================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2004
OR
[ ] 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. 0-20260
IntegraMed America, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 06-1150326
(State or other jurisdiction (I.R.S. employer identification no.)
of incorporation or organization)
Two Manhattanville Road
Purchase, New York 10577
(Address of principal executive offices) (Zip Code)
(914) 253-8000
(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 [ ]
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Exchange Act Rule 12 b-2).
Yes [ ] No [X]
The aggregate number of shares of the Registrant's Common Stock, $.01
par value, outstanding on October 25, 2004 was 3,581,865.
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INTEGRAMED AMERICA, INC.
FORM 10-Q
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets at September 30, 2004 and
December 31, 2003....................................... 3
Consolidated Statements of Income for the three and
nine-month periods ended September 30, 2004 and 2003 ... 4
Consolidated Statements of Cash Flows for the nine-month
periods ended September 30, 2004 and 2003 .............. 5
Notes to Consolidated Financial Statements .............. 6-10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................11-17
Item 3. Quantitative and Qualitative Disclosures About Market Risk.... 18
Item 4. Controls and Procedures....................................... 18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings............................................. 19
Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases
of Equity Securities...................................... 19
Item 3. Defaults upon Senior Securities............................... 19
Item 4. Submission of Matters to a Vote of Security Holders........... 19
Item 5. Other Information............................................. 19
Item 6. Exhibits ..................................................... 19
SIGNATURES ..................................................... 20
CERTIFICATIONs PURSUANT TO 18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002...................................... EXHIBITS
CERTIFICATIONS PURSUANT TO 18 U.S.C ss.1350, AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002...................................... EXHIBITS
2
PART I -- FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
INTEGRAMED AMERICA, INC.
CONSOLIDATED BALANCE SHEETS
(all dollars in thousands, except per share amounts)
ASSETS
September 30, December 31,
------------- ------------
2004 2003
------------ ------------
(unaudited)
Current assets:
Cash and cash equivalents ........................................................ $ 13,896 $ 6,885
Due from Medical Practices, net .................................................. 8,226 8,918
Pharmaceutical sales accounts receivable ......................................... 1,684 1,484
Deferred taxes ................................................................... 948 948
Prepaids and other current assets ................................................. 1,555 3,264
-------- --------
Total current assets ......................................................... 26,309 21,499
Fixed assets, net ................................................................ 12,992 10,218
Intangible assets, net ........................................................... 20,844 20,504
Deferred taxes ................................................................... 2,292 2,795
Other assets ..................................................................... 368 278
-------- --------
Total assets ................................................................. $ 62,805 $ 55,294
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................................................. $ 791 $ 167
Accrued liabilities .............................................................. 7,235 5,274
Current portion of long-term notes payable and other obligations ................. 3,217 3,272
Patient deposits ................................................................. 14,285 9,492
-------- --------
Total current liabilities .................................................... 25,528 18,205
-------- --------
Long-term notes payable and other obligations ...................................... 3,326 4,239
-------- --------
Commitments and contingencies
Stockholders' Equity:
Common Stock, $.01 par value - 15,000,000 and 50,000,000 shares authorized in
2004 and 2003 respectively; and 3,562,365 and 3,544,292 shares issued in
2004 and 2003, respectively .................................................. 35 35
Capital in excess of par ......................................................... 48,083 48,172
Deferred compensation ............................................................ (351) (315)
Treasury stock, at cost - 7,360 and 89,595 shares in 2004 and 2003, respectively . (47) (426)
Accumulated deficit .............................................................. (13,769) (14,616)
-------- --------
Total stockholders' equity ................................................... 33,951 32,850
-------- --------
Total liabilities and stockholders' equity ................................... $ 62,805 $ 55,294
======== ========
See accompanying notes to the consolidated financial statements.
3
INTEGRAMED AMERICA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(all amounts in thousands, except per share amounts)
For the For the
three-month period nine-month period
ended September 30, ended September 30,
--------------------- -------------------
2004 2003 2004 2003
--------- -------- ------- ------
(unaudited) (unaudited)
Revenues, net:
FertilityPartners Service Fees ..... $ 21,535 $ 17,762 $ 63,608 $ 55,533
Pharmaceutical sales ............... 4,102 3,553 11,771 12,846
FertilityDirect revenues ........... 1,579 942 4,124 2,089
-------- -------- -------- --------
Total revenues .................. 27,216 22,257 79,503 70,468
Cost of services and sales:
FertilityPartners Service Fees ..... 19,136 15,591 56,983 48,715
Pharmaceutical costs ............... 3,958 3,440 11,331 12,500
FertilityDirect costs .............. 989 577 2,810 1,333
-------- -------- -------- --------
Total costs of services and sales 24,083 19,608 71,124 62,548
Contribution:
FertilityPartners Service Fees ..... 2,399 2,171 6,625 6,818
Pharmaceutical contribution ........ 144 113 440 346
FertilityDirect contribution ....... 590 365 1,314 756
-------- -------- -------- --------
Total contribution ............... 3,133 2,649 8,379 7,920
General and administrative expenses ... 2,556 2,233 6,928 6,668
Interest income ....................... (65) (33) (185) (77)
Interest expense ...................... 77 22 229 54
-------- -------- -------- --------
Total other expenses ............... 2,568 2,222 6,972 6,645
Income before income taxes ............ 565 427 1,407 1,275
Income tax provision .................. 225 166 560 497
-------- -------- -------- --------
Net income ............................ $ 340 $ 261 $ 847 $ 778
======== ======== ======== ========
Basic earnings per share .............. $ 0.10 $ 0.08 $ 0.24 $ 0.23
======== ======== ======== ========
Diluted earnings per share ............ $ 0.09 $ 0.07 $ 0.22 $ 0.22
======== ======== ======== ========
Weighted average shares - basic ....... 3,551 3,448 3,590 3,399
======== ======== ======== ========
Weighted average shares - diluted ..... 3,698 3,643 3,784 3,564
======== ======== ======== ========
See accompanying notes to the consolidated financial statements.
