U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT PUSUANT SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30,1999
TRANSITION REPORT PURSUANT SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from____to ____
Commission File Number 0-26775
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
NEVADA 88-0384037
- ------------------------------- --------------
(State or other jurisdiction of (IRS. Employer
incorporation or organization) Identification No.)
101 Convention Center Dr. Suite 310 89109
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 702-735-7001
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 |_| No |X|
The number of shares of Common Stock outstanding as at November 19, 1999 was
15,136,979. Transitional Small Business Disclosure Format (check one): Yes |_|
No |X|
1
<PAGE>
PART I-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The information required is attached.
PART II-OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits Index - FORM 10-QSB. None.
b. Reports on Form 8-K. No Reports were filed for the last quarter of the fiscal
year covered by this report
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
(Registrant)
By: /s/ Alfred T. Sapse,
- -----------------------------
President
(principal executive officer)
Date: 11/19/99
2
<PAGE>
STEROIDOGENESIS INHIBITORSINTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
September 30, 1999 & 1998
<PAGE>
TABLE OF CONTENTS
Consolidated, Interim Balance Sheet as of September 30, 1999,
& 1998 (Unaudited). 3
Consolidated Interim Statements of Operations for the period from
Inception (September 5, 1994) to September 30, 1999, and the Nine
Months Ended September 30, 1999 & 1998 (Unaudited). 4
Consolidated Interim Statement of Stockholders' Equity
(Deficit) for the period from Inception
(September 5, 1994) to September 30, 1999 (Unaudited). 5
Consolidated Interim Statements of Stockholders' Equity
(Deficit) for the Nine Months Ended September 30,
1999 & 1998 (Unaudited). 6
Consolidated Interim Statements of Cash Flows for the period from
Inception (September 5, 1994) to September 30, 1999 and for the
Nine Months Ended September 30, 1999 & 1998 (Unaudited). 7
Notes to Interim Financial Statements. 8 - 13
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED, INTERIM BALANCE SHEETS
(UNAUDITED)
SEPTEMBER 30, 1999 & 1998
<TABLE>
<CAPTION>
ASSETS 1999 1998
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 2,857 $ 74,450
Note receivable-related party (note 8) 3,098 13,090
----------- -----------
5,955 87,540
----------- -----------
FIXED ASSETS:
Furniture & fixtures, at cost 30,308 29,217
Accumulated depreciation (14,663) (9,171)
----------- -----------
15,645 20,046
----------- -----------
OTHER ASSETS:
Patent registration costs 40,666 32,926
Purchased technology rights, net of accumulated
amortization of $20,885 & $ 9,988 (notes 1&2) 88,084 98,980
Deposits 15,720
Other 19,249 150
----------- -----------
163,719 132,056
----------- -----------
TOTAL ASSETS $ 185,319 $ 239,642
=========== ===========
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 91,644 $ 98,420
----------- -----------
91,644 98,420
LONG-TERM LIABILITIES
Convertible debenture (note 3) 184,000
Note payable (note 3) 50,000
Deferred revenue (note 4) 250,000 250,000
----------- -----------
575,644 348,420
----------- -----------
COMMITMENTS (note 5)
SHAREHOLDERS' EQUITY:
Common stock, 25,000,000 share authorized at .001 par,
14,913,117 issued and outstanding (note 7) 14,914 9,871
Common stock reserved for conversion of parent's stock 111 125
Paid in capital in excess of par, net of offering costs 5,147,400 3,881,000
Accumulated deficit (5,552,750) (3,999,774)
----------- -----------
(390,325) (108,778)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 185,319 $ 239,642
=========== ===========
</TABLE>
See accompanying notes to the consolidated, interim financial statements
(unaudited)
-3-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED, INTERIM STATEMENTS OF OPERATIONS
(UNAUDITED)
FROM INCEPTION (SEPTEMBER 5, 1994) AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 & 1998
From
09/05/94
To
Sep. 30, 1999 1999 1998
------------- ----------- -----------
REVENUES: $ 50,000 $ 50,000 $ 0
----------- ----------- -----------
EXPENSES:
Research & development 523,098 244,988 42,398
Interest 13,471 13,471
General & administrative 5,030,528 1,189,703 813,115
Depreciation and amortization 35,653 12,165 11,783
----------- ----------- -----------
5,602,750 1,460,327 867,296
----------- ----------- -----------
Net loss $(5,552,750) $(1,410,327) $ (867,296)
=========== =========== ===========
Earnings per share:
Basic $ (0.72) $ (0.11) $ (0.09)
=========== =========== ===========
Diluted $ (0.72) $ (0.11) $ (0.09)
=========== =========== ===========
Weighted average number of
shares outstanding:
Basic 7,685,189 12,830,726 9,208,236
Diluted 7,689,288 12,858,504 9,208,236
See accompanying notes to the consolidated, interim financial statements
(unaudited)
-4-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONS, INC.
