<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 1, 1996
ONCOGENE SCIENCE, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-15190 13-3159796
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
106 CHARLES LINDBERGH BLVD., UNIONDALE, NY 11553
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (516) 222-0023
<PAGE> 2
This Form 8-K/A is being filed to amend Item 7 of the Current Report on
Form 8-K of Oncogene Science, Inc. filed on April 26, 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
The audited financial statements of MYCOsearch, Inc. appear on pages
3-14 hereof.
(b) PRO FORMA FINANCIAL INFORMATION.
The pro forma financial information relating to Oncogene Science,
Inc.'s acquisition of MYCOsearch, Inc. appears on pages 15-20 hereof.
(b) EXHIBITS.
*2.1 Agreement and Plan of Merger dated as of
April 11, 1996 among the Company, MYCOsearch
Acquisition Corp., MYCOsearch and the
shareholders of MYCOsearch.
- ------------------
* Previously filed.
-2-
<PAGE> 3
MYCOSEARCH, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1995
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
-3-
<PAGE> 4
Independent Auditors' Report
The Board of Directors and Stockholders
MYCOsearch, Inc.:
We have audited the accompanying balance sheet of MYCOsearch, Inc. as of
December 31, 1995, and the related statements of operations, stockholders'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MYCOsearch, Inc. at December
31, 1995, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
April 11, 1996
-4-
<PAGE> 5
MYCOSEARCH, INC.
Balance Sheet
December 31, 1995
Assets
<TABLE>
<S> <C>
Current assets:
Cash and cash equivalents $ 262,907
Accounts receivable 2,250
Prepaid expenses 9,511
---------
Total current assets 274,668
---------
Equipment and leasehold improvements, net 51,605
Investment in Avid Therapeutics, Inc. 25,002
Deposits 2,550
---------
$ 353,825
=========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses 66,868
Unearned revenue 200,000
---------
Total current liabilities 266,868
---------
Stockholders' equity:
Common stock - Class A, $1 par value, authorized 1,000
shares; issued 500 shares in 1995 500
Common stock - Class B, $2.50 par value,
authorized 100,000 shares; issued -0- shares in 1995 --
Additional paid-in capital 100,570
Accumulated deficit (14,113)
---------
Total stockholders' equity 86,957
---------
Commitments
$ 353,825
=========
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE> 6
MYCOSEARCH, INC.
Statement of Operations
Year ended December 31, 1995
<TABLE>
<S> <C>
Revenues $ 1,064,382
-----------
Expenses:
Production 819,539
Research and development 234,581
Selling, general and administrative expenses 86,913
-----------
Total expenses 1,141,033
-----------
Loss from operations (76,651)
-----------
Other income (expense):
Interest income 10,070
Loss on investments (12,000)
Interest expense (7,289)
-----------
Loss before provision for income taxes (85,870)
Provision for income taxes 8,023
-----------
Net loss $ (93,893)
===========
</TABLE>
See accompanying notes to financial statements.
-6-
<PAGE> 7
MYCOSEARCH, INC.
Statement of Stockholders' Equity
Year ended December 31, 1995
<TABLE>
<CAPTION>
Addi Retained
tional - earnings Total
Common paid-in (accum. stockholders'
stock capital deficit) equity
----- ------- -------- ------
<S> <C> <C> <C> <C>
Balance at December 31, 1994 $500 50,570 79,780 130,850
Issuance of stock option to employee -- 50,000 -- 50,000
Net loss -- -- (93,893) (93,893)
---- ------- ------- --------
Balance at December 31, 1995 $500 100,570 (14,113) 86,957
==== ======= ======= ========
</TABLE>
See accompanying notes to financial statements.
-7-
<PAGE> 8
MYCOSEARCH, INC.