4
INTEGRAMED AMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(all amounts in thousands)
For the
nine-month period
ended September 30,
-------------------
2004 2003
------- --------
(unaudited)
Cash flows from operating activities:
Net income ...................................................................... $ 847 $ 778
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ................................................. 3,631 2,861
Change in assets and liabilities --
Decrease (increase) in assets:
Due from Medical Practices ................................................. 692 (1,874)
Pharmaceutical sales accounts receivable ................................... (200) 528
Prepaids and other current assets .......................................... 1,839 604
Other assets ............................................................... (90) 407
Increase (decrease) in liabilities:
Accounts payable .......................................................... (469) 664
Accrued liabilities ....................................................... 3,054 (669)
Patient deposits .......................................................... 4,793 2,638
-------- --------
Net cash provided by operating activities .......................................... 14,097 5,937
-------- --------
Cash flows used in investing activities:
Payment for Exclusive Service Rights .......................................... (1,204) (2,232)
Trademarks .................................................................... (39) --
Proceeds from sale of fixed assets ............................................ -- 380
Proceeds from sale of intangible assets ....................................... -- 136
Purchase of fixed assets and leasehold improvements ........................... (4,953) (4,256)
-------- --------
Net cash used in investing activities .............................................. (6,196) (5,972)
-------- --------
Cash flows used in financing activities:
Increase in notes payable ..................................................... -- 5,750
Principal repayments on debt .................................................. (925) (1,598)
Principal repayments under capital lease obligations .......................... (43) (38)
Proceeds from exercise of common stock warrants and options ................... 523 171
Repurchase of common stock .................................................... (445) --
-------- --------
Net cash (used in) provided by financing activities ................................ (890) 4,285
-------- --------
Net change in cash ................................................................. 7,011 4,250
Cash at beginning of period ........................................................ $ 6,885 $ 8,693
-------- --------
Cash at end of period .............................................................. $ 13,896 $ 12,943
======== ========
See accompanying notes to the consolidated financial statements.
5
INTEGRAMED AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 -- INTERIM RESULTS:
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, accordingly, do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, the accompanying unaudited interim financial statements contain all
adjustments (consisting only of normal recurring accruals) necessary to present
fairly the financial position at September 30, 2004, and the results of
operations and cash flows for the interim periods presented. Operating results
for the interim period are not necessarily indicative of results that may be
expected for the year ending December 31, 2004. These financial statements
should be read in conjunction with the financial statements and notes thereto
included in IntegraMed America's (the "Company") Annual Report on Form 10-K for
the year ended December 31, 2003.
NOTE 2 -- EARNINGS PER SHARE:
The reconciliation of the numerators and denominators of the basic and
diluted EPS computations for the three and nine-month periods ended September
30, 2004 and 2003 is as follows (000's omitted, except for per share amounts):
For the For the
three-month period nine-month period
ended September 30, ended September 30,
------------------- -------------------
2004 2003 2004 2003
-------- --------- -------- --------
Numerator
Net Income ................................... $ 340 $ 261 $ 847 $ 778
Denominator
Weighted average shares outstanding .......... 3,551 3,448 3,590 3,399
Effect of dilutive options and warrants ...... 147 195 194 165
------ ------ ------ ------
Weighted average shares and dilutive potential
Common shares ................................ 3,698 3,643 3,784 3,564
Basic EPS .................................... $ 0.10 $ 0.08 $ 0.24 $ 0.23
Diluted EPS .................................. $ 0.09 $ 0.07 $ 0.22 $ 0.22
For the three-month period ended September 30, 2004, the effect of the
assumed exercise of options to purchase approximately 10,000 shares of Common
Stock at an exercise price of $6.15 per share was excluded in computing the
diluted per share amount because the exercise prices of the options was greater
than the average market price of the shares of Common Stock, therefore causing
these options to be anti-dilutive. For the nine-month period ended September 30,
2004, there were no outstanding options to purchase shares of Common Stock which
were excluded from the computation of the diluted earnings per share amount as
the exercise price of all outstanding options was less than the average market
price of the shares of Common Stock.
For the three-month period ended September 30, 2003, there were no
outstanding options to purchase shares of Common Stock which were excluded from
the computation of the diluted earnings per share amount as the exercise price
of all outstanding options was less than the average market price of the shares
of Common Stock.For the nine-month period ended September 30, 2003, the effect
of the assumed exercise of options to purchase approximately 128,000 shares of
Common Stock at exercise prices ranging from $5.98 to $6.15 per
6
INTEGRAMED AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(unaudited)
share was excluded in computing the diluted per share amount because the
exercise prices of the options was greater than the average market price of the
shares of Common Stock, therefore causing these options to be anti-dilutive.
For the three-and nine-month periods ended September 30, 2004, the effect
of the assumed exercise of warrants to purchase approximately 88,000 shares of
Common Stock at an exercise price of $9.00 per share was excluded in computing
the diluted per share amount because the exercise prices of the warrants were
greater than the average market price of the shares of Common Stock, thereby
causing these warrants to be anti-dilutive. For the three-and nine-month periods
ended September 30, 2003, the effect of the assumed exercise of warrants to
purchase approximately 106,000 shares of Common Stock at exercise prices ranging
from $6.25 to $9.00 per share was excluded in computing the diluted per share
amount because the exercise prices of the warrants were greater than the average
market price of the shares of Common Stock, thereby causing these warrants to be
anti-dilutive.