(A DEVELOPMENT STATE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(UNAUDITED)
FROM INCEPTION (SEPTEMBER 5, 1994) TO SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Shares
Number Par Value Reserved
of Common for Paid in
Shares Stock Conversion Capital Warrants
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Inception at September 5, 1994 0 $ $ $ $
Shares issued for cash, net of offering costs 6,085,386 609 635,481
Warrants issued for cash 5,000
Shares issued as compensation for services 714,500 71 1,428,929
Loss, from inception through 12/31/96
----------- ----------- ----------- ----------- -----------
December 31, 1996 6,799,886 680 2,064,410 5,000
Issuance of stock, prior to acquisition 206,350 21 371,134 `
Acquisition of subsidiary for stock (note 2) 1,503,000 150 46,545
Recapitalization (note 2)
Shares of parent redeemed, par value $.0001 (8,509,236) (851) 851
Shares of public subsidiary issued, par value $.001 7,689,690 7690 820 (8,510)
Loss, development stage, 1997
----------- ----------- ----------- ----------- -----------
December 31, 1997 7,689,690 7,690 820 2,474,430 5,000
Add'l. conversion of parent's shares 696,022 696 (696)
Shares issued for cash to public, net of offering costs 693,500 694 605,185
Shares issued in cancellation of debt 525,000 525 524,475
Shares issued as compensation (note 7) 400,000 400 349,600
Loss, development stage, 1998
----------- ----------- ----------- ----------- -----------
December 31, 1998 10,004,212 $ 10,005 $ 124 $ 3,953,690 $ 5,000
Conversion of parent's shares 13,000 13 (13)
Shares issued in cancellation of debt 30,000 30 29,970
Shares issued to public, net of offering costs 45,000 45 44,955
Shares issued as compensation (note 7) 3,569,250 3,569 493,378
Share issuance costs (3,344)
Shares issued pursuant to convertible debentures:
Detachable warrants issued (note 7) 152,125
Detachable warrants exercised (note 7) 100,000 100 148,900 (149,000)
Debentures converted to stock (note 7) 1,151,655 1,152 471,726
Net loss for the six months ended 9/30/99
----------- ----------- ----------- ----------- -----------
September 30, 1999 14,913,117 $ 14,914 $ 111 $ 5,139,275 $ 8,125
=========== =========== =========== =========== ===========
<CAPTION>
Total Total
Paid in Retained Shareholders'
Capital Earnings Equity
----------- ----------- -----------
<S> <C> <C> <C>
Inception at September 5, 1994 $ $ $ 0
Shares issued for cash, net of offering costs 635,481 636,090
Warrants issued for cash 5,000 5,000
Shares issued as compensation for services 1,428,929 1,429,000
Loss, from inception through 12/31/96 (2,152,843) (2,152,843)
----------- ----------- -----------
December 31, 1996 2,069,410 (2,152,843) (82,753)
Issuance of stock, prior to acquisition 371,134 371,155
Acquisition of subsidiary for stock (note 2) 46,545 46,695
Recapitalization (note 2)
Shares of parent redeemed, par value $.0001 851 0
Shares of public subsidiary issued, par value $.001 (8,510) 0
Loss, development stage, 1997 (979,635) (979,635)
----------- ----------- -----------
December 31, 1997 2,479,430 (3,132,478) (644,538)
Add'l. conversion of parent's shares 0
Shares issued for cash to public, net of offering costs 605,185 605,879
Shares issued in cancellation of debt 524,475 525,000
Shares issued as compensation (note 7) 349,600 350,000
Loss, development stage, 1998 (1,009,945) (1,009,945)
----------- ----------- -----------
December 31, 1998 $ 3,958,690 $(4,142,423) $ (173,604)
Conversion of parent's shares 0 0
Shares issued in cancellation of debt 29,970 30,000
