<PAGE> 1
FORM 10-Q - QUARTERLY OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended - September 30, 1997
( ) 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 0-10252
VIRAGEN, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 59-2101668
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
865 SW 78TH AVENUE, SUITE 100, PLANTATION, FLORIDA 33324
---------------------------------------------------------------
(Address of principal executive offices)
(954) 233-8746
---------------------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
---------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 X No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE
PRECEDING FIVE YEARS Check whether the registrant filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.
Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Common Stock, par value $ .01 - 49,333,797 shares at November 10, 1997.
<PAGE> 2
VIRAGEN, INC. AND SUBSIDIARIES
INDEX
PART I - FINANCIAL INFORMATION
The Consolidated Condensed Statements of Operations (Unaudited) for the
three-month periods ended September 30, 1997 and September 30, 1996 include the
accounts of the Registrant and all its subsidiaries.
Item 1. Financial Statements
1) Consolidated Condensed Statements of Operations for the three months ended
September 30, 1997 and September 30, 1996.
2) The Consolidated Condensed Balance Sheets as of September 30, 1997 and June
30, 1997.
3) Consolidated Condensed Statements of Cash Flows for the three months ended
September 30, 1997 and September 30, 1996.
4) Notes to Consolidated Condensed Financial Statement as of September 30,
1997.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule (for SEC use only)
2
<PAGE> 3
VIRAGEN, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1997 1996
------------ ------------
<S> <C> <C>
INCOME
Interest and other income $ 433,851 $ 227,958
----------- ------------
433,851 227,958
COSTS AND EXPENSES
Research and development costs 899,111 427,085
Selling, general and administrative
expenses 967,365 617,434
Depreciation and amortization 270,815 53,801
Interest Expense 255,914 11,688
----------- ------------
2,393,205 1,110,008
----------- ------------
Loss before minority interest (1,959,354) (882,050)
Minority interest in loss of consolidated
subsidiaries 98,466 27,809
----------- -------------
NET LOSS (1,860,888) (854,241)
Deduct required dividends on convertible preferred
stock, Series A 663 663
Deduct required dividends on convertible preferred
stock, Series B (restated for 1996) -- 2,341,859
Deduct required dividends on convertible preferred
stock, Series D 169,221 --
Deduct required dividends on convertible preferred
stock, Series E 65,418 --
Deduct required dividends on convertible preferred
stock, Series F 50,444 --
Deduct required dividends on convertible preferred
stock, Series G 26,849 --
----------- ------------
LOSS ATTRIBUTABLE TO COMMON STOCK $(2,173,483) $ (3,196,763)
=========== ============
LOSS PER COMMON SHARE,
after deduction for required dividends on
convertible preferred stock $ (.05) $ (0.08)
=========== ============
Weighted average shares outstanding 47,357,382 38,018,217
=========== ============
</TABLE>
See notes to consolidated condensed financial statements.
