<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] 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 0-15327
-------
CYTRX CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 58-1642740
- --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
154 Technology Parkway, Norcross, Georgia 30092
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 368-9500
- --------------------------------------------------------------------------------
(Registrant's telephone number)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
--- ---
Number of shares of CytRx Corporation Common Stock, $.001 par value, issued and
outstanding as of August 10, 1998: 7,670,871.
<PAGE> 2
CYTRX CORPORATION
Form 10-Q
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements:
Condensed Consolidated Balance Sheets as of June 30, 1998 (unaudited)
and December 31, 1997 3
Condensed Consolidated Statements of Operations (unaudited) for the
Three Month and Six Month Periods Ended June 30, 1998 and 1997 4
Condensed Consolidated Statements of Cash Flows (unaudited)
for the Six Month Periods Ended June 30, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION
Item 4 Results of Votes of Security Holders 12
Item 6 Exhibits and Reports on Form 8-K 13
SIGNATURES 13
</TABLE>
2
<PAGE> 3
Part I - FINANCIAL INFORMATION
Item 1. - Financial Statements
CYTRX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
<S> <C> <C>
-------------- -----------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 15,039,055 $ 5,895,008
Accounts receivable 220,775 1,917,013
Notes receivable 4,300,000 -
Inventories 9,001 2,272,798
Other current assets 233,209 29,157
------------ ------------
Total current assets 19,802,040 10,113,976
Property and equipment, net 257,456 4,713,586
Other assets:
Long-term investments (restricted) - 5,326,647
Notes receivable, net of reserve - 400,000
Acquired developed technology, net 3,334,356 3,454,356
Other assets 790,351 897,430
------------ ------------
Total other assets 4,124,707 10,078,433
------------ ------------
Total assets $ 24,184,203 $ 24,905,995
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 326,797 $ 1,273,303
Accrued liabilities 576,366 1,599,628
Unearned revenue 275,353 166,187
------------ ------------
Total current liabilities 1,178,516 3,039,118
6% Convertible debentures - 2,000,000
Minority interest in Vaxcel, Inc. 502,546 618,482
Commitments
Stockholders' equity:
Preferred stock, $.01 par value, 1,000 shares authorized, including 1000
shares of Series A Junior Participating Preferred Stock;
no shares issued and outstanding - -
Common stock, $.001 par value, 18,750,000 shares authorized;
8,217,249 and 7,986,441 shares issued at June 30, 1998
and December 31, 1997, respectively 8,217 7,986
Additional paid-in capital 66,374,323 65,793,491
Treasury stock, at cost (555,154 shares held at June 30, 1998
and December 31, 1997, respectively) (2,198,533) (2,198,533)
Accumulated deficit (41,680,866) (44,354,549)
------------ ------------
Total stockholders' equity 22,503,141 19,248,395
------------ ------------
Total liabilities and stockholders' equity $ 24,184,203 $ 24,905,995
============ ============
</TABLE>
See accompanying notes.
3
<PAGE> 4
CYTRX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Month Period Ended June 30, Six Month Period Ended June 30,
-------------------------------- -------------------------------
1998 1997 1998 1997
----------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 254,751 $ 222,889 $ 472,716 $ 450,200
Interest income 289,632 219,738 433,482 463,753
Collaborative and grant income 453,144 13,322 469,627 105,989
Other 31,151 88,961 93,816 173,977
----------- ----------- ----------- -----------
1,028,678 544,910 1,469,641 1,193,919
Expenses:
Cost of sales 47,347 62,462 111,885 140,165
Research and development 2,496,202 799,779 3,792,272 1,667,819
Selling, general and administrative 961,753 1,057,132 1,728,517 1,646,340
Acquired research and development -- 951,017 -- 951,017
----------- ----------- ----------- -----------
3,505,302 2,870,390 5,632,674 4,405,341
----------- ----------- ----------- -----------
Loss from continuing
operations before minority interest
and extraordinary item (2,476,624) (2,325,480) (4,163,033) (3,211,422)
Minority interest (52,680) (125,284) (115,936) (125,284)
----------- ----------- ----------- -----------
Loss from continuing operations
before extraordinary item (2,423,944) (2,200,196) (4,047,097) (3,086,138)
Income (loss) from
discontinued operations 6,169,073 (63,096) 7,045,900 150,486
----------- ----------- ----------- -----------
Income (loss) before
extraordinary item 3,745,129 (2,263,292) 2,998,803 (2,935,652)
Extraordinary item:
Loss on early extinguishment
of debt (203,923) -- (325,120) --
----------- ----------- ----------- -----------
Net income (loss) $ 3,541,206 $(2,263,292) $ 2,673,683 $(2,935,652)
=========== =========== =========== ===========
Basic and diluted income (loss) per
common share:
Continuing operations $ (0.32) $ (0.30) $ (0.53) $ (0.42)
Discontinued operations 0.81 (0.01) 0.93 0.02
Extraordinary item (0.03) -- (0.04) --
----------- ----------- ----------- -----------
Net loss $ 0.46 $ (0.31) $ 0.35 $ (0.40)
=========== =========== =========== ===========
Basic and diluted
weighted average shares outstanding 7,659,456 7,409,712 7,591,361 7,425,289
</TABLE>
See accompanying notes.
