<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
-----------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
-------- --------
Commission file number 0-15327
-------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
CYTRX CORPORATION 401(K) PROFIT-SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CYTRX CORPORATION
154 Technology Parkway
Norcross, Georgia 30092
<PAGE> 2
CYTRX CORPORATION
401(K) PROFIT-SHARING PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Auditors 2
Statements of Net Assets Available for Plan Benefits
as of December 31, 1996 and 1995 3
Statements of Changes in Net Assets Available for Plan Benefits
for the Years Ended December 31, 1996, 1995 and 1994 4
Notes to Financial Statements 6
Signatures 9
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes 10
Schedule of Reportable Transactions 11
Exhibit Index 13
</TABLE>
<PAGE> 3
REPORT OF INDEPENDENT AUDITORS
The Trustees of the CytRx Corporation
401(k) Profit-Sharing Plan
We have audited the accompanying statements of net assets available for plan
benefits of the CytRx Corporation 401(k) Profit-Sharing Plan (the "Plan") as of
December 31, 1996 and 1995, and the related statements of changes in net assets
available for plan benefits for each of the three years in the period ended
December 31, 1996. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits 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
from 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 audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1996 and 1995, and the changes in net assets available for
plan benefits for each of the three years in the period ended December 31,
1996, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental Schedule
of Assets Held for Investment Purposes as of December 31, 1996 and Schedule of
Reportable Transactions for the year ended December 31, 1996 are presented for
purposes of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and are not a required part of the basic financial statements. The
supplemental schedules have been subjected to the auditing procedures applied
in the audit of the 1996 financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic 1996 financial
statements taken as a whole.
ERNST & YOUNG LLP
Atlanta, Georgia
May 29, 1997
2
<PAGE> 4
CYTRX CORPORATION
401(K) PROFIT-SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
Retirement Corporate Basic CytRx
Preservation Bond Capital Value Growth Corporation
Trust Fund Fund Fund Fund Common Stock Total
------------ ----------- ---------- ---------- ---------- ------------ ----------
DECEMBER 31, 1996
- -----------------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at Market Value $ 85,995 $ 18,710 $ 287,784 $ 343,640 $ 224,164 $ 304,463 $1,264,756
Cash & Cash Equivalents 203 -- -- -- -- -- 203
Receivables:
Employer contributions -- -- -- -- -- 30,450 30,450
Employee contributions 492 1,267 3,319 5,935 6,999 1,668 19,680
Employee loans 17,480 -- -- -- -- 17,480
Other 13 -- -- -- -- 13
---------- ---------- ---------- ---------- ---------- ---------- ----------
17,985 1,267 3,319 5,935 6,999 32,118 67,623
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Assets 104,183 19,977 291,103 349,575 231,163 336,581 1,332,582
---------- ---------- ---------- ---------- ---------- ---------- ----------
LIABILITIES -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Assets Available for Plan Benefits $ 104,183 $ 19,977 $ 291,103 $ 349,575 $ 231,163 $ 336,581 $1,332,582
========== ========== ========== ========== ========== ========== ==========
DECEMBER 31, 1995
-----------------
ASSETS
Investments at Market Value $ 59,107 $ 5,837 $ 235,369 $ 253,093 $ 57,744 $ 200,356 $ 811,506
Cash & Cash Equivalents 21,751 -- -- -- -- -- 21,751
Pending Interfund Transfers (7,776) (15) (1,316) 8,826 (524) 805 --
Receivables:
Employer contributions -- -- -- -- -- 25,737 25,737
Employee contributions 13,166 1,121 3,795 4,015 10,090 1,204 33,391
Employee loans 7,949 -- -- -- -- -- 7,949
---------- ---------- ---------- ---------- ---------- ---------- ----------
21,115 1,121 3,795 4,015 10,090 26,941 67,077
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Assets 94,197 6,943 237,848 265,934 67,310 228,102 900,334
---------- ---------- ---------- ---------- ---------- ---------- ----------
LIABILITIES -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Assets Available for Plan Benefits $ 94,197 $ 6,943 $ 237,848 $ 265,934 $ 67,310 $ 228,102 $ 900,334
========== ========== ========== ========== ========== ========== ==========
</TABLE>
See accompanying notes.