NOTE 3 -- SEGMENT INFORMATION:
The Company is principally engaged in providing products and services to
the fertility market. For disclosure purposes, the Company recognizes Business
Services offered to its network of FertilityPartners and its pharmaceutical
distribution operations as separate reporting segments. The Business Services
segment includes revenues and costs categorized as FertilityPartners Service
Fees and FertilityDirect Revenues, as follows (000's omitted):
Business Pharmaceutical
Corporate Services Distribution Consolidated
--------- -------- ------------ ------------
For the three months ended September 30, 2004
Revenues...................................... $ -- $23,114 $4,102 $27,216
Cost of services.............................. -- 20,125 3,958 24,083
Contribution.................................. -- 2,989 144 3,133
------- ------- ------- -------
General and administrative costs.............. 2,556
Interest, net................................. 12
Income before income taxes.................... 565
Depreciation expense included above........... 719
Capital expenditures.......................... 316 1,687 2,003
Total assets.................................. 37,831 22,851 2,123 62,805
For the nine months ended September 30, 2004
Revenues...................................... $ -- $67,732 $11,771 $79,503
Cost of services.............................. -- 59,793 11,331 71,124
------- ------- ------- -------
Contribution.................................. -- 7,939 440 8,379
General and administrative costs.............. 6,928
Interest, net................................. 44
Income before income taxes.................... 1,407
Depreciation expense included above........... 2,179
Capital expenditures.......................... 458 4,495 4,953
Total assets.................................. 37,831 22,851 2,123 62,805
7
Business Pharmaceutical
Corporate Services Distribution Consolidated
--------- -------- ------------ ------------
For the three months ended September 30, 2003
Revenues...................................... $ -- $18,704 $3,553 $22,257
Cost of services.............................. -- 16,168 3,440 19,608
-------- ------- ------ --------
Contribution.................................. -- 2,536 113 2,649
General and administrative costs.............. 2,233
Interest, net................................. (11)
--------
Income before income taxes.................... 427
Depreciation expense included above........... 486
Capital expenditures.......................... 73 2,991 -- 3,064
Total assets.................................. 15,280 39,523 730 55,533
For the nine months ended September 30, 2003
Revenues...................................... $ -- $57,622 $12,846 $70,468
Cost of services.............................. -- 50,048 12,500 62,548
Contribution.................................. -- 7,574 346 7,920
General and administrative costs.............. 6,668
Interest, net................................. (23)
Income before income taxes.................... 1,275
Depreciation expense included above........... 1,563
Capital expenditures.......................... 354 3,902 -- 4,256
Total assets.................................. 15,280 39,523 730 55,533
NOTE 4 -- STOCK-BASED EMPLOYEE COMPENSATION:
As of September 30, 2004, the Company had two stock-based employee
compensation plans, which are described more fully in Note 12 of the Company's
financial statements in its most recent Annual Report on Form 10-K. Prior to
fiscal 2003, the Company accounted for those plans under the recognition and
measurement principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related Interpretations. Under this standard, no stock
option-based employee compensation cost is reflected in net income, as all
options granted under the plans had an exercise price equal to the market value
of the underlying Common Stock on the date of grant. Effective January 1, 2003,
the Company adopted the fair value recognition provisions of FAS No. 123,
Accounting for Stock-Based Compensation, prospectively to all employee awards
granted, modified, or settled after January 1, 2003. Awards under the company's
plans vest over a period of four years from the date of grant. Therefore, the
cost related to stock-based employee compensation included in the determination
of net income for 2004 and 2003 is less than that which would have been
recognized if the fair value based method had been applied to all awards since
the effective date of Statement 123. The following table illustrates the effect
on net income and earnings per share as if the fair value based method had been
applied to all outstanding and unvested awards in each period. (000's omitted,
except per share amounts).
8
For the For the
three-month period nine-month period
ended September 30, ended September 30,
------------------- -------------------
2004 2003 2004 2003
---- ----- --------- --------
Net Income, as reported ........................... $ 340 $ 261 $ 847 $ 778
Add: Stock-based employee compensation expense
included in reported net income, net of related tax
effects ........................................... -- -- -- --
Deduct: Total stock-based employee compensation
expense determined under fair value based method
for all awards, net of related tax effects ........ (61) (77) (183) (230)
------- ------- ------- -------
Pro forma net income .............................. 279 184 664 548
Earnings per share:
Basic-as reported ............................ 0.10 0.08 0.24 0.23
Basic-pro forma .............................. 0.08 0.05 0.18 0.16
Diluted-as reported .......................... 0.09 0.07 0.22 0.22
Diluted-pro forma ............................ 0.08 0.05 0.18 0.15
NOTE 5- LITIGATION
In June 2002, the Company was served with a complaint, captioned
WINFertility, Inc. vs. IntegraMed America, Inc., in which the plaintiff filed an
action in the Supreme Court of New York, Westchester County, alleging breach of
contract and seeking damages in excess of $5 million. The Company had retained
WINFertility in April 2001 to provide claims management services in connection
with the Company's Shared Risk Refund Program. WINFertility failed to provide
the services for which the Company contracted and the Company terminated the
contract in May 2002. The Company has served and filed an answer denying all
material allegations of the complaint and asserting affirmative defenses. The
Company has also filed a counterclaim against the plaintiff demanding an
accounting and return of certain fees paid to plaintiff by the Company. The
matter is scheduled for trial in January 2005.
There are other minor legal proceedings to which the Company is a party.
Litigation is subject to many uncertainties and management is unable to
predict the outcome of pending suits and claims. It is possible that the result
of operations or liquidity and capital resources of the Company could be
adversely affected by the ultimate outcome of pending litigation or as a result
of the costs of contesting such lawsuits. The Company is currently unable to
estimate the ultimate liability, if any, that may result from pending litigation
and accordingly, no material provision for any liability has been made for such
pending litigation in the consolidated financial statements. When the Company is
reasonably able to determine the probable minimum or ultimate liability, if any,
that may result from any of pending litigation, the Company will record a
provision for such liability to the extent not covered by insurance.
9
NOTE 6 -- RECENT ACCOUNTING STANDARDS
The Company discloses its critical accounting policies in its Form 10-K
filed with the Securities and Exchange Commission. Since December 31, 2003, none
of those policies has changed, nor has any been added.
At this time, there are no recently issued accounting standards, which
impact the Company.
10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion and analysis should be read in conjunction with
the consolidated financial statements and notes thereto included in this
quarterly report and with IntegraMed America Inc.'s Annual Report on Form 10-K
for the year ended December 31, 2003.
