UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE PERIOD ENDED JUNE 30, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________
TO _____________
Commission File Number: 0-27088
SANO CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 650263022
- --------------------------------------- ------------------------------------
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3250 COMMERCE PARKWAY
MIRAMAR, FLORIDA 33025
- --------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)
(954) 430-3340
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1933 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, $.01 par value 9,226,096 shares as of August 7, 1996.
<PAGE>
SANO CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets -- June 30, 1996 and December 31, 1995
Statements of Operations -- Three and six months ended June 30, 1996
and 1995 and for the cumulative period
from inception (May 16, 1991) through
June 30, 1996
Statements of Cash Flows -- Six months ended June 30, 1996, and 1995
and for the cumulative period from
inception (May 16, 1991) through June 30,
1996
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
Page 1
<PAGE>
FINANCIAL STATEMENTS
ITEM 1.
SANO CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30 December 31,
1996 1995
---- ----
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 6,356,777 $ 5,517,061
Marketable securities 14,884,162 22,782,221
Other current assets 181,398 320,401
----------- -----------
Total current assets 21,422,337 28,619,683
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, NET 7,700,055 5,304,167
----------- -----------
OTHER ASSETS
Patents, net 348,982 236,815
Deposits and other 1,163,734 463,838
----------- -----------
Total other assets 1,512,716 700,653
----------- -----------
TOTAL ASSETS $30,635,108 $34,624,503
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 33,711 $ 213,816
Current obligation under capitalized leases 35,989 33,429
Accounts payable 693,219 696,015
Accrued expenses 1,294,108 647,871
----------- -----------
Total current liabilities 2,057,027 1,591,131
----------- -----------
LONG TERM LIABILITIES
Deferred revenue 3,318,509 1,451,655
Capitalized lease obligations, net of current portion 30,290 48,990
Notes payable 496,558 473,024
----------- -----------
Total long term liabilities 3,845,357 1,973,669
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value, 5,000,000 authorized, none issued or outstanding -- --
Common stock $0.01 par value, 25,000,000 shares authorized, 9,225,680 & 9,206,932
issued and outstanding at June 30, 1996 and December 31, 1995, respectively 92,257 92,069
Additional paid-in-capital 45,369,424 45,354,225
Deficit accumulated during development stage (20,728,957) (14,386,591)
----------- -----------
Total stockholders' equity 24,732,724 31,059,703
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $30,635,108 $34,624,503
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES
Page 2
<PAGE>
SANO CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
CUMULATIVE
PERIOD FROM
INCEPTION
(MAY 16, 1991)
THREE MONTHS ENDED SIX MONTHS ENDED THROUGH
JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ -
OPERATING EXPENSES
Research and development 3,077,056 1,823,678 5,835,434 3,320,776 18,618,875
General and administrative 646,637 242,709 1,090,866 421,380 3,123,134
----------- ----------- ----------- ----------- ------------
Total operating expenses 3,723,693 2,066,387 6,926,300 3,742,156 21,742,009
----------- ----------- ----------- ----------- ------------
OTHER INCOME (EXPENSE)
Development fees - - - - 228,025
Interest income 302,360 38,397 638,320 51,810 1,017,251
Interest expense (17,484) (21,156) (37,746) (40,283) (215,584)
Loss on sale of equipment - - (16,640) - (16,640)
----------- ----------- ----------- ----------- ------------
Total other income (expense) 284,876 17,241 583,934 11,527 1,013,052
----------- ----------- ----------- ----------- ------------
NET LOSS (3,438,817) (2,049,146) (6,342,366) (3,730,629) (20,728,957)
----------- ----------- ----------- ----------- ------------
Dividends on redeemable preferred stock - (379,182) - (379,182) -
----------- ----------- ----------- ----------- ------------
