Full Press Release Details
| F INANCIAL S TATEMENTS | ||||
| Intra-Cellular Therapies, Inc. | ||||
| Years Ended December 31, 2012 and 2011 | ||||
| With Report of Independent Registered Public Accounting Firm |
Intra-Cellular Therapies, Inc.
Financial Statements
Years Ended December 31, 2012 and 2011
| Report of Independent Registered Public Accounting Firm | 1 | |||
| Financial Statements | ||||
| Balance Sheets | 2 | |||
| Statements of Operations | 3 | |||
| Statements of Redeemable Convertible Preferred Stock and Stockholders Deficit | 4 | |||
| Statements of Cash Flows | 5 | |||
| Notes to Financial Statements | 6 |
Report of Independent Registered Public Accounting Firm
The Board of Directors of
We have audited the accompanying balance sheets of Intra-Cellular Therapies, Inc. as of December 31, 2012 and
2011, and the related statements of operations, comprehensive income, redeemable convertible preferred stock and stockholders deficit, and cash flows for the years then ended. These financial statements are the responsibility of the
Company s management. Our responsibility is to express an opinion on these financial statements based on our audits.
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. We were not engaged to perform an audit of the Company s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of Intra-Cellular Therapies, Inc. at December 31, 2012 and 2011, and the results of its operations and its cash flows for the years then ended, in conformity with
U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Intra-Cellular Therapies, Inc.
| December 31 | ||||||||
| 2012 | 2011 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 15,645,528 | $ | 13,693,215 | ||||
| Certificates of deposit | 3,500,000 | 9,200,123 | ||||||
| Accounts receivable | 300,429 | 349,063 | ||||||
| Prepaid expenses and other current assets | 188,702 | 114,468 | ||||||
| Total current assets | 19,634,659 | 23,356,869 | ||||||
| Property and equipment, net | 58,266 | 67,056 | ||||||
| Other assets | 130,755 | 170,800 | ||||||
| Total assets | $ | 19,823,680 | $ | 23,594,725 | ||||
| Liabilities, redeemable convertible preferred stock and stockholders deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 41,608 | $ | 595,864 | ||||
| Accrued liabilities | 588,065 | 1,103,486 | ||||||
| Accrued employee benefits | 726,657 | 669,739 | ||||||
| Deferred revenue short-term | 1,666,674 | 1,666,666 | ||||||
| Convertible promissory notes | 15,173,013 | |||||||
| Total current liabilities | 18,196,017 | 4,035,755 | ||||||
| Deferred revenue long-term | 1,666,667 | |||||||
| Series A Redeemable Convertible Preferred Stock, $0.001 par value: 10,000,000 shares authorized; 3,700,000 shares issued and outstanding at December 31, 2012 and 2011 | 6,755,992 | 6,459,992 | ||||||
| Series B Redeemable Convertible Preferred Stock, $0.001 par value: 6,312,500 shares authorized; 3,631,898 shares issued and outstanding at December 31, 2012 and 2011 | 8,936,955 | 8,475,905 | ||||||
| Series C Redeemable Convertible Preferred Stock, $0.001 par value: 8,060,048 shares authorized; 5,762,765 shares issued and outstanding at December 31, 2012 and 2011 | 15,141,345 | 14,205,340 | ||||||
| Stockholders deficit: | ||||||||
| Common stock, $.001 par value: 30,000,000 shares authorized; 11,269,530 and 11,202,990 shares issued and outstanding at December 31, 2012 and 2011, respectively | 11,270 | 11,202 | ||||||
| Additional paid-in capital | 1,478,400 | 2,845,336 | ||||||
| Accumulated deficit | (30,696,299 | ) | (14,105,472 | ) | ||||
| Total stockholders deficit | (29,206,629 | ) | (11,248,934 | ) | ||||
| Total liabilities, redeemable convertible preferred stock and stockholders deficit | $ | 19,823,680 | $ | 23,594,725 |
See accompanying notes.