Statement of Cash Flows
Year ended December 31, 1995
<TABLE>
<S> <C>
Net loss $ (93,893)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 11,139
Loss on investments 12,000
Issuance of stock option 50,000
Write off of employee loan 41,788
Write off of loans to officers and stockholders 61,883
Changes in assets and liabilities:
Receivables 37,740
Interest receivable (1,308)
Prepaid expenses (4,101)
Accounts payable and accrued expenses 35,621
Unearned revenue 200,000
Income taxes payable (10,958)
---------
Net cash provided by operating activities 339,911
---------
Cash flows from investing activities:
Additions to equipment and leasehold improvements (37,282)
Loans to officers and employee (41,717)
---------
Net cash used in investing activities (78,999)
---------
Cash flows from financing activities:
Proceeds of loan from stockholder 50,000
Repayment of loans from stockholder (54,461)
---------
Net cash used in financing activities (4,461)
---------
Net increase in cash and cash equivalents 256,451
Cash and cash equivalents at beginning of year 6,456
---------
Cash and cash equivalents at end of year $ 262,907
=========
Supplemental disclosure of cash flow information
Cash paid for interest $ 7,289
=========
Cash paid for income taxes $ 19,170
=========
</TABLE>
See accompanying notes to financial statements.
-8-
<PAGE> 9
MYCOSEARCH, INC.
Notes to Financial Statements
December 31, 1995
(1) Description of Business and Summary of Significant Accounting Policies
(a) Description of Business
MYCOsearch, Inc. (the Company), located in Durham, North Carolina, is
engaged in the business of isolating fungi and actinomycetes from
nature and extracting chemicals from such microorganisms for the
purpose of new drug discovery.
(b) Revenue Recognition
Revenues represent payments and receivables for providing specimens and
related services to various pharmaceutical and biotechnology companies
under fungus extract supply and collaborative agreements and are
recognized when earned in accordance with the terms of the contracts
and upon shipment of the extracts. Revenues are deferred for cash
payments received in advance of shipment or performance of services.
(c) Investments
The Company's investment in Avid Therapeutics, Inc. (Avid) is valued at
cost, which approximates market value at December 31, 1995. Loss on
investments of $12,000 reflected in the accompanying statement of
operations represents the write off of two investments during 1995
that were deemed to be without value.
(d) Research and Development Costs
Research and development costs are charged to operations as incurred and
include direct costs of research scientists and equipment and an
allocation of indirect costs. The costs associated with the
development of the Company's inventory of fungi and actinomycetes
extracts have been expensed as incurred.
(e) Depreciation and Amortization
Depreciation is provided for by the straight-line method over the
estimated useful lives of the assets. Leasehold improvements are
amortized on the straight-line method over the lesser of the life of
the related lease or their estimated useful lives.
(f) Income Taxes
Deferred income taxes are recognized based on the difference between the
financial statement and tax bases of assets and liabilities (temporary
differences) using enacted tax rates in effect for the years in which
the differences are expected to reverse.
(Continued)
-9-
<PAGE> 10
MYCOSEARCH, INC.
Notes to Financial Statements, Continued
(g) Cash Equivalents
The Company considers all highly liquid investments with an original
maturity of three months or less when purchased to be cash
equivalents. Cash equivalents at December 31, 1995 consist of a money
market fund in the amount of $3,140.
(h) Use of Estimates
Management of the Company has made a number of estimates and assumptions
relative to the reporting of assets and liabilities and the disclosure
of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
(2) Extract Supply Contracts
The Company has entered into fungus extract agreements with various
pharmaceutical and biotechnology companies that provide for the
Company to produce and supply extracts from its collection of fungi
and actinomycetes, on a non-exclusive basis, in exchange for cash
payments. In exchange for additional payments, the Company provides
exclusive access to particular extracts under which the Company will
not supply or distribute the identified extracts to any other party.
The agreements also provide for payment of royalties to the Company in
the event that a drug is derived from the extracts. A summary of
certain significant extract agreements follows:
Effective July 12, 1993, the Company entered into a three-year fungus
extract supply and collaborative agreement with Oncogene Science, Inc.
(Oncogene). Pursuant to the agreement, the Company agreed to supply
Oncogene up to 21,000 fungal extracts from up to 3,500 different
fungal cultures during the first twelve months of the agreement term
and up to 42,000 extracts from up to 7,000 fungal cultures for each of
the remaining twelve month periods of the agreement term. In addition,
Oncogene agreed to lease to the Company, at no cost, certain
equipment, hardware, software, peripherals and related manuals
necessary to develop and produce the quantities of extracts to be
provided under the agreement. At the end of the three-year agreement
period, the Company has the option to purchase the leased equipment
for $1.
