Chemomab Therapeutics Ltd. 10-K

Item 5. Market for Registrant’s ADSs, Related Stockholder Matters and Issuer Purchases of Equity Securities The ADSs, representing our ordinary shares, have been trading on Nasdaq under the symbol “ANCN” since February 12, 2019. Prior to that date, there was no public trading market for the ADSs. Our ordinary shares were traded on the Tel Aviv Stock Exchange (“TASE”) until June 2019, under the symbol “ANCN”. As of February 18, 2020, there were seven holders of record of our ordinary shares. Item 6. Selected Financial Data Not applicable. 62 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis, particularly with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should read “Risk Factors” in Item 1A of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Overview We are an early-stage preclinical biopharmaceutical company dedicated to the discovery, development, and commercialization of novel targeted therapies to treat cancer in areas of significant clinical need. Throughout most of 2019, we ran a Phase 2 study, designated Codex, evaluating the gene therapy inodiftagene in patients with BCG-unresponsive NMIBC. However, in November 2019, after a thorough evaluation of data, we determined there was a low probability of surpassing the pre-defined futility threshold at the planned interim analysis of the study, and announced the discontinuation of the study and of active clinical development of inodiftagene. We recently acquired two developmental programs targeting oncogenic pathways (small-molecule pan-RAS inhibitors and inhibitors of PDE10 and the β-catenin pathway) pursuant to the Collaboration Agreement into which we entered with ADT on September 20, 2019. Our operations are focused on the successful development, regulatory approval and commercialization of products derived from the compounds contemplated thereby, which are in the concept, research and preclinical stages. Under the agreement, we are primarily responsible for the research, development, manufacturing and regulatory activities with respect to the Compounds. For further information regarding our business and operations, see “Item 1. Business.” Our corporate structure consists of a parent company, Anchiano Therapeutics Ltd. (formerly BioCancell Ltd.), incorporated in Israel, which wholly owns a subsidiary, Anchiano Therapeutics Israel Ltd. (formerly BioCanCell Therapeutics Israel Ltd.), incorporated in Israel, which itself wholly owns a subsidiary, Anchiano Therapeutics, Inc. (formerly BioCanCell USA, Inc.), incorporated in Delaware. We currently maintain offices in Cambridge, MA and an office and laboratory in Jerusalem, Israel. However in January 2020, our board of directors approved our management’s recommendation to close our Israeli office and laboratories in 2020, with our operations to continue from our Cambridge office. Acquisition Agreement In September 2019, we announced that we had entered into the option to license Agreement with ADT. Pursuant to the terms and conditions set forth in the agreement, we have mutually agreed to use commercially reasonable efforts to conduct research and development activities of novel small-molecule inhibitors (RAS and PDE10/β-catenin) . As part of the arrangement, we will be primarily responsible for the research, development, manufacturing and regulatory activities and ADT will assist with the research activities as necessary in exchange for a quarterly fee. In connection with the agreement, ADT also granted us exclusive rights to research, develop, manufacture and commercialize the aforementioned compounds relating to patents owned by ADT and any products containing such compounds worldwide. In consideration for the rights granted under the agreement, we will pay ADT (i) a $3 million upfront fee; (ii) a fee upon transfer of the know-how and intellectual property rights to us; and (iii) additional payments, including milestone and royalty payments. We may terminate the agreement at any time in its entirety or on a compound-by-compound basis after providing 90 days written notice to ADT. The upfront fee was paid in 2019. Since there is no alternative future use for the upfront fee, we accounted for it as a research and development expense. Transition to U.S. GAAP As of June 30, 2019, we have no longer met the requirements to qualify as a foreign private issuer under the Exchange Act. As a result, we began reporting as a domestic issuer as of January 1, 2020 and we are now required under SEC rules to prepare our financial statements in accordance with U.S. GAAP, rather than IFRS. The main impact of the transition from consolidated financial statements under IFRS to U.S. GAAP on our consolidated financial statements as at December 31, 2018 included the treatment of our 2018 financing round. In our IFRS financials, the warrants and the price protection rights were accounted for as two derivative financial instruments. Accordingly, such derivatives were measured initially at fair value on the date of the transaction with the remaining balance, representing the issued shares, being allocated to equity. In the current US GAAP financials, on initial measurement, both of the freestanding instruments (warrants and shares together with their price protections) were classified as equity instruments that are not subsequently measured at fair value, 63 Functional currency Items included in the financial statements of our entities are measured using the currency of the primary economic environment in which we operate. Our functional currency from inception through December 31, 2018 was the New Israeli Shekel (“NIS”), as this was the functional currency of its significant operations. Effective January 1, 2019, we, including our Israeli subsidiary, reassessed our functional currency and determined to change our functional currency to the U.S. dollar (“dollar”, “USD” or “$”) from the NIS. The change in functional currency was accounted for prospectively from January 1, 2019, and the financial statements prior to and including the period ended December 31, 2018 were not restated for the change in functional currency. In late 2018 and the beginning of 2019, we went through significant business developments