Form 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For the fiscal year ended December 31, 2010
OR
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 001-35006
| A. |
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Full title of the plan and the address of the plan, if different from
that of the issuer named below: |
SPECTRUM PHARMACEUTICALS, INC.
401(k) PLAN
| B. |
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Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office: |
SPECTRUM PHARMACEUTICALS, INC.
11500 South Eastern Avenue, Suite 240
Henderson, Nevada 89052
Spectrum Pharmaceuticals, Inc. 401(k) Plan
Table of Contents
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2 |
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Financial Statements: |
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3 |
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4 |
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5-11 |
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Supplemental Information: |
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12 |
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13 |
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14 |
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Exhibit Index |
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15 |
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| Exhibit 23.1 |
1
Report of Independent Registered Public Accounting Firm
To the Administrative Committee of
The Spectrum Pharmaceuticals, Inc. 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits of The Spectrum
Pharmaceuticals, Inc. 401(k) Plan (the “Plan”) as of December 31, 2010 and 2009, and the related
statement of changes in net assets available for benefits for the
year ended December 31,
2010. These financial statements are the responsibility of the Plan’s management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31, 2010 and 2009, and
the changes in net assets available for benefits for the year ended December 31, 2010 in conformity
with accounting principles generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken
as a whole. The supplemental schedules of delinquent participant
contributions for the year ended December 31, 2010 and assets (held at
year-end) as of December 31, 2010, are presented for purposes of
additional analysis and are not a required part of the basic
financial statements, but are
supplementary information required by the Department of Labor’s Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan’s management. The supplemental schedules have been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Windes & McClaughry Accountancy Corporation
Irvine, California
June 28, 2011
2
Spectrum Pharmaceuticals, Inc. 401(k) Plan
Statements of Net Assets Available for Benefits
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December 31, |
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2010 |
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2009 |
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ASSET |
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Investments, at fair value |
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Registered investment companies |
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$ |
3,001,835 |
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$ |
2,070,093 |
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Common/collective trust |
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775,958 |
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833,215 |
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Spectrum Pharmaceuticals, Inc. common stock fund |
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1,892,537 |
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1,174,168 |
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5,670,330 |
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4,077,476 |
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Receivables: |
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Employer contributions |
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35,501 |
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— |
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Participant contributions |
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666 |
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— |
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Notes receivable from participants |
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96,433 |
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84,036 |
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132,600 |
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84,036 |
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NET ASSETS REFLECTING INVESTMENTS AT FAIR VALUE |
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5,802,930 |
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4,161,512 |
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Adjustment from fair value to contract value for fully benefit-responsive investment contract |
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(16,752 |
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(1,668 |
) |
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NET ASSETS AVAILABLE FOR BENEFITS |
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$ |
5,786,178 |
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$ |
4,159,844 |
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The accompanying notes are an integral part of these financial statements.
3
Spectrum Pharmaceuticals, Inc. 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
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Year Ended |
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December 31, |
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2010 |
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ADDITIONS TO NET ASSETS ATTRIBUTED TO: |
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Contributions: |
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Participant |
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$ |
1,059,173 |
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Participant rollover contributions |
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16,526 |
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Employer contributions |
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600,189 |
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1,675,888 |
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Investment income (loss): |
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Interest and dividends |
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61,292 |
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Net appreciation in fair value of investments |
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1,087,346 |
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1,148,638 |
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Interest
income from notes receivable from participants |
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8,227 |
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Total additions |
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2,832,753 |
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DEDUCTIONS TO NET ASSETS ATTRIBUTED TO: |
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Distributions to participants |
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1,205,144 |
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Administrative expenses |
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1,275 |
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Total deductions from net assets |
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1,206,419 |
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NET INCREASE IN PLAN NET ASSETS |
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1,626,334 |
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NET ASSETS AVAILABLE FOR BENEFITS, AT BEGINNING OF YEAR |
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4,159,844 |
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NET ASSETS AVAILABLE FOR BENEFITS, AT END OF YEAR |
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$ |
5,786,178 |
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The accompanying notes are an integral part of these financial statements.