Effective September 17, 1993, the Company entered into a three-year fungus
extract supply and collaborative agreement with Genetics Institute,
Inc. (Genetics). Pursuant to the agreement, the Company agreed to
supply Genetics with up to 20,000 extracts during the first twelve
months of the agreement and up to 40,000 extracts during each of the
remaining twelve month periods of the agreement. The Company also
agreed to provide biotransformations of certain extracts at Genetics'
request for which the Company is to be reimbursed its cost plus 20%
not to exceed $100,000. At December 31, 1995, the Company has recorded
deferred revenue of $200,000 related to this agreement. This amount
represents the payment for services and extracts not yet provided to
Genetics. This unearned revenue is expected to be earned during 1996.
Effective June 15, 1994, the Company entered into three-year year fungus
extract supply and collaborative agreement with Avid to supply Avid
with up to 20,004 extracts during the first eighteen months of the
agreement and additional extracts as requested by Avid during the
remaining term of the agreement. In connection with the agreement, the
Company purchased 16,668 shares of Avid common stock for $25,002.
(Continued)
-10-
<PAGE> 11
MYCOSEARCH, INC.
Notes to Financial Statements, Continued
Effective February 1, 1995, the Company entered into a three-year fungus
extract supply and collaborative agreement with NHC Laboratories, Inc.
(NHC). The Company agreed to supply NHC with approximately 120,000
extracts during the term of the agreement (approximately 40,000 per
year). As discussed in note 9, NHC is considered a related party based
on common ownership and also provided consulting services to the
Company during 1995. The stated price per extract in the agreement is
substantially lower than the price per extract charged to other
unrelated customers of the Company. The Company did not provide any
extracts to NHC under this agreement during 1995.
(3) Equipment and Leasehold Improvements
Equipment and leasehold improvements are recorded at cost and consist of
the following:
<TABLE>
<CAPTION>
Estimated
life (years)
------------
<S> <C> <C>
Laboratory equipment 5-7 $ 119,857
Office furniture and equipment 5-7 15,583
Automobile equipment 5 10,510
Leasehold improvements Life of lease 4,354
-------------
150,304
Less: accumulated depreciation
and amortization 98,699
-------------
Net equipment and leasehold improvements $ 51,605
=============
(4) Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses are summarized as follows:
Accounts payable $ 10,961
Accrued state taxes 775
Accrued payroll taxes 55,132
------------
$ 66,868
============
(5) Income Taxes
The provision for income taxes is comprised of the following:
Federal $ 2,779
State 5,244
------------
$ 8,023
============
</TABLE>
(Continued)
-12-
<PAGE> 12
MYCOSEARCH, INC.
Notes to Financial Statements, Continued
The income tax provision is different from that which would be computed by
applying the U.S. federal income tax rate to income before taxes as
follows:
<TABLE>
<S> <C>
Benefit at statutory rate $ (29,200)
Surtax exemption (10,200)
State income taxes, net of federal
income tax benefit 3,460
Change in valuation allowance 45,550
Other (1,587)
------------------
$ 8,023
==================
</TABLE>
The tax effects of temporary difference that give rise to the deferred tax
assets and deferred tax liabilities at December 31, 1995 are as
follows:
<TABLE>
<S> <C>
Deferred tax asset:
Research and development credits $ 141,388
Employee benefit costs 69,250
Less valuation allowance (197,416)
------------------
Net deferred tax asset 13,222
------------------
Deferred tax liability:
Depreciation (13,222)
------------------
Net deferred tax asset $ -
==================
</TABLE>
The Company recorded a valuation allowance equal to the amount of the net
deferred tax based on the uncertainity of projecting future taxable
income sufficient to realize the carryforward of the research and
development credits and deductions of certain employee benefit costs.
The change in the valuation allowance of $45,550 reflects an increase
in deferred tax assets related to employee benefit costs offset by the
utilization of research and development carryforward credits in the
1995 federal income tax return.
(6) Lease Commitment
The Company leases office, operating and laboratory space under a lease
agreement. Rent expense was approximately $31,000 for the fiscal year
ended December 31, 1995. The following is a schedule of future minimum
rental payments required as of December 31, 1995, assuming renewal of
the lease for one year on April 30, 1996 to expire on April 30, 1997.
