<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM
_____________________________ TO ____________________________________
COMMISSION FILE NO. 0-29608
GENETRONICS BIOMEDICAL LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BRITISH COLUMBIA, CANADA 33-002-4450
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.
for Genetronics,
Inc.)
11199 SORRENTO VALLEY ROAD 92121-1334
SAN DIEGO, CALIFORNIA (Zip Code)
(Address of principal executive offices)
Company's telephone number, including area code: (858) 597-6006
Indicate by check mark whether the Company (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 Company
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 the Company's Common Stock, no par
value, was 27,289,218 as of November 3, 2000.
<PAGE> 2
GENETRONICS BIOMEDICAL LTD.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Item 1. Financial Statements
Page
----
a) Consolidated Balance Sheets
as of September 30, 2000 and March 31, 2000........................1
b) Consolidated Statements of Loss and Deficit
for the Three Months and Six Months Ended September 30, 2000
and 1999 .....................................................2
c) Consolidated Statements of Cash Flows
for the Six Months Ended September 30, 2000
and 1999 .....................................................3
d) Notes to Consolidated Financial Statements.........................4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................................11
Item 3. Quantitative and Qualitative Disclosures About Market Risk.............18
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds..............................19
Item 4. Submission of Matters to a Vote of Security Holders....................19
Item 5. Other Information......................................................20
Item 6. Exhibits and Reports on Form 8-K.......................................21
Signatures..............................................................................22
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GENETRONICS BIOMEDICAL LTD.
CONSOLIDATED BALANCE SHEETS
(In U.S. dollars)
<TABLE>
<CAPTION>
September 30, March 31,
2000 2000
$ $
(Unaudited) (Note)
--------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents 6,028,481 9,742,344
Accounts receivable, net of allowance for
uncollectible accounts of $ 32,377
[March 31, 2000 - $54,925] 981,527 1,120,450
Inventories [note 5] 977,913 611,642
Prepaid expenses and other 62,569 139,423
----------- -----------
TOTAL CURRENT ASSETS 8,050,490 11,613,859
----------- -----------
Fixed assets, net 972,714 1,014,811
Other assets, net [note 12] 2,334,877 1,383,634
----------- -----------
11,358,081 14,012,304
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Accounts payable and accrued expenses [note 12] 1,623,212 1,784,084
Current portion of obligations under
capital leases 55,058 53,098
Deferred revenue 250,885 268,665
----------- -----------
TOTAL CURRENT LIABILITIES 1,929,155 2,105,847
----------- -----------
Obligations under capital leases 37,748 65,286
Deferred rent 24,930 9,972
----------- -----------
TOTAL LIABILITIES 1,991,833 2,181,105
----------- -----------
SHAREHOLDERS' EQUITY
Share capital [note 6] 42,287,237 30,491,793
Additional paid in capital [note 12] 589,718 35,768
Special warrants -- 11,002,992
Cumulative translation adjustment (102,098) (100,911)
Deficit (33,408,609) (29,598,443)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 9,366,248 11,831,199
----------- -----------
11,358,081 14,012,304
----------- -----------
</TABLE>
Note: The financial statements at March 31, 2000 are derived from audited
financial statements but do not include all of the footnote and other
disclosures required by generally accepted accounting principles.
See accompanying notes.
1
<PAGE> 4
GENETRONICS BIOMEDICAL LTD.
CONSOLIDATED STATEMENTS OF
LOSS AND DEFICIT
(Unaudited)
(In U.S. dollars, except weighted average number of common shares)
<TABLE>
<CAPTION>
Three Months Ended September 30, Six Months Ended September 30,
2000 1999 2000 1999
$ $ $ $
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE
Net sales 1,172,951 1,081,300 2,337,739 1,780,378
License fee and milestone payments 83,333 333,334 83,333 333,334
Grant funding 55,709 43,520 68,096 241,905
Revenues under collaborative research
and development arrangements 97,779 15,000 172,780 15,000
Interest income 118,286 176,410 256,664 244,693
----------- ----------- ----------- -----------
1,528,058 1,649,564 2,918,612 2,615,310
----------- ----------- ----------- -----------
EXPENSES
Cost of sales 591,545 438,856 1,046,185 765,593
Research and development 1,431,205 1,672,757 2,826,035 3,642,620
Selling, general and administrative 1,403,528 1,407,742 2,846,816 3,014,406
Interest expense 4,666 6,549 9,742 13,259
Restructuring charges -- 367,579 -- 367,579
----------- ----------- ----------- -----------
3,430,944 3,893,483 6,728,778 7,803,457
----------- ----------- ----------- -----------
NET LOSS FOR THE PERIOD (1,902,886) (2,243,919) (3,810,166) (5,188,147)
Deficit , beginning of period (31,505,723) (22,942,729) (29,598,443) (19,998,501)
----------- ----------- ----------- -----------
DEFICIT, END OF PERIOD (33,408,609) (25,186,648) (33,408,609) (25,186,648)
----------- ----------- ----------- -----------
NET LOSS PER COMMON SHARE - BASIC AND
DILUTED [NOTE 7] (0.07) (0.10) (0.15) (0.24)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 27,272,642 22,017,670 25,461,020 21,846,316
=========== =========== =========== ===========
</TABLE>
See accompanying notes
2
<PAGE> 5
GENETRONICS BIOMEDICAL LTD.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
(In U.S. dollars)
SIX SIX
MONTHS ENDED MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999
$ $
---------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss for the period (3,810,166) (5,188,147)
Items not involving cash:
Depreciation and amortization 281,318 248,643
Provision for (recovery of) uncollectible accounts (22,548) 41,808
Provision for inventory obsolescence (17,130) 7,868
Loss on disposal of fixed assets 3,760 --
Deferred rent 14,958 (7,173)
Changes in non-cash working capital items:
Accounts receivable 161,471 (49,641)
Inventories (349,141) (189,609)
Prepaid expenses and other 76,854 (119,337)
Accounts payable and accrued expenses (507,372) 278,876
Deferred revenue (17,780) --
----------- -----------
CASH USED IN OPERATING ACTIVITIES (4,185,776) (4,976,712)
----------- -----------
INVESTING ACTIVITIES
Purchase of short-term investments -- (8,811,867)
Purchase of capital assets (155,051) (26,712)
Increase in other assets (138,723) (233,852)
