<PAGE>
UNITED STATES
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 September 30, 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. 0-16482
IMMUNE RESPONSE, INC.
(Exact Name of Registrant as Specified in its Charter)
COLORADO 84-0950197
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
7315 EAST PEAKVIEW AVENUE, BLDG. 8
ENGLEWOOD, COLORADO 80111
(Address of principal executive offices) (Zip code)
(303) 796-8940
(Registrant's telephone number including area code)
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Number of shares of common stock outstanding at November 10, 1995:
294,970,000
<PAGE>
IMMUNE RESPONSE, INC.
Part 1. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
The accompanying interim unaudited condensed financial statements have
been prepared in accordance with the instructions to Form 10-QSB and
do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair
presentation have been included, and the disclosures are adequate
to make the information presented not misleading. Operating
results for the three and nine months ended September 30, 1995
are not necessarily indicative of the results that may be
expected for the year ended December 31, 1995. These statements
should be read in conjunction with the financial statements and
notes thereto included in the Annual 10-KSB Report (filed with
the Securities and Exchange Commission) for the year ended
December 31, 1994.
F-1
<PAGE>
IMMUNE RESPONSE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 2,684 $ 11
Note receivable, net of allowance for doubtful
accounts of $6,338 6,339 6,339
Accrued interest receivable, net of allowance
for doubtful accounts of $1,220 and $745
in 1995 and 1994, respectively 1,220 745
----------- -----------
10,243 7,095
Other assets
Investment - related entity - 875
Investment in MacGregor 200,831 109,838
----------- -----------
200,831 110,713
----------- -----------
$ 211,074 $ 117,808
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Notes payable - related entity $ 76,100 $ 66,100
Notes payable - other 68,864 68,864
Accrued legal expense payable to former director 52,062 52,062
Accounts payable - related entity 2,220 1,928
Accrued salary to officer 11,250 11,250
Accounts payable - others 22,143 10,976
Accounts payable - directors 10,400 5,405
Interest payable - related entity 33,565 27,666
Interest payable - other - 27,923
----------- -----------
276,604 272,174
Stockholders' equity (deficit)
Common stock, $.0001 par value; 950,000,000
shares authorized; 312,470,000 shares issued;
294,970,000 shares outstanding 31,247 31,247
Additional paid-in capital 877,906 877,906
Unrealized gain on available-for-sale securities 90,993
Deficit accumulated during the development stage (1,065,676) (1,063,519)
Less: treasury stock, at cost (17,500,000 shares) - -
----------- -----------
(65,530) (154,366)
----------- -----------
$ 211,074 $ 117,808
----------- -----------
----------- -----------
</TABLE>
F-2
<PAGE>
IMMUNE RESPONSE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED FROM INCEPTION
SEPTEMBER 30, SEPTEMBER 30, (MAY 14, 1984)
-------------------------- ------------------------- TO SEPTEMBER 30,
1995 1994 1995 1994 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue
Interest income $ 317 $ 317 $ 951 $ 951 $ 111,184
Laboratory test income - - - - 50,187
Sale of marketing rights to related party - - - - 7,004
Miscellaneous income - - - - 1,897
Gain on debt forgiveness 34,107 - 34,107 - 34,107
----------- ----------- ----------- ----------- -----------
34,424 317 35,058 951 204,379
Expenses
Write-off of investment in related entity - - 875 - 875
Write-off of deferred warrant
registration costs - - - - 29,422
Loss on disposal of laboratory - - - - 74,710
Valuation allowance - investment (52,300) 73,220 78,442
Write-down of investment 99,351
Lab supplies - - - - 55,244
Consulting - related entity - - - - 37,500
Interest 4,186 3,948 12,083 11,837 125,389
Abandoned license agreement costs - - - - 50,000
Research and development - - - - 28,680
Rent - - - - 79,232
Services for stock - - - - 7,597
Salaries - - - - 275,287
Bad debt expense 158 - 475 - 7,659
Depreciation - - - - 34,848
General and administrative 20,324 1,273 23,781 6,472 285,819
----------- ----------- ----------- ----------- -----------
24,668 (47,079) 37,214 91,529 1,270,055
----------- ----------- ----------- ----------- -----------
Net income (loss) $ 9,756 $ 47,396 $ (2,156) $ (90,578) $(1,065,676)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Net loss per common share $ (-) $ (-) $ (-) $ (-) $ (-)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Weighted average number of common
shares 294,970,000 294,970,000 294,970,000 294,970,000 240,255,884
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
F-3
<PAGE>
IMMUNE RESPONSE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE NINE MONTHS ENDED FROM INCEPTION
SEPTEMBER 30, (MAY 14, 1984)
------------------------- TO SEPTEMBER 30,
1995 1994 1995
-------- -------- -----------
<S> <C> <C> <C>
Cash flows used by operating activities:
Net (loss) income $ (2,156) $(90,578) $(1,065,675)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation 34,848
Abandoned license agreement costs - 50,000
Services for stock - 7,597
Valuation allowance-investment in MacGregor 73,220 177,793
Writeoff of deferred warrant registration costs 29,422
Writeoff of investment in related entity 875 875
Changes in assets and liabilities:
(Increase) in interest receivable (475) (951) (1,965)