<TABLE>
<S> <C>
Fiscal years ended:
1996 $ 31,743
1997 10,700
------------
$ 42,443
============
</TABLE>
(Continued)
-12-
<PAGE> 13
MYCOSEARCH, INC.
Notes to Financial Statements, Continued
(7) Employment Agreement
In January 1994, the Company entered into an employment and
non-competition agreement with its director of fermentation and
microbiology. The agreement provides the terms of his employment,
which includes a base salary of $80,000 per year, an option to
purchase up to 1% of the then outstanding shares of the capital stock
of the Company for each full year of service to the Company up to a
maximum of 5%, and a share of the Company's net income. The fair value
of the options has been estimated at $50,000 per year and the expense
of the 1995 option has been reflected as an additional expense in the
accompanying statement of operations for the year ended December 31,
1995.
At December 31, 1995, the Company had provided this employee a
non-interest bearing advance totaling $41,788. On April 10, 1996, the
Board of Directors forgave this advance in recognition of services
rendered to the Company and certain other consideration. The
forgiveness of the advance has been recognized as an expense in the
accompanying statement of operations for the year ended December 31,
1995.
(8) Business Concentration
Revenue by customer as a percentage of total revenue for the year ended
December 31, 1995 is as follows:
<TABLE>
<S> <C>
Oncogene 51%
Genetics 30
Other 19
----
100%
====
</TABLE>
(9) Related Party Transactions
During 1995, the NHC provided consulting services to the Company in
exchange for payments totaling $112,400. The Company also sublet a
portion of its premises to NHC at no cost.
BJB Holdings, Inc. (BJB) is wholly owned by the three stockholders of the
Company. BJB owns approximately 41% of NHC's common stock. In
addition, a stockholder of the Company also owns individually
approximately 4% of NHC's common stock. At December 31, 1995, the
Company had a receivable from BJB of $2,428, which bears interest at
6% and was due on December 31, 1997.
In January 1995, an officer and stockholder of the Company provided a
$50,000 demand loan to the Company. The loan was paid in full in
December 1995 and bore interest at 16% per annum, which amounted to
$7,289.
At December 31, 1995, the Company had notes due from officers of $58,147,
which bore interest at rates ranging from 6% to 7% per annum and were
due at varying dates from August 1997 through December 1997.
(Continued)
-13-
<PAGE> 14
MYCOSEARCH, INC.
Notes to Financial Statements, Continued
On April 10, 1996, the Board of Directors forgave the amounts due from
officers of $59,455, including accrued interest thereon of $1,308, and
the amount due from BJB in the amount of $2,428 in recognition of
services rendered to the Company and certain other consideration. The
forgiveness of the notes receivable and accrued interest totaling
$61,883 has been recognized as an expense in the accompanying
statement of operations for the year ended December 31, 1995.
(10) Subsequent Event
On April 11, 1996, the Company was acquired by Oncogene for approximately
$5.2 million in cash and Oncogene's common stock and warrants. Under
the terms of the agreement, the Company will become a wholly-owned
subsidiary of Oncogene.
-14-
<PAGE> 15
PRO FORMA FINANCIAL INFORMATION
(UNAUDITED)
The following unaudited pro forma financial statements give effect to the
acquisition of MYCOsearch, Inc. in exchange for $1,750,000 in cash, $2,950,000
in common stock of the Company based on 316,533 shares at $9.319 per share and
warrants to purchase 100,000 shares of the Company's common stock at $9.319 per
share valued at $483,000.
The pro forma statements of operations for the year ended September 30, 1995
and the three months ended December 31, 1995 assume such acquisition was
consummated as of October 1, 1994 and October 1, 1995, respectively. The pro
forma balance sheet assumes that such acquisition was consummated as of
December 31, 1995. For purposes of the pro forma financial information, the
historical financial statements of MYCOsearch, Inc. for the year ended December
31, 1995 has been used to prepare the pro forma statement of operations for the
year ended September 30, 1995.
The pro forma financial statements do not purport to represent the Company's
actual financial condition or results of operations had such acquisition
actually been made on the dates indicated, nor do they project the Company's
financial position or results of operations for any future dates or periods.
The pro forma financial statements should be read in conjunction with the notes
thereto and the historical financial statements of the Company and MYCOsearch,
Inc.