Intra-Cellular Therapies, Inc.
Statements of Operations
| Year Ended December 31 | ||||||||
| 2012 | 2011 | |||||||
| Revenues: | ||||||||
| License and collaboration revenue | $ | 3,117,991 | $ | 22,327,464 | ||||
| Grant revenue | 1,034,495 | |||||||
| Total revenues | 3,117,991 | 23,361,959 | ||||||
| Costs and expenses: | ||||||||
| Research and development | 15,486,476 | 7,654,546 | ||||||
| General and administrative | 4,034,925 | 4,612,450 | ||||||
| Total costs and expenses | 19,521,401 | 12,266,996 | ||||||
| (Loss) income from operations | (16,403,410 | ) | 11,094,963 | |||||
| Interest expense | (193,498 | ) | (15 | ) | ||||
| Interest income | 39,002 | 62,315 | ||||||
| Income taxes | (32,921 | ) | (64,834 | ) | ||||
| Net (loss) income | (16,590,827 | ) | 11,092,429 | |||||
| Cumulative dividends on redeemable convertible preferred stock | (1,672,223 | ) | (1,669,786 | ) | ||||
| Net (loss) income attributable to common stockholders | (18,263,050 | ) | 9,422,643 | |||||
| Net (loss) income per common share: | ||||||||
| Basic | $ | (1.63 | ) | $ | 0.39 | |||
| Dilutive | (1.63 | ) | 0.33 | |||||
| Weighted average number of common shares: | ||||||||
| Basic | 11,215,077 | 11,202,990 | ||||||
| Dilutive | 11,215,077 | 13,190,476 |
See accompanying notes.
Intra-Cellular Therapies, Inc.
Statements of Redeemable Convertible Preferred Stock and Stockholders Deficit
| Series A Redeemable Convertible Preferred Stock | Series B Redeemable Convertible Preferred Stock | Series C Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2010 | 3,700,000 | $ | 6,163,992 | 3,631,898 | $ | 8,005,827 | 5,762,765 | $ | 13,269,334 | 11,202,990 | $ | 11,202 | $ | 4,266,968 | $ | (25,197,901 | ) | $ | (20,919,731 | ) | ||||||||||||||||||||||||
| Share-based compensation | 280,452 | 280,452 | ||||||||||||||||||||||||||||||||||||||||||
| Accretion of issuance costs | 11,466 | 20,832 | (32,298 | ) | (32,298 | ) | ||||||||||||||||||||||||||||||||||||||
| Dividends on redeemable convertible preferred stock | 296,000 | 458,612 | 915,174 | (1,669,786 | ) | (1,669,786 | ) | |||||||||||||||||||||||||||||||||||||
| Net income | 11,092,429 | 11,092,429 | ||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2011 | 3,700,000 | 6,459,992 | 3,631,898 | 8,475,905 | 5,762,765 | 14,205,340 | 11,202,990 | 11,202 | 2,845,336 | (14,105,472 | ) | (11,248,934 | ) | |||||||||||||||||||||||||||||||
| Exercise of stock options | 66,540 | 68 | 31,013 | 31,081 | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | 295,106 | 295,106 | ||||||||||||||||||||||||||||||||||||||||||
| Accretion of issuance costs | 20,832 | (20,832 | ) | (20,832 | ) | |||||||||||||||||||||||||||||||||||||||
| Dividends on redeemable convertible preferred stock | 296,000 | 461,050 | 915,173 | (1,672,223 | ) | (1,672,223 | ) | |||||||||||||||||||||||||||||||||||||
| Net loss | (16,590,827 | ) | (16,590,827 | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2012 | 3,700,000 | $ | 6,755,992 | 3,631,898 | $ | 8,936,955 | 5,762,765 | $ | 15,141,345 | 11,269,530 | $ | 11,270 | $ | 1,478,400 | $ | (30,696,299 | ) | $ | (29,206,629 | ) |
See accompanying notes.
Intra-Cellular Therapies, Inc.