----------- -----------
CASH USED IN INVESTING ACTIVITIES (293,774) (9,072,431)
----------- -----------
FINANCING ACTIVITIES
Payments on obligations under capital leases (25,578) (22,112)
Proceeds from issuance of Special Warrants - net -- 11,222,554
Proceeds from issuance of common shares - net 792,452 506,719
----------- -----------
CASH PROVIDED BY FINANCING ACTIVITIES 766,874 11,707,161
----------- -----------
Effect of exchange rate changes on cash (1,187) 364
----------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS (3,713,863) (2,341,618)
Cash and cash equivalents, beginning of period 9,742,344 6,189,284
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD 6,028,481 3,847,666
----------- -----------
</TABLE>
See accompanying notes
3
<PAGE> 6
GENETRONICS BIOMEDICAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In U.S. dollars)
1. BASIS OF PRESENTATION
The Consolidated Statements of Loss and Deficit for the three months and
six months ended September 30, 2000 and 1999, the Consolidated Balance Sheet as
of September 30, 2000, and the Consolidated Statements of Cash Flows for the six
months ended September 30, 2000 and 1999 have been prepared by the Company in
accordance with Canadian generally accepted accounting principles for annual
financial statements. In the opinion of management, all adjustments (which
include reclassifications and normal recurring adjustments) necessary to present
fairly the financial position, results of operations and cash flows at September
30, 2000 and for all periods presented, have been made.
The accounting policies and methods of application adopted in these
financial statements are the same as those of the annual consolidated financial
statements for the year ended March 31, 2000, with the exception of the change
in accounting policy related to income taxes [see note 4].
Certain information and note disclosures normally included in the annual
financial statements prepared in accordance with Canadian generally accepted
accounting principles have been omitted. These interim consolidated financial
statements and notes thereto should be read in conjunction with the annual
consolidated financial statements for the year ended March 31, 2000 included in
the Genetronics Biomedical Ltd. Annual Report on Form 10-K filed with the
Securities and Exchange Commission. The results of operations for the three
months and six months ended September 30, 2000 are not necessarily indicative of
the results for the full year or for any other future period.
2. PRINCIPLES OF CONSOLIDATION
These consolidated financial statements include the accounts of
Genetronics Biomedical Ltd. and its wholly-owned subsidiary, Genetronics, Inc.,
a private company incorporated in the state of California, USA. Effective May
2000, the Company closed the operations of its wholly owned subsidiary
Genetronics SA, a company incorporated in France, and subsequently sold its
investment in Genetronics SA for nominal consideration to Geser SA, a company
owned by Genetronics SA's former General Manager. Significant intercompany
accounts and transactions have been eliminated on consolidation.
3. ACCOUNTING POLICIES
Future Income Taxes
Future income taxes are recognized for the future income tax
consequences attributable to differences between the carrying values of assets
and liabilities and their respective income tax bases. Future income tax assets
and liabilities are measured using enacted income tax rates expected to apply to
taxable income in the years in which temporary differences are expected to
4
<PAGE> 7
be recovered or settled. The effect on future income tax assets and liabilities
of a change in rates is included in earnings in the period that includes the
enactment date. Future income tax assets are recorded in the financial
statements if realization is considered more likely than not.
4. CHANGE IN ACCOUNTING PRINCIPLE
Effective April 1, 2000, the Company adopted the new recommendations of
The Canadian Institute of Chartered Accountants with respect to accounting for
income taxes. The change has been applied retroactively, and as permitted, the
comparative financial statements have not been restated. The change in
accounting policy did not result in any adjustment in the current period or to
opening deficit. Before the adoption of the new recommendations, income tax
expense was determined using the deferral method of tax allocation.
5. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
September 30, 2000 March 31, 2000
------------------ --------------
<S> <C> <C>
Raw Materials 643,202 490,926
Work in process 172,449 79,683
Finished Goods 233,569 129,470
Less: allowance for obsolescence (71,307) (88,437)
-------- --------
977,913 611,642
======== ========
</TABLE>
6. SHARE CAPITAL
Authorized and Issued Share Capital as at September 30, 2000:
Authorized: 100,000,000 common shares without par value
100,000,000 Class A preferred shares without par value
Issued: 27,289,218 common shares for a total of $ 42,287,237
Authorized and Issued Share Capital as at March 31, 2000:
Authorized: 100,000,000 common shares without par value
100,000,000 Class A preferred shares without par value
Issued: 22,832,324 common shares for a total of $30,491,793
No Class A preferred shares have been issued to date.
5
<PAGE> 8
The 2000 Stock Option Plan, effective July 31, 2000 (the "2000 Plan"),
was approved by the shareholders on August 7, 2000, pursuant to which
7,400,000 common shares are reserved for issuance. The 2000 Plan
supercedes all previous stock option plans. As of September 30, 2000,
1,414,425 common shares were available for grant under the 2000 Plan.
Stock Options Outstanding as at September 30, 2000:
5,210,575 stock options outstanding at exercise prices ranging from $
1.12 to $ 5.50 with a weighted average remaining life of 6.7 years, of
which 3,620,546 are vested as at September 30, 2000.
In September, the Company and Genetronics, Inc. entered into an
exclusive license agreement with the University of South Florida
Research Foundation, Inc. ("USF"), whereby USF granted the Company and
Genetronics Inc. an exclusive, worldwide license to USF's rights in
patents and patent applications generally related to needle electrodes
("License Agreement"). These electrodes were jointly developed by the
Company and Genetronics, Inc. and USF. Pursuant to the License Agreement
, the Company granted USF and its designees warrants to acquire 600,000
common shares for $ 2.25 per share until September 14, 2010. A portion
of the warrants vested at the date of grant and the remainder will vest
upon the occurrence of certain future events.