3
<PAGE> 4
VIRAGEN, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, June 30,
1997 1997
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 3,267,085 $ 12,873,301
Marketable securities, available-for-sale 23,181,915 18,541,616
Prepaid expenses 205,447 237,569
Due from employees 54,620 53,980
Other current assets 739,896 674,992
---------- ----------
TOTAL CURRENT ASSETS 27,448,963 32,381,458
PROPERTY, PLANT AND EQUIPMENT 7,875,088 6,920,226
Construction in progress -- 370,364
------------ ------------
7,875,088 7,290,590
Less accumulated depreciation (2,522,954) (2,252,392)
------------ ------------
5,352,134 5,038,198
DEPOSITS AND OTHER ASSETS 42,181 41,887
------------ ------------
$ 32,843,278 $ 37,461,543
============ ============
</TABLE>
4
<PAGE> 5
VIRAGEN, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS-(CONTINUED)
<TABLE>
<CAPTION>
September 30, June 30,
1997 1997
------------ ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 834,310 $ 1,431,211
Note Payable 9,720,241 --
Accrued expenses and other liabilities 596,512 1,573,464
Current portion of long-term debt 45,703 45,703
------------ ------------
TOTAL CURRENT LIABILITIES 11,196,766 3,050,378
ROYALTIES PAYABLE 107,866 107,866
LONG-TERM DEBT, less current portion 223,882 238,895
MINORITY INTEREST IN SUBSIDIARIES 1,821,634 1,920,100
REDEEMABLE PREFERRED STOCK-SERIES G 3,333,000 --
STOCKHOLDERS' EQUITY
Convertible 10% Series A cumulative preferred stock,
$1.00 par value. Authorized 375,000 shares; issued
and outstanding 2,650 shares. Liquidation preference
value: $10 per share aggregating $26,500 2,650 2,650
Convertible 5% Series B Cumulative preferred stock,
$1.00 par value. Authorized 15,000 shares; issued
and outstanding 7,445 shares at June 30, 1997 -- 7,445
Convertible Series C Cumulative preferred stock, $1.00
par value. Authorized 5,000 shares; issued and
outstanding 974 shares 974 974
Convertible 6% Series D Cumulative preferred stock,
$1.00 par value. Authorized 15,000 shares; issued
and outstanding 10,200 shares at June 30, 1997 -- 10,200
Convertible 5% Series E Cumulative preferred stock,
$1.00 par value. Authorized issued and outstanding
5,000 shares at June 30, 1997 -- 5,000
Convertible 10% Series F Cumulative preferred stock,
$1.00 par value. Authorized 15,000 shares; issued
and outstanding 6,700 shares at September 30, 1997 6,700 --
Common stock, $.01 par value Authorized 75,000,000 shares;
issued 48,601,415 and 46,260,360 shares at September 30, 1997
and June 30, 1997, respectively,
of which 386,777 shares are held as treasury stock 489,882 462,601
Capital in excess of par value 48,652,451 59,995,768
Treasury stock (699,150) (699,150)
Retained deficit (32,332,216) (27,802,624)
Foreign currency transaction adjustment 152,993 273,469
Notes due from officers/directors (103,542) (101,417)
Unrealized loss on marketable securities,
available-for-sale (10,612) (10,612)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 16,160,130 32,144,304
------------ ------------
$ 32,843,278 $ 37,461,543
============ ============
</TABLE>
See notes to consolidated condensed financial statements.
5
<PAGE> 6
VIRAGEN, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1997 1996
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net Loss (1,860,888) $(854,241)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 270,815 53,801
Compensation expense on stock options -- 12,227
Minority interest in loss of subsidiary (98,466) (27,809)
Increase (decrease) relating to operating activities from:
Prepaid expenses 32,122 (48,833)
Due from employees (2,765) 45,593
Other current assets (64,904) (5)
Deposit and other assets (294) (7,111)
Accounts payable (596,901) (60,209)
Accrued expenses and other liabilities (31,675) (100,933)
----------- ---------
Net cash used in operating activities (2,289,606) (987,520)
----------- ---------
INVESTING ACTIVITIES
Purchase of marketable securities, available-for-sale (4,640,299) --
Additions to property, plant and equipment, net (584,751) (119,909)
----------- ---------
Net cash used in investing activities (5,225,050) (119,909)
----------- ---------
</TABLE>
6
<PAGE> 7
VIRAGEN, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1997 1996
------------ ------------
<S> <C> <C>
FINANCING ACTIVITIES
Payments on long-term debt $ (10,158) $ (658,695)
Payment of preferred dividends (518,808) --
Refund of paid in capital (838,157) --
Redemption of preferred stock, series G (667,000) --
Proceeds from exercise of warrants 67,894 167,707
Proceeds from exercise of options -- 4,230
Proceeds from exercise of subsidiary warrants -- 296,000
------------ ------------
Net cash provided by (used in) financing activities (1,966,229) (190,758)
Effect of exchange rate fluctuations on cash (125,331) (1,857)
------------ ------------
(Decrease) in cash (9,606,216) (1,300,044)
Cash and cash equivalents at beginning of period 12,873,301 19,449,059
------------ ------------
Cash and cash equivalents at end of period $ 3,267,085 $ 18,149,015
============ ============
</TABLE>
See notes to consolidated condensed financial statements.