4
Spectrum Pharmaceuticals, Inc. 401(k) Plan
Notes to Financial Statements
December 31, 2010
1. Description of the Plan
The following description of the Spectrum Pharmaceuticals, Inc. 401(k) Plan (the “Plan”) is
provided for general information purposes only. Participants should refer to the Plan document for
a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution pension plan covering eligible employees of Spectrum
Pharmaceuticals, Inc. (the “Company” or “Spectrum”) as defined in the Plan Document. The Plan was
adopted January 1, 1990 and established for the purpose of providing retirement benefits for
eligible employees of the Company. The Plan is subject to regulation under the Employee Retirement
Income Security Act of 1974 (“ERISA”) and the qualification provisions of the Internal Revenue Code
(the “Code”).
Effective as of January 1, 2007, the Plan was amended to allow hardship distributions for expenses
of beneficiaries.
Effective as of January 1, 2008, the Plan was amended to permit non-spouse beneficiaries to
rollover their portion of a death benefit to which they are entitled to an individual retirement
account described in Section 408(a) or (b) of the Code.
Effective as of January 1, 2009, the Plan permits Qualified Reservist Distributions. A Qualified
Reservist Distribution is any distribution to an individual who is ordered or called to active duty
after September 11, 2001.
Effective as of January 1, 2010, the Plan was amended to comply with the additional guidance
provided in Internal Revenue Service (“IRS”) Notice 2010-15 regarding the Heroes Earnings Assistance and Relief Tax Act of 2008
(HEART Act) and the Worker, Retiree and Employer Recovery Act of 2008 (WRERA).
Administration
The Plan has designated Rajesh C. Shrotriya, MD, President and Chief Executive Officer, and Shyam
K. Kumaria, Senior Vice President of Finance, as Trustees of the Plan. MG Trust Company, LLC, (“MG
Trust”) serves as the account custodian for the Plan. Digital Retirement Solutions, Inc. (“DRS”)
performs administrative and recordkeeping services for the Plan.
Eligibility
All employees of the Company may become eligible to participate in the Plan, provided the employee
has completed three months of employment, and is not covered by a collective bargaining agreement
as to which retirement benefits were the subject of good faith bargaining. An eligible employee
may enter the Plan on the first day of the month following his or her satisfaction of the
eligibility requirements.
The Plan gives employees of newly acquired entities credit for years of service earned prior to the
Company’s ownership. If this credit for prior service allows the acquisition employee to meet Plan
eligibility requirements, they are granted the option of entering the Plan on the first day of the
month following their date of hire.
Contributions
Each year, participants may elect to make pre-tax contributions up to 75% of their eligible
compensation, as defined in the Plan. In addition, participants may elect to make after-tax
contributions up to 75% of their eligible compensation. Compensation deferrals cannot exceed the
maximum deferral, as determined by the IRS each year. Such deferral limitation
was $16,500 in 2010 and 2009. Employees who attained the age of 50 before the end of the plan year
are eligible to make catch-up contributions of up to $5,500 during those respective Plan
years.
The
Company provides matching contributions equal to 100 percent of the first 3 percent of compensation deferred by a participant and 50
percent of the next 2 percent of compensation deferred by a participant. The Company’s matching
contribution made on behalf of any participant for any Plan year shall not exceed 4 percent of
compensation. The Company has the right under the Plan to discontinue or modify its matching
contributions at any time. The Company’s aggregate matching contribution under the Plan was
$600,189 for the year ended December 31, 2010. Additional amounts may be contributed at the
option of the Company’s board of directors.
5
Spectrum Pharmaceuticals, Inc. 401(k) Plan
Notes to Financial Statements
December 31, 2010
1. Description of the Plan (Continued)
Participant Accounts
MG Trust maintains an account in the name of each participant. Each eligible participant’s account
is credited with (a) the participant’s contributions, (b) the Company’s Safe Harbor matching
contributions, and (c) an allocation of interest, dividends and any change in the market value of
the various investment funds. Each eligible participant’s account is charged with any withdrawals
or distributions requested by the participant and an allocation of administrative expenses, if
applicable. Allocations are based on the ratio that each participant’s account balance in the fund
bears to the total account balances of all participants in the respective fund.
Investment Options
Participants direct the investment of their contributions and the Company’s matching contributions
into various investment options offered by the Plan. These options include numerous registered
investment companies, a common/collective trust and Spectrum’s common stock. Participants may
change their investment elections daily for both existing account balances and future
contributions.