Shares issued to public, net of offering costs 44,955 45,000
Shares issued as compensation (note 7) 493,378 496,947
Share issuance costs (3,344) (3,344)
Shares issued pursuant to convertible debentures: 0
Detachable warrants issued (note 7) 152,125 152,125
Detachable warrants exercised (note 7) (100) 0
Debentures converted to stock (note 7) 471,726 472,878
Net loss for the six months ended 9/30/99 (1,410,327) (1,410,327)
----------- ----------- -----------
0
September 30, 1999 $ 5,147,400 $(5,552,750) $ (390,325)
=========== =========== ===========
</TABLE>
See accompanying notes to the consolidated, interim financial statements
(unaudited)
-5-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONS, INC.
(A DEVELOPMENT STATE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(UNAUDITED)
FOR THE NINE MONTHS ENDING SEPTEMBER 30, 1999 &1998
<TABLE>
<CAPTION>
Shares
Number Par Value Reserved
of Common for Paid in
Shares Stock Conversion Capital
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
December 31, 1997 7,689,690 $ 7,690 $ 820 $ 2,474,430
Conversion of parent's shares 694,707 695 (695)
Shares issued in cancellation of short- term debt 525,000 525 524,475
Shares issued to public, net of offering costs 661,000 661 577,395
Shares issued as compensation (note 7) 300,000 300 299,700
Net loss for the nine months ended 9/30/98
------------ ------------ ------------ ------------
September 30, 1998 9,870,397 $ 9,871 $ 125 $ 3,876,000
============ ============ ============ ============
December 31, 1998 10,004,212 $ 10,005 $ 124 $ 3,953,690
Conversion of parent's shares 13,000 13 (13)
Shares issued in cancellation of debt 30,000 30 29,970
Shares issued to public, net of offering costs 45,000 45 44,955
Shares issued as compensation (note 7) 3,569,250 3,569 493,378
Share issuance costs (3,344)
Shares issued pursuant to convertible debentures:
Detachable warrants issued (note 7)
Detachable warrants exercised (note 7) 100,000 100 148,900
Debentures converted to stock (note 7) 1,151,655 1,152 471,726
Net loss for the nine months ended 9/30/99
------------ ------------ ------------ ------------
September 30, 1999 14,913,117 $ 14,914 $ 111 $ 5,139,275
============ ============ ============ ============
<CAPTION>
Total Total
Paid in Retained Shareholders'
Warrants Capital Earnings Equity
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
December 31, 1997 $ 5,000 $ 2,479,430 $ (3,132,478) $ (644,538)
0
Conversion of parent's shares 0 0
Shares issued in cancellation of short- term debt 524,475 525,000
Shares issued to public, net of offering costs 577,395 578,056
Shares issued as compensation (note 7) 299,700 300,000
Net loss for the nine months ended 9/30/98 (867,296) (867,296)
------------ ------------ ------------ ------------
September 30, 1998 $ 5,000 $ 3,881,000 $ (3,999,774) $ (108,778)
============ ============ ============ ============
December 31, 1998 $ 5,000 $ 3,958,690 $ (4,142,423) $ (173,604)
0
Conversion of parent's shares 0 0
Shares issued in cancellation of debt 29,970 30,000
Shares issued to public, net of offering costs 44,955 45,000
Shares issued as compensation (note 7) 493,378 496,947
Share issuance costs (3,344) (3,344)
Shares issued pursuant to convertible debentures: 0
Detachable warrants issued (note 7) 152,125 152,125 152,125
Detachable warrants exercised (note 7) (149,000) (100) 0
Debentures converted to stock (note 7) 471,726 472,878
Net loss for the nine months ended 9/30/99 (1,410,327) (1,410,327)
------------ ------------ ------------ ------------
0
