FORM 10-Q SB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 33-20897-D
HELIX BIOMEDIX, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
Colorado 84-1080717
_______________________________ __________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2151 E. Lakeshore Drive, Baton Rouge, LA 70808
___________________________________________________________________________
(Address of principal executive offices) (Zip Code)
(504)-387-1112
________________________________________________________________________________
(Registrant's telephone number, including area code)
Not Applicable
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
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
stock, as of the latest practicable date.
Shares Outstanding
Class of Securities at July 1, 1997
___________________ ___________________
Common Stock, no par value 1,270,620
DOCUMENTS INCORPORATED BY REFERENCE: YES, SEE INDEX ON PAGE 3
-------------------------
EXHIBITS: Indexed at page 3.
-------------------
PAGES: This form 10-QSB consists of 4 pages, plus pages F-1 through F-5.
1
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Information
Please see Pages F-1 through F-5.
The following financial statements are filed as part of the Report:
Accountants' Disclaimer of Opinion .......................F-1
Balance Sheet ............................................F-2
Statements of Operations . ...............................F-3
Statements of Cash Flows .................................F-4
Notes to Financial Statements ............................F-5
These financial statements should be read in conjunction with the audited
financial statements at December 31, 1996. Those statements are
incorporated herein by reference as part of Exhibit 99-a.
ITEM 2. Management's Discussion and Analysis or Plan of Operation
This item is incorporated by reference to Item 6-Part II of Registrant's
Annual Report on Form 10-KSB for the fiscal year ended December 31, 1996.
(Exhibit 99-a). That Report was dated April 9, 1997, and, except for
the financial statements, the information therein is current and fully
applicable to the report.
During the first quarter of 1997 continuing disputes between the Registrant
mid Louisiana State University ("LSU") resulted in each party placing the
other in default of the agreements between the two. During the second quarter
LSU formally terminated the Company's license of certain LSU patents relating,
to the lytic peptide technology. This termination of license and resolution of
the alleged defaults of the parties are all subject to arbitration. The
arbitration procedures are in progress, and the Company has notified LSU of
the: Company's intent to seek further relief in an appropriate court of law.
At the present time. the Registrant and LSU are in involved in good faith
negotiations which may lead to an amicable resolution of the various disputes
between the parties. The actions of LSU in terminating the license agreement
with the Registrant is unwarranted in the opinion of management and corporate
counsel. The Company's ongoing initiatives to raise capital and to confect
strategic alliances to commercialize the lytic peptide technology are
effectively delayed until the conflict with LSU is either settled or otherwise
resolved. In the opinion of management LSU's liabilities to the Company for
damages are substantial and will continue to increase until the disputes are
resolved.
2
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None in the period covered by this Report.
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) Exhibits
Exhibit No. Description and Location
- ----------- ------------------------
99-a Registrant's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996
Incorporated by reference to Form 10-KSB for 1996 filed by
Registrant with the SEC (File No. 33-20897-D) on April 14, 1997.
(b) Reports on Form 8-K
None
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused the Report to be signed on its behalf by the
undersigned thereunto duly authorized.
HELIX BIOMEDIX, INC. DATE: August 14, 1997
By:/s/ Keith P. Lanneau
----------------
Keith P. Lanneau, President, Principal Financial and Accounting Officer.
<PAGE>
HELIX BIOMEDIX, INC.
(A Development Stage Company)
June 30, 1997
(Unaudited)
<PAGE>
CONTENTS
Page
ACCOUNTANTS' REPORT F-1
BALANCE SHEET F-2
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT F-3
STATEMENTS OF CASH FLOWS F-4
NOTES TO FINANCIAL STATEMENTS F-5
<PAGE>
The Board of Directors
Helix BioMedix, Inc.
The accompanying balance sheet of Helix BioMedix, Inc. (a
development stage company) as of June 30, 1997 and the
related statements of loss and accumulated deficit and
cash flows for the period then ended were not audited by
us, and accordingly, we do not express an opinion on them.
Aurora, Colorado
August 11, 1997
COMISKEY & COMPANY
PROFESSIONAL CORPORATION
F-1
<PAGE>
Helix BioMedix, Inc.
(A Development Stage Company)
BALANCE SHEET
June 30, 1997
(unaudited)
ASSETS
CURRENT ASSETS
Cash $ 37
Note receivable - TPI 25,000
----------
Total current assets 25,037
OTHER ASSETS
Antimicrobial technology (net) 138,122
Patents pending and approved (net) 323,076
Accrued interest receivable 2,714
----------
Total other assets 463,912
----------
TOTAL ASSETS $ 488,949
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $ 16,446
Accounts payable - Frazer 4,500
Notes payable 65,000
Notes payable - related parties 235,566
Accrued interest payable 10,596
----------
Total current liabilities 332,108
LONG-TERM LIABILITIES
Notes payable to shareholders 718,858
----------
Total liabilities 1,050,966
STOCKHOLDERS' DEFICIT
Common stock, no par value, 2,000,000 shares
authorized, 1,270,620 shares issued and outstanding 2,001,580
Additional paid-in-capital 137,400
Deficit accumulated during the
development stage (2,700,997)
----------
Total stockholders' deficit (562,017)
----------
Total liabilities and stockholders' deficit $ 488,949
==========
The accompanying notes are an integral part of the financial statement
F-2
<PAGE>
Helix BioMedix, Inc.
