UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended December 31, 2005
o TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from __________ to _________
Commission File No. 0-24676
CARACO PHARMACEUTICAL LABORATORIES, LTD.
(Exact name of registrant as specified in its charter)
|
MICHIGAN |
38-2505723 |
1150 ELIJAH MCCOY DRIVE, DETROIT, MICHIGAN 48202
(Address of principal executive offices) (Zip Code)
TELEPHONE: (313) 871-8400
Registrant’s telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes x No o
Indicate by check mark whether the registrant is a shell company ((as defined in Rule 12b-2 of the Exchange Act).
Yes o No x
As of January 20, 2006 the registrant had 26,421,394 shares of common stock issued and outstanding.
CARACO PHARMACEUTICAL
LABORATORIES LTD.
(A subsidiary of Sun Pharmaceutical Industries
Limited)
BALANCE SHEETS
| DECEMBER 31, 2005 |
MARCH 31, 2005 |
|||||||
|---|---|---|---|---|---|---|---|---|
| UNAUDITED | AUDITED | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 8,865,440 | $ | 6,627,425 | ||||
| Accounts receivable, net | 19,518,008 | 6,736,778 | ||||||
| Inventories | 21,338,531 | 18,467,693 | ||||||
| Prepaid expenses and deposits | 3,005,040 | 1,105,618 | ||||||
| Total current assets | 52,727,019 | 32,937,514 | ||||||
| Property, plant and equipment | ||||||||
| Land | 197,305 | 197,305 | ||||||
| Building and improvements | 9,816,175 | 9,605,888 | ||||||
| Equipment | 11,798,108 | 9,701,979 | ||||||
| Furniture and fixtures | 667,284 | 589,329 | ||||||
| Total | 22,478,872 | 20,094,501 | ||||||
| Less: accumulated depreciation | 8,281,353 | 7,197,422 | ||||||
| Net property, plant & equipment | 14,197,519 | 12,897,079 | ||||||
| Total assets | $ | 66,924,538 | $ | 45,834,593 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 2,178,571 | $ | 2,577,669 | ||||
| Accounts payable, Sun Pharma | 13,819,750 | 9,639,890 | ||||||
| Accrued expenses | 2,048,712 | 1,931,442 | ||||||
| Total current liabilities | 18,047,033 | 14,149,001 | ||||||
| Total liabilities | 18,047,033 | 14,149,001 | ||||||
| Commitments and contingencies (notes 11 and 12) | ||||||||
| Stockholders’ equity | ||||||||
| Common stock, no par value, authorized 30,000,000 shares; | ||||||||
| issued and outstanding shares - 26,396,394 and 26,360,294 shares | 44,956,867 | 44,927,987 | ||||||
| Convertible Series B Preferred Stock, no par value, authorized | ||||||||
| 15,000,000 shares; issued and outstanding - 9,248,000 and 5,984,000 shares | 58,747,770 | 37,700,410 | ||||||
| Additional paid in capital | 2,718,735 | 2,718,735 | ||||||
| Accumulated deficit | (57,545,867 | ) | (53,661,540 | ) | ||||
| Total stockholders’ equity | 48,877,505 | 31,685,592 | ||||||
| Total liabilities and stockholders’ equity | $ | 66,924,538 | $ | 45,834,593 | ||||
See accompanying notes
2
CARACO PHARMACEUTICAL
LABORATORIES, LTD.
(A subsidiary of Sun Pharmaceutical Industries Limited)
STATEMENTS OF OPERATIONS
| NINE MONTHS ENDED DECEMBER 31, |
THREE MONTHS ENDED DECEMBER 31, |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2005 |
2004 |
2005 |
2004 |
|||||||||||
| UNAUDITED | UNAUDITED | UNAUDITED | UNAUDITED | |||||||||||
| Net sales | $ | 58,087,910 | $ | 46,779,221 | $ | 20,678,978 | $ | 16,680,678 | ||||||
| Cost of goods sold | 29,861,857 | 19,050,867 | 10,329,598 | 7,283,981 | ||||||||||
| Gross profit | 28,226,053 | 27,728,354 | 10,349,380 | 9,396,697 | ||||||||||
| Selling, general and administrative expenses | 5,701,231 | 3,994,400 | 2,133,346 | 1,700,241 | ||||||||||
| Research and development costs - affiliate (Note 7) | 21,047,360 | 16,568,880 | 7,137,280 | 6,217,920 | ||||||||||
| Research and development costs - other | 5,512,554 | 4,920,003 | 1,848,167 | 2,016,052 | ||||||||||
| Operating (loss) income | (4,035,092 | ) | 2,245,071 | (769,413 | ) | (537,516 | ) | |||||||
| Other income (expense) | ||||||||||||||
| Interest expense | 0 | (225,788 | ) | 0 | (8,658 | ) | ||||||||
| Interest income | 108,130 | 38,301 | 54,820 | 5,549 | ||||||||||
| Other income (expense) | 42,635 | (14,031 | ) | 33,637 | (4,582 | ) | ||||||||
| Other income (expense) - net | 150,765 | (201,518 | ) | 88,457 | (7,691 | ) | ||||||||
| Net (loss) income | $ | (3,884,327 | ) | $ | 2,043,553 | $ | (680,956 | ) | $ | (545,207 | ) | |||
| Net (loss) income per common share | ||||||||||||||
| Basic | (0.15 | ) | 0.08 | (0.03 | ) | (0.02 | ) | |||||||
| Diluted | (0.15 | ) | 0.07 | (0.03 | ) | (0.02 | ) | |||||||
See accompanying notes
3
CARACO PHARMACEUTICAL
LABORATORIES, LTD.