Overview
IntegraMed America, Inc. offers products and services to patients and
providers in the fertility industry. The IntegraMed Provider Network is
comprised of twenty-five fertility centers in major markets across the United
States and the Council of Physicians and Scientists. Eighteen Affiliate
fertility centers purchase discrete service packages provided by us and seven
fertility centers have access to the entire portfolio of products and services
under the comprehensive FertilityPartners(TM) program. All twenty-five fertility
centers have access to our consumer services, principally pharmaceutical
products and patient treatment financing products.
Our strategy is to align information, technology and finance for the
benefit of fertility patients, providers, and payers. The primary elements of
our strategy includes: (i) expanding our Provider Network into new major
markets; (ii) increasing the number and value of service packages purchased by
members of our Provider Network; (iii) entering into additional
FertilityPartners(TM) contracts; (iv) increasing revenues at contracted
FertilityPartners(TM) centers; (v) increasing the number of Shared Risk Refund
treatment packages sold to patients of our Provider Network and managing the
risk associated with the Shared Risk Refund program; (vi) increasing sales of
pharmaceutical products and services; and (vii) developing Internet-based access
to personalized health information.
Major events impacting financial condition and results of operations
During 2003, we re-negotiated revised fee structures on three of our
existing FertilityPartner contracts. In all three of these contracts, the
timetable for the phase-in of contracted fee reductions, which are based on the
earnings of the underlying fertility centers, were delayed by one year from
fiscal 2004 to fiscal 2005. Beginning in the year 2006, these revised contracts
also contain clauses placing a maximum annual limit on the amount of fees we can
earn, which are based on the earnings of the underlying fertility centers. This
maximum annual limitation is below the fees earned by us on this portion of one
contract in fiscal year 2003 and below the expected earnings from this portion
of the contract in fiscal 2004. We believe that these fee reductions will be
more than offset by volume-based increases in fees earned in other areas of our
existing contracts, the sale of new FertilityPartner contracts and growth in our
FertilityDirect business unit.
In July 2003, we amended our existing credit agreements with Bank of
America, then Fleet Bank, N.A. The amended agreement is comprised of a renewal
of our $7.0 million three-year working capital revolver and a new $5.75 million
three year term loan, of which $0.75 million was used to retire the outstanding
balance on our previous term loan. We believe that these credit facilities will
be sufficient to fund our current operational, capital investment and
acquisition plans.
On September 1, 2003, we signed a FertilityPartners agreement with the
Charlotte, North Carolina based Reproductive Endocrinology and Andrology of
Charlotte ("REACh") physician practice. Under the terms of this 15-year
agreement, our service fees are comprised of reimbursed costs of services, a
tiered percentage of revenues, and an additional fixed percentage of REACh's
earnings. As part of this agreement, we also committed up to $2 million to fund
the development and equipping of a new state-of-the-art facility to house the
clinical practice and embryology laboratory for REACh and its patients. As of
September 30, 2004 this facility has been completed, placed into operation and
our financing commitment substantially completed.
In January 2004, we signed a FertilityPartner agreement to supply a
complete range of business, marketing and facility services to a group of
fertility physicians in the Seattle, Washington metropolitan area. Under the
terms of the 15-year agreement, IntegraMed will build a new facility and help
the group to establish a private, full service fertility center. As part of this
agreement, we had committed up to $2 million to fund the development and
equipping of a new state-of-the-art facility to house the clinical practice and
embryology laboratory for the group and its patients. As of September 30, 2004
this facility has been substantially completed and has begun treating patients
on a limited basis. Based upon the current construction schedule, we expect the
facility to be fully completed, and our financial commitment met, by the end of
11
the fourth quarter of 2004. At that time, our service fees will be comprised of
our standard reimbursed costs of services, a fixed percentage of revenues, plus
an additional fixed percentage of the new center's earnings.
We continue to aggressively promote our Shared Risk Refund Program. The
Shared Risk Refund Program is an innovative treatment and financing program,
which consists of up to three treatment cycles of in vitro fertilization for one
fixed price with a significant refund if the patient does not deliver a live
baby. Under this financial program, we receive payment directly from consumers
who qualify for the program and pay contracted fertility centers a defined
reimbursement for each treatment cycle performed. We manage the risks associated
with the Shared Risk Refund Program through a case management program. This case
management program authorizes patient care and provides information to be used
in recognizing revenue and developing the related reserves for refunds.
Results of Operations
The following table shows the percentage of net revenues represented by
various expense and other income items reflected in our Consolidated Statement
of Operations.
For the For the
three-month period nine-month period
ended September 30, ended September 30,
------------------- --------------------
2004 2003 2004 2003
------ -------- --------- --------
(unaudited) (unaudited)
Revenues, net
FertilityPartners Service Fees ... 79.1% 79.8% 80.0% 78.8%
Pharmaceutical Sales ............. 15.1% 16.0% 14.8% 18.2%
FertilityDirect Revenues ......... 5.8% 4.2% 5.2% 3.0%
----- ----- ----- -----
Total Revenues ................... 100.0% 100.0% 100.0% 100.0%
Costs of services incurred:
FertilityPartners costs ......... 70.3% 70.0% 71.7% 69.1%
Pharmaceutical costs ............ 14.6% 15.5% 14.3% 17.7%
FertilityDirect costs ........... 3.6% 2.6% 3.5% 2.0%
----- ----- ----- -----
Total Costs of services and sales 88.5% 88.1% 89.5% 88.8%
Contribution
FertilityPartners contribution ... 8.8% 9.8% 8.3% 9.7%
Pharmaceutical contribution ...... 0.6% 0.6% 0.6% 0.5%
FertilityDirect contribution ..... 2.2% 1.6% 1.7% 1.0%
----- ----- ----- -----
Total contribution ............... 11.4% 11.9% 10.6% 11.2%
General and administrative expenses .... 9.4% 10.0% 8.7% 9.5%
Interest income ........................ (0.3)% (0.1)% (0.3)% (0.1)%
Interest expense ....................... 0.2% 0.1% 0.2% 0.0%
Total other expenses ............. 9.4% 10.0% 8.7% 9.4%
Income before income taxes ............. 2.1% 1.9% 1.8% 1.8%
Provision for income taxes ............. 0.8% 0.7% 0.7% 0.7%
----- ----- ----- -----
Net income ............................. 1.3% 1.2% 1.1% 1.1%
12
Three Months Ended September 30, 2004 Compared to Three Months Ended
September 30, 2003
Revenues for the three months ended September 30, 2004 increased by a net
of approximately $5.0 million, or 22.3%, from the same period in 2003. The main
growth factors contributing to this increase were:
(i) Revenues at our five FertilityPartner centers opened prior to
2003, increased by $2.2 million, or 12.5%. This increase
resulted from strong patient volume and clinical billings and is
attributable to our ongoing consumer marketing efforts. Revenue
from our two recent FertilityPartner centers, located in
Charlotte, North Carolina and Seattle, Washington, who joined
our network in September 2003 and January 2004, respectively,
totaled $1.8 million in the third quarter of 2004. The Seattle
FertilityPartner location spent much of the third quarter of
2004 undergoing major construction and is not expected to begin
fully servicing patients until the fourth quarter of 2004.