September 30, 1999 $ 8,125 $ 5,147,400 $ (5,552,750) $ (390,325)
============ ============ ============ ============
</TABLE>
See accompanying notes to the consolidated, interim financial statements
(unaudited)
-6-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED, INTERIM STATEMENTS OF CASH FLOWS
(UNAUDITED)
FROM INCEPTION (SEPTEMBER 5, 1994) AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 & 1998
<TABLE>
<CAPTION>
Inception
to 9/30/99 1999 1998
---------- ---- ----
<S> <C> <C> <C>
NET CASH USED BY OPERATING ACTIVITIES:
Net loss $(5,552,750) $(1,410,327) $ (867,296)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 35,653 12,165 11,783
Expenses paid through issuance of stock 2,329,195 503,695 300,000
(Increase) decrease in assets:
Notes receivable (3,098) 9,992 (13,090)
Prepaids & other current assets (34,900) (23,382)
Increase (decrease) in liabilities:
Deferred revenue 250,000
Accounts payable 91,664 22,648 (2,011)
----------- ----------- -----------
(2,884,236) (885,209) (570,614)
----------- ----------- -----------
NET CASH USED BY INVESTING ACTIVITIES:
Purchase of technology (108,969)
Purchase of furniture and equipment (30,308) (1,092) (15,707)
Patent registration costs (note 1.d.1)) (40,666) (5,248) (6,000)
----------- ----------- -----------
(179,943) (6,340) (21,707)
----------- ----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES:
Proceeds from loans 50,000 50,000
Proceeds from warrants 157,125 152,125
Proceeds from debentures 650,375 650,375
Proceeds from stock offering, net of costs 1,654,536 41,412 578,056
Short-term loan proceeds 555,000
----------- ----------- -----------
3,067,036 893,912 578,056
----------- ----------- -----------
CHANGE IN CASH 2,857 2,363 (14,265)
CASH AT BEGINNING OF PERIOD 0 494 88,715
----------- ----------- -----------
CASH AT END OF PERIOD $ 2,857 $ 2,857 $ 74,450
=========== =========== ===========
NON-CASH FINANCING & INVESTING ACTIVITIES:
Purchase of net, non-cash assets of subsidiary
for stock $ 195 $ 0 $ 0
Short-term debt retired through issuance
of stock $ 555,000 $ 30,000 $ 525,000
Income taxes and interest paid with cash 0 0 0
</TABLE>
See accompanying notes to the consolidated, interim financial statements
(unaudited)
-7-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to interim financial statements
1. Summary of Accounting Policies:
a. The Company:
In October, 1997, WEBX Media, Inc., a non-operating public shell, entered into
an exchange of stock with the owners of Steroidogenesis Inhibitors, Inc. (SI), a
company incorporated in Nevada in September, 1994. Subsequent to the
transaction, WEBX Media, Inc., changed its name to Steroidogenesis Inhibitors
International, Inc.(STGI). Technically, SI is a subsidiary of STGI. For
accounting purposes, however, because STGI was a non-operating shell, SI is
treated as the parent of STGI. Therefore, the financial statements include the
activity of SI from inception. See also Note 2.
The Company is engaged in securing the patent for and the licensing of a drug
called ANTICORT, a trademarked, proprietory drug. The product was developed by
Cortisol Medical Research, Inc., the majority shareholder from whom the Company
purchased the rights. Anticort was developed for the treatment of disorders and
ailments related to cortisol diseases.
The Company is actively seeking additional capital to complete the testing
required for FDA approval and an international patent filing. Successful
completion of the drug approval endevors is dependent upon raising sufficient
capital to continue its efforts.