(A Development Stage Company)
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
For the period from inception (November 7, 1988) to June 30, 1997
(unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
Inception to For the quarter ended For the six months ended
June 30, June 30, June 30, June 30, June 30,
1997 1997 1996 1997 1996
------------ --------- --------- ---------- --------
REVENUE $ 18,476 $ - $ - $ 10,000 $ -
EXPENSES
Research &
development 1,408,319 12,000 18,500 46,500 46,500
Amortization 100,918 4,373 4,373 8,746 8,746
Accounting & legal 107,269 3,173 2,377 3,173 3,227
Advertising 13,488 - - - -
Compensation cost 137,400 - - - -
Consulting fees 466,208 10,500 32,550 16,500 44,550
Office expense 138,712 4,571 7,669 10,457 12,749
Other general &
administrative costs 10,875 234 240 428 482
------------ -------- -------- ---------- --------
TOTAL OPERATING
EXPENSES 2,383,189 34,851 65,709 85,804 116,254
------------ -------- -------- ---------- --------
NET LOSS FROM
OPERATIONS (2,364,713) (34,851) (65,709) (75,804) (116,254)
OTHER (INCOME) EXPENSE
Gain on settlement
of lawsuit (48,574) - (48,574) - (48,574)
Interest income (3,238) (438) (438) (876) (962)
Interest expense 388,096 19,333 17,092 38,073 33,214
------------ -------- ------- --------- -------
NET LOSS $ (2,700,997) $ (53,746) $ (33,789) $ (113,001) $ (99,932)
============ ========= ========== ========== =========
NET LOSS PER SHARE ($2.95) ($0.04) ($0.03) ($0.09) ($0.09)
============ ========= ========== ========== =========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 915,138 1,270,620 1,159,644 1,270,620 1,159,644
============ ========= ========== ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
Helix BioMedix, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the period from inception (November 7, 1988) to June 30, 1997
(unaudited)
Inception to For the six months end
June 30, June 30,
1997 1997 1996
------------ ----------- ----------
NET CASH USED IN OPERATIONS $ (1,007,234) $ (7,921) $ (36,211)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash from settlement of lawsuit - - 48,574
Patents (199,106) (7,411) (8,746)
------------ ----------- ----------
NET CASH PROVIDED (USED) IN
INVESTING ACTIVITIES (199,106) (7,411) 39,828
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of stock for services 73,539 - -
Issuance of stock for cash 52,000 - -
Note receivable (25,000) - -
Cash received in reverse acquisition 634,497 - -
Notes payable 72,394 25,000 -
Related party notes payable (net) 398,947 (11,000) 37,000
------------ ----------- ----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 1,206,377 14,000 37,000
------------ ----------- ----------
NET INCREASE (DECREASE) IN CASH 37 (1,332) 40,617
CASH, BEGINNING OF PERIOD - 1,369 267
------------ ----------- ----------
CASH, END OF PERIOD $ 37 $ 37 $ 40,884
============ =========== ==========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
AND OTHER CASH INFORMATION
Stock issued to acquire patents 66,486 - -
Debt issued to acquire technology 200,000 - -
Bridge loans outstanding at acquisition 200,000 - -
Patent costs included in accounts payable 81,531 7,411 4,988
Accounts payable converted to notes 710,217 22,953 18,000
Accrued interest rolled into note 307,140 17,689 13,815
Notes converted to equity 867,023 - -
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
Helix BioMedix, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(unaudited)
1. Management's representation of interim financial information. The
accompanying financial statements have been prepared by Helix BioMedix,
Inc. without audit pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted as allowed by such rules and regulations, and management believes
that the disclosures are adequate to make the information presented
not misleading. These financial statements include all of the adjustments
which, in the opinion of management, are necessary to a fair
presentation of financial position and results of operations. All
such adjustments are of a normal and recurring nature. These
financial statements should be read in conjunction with the audited
financial statements at December 31, 1996.
2. Notes Payable
The long-term related party note to Helix International Corporation was
extended in during the year ended December 31, 1996. The note is now due
September 30, 1998. This note is convertible into shares at $2.50 per
share. During the six months ended June 30, 1997, a shareholder note
payable in the amount of $25,000 was issued. This note is convertible
into shares at $1.50 per share.
3. Agreements in Default
This item is incorporated by reference to Item 6-Part II of Registrant's
annual Report on Form 10-KSB for the fiscal year ended December 31, 1996.
(Exhibit No. 99-a.). That Report was dated April 9, 1997, and, except for
the financial statements. the information therein is current and fully
applicable to this Report.
During the first quarter of 1997 continuing disputes between the Registrant
and Louisiana State University ("LSU") resulted in each party placing the
other in default of the agreements between the two. During the second
quarter LSU formally terminated the Company's license of certain LSU
patents relating, to the lytic peptide technology. This termination of
license and resolution of the alleged defaults of the parties are all
subject to arbitration. The arbitration procedures are in progress, and the
Company has notified LSU of the: Company's intent to seek further relief in
an appropriate court of law.
At the present time. the Registrant and LSU are in involved in good faith
negotiations which may lead to an amicable resolution of the various
disputes between the parties. The actions of LSU in terminating the
license agreement with the Registrant is unwarranted in the opinion of
management and corporate counsel. The Company's ongoing initiatives to
raise capital and to confect strategic alliances to commercialize the lytic
peptide technology are effectively delayed until the conflict with LSU is
either settled or otherwise resolved. In the opinion of management LSU's
liabilities to the Company for damages are substantial and will continue to
increase until the disputes are resolved.
F-5
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENTS OF LOSS AND ACCUMULATED DEFICIT AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH 10QSB FOR THE QUARTER ENDED JUNE 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 37
<SECURITIES> 0
<RECEIVABLES> 25000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 25037
<PP&E> 463912
<DEPRECIATION> 0
<TOTAL-ASSETS> 488949
<CURRENT-LIABILITIES> 332108
<BONDS> 718858
0
0
<COMMON> 2001580
<OTHER-SE> (2563597)
<TOTAL-LIABILITY-AND-EQUITY> 488949
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 34413
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19333
<INCOME-PRETAX> (53746)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (53746)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
