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SEC Filings

S-1/A
PROTEON THERAPEUTICS INC filed this Form S-1/A on 10/07/2014
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Table of Contents

        Research and Development Expenses.    The following table identifies research and development expenses on both an external and internal basis for the years ended December 31, 2012 and 2013:

 
  Years Ended December 31,    
 
 
  Period-to-
Period Change
 
 
  2012   2013  
 
  (in thousands)
 

External research and development expenses

  $ 3,514   $ 1,962   $ (1,552 )

Internal research and development expenses

    2,393     2,032     (361 )
               

Total research and development expenses

  $ 5,907   $ 3,994   $ (1,913 )
               
               

        During the year ended December 31, 2013, our total research and development expenses decreased by $1.9 million compared to the prior year, primarily due to the completion of our AVF Phase 2 trial and our AVG Phase 1/2 trial. Our external research and development expenses decreased by $1.5 million primarily due to a reduction in expenses related to our clinical trials and our manufacturing and process development. Our internal research and development expenses decreased by $0.4 million primarily due to a reduction in our research and development employees and contractors.

        General and Administrative Expenses.    During the year ended December 31, 2013, our total general and administrative expenses increased by $1.0 million compared to the prior year. This increase was primarily due to additional overhead and personnel costs in 2013 of $0.5 million to support our ongoing corporate activities and $0.5 million related to higher legal expenses.

        Other Income (Expense).    During the year ended December 31, 2013, our other income increased by $0.1 million due to a gain from the sale of fixed assets.

        Interest Expense, Net.    During the year ended December 31, 2013, our interest expense, net increased by $0.8 million due to the interest expense on our convertible promissory notes.

Liquidity and Capital Resources

    Overview

        Since our inception and through June 30, 2014, we had received $111.9 million in net proceeds million comprised of $94.0 million from the issuance of equity securities, $7.7 million from the issuance of convertible notes, $10.0 million from business development activities and $0.2 million from government grants. At June 30, 2014, our cash and cash equivalents and available-for-sale investments totaled $25.4 million.

    Convertible Note Financings

        In April 2013, we entered into a convertible note purchase agreement with some of our existing preferred stockholders whereby we had the option, but not the obligation, to issue convertible promissory notes in the aggregate principal amount of approximately $4.3 million, subject to meeting at least one of two pre-determined conditions. In September 2013, upon satisfying one of the conditions, we issued the notes, which accrue interest at 8% annum and mature on or after March 31, 2014 upon written notice from a majority of the outstanding note holders.

        As further described above and within our financial statements appearing elsewhere in this prospectus, in connection with the issuance of the convertible notes, we recorded $1.4 million as a discount on the convertible notes related to the estimated fair value of the combined embedded derivative liability and certain issuance costs. The discount was amortized to interest expense over the life of the convertible notes. Changes in the estimated fair value of the combined embedded derivative liability were recorded in earnings in the periods in which they occurred.

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