Adjustments and disclosures have been made so that the interim financial
statements are not misleading.
b. Basis of Consolidation:
The accompanying financial statements include the accounts of STGI and SI. All
intercompany balances and transactions have been eliminated in consolidation.
The stock exchange occurred October 21, 1997. In accordance with generally
accepted accounting principles, the results of WEBX Media, Inc., through the
acquisition date are not included in the consolidated operating statements.
c. Plant, Property, and Equipment:
Fixed assets purchased are recorded at cost. Depreciation is provided using the
straight line method over the estimated useful lives of the assets. Depreciation
expense was approximately $3,566 and $3.948 for the nine months ended September
30, 1998 and 1999, respectively.
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to interim financial statements
d. Intangibles:
1) Legal fees associated with registering Anticort, and derivative patents are
recorded at cost. Amortization, once the patent is approved, will be calculated
using the straight-line method, over the estimated useful lives of the patents.
2) Purchased technology rights are recorded at cost and are being amortized
using the straight line method over the estimated useful life of the technology.
Amortization of purchased technology was approximately $8,172 for the nine
months ended September 30, 1998 and 1999, respectively.
e. Earnings per share:
The Company calculates earnings per share in accordance with SFAS 128. At
September 30, 1998, there were no potentially dilutive warrants or options
outstanding.
f. Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
2. Reverse Acquisition:
On October 21, 1997, SI secured WEBX Media through a reorganization agreement.
Under the agreement, the principal shareholders of the SI exchanged their stock
on a share for share basis for the stock of WEBX. At the time of the
acquisition, WEBX was non-operating public shell with no significant assets.
The Company has accounted for this transaction as a capital transaction; a
retirement of SI shares and issuance of STGI shares (formerly WEBX). Because
STGI shares have stated par value of $.001 compared to SI shares at $.0001, the
exchange resulted in a reclassification from 'additional paid in capital' to
'par value'.
At the transaction date, approximately 88% of SI's shareholders exchanged SI
stock for STGI stock. The Company reserved additional STGI shares to convert the
balance of the remaining SI shareholders as they were located. During 1998, an
additional 10% of the shareholders of record at the acquisition date had
converted their shares.
Such conversion have continued through September 30, 1999.
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to interim financial statements
3. Convertible debentures, detachable warrants, and long term debt:
During the nine months ended September 30, 1999, the Company raised capital
approximating $802,500 through convertible debentures, some of which had
detachable warrants. The Company allocated the proceeds between the debentures
and the warrants premised upon the difference in the exercise price and the
trading price of the stock at the date the warrants were issued.
Debentures of $618,500 were converted by September 30, 1999, through the
issuance of approximately 1.175 million shares of common stock. Of the 150,000
warrants issued, 100,000 were converted by September 30, 1999.
At September 30, 1999, the Company had drawn $50,000 of a $500,000 loan. The
loan is due August, 2001 with interest at 8%.
4. Deferred revenue:
SI received $250,000 from Steroidogenesis Inhibitors Canada, Inc., ( SI- Canada)
for a licensing agreement prior to the acquisition date. The licensing agreement
has a duration of ten years beginning with the date the drug is approved for use
in Canada. Pursuant to the agreement, the Company has agreed to provide
assistance in securing such approval.
During the nine month ended September 30, 1999, the Company earned $50,000 from
SI-Canada pursuant to an agreement which called for a payment of $50,000 once
SI-Canada became a public company.
5. Commitments and Contingencies:
The Company has contracted with the Aids Research Alliance to perform clinical
testing required pursuant to the Company's efforts to secure FDA approval for
Anticort. Approximately $227,000 of the $650,000 contract was paid during March
1999. The Company is seeking additional capital to complete the contract
payments.
6. Income taxes:
Both STGI and SI have incurred substantial tax losses since inception.
Realization of the tax benefits of such are dependent upon future taxable income
within the period of time permitted by the tax code (20 years from the year of
loss). Because future earnings are uncertain, the future benefits of
carryforward losses have not been accrued.
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to interim financial statements
7. Stock transactions:
a. Stock warrants and options:
The Company had outstanding stock options at September 30, 1999 & 1998.
