SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarter Ended October 31, 1995
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-11572
ImmmunoTherapeutics, Inc.
(Exact name of registrant as specified in its charter)
Delaware 41-1505029
(State of other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
3233 15th Street South, Fargo, ND 58104
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (701) 232-9575
(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 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
At October 31, 1995, 5,272,048 shares of the registrant's common stock
(par value, $.001 per share) were outstanding.
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
(UNAUDITED)
<CAPTION>
October 31,
1995
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,421,141
Prepaid expenses 15,197
TOTAL CURRENT ASSETS $ 1,436,338
Office and lab equipment, Net of
Accumulated Depreciation of $896,310. 113,183
Leasehold improvements, Net of
Accumulated Amortization of $298,817. 115,853
Patent issuance costs, Net of Accumulated
Amortization of $5,068. 186,427
TOTAL ASSETS $ 1,851,801
<F/N>
See accompanying condensed notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
Current liabilities:
Accounts payable and accrued expenses $ 28,620
TOTAL CURRENT LIABILITIES $ 28,620
STOCKHOLDERS' EQUITY:
Preferred stock, $.05 par value.
Authorized 500,000 shares;
none issued and outstanding --
Common stock, $0.001 par value.
Authorized 50,000,000 shares;
issued 5,901,675, outstanding 5,272,048 5,902
Additional paid-in capital 10,068,747
(Deficit) accumulated during the development
stage (7,951,468)
Total $ 2,123,181
Less:
Treasury Stock, at cost, 629,627 shares (300,000)
TOTAL STOCKHOLDERS' EQUITY 1,823,181
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,851,801
<F/N>
See accompanying condensed notes to financial statements
</TABLE>
<PAGE>
<TABLE>
IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Cumulative from
February 15, 1985
Three Months Ended Oct 31, (date of inception)
1995 1994 to Oct 31, 1995
<S> <C> <C> <C>
SBIR contract revenue $ $ $ 100,000
Operating expenses:
SBIR contract
research and
development $ -- $ -- $ 86,168
Proprietary research
and development 235,308 $ 269,177 6,292,148
Rent Expense 12,877 9,844 345,559
General and
administrative expenses 53,742 76,893 2,052,092
Total operating expenses $ 301,927 $ 355,914 $ 8,775,967
(Loss) from operations (301,927) (355,914) (8,675,967)
Other income -- -- 1,512
Interest income 16,956 29,032 763,625
Interest expense -- -- (40,638)
Net loss $ (284,971) $ (326,882) $ (7,951,468)
Net loss per share $ (0.05) $ (0.06)
Weighted average
common shares
outstanding 5,272,048 5,642,698
</TABLE>
<F/N>
See accompanying condensed notes to financial statements
<PAGE>
<TABLE>
IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Cumulative from
February 15, 1985
Nine Months Ended Oct 31, (date of inception)
1995 1994 to July 31, 1995
<S> <C> <C> <C>
SBIR contract revenue $ $ $ 100,000
Operating expenses:
SBIR contract
research and
development $ -- $ -- $ 86,168
Proprietary research
and development 646,853 $ 779,351 6,292,148
Rent Expense 29,284 25,406 345,559
General and
administrative expenses 268,910 208,547 2,052,092
Total operating expenses $ 945,047 $ 1,013,304 $ 8,775,967
(Loss) from operations (945,047) (1,013,304) (8,775,967)
Other income -- 130 1,512
Interest income 62,397 76,365 763,625
Interest expense -- -- (40,638)
Net loss $ (882,650) $ (936,809) $ (7,951,468)
Net loss per share $ (0.17) $ (0.16)
Weighted average
common shares
outstanding 5,272,048 5,814,987
</TABLE>
<F/N>
See accompanying condensed notes to financial statements
<PAGE>
<TABLE>
IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Cumulative from
Nine months February 15, 1985
ended Oct 31, (date of inception)
1995 1994 to Oct 31, 1995
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net (loss) $ (882,650) $ (936,809) ($ 7,951,468)