4
<PAGE> 5
CYTRX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Month Period Ended June 30,
-------------------------------------
1998 1997
------------ ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 2,673,683 $ (2,935,652)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 324,743 324,659
Gain on sales of subsidiaries (7,115,008) -
Gain on sale or real estate (409,454) -
Extraordinary loss on early extinguishment of debt 325,120 -
Charge for acquired research and development - 951,017
Minority interest in net loss (115,936) (125,284)
Net change in assets and liabilities 1,057,378 (503,450)
------------ ------------
Total adjustments (5,933,157) 646,942
------------ ------------
Net cash used by operating activities (3,259,474) (2,288,710)
Cash flows from investing activities:
Dcrease in short-term investments - 1,880,100
Decrease in long-term investments 5,326,647 5,096,353
Capital expenditures/retirements, net (39,641) (201,332)
Net proceeds from sales of subsidiaries 4,464,688 -
Net proceeds from sale of real estate 4,225,221 -
Net cash paid for acquisition - (1,239,355)
------------ ------------
Net cash provided by investing activities 13,976,915 5,535,766
Cash flows from financing activities:
Net proceeds from issuance of common stock 76,606 87,762
Redemption of debt (1,650,000) -
Purchase of treasury stock - (176,864)
------------ ------------
Net cash used by financing activities (1,573,374) (89,102)
------------ ------------
Net increase in cash and cash equivalents 9,144,047 3,157,954
Cash and cash equivalents at beginning of period 5,895,008 1,604,003
------------ ------------
Cash and cash equivalents at end of period $ 15,039,055 $ 4,761,957
============ ============
</TABLE>
See accompanying notes.
5
<PAGE> 6
CYTRX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
1. DESCRIPTION OF COMPANY AND BASIS OF PRESENTATION
CytRx Corporation ("CytRx") was founded in 1985 and is engaged in the
development and commercialization of pharmaceutical-related products and
services including human therapeutics focused on high-value critical-care
therapies. CytRx's FLOCOR(TM), purified poloxamer 188, is being developed to
treat acute sickle cell crisis and other vascular-occlusive diseases.
In addition to its development work in human therapeutics, CytRx has
created several operating subsidiaries to broaden the development of its
technologies without losing focus on its core critical-care strategy. Vaxcel,
Inc. ("Vaxcel") is developing delivery systems to enhance the effectiveness of
vaccines. Before their divestiture by CytRx in February 1998 and April 1998,
respectively (see Note 4), Proceutics, Inc. ("Proceutics") provided preclinical
development services to the pharmaceutical industry and VetLife, Inc.
("VetLife") was engaged in marketing and distributing products to enhance North
American beef cattle productivity. Reference herein to "the Company" includes
CytRx and its majority-owned subsidiaries.
The accompanying condensed consolidated financial statements at June
30, 1998 and for the three month and six month periods ended June 30, 1998 and
1997 include the accounts of CytRx together with those of its subsidiaries and
are unaudited, but include all adjustments, consisting of normal recurring
entries, which the Company's management believes to be necessary for a fair
presentation of the periods presented. All significant intercompany transactions
have been eliminated. Interim results are not necessarily indicative of results
for a full year. The financial statements should be read in conjunction with the
Company's audited financial statements in its Form 10-K for the year ended
December 31, 1997.
Certain prior year amounts have been reclassified to conform to the
1998 financial statement presentation. As more thoroughly discussed in Note 4,
Proceutics and VetLife are presented as discontinued operations for all periods
presented.