Net loss attributable to common stockholders $(3,438,817) $(2,428,328) $(6,342,366) $(4,109,811) $(20,728,957)
=========== =========== =========== =========== ============
LOSS PER SHARE (NOTE 2) $ (0.37) $ (0.41) $ (0.69) $ (0.72) $ (4.38)
=========== =========== =========== =========== ============
WEIGHTED AVERAGE SHARES 9,214,000 5,913,000 9,210,000 5,694,000 4,737,000
=========== =========== =========== =========== ============
</TABLE>
SEE ACCOMPANYING NOTES
Page 3
<PAGE>
SANO CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
CUMULATIVE PERIOD
FROM INCEPTION
(MAY 16, 1991)
THROUGH
SIX MONTHS ENDED JUNE 30, JUNE 30,
1996 1995 1996
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(6,342,366) $(3,730,629) $(20,728,957)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 312,500 166,887 927,653
Loss on sale of equipment 16,640 - 16,640
Accretion of discount on marketable securities (79,338) - (242,586)
Interest accrued on notes payable 36,402 37,740 139,745
Changes in operating assets and liabilities:
Decrease (increase) in other current assets 151,204 91,048 (169,197)
Decrease (increase) in deposits and other (712,097) 7,274 (1,175,935)
Increase in accounts payable and accrued expenses 643,441 742,677 1,987,327
----------- ----------- ------------
Net cash used in operating activities (5,973,614) (2,685,003) (19,245,310)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,721,012) (2,466,293) (8,537,012)
Sale of equipment 2,200 - 2,200
Sale and maturities of marketable securities 17,629,278 - 17,629,278
Purchase of marketable securities (9,651,881) - (32,270,854)
Expenditures for patents (118,383) (91,991) (363,122)
----------- ----------- ------------
Net cash (used in) provided by
investing activities 5,140,202 (2,558,284) (23,539,510)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Fractional share payoff - - (707)
Repayment of notes payable (209,113) - (1,925,086)
Proceeds from notes payable - 129,495 2,511,960
Advances from distributor 1,866,854 - 3,318,509
Proceeds from exercise of stock options 15,387 - 15,387
Proceeds from issuance of common stock, net of expenses - - 31,671,037
Proceeds from issuance of preferred stock series A - - 400,000
Proceeds from issuance of preferred stock series B - - 553,997
Proceeds from issuance of preferred stock series C - - 1,499,989
Proceeds from issuance of preferred stock series D - 156,563 6,000,000
Proceeds from issuance of preferred stock series E - 5,101,249 5,096,511
----------- ----------- ------------
Net cash provided by financing activities 1,673,128 5,387,307 49,141,597
----------- ----------- ------------
Net increase in cash and cash equivalents 839,716 144,020 6,356,777
Cash and cash equivalents at beginning of period 5,517,061 2,585,918 -
----------- ----------- ------------
Cash and cash equivalents at end of period $ 6,356,777 $ 2,729,938 $ 6,356,777
=========== =========== ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
Accrued interest on redeemable preferred stock $ - $ 379,182 $ -
=========== =========== ============
Capitalized leases $ - $ - $ 95,396
=========== =========== ============
</TABLE>
In November 1995, in conjunction with the initial public offering, the Company
had a 5 for 6 reverse stock split of its common stock and all preferred stock
was converted into 3,797,213 shares of common stock.
SEE ACCOMPANYING NOTES
Page 4
<PAGE>
SANO CORPORATION
(A Development Stage Corporation)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(1) BASIS OF PRESENTATION:
The information at June 30, 1996 and for the six months ended June 30, 1996 and
1995 is unaudited. However, such information includes all adjustments
(consisting of normal recurring adjustments) which management of Sano
Corporation (the "Company") believes are necessary for a fair financial
presentation of the results for the periods presented. The results of operations
and cash flows for the six month period ended June 30, 1996 are not necessarily
indicative of results of operations and cash flows which may be reported for a
full year. These financial statements should be read in conjunction with the
audited financial statements for the year ended December 31, 1995.