In addition, pursuant to the above License Agreement the Company agreed
to issue a total of 150,000 common shares to USF and its designees for
no additional consideration. The issuance of the common shares has not
occurred as of September 30, 2000 and is subject to regulatory approval.
The terms of the exclusive License Agreement include a royalty to be
paid to USF based on net sales of products under the license.
During the three months ended September 30, 2000 the Company issued
25,000 common shares pursuant to the exercise of stock options at a
price of $ 1.76 per share for gross proceeds of $ 44,000.
7. LOSS PER COMMON SHARE
Basic loss per common share is computed by dividing the net loss for the
period by the weighted average number of common shares outstanding during the
period. Diluted earnings per share reflect the potential dilution that would
occur if securities or other contracts to issue common stock were exercised or
converted to common stock. Since the effect of the assumed exercise of common
stock options and other convertible securities was anti-dilutive, basic and
diluted loss per share are the same.
8. INCOME TAXES
Significant components of the Company's future tax assets as of April 1,
2000 are shown below. A valuation allowance would be recognized to fully offset
the future tax assets as of April 1, 2000 as realization of such assets is
uncertain.
6
<PAGE> 9
<TABLE>
<CAPTION>
$
-----------
<S> <C>
April 1, 2000
Capitalized research expense 246,000
Net operating loss carryforwards 10,834,000
Research and development credits 1,042,000
Share issue costs 854,000
Other - net 262,000
-----------
Total future tax assets 13,238,000
Valuation allowance for future tax assets (13,238,000)
-----------
Net future tax assets --
===========
</TABLE>
9. SEGMENT INFORMATION
The Company's reportable business segments include the Company's U.S.
subsidiary's BTX Instrument Division and the Drug and Gene Delivery Division.
The Company evaluates performance based on many factors including net results
from operations before certain unallocated costs. The Company does not allocate
interest income and expenses and general and administrative costs to its
reportable segments. In addition, total assets are not allocated to each
segment.
<TABLE>
<CAPTION>
BTX DRUG AND GENE
INSTRUMENT DELIVERY
DIVISION DIVISION TOTAL
$ $ $
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
THREE MONTHS ENDED SEPTEMBER 30, 2000
Reportable segment net sales 1,172,951 -- 1,172,951
Other reportable segment revenue -- 236,821 236,821
---------- ---------- ----------
Total segment revenue 1,172,951 236,821 1,409,772
Add unallocated item
Interest income 118,286
---------- ---------- ----------
Total revenue 1,528,058
---------- ---------- ----------
Reportable segment cost of sales (591,545) -- (591,545)
Other reportable segment expenses (493,336) (1,247,260) (1,740,596)
---------- ---------- ----------
Net results of reportable segment 88,070 (1,010,439) (922,369)
---------- ---------- ----------
Add (deduct) unallocated items
Interest income 118,286
General and administrative (1,094,137)
Interest expense (4,666)
---------- ---------- ----------
Net loss (1,902,886)
---------- ---------- ----------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
BTX DRUG AND GENE
INSTRUMENT DELIVERY
DIVISION DIVISION TOTAL
$ $ $
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
THREE MONTHS ENDED SEPTEMBER 30, 1999
Reportable segment net sales 1,077,430 3,870 1,081,300
Other reportable segment revenue -- 391,854 391,854
---------- ---------- ----------
Total segment revenue 1,077,430 395,724 1,473,154
Add unallocated item
Interest income 176,410
---------- ---------- ----------
Total revenue 1,649,564
---------- ---------- ----------
Reportable segment cost of sales (435,519) (3,337) (438,856)
Other reportable segment expenses (469,747) (1,884,875) (2,354,622)
---------- ---------- ----------
Net results of reportable segment 172,164 (1,492,488) (1,320,324)
---------- ---------- ----------
Add (deduct) unallocated items
Interest income 176,410
General and administrative (1,093,456)
Interest expense (6,549)
---------- ---------- ----------
Net loss (2,243,919)
---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
BTX DRUG AND GENE
INSTRUMENT DELIVERY
DIVISION DIVISION TOTAL
$ $ $
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SIX MONTHS ENDED SEPTEMBER 30, 2000
Reportable segment net sales 2,337,739 -- 2,337,739
Other reportable segment revenue -- 324,209 324,209
---------- ---------- ----------
Total segment revenue 2,337,739 324,209 2,661,948
Add unallocated item
Interest income 256,664
---------- ---------- ----------
Total revenue 2,918,612
---------- ---------- ----------
Reportable segment cost of sales (1,046,185) -- (1,046,185)
Other reportable segment expenses (901,398) (2,525,047) (3,426,445)
---------- ---------- ----------
Net results of reportable segment 390,156 (2,200,838) (1,810,682)
---------- ---------- ----------
Add (deduct) unallocated items
Interest income 256,664
General and administrative (2,246,406)
Interest expense (9,742)
---------- ---------- ----------
Net loss (3,810,166)
---------- ---------- ----------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
BTX DRUG AND GENE
INSTRUMENT DELIVERY
DIVISION DIVISION TOTAL
$ $ $
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
SIX MONTHS ENDED SEPTEMBER 30, 1999
Reportable segment net sales 1,776,508 3,870 1,780,378
Other reportable segment revenue -- 590,239 590,239
---------- ---------- ----------
Total segment revenue 1,776,508 594,109 2,370,617
Add unallocated item
Interest income 244,693
---------- ---------- ----------
Total revenue 2,615,310
---------- ---------- ----------
Reportable segment cost of sales (762,256) (3,337) (765,593)
Other reportable segment expenses (976,622) (3,735,154) (4,707,906)
---------- ---------- ----------
Net results of reportable segment 37,630 (3,144,382) (3,106,752)
---------- ---------- ----------
Add (deduct) unallocated items
Interest income 244,693
General and administrative (2,312,829)
Interest expense (13,259)
---------- ---------- ----------
Net loss (5,188,147)
---------- ---------- ----------
</TABLE>
Substantially all of the Company's assets and operations are located in the
United States and predominantly all revenues are generated in the United States.
