<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
FORM 10-QSB/A-1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 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 000-28782
---------
NEOTHERAPEUTICS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 93-0979187
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
157 TECHNOLOGY DRIVE
IRVINE, CALIFORNIA 92618
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (949) 788-6700
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
--- ------
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock as of the latest practicable date:
Class Outstanding at October 30, 1998
- ----------------------------- -------------------------------
Common Stock, $.001 par value 5,848,275
Page 1 of 3 Pages
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL POSITION
YEAR 2000 READINESS DISCLOSURE
All statements contained in the following section are "Year 2000 Readiness
Disclosures" within the meaning of the Year 2000 Information and Disclosure
Act.
The Year 2000 issue (the "Year 2000 Issue") in computers arises from
the common industry practice of using two digits to represent a date in
computer software code and databases to enhance both processing time and save
storage space. Therefore, when dates in the year 2000 and beyond are
indicated and computer programs read the date "00", the computer may default
to the year "1900" rather than the correct "2000". This could result in
incorrect calculations, faulty data and computer shutdowns, which would cause
disruptions of operations. In addition, the Year 2000 is a leap year and
systems need to recognize it as such.
The Company has developed a multi-phase program for Year 2000 Issues
that consists of the following: (i) assessment of the corporate systems and
operations of the Company that could be affected by the Year 2000 Issue, (ii)
remediation of non-compliant systems and components, if any, and (iii)
testing of systems and components following remediation. The Company has
focused its Year 2000 compliance assessment program on four principal areas:
(a) the Company's internal information technology system applications,
including voice and data systems ("IT Systems"), (b) the Company's internal
non-IT facilities systems, including embedded software in environmental
controls, security systems, fire protection systems, elevators and public
utility connections for gas, electric and telephone systems ("Facilities
Systems"), (c) embedded and external software contained in laboratory and
other equipment ("Equipment"), and (d) Year 2000 compliance by third parties
with which the Company has a material relationship, such as significant
vendors, financial institutions and insurers.
The Company has completed an inventory and risk assessment of its own
internal IT Systems, Facilities Systems, and Equipment that it believes could
be adversely affected by the Year 2000 Issue, and believes that its own
internal systems are, at the present time, substantially compliant based upon
internal systems tests, currently available information and reasonable
assurance by its equipment and software vendors. The cost to remediate the
Year 2000 Issues with regard to the Company's IT and Facility Systems and
Equipment is not material.
In June of 1998, the Company began sending questionnaires to and/or
contacting its outside vendors regarding their state of readiness with
respect to identifying and remediating their Year 2000 Issues. The Company
has completed its risk assessment of its outside vendors and is currently
reviewing their compliance. It is not possible for the Company to determine
or be assured that adequate remediation of the Year 2000 Issue will be
accomplished by such vendors. Furthermore, it is not possible for the Company
to determine or be assured that third parties upon which the Company's
vendors are dependent, will accomplish adequate remediation of their Year
2000 Issues. Except for the Company's public utility service vendors, who
have indicated that they expect to be in compliance by mid-1999, the Company
believes that, with respect to the computer systems of its major outside
vendors, should a Year 2000 Issue exist whereby a vendor was unable to
address the Company's needs, alternative vendors have been identified and are
readily available that could furnish the Company with the same or similar
supplies or services that it presently receives from these vendors without
undue cost or expense.
Page 2
<PAGE>
Based on currently available information, the Company believes that
the impact of the Year 2000 Issue, as it relates to its IT Systems,
Facilities Systems, Equipment and third parties will not be material. In the
event the Company were to fail to successfully implement the Year 2000 Issues
with respect to its internal systems in a timely manner, the Company believes
that while such events would be disruptive to the Company's operations in the
short term, such circumstances would not have a material adverse effect on
the business, financial condition and results of operations of the Company
over the long term. However, failure of the major third parties, in
particular the financial institutions with which the Company has significant
banking and investment management relationships and the Company's third party
manufacturers, to be Year 2000 compliant could have a material adverse effect
on the Company's business, financial condition and results of operations or
business prospects.
Readers are cautioned that most of the statements contained in
the "Year 2000 Readiness Disclosure" paragraphs are forward-looking and
should be read in conjunction with the Company's disclosures under the
heading "PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS" set forth
above.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEOTHERAPEUTICS, INC.
Date: February 19, 1999 By: /s/Samuel Gulko
-------------------------------------
Samuel Gulko, Chief Financial Officer
Page 3
