<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 - December 31, 1996
( ) 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 0-17827
VIRAGEN (EUROPE) LTD.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 11-2788282
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2343 West 76th Street, Hialeah, FL 33016
----------------------------------------
(Address of principal executive offices)
(305) 823-0269
----------------------------------------------------
(Registrant's telephone number, including area code)
---------------------------------------------------------------
(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 - 7,095,559 shares at February 12, 1997.
<PAGE> 2
VIRAGEN (EUROPE) LTD. AND SUBSIDIARY
INDEX
PART I - FINANCIAL INFORMATION
The Consolidated Condensed Statements of Operations (Unaudited) for the three
months and six months ended December 31, 1996 and December 31, 1995 include the
accounts of the Registrant and its subsidiary.
Item 1. Financial Statements
(1) Consolidated Condensed Statements of Operations for the three months
ended and six months ended December 31, 1996 and December 31, 1995.
(2) Consolidated Condensed Balance Sheets as of December 31, 1996 and
June 30, 1996.
(3) Consolidated Condensed Statements of Cash Flows for the six months
ended December 31, 1996 and December 31, 1995.
(4) Notes to Consolidated Condensed Financial Statement as of December 31,
1996.
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 (EUROPE) LTD. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
INCOME
Interest income $ 62,583 $ 1,811 $ 122,168 $ 2,285
--------- ---------- --------- -----------
62,583 1,811 122,168 2,285
COSTS AND EXPENSES
Research and development costs 19,899 61,859
General and administrative expenses 153,426 6,330 269,622 70,266
Depreciation and amortization 959 1,707
--------- ---------- --------- -----------
174,284 6,330 333,188 70,266
NET LOSS $(111,701) $ (4,519) $(211,020) $ (67,981)
========= ========== ========= ===========
Net Loss per common share $ (0.02) $ (0.014) $ (0.03) $ (0.005)
========= ========== ========= ===========
Weighted average common shares
outstanding 7,049,012 2,034,129 6,990,844 12,576,246
========= ========== ========= ===========
</TABLE>
SEE NOTE TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
3
<PAGE> 4
VIRAGEN (EUROPE) LTD. AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
----------- ----------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $5,177,727 $4,985,897
Advances to parent 1,161,303 882,960
Other current assets 52,542 51,313
---------- -----------
Total Current Assets 6,391,572 5,920,170
PROPERTY, PLANT AND EQUIPMENT
Equipment and furniture 21,529 5,985
Construction in progress 1,228,510 21,811
---------- -----------
1,250,039 27,796
Less accumulated depreciation (2,000) (183)
---------- -----------
1,248,039 27,613
OTHER ASSETS 10,119 6,166
---------- ----------
$7,649,730 $5,953,949
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 653,127 $ 124,384
---------- ----------
Total Current Liabilities 653,127 124,384
Stockholders' Equity
Common stock, $.01 par value. Authorized
20,000,000 shares; issued and outstanding
6,962,830 shares at December 31, 1996
and 6,922,830 shares at June 30, 1996 70,956 69,228
Additional paid-in capital 7,318,652 6,192,005
Deficit (685,745) (474,725)
Foreign currency translation adjustment 292,740 43,057
---------- ----------
Total Stockholders' Equity 6,996,603 5,829,565
---------- ----------
$7,649,730 $5,953,949
========== ==========
</TABLE>
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
4
<PAGE> 5
VIRAGEN (EUROPE) LTD. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (211,020) $(67,981)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of deferred expenses -- 771
Depreciation 959 --
Changes in assets and liabilities:
Increase in other current assets (1,229) --
Increase in other assets (3,953) --
Increase in accounts payable and
accrued expenses. 528,743 11,342
Increase in advances to parent (278,343) --
----------- --------
Net cash used in operating activities 35,157 (55,868)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment, net of
minor disposals (1,222,243) --
Net proceeds to/from affiliates -- 29,976
----------- --------
Net cash provided by (used in) investing activities (1,222,243) 29,976
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from purchase of business -- 867,202
Exercise of warrants 1,128,375 --
Contributions from officers -- 400
----------- --------
Net cash provided by financing activities 1,128,375 867,602
Effect of foreign currency translation 250,541 --
----------- --------
Net increase (decrease) in cash 191,830 841,710
Cash - Beginning of Period 4,985,897 50,226
----------- --------
Cash - End Period $ 5,177,727 $891,936
=========== ========
SUPPLEMENTAL DISCLOSURE ON NON-CASH
FINANCING ACTIVITIES:
In conjunction with the reverse acquisition
the following occurred:
Assets acquired 917,369
Liabilities assumed (50,167)
Cash $867,202
</TABLE>
SEE NOTE TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5
<PAGE> 6
VIRAGEN (EUROPE) LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE - A - ORGANIZATION AND CONSOLIDATION
Viragen (Europe) Ltd. ("VEL") and its subsidiary are engaged in the
research, development and manufacture of certain immunological products for
commercial application. The consolidated financial statements include the
accounts of VEL and its wholly-owned subsidiary, Viragen (Scotland) Ltd.