(ii) Revenue at our pharmaceutical unit increased by $0.5 million, or
15.5% from the same period in 2003. During the third quarter of
2003, we had decided to de-emphasize the sale of certain high
volume products due to their lack of profitability. This
decision caused a drop in revenue during the last two quarters
of 2003. As a result of a more favorable pricing and
reimbursement environment for these products since the first
quarter of 2004, revenues have increased on a quarterly basis.
We expect this trend to continue and have recently reorganized
our pharmaceutical marketing support resources in an attempt to
continue to build volume and revenues in future periods.
(iii) FertilityDirect revenues, which are comprised primarily of our
direct to consumer Shared Risk Refund program as well as
membership fees from affiliated clinics, increased by $0.6
million, or 67.6% from prior year levels. We plan to continue
the promotion of our FertilityDirect programs through aggressive
marketing and anticipate that both of these programs will
continue to show growth in future quarters.
Contribution of $3.1 million for the third quarter of 2004 was up $0.5
million, or 18.3% from 2003 levels. As a percentage of revenue, the contribution
margin was 11.5% for 2004 versus 11.9% in 2003. The following factors had a
significant effect on third quarter 2004 contribution:
(i) Contribution generated by the FertilityPartners agreements
increased by $0.2 million in the third quarter of 2004 versus
the same period in 2003. Contribution growth for the third
quarter did not match the growth in revenue due in part to
previously disclosed pricing adjustments on several
FertilityPartner contracts.
(ii) Pharmaceutical contribution increased by $31,000, or 27.4%, and
margin rates increased to 3.5% during the third quarter of 2004
from 3.2% in 2003. The contribution increase to 3.5% reflects
the resolution of negative pricing and reimbursement issues on
certain products which were encountered during the third and
fourth quarters of 2003. We anticipate that our pharmaceutical
margins will stabilize in their historic range of 3.5 - 4.0% for
the balance of 2004.
(iii) Contribution from the FertilityDirect program increased by
$225,000, or 61.6% from the same period in the prior year. This
increase was driven by increased Shared Risk Refund patient
volume, better than expected clinical outcomes for Shared Risk
patients and higher monthly membership fees, introduced in early
2004, for affiliated clinics.
General and Administrative expenses increased by $323,000 in the third
quarter of 2004 versus the same period in 2003 as a result of increased
consulting costs to prepare for the requirements of Sarbanes-Oxley legislation
as well as changes in compensation and incentives in certain segments of our
business.
Interest income rose to $65,000 for the quarter ended September 30, 2004,
from $33,000 in 2003. This increase was mainly attributable to finance charges
assessed to various FertilityPartner locations on invested capital in excess of
predefined limits, and higher available cash balances. Interest expense also
13
increased by $55,000 from the same quarter in the prior year as a result of
higher debt levels in conjunction with our renegotiated credit facilities and a
draw-down on our revolving line of credit.
The provisions for income tax were $225,000, or 39.8% of pre-tax income and
$166,000, or 39.0% of pretax income for the quarters ended September 30, 2004
and 2003, respectively. There were no Federal income tax payments during either
2003, or 2004 to date due to the utilization of our net operating loss carry
forwards. The effective tax rates for both 2004 and 2003 reflect a provision for
current state taxes as well as amortization of our deferred Federal tax asset.
Nine months Ended September 30, 2004 Compared to Nine months Ended
September 30, 2003
Revenues for the nine months ended September 30, 2004 increased by a net
of approximately $9.0 million, or 12.8%, from the same period in 2003. The main
factors contributing to this increase were:
(i) Revenues at our FertilityPartner centers increased by $8.1
million, or 14.5% from the prior year period. Growth from the
same period in the prior year is mainly attributable to
continuing investments in field sales and marketing staff as
well as increasing local and national media exposure of
fertility treatment options available within the network. The
two FertilityPartners agreements signed subsequent to September
1, 2003, and located in North Carolina and Seattle, contributed
revenues of $3.9 million in the first nine months of 2004,
versus $300,000 in the same period of 2003. Prior year results
also included revenues of $4.8 million from our FertilityPartner
agreement with RSA of New York, which terminated in June of
2003. Excluding the impact of this terminated agreement,
revenues grew by $12.9 million, or 25.3% from prior year levels.
(ii) Revenue at our pharmaceutical unit decreased by $1.1 million, or
8.4% from the same period in 2003. As previously stated, this
reduction was the result of the decision in mid-2003 to
de-emphasize the sale of certain high volume/low margin products
to a product mix offering more stable, higher margins. As
previously noted, since this decision was made, revenues at our
pharmaceutical segment have increased each quarter since the end
of 2003, and margins have stabilized as expected.
(iii) FertilityDirect revenues increased by $2.0 million, or 97.4%
from the same period in 2003. This increase is the direct result
of both our successful efforts to re-contract with a majority of
our affiliate providers, at increased monthly membership fees,
and a strong increase in patient demand for our Shared Risk
Refund program. Demand for the Shared risk program has benefited
from both increased marketing penetration of our provider
network as well as local and national media exposure. We plan to
continue the aggressive development and promotion of our
FertilityDirect product lines and are currently exploring
additional consumer products which can be co-marketing through
this channel.