Statements of Cash Flows
| Year Ended December 31 | ||||||||
| 2012 | 2011 | |||||||
| Operating activities | ||||||||
| Net (loss) income | $ | (16,590,827 | ) | $ | 11,092,429 | |||
| Adjustments to reconcile net loss (income) to net cash (used in) provided by operating activities: | ||||||||
| Depreciation | 47,747 | 189,186 | ||||||
| Share-based compensation expense | 295,106 | 280,452 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 48,634 | (349,063 | ) | |||||
| Prepaid expenses and other assets | (34,189 | ) | 521,245 | |||||
| Accounts payable | (554,256 | ) | 321,426 | |||||
| Accrued liabilities and employee benefits | (448,493 | ) | 1,016,953 | |||||
| Deferred revenue | (1,666,659 | ) | 3,132,038 | |||||
| Net cash (used in) provided by operating activities | (18,902,937 | ) | 16,204,666 | |||||
| Investing activities | ||||||||
| Purchases of investments | (12,000,000 | ) | (7,200,000 | ) | ||||
| Maturities of investments | 17,700,122 | 2,850,000 | ||||||
| Purchase of property and equipment | (38,957 | ) | (17,825 | ) | ||||
| Net cash provided by (used in) investing activities | 5,661,165 | (4,367,825 | ) | |||||
| Financing activities | ||||||||
| Proceeds from issuance of Series C Redeemable Convertible Preferred Stock, net of offering costs | ||||||||
| Proceeds from issuance of convertible promissory notes, net | 15,163,004 | |||||||
| Proceeds from stock option exercises | 31,081 | |||||||
| Net cash provided by financing activities | 15,194,085 | |||||||
| Net increase (decrease) in cash and cash equivalents | 1,952,313 | 11,836,841 | ||||||
| Cash and cash equivalents at beginning of year | 13,693,215 | 1,856,374 | ||||||
| Cash and cash equivalents at end of year | $ | 15,645,528 | $ | 13,693,215 | ||||
| Cash paid for interest | $ | $ | 15 | |||||
| Cash paid for taxes | $ | 13,857 | $ | 30,589 |
See accompanying notes.
Intra-Cellular Therapies, Inc.
Notes to Financial Statements
Intra-Cellular Therapies, Inc. (ITI or the Company) was incorporated in the state of Delaware on May 22, 2001 and commenced operations in
June 2002. The Company was founded to discover and develop drugs for the treatment of neurological and psychiatric disorders. The Company s technology is built on a unique and proprietary understanding of the intracellular effects of
neurotransmitters. This know-how has allowed ITI to develop new drugs based on novel drug targets and to create unique molecular signatures for known neurotransmitters and drugs. This technology has also allowed ITI to screen potential lead
compounds in more specific ways than are currently available. The Company s technology addresses diseases of the central nervous system, including schizophrenia, cognition, Parkinson s disease, anxiety, depression, Alzheimer s
disease, sleep, and those related to women s health.
The Company earns its license and collaboration revenue from its significant
partnership with Takeda Pharmaceutical Company Limited (Takeda). For the year ended December 31, 2011, the Company earned grant revenue under grants awarded by U.S. government agencies and foundations. In order to further its research projects
and support its collaborations, the Company will require additional financing until such time that revenue streams are sufficient to generate consistent positive cash flow from operations. Possible sources of funds are strategic alliances,
additional equity offerings, grants and contracts, and research and development funding from third parties.
2. Summary of Significant
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Although actual results could differ from those estimates, management does not believe that such differences would be material.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents consist of certificates of deposit with commercial banks and financial institutions. Certificates of deposit with a maturity date of more
than three months are classified separately on the balance sheet. Their carrying values approximate the fair market value.
Intra-Cellular Therapies, Inc.