2. INVENTORIES
Inventories at December 31, 1997 were comprised primarily of finished
cattle growth promotant products related to the discontinued operations of
VetLife.
6
<PAGE> 7
3. 6% CONVERTIBLE DEBENTURES
In October 1997, the Company privately placed with certain investors
$2,000,000 of convertible notes (the "Debentures") maturing in October, 2001. In
February and March 1998, $500,000 of the Debentures were converted into 204,104
shares of common stock. The provisions for conversion of the Debentures allow
the Company, at its discretion, to disallow conversions below $4.00 per share by
redeeming the amount attempted to be converted at a 10% premium. In February and
May 1998, $1,500,000 of Debentures were redeemed by the Company. At June 30,
1998 there were no remaining outstanding Debentures. Total redemption premiums
of $150,000 were paid to redeem the Debentures. In addition $175,000 of
previously capitalized debt issue costs were written off. The redemption
premiums and debt issue costs written off are reflected as an extraordinary item
in the statement of operations as loss on early extinguishment of debt.
4. DISCONTINUED OPERATIONS
Sale of Proceutics In February 1998, the Company consummated a sale of
substantially all of the assets of Proceutics other than real estate to Oread
Laboratories, Inc. ("Oread") for approximately $2.1 million. Proceutics retained
its real estate assets consisting of a laboratory building which it leased to
Oread. The laboratory building was subsequently sold in April 1998 (see Note 5).
Net income (loss) associated with Proceutics included in income (loss)
from discontinued operations were $366,000 and $1,363,000 for the three and six
months ended June 30, 1998, as compared to $(219,000) and $(305,000) in 1997. A
gain related to the sale of approximately $820,000 is included in income (loss)
from discontinued operations for the six months ended June 30, 1998. Also
included in income (loss) from discontinued operations for the three months
ended June 30, 1998 is a $409,000 gain on the sale of Proceutics' real estate
assets (see Note 5). A summary of the assets and liabilities of Proceutics which
were sold, and which are included in the consolidated balance sheet at December
31, 1997 are as follows (in thousands):
<TABLE>
<S> <C>
Current assets $ 721
Property and equipment, net 696
------
Total assets $1,417
Total liabilities $ 228
</TABLE>
Sale of VetLife
In April 1998, CytRx and VetLife entered into an Acquisition Agreement
with VetLife LLC ("VL LLC") pursuant to which VL LLC acquired substantially all
of VetLife's assets for a total purchase price consisting of: (i) a cash payment
of $3,500,000, subject to certain working capital adjustments, (ii) an
unsecured, subordinated promissory note in the principal amount of $4,000,000
bearing interest at an annual rate of 12%, and (iii) certain contingent payments
based on future sales of specified products of VL LLC and its affiliates that,
if made in full, could total up to $5,500,000. The sale of the assets closed on
the same day. The Company retained the $5.4 million in investments that were
pledged to secure a letter of credit for VetLife.
7
<PAGE> 8
Net income associated with the discontinued operations of VetLife
included in income (loss) from discontinued operations was $5,802,000 and
$5,683,000 for the three and six months ended June 30, 1998, as compared to
$156,000 and $456,000 in 1997. A gain related to the sale of approximately
$6,295,000 is included in income (loss) from discontinued operations for the
three and six month periods ended June 30, 1998. A summary of the assets and
liabilities of VetLife which were sold and which are included in the
consolidated balance sheet at December 31, 1997 are as follows (in thousands):
<TABLE>
<S> <C>
Current assets $ 3,695
Property and equipment, net 100
------
Total assets $ 3,795
======
Total liabilities $ 2,048
======
</TABLE>
5. SALE OF REAL ESTATE
On May 11, 1998, CytRx and Proceutics consummated the sale of the two
buildings owned by them at 150 and 154 Technology Parkway, Norcross, Georgia, to
Alexandria Real Estate Equities, Inc. ("Alexandria") for $4,500,000. Under the
terms of the Agreement, Proceutics' rights and obligations under the lease to
Oread (See Note 4) were assigned to Alexandria, and CytRx leased the building at
154 Technology Parkway from Alexandria. The CytRx lease is for a period of ten
years, with base annual rent of $148,500, escalating 4% annually. CytRx will
also be responsible for all operating expenses for the property. The Company
recorded a gain of $409,000 for the sale of the Proceutics building which was
recognized during the second quarter. A gain of $271,000 in the sale/leaseback
of the CytRx building will be deferred and amortized over the ten year lease.