Contribution for the first nine months of 2004 increased by $0.5 million,
or 5.8%, to $8.4 million from $7.9 million for the same period in 2003. The main
factors driving this increase by product line were as follows:
(i) Contribution generated by our FertilityPartner agreements
decreased by $0.2 million in the first nine months of 2004
relative to the same period in 2003. This decrease was
principally the result of the contribution lost due to the
termination of our FertilityPartner agreement with RSA of New
York in 2003. The RSA of New York generated $0.7 million in
contribution during the comparable period of 2003, versus no
contribution in 2004. Excluding the impact of this terminated
agreement, contribution grew by $0.5 million, or 7.7% from the
prior year period.
(ii) Pharmaceutical contribution increased by $94,000, or 27.2%, over
the first nine months of 2003, despite the reduction in revenue
as described above. As a result of altering our product mix to
reduce sales of certain higher volume/lower margin products,
pharmaceutical margins have risen from 2.7% in the first nine
months of 2003, to 3.7% for the same period in 2004. We expect
to achieve pharmaceutical margins in the 3.5% - 4.0% range
during the last quarter of 2004 while attempting to build sales
volume by providing additional marketing support.
14
(iii) Contribution from the FertilityDirect program increased by
$558,000, or 73.8% from the same period in the prior year. This
increase reflects increased Shared Risk Refund patient volume,
as well as the introduction of higher revenue affiliate provider
contracts designed to focus on increased distribution of our
consumer product lines.
General and Administrative expenses increased by $260,000 in the first nine
months of 2004 versus the first nine months of 2003 as a result of increased
consulting costs to prepare for the requirements of Sarbanes-Oxley legislation
as well as changes to compensation and incentives in certain segments of our
business.
Interest income increased by $108,000 to $185,000 for the nine months ended
September 30, 2004, from $77,000 in the same period in 2003. This increase was
mainly attributable to finance charges assessed to various FertilityPartner
locations on invested capital in excess of predefined limits, and interest
earned on higher investable cash balances. Interest expense also increased to
$229,000 from $54,000 for the same period in the prior year as a result of
higher debt levels incurred in conjunction with our new credit facilities and a
draw-down on our revolving line of credit.
Our provisions for income taxes were approximately $560,000, or 39.8% of
pre-tax income and $497,000, or 39.0% of pretax income for the nine months ended
September 30, 2004 and 2003, respectively. There were no Federal income tax
payments during either 2003, or 2004 to date due to the utilization of net
operating loss carry forwards. Our effective tax rates for both 2004 and 2003
reflect a provision for current state taxes as well as amortization of our
deferred Federal tax asset.
Off-balance Sheet Arrangements
As part of our ongoing business, we do not participate in transactions that
generate relationships with unconsolidated entities or financial partnerships,
such as entities often referred to as structured finance or special purpose
entities ("SPE's"), which would have been established for the purpose of
facilitating off-balance sheet arrangements or other contractually narrow or
limited purposes. As of September 30, 2004, we were not involved in any
unconsolidated SPE transactions.
Liquidity and Capital Resources
Historically, we have financed our operations by the sale of equity
securities, issuance of notes and internally generated resources. In addition,
we also use bank financing for working capital and business development
purposes. Due to our continued capital investment in the start-up and expansion
of several of our FertilityPartner locations, as well as incurring an obligation
for the payment of additional Service Rights related to the Seattle
FertilityPartner contract, working capital decreased during the first nine
months of 2004 to $0.8 million as of September 30, 2004, from $3.3 million as of
December 31, 2003. We believe that working capital and, specifically, cash and
cash equivalents remain at adequate levels to fund our operations. As of
September 30, 2004, we have substantially completed our expansion commitment at
all of our FertilityPartner locations, with the exception of Seattle. In
Seattle, we have invested $978,000 of capital as of September 30, 2004, out of
an anticipated $2.6 million net build out cost. We believe that the cash flows
from our operations plus the existing credit facility and term loan will be
sufficient to provide for our future liquidity needs for the next twelve months.
Patient deposits, which represent funds received from patients in advance
of treatment cycles, increased by $4,793,000 since December 31, 2003 to
$14,285,000 as of September 30, 2004. These deposits, which are comprised of
both Shared Risk and non-Shared Risk sources, are prepayments of future revenues
from patients without full insurance coverage. Deposits are a significant source
of recurring cash flow and represent interest free financing for us.
On July 31, 2003, we amended our existing credit facility with Bank of
America (formally Fleet Bank). The amended facility is comprised of a $7.0
million three-year working capital revolver and a $5.75 million three-year term
loan, of which approximately $5.0 million was used during 2003 for the
acquisition of fixed assets and to fund the payment for Exclusive Business
Rights in connection with the North Carolina transaction and $0.75 million was
used to repay the remaining outstanding balance of the previous credit facility.
Each component bears interest by reference to Bank of America's prime rate or
LIBOR, at our option, plus a margin, which is dependent upon a leverage test,
ranging from 2.25% to 2.75% in the case of LIBOR-based loans. Prime based loans
15
are made at Bank of America's prime rate and do not contain an additional
margin. Interest on the prime-based loans is payable monthly and interest on
LIBOR-based loans is payable on the last day of each applicable interest period.
Unused amounts under the working capital revolver bear a commitment fee of 0.25%
and are payable quarterly. Availability of borrowings under the working capital
revolver is based on eligible accounts receivable as defined. As of September
30, 2004, we had borrowed $2.0 million under the working capital revolver
agreement for general corporate purposes. The remaining working capital revolver
balance of $5.0 million is available to us. The Bank of America credit facility
is collateralized by all of our assets. The credit facility is subject to
several covenants, all of which were met at September 30, 2004.
We continuously review our credit agreements and may renew, revise or enter
into new agreements from time to time as deemed necessary.
Significant Contractual Obligations and Other Commercial Commitments:
The following summarizes our contractual obligations and other commercial
commitments at September 30, 2004, and the effect such obligations are expected
to have on our liquidity and cash flows in future periods.