and changes in its economic circumstances, that clearly indicate that the functional currency has changed, beginning January 2019, include the following: - There has been a significant increase in our activities in the USA, resulting from our management’s strategic decision to shift our development, financing and ongoing operations from Israel to the USA, as evidenced, inter alia, by the transfer of our operations and development activities, including our management, to the USA; - The initiation of a pivotal clinical trial in the USA, which was substantially larger than any previous clinical trial that we had performed, all of which result in a significant increase in expenses and financing denominated in USD relative to other currencies; - Our recent initial public offering on the Nasdaq Capital Market in USD, with additional funding going forward also expected to be denominated in USD. The Nasdaq listing has involved a significant increase in related USD expenses; and - Our U.S. subsidiary entering into a license agreement with ADT Pharmaceuticals, LLC (“ADT”), which will be managed solely in dollars. Moreover, the discontinuation of the Codex study in November 2019 led to the closure of our Israeli operations and the focus of our resources on programs related to the ADT agreement. In effecting the change in functional currency to the U.S. dollar, as of January 1, 2019, monetary assets and liabilities denominated in foreign currencies have been translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities were based on prior period translated amounts, and non-monetary assets acquired and non-monetary liabilities incurred after January 1, 2019 were translated at the approximate exchange rate prevailing at the date of the transaction. Expenses were translated at the approximate exchange rate in effect at the time of the transaction. Foreign exchange gains and losses were included in the consolidated statement of operations and comprehensive loss as foreign exchange gain (loss). The exchange rate on the date of the change became the historical rate for subsequent re-measurement of non-monetary assets and liabilities into USD, our new functional currency. For periods prior to January 1, 2019, the effects of exchange-rate fluctuations on translating foreign currency monetary assets and liabilities into NIS were included in the statement of operations and comprehensive loss as foreign exchange gain/loss. Expense were translated into USD reporting currency at the balance sheet date at average exchange rates during the period, and assets and liabilities were translated at period-end exchange rates, except for equity transactions, which were translated at historical exchange rates. Translation gains and losses from the application of USD as our reporting currency, while NIS was the functional currency, are included as part of the cumulative foreign currency translation adjustment, which is reported as a component of shareholders’ equity under accumulated other comprehensive loss. 64 Components of Operating Results Revenues To date, we have not generated any revenue. We do not expect to receive any revenue unless and until we obtain regulatory approval and commercialize a future product candidate, or until we receive revenue from a collaboration such as a co-development or out-licensing agreement. There can be no assurance that we will receive such regulatory approvals, and if a future product candidate is approved, that we will be successful in commercializing it. Research and Development Expenses Research and development activities are our primary focus. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We do not believe that it is possible at this time to accurately project total expenses required for us to reach commercialization of our product candidates. Due to the inherently unpredictable nature of preclinical and clinical development, we are unable to estimate with certainty the costs we will incur and the timelines that will be required in the continued development and approval of our product candidates. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. In addition, we cannot forecast which product candidates may be subject to future collaborations, if and when such arrangements will be entered into, if at all, and to what degree such arrangements would affect our development plans and capital requirements. We expect our research and development expenses to increase over the next several years as our clinical programs progress and as we seek to initiate clinical trials of additional product candidates. We also expect to incur increased research and development expenses as we selectively identify and develop additional product candidates. Research and development expenses include the following: · employee-related expenses, such as salaries and share-based compensation; · expenses relating to outsourced and contracted services, such as CROs, external laboratories and consulting, research and advisory services; · supply, development and manufacturing costs relating to clinical trial materials; · expenses incurred in operating our laboratories and small-scale equipment; · preclinical study expenses and related developmental costs; and · costs associated with regulatory compliance. We recognize research and development expenses as we incur them. General and Administrative Expenses General and administrative expenses consist primarily of personnel costs, including share-based compensation related to directors and employees, facility costs, patent application and maintenance expenses, and external professional service costs, including legal, accounting, audit, finance, business development, investor relations and human resource services, and other consulting fees. 65 Finance Expenses, Net Finance expenses, net, consisted primarily of finance expenses recorded due to revaluation of investor warrants at fair value during a period where these could not be classified within equity (for more details, see Note 6c in “Item 8. Financial Statements and Supplementary Data” below), offset by interest income. Restructuring Expenses We have recognized restructuring provisions for the direct expenditures arising from restructuring initiatives, where