In November 1995, in conjunction with the initial public offering, the Company
had a 5 for 6 reverse stock split of its common stock and all preferred stock
was converted into 3,797,213 shares of common stock.
(2) DEFERRED REVENUE:
In 1994, the Company entered into an agreement with a distribution company
pursuant to which such distribution company would pay certain product
development fees in exchange for the right to distribute certain products in
development by the Company. Certain funds received by the Company pursuant to
the agreement are to be repaid from future gross profits derived from certain
products developed by the Company and distributed by the distribution company.
Other funds received under the agreement are subject to conditions of the
agreement for recognition as revenue, that have not yet been met. The amounts
received under the agreement are classified as deferred revenue and will be
recognized as income through future sales or as the specified conditions are
met.
(3) LOSS PER SHARE:
Loss per share is determined by dividing the net loss attributable to holders of
Company's common stock by the weighted average number of shares of common stock
and dilutive common stock equivalents outstanding, after applying the treasury
stock method and after giving effect to the reverse stock split and the
recapitalization referred to above.
Common stock equivalents do not include the issuance of stock options and
warrants because of their antidilutive effect.
Page 5
<PAGE>
SANO CORPORATION
(A Development Stage Corporation)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
CONTINUED
(4) STOCK OPTION PLAN:
In May 1993, the Board of Directors of the Company adopted the Sano Corporation
1993 Nonqualified Stock Option Plan (the "Plan") which has been approved by the
Company's stockholders. All directors, officers, employees and certain related
parties of the Company designated by the Board are eligible to receive options
under the Plan. The Plan provides for the granting of stock options for the
purchase of up to 1,224,083 shares of the Company's common stock. The Plan which
is administered by the Board of Directors of the Company, terminates on May 4,
2003. The purchase price per share of stock purchased under an option pursuant
to the Plan is determined by the Board, but in no event may such price be below
the fair market value of such stock. The maximum term of any option is ten years
from the date of grant. All options terminate within 120 days of termination of
employment.
In September 1995, the Company adopted the 1995 Stock Option Plan (the "1995
Plan") which provides for the granting of stock options to key employees,
officers, directors and independent contractors for the purchase of up to
500,000 shares of the Company's common stock. Options granted under the Plan may
be incentive stock options or nonqualified options. Additionally, under the 1995
Plan, each non-employee director receives on the date of his appointment as
director an option to purchase 5,000 shares of common stock, and upon the
release of prior year earnings in each subsequent year an option to purchase
5,000 shares of common stock.
Options typically vest over a period of years. However, each Plan provides for
immediate vesting for certain key officers, if control of the Company is
changed.
The following is a summary of stock option activity:
NUMBER OF OPTION PRICE
SHARES PER SHARE
--------- -----------
Outstanding at December 31, 1995 1,272,500 $ .67 - 11.50
Granted 241,000 11.88 - 16.75
Exercised (18,748) .67 - 2.70
Canceled (8,141) .67 - 16.75
--------- --------------
Outstanding at June 30, 1996 1,486,611 $ .67 - 16.75
========= ==============
Options exercisable at June 30, 1996 875,076 $ .67 - 14.38
========= ==============
Shares of common stock available for
future grants at June 30, 1996 218,724
=========
Page 6
<PAGE>
SANO CORPORATION
(A Development Stage Corporation)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
CONTINUED
(5) LEGAL PROCEEDINGS:
On March 6, 1996, Key Pharmaceuticals, Inc. ("Key") filed a complaint
in the United States District Court of Florida alleging that one of the
Company's transdermal nitroglycerin patches, a generic version of Nitro
Dur/registered trademark/, for which the Company has filed an Abbreviated New
Drug Application with the U.S. Food and Drug Administration, infringed certain
patents owned by Key. The Company has invited Key to review samples of and
certain information about the Company's generic version of Nitro Dur/registered
trademark/ under appropriate confidentiality arrangements. Key has not yet
responded. The Company had previously obtained non-infringement opinions with
regard to its product and believes that there is no merit to the allegations in
the complaint. The Company has filed an answer and counter claims to the
complaint and intends to vigorously defend this lawsuit. If however, the Company
is found in violation of Key's patents, it may not be able to market its generic
version of Nitro Dur/registered trademark/ on a commercially acceptable basis or
at all.