8
<PAGE> 9
Item 2. -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At June 30, 1998 the Company had cash and cash equivalents of $15
million and net assets of $22.5 million, compared to $5.9 million and $19.2
million, respectively, at December 31, 1997. Working capital totaled $18.6
million at June 30, 1998, compared to $7.1 million at December 31, 1997. At
December 31, 1997 the Company also had $5.3 million in investments (classified
as other assets in the accompanying balance sheets) held as collateral pursuant
to a letter-of-credit arrangement which was dissolved in April 1998, thereby
releasing the restriction on such investments.
Management believes that cash and cash equivalents on hand, combined
with interest income, operating revenues and the proceeds from the transactions
discussed below, will be sufficient to satisfy the Company's projected liquidity
and working capital needs through 1999, but it is likely that additional funding
will be required to complete the necessary testing and data collection
procedures prescribed by the U.S. Food and Drug Administration ("FDA") for the
commercialization of any products for human use. Definitive statements as to the
time required and costs involved in reaching certain objectives for the
Company's products are difficult to project due to the uncertainties of the
medical research field. Requirements could vary depending upon the results of
research, competitive and technological developments, and the time and expense
required for governmental approval of products, some of which factors are beyond
management's control. CytRx anticipates that it may raise funds through equity
offerings. Additional funding for research and development expenditures may be
obtained through joint ventures and product licensing arrangements with other
companies.
During 1997 and 1998, the Company received federal government funding
for certain research and development activities via several Small Business
Innovative Research (SBIR) grants. Most recently, the Company received a grant
from the U.S. Food and Drug Administration's Division of Orphan Drug Development
to support CytRx's Phase III clinical trial of FLOCOR. This grant will provide
approximately $400,000 over two years to help defray the overall costs of the
study. The Company intends to continue to seek government assistance for its
product development efforts.
In February 1998, CytRx's wholly-owned subsidiary, Proceutics, Inc.
consummated a sale of substantially all of its non-real estate assets to Oread
Laboratories, Inc. ("Oread") for approximately $2.1 million. Proceutics retained
its real estate assets and leased its building at 150 Technology Parkway to
Oread. (See Note 4 to Financial Statements.) In May 1998, CytRx and Proceutics
sold the two buildings owned by them at 150 and 154 Technology Parkway,
Norcross, Georgia, to Alexandria Real Estate Equities, Inc. for $4,500,000. (See
Note 5 to Financial Statements).
9
<PAGE> 10
In April 1998, CytRx's wholly-owned subsidiary, VetLife, Inc.
consummated a sale of substantially all of its assets related to its cattle
marketing operations for approximately $7.5 million in cash and a note payable,
plus contingent payments of up to an additional $5.5 million. (See Note 4 to
Financial Statements). The Company also retained the $5.4 million in investments
owned by VetLife that were pledged to secure a letter-of-credit.
At December 31, 1997 the Company had net operating loss carryforwards
for income tax purposes of approximately $44.6 million, which will expire in
2000 through 2012 if not utilized. The Company also has research and development
credits available to reduce income taxes, if any, of approximately $1.1 million
which will expire in 2000 through 2010 if not utilized. Based on an assessment
of all available evidence including, but not limited to, the Company's limited
operating history and lack of profitability, uncertainties of the commercial
viability of the Company's technology, the impact of government regulation and
healthcare reform initiatives, and other risks normally associated with
biotechnology companies, the Company has concluded that it is more likely than
not that these net operating loss carryforwards and credits will not be realized
and, as a result, a 100% deferred tax valuation allowance has been recorded
against these assets.
Results of Operations
The following table presents the breakdown of consolidated results of
operations by operating unit for the three month and six month periods ended
June 30, 1998 and 1997.
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
(in thousands) 1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Continuing operations:
CytRx* $(2,056) $(1,006) $(3,236) $(1,549)
Vaxcel (421) (1,319) (927) (1,662)
Minority interest 53 125 116 125
------- ------- ------- -------
(2,424) (2,200) (4,047) (3,086)
Discontinued operations:
Proceutics*** 367 (219) 1,363 (305)
VetLife** 5,802 156 5,683 455
------- ------- ------- -------
6,169 (63) 7,046 150
Extraordinary item (204) -- (325) --
------- ------- ------- -------
Net income (loss) $ 3,541 $(2,263) $ 2,674 $(2,936)
======= ======= ======= =======
</TABLE>
* Includes continuing operations of VetLife.
