<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1995
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-17951
CORTEX PHARMACEUTICALS, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
Delaware 33-0303583
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
15241 Barranca Parkway, Irvine, California, 92718
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(714) 727-3157
(ISSUERS'S TELEPHONE NUMBER)
NOT APPLICABLE
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST YEAR)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the 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
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
6,556,730 shares of Common Stock as of February 12, 1996
Page 1 of 14
<PAGE>
CORTEX PHARMACEUTICALS, INC.
INDEX
PAGE NUMBER
-----------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets -- December 31, 1995 and June 30, 1995. . . . . 3
Statements of Operations -- Three months ended
December 31, 1995 and 1994; and period from
inception (February 10, 1987) through December 31, 1995. . . . 4
Statements of Cash Flows -- Three months ended
December 31, 1995 and 1994 and period from
inception (February 10, 1987) through December 31, 1995. . . . 5
Notes to Financial Statements. . . . . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . . . 9
PART II. OTHER INFORMATION
Item 3. Defaults upon Senior Securities. . . . . . . . . . . . . . . 12
Item 4. Submission of Matters to a Vote of Security Holders. . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 13
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Page 2 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CORTEX PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED) (NOTE)
DECEMBER 31, 1995 JUNE 30, 1995
----------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 123,029 $ 149,880
U.S. government securities -- available for sale 5,235,830 3,689,356
Other current assets 97,250 92,212
------------ ------------
Total current assets 5,456,109 3,931,448
Furniture, equipment and leasehold improvements, net 820,820 931,794
Other 23,659 23,130
------------ ------------
$ 6,300,588 $ 4,886,372
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 155,216 $ 377,589
Accrued dividends 59,400 183,150
Accrued wages, salaries and related expenses 32,696 35,223
Current obligations under capital leases 8,098 7,698
------------- ------------
Total current liabilities 255,410 603,660
Obligations under capital leases 5,853 10,016
Note payable issuable to Alkermes, Inc. 1,012,658 1,000,000
Stockholders' equity:
9% cumulative convertible preferred stock, $0.001
par value; $1.00 per share liquidation preference;
shares authorized: 1,250,000; shares issued and
outstanding: 110,000 (December 31, 1995) and
370,000 (June 30, 1995) 110,000 370,000
Series B convertible preferred stock, $0.001 par value;
$0.6667 per share liquidation preference; shares
authorized: 3,200,000; shares issued and
outstanding: 150,000 (December 31, 1995) and
525,000 (June 30, 1995) 86,810 303,837
Series C convertible preferred stock, $0.001 par value;
$25,000 per share liquidation preference; shares
authorized: 160; shares issued and outstanding: 160
(December 31, 1995) 3,447,732 --
Common stock, $0.001 par value; shares authorized:
20,000,000; shares issued and outstanding:
6,159,855 (December 31, 1995) and 6,085,201
(June 30, 1995) 6,160 6,085
Additional paid-in capital 24,601,734 23,957,790
Deferred compensation -- (145,359)
Unrealized loss on available for
sale U.S. government securities (461) (18,606)
Deficit accumulated during the development stage (23,225,308) (21,201,051)
------------- ------------
Total stockholders' equity 5,026,667 3,272,696
------------- ------------
$ 6,300,588 $ 4,886,372
============= ============
</TABLE>
SEE ACCOMPANYING NOTES.
NOTE: THE BALANCE SHEET AS OF JUNE 30, 1995 HAS BEEN DERIVED FROM THE AUDITED
FINANCIAL STATEMENTS AT THAT DATE.
