<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
-----------
Date of Report (Date of earliest event reported) March 15, 1996
--------------
VIRAGEN, INC.
-------------
(Exact name of registrant as specified in its charter)
Delaware 0-10252 59-2101668
- --------------------------------------------------------------------------------
(State or other juris- (Commission File (IRS Employer
diction incorporation) Number) Identification No.)
2343 West 76th Street, Hialeah, Florida 33016
- --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (305) 557-6000
--------------
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
1
<PAGE> 2
ITEM 5. OTHER EVENTS
On March 15, 1996, the Company's majority owned subsidiary Sector Associates,
Ltd. ("Sector") (to be renamed Viragen (Europe) Limited following the adoption
of a proposed Certificate of Amendment to the Company's Certificate of
Incorporation), completed two Private Placement Offerings, issuing 770,000
shares of Sector Common Stock and 217,500 Common Stock Purchase Warrants having
an exercise price of $12.00 per share. These two Offerings generated net
proceeds of approximately $5,190,000 after related expenses of $300,000. (See
Quarterly Report on From 10-QSB for Sector, filed March 25, 1996).
Proceeds of the Offerings will be used to underwrite domestic and European
research and clinical trial activities including the construction of a
laboratory and manufacturing facility in Scotland. Proceeds of approximately
$2,000,000 will be utilized by the Parent for ongoing research projects and
general working capital purposes. Following the completion of these Offerings,
the Company held a 74% equity ownership position in Sector.
The following pro forma financial information reflects the Balance Sheet at
December 31, 1995, Statement of Operations and Statement of Cash Flows for the
six month period ended December 31, 1995 as if the Offerings had been completed
as of that date.
2
<PAGE> 3
VIRAGEN INC., AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VIRAGEN PROFORMA
INC. ADJUSTMENTS PROFORMA
------- ----------- --------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,139,543 $5,190,000 $6,329,543
Accounts and notes receivable,
less allowance of $69,590
Inventory 17,568 17,568
Prepaid expenses 113,571 113,571
Other current assets 8,065 8,065
----------- ---------- ----------
TOTAL CURRENT ASSETS 1,330,018 5,190,000 6,520,018
PROPERTY, PLANT AND EQUIPMENT
Land, building and improvements 1,193,402 1,193,402
Equipment and furniture 1,410,842 1,410,842
----------- ----------
2,604,244 2,604,244
Less accumulated depreciation (1,608,749) (1,608,749)
----------- ----------
995,495 995,495
DEPOSITS AND OTHER ASSETS 14,672 14,672
----------- ---------- ----------
$ 2,340,185 $5,190,000 $7,530,185
=========== ========== ==========
</TABLE>
3
<PAGE> 4
VIRAGEN INC., AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VIRAGEN PROFORMA
INC. ADJUSTMENTS PROFORMA
------- ----------- --------
<S> <C> <C> <C>
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 68,626 $ 68,626
Accrued expenses
and other liabilities 321,746 321,746
Current portion of
long-term debt 854,165 854,165
------------ ------------
TOTAL CURRENT LIABILITIES 1,244,537 1,244,537
ROYALTIES PAYABLE,
less current portion 107,866 107,866
OTHER NOTES PAYABLE 10,173 10,173
LONG TERM DEBT,
less current portion 35,578 35,578
Minority Interest in Subsidiary 48,000 $1,509,844 1,557,844
STOCKHOLDERS' EQUITY
Convertible 10% Series A
Cumulative Preferred Stock
$1.00 par value. Authorized
375,000 shares; issued and
outstanding 3,450 shares.
Liquidation preference value:
$10 per share, aggregating
$34,500 3,450 3,450
Common Stock, $.01 par value.