Approximately 36% (1999: 27%) and 38% (1999: 29%) of the BTX Instrument
Division's net sales were made to one customer for the three months and six
months ended September 30, 2000, respectively. The BTX Instrument Division
exported approximately 32% (1999: 34%) and 34% (1999: 35%) of its net sales for
the three months and six months ended September 30, 2000, respectively.
Net sales of the BTX Instrument Division by destination were as follows:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
THREE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
SEPTEMBER 30, 2000 1999 2000 1999
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
United States 802,718 714,974 1,548,586 1,156,243
Canada 12,569 20,928 61,576 30,140
Europe 202,921 172,045 404,653 252,017
East Asia 127,361 100,570 258,614 256,226
Rest of World 27,382 68,913 64,310 81,883
--------- --------- --------- ---------
Total 1,172,951 1,077,430 2,337,739 1,776,509
--------- --------- --------- ---------
</TABLE>
10. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED STATES
These consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in Canada (Canadian GAAP), which,
in the case of the Company, conform in all material respects with those in the
United States (U.S. GAAP) and with the requirements of the Securities and
Exchange Commission (SEC), except as described in the Company's consolidated
financial statements for the year ended March 31, 2000.
9
<PAGE> 12
The impact of significant variations to U.S. GAAP on the consolidated
statements of loss and deficit are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
$ $ $ $
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net loss for the period, Canadian GAAP (1,902,886) (2,243,919) (3,810,166) (5,188,147)
Adjustment for stock based compensation
- non-employees (190,445) (787,595) (290,336) (889,748)
----------- ----------- ----------- -----------
Net loss for the period, U.S. GAAP (2,093,331) (3,031,514) (4,100,502) (6,077,895)
----------- ----------- ----------- -----------
Unrealized losses from short term investments -- (5,778) -- (5,778)
Unrealized gains (losses) on foreign currency
translation (433) 3,184 (1,187) 364
----------- ----------- ----------- -----------
Comprehensive loss for the period, U.S. GAAP (2,093,764) (3,034,108) (4,101,689) (6,083,309)
----------- ----------- ----------- -----------
Net loss per common share, U.S. GAAP - basic
and diluted (0.08) (0.14) (0.16) (0.28)
----------- ----------- ----------- -----------
Weighted average number of,
common shares, U.S. GAAP 27,272,642 22,017,670 25,461,020 21,846,316
----------- ----------- ----------- -----------
</TABLE>
The impact of significant variations to U.S. GAAP on the consolidated balance
sheet items is as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
2000 2000
$ $
-----------------------------------------------------
<S> <C> <C>
Share capital 45,114,705 33,028,925
Deficit (36,236,077) (32,135,575)
----------- -----------
</TABLE>
11. NEW ACCOUNTING PRONOUNCEMENTS
On June 26, 2000, the SEC deferred the effective date of Staff Accounting
Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements". As a
result of this deferral, SAB No. 101 will be effective for the Company's fiscal
quarter beginning January 1, 2001, requiring retroactive application to the
beginning of the Company's 2001 fiscal year with restatement, if necessary. SAB
No. 101 expresses the views of the SEC staff in applying GAAP to certain revenue
recognition issues. The Company has not yet determined the impact, if any, of
this pronouncement on its consolidated financial statements.
Effective July 1, 2000 the Company adopted FASB's Interpretation No. 44,
"Accounting for Certain Transactions Involving Stock Compensation" (FIN. No.
44).
12. SUPPLEMENTAL CASH FLOW INFORMATION AND OTHER
During the six months ended September 30, 2000 the Company entered into
an exclusive license agreement with USF. Pursuant to the License Agreement , the
Company granted USF and its designees warrants to acquire 600,000 common shares
for $ 2.25 per share until September 14, 2010. A portion of the warrants vested
at the date of grant and the remainder will vest upon the occurrence of certain
future events. The vested warrants which were valued at $553,950 using the Black
Sholes pricing model were recorded as other assets and credited to additional
paid in capital.
10
<PAGE> 13
In addition, pursuant to the above Agreement, the Company agreed to
issue a total of 150,000 common shares to USF and its designees, subject to
regulatory approval. As regulatory approval has not been obtained, the shares
have not been issued and the value of the common shares at the date of the
Agreement, amounting to $346,500 is included in accounts payable and accrued
expenses.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto. This Quarterly Report on
Form 10-Q includes forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934 that involve risk and uncertainty, including those related to development
plans, intentions to seek licensing partners and additional sources of capital,
intended inventory levels, expectations concerning the adequacy of existing cash
resources, and other financial, clinical, business environment and trend
projections. Although the Company believes that its expectations are based on
reasonable assumptions, it can give no assurance that its goals will be
achieved. The important factors that could cause actual results to differ
materially from those in the forward-looking statements herein include, without
limitation, the current stage of development of both the Company and its
products, the timing and uncertainty of results of both research and regulatory
processes, the extensive government regulation applicable to its business, the
unproven safety and efficacy of its device products, its significant additional
financing requirements, the volatility of its stock price, the uncertainty of
future capital funding, its potential exposure to product liability or recall,
uncertainties relating to patents and other intellectual property, including
whether the Company will obtain sufficient protection or competitive advantage
therefrom, its dependence upon a limited number of key personnel and consultants
and its significant reliance upon its collaborative partners for achieving its
goals, and other factors detailed in its Annual Report on Form 10-K for the year
ended March 31, 2000.
GENERAL
Through its Drug and Gene Delivery Division, Genetronics is engaged in
developing drug and gene delivery systems based on electroporation to be used in
the site-specific treatment of disease. Through its BTX Instrument Division, the
Company develops, manufactures, and sells electroporation equipment to the
research laboratory market.