Page 7
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
GENERAL
Since its commencement of operations in October 1992, the Company has devoted
substantially all of its resources to drug delivery research and development
programs and now has ten proprietary products and twelve generic products in
various stages of development. The Company has not yet commenced its planned
principal operations and is therefore classified as a development stage company.
The Company has been unprofitable since inception and expects to incur
significant additional losses in the near future. For the period from inception
(May 16, 1991) through June 30, 1996, the Company incurred a cumulative net loss
of $20,729,000. The Company's sources of working capital have been an initial
public offering (the "Offering"), equity financing prior to the Offering,
product development fees and advances from Pharmaceutical Resources, Inc.
("PRI") in connection with its distribution agreement and, to a far lesser
extent, interest earned on investment of cash.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995.
The Company reported net loss of $3,439,000 for the three months ended June 30,
1996, compared to a net loss of $2,428,000 for the same period in 1995. The
increase in net loss of $1,011,000 primarily represents the Company's increasing
clinical, facilities, research and development and personnel expenditures. In
addition, dividends on redeemable preferred stock of $379,000 were accrued for
three months ended June 30, 1995. The Company employed 75 individuals during the
quarter ended June 30, 1996 compared to 44 individuals for the same period in
the prior year.
The Company incurred research and development expenses of $3,077,000 during the
three month period ended June 30, 1996 compared to $1,824,000 for the same
period in the prior year, an increase of $1,253,000 or 69%. Of the $1,253,000
increase, $756,000 is a result of increases in the Company's clinical trial
programs for its Proprietary and Generic products and increases in its research
program; $341,000 of the increase is due to increased personnel and related
expenditures necessary to undertake increased research and development
activities; and $156,000 of the increase relates to increases in operating
overhead allocations due to facilities expansion including rent, common area
maintenance, taxes and utilities. As of June 30, 1996, the Company had 22
products in various stages of development compared to 15 products at June 30,
1995.
General and administrative expenses were $647,000 and $243,000, respectively,
for the three month period ended June 30, 1996 and 1995. The $404,000 increase
is due to personnel and related expenditures associated with the expansion of
facilities and administrative support for the Company's research and development
efforts as well as increases in professional fees, facilities operation
expenses, depreciation and insurance expenses.
Interest income for the three month period ended June 30, 1996 increased to
$302,000 compared to $38,000 for the same prior year period. This $264,000
increase in interest income is attributable to the investment of the remaining
proceeds of the Offering.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995.
The Company reported net loss of $6,342,000 for the six months ended June 30,
1996, compared to a net loss of $4,110,000 for the same period in 1995. The
increase in net loss of $2,232,000 reflects the Company's increasing clinical,
facilities, research and development and personnel expenditures.
The Company incurred research and development expenses of $5,835,000 during the
six month period ended June 30, 1996 compared to $3,321,000 for the same period
in the prior year, an increase of $2,514,000 or 76%. Of the $2,514,000 increase,
$1,455,000 is a result of increases in the Company's clinical trial programs for
its Proprietary and Generic products and increases in its research program;
$718,000 of the increase is due to increased personnel and related expenditures
necessary to undertake increased research and development activities; and
$341,0000 of the increase relates to increases in operating overhead allocations
due to facilities expansion including rent, common area maintenance, taxes and
utilities.