Vesting
Participant contributions are fully vested when made. Company Safe Harbor matching contributions
are fully vested when made. Participants in the Plan receive vesting credit for Company
discretionary matching contributions, if any, based upon years of service, beginning with the date
of employment with the Company or one of its subsidiaries, as follows:
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| Years of Service |
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| (whole years) |
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Vesting |
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Less than 2 |
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0 |
% |
2 |
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20 |
% |
3 |
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40 |
% |
4 |
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60 |
% |
5 |
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80 |
% |
6 or more |
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100 |
% |
Distributions and Payments of Benefits
On termination of service due to death, disability, retirement, or other reasons, a participant may
receive the value of the vested interest in his or her account as a lump-sum distribution. The
Plan also permits distributions for hardships, as defined in the Plan document. Withdrawals by
participants from their accounts are permitted in accordance with the Plan’s provisions.
Forfeitures
Forfeitures of terminated participants’ non-vested account balances may be used to pay
administrative expenses or reduce any Company contributions. There were no forfeitures during the
year ended December 31, 2010.
Administrative Expenses
The compensation or fees of accountants, counsel and other specialists and any other costs of
administering the Plan or the trust are generally paid by the Company. Administrative expenses
that are not paid by the Company are paid by the Plan. Administrative expenses for the year ended
December 31, 2010 paid by the Plan were $1,275, and are in included in administrative expenses.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to
discontinue its contributions at any time and to terminate the Plan, subject to the provisions of
ERISA. In the event of Plan termination, participants will become fully vested in their accounts.
Notes Receivable From Participants
Loans to participants are secured by the participant’s account balance and may not exceed the
lesser of 50% of the participant’s account balance or $50,000 in the aggregate for any individual
participant. Loans bear interest at fixed annual rates that are computed as the prime interest rate
plus 2 percent on the date the loan is processed. At December 31, 2010 and 2009, the annual
interest rate of all loans outstanding was between 5.25% and 10.25%. Principal and interest are
paid ratably through payroll deductions over a term not to exceed 5 years. A participant applying
for a loan through the Plan will be charged a $100 loan application fee. The loan application fee
is nonrefundable and will be used to offset the administrative expenses associated with the loan.
6
Spectrum Pharmaceuticals, Inc. 401(k) Plan
Notes to Financial Statements
December 31, 2010
2. Summary of Significant Accounting Policies
Basis of Accounting
The Plan’s financial statements are prepared on the accrual basis, in conformity with generally
accepted accounting principles in the United States of America.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic
No. 962 Plan Accounting Defined Contribution Pension Plans, requires investment contracts held by a
defined-contribution plan to be reported at fair value. However, contract value is the relevant
measurement attribute for that portion of the net assets available for benefits of a
defined-contribution plan attributable to fully benefit-responsive investment contracts because
contract value is the amount participants would receive if they were to initiate permitted
transactions under the terms of the plan. As required by the ASC Topic No. 962, the Statement of
Net Assets Available for Benefits presents the fair value of the investment contracts as well as
the adjustment of the fully benefit-responsive investment contracts from fair value to contract
value. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract
value basis.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and changes therein, and disclosure of contingent assets and liabilities at the
date of the financial statements. Significant estimates are made in determining fair value of
investments. Actual results could differ from those estimates. The current economic environment
has increased the level of uncertainty inherent in these estimates and assumptions.
Investment Valuation and Income Recognition
The Plan’s investments are stated at fair value. See Note 3 for discussion of fair value measures.
Purchases and sales of securities are recorded on a trade date basis. The Plan presents in the
Statement of Changes in Net Assets Available for Benefits the net appreciation in the fair value of
its investments which consists of the related gains and the unrealized appreciation on these
investments. Dividends are recorded on the record date. Interest income is recorded on the accrual
basis.
Fully Benefit-Responsive Benefit Contracts
One of the investment options offered by the Plan, the Wells Fargo Stable Return Fund N (the
“Stable Return Fund”), is a common collective trust that is fully invested in Wells Fargo Stable
Return Fund G, which is fully invested in contracts deemed to be fully benefit-responsive. The Plan
reports its investment in the Stable Return Fund at fair value. However, contract value is the
relevant measure to the Plan because it is the amount that is available for Plan benefits.