In the past the Company's revenues primarily reflected product sales to
the research market through the BTX Instrument Division and research grants
through the Drug and Gene Delivery Division. In October 1998 the Company entered
into a comprehensive License and Development Agreement and a Supply Agreement
with Ethicon, Inc., a Johnson & Johnson company, involving Genetronics'
proprietary drug and DNA delivery system for the electroporation therapy
treatment of solid tumor cancer. As part of the License and Development
Agreement, the Company received an up-front licensing fee. The Company has also
received milestone payments pursuant to the License and Development Agreement.
In August 1999, the Company announced that Ethicon Inc. transferred its
responsibilities and obligations under the License and Development and Supply
Agreements to Ethicon Endo-Surgery, Inc., which is also a Johnson & Johnson
company. In January 2000, the Company and Ethicon began to assemble and review
existing clinical and regulatory information relating to human clinical trials
for treating certain cancers with bleomycin and the Company's MedPulser(R)
system. Existing information relating to pre-clinical in-vitro and in-vivo
animal studies was also reviewed. These reviews delayed pre-commercialization
activities for the system in Europe and initiation of a pivotal or other
clinical
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<PAGE> 14
trial in the United States and are expected to further delay European commercial
launch and initiation of new clinical trials for at least several more months.
Pivotal clinical trials are used to assess a drug or medical device for efficacy
at several independent sites in a statistically large number of patients.
In July 2000 the Company received notice from Ethicon Endo-Surgery, Inc. that
it had elected to exercise its discretionary right to terminate, without cause,
the Licensing and Development Agreement and the Supply Agreement. All rights for
the development and distribution of Genetronics proprietary Electroporation Drug
Delivery System for the treatment of cancer will be returned to Genetronics.
The Company plans to seek a new licensing partner for the Electroporation
Drug Delivery System. The Company will not receive any milestone or licensing
payments for development or sale of the products contemplated under the Ethicon
agreement unless and until a new agreement is in place with a new partner and
the Company achieves the milestones specified in the new agreement or product
sales commence under the new agreement. The Company believes it has sufficient
current resources to initiate activities directed toward product launch and
marketing in Canada and Europe, and for initiation of a Phase III clinical study
in the United States. In addition, the Company is continuing and intends to
complete the review of existing clinical and regulatory information related to
the Electroporation Drug Delivery System.
Until it achieves the commercialization of clinical products, the Company
expects revenues to continue to be attributable to product sales to the research
market, grants, collaborative research arrangements, and interest income.
Due to the expenses incurred in the development of the drug and gene delivery
systems, the Company has been unprofitable in the last five years. As of
September 30, 2000 the Company has incurred a cumulative deficit of $
33,408,609. The Company expects to continue to incur substantial operating
losses in the future due to continued spending on research and development
programs, the funding of preclinical studies, clinical trials and regulatory
activities and the costs of manufacturing and administrative activities.
Inflation
The Company does not believe that inflation has had a material adverse
effect on net sales or results of operations. The Company has generally been
able to pass on increased costs related to inflation through increases in
selling prices.
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<PAGE> 15
RESULTS OF OPERATIONS
Revenues
The BTX Instrument Division produced net sales of $ 1,172,951 for the
three months ended September 30, 2000 which was an increase in the amount of $
95,521, or 9%, compared to total revenues of $ 1,077,430 for the three months
ended September 30, 1999. For the three months ended September 30, 2000 the BTX
Instrument Division realized 32% of its net sales from exports, compared to 34%
for the same quarter of the previous year. The overall increase of net sales
over the same quarter of the previous year was partly a result of an increase of
sales to the Company's main U.S. distributor, VWR Scientific ("VWR"). Sales to
VWR increased from 27% of total sales for the quarter ended September 30, 1999
to 36% of total sales for the quarter ended September 30, 2000.
Net sales for the six month period ended September 30, 2000 in the
amount of $ 2,337,739 increased by $ 561,231, or 32%, compared to total revenues
in the amount of $ 1,776,508 for the period ended September 30, 1999, primarily
as a result of the stronger first quarter of 2000 compared to the first quarter
of 1999. The stronger first quarter of 2000 was also attributable to a
significant increase of net sales to VWR. Export sales as a percentage of total
sales remained relatively constant with 34% for the six months ended September
30, 2000 compared to 35% for the six months ended September 30, 1999.
Revenues from grant funding increased from $ 43,520 for the three months
ended September 30, 1999 to $ 55,709 for the three months ended September 30,
2000. The grant revenues for the three months ended September 30, 2000 were a
result of a phase I grant awarded in the Gene Therapy field and a phase II grant
awarded in the Oncology field. The Gene Therapy grant expired in August 2000
while the Oncology grant has been extended to December of 2000. No new grants
have been awarded as of the time of this filing.
Revenues from grant funding for the six months ended September 30, 2000
in the amount of $ 68,096 decreased by $ 173,809, or 72%, compared to $ 241,905
for the six months ended September 30, 1999. The main reason for the decrease
was that a major part of the revenues for the previously mentioned phase II
grant awarded in the Oncology field was realized in the three months ended June
30, 1999 and the grant was winding down in the first six months ended September
30, 2000.
During the three months ended September 30, 2000 the Drug and Gene
Delivery Division recorded revenues under collaborative research and development
arrangements in the amount of $ 97,779 as a result of collaborative research
agreements to develop Genetronics' electroporation technology for use in
particular gene therapy applications. This represents a significant increase
over the same period of the previous year since the Company did not enter into
these research agreements until the end of calendar 1999.
Also as a result of the research agreements entered into at the end of
calendar year 1999, the revenues under collaborative research and development
arrangements for the six months ended September 30, 2000 in the amount of $
172,780 increased by $ 157,780, compared to $ 15,000 for the same period of the
previous year.
