ersion will be made at $2.50 per share.
The shareholder notes for $87,329 are secured by a first security
interest in technology and intellectual property rights of the
Company. Interest is payable quarterly in cash or common shares of
the Company at the rate of $1.00 per share, or may be converted to
principal. Form of payment of quarterly interest is at the discretion of
the note holder. The note plus accrued interest is convertible in whole
or in part at any time prior to maturity into shares of the Company's
common stock at $1.00 per share.
The 8% note for $8,131 is convertible into shares of the Company's
common stock at $2.50 per share.
The 10% convertible promissory note is payable to Thomas L. Fraser,
shareholder and director, and is convertible to shares of the Company's
common stock at $1.00 per share.
Debt maturities over the next five years are as follows: due in 1996,
$131,460; due in 1997, $628,377; and, due thereafter $0.
3. Stockholders' Equity
The Company has 1,159,644 outstanding common shares and no outstanding
preferred shares. The Company is authorized to issue 2,000,000 common
and 400,000 preferred shares. The Company's president, Keith P. Lanneau,
holds a total of 640,000 shares beneficially as shareholder in Helix
International, which holds 540,000 of the Company's shares, and as beneficial
owner of Arrowhead Technology Associates, which holds 20,000 of the Company's
shares and an additional 80,000 shares from the conversion of debt owed to
equity.
On December 29, 1993, the Company underwent a 1 for 500 reverse stock
split. All share and per share amounts in these financial statements have
been retroactively restated to reflect this reverse split.
At December 31, 1995, the Company had outstanding stock options to
purchase 91,400 shares of the Company's common stock at prices ranging from
$0.50 to $1.00 per share. The options become exercisable upon issuance and
expire at various dates through 1998. Compensation expenses charged to
operations in 1995 was $137,400.
4. Income Taxes
At December 31, 1995, the Company has approximately $2,134,000 in net
operating loss carryforwards and approximately $35,000 in Federal
Research and Development tax credit carryforwards available to offset
future taxable income and related income tax. The operating loss
carryforwards expire between 2003 and 2010. The tax benefit of these
carryforwards has been offset by a full allowance for realization.
F-12
<PAGE>
Helix BioMedix, Inc.
Notes to Financial Statements
For the period from inception (November 7, 1988) to December 31,1995
(REVISED)
5. Related Party Transactions
From March 1989 to March 1990, the Company contracted with Helix International,
Inc., a principal shareholder, to conduct lytic peptide research on a
contract basis for the account of the Company. The Company incurred a total of
$655,321 in research costs paid or payable to Helix International during this
period. At December 31, 1995, a promissory note for $603,377 was
outstanding, consisting of unpaid research costs, accrued interest, and
patent pass through costs. In addition, $50,000 in debt payable to Helix
International had been converted to equity in 1992.
The Company maintains its corporate offices in the offices of its
president. From inception to December 31, 1995, the Company has incurred
$101,841 in rental and general office expense reimbursements which have
been paid or are payable to an affiliated company.
The President of the Company is also a principal shareholder in Helix
Phytonetix, Inc. ("Phytonetix"). Phytonetix is a party to the LSU
settlement agreement described in Note 1, and is a licensee of lytic
peptide technology as it relates to applications in plants. Phytonetix
owes the Company $30,124 in patent costs which were paid by the Company
during 1995.
As part of the LSU settlement described in Note 1, the Company entered
into a sublicense agreement with URM, a shareholder, for the
development and marketing of a portion of the patented technology,
specifically the use of the technology in food preservation and
purification of drinking water.
A $66,000 consulting fee has accrued to Helix International for the
year ended December 31, 1995.
F-13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
10Q-SB OF HELIX BIOMEDIX, INC. FOR THE QUARTER MARCH 31, 1996, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10Q-SB.
</LEGEND>
<CIK> 0000831749
<NAME> HELIX BIOMEDIX, INC.
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