A summary of the status of the Company's outstanding warrants and options at
September 30, 1999 and 1998, and changes during the nine months ended on those
dates is presented below:
Weighted
Weighted Average
Average Contractual
Shares Price Life
------ ----- ----
Outstanding & exercisable at
December 31, 1997 1,100,000 4.86 12/31/01
Granted during the nine months
ended 9/30/98 1,186,000 5.00 12/31/99
---------
Outstanding & exercisable at 9/30/98 2,286,000 $ 4.93 12/15/00
=========
Outstanding & exercisable at
December 31, 1998 2,318,500 4.94 11/30/00
Granted during the nine months
ended 9/30/99 50,000 .94 04/01/04
---------
Outstanding & exercisable at 9/30/98 2,368,500 $ 4.86 12/31/00
=========
During the nine months ended September 30, 1999, 100,000 options issued in March
1999, were exercised. The options were issued with convertible debentures and
allocated a value of $149,000.The options' exercise price was $.01/share. At the
date of grant, shares were trading for approximately $1.50/share.
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to interim financial statements
Also granted were 50,000 warrants which remain outstanding at September 30,
1999. These were also granted with debentures. The debentures were subsequently
converted. The options were allocated a value of approximately $3,125. At the
date of grant, shares were trading for approximately $1.00/share. The exercise
price is $.9375/share. This warrant contains a cashless exercise feature which
adjusts the number of shares to be issued dependent upon the market share of the
stock.
b. Stock as compensation:
The Company issues stock for services, valuing such issues premised upon the
fair market value of the stock or the services, whichever is more clearly
determinable.
During the nine months ended September 30, 1998, the Company issued 300,000
shares for services rendered by related parties. The Company valued those shares
at the share price of an offering in progress on the date of grant, $1.00/share.
During the nine months ended September 30, 1999, the Company issued 3,569,250
shares as compensation valuing such compensation in aggregate at $496,947. Of
these share, 3,223,000 shares were issued to directors. These shares have
limitations regarding their trade and other restrictions.
c. Stock option plan
The Company has a stock option plan under which 2,500,000 shares are reserved.
At September 30, 1999, no options have been granted pursuant to the plan.
8. Related party transactions:
SI purchased the technology rights (Note 1.d.2) from an entity controlled by the
president of the Company for $108,968. SI-Canada, subsequent to securing the
licensing agreement with the Company (Note 4), issued 300,000 share to the
president of the Company.
Also, during 1998, consulting fees of $24,000 were paid to an entity owned by a
family member of the president.
A director and officer of the Company owns the investment company which received
1,000,000 shares and options as compensation for consulting pursuant to the
acquisition.
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to interim financial statements
Directors of the Company received shares of common stock of compensation for
consulting services during 1998 which were valued at $300,000. During the nine
months ended September 30, 1999, directors received stock valued at $161,150 for
services.
9. Risks and uncertainties:
Marketability of the product is dependent, among other things, upon securing
additional capital to successfully complete the clinical testing of the product,
securing FDA approval, and procurement of viable patents.
10. Subsequent Event:
Beginning in September, 1999, negotiations were underway with a company named
Pashua for funding of up to $10,000,000 for the licenses to the Anticort
product.
At the end of October, 1999, the Company filed a lawsuit in Las Vegas, Nevada,
its corporate headquarters, against SI-Canada seeking the assistance of the
court, damages, and other relief to a dispute and action taken by SI-Canada. The
Company is contending that SI-Canada is interfering with the Company and the
intended transaction with Pashua.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,857
<SECURITIES> 0
<RECEIVABLES> 3,098
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,955
<PP&E> 30,308
<DEPRECIATION> 14,663
<TOTAL-ASSETS> 185,319
<CURRENT-LIABILITIES> 91,644
<BONDS> 234,000
0
0
<COMMON> 14,914
<OTHER-SE> (405,239)
<TOTAL-LIABILITY-AND-EQUITY> 185,319
<SALES> 0
<TOTAL-REVENUES> 50,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,460,327
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,471
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