Payments Due by Period
Total Less than 1 year 1 - 3 years 4 - 5 years After 5 years
---------- ---------------- ----------- ------------ -------------
Notes Payable................. $ 6,312,500 $3,150,000 $ 3,162,500 $ -- $ --
Capital lease obligations..... 231,000 67,000 164,000 -- --
Operating leases.............. 45,170,000 5,093,000 15,552,000 8,818,000 15,707,000
FertilityPartners capital
and other................. 1,022,000 1,022,000 -- -- --
Total contractual cash
Obligations............... $52,735,500 $9,332,000 $18,878,500 $8,818,000 $15,707,000
Amount of Commitment Expiration Per Period
Total Less than 1 year 1 - 3 years 4 - 5 years After 5 years
---------- ---------------- ------------- ------------- -------------
Lines of credit............... $ 7,000,000 $ -- $7,000,000 $ -- $ --
We also have commitments to provide accounts receivable financing under our
FertilityPartners agreements. Our financing of this receivable occurs on the
15th of each month. The medical practice's repayment priority consists of the
following:
(i) Reimbursement of expenses that we have incurred on their
behalf;
(ii) Payment of the fixed or, if applicable, the variable portion
of the service fee which relates to the FertilityPartners
revenues; and
(iii) Payment of the variable portion of the service fee.
We are responsible for the collection of receivables, which are financed
with full recourse. We have continuously funded these needs from cash flow from
operations and the collection of the prior month's receivables. If delays in
repayment are incurred, which have not as yet been encountered, we could draw on
our existing working capital line of credit. We make payments on behalf of the
FertilityPartners for which we are reimbursed in the short-term. Other than
these payments, as a general course, we do not make other advances to the
medical practice. Other than the capital and other commitments, we have no other
funding commitments to the FertilityPartners.
16
Recent Accounting Standards
At this time, there are no recently issued accounting standards which
impact the Company.
Forward Looking Statements
This Form 10-Q and discussions and/or announcements made by or on behalf of
the Company, contain certain forward-looking statements regarding events and/or
anticipated results within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, the attainment of which
involves various risks and uncertainties. Forward-looking statements may be
identified by the use of forward-looking terminology such as, "may", "will",
"expect", "believe", "estimate", "anticipate", "continue", or similar terms,
variations of those terms or the negative of those terms. The Company's actual
results may differ materially from those described in these forward-looking
statements due to the following factors: the Company's ability to acquire
additional FertilityPartners agreements, the Company's ability to raise
additional debt and/or equity capital to finance future growth, the loss of
significant FertilityPartners agreement(s), the profitability or lack thereof at
fertility centers serviced by the Company, increases in overhead due to
expansion, the exclusion of fertility and ART services from insurance coverage,
government laws and regulation regarding health care, changes in managed care
contracting, the timely development of and acceptance of new fertility, and ART
and/or genetic technologies and techniques. The Company is under no obligation
to (and expressly disclaims any such obligation) update or alter any
forward-looking statements whether as a result of new information, future events
or otherwise.
17
Item 3. Quantitative and Qualitative Disclosures About Market Risk
For information regarding our exposure to certain market risks, see Item
7A, QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK, in our Annual
Report on Form 10-K for the year ended December 31, 2003. There have been no
significant changes in our market risk exposures from the fiscal 2003 year end.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, we evaluated
the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15 under the Exchange Act) as of September
30, 2004 (the "Evaluation Date"). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that, as of the
Evaluation Date, our disclosure controls and procedures were effective in timely
alerting them to the material information relating to us required to be included
in our periodic SEC filings.
(b) Changes in internal controls.
There were no significant changes made in our internal controls during the
period covered by this report or, to our knowledge, in other factors that could
significantly affect these controls subsequent to the date of their evaluation.
18
Part II - OTHER INFORMATION
Item 1. Legal Proceedings.
In June 2002, the Company was served with a complaint,
captioned WINFertility, Inc. vs. IntegraMed America, Inc.,
in which the plaintiff filed an action in the Supreme Court
of New York, Westchester County, alleging breach of
contract and seeking damages in excess of $5 million. The
Company had retained WINFertility in April 2001 to provide
claims management services in connection with the Company's
Shared Risk Refund Program. WINFertility failed to provide
the services for which the Company contracted and the
Company terminated the contract in May 2002. The Company
has served and filed an answer denying all material
allegations of the complaint and asserting affirmative
defenses. The Company has also filed a counterclaim against
the plaintiff demanding an accounting and return of certain
fees paid to plaintiff by the Company. The matter is
scheduled for trial in January 2005.
Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases
of Equity Securities.
In May 2004, the Company retired all 140,116 shares of its
Common Stock then being held as treasury shares.
In June 2004, the Company obtained 7,360 shares of its
Common Stock that are now held as treasury shares. These
shares represent reimbursement certain officers made to the
Company for the withholding of taxes paid, on their behalf,
by the Company on a stock grant issued in 2004. The Company
currently has no plans to dispose of these shares.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
See Index to Exhibits on Page 21.
19
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.
INTEGRAMED AMERICA, INC.
(Registrant)
Date: November 12, 2004 By: /s/: John W. Hlywak, Jr.
----------------------------
John W. Hlywak, Jr.
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
20
INDEX TO EXHIBITS
Exhibit
Number Exhibit
3.1(a) -- Amended and Restated Certificate of Incorporation of Registrant
effecting, inter alia, reverse stock split filed as Exhibit with
identical exhibit number to Registrant's Statement on Form S-1
(Registration No. 33-60038) and incorporated herein by reference
thereto.
3.1(b) -- Amendment to Certificate of Incorporation of Registrant
increasing authorized capital stock by authorizing Preferred
Stock filed as Exhibit with identical exhibit number to
Registrant's Statement on Form S-1 (Registration No. 33-60038)
and incorporated herein by reference thereto.
3.1(c) -- Certificate of Designations of Series A Cumulative Convertible
Preferred Stock filed as Exhibit with identical exhibit number
to Registrant's Statement on Form S-1 (Registration No.
33-60038) and incorporated herein by reference thereto.