3
<PAGE> 5
CYTRX CORPORATION
401(K) PROFIT-SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
Retirement Federal Corporate
Preservation Securities Bond Capital
Trust Trust Fund Fund
------------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
Net assets available for plan benefits
December 31, 1993 $ 2,357 $ 7,651 $ -- $ 36,453
Employee contributions 12,475 14,776 -- 110,122
Employer contributions -- -- -- --
Investment income 569 621 -- 10,017
Net appreciation (depreciation) in
market value of investments -- (1,044) -- (11,968)
Interfund transfers (9,836) (2,412) -- (2,371)
Distributions/Withdrawals -- -- -- (652)
--------- --------- --------- ---------
Net assets available for plan benefits
December 31, 1994 5,565 19,592 -- 141,601
Employee contributions 44,038 14,935 6,866 67,176
Employer contributions -- -- -- --
Investment income 1,545 814 109 22,449
Net appreciation (depreciation) in
market value of investments -- 2,561 16 30,398
Interfund transfers 43,049 (37,902) (48) (23,018)
Forfeitures -- -- -- --
Distributions/Withdrawals -- -- -- (758)
--------- --------- --------- ---------
Net assets available for plan benefits
December 31, 1995 $ 94,197 $ -- $ 6,943 $ 237,848
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
CytRx
Basic Value Growth Corporation
Fund Fund Common Stock Total
----------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Net assets available for plan benefits
December 31, 1993 $ 29,796 $ -- $ 259,662 $ 335,919
Employee contributions 106,258 -- 96,358 339,989
Employer contributions -- -- 107,865 107,865
Investment income 6,220 -- (658) 16,769
Net appreciation (depreciation) in
market value of investments (6,871) -- (332,112) (351,995)
Interfund transfers 5,687 -- 8,932 --
Distributions/Withdrawals (651) -- (4,427) (5,730)
--------- --------- --------- ---------
Net assets available for plan benefits
December 31, 1994 140,439 -- 135,620 442,817
Employee contributions 59,881 52,916 61,077 306,889
Employer contributions -- -- 138,672 138,672
Investment income 9,296 4,857 2,962 42,032
Net appreciation (depreciation) in
market value of investments 44,233 (3,863) (101,031) (27,686)
Interfund transfers 13,156 13,400 (8,637) --
Forfeitures -- -- (425) (425)
Distributions/Withdrawals (1,071) -- (136) (1,965)
--------- --------- --------- ---------
Net assets available for plan benefits
December 31, 1995 $ 265,934 $ 67,310 $ 228,102 $ 900,334
========= ========= ========= =========
</TABLE>
See accompanying notes.
4
<PAGE> 6
CYTRX CORPORATION
401(K) PROFIT-SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
Retirement Federal Corporate
Preservation Securities Bond Capital
Trust Trust Fund Fund
------------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
Net assets available for plan benefits
December 31, 1995 $ 94,197 $ -- $ 6,943 $ 237,848
Employee contributions 35,910 -- 17,206 47,933
Employer contributions -- -- -- --
Investment income 5,741 -- 1,182 25,716
Net appreciation (depreciation) in
market value of investments -- -- 405 4,438
Interfund transfers (25,525) -- (3,307) (11,518)
Forfeitures -- -- -- --
Distributions/Withdrawals (6,140) -- (2,452) (13,314)
--------- --------- --------- ---------
Net assets available for plan benefits
December 31, 1996 $ 104,183 $ -- $ 19,977 $ 291,103
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
CytRx
Basic Value Growth Corporation
Fund Fund Common Stock Total
----------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Net assets available for plan benefits
December 31, 1995 $ 265,934 $ 67,310 $ 228,102 $ 900,334
Employee contributions 69,821 114,542 32,379 317,791
Employer contributions -- -- 143,067 143,067
Investment income 20,221 16,138 -- 68,998
Net appreciation (depreciation) in
market value of investments 25,803 24,348 (87,606) (32,612)
Interfund transfers (12,405) 23,522 29,233 --
Forfeitures -- -- -- --
Distributions/Withdrawals (19,799) (14,697) (8,594) (64,996)
--------- --------- --------- ----------
Net assets available for plan benefits
December 31, 1996 $ 349,575 $ 231,163 $ 336,581 $1,332,582
========= ========= ========= ==========
</TABLE>
See accompanying notes.
5
<PAGE> 7
CYTRX CORPORATION
401(K) PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of Plan
General
The CytRx Corporation 401(k) Profit-Sharing Plan (the "Plan") is a
contributory defined contribution plan that covers substantially all
employees of CytRx Corporation and its wholly-owned subsidiaries --
Proceutics, Inc., Vaxcel, Inc. and Vetlife, Inc. (collectively referred to
herein as "the Company"). The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA"). Participants
should refer to the Summary Plan Description for the Plan for a more
complete description of the Plan's provisions.
Contributions
Eligible employees may elect to contribute up to 15% of their total
compensation on a pre-tax basis, subject to statutory restrictions. In
1996 the maximum salary deferral allowed by the Internal Revenue Service
was $9,500. Participants may also elect to contribute additional amounts
on an after-tax basis, subject to statutory restrictions.