Adjustments to Reconcile
Net (Loss) to Cash Provided
by Operating Activities:
Depreciation and
Amortization 144,371 140,609 712,561
Amortization of Discounted
Note Receivable -- -- --
Amortization of Deferred
Revenue -- -- --
Amortization of
Deferred Compensation 13,500 51,000 131,786
Excess of Fair Market
Value Over Option
Price on Non-Qualified
Options Granted (5,474) (10,386) 279,585
Gain on Sale of Assets -- (130) 740
Write off on Patent
Issuance Cost -- 18,357 101,006
Changes in Assets and Liabilities:
(Increase) Decrease in:
Prepaid Expenses 38,457 (38,193) (15,197)
Increase (Decrease) in:
Accounts Payable 3,412 23,216 3,412
Accrued Expenses (55,017) (76,269) 119,205
Accrued Salaries 124 -- 124
Accrued Payroll Taxes -- (2,000) --
Delaware Franchise Tax (4,151) (2,553) (4,151)
Defered Revenue -- -- --
Total Adjustments $ (135,222) $ 103,651 $ 1,327,591
NET CASH-OPERATING
ACTIVITIES-Forward $ (747,438) $ (833,158) $ (6,623,877)
INVESTING ACTIVITIES:
Patent Issuance Cost $ (60,959) $ (17,019) $ (292,502)
Organizational Costs
Incurred -- -- (135)
Deposit on Leasehold
Improvements -- -- (5,000)
Purchase of Leasehold
Improvements (6,628) (4,803) (414,671)
Purchases of Office
and Lab Equipment -- (1,817) (516,984)
Proceeds from Assets
Sold -- 130 1,000
NET CASH-INVESTING
ACTIVITIES-Forward $ (67,587) $ (23,509) $ (1,228,292)
<F/N>
See Accompanying Condensed Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOW
(UNAUDITED
<CAPTION>
Cumulative from
Nine Months February 15, 1985
Ended Oct 31, (date of inception)
1995 1994 to Oct 31, 1995
<S> <C> <C> <C>
NET CASH-OPERATING
ACTIVITIES-Forwarded $ (747,428) $ (833,158) $ (6,623,877)
NET CASH-INVESTING
ACTIVITIES-Forwarded $ (67,587) $ (23,509) $ (1,228,292)
FINANCING ACTIVITIES:
Net Proceeds from
Issuance of Common
Stock $ -- $ -- $ 9,594,876
Purchase of Common Stock -- (300,000) (300,000)
Proceeds from Exercise
of Options -- -- 87
Proceeds from Borrowings
from President -- -- 41,433
Repayment of Borrowings
from President -- -- (41,433)
Proceeds from Borrowings
Under Line of Credit -- -- 300,000
Repayment of Borrowings
Under Line of Credit -- -- (300,000)
Proceeds from Note
Payable to Bank -- -- 150,000
Payments on Note
Payable to Bank -- -- (150,000)
Proceeds from Borrowings
from Stockholders -- -- 15,867
Repayment of Borrowings
from Stockholders -- -- (15,867)
Advances from Parent
Company -- -- 135,000
Payments to Parent
Company -- -- (135,000)
Repayment of Long-
Term Note Receivable -- -- 50,315
Repayment of Note
Payable Issued in
Exchange for Legal
Service -- -- (71,968)
NET CASH-
FINANCING ACTIVITIES $ -- $ (300,000) $ 9,273,310
NET (DECREASE)
INCREASE IN CASH
AND CASH EQUIVALENTS $ (815,015) $ (1,156,667) $ 1,421,141
CASH AND CASH
EQUIVALENTS-
BEGINNING OF
PERIODS $ 2,236,156 $ 3,698,639 $
CASH AND CASH
EQUIVALENTS-
END OF PERIODS $ 1,421,141 $ 2,541,972 $ 1,421,141
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION
Cash paid during the
periods for:
Interest $ -- $ -- $ 40,648
<F/N>
See accompanying Condensed Notes to Financial Statements
</TABLE>
<PAGE>
IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
Financial Statements
The Balance Sheet as of October 31, 1995, the Statements of Operations
for the three and nine month periods ended October 31, 1994 and 1995; and
the cumulative period from February 15, 1985 (date of inception) to
October 31,1995; and the Statements of Cash Flows for the nine month periods
ended October 31, 1995 and October 31, 1994 have been prepared by the
Company without audit. In the opinion of management, all adjustments
necessary to present fairly the financial position at October 31, 1995 and
the results of operations and cash flows for the periods ended October 31,
1995 and October 31, 1994 have been made. All adjustments were of a normally
recurring nature. The results of operations for interim periods are not
necessarily indicative of the results for the full fiscal year.