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Fair Value Measurements
The Company applies the fair value method under ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a fair value hierarchy for assets and liabilities
measured at fair value and requires expanded disclosures about fair value measurements. The ASC 820 hierarchy ranks the quality and reliability of inputs, or assumptions, used in the determination of fair value and requires assets and liabilities
carried at fair value to be classified and disclosed in one of the following categories based on the lowest level input used that is significant to a particular fair value measurement:
The Company evaluates financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at
which to classify them each reporting period. This determination requires the Company to make subjective judgments as to the significance of inputs used in determining fair value and where such inputs lie within the ASC 820 hierarchy.
Intra-Cellular Therapies, Inc.
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
The Company has no assets or liabilities that were measured using quoted prices for similar assets and
liabilities or significant unobservable inputs (Level 2 and Level 3 assets and liabilities, respectively) as of December 31, 2012. The carrying value of cash held in money market funds of approximately $1.2 million as of December 31, 2012, is
included in cash and cash equivalents and approximates market value based on quoted market price or Level 1 inputs.
Intra-Cellular Therapies, Inc.
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Financial Instruments
The Company considers the recorded costs of its financial assets and liabilities, which consist of cash equivalents, accounts receivable, accounts payable and accrued liabilities, to approximate their
fair value because of their relatively short maturities at December 31, 2012 and 2011. Management believes that the risks associated with its financial instruments are minimal as the counterparties are various corporations, financial
institutions and government agencies of high credit standing.
Concentration of Credit Risk
Cash equivalents are held with major financial institutions in the United States. Certificates of deposit held with banks may exceed the amount of
insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk.
Accounts receivable that management has the intent and ability to collect are reported in the balance sheets at outstanding
amounts, less an allowance for doubtful accounts. The Company writes off uncollectible receivables when the likelihood of collection is remote.
The Company evaluates the collectability of accounts receivable on a regular basis. The allowance, if any, is based upon various factors including the
financial condition and payment history of customers, an overall review of collections experience on other accounts and economic factors or events expected to affect future collections experience. No allowance was recorded as of December 31,
2012, as the Company has a history of collecting on all accounts including government agencies and collaborations funding its research.
Property and Equipment
equipment is stated at cost and depreciated on a straight-line basis over estimated useful lives ranging from three to five years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of
the assets or the term of the related lease. Expenditures for maintenance and repairs are charged to operations as incurred.
of possible impairment are identified, the Company evaluates the recoverability of the carrying value of its long-lived assets based on the criteria established in ASC 360,
Intra-Cellular Therapies, Inc.
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Property, Plant and Equipment. The Company considers historical performance and anticipated
future results in its evaluation of potential impairment. The Company evaluates the carrying value of those assets in relation to the operating performance of the business and undiscounted cash flows expected to result from the use of those assets.
Impairment losses are recognized when carrying value exceeds the undiscounted cash flows then management must determine the fair value of the underlying asset. No such impairment losses have been recognized to date.
recognized when all terms and conditions of the agreements have been met, including persuasive evidence of an arrangement, delivery has occurred or services have been rendered, price is fixed or determinable and collectability is reasonably assured.
The Company is reimbursed for certain costs incurred on specified research projects under the terms and conditions of grants, collaboration agreements, and awards. The Company records the amount of reimbursement as revenues on a gross basis in
accordance with ASC 605-45, Revenue Recognition/Principal Agent Considerations. The Company is the primary obligor with respect to purchasing goods and services from third-party suppliers, is obligated to compensate the service provider for
the work performed, and has discretion in selecting the supplier. Provisions for estimated losses on research grant projects and any other contracts are made in the period such losses are determined.
Effective January 1, 2011, the Company adopted a new accounting standard that amends the guidance on the accounting for arrangements involving the
delivery of more than one element. Pursuant to the new standard, each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting. For ITI this determination is generally based on whether the deliverable has
stand-alone value to the customer. The Company adopted this new accounting standard on a prospective basis for all Multiple-Deliverable Revenue Arrangements (MDRAs) entered into on or after January 1, 2011, and for any MDRAs that
were entered into prior to January 1, 2011, but materially modified on or after that date.