("VSL"), collectively known as the Company. VSL is a private Scottish company.
All material intercompany accounts and transactions have been eliminated in
consolidation. VEL is a majority-owned subsidiary of Viragen, Inc. See Note B
for further discussion relating to basis of presentation.
Effective May 2, 1996, the Company's name was changed from Sector
Associates, Ltd. to Viragen (Europe) Ltd. The common stock was reverse split one
share for fourteen (1:14) and the par value was changed from $.10 per share to
$.01 per share. The number of authorized common shares was reduced from 50
million shares to 20 million shares.
The effect of the reverse split has been reflected in the consolidated
financial statements for the three months ended and six months ended December
31, 1996 and fiscal year ended June 30, 1996.
NOTE - B - ACQUISITION - BASIS OF PRESENTATION
On September 20, 1995, Sector Associated, Ltd. ("Sector"), (now named
VEL) entered into an agreement and Plan of Reorganization (the "Agreement") with
Viragen, Inc. ("Viragen"), a Delaware corporation. Under the terms of the
Agreement, Sector was to acquire a 100% interest in VSL, in consideration for
Viragen receiving a 94% interest in Sector.
On November 7, 1995, the Agreement was amended to provide for an
interim loan of $500,000 by Sector to VSL, the filing of certain financial
reports by Sector prior to closing, a capital contribution of $300,000 into
Sector within thirty days, and the modification of a related investment banking
agreement. The $500,000 loan was funded November 9, 1995, bearing interest at 4%
per annum, secured by a 3.77% equity interest in VSL, and was guaranteed by
Viragen. Upon closing of the Agreement on December 8, 1995, the principal amount
of the note was deemed contributed capital to Sector.
6
<PAGE> 7
VIRAGEN (EUROPE) LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE B - ACQUISITION - BASIS OF PRESENTATION - CONTINUED
On December 8, 1995, Sector finalized the Agreement and acquired 100%
of the stock of VSL in exchanged for 2,000,000 voting shares of Series B
Convertible Preferred Stock, convertible into 5,600,000 shares of common stock
or approximately 94% of then issued and outstanding shares, as well as 94% of
the voting privileges, of Sector. Viragen retained an 84% ownership interest in
Sector, as 71,429 of the preferred shares (convertible into 200,000 common
shares) were disbursed as finders' fees, and 142,857 of the preferred shares
(convertible into 400,000 common shares) were issued to the Directors and an
affiliate, in exchange for their common shares of VSL. The Company recognized
$243,000 in compensation expense related to the disbursement of stock to the
Directors and affiliate. As the Parent Company of VSL gained voting control of
Sector in this transaction, VSL became the acquiring entity and accounting
survivor. Accordingly, the transaction was accounted for as a reverse
acquisition whereby the historical financial statements contained herein reflect
those of the accounting acquirer, VSL, not the financial statements of the legal
acquirer, VEL (formerly Sector). The historical financial statements for all
periods presented up to December 8, 1995 included herein are, therefore, those
of the predecessor, or VSL, the accounting survivor of the reverse acquisition.