** Includes a $6,295,000 gain on the sale of VetLife's cattle marketing
operations.
*** Three month and six month periods include a $409,000 gain on the sale of
real estate assets. Six month period also includes a $820,000 gain on the
sale of the Proceutics business.
10
<PAGE> 11
Consolidated net sales from continuing operations for the three month
and six month periods ended June 30, 1998 were $255,000 and $473,000,
respectively, as compared to $223,000 and $450,000, respectively, in 1997. Net
sales consist primarily of sales of TiterMax(R) research adjuvant and of service
revenues derived from the Company's small group of human resource professionals
marketing their services under the name of Spectrum Recruitment Research
("Spectrum"). Cost of sales from continuing operations was $47,000 (18% of net
sales) during the second quarter of 1998 as compared to $62,000 (28% of net
sales) in 1997. For the six month period ended June 30 cost of sales was
$112,000 (24% of net sales) in 1998 versus $140,000 (31% of net sales) in 1997.
Fluctuations in cost of sales are due to the mix of sales between TiterMax and
Spectrum, and to fluctuations in Spectrum's use of external consultants.
Although the TiterMax and Spectrum operations are profitable, the Company is not
dependent on the cash flow generated by these operations.
Interest income was $290,000 and $433,000 during the three month and
six month periods ended June 30, 1998 as compared to $220,000 and $464,000 for
the same periods in 1997. Fluctuations in interest income generally correspond
with changes in cash and investment balances.
Collaborative and grant income was $453,000 and $469,000 during the
three month and six month periods ended June 30, 1998 as compared to $13,000 and
$106,000 for the same periods in 1997. Contributing to the increase for 1998 was
a $200,000 grant from the Orphan Drug Product Development Division of the FDA to
support the Company's Phase III clinical trial for FLOCOR. During the third
quarter of 1997, the Company was also awarded three new federal grants which
provide for total funding of $500,000 over a 12 month period.
Research and development expenditures from continuing operations for
the three month period ended June 30, 1998 were $2,496,000 as compared to
$800,000 in 1997. For the six month period research and development expenditures
totaled $3,792,000 as compared to $1,668,000 in 1997. Research and development
expenditures increased in 1998 as a result of the Company's development
activities for FLOCOR, including the initiation in March 1998 of a Phase III
clinical trial. For the three and six month periods ended June 30, 1997, the
Company recognized a $951,000 charge for acquired research and development as
a result of Vaxcel's acquisition of Zynaxis, Inc. This charge is reported as a
separate line item on the accompanying Statement of Operations.
Selling, general and administrative expenses for the three month period
ended June 30, 1998 were $962,000 as compared to $1,057,000 in 1997. For the six
month period selling, general and administrative expenses totaled $1,729,000 as
compared to $1,646,000 in 1997. Fluctuations in selling, general and
administrative expenses are due to normal business activities. Management
believes that inflation had no material impact on the Company's operations
during the six month period ended June 30, 1998 or on the three year period
ended December 31, 1997. For the three month and six month periods ended June
30, 1998, the Company reported an extraordinary loss on early extinguishment of
debt of $204,000 and $325,000, respectively. This is a non-recurring item
related to redemption of the Company's outstanding Debentures (see Note 3 to
Financial Statements). Total redemption premiums of $150,000 were paid to
redeem the Debentures and $175,000 of previously capitalized debt issue costs
were written off.
The above statements regarding the Company's plans and expectations for
future financing are forward-looking statements that are subject to a number of
risks and uncertainties. The Company's ability to obtain future financings
through joint ventures, product licensing
11
<PAGE> 12
arrangements, equity financings or otherwise is subject to market conditions and
the Company's ability to identify parties that are willing and able to enter
into such arrangements on terms that are satisfactory to the Company. There can
be no assurance that the Company will be able to obtain future financing from
these sources. Additionally, depending upon the outcome of the Company's fund
raising efforts via its subsidiaries discussed above, the accompanying financial
information may not necessarily be indicative of future operating results or
future financial condition.
PART II-- OTHER INFORMATION
Item 4 Results of Votes of Security Holders
At the Company's Annual Meeting of Stockholders held on June 10, 1998, the
following members were elected to the Board of Directors:
<TABLE>
<CAPTION>
Votes For Votes Withheld
--------- --------------
<S> <C> <C>
Lyle A. Hohnke 6,573,068 159,145
Jack J. Luchese 6,575,414 156,799
</TABLE>
In addition to the election of the above-named persons, the following
individuals' terms of office continued after the meeting:
Jack L. Bowman
Raymond C. Carnahan, Jr.