(Increase) in note receivable (287,102)
Increase in accounts payable
to directors 4,995 1,858 10,400
Increase in accrued legal expenses payable
to former director 52,062
Increase in accrued salary to officer - - 11,250
Increase (decrease) in interest payable (22,024) 11,837 33,565
Increase (decrease) in accounts payable
to others 11,167 (613) 22,143
Increase in accounts payable-related entity 291 325 2,221
-------- -------- -----------
Net cash (used) by operating activities (7,327) (4,902) (922,566)
-------- -------- -----------
Cash flows provided (used) by investing activities:
Purchase of certificates of deposit - - (75,278)
Redemption of certificate of deposit - - 75,278
Capital expenditures - - (92,094)
Disposal of laboratory assets - - 57,246
Reclassification of certificate of deposit - - (50,000)
Acquisition of investment - related entity - - (7,000)
-------- -------- -----------
Net cash provided (used) by
investing activities - - (91,848)
-------- -------- -----------
</TABLE>
(Continued)
F-4
<PAGE>
IMMUNE RESPONSE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE NINE MONTHS ENDED FROM INCEPTION
SEPTEMBER 30, (MAY 14, 1984)
------------------------- TO SEPTEMBER 30,
1995 1994 1995
-------- -------- -----------
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from issuance of long-term
debt to banks $ - $ - $ 50,000
Proceeds from issuance of notes
payable to related entity 10,000 250 76,100
Proceeds from issuance of notes payable
to former related entity - - 68,864
Payments to bank to retire debt - - (50,000)
(Increase) in deferred warrant
registration costs - - (29,422)
Proceeds from issuance of common stock - - 901,556
-------- -------- -----------
Net cash provided by financing
activities 10,000 250 1,017,098
-------- -------- -----------
Net increase (decrease) in cash and
cash equivalents 2,673 (4,652) 2,684
Cash and cash equivalents at
beginning of period 11 4,662
-------- -------- -----------
Cash and cash equivalents at end of period $ 2,684 $ 10 $ 2,684
-------- -------- -----------
-------- -------- -----------
Supplemental cash flow information:
Interest received $ $ $ 70,085
-------- -------- -----------
-------- -------- -----------
Interest paid $ $ $ 54,910
-------- -------- -----------
-------- -------- -----------
Non-cash financing activities:
Stock issued for services $ $ $ 7,597
-------- -------- -----------
-------- -------- -----------
Investment in common stock of related
entity received in exchange for
marketing rights $ $ $ 7,000
-------- -------- -----------
-------- -------- -----------
Exchange of note receivable for
investment in MacGregor $ $ $ 281,506
-------- -------- -----------
-------- -------- -----------
</TABLE>
F-5
<PAGE>
IMMUNE RESPONSE, INC.
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations.
LIQUIDITY, CAPITAL RESOURCES AND RESULTS OF OPERATIONS. The
Company's cash and cash equivalents has increased by $2,673 since
December 31, 1994. This resulted from the loan of $10,000 from a
related entity exceeding the amount needed to cover cash payments
of general and administrative expenses of $7,327 for the nine
months ended September 30, 1995. The Company's net current
assets declined by only $1,282 since December 31, 1994. This
resulted from increases in trade payables of $11,167, increases
of accounts payable to directors of $4,995, increases in interest
payable of $12,083, and the above note payable increase of
$10,000 reduced by the forgiveness of interest of $34,102, and
the cash increase of $2,673.
Management is continuing to investigate various business
opportunities for the Company. The Investment on MacGregor is
expected to be sold during the balance of the 1995 calendar year
to pay off certain existing creditors and to meet the continuing
general and administrative expenses which are being minimized to
the extent possible.
PART II. OTHER INFORMATION
Item 1: Legal Proceedings
None
Item 2: Changes in Securities
None
Item 3: Defaults upon Senior Securities
None
Item 4: Submission of Matters to a Vote of Security Holders
None
Item 5: Other Information
None
Item 6: Exhibits and Reports on Form 8-K
(a) No exhibits in addition to those previously filed or contained
above in this report are required.
(b) During the quarter ended September 30, 1995, the Company filed no
reports on Form 8-K.
<PAGE>
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.
IMMUNE RESPONSE, INC.
(Registrant)
By: /s/ JOSEPH W. HOVORKA
--------------------------------------
Joseph W. Hovorka, President and Chief
Financial Officer
Date: November 16, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AND STATEMENT OF OPERATION FILED AS PART OF THE ANNUAL
REPORT ON FORM 10K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH ANNUAL REPORT ON FORM 10K.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,684
<SECURITIES> 0
<RECEIVABLES> 15,117
<ALLOWANCES> 7,558
<INVENTORY> 0
<CURRENT-ASSETS> 10,243
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 211,074
<CURRENT-LIABILITIES> 276,604
<BONDS> 0
<COMMON> 31,247
0
0
<OTHER-SE> (96,777)
<TOTAL-LIABILITY-AND-EQUITY> 211,074
<SALES> 0
<TOTAL-REVENUES> 35,058
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 24,656
<LOSS-PROVISION> 475
<INTEREST-EXPENSE> 12,083
<INCOME-PRETAX> (2,156)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,156)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,156)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