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<PAGE> 16
In August 2000, the Company received from Ethicon, in accordance with
the Licensing and Development Agreement, a final milestone payment in the amount
of $ 83,333. In July 2000, the Company received notice from Ethicon that it had
elected to exercise its discretionary right to terminate that Agreement.
As a result of the decreasing cash and cash equivalents due to the
continuing operating losses, interest income for the three months ended
September 30, 2000 in the amount of $ 118,286 decreased by $ 58,124, or 33%,
compared to $ 176,410 for the three months ended September 30, 1999.
Cost Of Sales
Cost of sales increased by $ 152,689, or 35%, from $ 438,856 for the
three months ended September 30, 1999 to $ 591,545 for the three months ended
September 30, 2000. The increase was partially a result of the higher sales in
the three-month period ended September 30, 2000. Increased overhead costs such
as rent also contributed to the higher cost of sales. In addition, upgrades of
existing products resulted in higher manufacturing labor costs since these
upgrades required services from technically skilled engineers.
Cost of sales for the six months ended September 30, 2000 in the amount
of $ 1,046,185 increased by $ 280,592, or 37%, compared to $ 765,593 for the six
months ended September 30, 1999. The increase was primarily a result of the 32%
higher sales for the six months ended September 30, 2000. Also, as discussed
above, the increased overhead and higher manufacturing labor components
contributed to the higher cost of sales.
Gross Profit and Gross Margin
The BTX Instrument Division's gross profit for the three months ended
September 30, 2000 in the amount of $ 581,406 represented a decrease of $
60,505, or 9%, compared with $ 641,911 for the three months ended September 30,
1999. The gross profit margin of 50% for the three months ended September 30,
2000 decreased by 9% from 59% for the three months ended September 30, 1999.
Reasons for the lower profit margin were the previously mentioned increase in
fixed overhead such as rent and the increase in manufacturing labor. Also, sales
to VWR as a percentage of total sales increased from 27% for the quarter ended
September 30, 1999 to 36% for the quarter ended September 30, 2000, resulting in
a decrease of the average gross profit margin since VWR purchases BTX products
at a discounted price. Furthermore, for competitive reasons the ECM 630 which
replaced the ECM 600 at the end of the second quarter of 1999 is sold at a lower
profit margin than the ECM 600 which also contributed to the lower average gross
profit margin.
As a result of the higher sales, the BTX Instrument Division's gross
profit for the six months ended September 30, 2000 in the amount of $ 1,291,554
increased by $ 277,302, or 27%, compared to the same period of the previous
year. As a result of the above mentioned higher cost of sales, the higher
distributor sales, and the lower gross profit margin for the ECM 630 the overall
gross profit margin of 55% for the six months ended September 30, 2000 decreased
by 2% compared to the gross profit margin of 57% for the six months ended
September 30, 1999.
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<PAGE> 17
Research and Development
Research and development which includes clinical trial costs decreased
by $ 241,552, or 14%, from $ 1,672,757 for the three months ended September 30,
1999 to $ 1,431,205 for the three months ended September 30, 2000. For the six
months ended September 30, 2000 the research and development and clinical trial
costs in the amount of $ 2,826,035 decreased by $ 816,585, or 22%, compared to
the research and development expense in the amount of $ 3,642,620 for the six
months ended September 30, 1999. The decrease, primarily in the clinical and
regulatory areas as well as the Drug Delivery Division engineering department,
was a result of the delay of pre-commercialization activities for the MedPulser
system in Europe and the delay of initiation of pivotal or other clinical trials
in the U.S. These lower expenses more than offset higher engineering expenses in
the BTX Instrument Division for the three months and six months ended compared
with the same period of the previous year. The higher BTX Instrument engineering
expenses were primarily related to an increase in the effective headcount and
skill level of personnel assigned to a project to improve manufacturability and
engineering design of the overall BTX product line
Selling, General and Administrative Expenses
Selling, general and administrative expenses, which include advertising,
promotion and selling expenses in the amount of $ 1,403,528 for the three months
ended September 30, 2000 remained at the same level compared to the equivalent
period of the previous year.
For the six months ended September 30, 2000 selling, general and
administrative expenses in the amount of $ 2,846,816 decreased by $ 167,590, or
6%, from $ 3,014,406 for the six months ended September 30, 1999.
Net results of reportable segments (Net results of reportable segments
do not include unallocated costs such as interest income and expense and general
and administrative costs)
The BTX Instrument Division reported net results in the amount of $
88,070 for the three months ended September 30, 2000, compared to net results in
the amount of $ 172,164 for the three months ended September 30, 1999, which
meant a decrease in the amount of $ 84,094, or 49%. The decrease was a result of
the lower gross profit margin for the three months ended September 30, 2000 as
well as the higher engineering expenses. For the six months ended September 30,
2000 the BTX Instrument Division reported net results in the amount of $ 390,156
which meant an increase in the amount of $ 352,526 over the same period of the
previous year, primarily as result of the 32% increase in net sales.
The Drug and Gene Delivery Division reported net expenditures in the
amount of $1,010,439 for the three months ended September 30, 2000 compared to $
1,492,488 for the three months ended September 30, 1999, a decrease of $
482,049, or 32%. The lower net expenditures were primarily a result of the lower
research and development and clinical trial costs for the three months ended
September 30, 2000. Also, primarily as a result of lower operating expenses the
net expenditures in the amount of $ 2,200,838 for the six months ended September
30, 2000 decreased by $ 943,544, or 30%, over the same period of the previous
year.
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<PAGE> 18
Net Loss
For the three months ended September 30, 2000, the Company recorded a
net loss of $ 1,902,886, or $ 0.07 per common share, compared with a net loss of
$ 2,243,919, or $ 0.10 per common share, for the three months ended September
30, 1999, which meant a decrease of $ 341,033, or 15%. The lower net loss is
primarily a result of the decreased research and development expenses. Primarily
as a result of the lower research and development expenses as well as general
and administrative expenses, the net loss in the amount of $ 3,810,166 for the
six months ended September 30, 2000 was $ 1,377,981, or 27%, lower than the net
loss in the amount of $ 5,188,147 for the same period of the previous year.