Max Link
Herbert H. McDade, Jr.
The following proposals were also submitted to the Company's Stockholders for
approval:
<TABLE>
<CAPTION>
Votes Abstained/
Votes For Votes Against Not Voted
--------- ------------- ---------
<S> <C> <C> <C>
Approval of the Company's
1998 Long-Term Incentive Plan 1,342,775 488,353 39,135
Ratification of appointment of
Ernst & Young LLP as independent
auditors for the fiscal year
ending December 31, 1998 6,675,581 39,344 17,288
</TABLE>
The nominees for election as directors were all elected. The proposals to
approve the Company's 1998 Long-Term Incentive Plan and to ratify the selection
of the Company's auditors received more than the number of votes required for
their approval, and were adopted.
12
<PAGE> 13
Item 6. Exhibits and Reports on Form 8-K
<TABLE>
(a) Exhibits
Exhibit
Number Description
------ -----------
<S> <C>
27.1 Financial Data Schedule (for SEC use only)
27.2 Financial Data Schedule (Restated 1997) (for SEC use only)
</TABLE>
(b) Reports on Form 8-K
On May 1, 1998, the Registrant filed a Current Report on Form 8-K
related to the sale of substantially all the assets of VetLife, Inc.
Included in this filing were the Registrant's financial statements as
of December 31, 1997 and for the three years then ended, restated to
reflect VetLife as a discontinued operation. This filing was amended on
Form 8-K/A on June 19, 1998 and again on July 24, 1998.
On May 26, 1998, the Registrant filed a Current Report on Form 8-K
related to the sale of the real estate assets of Proceutics, Inc. and
the sale/leaseback of the real estate assets of CytRx Corporation. This
filing was amended on Form 8-K/A on June 19, 1998 and again on July
24, 1998.
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 thereunto duly authorized.
CYTRX CORPORATION
(Registrant)
Date: August 14, 1998 By: /s/ Mark W. Reynolds
--------------- --------------------------------------
Mark W. Reynolds
Chief Financial Officer
(Chief Accounting Officer
and a duly authorized officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE PERIOD ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 15,039,055
<SECURITIES> 0
<RECEIVABLES> 4,520,775
<ALLOWANCES> 0
<INVENTORY> 9,001
<CURRENT-ASSETS> 19,802,040
<PP&E> 977,940
<DEPRECIATION> 720,484
<TOTAL-ASSETS> 24,184,203
<CURRENT-LIABILITIES> 1,178,516
<BONDS> 0
0
0
<COMMON> 8,217
<OTHER-SE> 22,494,924
<TOTAL-LIABILITY-AND-EQUITY> 24,184,203
<SALES> 472,716
<TOTAL-REVENUES> 1,469,641
<CGS> 111,885
<TOTAL-COSTS> 111,885
<OTHER-EXPENSES> 5,520,789
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24,374
<INCOME-PRETAX> (4,047,097)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,047,097)
<DISCONTINUED> 7,045,900
<EXTRAORDINARY> (325,120)
<CHANGES> 0
<NET-INCOME> 2,673,683
<EPS-PRIMARY> .35
<EPS-DILUTED> .35
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE PERIOD ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,761,957
<SECURITIES> 8,393,008
<RECEIVABLES> 2,524,930
<ALLOWANCES> 0
<INVENTORY> 11,045
<CURRENT-ASSETS> 15,858,872
<PP&E> 7,294,804
<DEPRECIATION> 2,345,307
<TOTAL-ASSETS> 25,075,412
<CURRENT-LIABILITIES> 2,663,936
<BONDS> 0
0
0
<COMMON> 7,966
<OTHER-SE> 21,667,825
<TOTAL-LIABILITY-AND-EQUITY> 25,075,412
<SALES> 450,200
<TOTAL-REVENUES> 1,193,919
<CGS> 140,165
<TOTAL-COSTS> 140,165
<OTHER-EXPENSES> 4,265,176
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,086,138)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,086,138)
<DISCONTINUED> 150,486
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,935,652)
<EPS-PRIMARY> (.40)
<EPS-DILUTED> (.40)
</TABLE>
