<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
FORM 10-QSB/A
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to ______________________
Commission file number 000-25571
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AXONYX INC.
(Exact name of registrant as specified in its charter)
NEVADA 86-0883978
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(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
825 THIRD AVENUE, 40TH FLOOR, NEW YORK, NEW YORK 10022
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(Address of principal executive offices) (Zip Code)
(212) 688-4770
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
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 ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 12,938,002 shares of Common
Stock as of November 1, 1999.
Transitional Small Business Disclosure Format (check one); ______________
________________ _______________
This amended Form 10-QSB is being filed as a result of the fourth quarter
adjustment described in Note 1 to the financial statements included in the
Company's annual report on Form 10-KSB for the year ending December 31, 1999
filed on March 13, 2000.
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AXONYX INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - September 30, 1999 (unaudited)
Statements of Operations (unaudited)
Statements of Cash Flows (unaudited)
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Plan of Operation
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AXONYX INC.
(a development stage company)
BALANCE SHEETS
<TABLE>
<CAPTION>
September, 30, December 31,
1999 1998
-------------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 4,224,000 $ 1,558,000
Stock subscription receivable 150,000 750,000
Other 14,000 4,000
----------- -----------
Total current assets 4,388,000 2,312,000
Equipment, net 15,000 1,000
Other assets 7,000 --
----------- -----------
$ 4,410,000 $ 2,313,000
=========== ===========
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $ 84,000 $ 119,000
Deferred revenue 165,000 --
----------- -----------
249,000 119,000
----------- -----------
Convertible notes payable and accrued interest -- 210,000
----------- -----------
Total liabilities 249,000 329,000
STOCKHOLDERS' EQUITY
Preferred stock - $.001 par value, 5,000,000 shares authorized; none issued
Common Stock - $.001 par value, 25,000,000 shares authorized; 13,236,194
(including 100,000 shares held in escrow, and 24,000 shares subscribed)
and 12,210,002 issued and outstanding, respectively. 13,000 12,000
Additional paid-in capital 8,654,000 3,363,000
Unearned compensation - stock/options (258,000) (41,000)
Deficit accumulated during development stage (4,248,000) (1,350,000)
----------- -----------
Total stockholders' equity 4,161,000 1,984,000
----------- -----------
$ 4,410,000 $ 2,313,000
=========== ===========
</TABLE>
See notes to the financial statements
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AXONYX INC.
(a development stage company)
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
January 9,
1997
(inception)
Three months ended Nine months ended through
September 30, September 30, September 30,
1999 1998 1999 1998 1999
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenue $ 63,000 $ -- $ 85,000 $ -- $ 85,000
Costs and expenses:
Research and development 909,000 83,000 1,623,000 263,000 2,458,000
General and administrative 514,000 58,000 1,387,000 169,000 1,892,000
------------ ------------ ------------ ------------ ------------
1,423,000 141,000 3,010,000 432,000 4,350,000
------------ ------------ ------------ ------------ ------------
Loss from operations (1,360,000) (141,000) (2,925,000) (432,000) (4,265,000)
Interest income/(expense)-net 9,000 (6,000) 27,000 (6,000) 17,000
------------ ------------ ------------ ------------ ------------
Net loss $ (1,351,000) $ (147,000) $ (2,898,000) $ (438,000) $ (4,248,000)
============ ============ ============ ============ ============
Net loss per common share-
basic and diluted $ (0.11) $ (0.01) $ (0.23) $ (0.04)
Weighted average shares
basic and diluted 12,710,192 10,000,000 12,537,192 10,000,000
</TABLE>
See notes to the financial statements
<PAGE>
AXONYX INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
January 9,
1997
(inception)
Nine months ended through
September 30, September 30,
1999 1998 1999
----------- ----------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(2,898,000) $ (438,000) $(4,248,000)
Adjustments to reconcile net loss to cash used in
operating activities:
Amortization 672,000 89,000 878,000
Cost of services paid with common stock 1,195,000 -- 1,435,000
Depreciation 2,000 -- 3,000
Changes in:
other assets (17,000) -- (17,000)
accrued expenses, interest, and deferred revenue 120,000 91,000 249,000
----------- ----------- -----------
Net cash used in operating activities (926,000) (258,000) (1,700,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (16,000) -- (18,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable 200,000 200,000
Net proceeds from issuance of common stock and warrants 3,608,000 79,000 5,794,000
Cost of merger -- -- (52,000)
----------- ----------- -----------
Net cash provided by financing activities 3,608,000 279,000 5,942,000
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,666,000 21,000 4,224,000
Cash and cash equivalents at beginning of period 1,558,000 23,000 --
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,224,000 $ 44,000 $ 4,224,000
=========== =========== ===========
NONCASH TRANSACTIONS:
Note payable converted to common stock $ 200,000 $ -- $ 200,000
=========== =========== ===========
</TABLE>
See notes to the financial statements
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AXONYX INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(1) FINANCIAL STATEMENT PRESENTATION
The unaudited financial statements of Axonyx Inc. (the "Company") herein have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC) and, in the opinion of management, reflect all
adjustments (consisting only of normal recurring accruals) necessary to present
fairly the results of operations for the interim periods presented. Certain
information and footnote disclosure normally included in the financial
statements, prepared in accordance with generally accepted accounting
principles, have been condensed or omitted pursuant to such rules and
regulations. However, management believes that the disclosures are adequate to
make the information presented not misleading. These financial statements and
notes thereto should be read in conjunction with the financial statements and
the notes thereto for the year ended December 31, 1998 included in the Company's
Form 10-SB filing. The results for the interim periods are not necessarily
indicative of the results for the full fiscal year.
