Delaware
|
58-1972600
|
|
(State
or other jurisdiction
of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
Number)
|
PART
I FINANCIAL
INFORMATION
|
||
Page
|
||
Item
1. Financial
Statements
|
||
Condensed
Consolidated
Balance Sheets (unaudited) -
|
||
September
30, 2005 and
December 31, 2004
|
1
|
|
Condensed
Consolidated
Statements of Operations (unaudited) -
|
||
Three
and nine months
ended September 30, 2005 and 2004
|
2
|
|
Condensed
Consolidated
Statements of Cash Flows (unaudited) -
|
||
Nine
months ended
September 30, 2005 and 2004
|
3
|
|
Notes
to Unaudited
Condensed Consolidated Financial Statements (unaudited)
-
|
|
|
September 30, 2005 |
4
|
|
Item
2. Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
8
|
|
Item
3.
Quantitative and Qualitative Disclosures About Market
Risk
|
10
|
|
Item
4. Procedures
and
Controls
|
10
|
|
PART
II OTHER
INFORMATION
|
||
Item
6. Exhibits
|
11
|
|
SIGNATURES
|
11
|
|
SEPTEMBER
30,
|
DECEMBER
31,
|
|||||
|
2005
|
2004
|
|||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
and cash equivalents
|
$
|
15,873
|
$
|
48,377
|
|||
Marketable
securities
|
67,380
|
35,119
|
|||||
Accrued
interest receivable
|
235
|
350
|
|||||
Prepaids
and other current assets
|
146
|
182
|
|||||
Total
current assets
|
83,634
|
84,028
|
|||||
PROPERTY
AND EQUIPMENT, NET
|
2,080
|
2,367
|
|||||
OTHER
ASSETS:
|
|||||||
Deposits
and other long-term assets
|
43
|
42
|
|||||
TOTAL
ASSETS
|
$
|
85,757
|
$
|
86,437
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Accounts
payable and accrued liabilities
|
$
|
606
|
$
|
1,468
|
|||
Total
current liabilities
|
606
|
1,468
|
|||||
LONG-TERM
LIABILITIES:
|
|||||||
Deferred
rent
|
190
|
115
|
|||||
Total
liabilities
|
796
|
1,583
|
|||||
STOCKHOLDERS'
EQUITY:
|
|||||||
Preferred
stock, $.0001 par value; 5,000,000 shares authorized; none issued
|
—
|
—
|
|||||
Common
stock, $.0001 par value; 100,000,000 shares authorized;
|
|||||||
16,907,170
and 16,734,947 shares issued and 16,832,170 and 16,659,947
|
|||||||
outstanding
in 2005 and 2004, respectively
|
2
|
2
|
|||||
Additional
paid-in capital
|
368,929
|
368,385
|
|||||
Accumulated
deficit
|
(280,689
|
)
|
(279,656
|
)
|
|||
Treasury
stock, at cost
|
(2
|
)
|
(2
|
)
|
|||
Accumulated
other comprehensive loss
|
(113
|
)
|
(130
|
)
|
|||
Deferred
compensation
|
(3,166
|
)
|
(3,745
|
)
|
|||
Total
stockholders' equity
|
84,961
|
84,854
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
85,757
|
$
|
86,437
|
|
THREE
MONTHS
|
NINE
MONTHS
|
|||||||||||
|
ENDED
SEPTEMBER 30,
|
ENDED
SEPTEMBER 30,
|
|||||||||||
|
2005
|
2004
|
2005
|
2004
|
|||||||||
|
|||||||||||||
REVENUES:
|
|||||||||||||
Services
fees
|
$
|
—
|
$
|
1,106
|
$ | — | $ | 1,106 | |||||
Total
revenues
|
—
|
1,106
|
— | 1,106 | |||||||||
OPERATING
EXPENSES:
|
|||||||||||||
General
and administrative
|
714
|
404
|
2,501
|
2,329
|
|||||||||
Transaction
expenses
|
—
|