7
<PAGE> 8
VIRAGEN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE A - ORGANIZATION AND CONSOLIDATION
Viragen, Inc. and subsidiaries have been engaged in the research,
development and manufacture of certain immunological products for commercial
application. The consolidated financial statements include the accounts of
Viragen, Inc., and its wholly-owned subsidiaries, Vira-Tech, Inc., Viragen
Reagents, Inc., and Viragen Technology, Inc., and its majority owned
subsidiaries Viragen U.S.A., Inc., and Viragen (Europe) Ltd., including its
wholly-owned subsidiary, Viragen (Scotland) Ltd., collectively known as the
Company. All material intercompany accounts and transactions have been
eliminated in consolidation.
Certain reclassifications have been made to the fiscal 1997 Financial
Statements to conform to the September 30, 1997 interim presentation.
NOTE B - INTERIM ADJUSTMENTS AND USE OF ESTIMATES
The financial summaries for the three months ended September 30, 1997
and September 30, 1996 include, in the opinion of management of the Company, all
adjustments, consisting of normal recurring accruals, considered necessary for a
fair presentation of the financial position and the results of operations for
these periods.
Operating results for the three months ended September 30, 1997 are not
necessarily indicative of the results that may be expected for the entire fiscal
year ending June 30, 1998.
While the Company believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that these Consolidated
Condensed Financial Statements be read in conjunction with the financial
statements and notes included in the Company's latest annual report on Form 10-K
for the year ended June 30, 1997.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from these estimates.
8
<PAGE> 9
NOTE C - CONTINGENCY
In October 1997, the Company, the Company's President and Cytoferon
Corp. a former affiliate of the President were named as defendants in a civil
action brought in the United States District Court for the Southern District of
Florida (Case No: 97-3187-CIV-MARCUS) by a shareholder of the Company and
investor in Cytoferon Corp. The suit alleges the defendants violated federal and
state securities laws, federal and state RICO statutes, fraud, conspiracy,
breach of fiduciary duties and breach of contract. The plaintiff if seeking an
unspecified monitory judgement and the specific performance delivery of 441,368
shares of common stock. The Company filed a Motion to Dismiss denying the
allegations and requesting reimbursement of its costs.
In November 1997, the plaintiff in this litigation filed a Notice of
Voluntary Dismissal with the Federal Court concurrently notifying the Company of
their intent to refile a complaint in Circuit Court in the State of Florida.
Plaintiff subsequently refiled a complaint in the Circuit Court of the 11th
Judicial Circuit in and for Dade County, Florida (Case No. 97-25587 CA30) naming
the same defendants. The suit alleges breach of contract, fraud, violation of
Florida's RICO statute and breach of fiduciary duties and seeks a judgement
similar to that of the dismissed Federal suit.
The Company denies the allegations of the Complaint and intends to
vigorously defend the claims with regard to this matter.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The statements contained in this Report on Form 10-Q that are not
purely historical are forward looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange
Act of 1934, including statements regarding the Company's expectations, hopes,
intentions, beliefs, or strategies regarding the future. Forward looking
statements include the Company's statements regarding liquidity, anticipated
cash needs and availability, and anticipated expense levels in "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
including expected product clinical trial introductions, expected research and
development expenditures, new facility completion data and related anticipated
costs. All forward looking statements included in this document are based on
information available to the Company on the date hereof, and the Company assumes
no obligation to update any such forward looking statement. It is important to
note that the Company's actual results could differ materially from those in
such forward-looking statements. Among the factors that could cause actual
results to differ materially are the factors detailed below and the risks
discussed in the "Risk Factors" section included in the Company's Registration
Statement Form SB-2, as filed with the Securities and Exchange Commission
(effective on August 14, 1995 with related Post-Effective Amendment effective
May 30, 1996). You should also consult the risk factors listed from time to time
in the Company's Reports on Forms 10-Q, 8-K, S-3, 10-K and Annual Reports to the
Stockholders.
