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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
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 March 31, 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 ___ No _X_
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: 12,466,002 shares of Common
Stock as of June 30, 1999.
This amended Form 10-Q 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 - March 31, 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>
March 31, December 31,
1999 1998
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(unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 1,912,000 $ 1,558,000
Stock subscription receivable 50,000 750,000
Other 6,000 4,000
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Total current assets 1,968,000 2,312,000
Equipment, net 9,000 1,000
Other assets 7,000 --
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$ 1,984,000 $ 2,313,000
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LIABILITIES
Current liabilities:
Accrued Expenses $ 95,000 $ 119,000
Convertible notes payable and accrued interest 215,000 210,000
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Total liabilities 310,000 329,000
STOCKHOLDERS' EQUITY
Preferred stock - $.001 par value, 5,000,000 shares authorized; none issued
Common Stock - $.001 par value, 25,000,000 shares authorized; 12,324,476 12,000 12,000
and 12,210,002 shares issued and outstanding, respectively.
Additional paid-in capital 4,443,000 3,363,000
Unearned compensation - stock/options (551,000) (41,000)
Deficit accumulated during development stage (2,230,000) (1,350,000)
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Total stockholders' equity 1,674,000 1,984,000
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$ 1,984,000 $ 2,313,000
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</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 through
March 31, March 31,
1999 1998 1999
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<S> <C> <C> <C>
Costs and expenses:
Research and development $ 520,000 $ 86,000 $ 1,355,000
General and administrative 369,000 60,000 874,000
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Loss from operations $ (889,000) $ (146,000) $ (2,229,000)
Interest income/(expense)-net 9,000 -- (1,000)
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Net loss $ (880,000) $ (146,000) $ (2,230,000)
============ ============ ============
Net loss per common share $ (0.07) $ (0.01)
Weighted average shares-basic and diluted 12,319,476 10,000,000
</TABLE>
See notes to the financial statements
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AXONYX INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
January 9,
1997
(inception)
Three months ended through
March 31, March 31,
1999 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (880,000) $ (146,000) $(2,230,000)
Adjustments to reconcile net loss to cash used in
operating activities:
Amortization 151,000 30,000 357,000
Cost of services paid with common stock 399,000 639,000
Depreciation 1,000 -- 2,000
Changes in:
other assets (9,000) -- (9,000)
accrued expenses and interest (19,000) 27,000 110,000
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Net cash used in operating activities (357,000) (89,000) (1,131,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (9,000) -- (11,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable 5,000 200,000
Net proceeds from issuance of common stock and warrants 720,000 20,000 2,906,000
Cost of merger -- -- (52,000)
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Net cash provided by financing activities 720,000 25,000 3,054,000
NET INCREASE IN CASH AND CASH EQUIVALENTS 354,000 (64,000) 1,912,000
Cash and cash equivalents at beginning of period 1,558,000 23,000 --
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,912,000 $ (41,000) $ 1,912,000
=========== =========== ===========
</TABLE>
See notes to the financial statements
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AXONYX INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 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, S.A
("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 fee for the right to license of $250,000. The
right to license has a one year term, renewable for an additional one year
period upon payment of an additional fee of $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 of a license agreement between the parties if Ares
Serono exercises its right to license.
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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 three months ended March 31, 1999, the Company realized no revenue.
For the three months ended March 31, 1999 the Company incurred a loss from
operations of $889,000 compared to $146,000 for the three months ended March 31,
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 March 31, 1999 the Company incurred research and
development costs of $520,000 compared to $86,000 for the three months ended
March 31, 1998. The increase is a result of charges associated with the grant of
options to certain scientists and to NYU, and to a lesser extent, to additional
scientist and consultants being engaged.
For the period ended March 31, 1999 the Company incurred general and
administrative costs of $369,000 compared to $60,000 for the three months ended
March 31, 1998. The increase is due to hiring employees, the recognition of fair
value of options issued to consultants and advisors, and an overall increase in
costs due to the Company's commencement of 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.
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