Authorized 50,000,000 shares;
issued and outstanding
35,546,382 shares at
December 31, 1995 355,464 355,464
Capital in excess of par value 19,425,767 3,680,156 23,105,923
Deficit (18,890,650) (18,890,650)
------------ ---------- ------------
TOTAL STOCKHOLDERS EQUITY 894,031 3,680,156 4,574,187
------------ ---------- ------------
$ 2,340,185 $5,190,000 $ 7,530,185
============ ========== ============
</TABLE>
4
<PAGE> 5
VIRAGEN INC., AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD JULY 1 THROUGH DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VIRAGEN PROFORMA
INC. ADJUSTMENTS PROFORMA
------- ----------- --------
<S> <C> <C> <C>
INCOME
Revenues $ 202,317 $ $ 202,317
Interest and other Income 42,065 42,065
----------- --------- -----------
244,382 - 244,382
COST AND EXPENSES
Cost of goods sold 160,800 160,800
Depreciation and amortization 97,538 97,538
Research and Development costs 557,380 557,380
Selling, general and
administrative expenses 978,344 978,344
Directors & Officers options
granted 183,144 183,144
Interest expense 47,225 47,225
----------- -----------
2,024,431 2,024,431
----------- -----------
NET (LOSS) (1,780,049) (1,780,049)
Deduct required dividends on
convertible preferred stock 1,725 1,725
----------- --------- -----------
LOSS ATTRIBUTABLE TO COMMON STOCK $(1,781,774) $ - $(1,781,774)
=========== ========= ===========
LOSS PER COMMON SHARE,
after deduction for required
dividends on convertible
preferred stock $ (.05) $ (.05)
=========== ===========
Weighted average shares
outstanding 35,482,257 35,482,257
=========== ===========
</TABLE>
5
<PAGE> 6
VIRAGEN INC., AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIOD JULY 1 THROUGH DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VIRAGEN PROFORMA
INC. ADJUSTMENTS PROFORMA
------- ----------- --------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss $(1,780,049) $(1,780,049)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 97,538 97,538
Compensation expense on options 183,144 183,144
Bad debt expenses 50,551 50,551
Increase (decrease) relating to
operating activities from:
Accounts receivable (48,938) (48,938)
Interferon inventory 193,632 193,632
Prepaid expenses & other current assets (9,183) (9,183)
Deferred expenses and other assets 1,628 1,628
Accounts payable (136,917) (136,917)
Accrued expenses and other liabilities (77,444) (77,444)
----------- -----------
Net cash used in operating
activities (1,526,038) (1,526,038)
INVESTING ACTIVITIES:
Additions to property, plant and
equipment, net of minor disposals (60,851) (60,851)
----------- -----------
Net cash used in investing activities (60,851) (60,851)
FINANCING ACTIVITIES:
Proceeds from Private Placements net
of related expenses $5,190,000 5,190,000
Proceeds from Sector Associates, Ltd. 800,000 800,000
Proceeds from exercise of Common
Stock Warrants 40,750 40,750
Contribution from Officers 400 400
Payments/reclassifications on long-term debt (19,405) (19,405)
----------- --------- -----------
Net cash provided by financing activities 821,745 5,190,000 6,011,745
Incr. (decr) in cash & cash equivalents (765,144) 4,424,856 4,424,856
Cash and cash equivalents
at beginning of period 1,904,687 1,904,687
----------- --------- -----------
Cash and cash equivalents
at end of period $ 1,139,543 4,424,856 $ 6,329,543
=========== ========= ===========
Non-cash items:Maturities-long term debt $ 804,453
</TABLE>
6
<PAGE> 7
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
(99.1) Press Release - "Viragen, Inc. Closes $6 Million Financing For
European Subsidiary".
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VIRAGEN INC., AND SUBSIDIARIES
By: /s/ Dennis W. Healey
--------------------------
Executive Vice President
Chief Financial Officer
DATED: March 29, 1996
7
<PAGE> 1
EXHIBIT 99.1
[VIRAGEN INC. LETTERHEAD]
FOR IMMEDIATE RELEASE
CONTACT:
Dennis W. Healey
Executive Vice President
Viragen, Inc.
(305) 557-6000
VIRAGEN, INC. CLOSES $6 MILLION FINANCING
FOR EUROPEAN SUBSIDIARY
MIAMI, FLORIDA, MARCH 18, 1996 -- VIRAGEN, INC. (NASDAQ BULLETIN BOARD: VRGN)
today announced that it has closed a $6 million privately placed equity
financing of its majority-owned subsidiary, Sector Associates, Ltd., to be
renamed Viragen (Europe) Ltd.
A portion of these proceeds will be used to complete the Company's European
plant located in Edinburgh, Scotland. This state-of-the-art manufacturing
facility will produce Omniferon(TM), a natural human alpha interferon. The
Company plans to undertake clinical studies in Europe for testing Omniferon in
the treatment of such diseases as multiple sclerosis, HIV/AIDS, hepatitis B & C
and certain cancers.
The Edinburgh plant is the result of collaborative agreements between Scottish
governmental health agencies and the Company. Viragen has exclusively licensed
its subsidiary to produce Omniferon for production and testing within the
European Union.
Gerald Smith, Viragen's Chairman and President, stated, "This financing allows
us to proceed as scheduled in Europe. A portion of the proceeds will also be
used to fund continuing research and development here in the U.S."
---------------------
Viragen, Inc. is an emerging biopharmaceutical company engaged in the research,
development, manufacture and clinical study of natural human interferons for
the treatment of various viral diseases and immune disorders. The Company is
currently conducting an investigational study of its human alpha interferon for
the treatment of HIV/AIDS under Florida's Investigational Drug Program.