Moreover, since at the time of the acquisition the legal acquirer, VEL, was a
shell corporation with no operations, the stockholder's equity of the conformed
entity was recapitalized to reflect the capital structure of the surviving legal
entity and the accumulated deficit of VSL.
NOTE C - INTERIM ADJUSTMENTS AND USE OF ESTIMATES
The financial summaries for the three month and six month periods ended
December 31, 1996 and December 31, 1995 included, 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 month period and six month period ended
December 31, 1996 are not necessary indicative of the results that may be
expected for the entire year ending June 30, 1997.
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, 1996.
7
<PAGE> 8
VIRAGEN (EUROPE) LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE C - INTERIM ADJUSTMENTS AND USE OF ESTIMATES - CONTINUED
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.
NOTE D - COMMON STOCK OPTIONS AND WARRANTS
Shares of the Company's common stock reserved at December 31, 1996
and June 30, 1996 for possible future issuance are as follows:
<TABLE>
<CAPTION>
Exercise December 31, June 30,
Price 1996 1996
----- ---- ----
<S> <C> <C> <C>
December 1995 Private Placement Warrants $ 6.00 701,271 840,000
Employee options 7.00 50,000 50,000
March 1996 Private Placement Warrants 8.00 422,000 450,000
March 1996 Private Placement Warrants 12.00 210,500 216,500
Class F Warrant (exercisable through
November 1, 1998) 105.00 44,196 44,196
----------- ------------
1,427,967 1,600,696
=========== ============
</TABLE>
During the six months ended December 31, 1996 138,729 warrants with an
exercise price of $6.00 per share issued in connection with the Company's
December 1995 Private Placement, 28,000 warrants with an exercise price of $8.00
per share issued to March 1996 Private Placement and 6,000 warrants with an
exercise price of $12.00 per share issued to March 1996 Private Placement
investors were exercised.
On June 30, 1996 10,120 Class B Warrants having an exercise price of
$133.00 per share expired.
NOTE E - CONTINGENCY
An action is pending against VEL (formerly Sector) alleging that Sector
mishandled payment of amounts due to a secured creditor. Sector has denied the
claim and has filed a counterclaim. Further, a shareholder of Sector has agreed
to indemnify VEL relating to this matter. The ultimate liability, if any, cannot
be determined at this time. Management intends to vigorously defend its
position.
8
<PAGE> 9
VIRAGEN (EUROPE) LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE F - COMMITMENTS
In June 1996, the Company executed a five-year lease on property
located in Edinburgh, Scotland that will serve as the Company's laboratory and
production facilities. Monthly rental on the property is approximately $10,000.
In addition, the Company may extend the term of the lease at its option, for
four five-year periods.
In November 1996, the Company entered into scientific equipment
purchase agreements relating to the Edinburgh, Scotland laboratory facility
totaling approximately $1,550,000.
9
<PAGE> 10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION 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 dates 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 declared effective by the Securities and Exchange Commission
on July 12, 1996. You should also consult the risk factors listed from time to
time in the Company's Reports on Form 10-Q, 8-K, 10-K and Annual Reports to the
Shareholders.
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 and 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 he 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 owned by the Company.