Accordingly, in the Statement of Net Assets Available for Benefits, the Stable Return Fund, along
with the Plan’s other investments, is stated at fair value with a corresponding adjustment to
reflect the investment in the Stable Return Fund at contract value.
Notes Receivable From Participants
Notes receivable from participants are measured at their unpaid principal balance plus any accrued
but unpaid interest. Delinquent participant loans are reclassified as distributions based upon the
terms of the Plan document.
Risks and Uncertainties
The Plan assets consist of various investments which are exposed to a number of risks, such as
interest rate, market and credit risks. Due to the level of risk associated with certain investment
securities and the level of uncertainty related to changes in the value of investment securities,
it is at least reasonably possible that changes in risks in the near term could materially affect
participants’ account balances and the amounts reported in the Statements of Net Assets available
for Benefits and the Statement of Changes in Net Assets Available for Benefits.
Payment of Benefits
Benefit payments to participants are recorded when paid.
Contributions
Contributions made by participants and the Company are recorded on an accrual basis. Contributions
are recognized during the period in which the related compensation
was paid.
Operating Expenses
All expenses of maintaining the Plan are paid by the Company
7
Spectrum Pharmaceuticals, Inc. 401(k) Plan
Notes to Financial Statements
December 31, 2010
2. Summary of Significant Accounting Policies (Continued)
New Accounting Pronouncements
In January 2010, the FASB issued ASC Topic 820 Update 2010-06, Fair Value Measurements and
Disclosures — Improving Disclosures about Fair Value Measurements. This guidance requires: (i)
separate disclosure of significant transfers between Level 1 and Level 2 and reasons for the
transfers; (ii) disclosure, on a gross basis, of purchases, sales, issuances, and net settlements
within Level 3; (iii) disclosures by class of assets and liabilities; and (iv) a description of the
valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair
value measurements. This guidance is effective for reporting periods beginning after December 15,
2009, except for the Level 3 disclosure requirements, which will be effective for fiscal years
beginning after December 15, 2010. The adoption of this guidance is reflected, where applicable,
throughout these financial statements.
In September 2010, the FASB issued ASU 2010-25, Reporting Loans to Participants by Defined
Contribution Pension Plans (ASU 2010-25). ASU 2010-25 requires participant loans to be measured at
their unpaid principal balance plus any accrued but unpaid interest and to be classified as notes
receivable from participants. Previously, loans were measured at fair value and classified as
investments. Participant loans have been reclassified to notes receivable from participants as of
December 31, 2010 and 2009. Interest income related to notes receivable has been reclassified to
interest income.
3. Fair Value Measurements
ASC Topic 820, Fair Value Measurements and Disclosures, provides the framework for measuring fair
value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value
hierarchy under ASC Topic 820 are described as follows:
| • |
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Level 1—Quoted prices in active markets for identical assets or liabilities. |
| • |
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Level 2—Inputs other than Level 1 that are observable, either directly or
indirectly; such as quoted prices for similar assets or liabilities, quoted
prices in markets that are not active; or other inputs that can be
corroborated by observable market data for substantially the full term of
the assets or liabilities. |
| • |
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Level 3—Unobservable inputs that are supported by little or no market
activity and that are significant to the fair value of the assets or
liabilities. |
The registered investment companies are valued at the net asset value (“NAV”) of shares held by the
Plan at year-end, based upon quoted market prices. The common/collective trust is valued at the
net unit value (“NUV”) of units held by the Plan at year-end. The NUV is determined by the total
value of fund assets divided by the total number of units of the fund owned. Spectrum common stock
is valued at the NAV at year-end, based upon the quoted market price of the Company common stock
held at year-end.