Page 3 of 14
<PAGE>
CORTEX PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
THREE MONTHS ENDED SIX MONTHS ENDED (FEBRUARY 10, 1987)
DECEMBER 31, DECEMBER 31, THROUGH
------------------ ------------------- DECEMBER 31,
1995 1994 1995 1994 1995
---- ---- ---- ---- ------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Research and license revenue
under an agreement with
Alkermes, Inc. $ -- $ -- $ -- $ -- $ 3,600,000
Grant revenue -- -- -- -- 94,717
----------- ----------- ----------- ----------- ------------
Total revenues -- -- -- -- 3,694,717
Operating expenses:
Research and development 607,438 1,214,645 1,272,916 2,289,046 17,664,451
General and administrative 487,731 467,724 811,175 894,020 9,118,002
Settlement with Alkermes, Inc. -- -- -- -- 1,227,977
----------- ----------- ----------- ----------- ------------
Total operating expenses 1,095,169 1,682,369 2,084,091 3,183,066 28,010,430
----------- ----------- ----------- ----------- ------------
Loss from operations (1,095,169) (1,682,369) (2,084,091) (3,183,066) (24,315,713)
Interest income, net 25,522 66,150 59,834 110,962 1,230,079
----------- ----------- ----------- ----------- ------------
Net loss $(1,069,647) $(1,616,219) $(2,024,257) $(3,072,104) $(23,085,634)
=========== =========== =========== =========== ============
Weighted average common
shares outstanding 6,159,855 6,074,937 6,123,330 6,074,439
=========== =========== =========== ===========
Net loss per share $ (0.17) $ (0.27) $ (0.33) $ (0.51)
=========== =========== =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES.
Page 4 of 14
<PAGE>
CORTEX PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
PERIOD FROM
INCEPTION
SIX MONTHS ENDED (FEBRUARY 10, 1987)
DECEMBER 31, THROUGH
------------------- DECEMBER 31,
1995 1994 1995
---- ---- ------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Loss $(2,024,257) $(3,072,104) $(23,085,634)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 115,322 93,863 994,120
Settlement with Alkermes, Inc. -- -- 1,227,977
Changes in operating assets/liabilities:
Accounts payable and accrued expenses (224,900) (218,094) 187,912
Accrued interest on U.S. government securities (27,129) (14,067) (45,090)
Other current assets (5,038) (13,603) (97,250)
Interest receivable from former officer -- -- (19,274)
Realized loss on sale of U.S. government securities 958 38,689 54,005
Stock option compensation expense 42,109 28,277 555,809
Stock issued for services -- -- 28,750
Reduction in note receivable from former
officer--compensation expense -- -- 22,600
Changes in other assets and other
long term liabilities 12,658 -- 20,647
----------- ----------- ------------
NET CASH USED IN OPERATING ACTIVITIES (2,110,277) (3,157,039) (20,155,428)
----------- ----------- ------------
Cash flows from investing activities:
U.S. government securities--available-for-sale--
Purchases (6,351,193) (3,371,091) (23,198,863)
Proceeds from sales 4,849,034 6,906,191 17,953,657
Purchase of fixed assets (7,124) (386,867) (1,785,664)
Sale of fixed assets 2,777 -- 10,236
Decrease (increase) in--
Other assets (529) 1,092 (40,399)
Note receivable from former officer -- -- (100,000)
----------- ----------- ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (1,507,035) 3,149,325 (7,161,033)
----------- ----------- ------------
Cash flows from financing activities:
Proceeds from issuance of common stock 9,839 2,343 20,913,448
Proceeds from issuance of Series C
convertible preferred stock 3,584,385 -- 3,584,385
Proceeds from issuance of Series B
convertible preferred stock -- -- 1,841,108
Proceeds from issuance of 9% preferred stock -- -- 1,076,588
Proceeds from subordinated convertible note -- -- 208,333
Payment of 9% preferred stock dividends -- -- (110,250)
Redemption of 9% preferred stock -- (63,750) (63,750)
Redemption of common stock -- -- (350)
Principal payments on capitalized leases (3,763) (2,673) (10,022)
----------- ----------- ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 3,590,461 (64,080) 27,439,490
----------- ----------- ------------
Increase (decrease) in cash and cash equivalents (26,851) (71,794) 123,029
Cash and cash equivalents, beginning of period 149,880 160,956 --
----------- ----------- ------------
Cash and cash equivalents, end of period $ 123,029 $ 89,162 $ 123,029
=========== =========== ============
</TABLE>
SEE ACCOMPANYING NOTES.
(CONTINUED ...)
Page 5 of 14
<PAGE>
CORTEX PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(UNAUDITED, CONTINUED)
<TABLE>
PERIOD FROM
INCEPTION
SIX MONTHS ENDED (FEBRUARY 10, 1987)
DECEMBER 31, THROUGH
------------------- DECEMBER 31,
1995 1994 1995
---- ---- ------------------
<S> <C> <C> <C>
Supplemental schedule of non-cash investing
and financing activities:
Accretion of 9% preferred stock $ -- $ -- $ 139,674
Conversion of 9% preferred stock to common stock 388,700 -- 1,311,686
Conversion of Series B preferred stock
to common stock 217,027 -- 1,754,273
Capital lease obligation incurred to lease equipment -- 23,973 23,973
</TABLE>
SEE ACCOMPANYING NOTES.