10
<PAGE> 11
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS
OF OPERATIONS - CONTINUED
LIQUIDITY AND CAPITAL RESOURCES
On December 8, 1995, the Company (then named Sector Associates, Ltd.)
acquired 100% of the Viragen (Scotland) Ltd. ("VSL") for 2,000,000 shares of
Series B Convertible Preferred Stock of the Company which, upon conversion,
represented 5,600,000 shares of Common Stock or approximately 94% of the then
issued and outstanding capital stock interest of the Company. As the
stockholders of VSL gained voting control of the Company in this transaction,
they became the acquiring entity and accounting survivor. Accordingly, the
acquisition was accounted for as a reverse acquisition whereby the historical
financial statements reflect those of the accounting acquirer, VSL, not the
financial statements of the legal acquirer, the Company. The historical
financial statements for all periods presented up to December 8, 1995 included
herein are therefore those of the predecessor, or VSL, the accounting survivor
of the reverse acquisition. Moreover, since at the time of the acquisition the
legal acquirer, the Company, was a shell corporation with no operations,
stockholders' equity of the combined entity was recapitalized to reflect the
capital structure of the surviving legal entity and the accumulated deficit of
VSL.
VSL was organized during April 1995 by Viragen, Inc. as a Scottish
private company to undertake clinical trials in the EU and for sales of
Viragen's Product, in the European Union ("EU") and other countries outside the
United States. Accordingly, no financial data is available for Viragen (Europe)
Ltd. and its subsidiary, VSL, prior to April 1995.
Through a license granted by Viragen, VSL's ultimate parent, VSL
secured certain rights to engage in the research, development and manufacture of
certain proprietary products and technologies that relate to the therapeutic
application of human leukocyte interferon for various diseases that affect the
human immune system. Pursuant to these rights, on July 20, 1995, VSL entered
into a License and Manufacturing Agreement with the Common Services Agency, an
agency acting on behalf of the Scottish National Blood Transfusion Services,
("SNBTS") pursuant to which SNBTS, on behalf of VSL, will manufacture and supply
VSL's Product to VSL for distribution in the EU in return for certain fees and
additional rights. SNBTS' services will be subject to all governmental
regulations and procedures pertaining to the manufacture and distribution of the
Product. SNBTS has committed to manufacture the Product in sufficient scale to
accommodate the EU clinical trials and may simultaneously engage in commercial
sales in amounts to be agreed upon by the parties and the European regulatory
authorities. SNBTS will also cooperate with the Company in studies relevant to
the Product and with eventual production, clinical trials and distribution.
Management considers it critical to the Company's operation and to planned
clinical trials to secure a sufficient qualified source of human leukocytes, a
critical component in the manufacture of the Product. VSL was a newly formed
company which commenced operations concurrent with the execution of its
agreements with SNBTS.
11
<PAGE> 12
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS
OF OPERATIONS - CONTINUED
The Company initiated a series of Private Placements to accredited
investors to raise capital necessary to complete the planned reverse
acquisition, raise the funding necessary to complete construction of its
Scottish facility and for initial Product testing phases by VSL in Scotland. In
December 1995, the Company completed a Private Placement, raising approximately
$750,000 through the sale of 336,000 units for a purchase price of $2.23 per
Unit. Each Unit consists of 0.71 shares of Common Stock and 2.5 Common Stock
Purchase Warrants having an exercise price of $6.00 per share, representing a
total of 240,000 Shares and 840,000 Warrants. In March 1996, the Company
completed two additional Private Placements, issuing a total of 768,000 shares
of Common Stock and 216,500 Warrants having an exercise price of $12.00 per
share. These offerings yielded net cash proceeds of $5,102,000. The completion
of the Private Placements provided the Company with initial capital necessary
(i) for the construction of a building and related facilities in Scotland, (ii)
for the purchase of equipment at the Company's Scottish facilities, (iii) to
provide a minimum royalty to the Company's affiliate, VTI to commence in
calendar year 1997 (iv) to expand the number of employees of VEL and (v) for
general working capital. However, the Company will require additional financing
to engage in clinical trials for the purpose of obtaining EU approval for the
Product. The entire process of research, development and EU regulatory approvals
(if obtained), of a new pharmaceutical product takes several years and requires
substantial funding. Pursuant to its Licensing Agreement with SNBTS, the Company
and SNBTS intend to commence EU preclinical trials in calendar 1997. The
Company's present focus is the continued research and development of the
Company's Product for the treatment of Multiple Sclerosis, Hepatitis B and C,
and HIV/AIDS.