-15-
<PAGE> 16
ONCOGENE SCIENCE
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Oncogene MYCOsearch, Excluded Pro Forma
Science, Inc. Inc. Assets Adjustments Pro Forma
------------- ----------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents.................... 17,919,609 262,907 (262,907) (1,750,000)(a) 16,169,609
Short-term investments....................... 8,866,957 8,866,957
Receivables.................................. 1,320,015 2,250 1,322,265
Interest receivable.......................... 45,263 45,263
Grants receivable............................ 433,530 433,530
Prepaid expenses............................. 518,150 9,511 527,661
--------------------------------------------------------------------------------
Total current assets...................... 29,103,524 274,668 (262,907) (1,750,000) 27,365,285
--------------------------------------------------------------------------------
Fixed assets, net.............................. 5,709,515 51,605 5,761,120
Other receivable............................... 262,703 262,703
Loans to officers and employees................ 25,516 25,516
Other assets................................... 325,582 27,552 (25,002) 328,132
Fungi cultures................................. 0 5,489,952 (b) 5,483,952
Intangible assets, net......................... 8,630,581 8,630,581
--------------------------------------------------------------------------------
Total assets.............................. 44,057,421 353,825 (287,909) 3,733,952 47,857,289
================================================================================
Current liabilities:
Accounts payable and accrued expenses........ 2,825,702 66,868 100,000 (a) 2,992,570
Current portion of unearned revenue.......... 150,041 200,000 350,041
--------------------------------------------------------------------------------
Total current liabilities................. 2,976,743 266,868 100,000 3,342,611
--------------------------------------------------------------------------------
Other liabilities:
Long-term portion of unearned revenue........ 165,839 165,839
Accrued postretirement benefit cost.......... 366,203 366,203
--------------------------------------------------------------------------------
Total liabilities......................... 3,507,785 266,868 0 100,000 3,874,653
--------------------------------------------------------------------------------
Stockholders' equity...........................
Common stock, $.01 par value................. 176,830 500 (500) 3,165 (a) 179,995
Additional paid-in capital................... 66,735,375 100,570 (100,570) 3,429,835 (a) 70,165,210
Accumulated deficit.......................... (26,129,341) (14,113) (186,839) 200,952 (b) (26,129,341)
Cumulative translation adjustment............ (55,689) (55,689)
Unrealized holding gain (loss)............... (35,000) (35,000)
--------------------------------------------------------------------------------
40,692,195 86,957 (287,909) 3,633,952 44,125,195
--------------------------------------------------------------------------------
Less: treasury stock, at cost.................. (142,559) (142,559)
--------------------------------------------------------------------------------
Total stockholders' equity................ 40,549,636 86,957 (287,909) 3,633,952 43,982,636
--------------------------------------------------------------------------------
Total liabilities and
stockholders' equity.................... 44,057,421 353,825 (287,909) 3,733,952 47,857,289
================================================================================
</TABLE>
-16-
<PAGE> 17
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
The foregoing pro forma adjustments assume the acquisition of MYCOsearch, Inc.
was consummated as of December 31, 1995.
(a) The consideration paid in connection with the acquisition is summarized as
follows:
<TABLE>
<S> <C>
Cash consideration paid........................... $1,750,000
Issuance of 316,533 shares of common stock........ 2,950,000
Issuance of 100,000 warrants...................... 483,000
Estimated costs incurred in connection with
the acquisition................................. 100,000
---------
Total consideration.................... $5,283,000
=========
</TABLE>
(b) The pro forma adjustment required to assign the estimated cost of the
acquisition is as follows:
<TABLE>
<S> <C>
Elimination of deficit............................ $ (200,952)
Increase to fungi cultures........................ 5,483,952
---------
$5,283,000
=========
</TABLE>
The increase relating to fungi cultures represents the estimated fair value
attributable to the approximately 80,000 distinct fungi cultures owned by
MYCOsearch, Inc. based on an independent appraisal. The cost of these fungi had
not been capitalized by MYCOsearch, Inc.
