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 April 30, 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 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 June 6, 1996, 9,122,047 shares or the registrant's common stock
(par value, $.001 per share) were outstanding.
<PAGE>
<TABLE>
ITEM I - FINANCIAL STATEMENTS
IMMUNOTHERAPEUTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
(UNAUDITED)
<CAPTION>
April 30,
1996
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 985,308
Prepaid expenses 37,009
TOTAL CURRENT ASSETS $ 1,022,317
Office and lab equipment, Net of
Accumulated Depreciation of $44,102. 91,308
Leasehold improvements, Net of
Accumulated Amortization of $367,929. 46,741
Patent issuance costs, Net of Accumulated
Amortization of $16,428. 169,710
TOTAL ASSETS $ 1,330,076
<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 $ 15,175
TOTAL CURRENT LIABILITIES $ 15,175
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 7,453,379 9,235
Additional paid-in capital 10,286,176
(Deficit) accumulated during development stage (8,536,760)
Total $ 1,758,651
Less:
Treasury Stock, at cost, 1,779,628 shares (443,901)
TOTAL STOCKHOLDERS' EQUITY 1,314,901
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,330,076
<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 April 30, (date of inception)
1996 1995 to April 30, 1996
<S> <C> <C> <C>
SBIR contract revenue $ $ $ 100,000
Operating expenses:
SBIR contract
research and
development $ -- $ -- $ 86,168
Proprietary research
and development 235,186 $ 231,082 6,786,942
Rent Expense 9,844 9,844 365,247
General and
administrative expenses 44,357 56,854 2,144,801
Total operating expenses $ 289,405 $ 297,780 $ 9,383,158
(Loss) from operations (289,405) (297,780) (9,283,158)
Other income -- -- 1,512
Interest income 9,448 23,837 785,524
Interest expense -- -- (40,638)
Net loss $ (279,957) $ (273,943) $ (8,536,760)
Net loss per share $ (0.05) $ (0.05)
Weighted average
common shares
outstanding 5,380,330 5,272,048
</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
Three months February 15, 1985
ended April 30, (date of inception)
1996 1995 to April 30, 1996
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net (loss) $ (279,957) $ (273,943) ($ 8,536,760)
Adjustments to Reconcile
Net (Loss) to Cash Provided
by Operating Activities:
Depreciation and
Amortization 57,341 48,869 816,786
Amortization of
Deferred Compensation -- 10,000 131,786
Excess of Fair Market
Value Over Option
Price on Non-Qualified
Options Granted -- (5,474) 283,680
Gain on Sale of Assts -- (130) (740)
Write off on Patent
Issuance Cost -- -- 101,006
Changes in Assets and Liabilities:
(Increase) Decrease in:
Prepaid Expenses 7,297 (11,270) (37,010)
Increase (Decrease) in:
Accounts Payable 45,775 (83,542) 101,677
Accrued Salaries 3,574 7,743 3,574
Accrued Payroll Taxes (109) -- (109)
Total Adjustments $ 22,338 $ (33,674) $ 1,400,353
NET CASH-OPERATING
ACTIVITIES-Forward $ (257,269) $ (307,617) $ (7,136,408)
INVESTING ACTIVITIES:
Patent Issuance Cost 5,729 (9,492) (287,144)
Organizational Costs
Incurred -- -- (135)
Deposit on Leasehold
Improvements -- -- (5,000)
Purchase of Leasehold
Improvements -- (4,747) (414,671)
Purchases of Office
and Lab Equipment (1,579) -- (518,561)
Proceeds from Assets
Sold -- -- 1,000
NET CASH-INVESTING
ACTIVITIES-Forward $ 4,149 $ (14,239) $ (1,224,511)
<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
Three Months February 15, 1985
Ended April 30, (date of inception)
1996 1995 to April 30, 1996
<S> <C> <C> <C>
NET CASH-OPERATING
ACTIVITIES-Forwarded $ (257,629) $ (307,617) $ (7,136,408)
NET CASH-INVESTING
ACTIVITIES-Forwarded $ 4,149 $ (14,239) $ (1,224,511)
FINANCING ACTIVITIES:
Net Proceeds from
Issuance of Common
Stock $ 216,667 $ -- $ 9,811,543
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 -- -- (443,750)
NET CASH-
FINANCING ACTIVITIES $ 216,677 -- $ 9,346,227
NET (DECREASE)
INCREASE IN CASH
AND CASH EQUIVALENTS $ (36,812) $ (321,856) $ (985,308)
CASH AND CASH
EQUIVALENTS-
BEGINNING OF
PERIODS $ 1,022,120 $ 2,236,156 $ --
CASH AND CASH
EQUIVALENTS-
END OF PERIODS $ 985,308 $ 1,914,300 $ 985,308
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 April 30, 1996, the Statements of Operations
for the three month periods ended April 30, 1996 and 1995; and the
cumulative period from February 15, 1985 (date of inception) to
April 30, 1996; and the Statements of Cash Flows for the three month
periods ended April 30, 1996 and April 30, 1995 have been prepared
by the Company without audit. In the opinion of management, all
adjustments necessary to present fairly the financial position at
April 30, 1996 and the results of operations and cash flows for the
periods ended April 30, 1996 and October 31, 1995 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)
ITEM II - 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, 1996, and April 30, 1996, the Company had cash and cash
equivalents of $1,022,120 and $984,308, respectively, and working
capital of $1,008,943 and $1,007,142, respectively.
In November 1995, the Company purchased from Primedex Health Systems, Inc.,
1,150,001 shares of its Common Stock at a price of $.125 per share, or an
aggregate of $143,750.
On March 1, 1996 the Company agreed to sell 5,000,000 shares of its Common
Stock for a price of $.065 per share, or an aggregate of $325,000. The
purchaser has the right to designate one person to the Company's Board of
Directors. The proceeds from the sales of the shares are intended to be
used for general corporate purposes.
The Company's current level of research and development activities
requires the expenditure of approximately $120,000 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, 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>
ITEM II (Cont.)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Three Months Ended April 30, 1996 Compared With Three Months Ended
April 30, 1995.
Total operating expenses for the Three months ended April 30, 1996 were
$289,405 compared to $297,780 in the preceding year representing a
decrease of $8,357 or 3%. The decrease resulted from later invoicing
of year end audit cost.
Proprietary research and development expenses increased by $4,106 to
$235,188 in 1996 compared to $231,082 in 1995, due to increased cost of
reagents. Total general and administrative expenses decreased by $12,479
or 22% reflecting later invoicing of year end audit cost.
Interest income decreased from $23,837 to $9,448, reflecting a decrease
in the Company's cash balance.
The Company's net loss Increased from $273,943 to $279,957 or 3%,
reflecting the Company's lower general and administrative cost offset
by higher research and development activity.
<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
Chief Financial Officer
6/12/1996
</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> 3-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> APR-30-1995
<CASH> 985,308
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,022,317
<PP&E> 37,010
<DEPRECIATION> 57,341
<TOTAL-ASSETS> 1,330,076
<CURRENT-LIABILITIES> 15,175
<BONDS> 0
<COMMON> 9,235
0
0
<OTHER-SE> 1,314,901
<TOTAL-LIABILITY-AND-EQUITY> 1,330,076
<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>
