Protein Polymer Reports 1997 Financial Results and Terms of a New Preferred
Stock Offering
SAN DIEGO, April 14, 1998 -- Protein Polymer Technologies,
Inc. (Nasdaq: PPTI), reports today its financial results for 1997 and for
the fourth quarter ended December 31, 1997. In addition, the Company
has reached agreement with a small group of accredited and institutional
investors on the terms of a private placement of its Series E Convertible
Preferred Stock, pending the required NASDAQ ten day notification to shareholders.
PPTI expects to receive approximately $3.3 million at the initial closing
which the Company believes will occur on or about April 24, 1998.
Such securities, if issued, may not be offered or sold in the United States
absent registration with the Securities and Exchange Commission (SEC), or
through an exemption from such registration.
Each share of Series E Convertible Preferred Stock is
priced at $100 per share, and the total offering of up to 55,000 shares
of Preferred Stock provides for multiple closings between now and the middle
of May. Each share can be converted at any time by the holder into
common stock at a price of $1.25 per share. Each share of Preferred
Stock also receives two common stock warrants. One warrant, exercisable
for 18 months, allows the holder to acquire 40 shares of PPTI common stock
at a price of $2.50, and the other warrant, exercisable for 36 months, allows
the holder to acquire 20 shares of common stock at a price of $5.00 per
share. The Company has agreed to use its best efforts to register
the underlying common stock with the SEC within 120 days following closing.
1997 Financial Results
In 1997, PPTI had a net loss applicable to common shareholders
of $4,887,000 ($.52 a share), versus a net loss of $3,356,000 ($.51 a share)
for the comparable period a year ago. For the quarter, the Company
had a net loss applicable to common shareholders of $1,316,000 ($.13 a share),
versus a net loss of $946,000 ($.13 a share) for the comparable period a
year ago. The net loss and loss per share include accumulated and
distributed dividends related to the Company's preferred stock. As
of December 31, 1997, PPTI had cash, cash equivalents and short term investments
of $1,300,000.
Contract revenues, interest and product income totaled
$174,000 for the fourth quarter, compared to $235,000 for the same period
last year, the decrease being due to reduced contract revenues. For
the year these revenues totaled $723,000, compared to $756,000 for the same
period last year. Operating expenses for the quarter were $1,419,000, as
compared to $1,058,000 for the same period in 1996. Total year operating
expenses totaled $5,177,000, compared to $3,620,000 for the same period
last year. The increase in both periods is due primarily to increased
research and development efforts and implementation of the U.S. Food &
Drug Administration's (FDA's) Good Laboratory Practice (GLP) regulations.
For both the fourth quarter and year end periods, the
Company continued research and development efforts in its surgical adhesives
and sealants program, and expanded its program in hydrogel-based polymers
targeted for use in cosmetic, plastic and reconstructive, and urological
soft tissue augmentation procedures. In addition, the Company completed
implementation of GLP regulations in preparation for preclinical and clinical
studies intended for FDA review.
Protein Polymer Technologies, Inc., a San Diego-based
biotechnology company, has developed a protein-based technology platform
that allows the creation of new biomaterials which target multiple applications
in biomedical markets. The different classes of biocompatible polymers
developed by PPTI have been genetically engineered to enable cell growth,
promote the regeneration of tissue, bond to synthetic surfaces and resorb
into tissue at controlled rates. Targeted applications include tissue
adhesives and sealants, tissue augmentation, wound healing, and drug delivery
vehicles.
Protein Polymer Technologies, Inc.
Condensed Financial Statements
(unaudited)
Three months ended Twelve months ended
December 31, December 31,
1997 1996 1997 1996
SUMMARY OF OPERATIONS
Contract revenue $135,000 $200,000 $459,510 $610,000
Interest income 23,646 22,054 186,531 87,317
Product and other
income 15,173 12,770 76,917 58,434
Total revenues 173,819 234,824 722,958 755,751
Total expenses 1,419,040 1,057,502 5,176,891 3,620,183
Net loss $(1,219,626) $(822,678) $(4,453,933) $(2,864,432)
Undeclared and/or paid
accumulated dividends
on Preferred Stock 71,113 123,639 432,682 491,867
Net loss applicable
to common
shareholders $(1,316,000) $(946,317) $(4,886,615) $ (3,356,299)
Loss per share $(0.13) $(0.13) $(0.52) $(0.51)
Weighted average shares
used in computing
loss per share 10,419,613 7,215,021 9,487,165 6,638,814
As of As of
Dec. 31, 1997 Dec. 31, 1996
BALANCE SHEET INFORMATION (audited)
Cash, cash equivalents
and short-term investments$1,299,838 $1,260,399
Working capital 697,020 840,196
Total assets 2,347,887 1,746,581
Total capital invested 25,549,644 20,456,360
Accumulated deficit (24,083,511) (19,207,237)