1,461
|
—
|
1,461
|
|||||||||
Depreciation
|
83
|
86
|
249
|
100
|
|||||||||
Total
operating expenses
|
797
|
1,951
|
2,750
|
3,890
|
|||||||||
OPERATING
LOSS
|
(797
|
)
|
(845
|
)
|
(2,750
|
)
|
(2,784
|
)
|
|||||
OTHER
INCOME
|
2
|
—
|
—
|
17
|
|||||||||
INTEREST
INCOME
|
668
|
313
|
1,717
|
801
|
|||||||||
NET
LOSS
|
$
|
(127
|
)
|
$
|
(532
|
)
|
$
|
(1,033
|
)
|
$
|
(1,966
|
)
|
|
Loss
per common share:
|
|||||||||||||
Basic
|
$
|
(0.01
|
)
|
$
|
(0.03
|
)
|
$
|
(0.06
|
)
|
$
|
(0.12
|
)
|
|
Diluted
|
$
|
(0.01
|
)
|
$
|
(0.03
|
)
|
$
|
(0.06
|
)
|
$
|
(0.12
|
)
|
|
Weighted
average shares outstanding:
|
|||||||||||||
Basic
|
16,310
|
16,082
|
16,283
|
16,082
|
|||||||||
Diluted
|
16,310
|
16,082
|
16,283
|
16,082
|
NINE
MONTHS
ENDED
SEPTEMBER 30,
|
|||||||
2005
|
2004
|
||||||
OPERATING
ACTIVITIES:
|
|||||||
Net
loss
|
$
|
(1,033
|
)
|
$
|
(1,966
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Depreciation
on property and equipment
|
249
|
100
|
|||||
Amortization
of deferred employee compensation
|
279
|
426
|
|||||
Amortization
of premium and discount on securities, net
|
(276
|
)
|
857
|
||||
Gain
on sale of marketable securities
|
--
|
(17
|
)
|
||||
Changes
in operating assets and liabilities:
|
|||||||
Accrued
interest receivable, prepaids and other current assets
|
151
|
5
|
|||||
Accounts
payable and accrued liabilities
|
(808
|
)
|
935
|
||||
Deferred
revenue
|
--
|
(1,106
|
)
|
||||
Deferred
rent
|
75
|
78
|
|||||
Deposits
and other long-term assets
|
(1
|
)
|
(2
|
)
|
|||
NET
CASH USED IN OPERATING ACTIVITIES
|
(1,364
|
)
|
(690
|
)
|
|||
INVESTING
ACTIVITIES:
|
|||||||
Purchases
of marketable securities
|
(66,588
|
)
|
(55,091
|
)
|
|||
Proceeds
from sale of marketable securities
|
--
|
51,244
|
|||||
Proceeds
from maturity of marketable securities
|
34,620
|
38,258
|
|||||
Additions
to property and equipment
|
(16
|
)
|
(2,518
|
)
|
|||
NET
CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
|
(31,984
|
)
|
31,893
|
||||
FINANCING
ACTIVITIES:
|
|||||||
Proceeds
from the exercises of stock options
|
844
|
51
|
|||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
844
|
51
|
|||||
CHANGE
IN CASH AND CASH EQUIVALENTS
|
(32,504
|
)
|
31,254
|
||||
CASH
AND CASH EQUIVALENTS, Beginning of Period
|
48,377
|
15,045
|
|||||
CASH
AND CASH EQUIVALENTS, End of Period
|
$
|
15,873
|
$
|
46,299
|
|||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
|
|||||||
|
|||||||
Issuance
of Restricted Stock
|
$
|
--
|
$ | 50 |
Nine
months ended
|
|||||||||||||
|
September
30
|
September
30
|
|||||||||||
|
2005
|
2004
|
2005
|
2004
|
|||||||||
|
|||||||||||||
Net
loss, as reported
|
$
|
(127
|
)
|
$
|
(532
|
)
|
$
|
(1,033
|
)
|
$
|
(1,966
|
)
|
|
Add
(deduct) stock-based employee compensation expense (credit)
|
|||||||||||||
included
in reported net loss, net of tax
|
121
|
(52
|
) |
278
|
|
426
|
|||||||
Deduct