the plans are sufficiently detailed and where appropriate communication to those affected has been made To this end, we have recorded restructuring expenses comprised principally of contract termination costs and employee severance and associated termination costs related to the reduction of our workforce. One-time termination benefits are expensed at the date the employees are notified, unless the employees must provide future services beyond a minimum retention period, in which case the benefits are expensed ratably over the future service periods. A provision for contract termination costs, in which a contract is terminated or the entity will continue to incur costs under a contract for its remaining term without economic benefit (an onerous contract), is recognized only when the contract is terminated or when the entity permanently ceases using the rights granted under the contract. Income Taxes We have yet to generate taxable income in Israel. We have historically incurred operating losses resulting in carry forward tax losses totaling approximately $105.4 million as of December 31, 2019. We anticipate that we will continue to generate tax losses for the foreseeable future and that we will be able to carry forward these tax losses indefinitely to future taxable years. Accordingly, we do not expect to pay taxes in Israel until we have taxable income after the full utilization of our carry forward tax losses. We have provided a full valuation allowance with respect to the deferred tax assets related to these carry forward losses. Results of Operations Below is a summary of our results of operations for the periods indicated: Fiscal Year Ended December 31, 2019 2018 (USD, in thousands) Operating expenses: Research and development expenses $ 13,303 $ 7,514 General and administrative expenses 6,245 5,521 Restructuring expenses 3,350 - Operating loss $ 22,898 $ 13,035 Financing income (393 ) (42 ) Financing expense 4,619 499 Financing expense, net 4,226 457 Loss before income taxes $ 27,124 $ 13,492 Income tax - 306 Net loss $ 27,124 $ 13,798 Our results of operations have varied in the past and can be expected to vary in the future due to numerous factors. We believe that period-to-period comparisons of our operating results are not necessarily meaningful and should not be relied upon as indications of future performance. 66 Year ended December 31, 2019 Compared to the Year Ended December 31, 2018 Research and development expenses Research and development expenses increased by approximately $5.8 million, 77%, to approximately $13.3 million for the year ended December 31, 2019 compared to approximately $7.5 million for the year ended December 31, 2018. The increase resulted primarily due to an increase in clinical trial expenses, manufacturing expenses and manpower expenses, as well as additional startup and initial ongoing expenses in connection with the Collaboration Agreement with ADT. General and administrative expenses General and administrative expenses increased by approximately $0.7 million, 13%, to approximately $6.2 million for the year ended December 31, 2019 compared to approximately $5.5 million for the year ended December 31, 2018. The increase was primarily due to increases in professional fees, insurance and manpower expenses, offset by a decrease in share-based payment. Restructuring expenses In November 2019, we decided to discontinue our Phase 2 Codex study in patients with BCG-unresponsive NMIBC. In connection with this decision, we are required to make certain payments under contracts with CROs and with other manufactures of the drug in order to terminate the contracts and close the trials. Moreover the restructuring plan included a reduction in the workforce of seven employees. Separately, in January 2020 our board of directors approved management’s recommendation to close our office and laboratories located in Israel. Restructuring expenses incurred during the fourth quarter of 2019 were comprised principally of contract termination costs and employee severance and associated termination costs related to the reduction of our workforce. Financing expense, net Financing expense, net increased by approximately $3.7 million, or 824%, to an expense of approximately $4.2 million for the year ended December 31, 2019 compared to approximately $0.46 million for the year ended December 31, 2018, primarily due to revaluation of investor warrants at fair value during a period where these could not be classified within shareholders’ equity, due to the following circumstances: On initial measurement, the warrants together with their price protections were classified as equity instruments that are not subsequently measured at fair value, and thus we allocated the proceeds according to the relative fair value of the instruments. However, we changed our functional currency from NIS to USD as of January 1, 2019. Due to this change from this date, the exercise price of the warrants was no longer denominated in our functional currency and the warrants were therefore not considered indexed to our own stock according to ASC 815-40 and no longer met all the criteria to be classified within equity. Therefore, the warrants were reclassified as a liability at their fair value as of January 1, 2019, and any difference was accounted for as an adjustment to equity. Upon our Nasdaq initial public offering of February 14, 2019, the warrants’ exercise price currency was changed to USD. As a result, the warrants were reclassified within equity. Consequently, the warrants were measured at fair value from January 1, 2019 until February 14, 2019, with resulting finance expenses of $4.6 million, until they were reclassified within equity. 