Page 8
<PAGE>
RESULTS OF OPERATIONS CONTINUED
General and administrative expenses were $1,091,000 and $421,000, respectively,
for the six month period ended June 30, 1996 and 1995. The $670,000 increase is
due to personnel and related expenditures associated with the expansion of
facilities and administrative support for the Company's research and development
efforts as well as increases in professional fees, facilities operation
expenses, depreciation and insurance expenses.
Interest income for the six month period ended June 30, 1996 increased to
$638,000 compared to $52,000 for the same prior year period. This $586,000
increase in interest income is attributable to the investment of the remaining
proceeds of the Offering. Interest expense is principally the interest expense
amortization associated with a discounted promissory note payable to PRI.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $5,974,000 for the six months ended
June 30, 1996, compared to $2,685,000 the same prior year period. This increase
reflects increased cash outlays for clinical trials, payroll and overhead.
The Company had capital expenditures of $2,721,000 for plant and equipment
acquisitions and $118,000 in additions to patents and licensing agreements
during the six months ended June 30, 1996, compared to $2,466,000 and $92,000,
respectively for the same period the prior year.
Net cash provided by financing activities totaled $1,673,000 for the six months
ended June 30, 1996 compared to $5,387,000 for the same period in 1995. The
decrease is a result of the proceeds received from the issuance of preferred
stock of $5,258,000 in 1995.
At June 30, 1996, the Company had working capital of $19,365,000 compared to
working capital of $27,029,000 at December 31, 1995. Cash and cash equivalents
and marketable securities were $21,241,000 and $28,299,000 at June 30, 1996 and
December 31, 1995, respectively.
Based on its current expectations of product development, the Company expects to
use approximately $5,000,000 in 1996 on capital improvements and purchases of
machinery and equipment. Based on its current expectations of product
development, the Company also anticipates using $5,000,000 to fund clinical
trials in 1996. Assuming it does not incur any unanticipated material expenses,
the Company believes that it has enough working capital to fund current
operations and capital requirements through early 1997.
The Company believes that it maintains certain technologies that are relatively
flexible and can be modified to apply to a variety of pharmaceutical products.
The Company is currently evaluating new product opportunities, which include the
formulation and commercialization of controlled release oral pharmaceuticals.
This advanced drug delivery system offers benefits similar to the transdermal
delivery system as compared to immediate release dosage forms. These benefits
include improved efficacy, increased patient compliance, and a more consistent
and appropriated drug level in the bloodstream. As of June 30, 1996, the Company
has expended approximately $220,000 in research and development expenses and
$225,000 in capital expenditures relating to controlled release oral
pharmaceuticals.
On April 19, 1996 the FDA's, Nonprescription Advisory Committee voted
unanimously to recommend that two of the four branded transdermal nicotine
patches be switched from prescription to over-the-counter (OTC) status (an "OTC
Switch"). As of August, 1996, two nicotine patches were approved by the FDA, but
no final decision as to exclusivity was announced. The Company has filed an
Abbreviated New Drug Application for approval of a generic version of
Habitrol/registered trademark/, which was not one of the nicotine patches
approved for the OTC Switch. The Company believes, however, based on prior
actions of the FDA with other products that it is likely Habitrol/registered
trademark/ will be approved for an OTC Switch. In addition, the FDA must
determine whether any one, or all, of the nicotine patches will receive a period
of marketing exclusivity. At this time management is unable to predict which
manufacturers, if any, will receive a period of marketing exclusivity and what
effect if any, the OTC Switch will have on the Company. In the event that
Habitrol/registered trademark/ is approved for the OTC Switch, any period of
exclusivity granted by the FDA for the OTC version of Habitrol/registered
trademark/ would serve to delay the launch of the Company's generic nicotine
patch, delay the Company's receipt of revenue from this product and could have a
negative impact on the ultimate marketability on the product.
