Deltagen Reports 2012 Fourth Quarter and Full-Year Financial Results Business Wire SAN MATEO, Calif. -- April 10, 2013 Deltagen, Inc. (Pink Sheets: DGEN), a leading provider of drug discovery tools and services to the biopharmaceutical industry, today reported unaudited consolidated financial results for the three months and year ended December 31, 2012. Revenues: The Company’s consolidated revenues for the three months and year ended December 31, 2012 totaled $0.133 million and $1.054 million, respectively. The revenues in the fourth quarter and in 2012 were attributable to license fees associated with the provision of knockout mice and related phenotypic data pursuant to orders placed by customers under the Company’s DeltaOne^TM program. The Company’s consolidated revenues for the three months and year ended December 31, 2012 included $0.088 million and $0.142 million, respectively, in revenues of Xenopharm, Inc. (“Xenopharm”), a wholly owned subsidiary of the Company. The revenues and expenses of Benten BioServices, Inc. ("Benten BioServices") are no longer consolidated with those of Deltagen and its wholly-owned subsidiaries, Xenopharm and Deltagen Research Laboratories, L.L.C. because Benten BioServices ceased being a wholly-owned subsidiary of Deltagen on August 15, 2012 due to the close of financing, after which Deltagen held 43.8% of the outstanding shares of Benten BioServices The application of the equity method of accounting now reports Benten BioServices' operating results as a single line in Deltagen's financial statements, which reflect Deltagen's 43.8% ownership interest in Benten BioServices. Expenses: Total consolidated expenses for the three months and year ended December 31, 2012 were $0.231 million and $1.107 million, respectively. The expenses in the fourth quarter (and for full-year 2012) were attributable primarily to labor costs and other general and administrative expenses, including expenses of $0.039 million in the fourth quarter ($0.343 million for full-year 2012) in royalty and commission expenses, and non-recurring expenses of $0.047 million in the fourth quarter ($0.054 million for full-year 2012) associated with the prosecution and issuance of patents licensed exclusively to Xenopharm. As of December 31, 2012, the Company had incurred aggregate royalties to Lexicon Pharmaceuticals, Inc. (“Lexicon”) of $5.705 million in royalty payments pursuant to a March 2005 settlement agreement between Lexicon and the Company. Under the settlement, the maximum aggregate amount of royalty payments due to Lexicon is $6 million. Accordingly, $0.295 million in contingent royalty payments remain owed to Lexicon as of December 31, 2012. Net Income/Losses: Consolidated net losses before provision for income taxes for the three months and year ended December 31, 2012 were $0.677 million and $1.165 million, respectively. These consolidated net losses included recognized net losses of $0.579 million and $1.113 million, respectively, or 43.8% of Benten BioServices' Net Operating Losses, which was accounted for using the equity method of accounting. Cash, Cash Equivalents and Accounts Receivable: As of December 31, 2012, the Company had $0.095 million in consolidated cash and cash equivalents and $0.163 million in accounts receivable. During the fourth quarter the Company borrowed $0.100 million under a secured promissory note dated December 20, 2012 in a related-party transaction involving a trust managed by Robert Driscoll, the Company's CEO, which note carries a 0.025% interest per annum, compounded annually. Major Events during 2012: Benten BioServices: Benten BioServices received an aggregate total of $2.940 million in secured bridge financing between January and August 2012 ("Series A"). The Series A financing was led by Life Sciences Green House of Central Pennsylvania and closed on August 15, 2012, at which time Benten BioServices ceased being a wholly-owned subsidiary of Deltagen. Following the Series A closing, excluding Benten BioServices' stock options, Deltagen held 43.8% of the outstanding shares of Benten BioServices. Deltagen shall retain a seat on the board of directors of Benten BioServices solely representing Deltagen so long as it beneficially owns at least 10% of the outstanding common stock of Benten BioServices. The unaudited consolidated financial statements for the fourth quarter and year of 2012, accompanying notes, and Management’s Discussion and Analysis of Financial Conditions and Results of Operations for such period will be posted on Deltagen’s website (www.deltagen.com). About Deltagen