background image
ARRAY BIOPHARMA INC.
Statements of Cash Flows
(Amounts in Thousands)
Years Ended June 30,
2012
2011
2010
Cash flows from operating activities
Net loss
$
(23,581)
$
(56,324)
$
(77,631)
Adjustments to reconcile net loss to net cash provided by (used
in) operating activities:
Depreciation and amortization expense
5,076
7,616
6,338
Share-based compensation expense
2,351
3,328
5,372
Payment of employee bonus with stock
1,969
3,982
2,412
Realized (gains) losses on auction rate securities, net
-
(1,891)
(1,444)
Impairment of marketable securities
-
-
217
Loss on early repayment of long-term debt, net
942
6,340
-
Non-cash interest expense
4,643
6,377
6,737
Changes in operating assets and liabilities:
Prepaid expenses and other current assets
2,201
(1,119)
(658)
Accounts payable
2,006
(1,173)
(1,064)
Accrued outsourcing costs
146
341
148
Accrued compensation and benefits
1,099
(3,582)
2,165
Deferred rent
(3,332)
(3,180)
(3,034)
Deferred revenue
(31,613)
(30,471)
78,078
Accrued and other liabilities
4,547
3,794
250
Net cash (used in) provided by operating activities
(33,546)
(65,962)
17,886
Cash flows from investing activities
Purchases of property and equiment
(1,437)
(1,901)
(1,253)
Purchases of marketable securities
(51,339)
(53,427)
(79,375)
Proceeds from sales and maturities of marketable securities
34,055
129,423
11,237
Net cash provided by (used in) investing activities
(18,721)
74,095
(69,391)
Cash flows from financing activities
Proceeds from exercise of stock options and shares issued under
the employee stock purchase plan
1,169
1,491
1,176
Proceeds from the issuance of common stock for cash
67,145
6,060
11,596
Payment of offering costs
(3,997)
(281)
(623)
Proceeds from the issuance of long-term debt
-
-
40,000
Payment of long-term debt principal
(4,350)
(150)
-
Payment of transaction fees
-
-
(1,000)
Net cash provided by financing activities
59,967
7,120
51,149
Net increase (decrease) in cash and cash equivalents
7,700
15,253
(356)
Cash and cash equivalents as of beginning of year
48,099
32,846
33,202
Cash and cash equivalents as of end of year
$
55,799
$
48,099
$
32,846
Supplemental disclosure of cash flow information
Cash paid for interest
$
7,008
$
9,105
$
8,540
See accompanying notes to the financial statements
F-8
ARRAY BIOPHARMA, INC.
Notes to the Financial Statements
For the Fiscal Years Ended June 30, 2012, 2011 and 2010
NOTE 1 OVERVIEW AND BASIS OF PRESENTATION
Organization
Array BioPharma Inc. (the ``Company'') is a biopharmaceutical company focused on the discovery,
development and commercialization of targeted small molecule drugs to treat patients afflicted with
cancer and inflammatory diseases. The Company's proprietary drug development pipeline includes
clinical candidates that are designed to regulate therapeutically important target pathways. In addition,
leading pharmaceutical and biotechnology companies partner with the Company to discover and develop
drug candidates across a broad range of therapeutic areas.
Basis of Presentation
The Company follows the accounting guidance outlined in the Financial Accounting Standards Board
Codification and these audited financial statements have been prepared in conformity with accounting
principles generally accepted in the United States (``U.S.'').
Certain fiscal 2012 amounts have been reclassified to conform to the current year presentation.
Specifically, certain amounts related to our marketable securities and payment of our bonus in stock have
been reclassified in the statement of cash flows for fiscal years 2011 and 2010.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
U.S. requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenue and expenses during the reporting period. Although management
bases these estimates on historical data and other assumptions believed to be reasonable under the
circumstances, actual results could differ significantly from these estimates.
The Company believes the accounting estimates having the most significant impact on its financial
statements relate to (i) estimating the periods over which up-front and milestone payments from
collaboration agreements are recognized; (ii) estimating accrued outsourcing costs for clinical trials and
preclinical testing; and (iii) estimating the fair value of the Company's long-term debt that has associated
warrants and embedded derivatives, and the separate estimated fair value of those warrants and
embedded derivatives.
Liquidity
The Company has incurred operating losses and has an accumulated deficit as a result of ongoing
research and development spending. As of June 30, 2012, the Company had an accumulated deficit of
$570.7 million. The Company had net losses of $23.6 million, $56.3 million and $77.6 million for the fiscal
years ended June 30, 2012, 2011 and 2010, respectively.
The Company has historically funded its operations from up-front fees and license and milestone revenue
received under its collaborations and out-licensing transactions, from the issuance and sale of its equity
securities and through debt provided by its credit facilities. For example, in February 2012 the Company
F-9