<PAGE>
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
COMMISSION FILE NUMBER 0-21225
-----------------------
VISCORP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 88-0101953
(STATE OF INCORPORATION) (I.R.S. EMPLOYER ID NO.)
4764 PARK GRANADA, SUITE 110, CALABASAS, CALIFORNIA 91302
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)
(818) 225-0000
(REGISTRANT'S PHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE
(TITLE OF CLASS)
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
1934 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
------ -------
THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUERS CLASSES OF COMMON
STOCK WAS 22,128,000 SHARES OF COMMON STOCK, PAR VALUE $0.01, OUTSTANDING AS
OF MARCH 31, 1997.
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<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
VISCORP
(A DEVELOPMENT STAGE ENTERPRISE)
Condensed Consolidated Balance Sheets
ASSETS
Unaudited Unaudited
Three Three
Months Months
Ended Ended
March 31, March 31,
1997 1996
------------- ------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash Equivalents 1,510,315 106,547
Receivables 0
Stockholders 20,000 24,598
Other 1,389
Prepaid expenses 13,235 524,800
------------- ------------
Total Current Assets 1,544,939 655,945
------------- ------------
PROPERTY AND EQUIPMENT, AT COST
Equipment and Furniture 62,893 65,505
Equipment and Furniture under
capital lease 46,589 4,883
Test Equipment 18,040 0
------------- ------------
127,522 70,388
Less accumulated depreciation (41,233) (28,636)
------------- ------------
Total Property and Equipment, Net 86,289 41,752
------------- ------------
OTHER ASSETS
Investment securities-Digital Sciences, Inc. 0 343,750
Intangible assets (Net of accumulated
amortization) 81,196 93,919
Other 5,753 5,670
------------- ------------
Total Other Assets 86,949 443,339
------------- ------------
Totals 1,718,177 1,141,036
------------- ------------
------------- ------------
</TABLE>
page 1
<PAGE>
VISCORP
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Unaudited Unaudited
Three Three
Months Months
Ended Ended
March 31, March 31,
1997 1996
------------ -------------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable 825,675 409,134
Accrued expenses 105,498 17,955
Notes payable to related parties 665,441 231,484
Other notes payable 117,777 0
Due to former officer and consultant 203,522 0
------------ ------------
Total Current Liabilities 1,917,913 658,573
------------ ------------
NOTES PAYABLE (Net of portion included
in current liabilityies) 29,665 0
MINIMUM ROYALTY OBLIGATONS 450,000 0
------------ ------------
Total Liabilities 2,397,578 658,573
------------ ------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock 221,280 216,280
Preferred stock 20,318 0
Additional paid-in capital (common) 15,096,123 7,640,498
Additional paid-in capital (preferred) 2,680,928 0
Dividend cost (preferred) (53,030)
Deferred compensation for grant
stock option (3,713,542) 0
Deficit accumulated during the
development stage (14,931,478) (7,088,377)
Net unrealized investment losses (gains) 0 (285,938)
------------ ------------
Total Stockholders' Equity (Deficit) (679,401) 482,463
------------ ------------
Totals 1,718,177 1,141,036
------------ ------------
------------ ------------
</TABLE>
page 2
<PAGE>
VISCORP
(A DEVELOPMENT STAGE ENTERPRISE)
Condensed Consolidated Statement of Income
<TABLE>
<CAPTION>
Unaudited Unaudited Period from
Three Three May 1, 1990
Months Months (Inception)
Ended Ended Unaudited
March 31, March 31, March 31,
1997 1996 1997
------------ ------------ -------------
<S> <C> <C> <C>
LICENSE INCOME 0 0 629,688
Operating Expenses
Research and development 25,084 286,738 3,823,264
Minimun royalty expense 0 0 900,000
Travel and entertainment 31,397 105,075 1,540,829
Unallocated 0 0 300,000
Legal fees
Former employee litigation 20,846 14,432 883,630
Other 96,881 71,461 1,131,897
Consulting 143,473 91,000 868,428
Stock option compensation 0 0 2,927,083
Fund raising fees for failed offerings 0 0 118,237
Rent expense - related parties 39,400
Other general and administrative 209,586 212,982 2,635,853
------------ ------------ -------------
Total Operating Expenses 527,267 781,688 15,168,621
------------ ------------ -------------
OPERATING LOSS 527,267 781,688 14,538,933
OTHER EXPENSE (INCOME)
Interest expense - Stockholder debt 15,488 3,498 253,416
Interest expense - Other 1,977 0 25,041
Interest income (1) (1,638) (20,242)
Loss on disposal of equipment 0 0 4,642
Loss on investment 0 0 129,688
------------ ------------ -------------
Total Other (Income) Expense,
Net 17,464 1,860 392,545
------------ ------------ -------------
NET LOSS 544,731 783,548 14,931,478
------------ ------------ -------------
------------ ------------ -------------
AVERAGE SHARES OUTSTANDING COMMON 22,128,000
AVERAGE SHARES OUTSTANDING PREFERRED 2,031,832
LOSS PER SHARE .02
</TABLE>
page 3
<PAGE>
VISCORP
(A DEVELOPMENT STAGE ENTERPRISE)
Condensed Consolidated Cash Flows
<TABLE>
<CAPTION>
Unaudited Unaudited Period from
Three Three May 1, 1990
Months Months (Inception)
Ended Ended Unaudited
March 31, March 31, March 31,
1997 1996 1997
