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| | Business Summary: Vyteris, Inc. develops systems to transdermally deliver peptide and small molecule drugs. Its Smart Patch transdermal technology is used to deliver a peptide molecule in humans without the use of needles. | | | Address
13-01 Pollitt Drive
Fair Lawn
, NJ 07410
Phone: 201-703-2299
Fax: 201-703-2295
Website: http://www.vyteris.com
| | Auditor |
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Amper, Politziner & Mattia, P.C.
| | Transfer Agent |
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American Stock Transfer & Trust Co.
| Employees: 61
ShareHolders: 946 | Founded: 1954
Domicile: Nevada | | | |
| | Vyteris, Inc. develops systems to transdermally deliver peptide and small molecule drugs. Its Smart Patch transdermal technology is used to deliver a peptide molecule in humans without the use of needles. The company offers LidoSite, a topical delivery system, indicated for use on normal intact skin to provide local anesthesia prior to needle stick procedures, such as venipunctures, injections, and intravenous therapies for arthritis and oncology patients, as well as superficial dermatological procedures. Its LidoSite is also used in physician office, hospitals, and commercial diagnostic laboratories. The company is also developing products using its Smart Patch transdermal technology for female infertility treatment, migraine treatment, pain management, and topical anesthetic applications. Vyteris has a license and development agreement with Ferring Pharmaceuticals, Inc. to develop a product for female infertility treatment. The company, formerly known as Vyteris Holdings (Nevada), Inc., was founded in 2000 and is headquartered in Fair Lawn, New Jersey. | | History: INCORPORATED in Nevada Mar. 13, 1997; and on Apr. 1, 1997, merged a Utah corporation of the same name (Treasure - Utah). Treasure - Utah was incorporated in Utah July 2, 1954, as Treasure Mountain Mining Company; name changed to Treasure Mountain Holdings, Inc. Feb. 11, 1997; to Vyteris Holdings (Nevada), Inc. May 2, 2005; and to Vyteris, Inc. May 2, 2007.
September 29, 2004, acquired Vyteris, Inc. (Vyteris) through merger of a wholly owned subsidiary of the company into Vyteris. In the merger, outstanding Common shares of Vyteris were converted into the right to receive approximately 189,526,467 Common shares of the company; and outstanding Series C Convertible Redeemable Preferred shares of Vyteris were converted into the right to receive 7,500,000 Series B Convertible Redeemable Preferred shares of the company.
Vyteris, Inc. (the acquired company) was incorporated in Delaware July 19, 2000, as Drug Delivery Technologies, Inc.; name changed to Vyteris, Inc. Feb. 13, 2001. Vyteris had no operating activity prior to Nov. 10, 2000. | | | | Subsidiaries: |
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Vyteris, Inc.
| | | | | | Capital Expenditures, thousand. US Dollars |
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| Year | Amount | | 2006 | 96 |
| | | | | | Research and Development Expenditures, thousand. US Dollars |
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| Year | Amount | | 2006 | 8,080 |
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Management
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| Officers | Position |
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| Donald F. Farley | Chairman & Chief Executive Officer | | Haro Hartounian | President | | Joseph Himy | Chief Financial Officer & Chief Accounting Officer | | Ashutosh Sharma | Exec VP | | David T. DiGiacinto | Secretary |
| | Directors |
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| John E. Burrows, Jr. | | Arthur Courbanou | | David T. DiGiacinto | | Donald F. Farley | | Susan P. Guerin | | Harold Paz | | Russell Owen Potts | | | |
| | | | Capitalization as of 03/31/2008: | | | | | Authorized Shares | Outstanding Shares |
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| Preferred | 50,000,000 | 7,500,000so1 | | Common $0.001 par | 200,000,000 | 107,959,312 |
| | | | LONG TERM DEBT: None. | | | | Common $0.001 par | | | |
Stockholders:
04/07/2008,
946.
| | PRINCIPAL STOCKHOLDERS: March 31, 2007, Kevin Kimberlin owned or controlled 35.3% of the Common and Qubit Holdings, LLC 11.2%. | | | |
Transfer Agent: American Stock Transfer & Trust Co.
New York
, NY | | | | OTC Bulletin Board( Primary): VYTR | | | | Exchange | Year | High | Low |
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| OTC Bulletin Board | 2007 | 3.1200 | 0.4600 | | OTC Bulletin Board | 2006 | 1.4500 | 0.1050 | | OTC Bulletin Board | 2005 | 6.0000 | 0.3000 |
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| | | | DIVIDENDS: Common $0.001 par: No cash.