-17-
<PAGE> 18
ONCOGENE SCIENCE
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Oncogene MYCOsearch, Pro Forma
Science, Inc. Inc. Adjustments Pro Forma
------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Revenues:
Collaborative program revenues, principally
from related parties........................ 9,885,858 9,885,858
Sales......................................... 4,266,540 1,064,382 (540,000)(b) 4,810,922
Other research revenue........................ 1,892,603 1,892,603
-----------------------------------------------------------------
Total revenues............................. 15,864,999 1,064,382 (540,000) 16,389,381
-----------------------------------------------------------------
Expenses:
Research and development...................... 13,523,043 225,961 (540,000)(b) 14,304,004
1,095,000 (a)
Production.................................... 1,252,990 789,374 2,042,364
Selling, general and administrative........... 7,140,208 82,602 7,222,810
Amortization of intangibles................... 1,696,561 1,696,561
-----------------------------------------------------------------
Total expenses............................. 23,612,802 1,097,937 555,000 25,265,739
-----------------------------------------------------------------
Loss from operations.................... (7,747,803) (33,555) (1,095,000) (8,876,358)
-----------------------------------------------------------------
Other income (expense):
Net investment income......................... 834,830 10,070 (60,000)(c) 784,900
Other expense................................. (66,086) (27,312) (93,398)
Gain on sale of Research Products Business.... 2,720,389 2,720,389
-----------------------------------------------------------------
Net loss........................................ (4,258,670) (50,797) (1,155,000) (5,464,467)
-----------------------------------------------------------------
Weight average number of shares of
common stock outstanding...................... 16,757,370 316,533 17,073,903
=================================================================
Net loss per weighted average share of
common stock outstanding...................... (0.25) (0.32)
=================================================================
</TABLE>
-18-
<PAGE> 19
ONCOGENE SCIENCE
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Oncogene MYCOsearch, Pro Forma
Science, Inc. Inc. Adjustments Pro Forma
------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Revenues:
Collaborative program revenues, principally
from related parties........................ 1,987,458 1,987,458
Sales......................................... 29,042 266,096 (135,000)(b) 160,138
Other research revenue........................ 259,748 259,748
-----------------------------------------------------------------
Total revenues............................. 2,276,248 266,096 (135,000) 2,407,344
-----------------------------------------------------------------
Expenses:
Research and development...................... 2,683,262 56,490 (135,000)(b) 2,879,752
275,000 (a)
Production.................................... 21,863 197,344 219,207
Selling, general and administrative........... 1,331,539 20,651 1,352,190
Amortization of intangibles................... 363,189 363,189
-----------------------------------------------------------------
Total expenses............................. 4,399,853 274,484 140,000 4,814,337
-----------------------------------------------------------------
Loss from operations.................... (2,123,605) (8,389) (275,000) (2,406,994)
-----------------------------------------------------------------
Other income (expense):
Net investment income......................... 364,524 2,518 (15,000)(c) 352,042
Other expense................................. (11,513) (6,828) (18,341)
-----------------------------------------------------------------
Net loss........................................ (1,770,594) (12,699) (290,000) (2,073,293)
-----------------------------------------------------------------
Weight average number of shares of
common stock outstanding...................... 17,476,343 316,533 17,792,876
=================================================================
Net loss per weighted average share of
common stock outstanding...................... (0.10) (0.12)
=================================================================
</TABLE>
-19-
<PAGE> 20
NOTES TO PRO FORMA STATEMENTS OF OPERATIONS
(UNAUDITED)
The following pro forma adjustments to the statements of operations for the
year ended September 30, 1995 and the three months ended December 31, 1995,
respectively, assume the acquisition of MYCOsearch, Inc. was consummated as of
October 1, 1994 and October 1, 1995, respectively.
<TABLE>
<CAPTION>
Three Months
Year Ended Ended
Sept. 30, 1995 Dec. 31, 1995
-------------- -------------
<S> <C> <C>
a) Amortization of fungi cultures over
a five-year period........................ $1,095,000 275,000
========== =======
b) Elimination of sales from MYCOsearch, Inc.
to Oncogene Science, Inc.................. $ 540,000 135,000
========== =======
c) Reduction of investment income related
to cash consideration paid................ $ 60,000 15,000
========== =======
d) Additional common shares outstanding...... 316,553 316,553
========== =======
</TABLE>
-20-
<PAGE> 21
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.
ONCOGENE SCIENCE, INC.
By: /s/ Robert L. Van Nostrand
------------------------------------------
Robert L. Van Nostrand,
Vice President, Finance and Administration
Dated: May 9, 1996