(2) NEW AGREEMENTS:
Effective as of May 17, 1999, Axonyx Inc. entered into a Development Agreement
and Right to License (the "Development Agreement") with Applied Research Systems
ARS Holding N.V., a wholly owned subsidiary of Ares Serono International, SA
("Ares Serono"). Under the Development Agreement, the Company granted an
exclusive right to license its patent rights and know-how regarding its amyloid
inhibitory peptide (AIP) and prion inhibitory peptide (PIP) technology to Ares
Serono. Ares Serono paid Axonyx a nonrefundable fee for the right to license of
$250,000. The right to license has a one year term, renewable for an additional
one-year term upon payment of an additional $500,000. In addition Ares Serono
undertakes to conduct research on the AIP and PIP technology during the term of
the Development Agreement. The parties also agreed to the basic licensing terms
that will form the basis for the license agreement between the parties if Ares
Serono exercises its right to license.
On June 18, 1999 the Company issued 200,000 shares of restricted common stock to
Infusion Capital Investment Corporation ("ICIC") pursuant to a Consulting
Agreement under which ICIC and its affiliates undertook to perform certain
investor relations and corporate development services on behalf of the Company.
100,000 shares out of the 200,000 shares of common stock issued to ICIC were
placed in an escrow account pursuant to an Escrow Agreement dated June 11, 1999
by an between the Company, ICIC and Atlas, Pearlman, Trop & Borkson, the escrow
agent. The 100,000 shares of restricted common stock held in the escrow account
will be released to ICIC on December 11, 1999 unless the Company decides not to
extend ICIC's retention under the Consulting Agreement for an additional six
months. The shares issued to ICIC were valued at fair value.
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On October 1, 1999 the Company entered into an agreement with the University of
Melbourne (Australia). In addition to the costs associated with the filing and
prosecution of any patent applications resulting from collaborative research,
the Company has committed approximately $60,000 per year for each of the next
three years to develop a diagnostic test for Alzheimer's Disease. Both parties
will own any resulting intellectual property as tenants in common in equal
shares. In addition, the Company has an option to acquire an exclusive worldwide
license to the intellectual property or patent resulting from the research
project, and to an existing patent application.
(3) PRIVATE PLACEMENT:
In May 1999 the Company commenced a private placement of up to 200 units for
$25,000 per unit. Each unit consists of 4,000 shares of common stock and 2,000
common stock purchase warrants to purchase one share of common stock at a price
of $11.00. The warrants expire August 1, 2004. Through September 30, 1999, the
Company had sold 123.5 units. Between September 30 and October 25, the
termination date of the offering, the Company sold an additional 47.5 units for
a total of 171 units.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Since the commencement of operations of its predecessor in January 1997,
the Company's efforts have been principally devoted to research and development
of its licensed pharmaceutical compounds, corporate consolidation, and raising
capital.
For the nine months ended September 30, 1999, the Company recognized
revenue in the amount of $85,000 from a non-refundable fee from Ares Serono
pursuant to the Development Agreement and Right to License.
For the three months ended September 30, 1999 the Company incurred a loss
from operations of $1,360,000 compared to a loss from operations of $141,000 for
the three months ended September 30, 1998. The Company incurred a loss from
operations of $2,925,000 for the nine months ended September 30, 1999 compared
to a loss from operations of $432,000 for the nine months ended September 30,
1998. The increase is due to additional research and development activities and
an increase in general and administrative expenses. The Company expects to incur
additional losses for the foreseeable future.
For the three months ended September 30, 1999 the Company incurred research
and development costs of $909,000 compared to $83,000 for the three months ended
September 30, 1998. The Company incurred research and development costs of
$1,623,000 for the nine months ended September 30, 1999 compared to $263,000 for
the nine months ended September 30, 1998. The increase is the result of charges
associated with the grant of options to certain scientists and to NYU, and to a
lesser extent, additional scientists and consultants being engaged.
For the three months ended September 30, 1999 the Company incurred general
and administrative costs of $514,000 compared to $58,000 for the three months
ended September 30, 1998. The Company incurred general and administrative costs
of $1,387,000 for the nine months ended September 30, 1999 compared to $169,000
for the nine months ended September 30, 1998. The increase is due to hiring
employees, the recognition of fair value of options issued to consultants and
advisors, an overall increase in costs due to the Company's activities
associated with patent support and marketing the Company's research and
development activities.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K.
The following exhibits are filed as part of this report:
27.1 Financial Data Schedule
(b) Reports on 8-K
None.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AXONYX INC.
By: /s/ Marvin S. Hausman, M.D.
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Marvin S. Hausman, M.D.
President and Chief Executive Officer
By: /s/ Michael M. Strage
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Michael M. Strage
Treasurer and Principal Financial and
Accounting Officer