Common reverse split 1-for-10, May 16, 2005. | | | | | |
so1Consists of Ser. B Conv. Mandatorily Redeemable Preferred. Liquidation preference, $9,600,000. | |
| | Annual Report |
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| | | Income Statement | |
| 2007 | 2006 | 2005 |
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| Revenues: |
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| | Product sales | $24,868 | $70,159 | $315,497 | | Product development revenue | 2,634,540 | 2,243,368 | 1,407,883 | | Other revenue | 124,679 | 150,583 | 485,626 | | Total revenues | 2,784,087 | 2,464,110 | 2,209,006 | | Costs and expenses: |
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| | Cost of sales | 1,490,847 | 240,714 | 3,407,702 | | Research and development | 8,956,962 | 8,080,228 | 8,922,600 | | General and administrative | 15,369,243 | 6,648,813 | 5,720,237 | | Sales and marketing | 6,251,362 | 1,121,261 | ----------- | | Impairment of fixed assets | 82,637 | 192,850 | 2,134,308 | | Non-cash warrant expense - financial consultants | 17,115,000 | ----------- | ----------- | | Registration rights penalty | 260,184 | 260,184 | 1,620,764 | | Total costs and expenses | 49,526,235 | 16,544,050 | 21,805,611 | | Loss from operations | (46,742,148) | (14,079,940) | (19,596,605) | | Interest (income) expense: |
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| | Interest income | (210,359) | (93,435) | (74,549) | | Interest expense to related parties | 2,208,557 | 1,767,885 | 2,221,707 | | Interest expense | 1,790,197 | 3,742,612 | 3,808,828 | | Interest expense, net | 3,788,395 | 5,417,062 | 5,955,986 | | Other expenses: |
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| | Non-cash debt extinguishment | 6,724,523 | 382,781 | ----------- | | Non-cash modification of redeemable preferred stock terms | 3,680,000 | ----------- | ----------- | | Revaluation of warrant liability | 10,341,408 | 837,764 | ----------- | | Total other expenses, | 20,745,931 | 1,220,545 | ----------- | | Loss before benefit from state income taxes | (71,276,474) | (20,717,547) | (25,552,591) | | Benefit from state income taxes | 463,786 | 466,887 | 291,722 | | Net loss | $(70,812,688) | $(20,250,660) | $(25,260,869) | | Net loss per common share: |
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| | Basic and diluted | $(0.89) | $(0.79) | $(1.31) | | Weighted average number of common shares: |
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| | Basic and diluted | 80,007,514 | 25,770,292 | 19,293,858 | | Operating Income As Calculated |
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| | Depr. and Amort. |
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| | Fixed Charges Coverage: |
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| | Available for Fixed Charges |
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| | Gross Fixed Charges |
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| | Fixed Charges Times Earnings |
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| | Fixed Charges Coverages and Preferred Dividends Times Earnings |
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| | Capital Expenditures |
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| | Research & Development Expenditures |
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| | | | Balance Sheet | |
| 2007 | 2006 |
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| ASSETS |
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| | Current assets: |
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| | Cash and cash equivalents | $1,716,671 | $2,171,706 | | Accounts receivable, net | 7,257 | 88,731 | | Inventories, net | ------------ | 3,374 | | Prepaid expenses and other current assets | 246,519 | 311,684 | | Restricted cash | 50,428 | 90,994 | | Total current assets | 2,020,875 | 2,666,489 | | Restricted cash, less current portion | 240,000 | 300,000 | | Property and equipment, net | 688,800 | 936,103 | | Debt issuance costs | ------------ | 82,676 | | Other assets | 276,026 | 273,376 | | TOTAL ASSETS | $3,225,701 | $4,258,644 | | LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
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| | Current liabilities: |
