBERLOCH PLACE B-4 CITY: THE WOODLANDS STATE: TX ZIP: 77380 8-K 1 h04631e8vk.txt ZONAGEN, INC. - DATED 03/31/2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT FILED PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 31, 2003 ZONAGEN, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 0-21198 76-0233274 (STATE OR OTHER JURISDICTION OF (COMMISSION FILE (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) NUMBER) IDENTIFICATION NO.) 2408 TIMBERLOCH PLACE, SUITE B-4 THE WOODLANDS, TEXAS 77380 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE) (281) 719-3400 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS c. Exhibits Exhibit Number Description ------- ----------- 99.1 Press Release dated March 31, 2003. ITEM 9. REGULATION FD DISCLOSURE The following information is being provided under Item 12: On March 31, 2003, Zonagen, Inc. (the "Company") announced in a press release its operating results for the fourth quarter and year ended December 31, 2002. A copy of the Company's press release is attached hereto as Exhibit 99.1. The press release is incorporated by reference herein and the foregoing description of the press release is qualified in its entirety by reference to the attached exhibit. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ZONAGEN, INC. Date: April 2, 2003. By: /s/ Louis Ploth, Jr. ----------------------------------------- Louis Ploth, Jr. Vice President, Business Development and Chief Financial Officer EXHIBIT INDEX Exhibit Number Description ------- ------------ 99.1 Press Release dated March 31, 2003. EX-99.1 3 h04631exv99w1.txt PRESS RELEASE DATED 3/31/2003 EXHIBIT 99.1 Press Release ZONAGEN REPORTS FOURTH QUARTER AND YEAR END 2002 RESULTS THE WOODLANDS, Texas--March 31, 2003--Zonagen, Inc. (Nasdaq:ZONA) (PCX:ZNG) today announced financial results for the three-month and twelve-month periods ended December 31, 2002. Total revenues for the three-month period ended December 31, 2002 were $245,000 as compared to $826,000 for the same period in the prior year, and for the twelve-month period ended December 31, 2002 were $5.3 million as compared to $3.9 million for the same period in the prior year. Licensing fees for the three-month period ended December 31, 2002 were zero as compared to $529,000 for the same period in the prior year, and were $4.2 million for the twelve-month period ended December 31, 2002 as compared to $2.2 million for the same period in the prior year. Included in licensing fees for the twelve-month period ended December 31, 2002 was $4.2 million as compared to $2.2 million for the same period in the prior year of revenues that were recognized from licensing and milestone payments received in prior years from Schering-Plough Corporation (NYSE:SGP) from their exclusive worldwide license to VASOMAX(R), the Company's oral therapy product for erectile dysfunction. These licensing fees, which had been received in previous periods, had been recorded as deferred revenue on the balance sheet and had been amortized to revenue due to the adoption of U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101). Due to the mutual termination of the Schering-Plough Corporation agreements in July 2002, the Company recognized the remaining $3.2 million of deferred revenue in accordance with SAB 101 relating to these agreements in the third quarter ended September 30, 2002. Product royalties from VASOMAX(R) were zero for both three-month periods ended December 31, 2002 and 2001, and were zero for the twelve-month period ended December 31, 2002 as compared to $58,000 for the same period in the prior year. Due to the ongoing partial clinical hold on VASOMAX(R) in the United States and the mutual termination of the Schering-Plough agreements regarding VASOMAX(R), the Company is uncertain as to whether it will be able to create a future revenue source regarding VASOMAX(R) or its other phentolamine-based products. There was $102,000 of research and development grant revenue for the three-month period ended December 31, 2002 as compared to zero for the same period in the prior year, and there was $315,000 of research and development grant revenue for the twelve-month period ended December 31, 2002 as compared to $115,000 for the same period in the prior year. The Company was awarded three Small Business Innovation Research (SBIR) grants during the year 2002 aggregating over $1 million and began performing that funded research in the third quarter ended September 30, 2002. The Company was awarded two SBIR grants during the last half of 2000 and performed some of that funded research during the first half of 2001. Interest income for the three-month period ended December 31, 2002 decreased to $143,000 from $297,000 for the same period in the prior year, and decreased to $711,000 for the twelve-month period ended December 31, 2002 as compared to $1.5 million for the same period in the prior year. The decrease in interest income was due to declining interest rate yields and lower cash balances. Research and development (R&D) expenses for the three-month period ended December 31, 2002 were $568,000 as compared to $891,000 for the same period in the prior year, and were $6.4 million for the twelve-month period ended December 31, 2002 as compared to $3.0 million for the same period in the prior year. Due to the mutual termination of the Schering-Plough agreements in July 2002, the future uncertainty surrounding the VASOMAX(R) product and the fact that the Company is not presently committing resources toward the approval of VASOMAX(R), the Company expensed both its bulk phentolamine inventory previously valued at $4.4 million and its VASOMAX(R) patent estate previously valued at approximately $1.0 million in the three-month period ended June 30, 2002 and in July 2002 a liability due to Schering-Plough of $1.3 million relating to a prior joint