67 Income tax Income tax decreased by approximately $0.3 million to approximately $0 million for the year ended December 31, 2019 compared to approximately $0.3 million for the year ended December 31, 2018. This decrease was primarily due to a decrease in the taxable income of our US subsidiary. Our U.S. subsidiary provides us with general and clinical trial management services. For these services, our US subsidiary is compensated on a cost-plus basis, and records income taxes accordingly. In 2019, following our acquisition of the programs from ADT, these expenses are not part of the cost-plus compensation and accordingly our US subsidiary does not have taxable income for the current year. Cash Flows The table below shows a summary of our cash flow activities for the periods indicated: Fiscal Year Ended December 31, 2019 2018 Net cash used in operating activities $ (16,458 ) $ (14,223 ) Net cash used in investing activities (95 ) (213 ) Net cash provided by financing activities 26,621 20,619 Net increase in cash and cash equivalents $ 10,068 $ 6,183 Operating activities Net cash used in operating activities increased by approximately $2.2 million, to approximately $16.5 million for the year ended December 31, 2019 compared to approximately $14.2 million for the year ended December 31, 2018. This increase is primarily due to increases in clinical trial expenses, manufacturing expenses, manpower expenses and restructuring expenses. Investing activities Net cash used in investing activities decreased by $0.1 million, to approximately $0.1 million for the year ended December 31, 2019 compared to $0.2 million for the year ended December 31, 2018. This decrease was primarily due to a decrease in equipment purchases for our laboratory. Financing activities Net cash provided by financing activities increased by $6.0 million, to approximately $26.6 million for the year ended December 31, 2019 compared to $20.6 million for the year ended December 31, 2018. This increase primarily reflects the size of our initial public offering in the first quarter of 2019, compared to our private placement of equities in the second quarter of 2018. Effects of Currency Fluctuation Currency fluctuations could affect us through increased or decreased costs, mainly for goods and services acquired outside of the United States. Currency fluctuations have not had a material effect on our results of operations during the years ended December 31, 2019 or 2018. Off-Balance Sheet Arrangements We have not entered into any transactions with unconsolidated entities as to which we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that would expose us to material continuing risks, contingent liabilities or any other obligation under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support. 68 Critical Accounting Policies The discussion and analysis of our financial condition and results of operations is based on our financial statements, which we prepared in accordance with U.S. GAAP. Comparative figures, which were previously presented and publicly reported in accordance with IFRS as issued by the International Accounting Standards Board, have been adjusted as necessary to be compliant with our policies under U.S. GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate such estimates and judgments, including those described in greater detail throughout this section. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Share-Based Compensation We account for employees’ and directors’ share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period. As of December 31, 2019, we have elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the accelerated method based on the multiple-option award approach. Forfeitures are accounted for estimating the number of awards expected to be forfeited instead of as they occur. Financial Derivatives We evaluate all financial instruments issued in connection with its equity offerings when determining the proper accounting treatment for such instruments in our financial statements. We consider a number of generally accepted accounting principles under U.S. GAAP to determine such treatment and evaluates the features of the instrument to determine the appropriate accounting treatment. We utilize the Probability Weighted Expected Return Method (PWERM), Option Pricing Model (OM) or other appropriate methods to determine the fair value of its derivative financial instruments such as the warrant liability. For financial instruments indexed to and potentially settled in our shares that are determined to be classified as liabilities on the consolidated balance sheet, changes in fair value are recorded as a gain or loss in our consolidated statement of operations with the corresponding amount recorded as an adjustment to the liability on its consolidated balance sheet. Accrued Expenses As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We make estimates of our accrued expenses as of each balance sheet date in our consolidated financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. Examples of estimated accrued research and development expenses include fees payable to clinical research organizations and investigative sites in connection with clinical trials, vendors in connection with preclinical development activities, vendors related to product manufacturing, development, and distribution of clinical materials; and professional service fees for consulting and related services. We base our expense accruals related to clinical trials on our estimates of the services received and efforts expended pursuant to our contract arrangements. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows and expense recognition. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid accordingly. Our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in our reporting changes in estimates in any particular period. 