Page 9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES CONTINUED
The foregoing Management's Discussion and Analysis contains various "forward
looking statements" within the meaning of Section 27A of the Securities Act of
1933 which represent the Company's expectations or beliefs concerning future
events, including, but not limited to statements regarding management's
expectations of FDA approval and the commencement of sales; and the sufficiency
of the Company's cash flow for the Company's future liquidity and capital
resource needs. These forward looking statements are further qualified by
important factors that could cause actual results to differ materially from
those in the forward looking statements. These factors include, without
limitation, the Company's ability to continue to complete development and
clinical trials of its products and, ultimately, to obtain approval for the sale
of such products from the FDA, neither of which is assured. Results actually
achieved may differ materially from expected results included in these
statements as a result of these or other factors.
Page 10
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Incorporated by reference to "Notes to Financial Statements - Legal
Proceeding" in Part I of this Quarterly Report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
10.1 1993 Non-Qualified Stock Option Plan of Registrant (1)
10.2 1995 Stock Option Plan of Registrant (1)
10.3 Form of Indemnification Agreement between the Registrant and each of its directors and executive
officers (1)
10.4 Employment Agreement, dated as of September 20, 1995, between the Registrant and Marc M.
Watson (2)
10.5 Employment Agreement, dated as of September 20, 1995, between the Registrant and Reginald L.
Hardy (2)
10.6 Employment Agreement, dated as of May 31, 1993, between the Registrant and Charles Betlach
(1)
10.7 Employment Agreement, dated as of September 30, 1993, between the Registrant and Cheryl
Gentile, as amended (2)
10.8 Employment Agreement, dated as of May 28, 1993, between the Registrant and Jesus Miranda, as
amended (2)
10.9 Employment Agreement, dated as of September 30, 1993, between the Registrant and Joseph
Gentile (1)
10.10 Distribution Agreement, dated February 24, 1994, between the Registrant and Pharmaceutical
Resources, Inc. (1) (4)
10.11 Lease Agreement, dated May 6, 1994, between the Registrant and Sunbeam Properties, Inc. (3250
Commerce Parkway, Miramar, Florida property) (1)
10.12 Lease Agreement, dated June 10, 1994, between the Registrant and Sunbeam Properties, Inc.
(3251 Corporate Way, Miramar, Florida property) (1)
10.13 Consulting Agreement dated January 7, 1994 between the Registrant and Dr. Donald Robinson (2)
10.14 License Agreement dated October 28, 1994 by and between Dr. Jed E. Rose, Dr. Edward D.
Levin and Robert J. Schaap and the Registrant (3)
23.1 Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. (included in its opinion
filed as Exhibit 5.1) (2)
23.2 Consent of Arthur Andersen LLP (3)
27 Financial Data Schedule
</TABLE>
- -----------------------------------------
(1) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Registration Statement on Form S-1, file number 33-97194.
(2) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Amendment No. 1 to Registration Statement on Form S-1, file
number 33-97194.
(3) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Amendment No. 2 to Registration Statement on Form S-1, file
number 33-97194.
Page 11
<PAGE>
(4) Certain marked portions of this Agreement have been redacted and
filed separately with the Commission pursuant to Rule 406 of the
Securities Act of 1933.
(b) REPORTS ON FORM 8-K
The Company filed no reports on Form 8-K during the second quarter of 1996.
Page 12
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
By: /s/ Reginald L. Hardy
------------------------
Dated: August 9, 1996 Reginald L. Hardy
PRESIDENT
(PRINCIPAL EXECUTIVE OFFICER)
By: /s/ Gerald S. Coombs
---------------------------
Dated: August 9, 1996 Gerald S. Coombs
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
Page 13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,356,777
<SECURITIES> 14,884,162
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 181,398
<PP&E> 8,605,993
<DEPRECIATION> 905,938
<TOTAL-ASSETS> 30,635,108
<CURRENT-LIABILITIES> 2,057,027
<BONDS> 0
0
0
<COMMON> 92,257
<OTHER-SE> 24,640,467
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</TABLE>