<PAGE>
IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Company is a development stage enterprise and expects no significant
revenue from the sale of products for the current fiscal year.
On August 20, 1992, the Company completed a public offering of
securities and realized net proceeds of approximately $6,750,000, before
deducting expenses related to the offering of approximately $500,000. At
January 31, 1995, and October 31, 1995, the Company had cash and cash
equivalents of $2,236,156 and $1,421,141, respectively, and working
capital of $2,205,557 and $1,407,718, respectively. The decline in
working capital is due primarily to ongoing research and development
activities, and general and administrative expenses.
The Company's current level of research and development activities
requires the expenditure of approximately $100,000 per month. Additional
expenses will be incurred in outside expanded clinical trials to
accomplish the necessary data collection and clinical trials required by
the FDA for the commercial production, marketing and distribution of the
Company's first proposed product. Management of the Company believes that
its current cash resources will be sufficient to support its operations
for at least through July 31, 1996. The Company's cash resources will
not be sufficient at current levels to permit the Company to complete the
clinical trials of its initial proposed product necessary to obtain any
FDA approvals. Accordingly, the Company may be required to collaborate
with one or more large pharmaceutical companies which will provide the
necessary financing and expertise to obtain regulatory approvals, complete
clinical development, manufacture and market such product. Alternatively,
the Company will be required to seek additional funds from other sources
not now identified. There can be no assurance that the Company will be
able to enter into the collaborative agreements or raise additional
capital necessary to complete its clinical trials, obtain necessary
regulatory approvals, or fully develop or commercialize its proposed
product on acceptable terms. In such event, if the Company was unable to
obtain from alternative sources the substantial financing necessary on
acceptable terms, it would be unable to complete the development or
commercialize any products.
<PAGE>
(Cont.)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Nine Months Ended October 31, 1995 Compared With Nine Months Ended
October 31, 1994.
Total operating expenses for the six months ended October 31, 1995 were
$945,047 compared to $1,013,304 in the preceding year representing a
decrease of $68,257 or 6%.
Proprietary research and development expenses decreased by $132,498 to
$646,853 in 1995 compared to $779,351 in 1994, due to the decrease in
in associated research and development activities. Rent increased $3,878
reflecting the increased expense in the Company's occupancy of the current
facility. Total general and administrative expenses increased by $60,363
or 28% reflecting increased activity.
Interest income decreased from $76,365 to $62,397, reflecting the
decrease in the Company's cash balance resulting from its activities offset
by higher interest rates.
The Company's net loss decreased from $936,809 to $882,650 or 5%,
reflecting the Company's decrease level of research and development offset
by an increase in general and administrative expenses.
<PAGE>
OTHER INFORMATION
Item 6. Exhibits and Reports on form 8-K
(a)Exhibits
None.
(b)Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to 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.
IMMUNOTHERAPEUTICS, INC.
Gerald J. Vosika
President and Director of the Company
James W. Burrow
11/26/95 Chief Financial Officer
</PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS AMMENDED FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED
STATEMENTS
OF OPERATION.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> OCT-31-1995
<CASH> 1,421,141
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,436,338
<PP&E> 15,197
<DEPRECIATION> 144,371
<TOTAL-ASSETS> 1,851,801
<CURRENT-LIABILITIES> 28,620
<BONDS> 0
<COMMON> 5,902
0
0
<OTHER-SE> 1,823,181
<TOTAL-LIABILITY-AND-EQUITY> 2,851,801
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