LIQUIDITY AND CAPITAL RESOURCES
During the last five fiscal years, the Company's primary uses of cash
have been to finance research and development activities and clinical trial
activities in the Drug and Gene Delivery Division. Since inception, the Company
has satisfied its cash requirements principally from proceeds from the sale of
equity securities. In June 1999 the Company closed a private placement of
4,187,500 Special Warrants at a price of $3.00 per special warrant for total
consideration of $12,562,500 before deducting the agent's commission of
$1,005,000 and other estimated issue costs. Each warrant entitled the holder to
acquire one common share in the capital of the Company at no additional cost
upon exercise. In March 2000, the Company issued 23,000 common shares pursuant
to the exercise and conversion of 23,000 Special Warrants. On June 16, 2000 the
remaining 4,164,500 Special Warrants exercised and converted into common shares.
In connection with the issuance of 4,187,500 Special Warrants pursuant
to an agency agreement dated June 16, 1999, the Company issued to the Agent's
nominee 30,000 common shares and 418,750 Special Warrants exercisable, for no
additional consideration, into 418,750 share purchase warrants, which were
exercisable into 418,750 common shares at a price of $3.31 per share on or
before June 16, 2000. During the year ended March 31, 2000, the Company issued
151,300 common shares pursuant to the exercise of 151,300 of these share
purchase warrants. During the three months ended June 30, 2000 the Company
issued 180,500 common shares pursuant to the exercise of 180,500 of these share
purchase warrants for net proceeds to the Company in the amount of $597,455. The
remaining 86,950 Special Warrants expired unexercised on June 16, 2000.
As of September 30, 2000 the Company had working capital of $6,121,335
compared to $9,508,012, as of March 31, 2000. The decrease was a result of the
operating loss in the six months ended September 30, 2000. The current ratio
decreased from 5.52 as of March 31, 2000 to 4.17 as of September 30, 2000.
The Company has a trade finance credit facility with a bank to borrow up
to $2,000,000. Borrowings under this line of credit are collateralized by
assignment of cash and cash equivalents. This credit facility bears interest at
the bank's floating rate less 1%, or the LIBOR rate plus 1.75%, and initially
expired on June 30, 2000 and was extended to September 29, 2000. In September
2000 the term of the credit facility was extended to August 31, 2001. At
September 30, 2000, there was no outstanding balance drawn on this credit
facility.
Inventories increased from $611,642 at March 31, 2000 to $ 977,913 at
September 30, 2000, primarily as the result of a build-up of inventory in the
BTX Instrument Division. The build-up of inventory was attributable partly to
the fact that the product mix of sales for the six
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<PAGE> 19
months ended September 30, 2000 was different than what was anticipated e.g.
sales of the ECM 630 and ECM 830 were lower than expected whereas sales of the
ECM 2001 were higher than expected. Also, the Company built up finished good
inventory levels in anticipation of a substantial order from Merck Eurolab, a
European distributor. In order to reduce backorders in the future, the Company
increased safety stock levels which resulted in a higher overall inventory
level. In addition, the Company intends to manage inventory levels during the
third quarter and beyond to eliminate current back orders and to establish
minimum levels sufficient to meet the forecasted demand of finished goods and
accessories.
Accounts receivables decreased by $ 138,923, or 12%, from $1,120,450 at
March 31, 2000 to $ 981,527 at September 30, 2000. The decrease was a result of
the payment of Ethicon receivables that had been outstanding on of March 31 2000
in the first quarter of 2000 which more than offset higher receivables against
BTX Instrument customers as of September 30, 2000. The reason for the lower
receivables against Ethicon was that no product for clinical trials was shipped
in the six months ended September 30, 2000 due to the review of clinical and
regulatory information by Ethicon and the Company and the subsequent termination
of the licensing agreement. The higher receivables against BTX Instrument
customers were a result of the increase in sales and a higher percentage of
receivables against distributors to which extended payment terms are granted.
Current liabilities decreased from $2,105,847 at March 31, 2000 to
$1,929,155 at September 30, 2000. The decrease was primarily a result of
payments of fiscal year-end accruals in the six months ended September 30, 2000.
A part of the year-end accruals consisted of accrued restructuring charges. The
decrease was partially offset by the $346,500 in respect of the 150,000 common
shares to be issued to USF and its designees awaiting regulatory approval.
The Company believes that it has sufficient funds to support its
operations for the balance of the fiscal year ended March 31, 2001. The Company
is currently considering a variety of methods to raise further capital.
The Company's long term capital requirements will depend on numerous
factors including
- The progress and magnitude of the research and development programs,
including preclinical and clinical trials;
- The time involved in obtaining regulatory approvals;
- The cost involved in filing and maintaining patent claims;
- Competitor and market conditions;
- The Company's ability to establish and maintain collaborative
arrangements;
- The Company's ability to obtain grants to finance research and
development projects; and
- The cost of manufacturing scale-up and the cost of commercialization
activities and arrangements
17
<PAGE> 20
The Company's ability to generate substantial funding to continue
research and development activities, preclinical and clinical studies and
clinical trials and manufacturing, scale-up, and selling, general, and
administrative activities is subject to a number of risks and uncertainties and
will depend on numerous factors including:
- The Company's ability to raise funds in the future through public or
private financings, collaborative arrangements, grant awards or from
other sources;
- The potential for equity investments, collaborative arrangements,
license agreements or development or other funding programs with the
Company in exchange for manufacturing, marketing, distribution or other
rights to products developed by the Company; and
- The Company's ability to maintain its existing collaborative
arrangements
The Company cannot guarantee that additional funding will be available when
needed. If it is not, the Company will be required to scale back its research
and development programs, preclinical studies and clinical trials, and selling,
general, and administrative activities, or otherwise reduce or cease operations
and its business and financial results and condition would be materially
adversely affected.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk related to changes in interest
rates. The risks related to foreign currency exchange rates are immaterial and
the Company does not use derivative financial instruments.