Company matching contributions are made equal to 50% of the participants
pre-tax contribution. The Company matching contribution is made in the
form of CytRx Corporation common stock. The number of shares of stock
contributed to the Plan is determined at the end of each calendar quarter
by dividing the total value of the authorized Company matching contribution
by the average stock price during the quarter.
Vesting
Participants are immediately vested in their contributions and earnings
thereon. Company contributions are vested in accordance with the following
schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
----------------- -----------------
<S> <C>
0 0%
1 33 1/3%
2 66 2/3%
3 100%
</TABLE>
Distributions
Withdrawals and distributions from the Plan are calculated at the
market value of the pro rata shares of the fund to which Participants are
entitled. Participants may receive distributions of their vested balances
upon termination of employment, disability or attainment of age 59 1/2.
Withdrawals are also permitted for financial hardship.
6
<PAGE> 8
Forfeitures
Forfeitures of unvested account balances by terminating Participants are used to
reduce future Company matching contributions.
Investment Programs
All amounts contributed to the Plan have been deposited with Merrill Lynch
Pierce Fenner & Smith, Inc., the Custodian of the Plan. The Plan provides the
following funds in which participants can elect to invest their Plan assets:
Merrill Lynch Retirement Preservation Trust -- This fund seeks current income,
preservation of capital and liquidity available from investing in a diversified
portfolio of short-term money market instruments as well as annuity contracts
issued by banks and insurance companies. At December 31, 1996 there were 29
Plan participants with balances in this fund.
Merrill Lynch Corporate Bond Fund -- High Income Portfolio - This fund seeks as
high a level of current income as is consistent with prudent investment
management by investing principally in corporate securities which are rated in
the lower categories of the established rating services. At December 31, 1996
there were 22 Plan participants with balances in this fund.
Merrill Lynch Capital Fund --This fund seeks to achieve the highest total
investment return consistent with prudent risk through a fully managed
investment policy which permits management of the fund to vary investment in
equity, debt, convertible and money market securities based on its evaluation of
changes in economic and market trends. At December 31, 1996 there were 49 Plan
participants with balances in this fund.
Merrill Lynch Basic Value Fund -- This fund seeks capital appreciation and,
secondarily, income by investing in securities, primarily equities, that
management of the fund believes to be undervalued, especially those selling at a
discount from book value or at historically low price/earnings ratios. At
December 31, 1996 there were 56 Plan participants with balances in this fund.
Merrill Lynch Growth Fund -- This fund seeks long-term capital appreciation by
investing in a diversified portfolio of equity securities with principal
emphasis on issues believed to be undervalued. At December 31, 1996 there were
52 Plan participants with balances in this fund.
CytRx Corporation Common Stock Fund -- Invests solely in common stock of CytRx
Corporation. At December 31, 1996 there were 74 Plan participants with balances
in this fund.
Federal Securities Trust -- This fund seeks a high current return through
investments in U.S. Government and Government Agency securities. The Plan
discontinued use of this fund during 1995.
7
<PAGE> 9
Amendment or Termination
The Company intends to continue the Plan indefinitely but reserves the
right to terminate it at any time or amend it in any manner it deems
advisable. No amendment or termination may reduce any participant's vested
interest accrued to the date of such amendment or termination.
2. Summary of Accounting Policies
Method of Accounting
The financial statements of the Plan have been prepared using the
accrual basis of accounting. Participant contributions are recorded as
receivables when the related payroll deductions are made for Plan
participants. Contributions receivable represent reconciling items between
the accompanying financial statements, which are prepared in accordance
with generally accepted accounting principles, and the financial
information contained in the Plan's Form 5500 filed with the Internal
Revenue Service, which is prepared using the cash basis of accounting.
Use of Estimates
The preparation of the 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 those estimates.
Investments
Investments are stated at market value based on quoted market prices on
national exchanges.
3. Administrative Expenses
All custodial, record-keeping and trust administration fees and expenses
incurred for the benefit of the Plan are paid by the Company.
4. Income Tax Status
The Plan has received a favorable determination letter from the Internal
Revenue Service indicating that it is qualified under Section 401 of the
Internal Revenue Code and that the related trust is tax-exempt under Section
501 of the Internal Revenue Code. Accordingly, the trust's net investment
income is exempt from income taxes. The Company is not aware of any actions
or series of events that have occurred that might adversely affect the
Plan's qualified status.
8
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed by the undersigned
hereunto duly authorized.
