Deltagen Reports 2013 First Quarter Financial Results Business Wire SAN MATEO, Calif. -- October 14, 2013 Deltagen, Inc. (Pink Sheets: DGEN), a provider of drug discovery tools and services to the biopharmaceutical industry, today reported unaudited consolidated financial results for the three months ended March 31, 2013. Revenues: The Company’s consolidated revenues for the three months ended March 31, 2013 totaled $0.194 million. The revenues in the first quarter of 2013 were attributable primarily 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 consolidated revenues for the period included $0.040 million for Xenopharm, Inc. (“Xenopharm”), a wholly-owned subsidiary of the Company. As of the third quarter of 2012 Benten BioServices' revenues and expenses were no longer consolidated with those of Deltagen and its wholly-owned subsidiaries, Xenopharm and Deltagen Research Laboratories, L.L.C. 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. The Equity Method of Accounting is described in the Company's Notes to Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Conditions and Results of Operations, which are posted on the Company's website (www.deltagen.com). Expenses: Total consolidated expenses for the three months ended March 31, 2013 were $0.258 million. The expenses in the first quarter of 2013 were attributable primarily to labor costs and other general and administrative expenses, including $0.068 million in royalty and commission expenses. As of March 31, 2013, the Company had incurred aggregate total royalties to Lexicon Pharmaceuticals, Inc. (“Lexicon”) of $5.735 million 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 $6.00 million. Accordingly, up to $0.265 million in contingent royalty payments remained owed to Lexicon as of March 31, 2013. Net Income/Losses: Consolidated net losses before provision for income taxes for the three months ended March 31, 2013 were $0.541 million, which included a net loss of $0.063 million from operations and a recognized net loss of $0.478 million (43.8% of Benten BioServices' Net Operating Results) from investments made by the Company in Benten BioServices, Inc. ("Benten BioServices"), which was accounted for using the Equity Method of Accounting. Cash, Cash Equivalents and Accounts Receivable: As of March 31, 2013, the Company had $0.120 million in consolidated cash and cash equivalents and $0.083 million in accounts receivable. 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. The promissory note was paid in full on September 28, 2013. Subsequent Events: Benten BioServices: On May 15, 2013, due to a lack of operating capital, Benten BioServices ceased its operations and laid off its employees. In June 2013, Benten BioServices voluntarily commenced a complete liquidation and dissolution pursuant to Section 275 of the Delaware General Corporation Law. The Company expects to write off completely the carrying value of Benten BioServices in its second quarter 2013 financials. Press Releases and Financial Disclosures: Commencing with the financial results for the second quarter of 2013, in an effort to adopt cost-saving measures, the Company will cease issuing on the wires press releases of its quarterly financial results. Instead, the Company intends to post its quarterly financial results on its website (www.deltagen.com) and issue on the wires press releases only for its annual financials on a calendar year basis. The unaudited consolidated financial statements for the first quarter of 2013, 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 3/31/13 Unaudited (In Thousands) 3/31/13 Consolidated Assets Current assets: Cash and cash equivalents $ 120 Accounts receivable, net 83 Prepaid expenses, deposits and deferred tax assets 35 Total current assets $ 238 Property and equipment, net 23 Investment in Benten BioServices, Inc. accounted for using the 3,989 Equity Method Goodwill - Non-current portion of deferred tax assets 1,586 Total assets $ 5,836 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 258 Accrued expenses 31 Total liabilities $ 289 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 (224,765 ) Foreign currency translation adjustment 402 Total stockholders' equity $ 5,447 Total liabilities and stockholders' equity $ 5,836 DELTAGEN, INC. CONSOLIDATED INCOME STATEMENT (UNAUDITED) Consolidated Income Statements and Statements of Retained Earnings For Quarter ended 3/31/13 Unaudited (In Thousands) 3/31/13 Consolidated Revenue $ 194 Royalty and Commission Costs 68 Other Operating Costs 190 Income From Operations $ (63 ) Income (Loss) from Benten BioServices, Inc. accounted for using (541 ) the Equity Method Interest Income - Loss on disposal of assets - Total Other Income (Loss) (541 ) Income before provision for income taxes $ (604 ) Provision for income taxes Current income tax expense - Deferred income tax expense - Adjustment for valuation allowance - Total income tax expense - Net Income (Loss) $ (604 ) Retained earnings at beginning of period (224,160 ) Retained earnings at end of period $ (225,765 ) DELTAGEN, INC. CONSOLIDATED CASH FLOW (UNAUDITED) Consolidated Cash Flows For Quarter ended 3/31/13 Unaudited 3/31/13 (In Thousands) Consolidated Cash flows from operating activities: Net Income (Loss) $ (604 ) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3 Stock-based compensation expense - Effect of equity method investments 541 (Increase)/Decrease in operating assets Accounts receivable 80 Prepaid expenses, deposits and tax assets 18 Purchase of assets - Deferred tax assets - Deferred rent - Increase/(Decrease) in operating liabilities Accounts payable (17 ) Accrued expenses 4 Change in goodwill - Benten stock issuance - Issuance of convertible note - Dividends paid 0 Net Increase/(Decrease) in cash $ 25 Effect of foreign exchange rate change on cash and cash - equivalents Cash and cash equivalents, at beginning of period 95 Cash and cash equivalents, at end of period 120 Contact: Deltagen, Inc. Robert J. Driscoll, 650-345-7601 President & CEO
Deltagen Reports 2013 First Quarter Financial Results
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