clinical development program for VASOMAX(R) was forgiven and taken as a reduction to R&D expenses. In addition, R&D expenses in the three-month period ended June 30, 2002 were reduced by $188,000 due to a reimbursement of prior clinical expenses for VASOMAX(R) that was received from a clinical research organization after a reconciliation was completed comparing actual expenses to payments made by the Company. R&D expenses excluding the four adjustments listed above would have been $2.5 million for the twelve-month period ended December 31, 2002. General and administrative (G&A) expenses for the three-month period ended December 31, 2002 were $1.0 million as compared to $242,000 for the same period in the prior year and increased to $2.7 million for the twelve-month period ended December 31, 2002 as compared to $1.7 million for the same period in the prior year. The increase in expenses for the three-month period ended December 31, 2002 as compared to the same period in the prior year is primarily due to the increase in costs associated with the costs of reviewing potential strategic alternative opportunities. The increase in expenses for the twelve-month period ended December 31, 2002 as compared to the same period in the prior year is primarily due to the increase in costs associated with potential strategic alternative opportunities, increase in insurance rates and personnel expenses offset by a discontinuation of quarterly amortization expenses relating to a non-cash compensation charge for stock options previously issued in December 1996 that were fully amortized by December 31, 2001. Net loss for the three-month period ended December 31, 2002, was ($1.4) million or ($0.12) per share as compared to a net loss of ($307,000) or ($0.03) per share for the same period in the prior year and was a net loss of ($3.9) million or ($0.34) per share for the twelve-month period ended December 31, 2002 as compared to ($839,000) or ($0.07) per share for the same period in the prior year. The increased loss for both the three-month and twelve-month periods ended December 31, 2002 as compared to last year is primarily due to write-offs regarding the uncertainties relating to the VASOMAX(R) program, a reduction in interest income and increased G&A expenses related to the costs of reviewing potential strategic alternative opportunities. On December 31, 2002, the Company reported cash, cash equivalents and marketable securities totaling $25.1 million as compared to $30.1 million reported as of December 31, 2001. The Company's reduction in cash for the year 2002 includes a November 2002, bridge loan to Lavipharm Corp. of $1.0 million that is collateralized by certain assets. On October 30, 2002, the Company entered into a definitive agreement to merge with Lavipharm Corp. that was subsequently terminated on March 27, 2003. As of December 31, 2002 common shares outstanding were approximately 11,503,000. Zonagen, Inc. is engaged in the development of pharmaceutical products that address diseases and conditions associated with the human reproductive system. A copy of this press release may be obtained via facsimile by dialing 1-888-329-0920 or via the internet by accessing www.zonagen.com. Any statements that are not historical facts contained in this release, are forward-looking statements that involve risks and uncertainties, including such risks identified in Zonagen's Annual Report on Form 10-K for the year ended December 31, 2001, as filed with the Securities and Exchange Commission (SEC). These documents are available on request from Zonagen or at www.sec.gov. Zonagen disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. ZONAGEN, INC. AND SUBSIDIARY (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share amounts) Twelve Months Three Months Ended Ended ----------------------- ---------------- December 31, December 31, 2002 2001 2002 2001 ----------- ----------- -------- ------- (Unaudited) (Unaudited) Revenues Licensing fees $- $529 $4,228 $2,162 Product royalties - - - 58 Research and development grants 102 - 315 115 Interest income 143 297 711 1,526 ----------- ----------- -------- ------- Total revenues 245 826 5,254 3,861 ----------- ----------- -------- ------- Expenses Research and development 568 891 6,420 3,028 General and administrative 1,038 242 2,716 1,672 ----------- ----------- -------- ------- Total expenses 1,606 1,133 9,136 4,700 ----------- ----------- -------- ------- Loss from continuing operations (1,361) (307) (3,882) (839) ----------- ----------- -------- ------- Net loss before cumulative effect of change in accounting principle (1,361) (307) (3,882) (839) Cumulative effect of change in accounting principle - - - - ----------- ----------- -------- ------- Net loss $(1,361) $(307) $(3,882) $(839) =========== =========== ======== ======= Loss per share - basic and diluted: Loss from continuing operations $(0.12) $(0.03) $(0.34) $(0.07) Net loss before cumulative effect of change in accounting principle (0.12) (0.03) (0.34) (0.07) Cumulative effect of change in accounting principle - - - - ----------- ----------- -------- ------- Net loss $(0.12) $(0.03) $(0.34) $(0.07) =========== =========== ======== ======= Shares used in loss per share calculation: Basic 11,500 11,338 11,412 11,333 Diluted 11,500 11,338 11,412 11,333 CONSOLIDATED BALANCE SHEETS December December 31, 31, 2002 2001 ----------- -------- Current assets $26,670 $35,260 Fixed assets (net) 191 340 Other assets (net) 509 1,314 ----------- -------- Total assets $27,370 $36,914 =========== ======== Accounts payable and accrued expenses $519 $2,117 Deferred revenue - short term - 2,114 Deferred revenue - long term - 2,114 Stockholders' equity 26,851 30,569 ----------- -------- Total liabilities and stockholders' equity $27,370 $36,914 =========== ======== -----END PRIVACY-ENHANCED MESSAGE-----