8
Spectrum Pharmaceuticals, Inc. 401(k) Plan
Notes to Financial Statements
December 31, 2010
3. Fair Value Measurements (Continued)
The following tables represent the Plan’s fair value hierarchy for its investments as of December
31, 2010 and 2009:
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Fair Value Measurements as of December 31, 2010 |
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| Investment Category |
|
Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Registered Investment Companies: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large Growth Funds |
|
$ |
1,298,432 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,298,432 |
|
Small/Mid Growth Funds |
|
|
523,336 |
|
|
|
— |
|
|
|
— |
|
|
|
523,336 |
|
Balanced Funds |
|
|
762,085 |
|
|
|
— |
|
|
|
— |
|
|
|
762,085 |
|
Value Funds |
|
|
211,180 |
|
|
|
— |
|
|
|
— |
|
|
|
211,180 |
|
Fixed Income Funds |
|
|
206,802 |
|
|
|
— |
|
|
|
— |
|
|
|
206,802 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Registered Investment Companies |
|
|
3,001,835 |
|
|
|
— |
|
|
|
— |
|
|
|
3,001,835 |
|
|
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Common Stocks: |
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Spectrum Pharmaceuticals Common Stock Fund |
|
|
1,892,537 |
|
|
|
— |
|
|
|
— |
|
|
|
1,892,537 |
|
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|
|
|
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|
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Total Common Stocks |
|
|
1,892,537 |
|
|
|
— |
|
|
|
— |
|
|
|
1,892,537 |
|
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Common/Collective Trust* |
|
|
— |
|
|
|
775,958 |
|
|
|
— |
|
|
|
775,958 |
|
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Total Assets at Fair Value |
|
$ |
4,894,372 |
|
|
$ |
775,958 |
|
|
$ |
— |
|
|
$ |
5,670,330 |
|
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| |
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| |
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Fair Value Measurements as of December 31, 2009 |
|
| Investment Category |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Registered Investment Companies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large Growth Funds |
|
$ |
838,675 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
838,675 |
|
Small/Mid Growth Funds |
|
|
355,238 |
|
|
|
— |
|
|
|
— |
|
|
|
355,238 |
|
Balanced Funds |
|
|
591,444 |
|
|
|
— |
|
|
|
— |
|
|
|
591,444 |
|
Value Funds |
|
|
150,512 |
|
|
|
— |
|
|
|
— |
|
|
|
150,512 |
|
Fixed Income Funds |
|
|
134,224 |
|
|
|
— |
|
|
|
— |
|
|
|
134,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Registered Investment Companies |
|
|
2,070,093 |
|
|
|
— |
|
|
|
— |
|
|
|
2,070,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spectrum Pharmaceuticals Common Stock Fund |
|
|
1,174,168 |
|
|
|
— |
|
|
|
— |
|
|
|
1,174,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stocks |
|
|
1,174,168 |
|
|
|
— |
|
|
|
— |
|
|
|
1,174,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Common/Collective Trust* |
|
|
— |
|
|
|
833,215 |
|
|
|
— |
|
|
|
833,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Assets at Fair Value |
|
$ |
3,244,261 |
|
|
$ |
833,215 |
|
|
$ |
— |
|
|
$ |
4,077,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| * |
|
As stated in Note 2 above, the Stable Return Fund, which is deemed to be fully
benefit-responsive, is stated at fair value on the Statements of Net Assets Available for
Benefits, with a corresponding adjustment to reflect contract value. The fair value of this
fund as of December 31, 2010 and 2009 was $775,958 and $833,215, respectively. The contract
value of the fund as of December 31, 2010 and 2009, which is a component of net assets
available for benefits, totaled $759,206 and $831,547, respectively. |
9
Spectrum Pharmaceuticals, Inc. 401(k) Plan
Notes to Financial Statements
December 31, 2010
4. Investments
The following presents the Plan’s individual investments, at fair value, that represent 5% or more
of the Plan’s net assets available for benefits at December 31, 2010 and 2009.:
| |
|
|
|
|
|
|
|
|
| |
|
As of December 31, |
|
| Investment |
|
2010 |
|
|
2009 |
|
Spectrum Pharmaceuticals Common Stock |
|
$ |
1,892,537 |
|
|
$ |
1,174,168 |
|
Wells Fargo Stable Return |
|
|
775,958 |
|
|
|
833,215 |
|
Oppenheimer Developing Markets |
|
|
414,862 |
|
|
|
297,992 |
|
DWS Gold & Precious Metals Fund |
|
|
404,264 |
|
|
|
234,644 |
|
American Funds American Balanced R3 |
|
|
** |
|
|
|
211,147 |
|
American Funds EuroPacific R3 |
|
|
** |
|
|
|
208,009 |
|
| |
|
|
| ** |
|
Not applicable as amount represents less than 5% of the Plan’s net assets available for benefits as of the applicable year end. |
During the year ended December 31, 2010, the Plan’s investments, including gains and losses on
investments sold during the year, changed in value as follows:
| |
|
|
|
|
| |
|
Year Ended |
|
| |
|
December 31, |
|
| Description |
|
2010 |
|
Registered Investment Companies |
|
$ |
423,552 |
|
Common/Collective Trust |
|
|
(526 |
) |
Spectrum Common Stock |
|
|
664,320 |
|
|
|
|
|
Net increase in fair value of investments |
|
$ |
1,087,346 |
|
|
|
|
|
5. Related Party Transactions
Transactions in shares of Spectrum’s common stock qualify as exempt party-in-interest transactions
under the provisions of ERISA, since Spectrum is the Plan administrator.