9
<PAGE> 10
The biopharmaceutical industry is highly competitive and subject to
rapid technological change. Significant competitive factors in the
pharmaceutical and biopharmaceutical markets include product efficacy, price and
timing of new product introductions. Increased competition from existing
biopharmaceutical companies as well as the entry into the market of new
competitors could adversely affect the Company's financial condition or results
of operations.
The Company's future success depends in part upon its intellectual
property, including patents, trade secrets, know-how and continuing technology
innovation. There can be no assurance that the steps taken by the Company to
protect its intellectual property will be adequate to prevent misappropriation
or that others will not develop competitive technologies or products. There can
be no assurance that any patent owned by the Company will not be invalidated,
circumvented or challenged, that the rights granted thereunder will provide
competitive advantages to the Company or that any of the Company's future patent
applications will be issued with the scope of the claims sought by the Company,
if at all. Furthermore, there can be no assurance that others will not develop
technologies that are similar or superior to the Company's technology, duplicate
the Company's technology or design around the patents, if any, owned by the
Company.
LIQUIDITY AND CAPITAL RESOURCES
The Company has incurred operational losses and operated with a
negative cash flow since its inception in December 1980. Losses totaled
$1,860,888 and $854,241 for the three month periods ended September 30, 1997
and September 30, 1996, respectively and $4,775,245, $4,672,271 and $3,951,839
for the years ended June 30, 1997, 1996 and 1995, respectively.
Working capital totaled approximately $16,250,000 at September 30,
1997, a decrease of $13,081,000 from the year end balance. This decrease was
due to an exchange and reclassification of a convertible preferred stock series
for a note payable totaling $9,720,240 classified as a current liability, cash
redemption in certain convertible preferred series totaling $667,000 and
operational losses of $1,861,000.
Commencing in June 1996 through February 1997, the Company completed
four Convertible Preferred stock issuances with gross proceeds of $40,000,000:
Series B-$15,000,000; Series C-$5,000,000; Series D-$15,000,000 and Series
E-$15,000,000.
During July and August of 1997, the terms of the four series of
preferred stock were modified in order to limit or otherwise restrict the timing
or number of conversions of the preferred stock into common stock over a given
period. This restructuring was initiated in order to mitigate concerns of the
Company and the investment community concerning the "overhang" of the Company's
common stock represented by the potential conversion of these outstanding series
of preferred stock under their original terms.
10
<PAGE> 11
In July 1997, the then remaining unconverted Series B Preferred Stock
was exchanged for a Promissory Note in the amount of $9,720,240. The Note bears
interest at 10% per annum with principal and interest payable over nine monthly
installments commencing in October 1997. The Note may be prepaid without penalty
and is not convertible into common stock of the Company. Also in July 1997, the
holders of the Series C Preferred Stock agreed to modify their conversion price
and limit conversions of their then remaining 974 shares ($1,000 face value per
share) over a two month period. The modified conversion price was the lower of
(i) $2.20 per share or (ii) the average closing price of the Company's Common
Stock over the five day period ending the day prior to the notice of conversion.
In September 1997, the Company concluded two Exchange Agreements
whereby the terms of the Series D Preferred Stock and Series E Preferred Stock
were modified with the remaining unconverted shares ($1,000 face value per
share) of Series D (7,950 Preferred Shares) and Series E (4,000 Preferred
Shares) being exchanged for a like number of Series F and Series G Preferred
Shares, respectively.