The Company has invested its excess cash and cash equivalents in United
States government, municipal, and corporate debt securities with high quality
credit ratings and an average maturity of no more than three months. These
investments are not held for trading or other speculative purposes. Given the
short-term nature of these investments, and that the Company has no borrowings
outstanding, the Company is not subject to significant interest rate risk.
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<PAGE> 21
PART II. OTHER INFORMATION
ITEMS 1 AND 3 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In September 2000, the Company agreed to issue an aggregate of 150,000
common shares and warrants permitting the holders thereof to purchase an
aggregate of 600,000 common shares for $ 2.25 per share until September 14,
2010. These shares and warrants were issued pursuant to the exemption provided
by Section 4(2) of the Securities Act to the University of South Florida
Research Foundation and its designees as consideration for patent license rights
received by the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders held on August 7, 2000, the
following resolutions were passed by the margins indicated:
1. Ernst & Young LLP, Chartered Accountants, were appointed auditors of
the Company by the Shareholders until the next annual general meeting of
the shareholders of the Company, and the Directors were authorized to fix
the remuneration of the auditors. The total number of votes cast for, against,
and withheld or abstained was 11,347,046 and 11,921 and 6,532, respectively.
2. The following seven Directors were elected to serve until the next
annual general meeting of the shareholders or until his or her successor is
duly elected or appointed, unless his or her office is earlier vacated in
accordance with the Articles of the Company or he or she becomes disqualified to
act as a Director.
<TABLE>
<CAPTION>
Votes Withheld or
Name Votes For Votes Against Votes Abstained
---- --------- ------------- -----------------
<S> <C> <C> <C>
Martin Nash 8,019,779 0 3,345,720
James L. Heppell 8,019,779 0 3,345,720
Gordon J. Politeski 10,509,085 0 856,414
Suzanne L. Wood 8,019,779 0 3,345,720
Felix Theeuwes 11,297,413 0 68,086
Gordon Blankstein 11,297,413 0 68,086
Grant W. Denison, Jr 7,563,454 0 3,802,045
</TABLE>
3. The Shareholders approved amendment of certain terms of the Stock Option Plan
of the Company, by adopting a 2000 Stock Option Plan, and to increase the
maximum number of common shares which may be issued pursuant to the 2000 Stock
Option Plan from 6,400,000 to 7,400,000. The total number of votes cast for,
against, and withheld or abstained was 1,647,358, 208,262, and 9,063,
respectively. The number of shares not voted was 9,500,816.
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<PAGE> 22
ITEM 5. OTHER INFORMATION
On August 7, 2000 Tazdin Esmail, President and Chief Executive Officer
of Forbes Medi-Tech Inc., Vancouver, British Columbia was appointed to the Board
of Genetronics Biomedical Ltd. Mr. Esmail has more than 20 years of experience
in the biomedical and pharmaceutical fields. Prior to joining Forbes Medi-Tech,
Mr. Esmail was Vice President, Medical Operations of QLT Photo Therapeutics
Inc., a Vancouver-based biotechnology company, which uses light-activated drugs
to treat disease. Mr. Esmail has held several senior management positions in
areas such as strategic planning, sales and marketing, new product and business
development, marketing research and management training and development with
Cyanamid Canada Inc., a subsidiary of American Cyanamid Company, in its Lederle
multinational pharmaceutical division.
On September 12, 2000 the Company announced that Babak Nemati, Ph.D.,
formerly Director of Surgical Oncology at Ethicon Endo-Surgery, Inc., a Johnson
& Johnson company, has been appointed Vice President of Corporate Development.
On September 28, 2000 the Company announced that Terry Gibson has been
named Chief Operating Officer. Mr. Gibson was formerly Vice President of
Operations at Advanced Tissue Sciences. As Chief Operating Officer, Mr. Gibson
will oversee Genetronics' launch of its proprietary Medpulser(R) electroporation
device used in Electroporation Therapy treatment of solid tumors.
On September 29, 2000 the employment of James Lierman, a senior
executive, with the Company ended. The Company entered into an Agreement for
Termination of Employment with Mr. Lierman.
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<PAGE> 23
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1* Agreement Concerning Termination of Employment of James Lierman
dated September 11, 2000 by and between the Registrant and James
Lierman
10.2* Trade Credit Agreement by and between the Registrant and Union
Bank of California dated September 29, 2000
10.3* Promissory Note - Trade Finance - Base Rate by the Registrant to
Union Bank of California dated September 29, 2000
10.4* Promissory Note - Base Rate by the Registrant to Union Bank of
California dated September 29, 2000
10.5* License Agreement dated September 20, 2000 by and between the
Registrant and the University of South Florida Research
Foundation, Inc.(1)
10.6* Warrant To Purchase Common Stock, dated September 15, 2000 by and
between the Registrant and the University of South Florida
Research Foundation(1)
10.7* Warrant To Purchase Common Stock, dated September 15, 2000 by and
between the Registrant and Dr. Richard Gilbert(1)
10.8* Warrant To Purchase Common Stock, dated September 15, 2000 by and
between the Registrant and Dr. Richard Heller(1)
10.9* Warrant To Purchase Common Stock, dated September 15, 2000 by and
between the Registrant and Dr. Mark Jaroszeski(1)
27 Financial Data Schedule (filed only electronically with the SEC)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended
September 30, 2000.
--------
* Filed on November 9, 2000 with the Form 10-Q for the six months ended
September 30, 2000.
(1) Confidential treatment has been requested with request to certain portions
of this exhibit. Omitted portions have been filed separately with the
Securities and Exchange Commission.
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<PAGE> 24
GENETRONICS BIOMEDICAL LTD.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Genetronics Biomedical Ltd.
Date: 1/10/01 By: /s/ Mervyn McCulloch
-------- -----------------------------------------
Mervyn J. McCulloch,
Chief Financial Officer
22