June 3, 1997 CYTRX CORPORATION
401(K) PROFIT-SHARING PLAN
/s/ Mark W. Reynolds
--------------------------
Mark W. Reynolds
Chief Financial Officer
CytRx Corporation
9
<PAGE> 11
CYTRX CORPORATION
401(K) PROFIT-SHARING PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Market
Name of Issuer and Title of Issue Shares Cost Value
--------- ----------- -----------
<S> <C> <C> <C>
Merrill Lynch Retirement Preservation Trust 85,995 $ 85,995 $ 85,995
Merrill Lynch Corporate Bond Fund 2,336 18,391 18,710
Merrill Lynch Capital Fund 9,448 278,766 287,784
Merrill Lynch Basic Value Fund 11,219 307,344 343,640
Merrill Lynch Growth Fund 9,232 207,238 224,164
CytRx Corporation Common Stock 88,584 458,253 304,463
---------- ----------
Total Assets Held for Investment $1,355,987 $1,264,756
========== ==========
</TABLE>
10
<PAGE> 12
CYTRX CORPORATION
401(K) PROFIT-SHARING PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Current
Value of
Assets on
Cost of Transaction Net
Identity of Party Involved Description of Assets Purchases Sales Asset Sold Date Gain (Loss)
- -------------------------- ---------------------------------------- --------- -------- ---------- ----------- -----------
Category (iii) - Series of transactions in excess of 5% of plan assets
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Merrill Lynch Pierce Fenner 70,896 shares
& Smith, Inc. CytRx Corporation Common Stock $222,889 $222,889
Merrill Lynch Pierce Fenner 40,513 shares
& Smith, Inc. CytRx Corporation Common Stock $162,373 $231,745 $162,373 $(69,372)
Merrill Lynch Pierce Fenner 4,077 shares
& Smith, Inc. Merrill Lynch Capital Fund $123,496 $123,496
Merrill Lynch Pierce Fenner 2,464 shares
& Smith, Inc. Merrill Lynch Capital Fund $ 75,878 $ 72,464 $ 75,878 $ 3,414
Merrill Lynch Pierce Fenner 4,535 shares
& Smith, Inc. Merrill Lynch Basic Value Fund $132,868 $132,868
Merrill Lynch Pierce Fenner 2,321 shares
& Smith, Inc. Merrill Lynch Basic Value Fund $ 67,775 $ 62,400 $ 67,775 $ 5,375
Merrill Lynch Pierce Fenner 8,666 shares
& Smith, Inc. Merrill Lynch Growth Fund $194,876 $194,876
Merrill Lynch Pierce Fenner 2,237 shares
& Smith, Inc. Merrill Lynch Growth Fund $ 52,265 $ 48,696 $ 52,265 $ 3,569
Merrill Lynch Pierce Fenner 89,796 shares
& Smith, Inc. Merrill Lynch Retirement Preservation Trust $ 89,796 $ 89,796
Merrill Lynch Pierce Fenner 62,908 shares
& Smith, Inc. Merrill Lynch Retirement Preservation Trust $ 62,908 $ 62,908 $ 62,908 $ --
</TABLE>
11
<PAGE> 13
CYTRX CORPORATION
401(K) PROFIT-SHARING PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Current
Value of
Assets on
Cost of Transaction Net
Identity of Party Involved Description of Assets Purchases Sales Asset Sold Date Gain (Loss)
- -------------------------- ---------------------------------------- --------- -------- ---------- ----------- -----------
Category (iii) - Series of transactions in excess of 5% of plan assets
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Merrill Lynch Pierce Fenner 433,545 shares
& Smith, Inc. Merrill Lynch CMA Money Fund $433,545 $433,545
Merrill Lynch Pierce Fenner 455,049 shares
& Smith, Inc. Merrill Lynch CMA Money Fund $455,049 $455,049 $455,049 $ --
</TABLE>
Note: Commissions and fees related to purchases and sales of investments are
included in the cost of investments or the proceeds from the sale and are not
separately identified by the trustee.
There were no category (i), (ii) or (iv) reportable transactions during the year
ended December 31, 1996.
12
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CYTRX CORPORATION
401(K) PROFIT-SHARING PLAN
FORM 11-K EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description Page
- -------------- ----------- ----
<S> <C> <C>
24.1 Consent of Ernst & Young LLP 14
</TABLE>
13
<PAGE> 1
EXHIBIT 24.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 No. 33-48706 pertaining to the CytRx Corporation 401(k) Profit-Sharing
Plan of our report dated May 29, 1997, with respect to the financial statements
and supplemental schedules of the CytRx Corporation 401(k) Profit-Sharing Plan,
included in this Annual Report (Form 11-K) for the year ended December 31,
1996.
Atlanta, Georgia ERNST & YOUNG LLP
May 29, 1997