---------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (544,731) (783,548) (14,931,478)
Adjustments to reconcile net
loss to net cash used in
operating activities 0
Depreciation and amortization 9,932 40,784 111,118
License income received in stock 0 0 (629,688)
Stock option compensation 0 0 2,927,083
Unallocated 0 0 300,000
Loss on investment 0 0 129,688
Services paid in stock 0 0 416,250
Interest on stockholder loans 15,488 3,498 253,418
Interest on nonstockholder loan 0 0 6,082
Provision for losses on advances 0 0 36,509
Loss on disposal of equipment 0 0 4,642
(Increase) in accounts receivable (1,389) 0 (1,389)
Increase (decrease) in prepaid
expenses) 17,243 (462,300) (13,235)
Increase (decrease) in
Accounts payable (613,608) 104,245 825,675
Accrued expenses (47,230) (1,387) 85,498
Minimum royalty obligation 0 0 450,000
--------------------------------------
Total Adjustments (619,564) (315,160) 4,901,651
--------------------------------------
Net Cash Used in Operating
Activities (1,164,295) (1,098,708) (10,029,827)
--------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of equipment 0 0 500
Capital expenditures 0 (10,077) (100,674)
Advances to related company 0 0 (36,509)
Patents and other expenditures 0 (142,234)
Advances to stockholders 0 (24,598) (116,478)
--------------------------------------
--------------------------------------
Net Cash used in Investing
Activities (1,164,295) (34,675) (395,395)
--------------------------------------
</TABLE>
page 4
<PAGE>
VISCORP
(A DEVELOPMENT STAGE ENTERPRISE)
Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Unaudited Unaudited Period from
Three Three May 1,1990
Months Months (Inception)
Ended Ended through
March 31, March 31, March 31,
1997 1996 1997
----------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of checks issued in exess
of funds on deposit 0 0
Borrowings from nonstockholders 0 0 100,000
Borrowings from stockholders 20,000 20,000
Principal payments under notes
payable (2,260) (2,260)
Repayments to affiliated company 0 0
Proceeds from issuance of
common stock 0 500,000 500,000
Payment of stock issuance cost (346,502) 0 (346,502)
Repayment of stockholder borrowings 0 (100,000)
Proceeds from issuance of
preferred stock 3,047,748 3,047,748
Dividends paid (53,030) (53,030)
----------------------------------------
Net Cash Provided by Financing
Activities 2,665,956 500,000 3,165,956
----------------------------------------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 1,501,661 (633,383) 1,510,315
----------------------------------------
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 8,654 739,930
----------------------------------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD 1,510,315 106,547 1,510,315
----------------------------------------
</TABLE>
page 5
<PAGE>
VisCorp
4764 Park Granada
Suite 110
Calabasas, CA 91302
RESULTS OF OPERATIONS
Three Months Ended March 31,1997 Compared to three Months Ended March 31,
1996.
Research and development expenses decreased to $25,084 for the first
quarter of 1997 from $286,738 for the first quarter of fiscal 1996, a decrease
of $261,654.This decrease was due to the reduced activity to the production of
a prototype of the ED.
Travel and entertainment expenses decreased to $31,399 for the first
quarter of fiscal 1997 from $105,075 for the first quarter of fiscal 1996, a
decrease of $73,676. The decrease was due to the reduction in travel by the
management.
Consulting expenses increased to $143,472 for the first quarter of 1997 from
$91,000 for the first quarter of fiscal 1996, an increase of $52,472. This
increase was due to retaining a new Chief Executive Officer.
Legal fees increased to $117,727 for the first quarter of fiscal 1997 from
$85,893 for the first quarter of fiscal 1996, an increase of $31,834. This
increase was due to increased activity relating to the Bushnell litigation and
Serlin litigation. (See 10K).
Other General and Administrative expenses decreased to $209,586 for the first
quarter of 1997 from $212,982 for the first quarter of fiscal 1996, a decrease
of $3,396. This decrease was due to the reduction of advertising materials.
page 6
<PAGE>
VisCorp
4764 Park Granada
Calabasas, CA 91302
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Viscorp
Date: May 15, 1997 /s/ LAWRENCE D. SIEGEL
------------ -------------------------------------
Lawrence D. Siegel
(President, Chief Executive Officer
and Director (Principal Executive
Officer))
Date: May 15, 1997 /s/ HUGH A. JENCKS
------------ -------------------------------------
Hugh A. Jencks
Vice President, Secretary and Chief
Operating Officer (Principal
Financial and Accounting Officer))
page 7
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 1510315
<SECURITIES> 0
<RECEIVABLES> 34624
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1544939
<PP&E> 244329
<DEPRECIATION> (71091)
<TOTAL-ASSETS> 1718177
<CURRENT-LIABILITIES> 1917913
<BONDS> 479665
0
20318
<COMMON> 221280
<OTHER-SE> (920999)
<TOTAL-LIABILITY-AND-EQUITY> 1718177
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 544731
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 544731
<EPS-PRIMARY> 0
<EPS-DILUTED> (.02)
</TABLE>