6. Concentration, Market and Credit Risk
The Plan provides for various investment options including the Company’s common stock. Investments
are exposed to various risks, such as interest rate, market and credit risk. Due to the level of
risk associated with certain investment securities, it is possible that changes in the values of
investment securities will occur in the near term and that such changes could materially affect
participants’ account balances and the amount reported in the Statements of Net Assets Available
for Benefits. As of December 31, 2010 and 2009, approximately 33% and 28% respectively, of the
investments of the Plan consisted of securities of its sponsor, Spectrum Pharmaceuticals, Inc. As
of December 31, 2010 and 2009, Spectrum’s stock price closed at $6.87 and $4.44, respectively.
7. Tax Status of the Plan
The IRS has determined and informed the Company by a letter dated March 31, 2008, that the Plan and
related trust are designed in accordance with applicable sections of the IRC. Although the Plan
has been amended since receiving the opinion letter, the Plan administrator and the Plan’s tax
counsel believe that the Plan is designed and is currently being operated in compliance with the
applicable requirements of the IRC and therefore believe that the Plan is qualified and the related
trust is tax-exempt.
Accounting principles generally accepted in the United States of America require Plan management to
evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the
organization has taken an uncertain position that more likely than not would not be sustained
upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the
Plan, and has concluded that as of December 31, 2010 there are no uncertain positions taken or
expected to be taken that would require recognition of a liability (or asset) or disclosure in the
financial statements. The Plan is subject to routine audits by taxing jurisdictions; however,
there are currently no audits for any tax periods in progress. The Plan administrator believes it
is no longer subject to income tax examinations for year prior to 2007.
10
Spectrum Pharmaceuticals, Inc. 401(k) Plan
Notes to Financial Statements
December 31, 2010
8. Subsequent Event
The Company evaluated all events and transactions that occurred from the balance sheet date of
December 31, 2010 through June 28, 2011 the date the financial statements were available to be
issued. During this period, there were no events or transactions occurring which require
recognition or disclosure in the financial statements.
11
Spectrum Pharmaceuticals, Inc. 401(k) Plan
EIN: 93-0979187, PN: 001
Supplementary Information
Schedule H, Part IV, Item 4a
Schedule of Delinquent Participant Contributions
For the Year Ended December 31, 2010
| |
|
|
|
|
|
|
|
|
| Participant |
|
|
|
|
|
|
| Contributions |
|
|
|
|
Total That Constitute |
|
| Transferred Late to |
|
|
|
|
Nonexempt Prohibited |
|
| Plan |
|
|
|
|
Transactions |
|
| |
|
|
|
|
|
|
|
|
| $ |
54,363 |
|
|
|
|
$ |
54,363 |
|
| |
|
|
|
|
|
|
During
the year ended December 31, 2010, contributions comprised of employee
deferrals for one payroll period were not remitted timely to the Plan, thus constituting nonexempt
transactions between the Plan and the Company. Lost earnings are being calculated and will be
remitted during the 2011 plan year.