3.1(d) -- Certificate of Amendment to Amended and Restated Certificate of
Incorporation increasing authorized Common Stock to 50,000,000
shares filed as Exhibit with identical number to Registrant's
Quarterly Report on form 10-Q for the period ended June 30,
1998.
3.1 (e) -- Certificate of Amendment to the Amended and Restated Certificate
of Incorporation filed as Exhibit with identical number to
Registrant's Quarterly Report on Form 10-Q for the period ended
June 30, 2004.
3.1 (f) -- Restated Certificate of Incorporation of IntegraMed America,
Inc. filed as Exhibit with identical number to Registrant's
Quarterly Report on Form 10-Q for the period ended June 30,
2004.
3.2 -- Copy of By-laws of Registrant filed as Exhibit with identical
exhibit number to Registrant's Statement on Form S-1
(Registration No. 33-47046) and incorporated herein by reference
thereto.
3.2(a) -- Copy of By-laws of Registrant (As Amended and Restated on
December 12, 1995) filed as Exhibit with identical number to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1995.
3.2(b) -- Copy of By-laws of Registrant (As Amended and Restated on March
4, 1997) filed as Exhibit with identical exhibit number to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997.
3.2(c) -- Copy of By-laws of Registrant (as Amended on February 17, 2004)
filed as Exhibit with identical number to Registrant's Quarterly
Report on Form 10-Q for the period ended March 31, 2004.
4.1 -- Warrant Agreement of Robert Todd Financial Corporation. filed as
Exhibit with identical exhibit number to Registrant's Statement
on Form S-1 (Registration No. 33-47046) and incorporated herein
by reference thereto.
4.2 -- Copy of Warrant, as amended, issued to IG Labs. filed as Exhibit
with identical exhibit number to Registrant's Statement on Form
S-1 (Registration No. 33-47046) and incorporated herein by
reference thereto.
4.3 -- RAS Securities Corp. and ABD Securities Corporation's Warrant
Agreement. filed as Exhibit with identical exhibit number to
Registrant's Statement on Form S-1 (Registration No. 33-60038)
and incorporated herein by reference thereto.
21
4.4 -- Form of Warrants issuable to Raymond James & Associates, Inc.
filed as Exhibit with identical exhibit number to Registrant's
Statement on Form S-4 (Registration No. 33-82038) and
incorporated herein by reference thereto.
4.6 -- Warrant issued to Morgan Stanley Venture Partners III, L.P.
filed as Exhibit with identical exhibit number to Registrant's
Quarterly Report on Form 10-Q for the period ended September 30,
1997 and incorporated herein by reference thereto.
4.7 -- Warrant issued to Morgan Stanley Venture Partners III, L.P.
filed as Exhibit with identical exhibit number to Registrant's
Quarterly Report on Form 10-Q for the period ended September 30,
1997 and incorporated herein by reference thereto.
4.8 -- Warrant issued to the Morgan Stanley Venture Partners
Entrepreneur Fund, L.P. filed as Exhibit with identical exhibit
number to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997.
4.9 (a) -- Warrant issued to Brian Kaplan, M.D. filed as Exhibit with
identical number to Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1998.
4.9 (b) -- Warrant issued to Aaron S. Lifchez, M.D. filed as Exhibit with
identical number to Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1998.
4.9 (c) -- Warrant issued to Jacob Moise, M.D. filed as Exhibit with
identical number to Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1998.
4.9 (d) -- Warrant issued to Jorge Valle, M.D. filed as Exhibit with
identical number to Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1998.
4.10 (a) -- Warrant issued to Donald Galen, M.D. filed as Exhibit with
identical number to Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1998.
4.10 (b) -- Warrant issued to Arnold Jacobson, M.D. filed as Exhibit with
identical number to Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1998.
4.10 (c) -- Warrant issued to Louis Weckstein, M.D. filed as Exhibit with
identical number to Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1998.
4.11 (a) -- Warrant issued to Michael J. Levy, M.D. filed as Exhibit with
identical number to Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1998.
4.11 (b) -- Warrant issued to Arthur W. Sagoskin, M.D. filed as Exhibit with
identical number to Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1998.
4.11 (c) -- Warrant issued to Robert J. Stillman, M.D. filed as Exhibit with
identical number to Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1998.
4.11 (d) -- Warrant issued to Robert J. Stillman, M.D. dated January 6, 1999
filed as Exhibit with identical number to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1998.
22
4.12 (a) -- Warrant issued to Patricia M. McShane, M.D. dated November 18,
1998 filed as Exhibit with identical number to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1998.
4.12 (b) -- Warrant issued to Samuel C. Pang, M.D. dated November 18, 1998
filed as Exhibit with identical number to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1998.
4.12 (c) -- Warrant issued to Issac Glatstein, M.D. dated November 18, 1998
filed as Exhibit with identical number to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1998.
4.13 -- Warrant issued to Vector Securities International, Inc. filed as
Exhibit with identical number to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1998.
4.14 -- Registration Rights Agreement dated July 20, 2002 filed as
Exhibit with identical number to Registrant's Quarterly Report
on Form 10-Q for the period ended June 30, 2002
4.14(a) -- Form of Warrant issued on July 30, 2002 filed as Exhibit with
identical number to Registrant's Quarterly Report on Form 10-Q
for the period ended June 30, 2002
31.1 -- CEO Certification Pursuant to 18 U.S.C. ss. 1350 as Adopted
Pursuant to Section 302 of the Sarbanes Oxley Act of 2002 dated
November 12, 2004.
31.2 -- CFO Certification Pursuant to 18 U.S.C. ss. 1350 as Adopted
Pursuant to Section 302 of the Sarbanes Oxley Act of 2002 dated
November 12, 2004.
32.1 -- CEO Certification Pursuant to 18 U.S.C. ss. 1350 as Adopted
Pursuant to Section 906 of the Sarbanes Oxley Act of 2002 dated
November 12, 2004.
32.2 -- CFO Certification Pursuant to 18 U.S.C. ss. 1350 as Adopted
Pursuant to Section 906 of the Sarbanes Oxley Act of 2002 dated
November 12, 2004.