69 Recently-Issued Accounting Pronouncements Certain recently-issued accounting pronouncements are discussed in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report. Liquidity and Capital Resources Following several fundraising rounds in prior years, in June 2018, we completed a $22.9 million fundraising round from investors in the United States and Israel, as well as existing shareholders, led by Shavit Capital Funds. In consideration for the investment, we issued 5,960,787 ordinary shares (constituting approximately 38% of our issued and outstanding share capital after completion of the transaction) at a price per share of approximately $3.842, as well as warrants to acquire additional shares equal to 80% of the shares issued, at an exercise price per share of NIS 16.20 (approximately $4.32). The warrants are exercisable for five years and may be exercised on a cashless basis. In addition, we granted the investors price protection rights (to shares and warrants) in the event of a future share issuance where the price does not increase by at least approximately 42.86% over the price per share in the fundraising (or is less than the adjusted price per share, if the price has already been adjusted). In February 2019, we raised $30.5 million in our Nasdaq initial public offering, allocating 2,652,174 ADSs, each representing five ordinary shares. In accordance with price protection rights granted in 2018 and activated in the offering, we allocated an additional 8,262,800 ordinary shares (equivalent to 1,652,560 ADSs) to rights holders and adjusted their warrants to be exercisable for an additional 6,207,330 ordinary shares (equivalent to 1,241,466 ADSs). As shown in the accompanying consolidated financial statements, we have incurred losses and cash flow deficits from operations since inception, resulting in an accumulated deficit at December 31, 2019 of approximately $105.4 million. We have financed operations to date primarily through public and private placements of equity securities. We anticipate that we will continue to incur net losses for the foreseeable future. We believe that our existing cash and cash equivalents will only be sufficient to fund our projected cash needs until the end of 2020. Accordingly, these factors, among others, raise substantial doubt about our ability to continue as a going concern. To meet future capital needs, we would need to raise additional capital through equity or debt financing or other strategic transactions. However, any such financing may not be on favorable terms or even available to us. Our failure to obtain sufficient funds on commercially acceptable terms when needed would have a material adverse effect on our business, results of operations and financial condition. The forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of our expenses could vary materially and adversely as a result of a number of factors. We have based our estimates on assumptions that may prove to be wrong, and our expenses could prove to be significantly higher than we currently anticipate. Current Outlook We estimate that our current cash resources will allow us to advance our pre-clinical development program through 2020, meaning that further fundraising will be required in order to complete the research and development of our product candidates. We expect to satisfy our future cash needs through capital raising from the public, private investors and institutional investors, such as through the public offering of ordinary shares that we completed in February 2019. We may also engage with a partner in order to share the costs associated with the development and manufacturing of our product candidates or seek to enter an out-licensing agreement. Developing drugs, conducting preclinical and clinical trials, obtaining commercial manufacturing capabilities and commercializing products is expensive and we will need to raise substantial additional funds to achieve our strategic objectives. We will require significant additional financing in the future to fund our operations, including if and when we progress into clinical trials of our product candidates, obtain regulatory approval for one or more of our product candidates, obtain commercial manufacturing capabilities and commercialize one or more of our product candidates. Our future capital requirements will depend on many factors, including, but not limited to: 70 · the progress and costs of our preclinical and clinical trials and other research and development activities; · the scope, prioritization and number of our preclinical and clinical trials and other research and development programs; · the amount of revenues and contributions we receive under future licensing, collaboration, development and commercialization arrangements with respect to our product candidates; · the costs of development and expansion of our operational infrastructure; · the costs and timing of obtaining regulatory approval for one or more of our product candidates; · our ability, or that of our collaborators, to achieve development milestones, marketing approval and other events or developments under potential future licensing agreements; · the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights; · the costs and timing of securing manufacturing arrangements for clinical or commercial production; · the costs of contracting with third parties to provide sales and marketing capabilities for us or establishing such capabilities ourselves; · the costs of acquiring or undertaking development and commercialization efforts for any future products, product candidates or technology; · the magnitude of our general and administrative expenses; and · any additional costs that we may incur under future in- and out-licensing arrangements relating to one or more of our product candidates. Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through capital raising or by out-licensing and/or co-developing applications of one or more of our product candidates. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of or eliminate research or development plans for, or commercialization efforts with respect to, one or more of our product candidates and make necessary change to our operations to reduce the level of our expenditures in line with available resources. We are a development-stage company and it is not possible for us to predict with any degree of accuracy the outcome of our research and development efforts. As such, it is not possible for us to predict with any degree of accuracy any significant trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net loss, liquidity or capital resources, or that would cause financial information to not necessarily be indicative of future operating results or financial condition. However, to the extent possible, certain trends, uncertainties, demands, commitments and events are described in this item. Item 8. Financial Statements and Supplementary Data See the Index to Consolidated Financial Statements on Page F-1 attached hereto. 71 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.