12
Spectrum Pharmaceuticals, Inc. 401(k) Plan
EIN: 93-0979187, PN: 001
Supplementary Information
Schedule
of Assets (Held at Year-End)
As of December 31, 2010
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Description of |
|
Type of |
|
Current |
|
| |
|
Identity of Issue |
|
Investment |
|
Investment |
|
Value |
|
| |
| |
|
AllianceBernstein L.P. |
|
AllianceBernstein Small/Mid Cap Value |
|
RIC |
|
$ |
109,762 |
|
| |
|
Capital Research and Management Co. |
|
American Funds American Balanced R3 |
|
RIC |
|
|
272,955 |
|
| |
|
Capital Research and Management Co. |
|
American Funds Bond Fund America R3 |
|
RIC |
|
|
137,320 |
|
| |
|
Capital Research and Management Co. |
|
American Funds Capital World Bond R3 |
|
RIC |
|
|
69,482 |
|
| |
|
Capital Research and Management Co. |
|
American Funds Capital World Growth & Income R3 |
|
RIC |
|
|
101,418 |
|
| |
|
Capital Research and Management Co. |
|
American Funds EuroPacific R3 |
|
RIC |
|
|
282,323 |
|
| |
|
Capital Research and Management Co. |
|
American Funds Growth Fund R3 |
|
RIC |
|
|
228,610 |
|
| |
|
Capital Research and Management Co. |
|
American Funds Small Cap World R3 |
|
RIC |
|
|
109,923 |
|
| |
|
BlackRock Funds |
|
BlackRock Energy & Resources |
|
RIC |
|
|
181,482 |
|
| |
|
Columbia Management |
|
Columbia Technology |
|
RIC |
|
|
222,254 |
|
| |
|
DWS Mutual Funds, Inc. |
|
DWS Gold & Precious Metals Fund |
|
RIC |
|
|
404,264 |
|
| |
|
Federated Government Obligations |
|
Federated Government Obligations IC |
|
RIC |
|
|
28,442 |
|
| |
|
Janus Investment Funds |
|
Janus Enterprise Fund |
|
RIC |
|
|
46,323 |
|
| |
|
Lord, Abbett & Co. |
|
Lord Abbett Small Cap Blend |
|
RIC |
|
|
107,690 |
|
| |
|
Munder Capital Management |
|
Munder Micro Cap Equity |
|
RIC |
|
|
65,108 |
|
| |
|
Oppenheimer Funds |
|
Oppenheimer Developing Markets |
|
RIC |
|
|
414,862 |
|
| |
|
Selected Funds |
|
Selected American Shares |
|
RIC |
|
|
141,699 |
|
| * |
|
Spectrum Pharmaceuticals, Inc. |
|
Spectrum Pharmaceuticals Common Stock Fund |
|
SPCS |
|
|
1,892,537 |
|
| |
|
Victory Capital Management |
|
Victory Special Value |
|
RIC |
|
|
77,918 |
|
| |
|
Wells Fargo Bank, NA |
|
Wells Fargo Stable Return |
|
CCT* |
|
|
775,958 |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
Total Investments |
|
|
|
|
5,670,330 |
|
| |
|
|
|
|
|
|
|
|
|
| * |
|
Notes Receivable from Participants |
|
Notes Receivable from Participant
(maturing 2011 to 2025) at interest rates of 5.25% to 10.25%. |
|
|
|
|
96,433 |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
| * |
|
Indicates a party-in-interest to the Plan. |
| |
| RIC — Registered Investment Company |
| |
| CCT — Common Collective Trust |
| |
| SPCS — Spectrum Pharmaceutical Common Stock |
13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan administrator of the
Spectrum Pharmaceuticals, Inc. 401(k) Plan has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
| |
|
|
|
|
| |
SPECTRUM PHARMACEUTICALS, INC. 401(k) PLAN
|
|
| Date: June 28, 2011 |
By: |
/s/ Shyam Kumaria
|
|
| |
|
Shyam Kumaria |
|
| |
|
Senior Vice President, Finance of
Spectrum Pharmaceuticals,
Inc.,
and
Plan Trustee of
Spectrum Pharmaceuticals,
Inc. 401(k) Plan |
|
14
EXHIBIT INDEX
| |
|
|
|
|
| Exhibit |
|
|
| Number |
|
Exhibit Title |
| |
23.1 |
|
|
Consent of Independent Registered Public Accounting Firm, Windes & McClaughry Accountancy Corporation |
15