Following the receipt of additional funding from the Company's Private
Placement completed in March 1996, research efforts commenced and related costs
were incurred which can be expected to increase as the Company continues its
development efforts for its proprietary production technology for its product.
In June 1996, the Company executed a five year lease agreement in a
biotechnology park in the Edinburgh area of Scotland. This facility, comprised
of approximately 8,100 sq. ft., will contain the Company's laboratory and
production facilities. The monthly rental for the facility is approximately
$10,000 per month. This location will augment other productive assets located
within the SNBTS facility which are available to the Company under the Scottish
Agreement.
The construction and equipping of the Company's Scottish laboratory and
production facility is expected to be completed during the first quarter of
calendar 1997. Estimated costs to complete the facilities, including equipment,
total approximately $3,700,000.
12
<PAGE> 13
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS
OF OPERATIONS - CONTINUED
Management believes that the working capital currently on-hand is
adequate to complete the planned construction phase of its Edinburgh production
facility and maintain its research and product development operations for the
foreseeable future. Additional funding will be required to undertake and
complete planned EU trials necessary for requisite regulatory approvals.
RESULTS OF OPERATIONS
Income reflected for the three months ended and six months ended
December 31, 1996 represents interest earned on investment of the proceeds from
the Private Placements completed during fiscal 1996.
Research and development costs are reflected during the first and
second fiscal quarters of 1997 as the Company, through Viragen (Scotland) Ltd.,
began conducting limited research projects associated with the transfer of
technology from the Company's parent, Viragen, Inc., related to the Company's
OmniferonTM product. These costs will continue to increase at least through the
balance of fiscal 1997 as the Company continues its process development
refinement efforts and works towards regulatory submissions.
General and administrative expenses increased significantly between the
periods reflecting the hiring of a Managing Director in Scotland and the
establishing of the administrative support functions associated with
construction of the Edinburgh, Scotland facility and technology transfer
activities. General and administrative expenses incurred during the first six
month period of fiscal 1997 included payroll and related taxes of $76,000,
professional fees of $82,000, including legal and accounting fees associated
with facility construction agreements and mandated reporting requirements. In
addition, the Company incurred $25,300 in financial consulting services
associated with the transitional phase of the Company's reverse acquisition
transaction.
13
<PAGE> 14
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
None
14
<PAGE> 15
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 (EUROPE) LTD.
By: /s/ Dennis W. Healey
---------------------------
Dennis W. Healey
Executive Vice President
Principal Financial Officer
By: /s/ Jose Ortega
---------------------------
Jose I. Ortega
Controller
Chief Accounting Officer
Dated: February 12, 1997
15
<PAGE> 1
EXHIBIT - 11
COMPUTATION OF PER SHARE EARNINGS
16
<PAGE> 2
VIRAGEN (EUROPE) LTD. AND SUBSIDIARY
EXHIBIT 11 - COMPUTATION OF LOSS PER COMMON SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
PRIMARY AND FULLY DILUTED
Weighted average shares outstanding 2,034,129 12,576,246
=========== ============== =========== ==============
Net Loss $ 29,316 $ (67,355)
=========== ============== =========== ==============
Net loss per common share $ (0.014) $ (0.005)
=========== ============== =========== ==============
</TABLE>
17
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 5,177,727
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,391,572
<PP&E> 1,250,039
<DEPRECIATION> 2,000
<TOTAL-ASSETS> 7,649,730
<CURRENT-LIABILITIES> 653,127
<BONDS> 0
0
0
<COMMON> 70,956
<OTHER-SE> 6,925,647
<TOTAL-LIABILITY-AND-EQUITY> 7,649,730
<SALES> 0
<TOTAL-REVENUES> 122,168
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 333,188
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (211,020)
<INCOME-TAX> 0
<INCOME-CONTINUING> (211,020)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (211,020)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
