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 July 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 August 21, 1995, 5,901,675 shares of the registrant's common stock
(par value, $.001 per share) were outstanding.
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<TABLE>
PART I - FINANCIAL INFORMATION
IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
(UNAUDITED)
<CAPTION>
July 31,
1995
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,658,211
Prepaid expenses 40,072
TOTAL CURRENT ASSETS $ 1,698,283
Office and lab equipment, Net of
Accumulated Depreciation of $ 383,909. 124,096
Leasehold improvements, Net of
Accumulated Amortization of $ 204,261. 150,409
Patent issuance costs, Net of Accumulated
Amortization of $4,586. 154,747
TOTAL ASSETS $ 2,127,535
<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 $ 21,636
TOTAL CURRENT LIABILITIES $ 21,636
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 5,901,675 5,902
Additional paid-in capital 10,068,747
(Deficit) accumulated during the development
stage (7,666,500)
Total $ 2,408,149
Less: Deferred compensation (2,250)
Treasury Stock, at cost, 629,627 shares (300,000)
TOTAL STOCKHOLDERS' EQUITY 2,105,899
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,127,535
<F/N>
See accompanying condensed notes to financial statements
</TABLE>
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<TABLE>
IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Cumulative from
February 15, 1985
Three Months Ended July 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 180,467 $ 235,335 6,056,844
Rent Expense 6,562 7,594 332,681
General and
administrative expenses 158,314 79,401 1,998,350
Total operating expenses $ 345,343 $ 322,350 $ 8,474,043
(Loss) from operations (345,343) (322,350) (8,374,043)
Other income -- -- 1,512
Interest income 21,603 23,213 746,669
Interest expense -- -- (40,638)
Net loss $ (323,740) $ (299,137) $ (7,666,500)
Net loss per share $ (0.05) $ (0.05)
Weighted average
common shares
outstanding 5,901,675 5,901,675
</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
Six Months Ended July 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 411,549 $ 510,175 6,056,844
Rent Expense 16,406 15,562 332,681
General and
administrative expenses 215,168 131,654 1,998,350
Total operating expenses $ 643,123 $ 657,391 $ 8,474,043
(Loss) from operations (643,123) (657,391) (8,374,043)
Other income -- 130 1,512
Interest income 45,441 47,333 746,669
Interest expense -- -- (40,638)
Net loss $ (597,682) $ (609,928) $ (7,666,500)
Net loss per share $ (0.10) $ (0.10)
Weighted average
common shares
outstanding 5,901,675 5,901,675
</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
Six months February 15, 1985
ended July 31, (date of inception)
1995 1994 to July 31, 1995
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net (loss) $ (597,682) $ (609,928) ($ 7,666,500)
Adjustments to Reconcile
Net (Loss) to Cash Provided
by Operating Activities:
Depreciation and
Amortization 96,934 93,717 655,124
Amortization of Discounted
Note Receivable -- -- --
Amortization of Deferred
Revenue -- -- --
Amortization of
Deferred Compensation 11,250 39,000 129,536
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 -- -- 101,006
Changes in Assets and Liabilities:
(Increase) Decrease in:
Prepaid Expenses 13,581 (61,865) (40,073)
Increase (Decrease) in:
Accounts Payable and
accrued expenses (62,614) (81,680) 111,608
Accrued Salaries -- -- --
Accrued Payroll Taxes -- (1,949) --
Total Adjustments $ 53,677 $ (23,293) $ (1,246,046)
NET CASH-OPERATING
ACTIVITIES-Forward $ (544,005) $ (633,221) $ (6,420,454)
INVESTING ACTIVITIES:
Patent Issuance Cost $ (28,796) $ (4,584) $ (260,339)
Organizational Costs
Incurred -- -- (135)
Purchase of Leasehold
Improvements -- -- (414,671)
Deposit on Leasehold
Improvements -- -- (5,000)
Purchases of Office
and Lab Equipment (5,144) (7,160) (515,500)
Proceeds from Assets
Sold -- 130 1,000
NET CASH-INVESTING
ACTIVITIES-Forward $ (33,940) $ (11,614) $ (1,194,645)
<F/N>
See Accompanying Condensed Notes to Financial Statements
</TABLE>
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<TABLE>
IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOW
(UNAUDITED
<CAPTION>
Cumulative from
Six Months February 15, 1985
Ended July 31, (date of inception)
1995 1994 to July 31, 1995
<S> <C> <C> <C>
NET CASH-OPERATING
ACTIVITIES-Forwarded $ (544,005) $ (633,221) $ (6,420,454)
NET CASH-INVESTING
ACTIVITIES-Forwarded $ (33,940) $ (11,614) $ (1,194,645)
FINANCING ACTIVITIES:
Net Proceeds from
Issuance of Common
Stock $ -- $ -- $ 9,594,876
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)
Purchase of Treasury Stock $ -- $ -- $ (300,000)
NET CASH-
FINANCING ACTIVITIES $ -- $ -- $ 9,273,310
NET (DECREASE)
INCREASE IN CASH
AND CASH EQUIVALENTS $ (577,945) $ (644,835) $ 1,658,211
CASH AND CASH
EQUIVALENTS-
BEGINNING OF
PERIODS $ 2,236,156 $ 3,698,639 $
CASH AND CASH
EQUIVALENTS-
END OF PERIODS $ 1,658,211 $ 3,053,804 $ 1,658,211
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>
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IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
Financial Statements
The Balance Sheet as of July 31, 1995, the Statements of Operations
for the three and six month periods ended July 31, 1994 and 1995; and the
cumulative period from February 15, 1985 (date of inception) to July 31,
1995; and the Statements of Cash Flows for the six month periods ended
July 31, 1995 and July 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 July 31, 1995 and the results of operations
and cash flows for the periods ended July 31, 1995 and July 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.
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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 July 31, 1995, the Company had cash and cash
equivalents of $2,236,156 and $1,658,211, respectively, and working
capital of $2,205,557 and $1,676,647, respectively.
The Company's current level of research and development activities
requires the expenditure of approximately $80,000 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 January 31, 1997. 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
Six Months Ended July 31, 1995 Compared With six Months Ended July 31, 1994.
Total operating expenses for the six months ended July 31, 1995 were
$643,123 compared to $657,391 in the preceding year representing a
decrease of $14,268 or 2%. The decrease resulted from a decrease in the
Company's research and development activities and staff offset by increased
administrative cost.
Proprietary research and development expenses decreased by $98,626 to
$411,549 in 1995 compared to $510,175 in 1994, due to the decrease in
staff and associated research and development activities. Total general
and administrative expenses increased by $83,514 or 63% reflecting largely
director and officers insurance and corporate development activities.
Interest income decreased from $47,333 to $45,441, reflecting the
decrease in the Company's cash balance.
The Company's net loss decreased from $609,928 to $597,682 or 2%,
reflecting the Company's decrease in operating expenses as noted above.
<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
8/30/95 Chief Financial Officer
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