The Series F Preferred Stock provides for a limitation on the holder
limiting conversion during any two-week period to 800 shares ($800,000). The
terms also provide the Company with a cash-out option at the face amount being
converted plus 12%. In consideration for the holder of the Series D Preferred
Stock agreeing to a limitation on future conversions, the Company agreed to
increase the dividend rate from 6% for the Series D Preferred Stock to 10% for
the Series F Preferred Stock.
Terms of the Series G Preferred Stock provide that commencing in
September 1997, the holder is limited to converting 667 shares ($667,000) per
month over a 6-month period. The provisions further prove that the Company will
be required to redeem 667 shares ($667,000) per month less the number of Series
G Preferred Stock converted during the proceeding calendar month. In addition,
the holder is restricted from converting into common stock if the market price
of the Company's common stock is less on $2.50, subject to adjustment, at the
date of the conversion notice. In consideration for the restrictions on
conversion, the Company agreed to increase the dividend rate from 5% for the
Series E Preferred Stock to 10% for the Series G Preferred Stock. No other
material changes have been made in the substantive terms from the previously
issued Series E Preferred Stock.
While subject to significant limitation, the Company at June 30, 1997
has available approximately $29 million in net tax operating loss carryforwards
expiring between 1999 and 2012, which may be used to offset taxable income, if
any, during those periods. The Company's ability to generate revenues during
future periods is dependent upon obtaining regulatory approvals of the Product.
As the Company cannot be assured as to its ultimate success in obtaining the
necessary regulatory approvals, the Company is unable to conclude that
realization of benefits from its deferred tax assets is more likely than not, as
prescribed by SFAS 109. Accordingly, the Company has recognized a valuation
allowance of offset 100% of the deferred tax assets related to these
carryforwards.
11
<PAGE> 12
Management believes that the Company's Omniferon product currently
under development can be manufactured in sufficient quantity and will be priced
at a level to offer patients an attractive alternative treatment to the
Synthetic Interferons currently being marketed. Management further believes that
working capital currently on hand will provide the Company with the funds
necessary for the foreseeable future to continue its current level of
operations, focused on current research and development and production scale-up
projects in the Company's laboratory and manufacturing facility in Scotland and
the commencement of EU clinical trials. Additional funding would be required to
complete the clinical trial process both in the EU and domestically prior to
receiving regulatory approval to market the Product. Anticipated funding
requirements in the EU include: pre-clinical Phase I and Phase II trials --
$1.5-$2.0 million and Phase III studies -- $12-$14 million. In addition,
anticipated funding requirements for U.S. operations include: the establishment
of domestic manufacturing capacity -- $6 million; joint research and development
projects -- $4 million and commencement of domestic preclinical Phase I and
Phase II studies -- $1.5-$2.0 million. Funding will also be utilized for
continued product development research, general working capital purposes
including administrative support functions and the possible acquisition of
businesses complementary to the Company's operations.
RESULTS OF OPERATIONS
No sales revenue or related costs of sales were recognized for the
quarters ended September 30, 1997 or 1996, respectively. The termination of
sales revenues was due to patients previously enrolled under the Company's State
of Florida HRS 499 Program completing their course of treatments in fiscal 1996.
The Company discontinued enrollment of new patients in its 499 Program (with the
exception of certain limited enrollments approved by HRS for humanitarian
purposes including an HIV/AIDS study conducted at no charge to patients) and all
revenues under this program ceased in March 1996. The Company has no other
source of revenues from the sale of its Products until it receives the necessary
regulatory approval from the U.S. Food and Drug Administration and/or comparable
European authorities. At the present time, the Company has no pending
application relative to Omniferon before the EU regulatory authorities or the
FDA for the treatment of any disease indications, although the Company intends
to commence clinical trials in the EU during calendar 1998 and eventually submit
an Investigational New Drug Application to the FDA. Such approvals cannot be
assured and are subject to the successful completion of clinical trials and the
Company's ability to raise significant additional investment capital to fund the
completion of such trials.
12
<PAGE> 13
Research and development costs totaled $889,111 for the first quarter
of fiscal 1998 compared to $427,085 for the same period of the previous year.