total stock-based employee compensation expense determined
|
|||||||||||||
under
fair-value based method for all awards, net of tax
|
(358
|
)
|
(670
|
)
|
(1,067
|
)
|
(2,007
|
)
|
|||||
Pro
forma net loss
|
$
|
(364
|
)
|
$
|
(1,254
|
)
|
$
|
(1,822
|
)
|
$
|
(3,547
|
)
|
|
Basic
and diluted net loss per share:
|
|||||||||||||
As
reported
|
$
|
(0.01
|
)
|
$ |
(0.03
|
)
|
$
|
(0.06
|
)
|
$
|
(0.12
|
)
|
|
Add
stock-based employee compensation expense included in
reported
|
|||||||||||||
net
loss, net of tax
|
0.01
|
0.00
|
0.02
|
0.03
|
|||||||||
Deduct
total stock-based employee compensation expense determined
|
|||||||||||||
under
fair-value based method for all awards, net of tax
|
(0.02
|
)
|
(0.04
|
)
|
$
|
(0.06
|
)
|
$
|
(0.12
|
)
|
|||
Pro
forma basic and diluted net loss per share
|
$
|
(0.02
|
)
|
$
|
(0.07
|
)
|
$
|
(0.10
|
)
|
$
|
(0.21
|
)
|
|
|
2005
|
|
2004
|
Dividend
yield
|
0.0%
|
0.0%
|
||
Expected
volatility
|
57.0%
|
62.0%
|
||
Risk-free
interest rate
|
4.0%
|
2.7%
|
||
Expected
life
|
Four
years
|
Four
years
|
(in
thousands)
|
Employee
Separation
Costs
|
|
|
Facility
Closing
Costs
|
|
|
Total
Restructuring
and
Related Costs
|
|
||
Balance
at December 31, 2003
|
$
|
125
|
$
|
105
|
$
|
230
|
||||
Accruals
during 2004
|
--
|
33
|
33
|
|||||||
Expenditures
during 2004
|
125
|
65
|
190
|
|||||||
Balance
at December 31, 2004
|
--
|
73
|
73
|
|||||||
Expenditures
during 2005
|
--
|
40
|
40
|
|||||||
Balance
at September 30, 2005
|
$
|
--
|
$
|
33
|
$
|
33
|
|
THREE
MONTHS ENDED SEPTEMBER 30,
|
NINE
MONTHS ENDED SEPTEMBER 30,
|
|||||||||||
|
2005
|
2004
|
2005
|
2004
|
|||||||||
(in
thousands)
|
|||||||||||||
Net
loss
|
$
|
(127
|
)
|
$
|
(532
|
)
|
$
|
(1,033
|
)
|
$
|
(1,966
|
)
|
|
(Increase)/decrease
in unrealized loss on marketable securities
|
1
|
34
|
17
|
(78
|
)
|
||||||||
Comprehensive
loss
|
$
|
(126
|
)
|
$
|
(498
|
)
|
$
|
(1,016
|
)
|
$
|
(2,044
|
)
|
10.1 |
Form
of Clarus 2005 Stock Incentive Plan Stock Option
Agreement.
|
31.1 |
Certification
of Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
31.2 |
Certification
of Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
32.1 |
Certification
of Principal Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
32.2 |
Certification
of Principal Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
By: | /s/ Nigel P. Ekern, | |
Nigel P. Ekern, |
||
Chief
Administrative Officer
(Principal
Executive Officer)
|
||
/s/ Susan Luckfield, | ||
Susan Luckfield, |
||
Controller
(Principal
Financial Officer)
|
10.1 |
Form
of Clarus 2005 Stock Incentive Plan Stock Option
Agreement.
|
31.1 |
Certification
of Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
31.2 |
Certification
of Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
32.1 |
Certification
of Principal Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
32.2 |
Certification
of Principal Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|