(A subsidiary of Sun Pharmaceutical Industries Limited)
STATEMENTS OF CASH FLOWS
| NINE MONTHS ENDED DECEMBER 31, UNAUDITED |
||||||||
|---|---|---|---|---|---|---|---|---|
| 2005 |
2004 |
|||||||
| Cash flows from operating activities | ||||||||
| Net (loss) income | $ | (3,884,327 | ) | $ | 2,043,553 | |||
| Adjustments to reconcile net (loss) / income to | ||||||||
| net cash flow from operating activities | ||||||||
| Depreciation | 1,083,931 | 743,345 | ||||||
| Capital stock issued or to be issued to affiliate | ||||||||
| in exchange for product formula | 21,047,360 | 16,568,880 | ||||||
| Changes in operating assets and liabilities | ||||||||
| which provided (used) cash: | ||||||||
| Accounts receivable | (12,781,230 | ) | (1,842,529 | ) | ||||
| Inventories | (2,870,838 | ) | (4,487,236 | ) | ||||
| Prepaid expenses and deposits | (1,899,421 | ) | (70,603 | ) | ||||
| Accounts payable | 3,780,761 | 3,103,479 | ||||||
| Accrued expenses and interest | 117,269 | (263,060 | ) | |||||
| Net cash provided by operating activities | 4,593,506 | 15,795,829 | ||||||
| Cash flows from investing activities | ||||||||
| Purchases of property, plant and equipment | (2,384,371 | ) | (2,695,404 | ) | ||||
| Net cash used in investing activities | (2,384,371 | ) | (2,695,404 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from loans payable to financial institutions | 0 | 10,000,000 | ||||||
| Repayments of loans payable to financial institutions | 0 | (22,375,000 | ) | |||||
| Proceeds from exercise of stock options | 28,880 | 3,453,946 | ||||||
| Repayments of EDC loan | 0 | (5,967,716 | ) | |||||
| Net cash provided by (used in) financing activities | 28,880 | (14,888,770 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | 2,238,015 | (1,788,345 | ) | |||||
| Cash and cash equivalents, beginning of period | 6,627,425 | 4,244,815 | ||||||
| Cash and cash equivalents, end of period | $ | 8,865,440 | $ | 2,456,470 | ||||
See accompanying notes
4
CARACO PHARMACEUTICAL
LABORATORIES, LTD.
(A subsidiary of Sun Pharmaceutical Industries Limited)
STATEMENT OF STOCKHOLDERS’ EQUITY
| PREFERRED STOCK |
COMMON STOCK |
ADDITIONAL PAID IN |
ACCUMULATED | TOTAL STOCKHOLDERS’ |
|||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SHARES | AMOUNT | SHARES | AMOUNT | CAPITAL | DEFICIT | EQUITY | |||||||||||||||||
| Balances at April 1, 2005 | 5,984,000 | $ | 37,700,410 | 26,360,294 | $ | 44,927,987 | $ | 2,718,735 | $ | (53,661,540 | ) | $ | 31,685,592 | ||||||||||
| Issuances of preferred stock to | |||||||||||||||||||||||
| affiliate in exchange for product | |||||||||||||||||||||||
| technology transfers | 3,264,000 | 21,047,360 | 21,047,360 | ||||||||||||||||||||
| Common stock options exercised | 36,100 | 28,880 | 28,880 | ||||||||||||||||||||
| Net loss | (3,884,327 | ) | (3,884,327 | ) | |||||||||||||||||||
| Balances at December 31, 2005 | 9,248,000 | $ | 58,747,770 | 26,396,394 | $ | 44,956,867 | $ | 2,718,735 | $ | (57,545,867 | ) | $ | 48,877,505 | ||||||||||
See accompanying notes
5
CARACO PHARMACEUTICAL LABORATORIES, LTD.
FORM 10-Q/A
EXPLANATORY NOTE
This Amendment No. 1 to the Form 10-Q includes minor changes to the Statement of Cash Flows and Statement of Stockholders’ Equity.
PART II — OTHER INFORMATION
|
ITEM 6. |
EXHIBITS |
|
10.26 |
Credit Agreement dated as of November 17, 2005 between Caraco and JP Morgan Chase Bank, N.A. (Filed with original Form 10-Q) |
|
10.27 |
Security Agreement dated as of November 17, 2005 between Caraco and JP Morgan Chase Bank, N.A. (Filed with original Form 10-Q) |
|
31.1 |
Certification of Chief Executive Officer |
|
31.2 |
Certification of Chief Financial Officer. |
|
32.1 |
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
6
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 authorized.
|
|
CARACO PHARMACEUTICAL | ||
|
Date: January 26, 2006 |
By: /s/ Daniel H. Movens | ||
|
|
Daniel H. Movens |
| |
|
|
Chief Executive Officer |
| |
|
Date: January 26, 2006 |
By: /s/ Jitendra N. Doshi | ||
|
|
Jitendra N. Doshi |
| |
|
|
Chief Financial Officer |
| |
7
EXHIBIT INDEX
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8