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| | Working Capital Facility to a related party | $------------ | $2,500,000 | | Senior secured convertible promissory note, net of discount | 243,597 | ------------ | | Senior secured convertible debentures, net of discount | ------------ | 210,048 | | Subordinated convertible notes due to related party | 5,366,550 | ------------ | | Warrant liability | ------------ | 8,993,368 | | Accounts payable | 1,897,359 | 2,838,959 | | Accrued registration rights penalty | 2,141,132 | 1,880,948 | | Interest payable and accrued expenses due to related party | 1,821,519 | 933,277 | | Accrued expenses, deferred revenue and current portion of capital lease obligations | 2,262,295 | 2,817,258 | | Total current liabilities | 13,732,452 | 20,173,858 | | Working Capital Facility to a related party | 2,850,000 | ------------ | | Senior secured convertible debentures, net of discount | ------------ | 12,050 | | Subordinated convertible notes due to a related party, net of discount | ------------ | 5,325,631 | | Deferred revenue, less current portion | 318,284 | 442,962 | | Capital lease obligations, less current portion | ------------ | 22,422 | | Preferred stock, 50,000,000 shares authorized, on December 31, 2007 and December 31, 2006: |
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| | Series B convertible, mandatorily redeemable preferred stock; 7,500,000 shares |
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| | issued and outstanding on December 31, 2007 and December 31, 2006; |
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| | liquidation preference $9,450,000 and $8,850,000 at December 31, 2007 and |
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| | December 31, 2006, respectively | 9,450,000 | 8,850,000 | | Total liabilities | 26,350,736 | 34,826,923 | | Commitments and contingencies |
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| | Stockholders' equity (deficit): |
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| | Common stock, par value $.001 per share; 500,000,000 shares authorized, |
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| | 88,880,897 and 63,284,956 shares issued and outstanding at December 31, 2007 |
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| | and December 31, 2006, respectively | 88,881 | 63,285 | | Additional paid-in capital | 149,152,702 | 70,922,366 | | Accumulated deficit | (172,366,618) | (101,553,930) | | Total stockholders' equity (deficit) | (23,125,035) | (30,568,279) | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $3,225,701 | $4,258,644 | | The accompanying notes are an integral part of these consolidated financial statements. |
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| | Net Working Capital |
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| | Equity per Share |
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| | Depr. and Amort. Reserve |
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| | Preferred Shares Issued |
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| | Common Shares Issued |
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| | Treasury Shares - Preferred |
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| | Treasury Shares - Common |
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| | Interim Report
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| | | Data Not Available | | | | | | | | | |
| | Pro Forma Report
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| | | Data Not Available | | | | | | | | | |
| | Quarterly Report Information
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| | | Quarterly Revenue, US$ |
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| Year | Quarter | Revenue | | 2008 |
1 | 720,000 | | 2008 |
2 | 950,000 | | 2007 |
1 | 950,000 | | 2007 |
2 | 820,000 | | 2007 |
3 | 790,000 | | 2007 |
4 | 230,000 | | 2007 |
Full Year
| 2,780,000 | | 2006 |
1 | 510,000 | | 2006 |
2 | 600,000 | | 2006 |
3 | 610,000 | | 2006 |
Full Year
| 2,460,000 | | 2005 |
1 | 520,000 | | 2005 |
2 | 470,000 | | 2005 |
3 | 570,000 | | 2005 |
4 | 650,000 | | 2005 |
Full Year
| 2,210,000 | | 2004 |
Full Year
| 240,000 |
| | | | | | Quarterly Net Income, US$ |
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| Year | Quarter | Revenue | | 2008 |
1 | (1,760,000) | | 2008 |
2 | (1,630,000) | | 2007 |
1 | (9,790,000) | | 2007 |
2 | (12,230,000) | | 2007 |
3 | (39,600,000) | | 2007 |
4 | (9,200,000) | | 2007 |
Full Year
| (70,810,000) | | 2006 |
1 | (4,140,000) | | 2006 |
2 | (3,790,000) | | 2006 |
3 | (4,240,000) | | 2006 |
Full Year
| (20,250,700) | | 2005 |
1 | (4,260,000) | | 2005 |
2 | (5,170,000) | | 2005 |
3 | (8,990,000) | | 2005 |
4 | (6,850,000) | | 2005 |
Full Year
| (25,261,000) | | 2004 |
Full Year
| (22,570,000) | | 2003 |
Full Year
| (12,530,000) |
| | | | | | Quarterly EPS, US$ |
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| Year | Quarter | Revenue | | 2008 |
1 | (.27) | | 2008 |
2 | (.23) | | 2007 |
1 | (2.25) | | 2007 |
2 | (2.25) | | 2007 |
3 | (6.90) | | 2007 |
4 | (1.95) | | 2007 |
Full Year
| (13.28) | | 2006 |
1 | (3.15) | | 2006 |
2 | (3.00) | | 2006 |
3 | (3.30) | | 2006 |
Full Year
| (11.84) | | 2005 |
1 | (3.30) | | 2005 |
2 | (4.05) | | 2005 |
3 | (7.05) | | 2005 |
4 | (5.25) | | 2005 |
Full Year
| (19.64) | | 2004 |
Full Year
| (133.43) |
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