Deltagen, Inc. is a provider of drug discovery tools to the biopharmaceutical industry, and offers access to its inventory of knockout mouse lines and related phenotypic data to enhance the efficiency of target validation and drug discovery. In addition, Deltagen offers target validation data in the areas of immunology and metabolic diseases. Deltagen's products and programs have been validated by customers and partners such as Eli Lilly & Co., GlaxoSmithKline, Merck & Co., Inc. and Pfizer Inc. For more information on Deltagen, visit the Company's website at www.deltagen.com. Safe Harbor Statement This press release contains “forward-looking statements,” including statements about Deltagen’s future revenues, cash flows and operating results, first-party royalty obligations and first-party licenses and intellectual property, as well as other matters that are not historical facts or information. These forward-looking statements are based on management’s current assumptions and expectations and involve risks, uncertainties and other important factors, specifically including those relating to Deltagen’s ability to achieve its operational objectives and revenue projections, that may cause Deltagen’s actual results to be materially different from any future results expressed or implied by such forward-looking statements. Information identifying such important risk factors is contained in the Company's annual financial disclosure's “Management’s Discussion and Analysis of Financial Conditions and Results of Operations”, which can be found at Deltagen’s website at www.deltagen.com. Deltagen undertakes no obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise. DELTAGEN, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) Consolidated Balance Sheet As of 12/31/12 Unaudited (In Thousands) 12/31/12 Consolidated Assets Current assets: Cash and cash equivalents $ 95 Accounts receivable, net 163 Prepaid expenses, deposits and deferred tax 53 assets Total current assets $ 311 Property and equipment, net 26 Investment in Benten BioServices, Inc. accounted for using the 4,530 equity method Goodwill - Non-current portion of deferred tax assets 1,586 Total assets $ 6,453 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 275 Accrued expenses 26 Total liabilities $ 301 Non-Current liabilities: Deferred rent $ - Note payable 100 Total long-term liabilities $ 100 Stockholders' equity: Common stock 39 Treasury Stock (867 ) Additional paid-in capital 230,638 Retained Earnings (224,160 ) Foreign currency translation adjustment 402 Total stockholders' equity $ 6,052 Total liabilities and $ 6,453 stockholders' equity DELTAGEN, INC. CONSOLIDATED INCOME STATEMENT (UNAUDITED) Consolidated Income Statements and Statements of Retained Earnings For Quarter ended 12/31/12 & Full Year 2012 Unaudited Unaudited (In Thousands) Quarter Ended Full-Year 12/31/12 2012 Consolidated Consolidated Revenue $ 133 $ 1,054 Royalty and Commission Costs 39 343 Other Operating Costs 192 764 Income From Operations $ (98 ) $ (53 ) Interest Income 0 1 Income (Loss) from Benten Investment using (579 ) (1,113 ) the equity method Total Other Income (Loss) (579 ) (1,112 ) Income before provision for income taxes $ (677 ) $ (1,165 ) Provision for income taxes Current income tax expense - - Total income tax expense - - Net Income (Loss) $ (677 ) $ (1,165 ) Retained earnings at beginning of period (223,483 ) (222,995 ) Retained earnings at end of period $ (224,160 ) $ (224,160 ) DELTAGEN, INC. CONSOLIDATED CASH FLOW (UNAUDITED) Consolidated Cash Flows For Quarter ended 12/31/12 & Full Year 2012 Unaudited Unaudited Quarter Ended Full-Year 12/31/12 2012 (Dollars In Thousands) Consolidated Consolidated Cash flows from operating activities: Net Income (Loss) $ (678 ) $ (1,166 ) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3 175 (Increase)/Decrease in operating assets Accounts receivable (100 ) (87 ) Prepaids, deposits and tax assets 16 293 Purchase of assets - (65 ) Deferred rent - 457 Increase/(Decrease) in operating liabilities Accounts payable (23 ) (227 ) Accrued expenses 11 (46 ) Notes payable 100 - Benten stock issuance - 1,895 Issuance of convertible note - (1,275 ) Cumulative effect of equity method 579 (1,269 ) recognition Net Increase/(Decrease) in cash $ (92 ) $ (1,314 ) Cash and cash equivalents, at beginning of 188 1,409 period Cash and cash equivalents, at end of period 95 95 Contact: Deltagen, Inc. Robert J. Driscoll, 650-345-7601 President & CEO
Deltagen Reports 2012 Fourth Quarter and Full-Year Financial Results
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