The increase of $472,026 (111%) reflects the overall increase in research
activities including projects related to the scale-up of the Company's
manufacturing technology in the Company's Scottish manufacturing facility.
Components of this increase included an increase in laboratory supplies expense
of $228,000, research related salaries of $63,000, and increased travel related
expenses associated with the transfer of technology and process development
between the Company's Florida and Scottish facilities.
Selling, general and administrative expenses totaled $967,365 for the
quarter ended September 30, 1997, an increase of approximately $350,000 from the
same period of the preceding year. This increase reflects an increase in
administrative salaries and related taxes of $134,000 due to the addition of
administrative staff in the Company's Scottish laboratory and manufacturing
facility, increased administrative staff in the Company's Florida facility and
domestic salary increases. The Company also recognized increases in rent expense
related to its new administrative facility in Plantation, Florida and in
insurance expenses associated with increased liability coverages of $27,000 and
increased travel related costs primarily attribute to administrative support
related to the establishment of the Company's Scottish facility.
Depreciation expenses increased to $270,815 for the quarter ended
September 30, 1997 compared with $53,801 for the same period of the preceding
year. Approximately $120,000 (44%) of this increase reflects the acquisition
and utilization of laboratory equipment in the Company's Scottish laboratory and
manufacturing facility during fiscal 1997 and the first quarter of fiscal 1998.
The balance of the increase was attributable primarily to utilization of
additional laboratory and research equipment in the Company's Florida laboratory
facility acquired during the same period. Depreciation expense will continue to
increase our comparable periods of the preceding year as the Company continues
its technology transfer and process development projects related to its Omniform
product.
The Company anticipates no significant financial impact to its
operational or financial data processing systems as a result of the "Year 2000"
change.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statement re: computation of per share earnings
(27) Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
Item 5 - Other Events and Item 7 - Financial Statements,
Pro Forma Financial Information and Exhibits filed
September 22, 1997.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VIRAGEN, INC.
By: /s/ DENNIS W. HEALEY
---------------------------
Dennis W. Healey
Executive Vice President
Principal Financial Officer
By: /s/ JOSE ORTEGA
---------------------------
Jose Ortega
Chief Accounting Officer
Dated: November 14, 1997
14
<PAGE> 1
VIRAGEN, INC. AND SUBSIDIARIES
EXHIBIT 11 - COMPUTATION OF LOSS PER COMMON SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1997 1996
------------ ------------
<S> <C> <C>
PRIMARY AND FULLY DILUTED
Weighted average shares outstanding 47,357,382 38,018,217
=========== ============
Net Loss $(1,860,888) $ (854,241)
Deduct required dividends on convertible preferred
stock, Series A 663 663
Deduct required dividends on convertible preferred
stock, Series B - 2,341,859
Deduct required dividends on convertible preferred
stock, Series D 169,221 -
Deduct required dividends on convertible preferred
stock, Series E 65,418 -
Deduct required dividends on convertible preferred
stock, Series F 50,444 -
Deduct required dividends on convertible preferred
stock, Series G 26,849 -
----------- ------------
Loss attributed to common stock $(2,173,483) $ (3,196,763
=========== ============
Net loss per common share after deduction for required dividends
on convertible preferred stock $ (.05) $ (0.08)
=========== ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,267,085
<SECURITIES> 23,181,915
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 27,448,963
<PP&E> 7,875,088
<DEPRECIATION> 2,522,954
<TOTAL-ASSETS> 32,843,278
<CURRENT-LIABILITIES> 11,196,766
<BONDS> 0
3,333,000
10,324
<COMMON> 489,882
<OTHER-SE> 12,326,924
<TOTAL-LIABILITY-AND-EQUITY> 32,843,278
<SALES> 0
<TOTAL-REVENUES> 433,851
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,137,291
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 255,914
<INCOME-PRETAX> (1,959,354)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,959,354)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,860,888)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> 0
</TABLE>