Page 6 of 14
<PAGE>
CORTEX PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
Period from Inception (February 10, 1987) through December 31, 1995
(UNAUDITED)
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three-month
and six-month periods ended December 31, 1995 are not necessarily indicative
of the results that may be expected for the year ending June 30, 1996. For
further information, refer to the financial statements and notes thereto
included in the Company's 1995 Annual Report on Form 10-KSB. Certain
previously reported amounts have been reclassified to conform with the June
30, 1995 and December 31, 1995 presentation.
NOTE 2 -- DEVELOPMENT STAGE ENTERPRISE
From inception (February 10, 1987) through December 31, 1995, the Company has
generated only modest operating revenues and has incurred losses aggregating
$23,085,634. As of December 31, 1995, the Company had working capital of
$5,200,699, which under current spending plans will sustain its operations
through December 1996. Over the longer term, successful completion of the
Company's development program and its transition, ultimately, to attaining
profitable operations is dependent upon obtaining additional financing
adequate to fulfill its research and development activities, and achieving a
level of revenues adequate to support the Company's cost structure.
NOTE 3 -- REVERSE STOCK SPLIT
On January 11, 1995, the Company effected a one-for-five reverse stock split
of its common stock and in connection therewith revised the authorized number
of shares of common stock to 20,000,000 shares, with no change in the par
value of $0.001 per share. The accompanying financial statements have been
adjusted retroactively to give effect to the reverse stock split.
NOTE 4 -- PRIVATE PLACEMENT
On December 8, 1995, the Company sold 160 shares of newly created Series C
Preferred Stock at a price of $25,000 per share, resulting in net proceeds of
approximately $3,600,000. The shares are convertible, as to one-third of
total shares on each of January 22, 1996, February 21, 1996 and March 22,
1996 into the Company's common stock at a conversion price of the lower of
(i) $2.825 per share of common stock or (ii) 85% of the fair market value of
the common stock on the date of conversion based on the average bid price
during the five trading days prior to the date of conversion. Based on the
$2.825 conversion price, all of the Series C Preferred Stock is convertible
into an aggregate of 1,415,929 shares of common stock. At any time the fair
market value of the common stock is less than $3.32 per share, the effective
conversion price will be less than $2.825
Page 7 of 14
<PAGE>
and the Series C Preferred Stock will be convertible into a larger number of
shares of common stock. In addition, holders of the Series C Preferred Stock
have a liquidation preference, after payment of full liquidation preference
to holders of 9% Preferred Stock and in parity with the Series B Preferred
Stock, of an amount equal to the sum of $25,000, plus an amount equal to 10%
of $25,000 per year commencing December 8, 1995. Upon receipt of a notice of
conversion from a Series C Preferred Stockholder, the Company may elect to
redeem the shares for a price equal to the closing bid price on the date of
conversion multiplied by the number of shares of common stock issuable upon
such conversion. On December 8, 1997 each share of Series C Preferred Stock
then outstanding will automatically convert into common stock at the
conversion price then in effect. The Company may elect to redeem the Series C
Preferred Stock at any time commencing January 22, 1996, subject to certain
restrictions, at a redemption price ranging from 130% to 115% of the
liquidation preference. The Company intends to use the proceeds for general
corporate purposes and to fund additional clincial testing and preclinical
toxicology studies of its lead compounds.
In connection with the placement, the Company paid to Swartz Investments,
Inc. a placement fee and expenses aggregating $400,000. In addition, the
Company issued to Swartz a five-year warrant to purchase 106,195 shares of
the Company's common stock at an exercise price of $2.825 per share.
Page 8 of 14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, PLAN OF OPERATION
THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS REPORT.
RESULTS OF OPERATIONS
From inception (February 10, 1987) through December 31, 1995, the Company's
revenue has consisted of (i) $3,600,000 of license fees and research and
development funding from January 1992 through June 1993 under the Company's
agreement with Alkermes, Inc. (ii) net interest income aggregating
$1,230,000, and (iii) $95,000 of grant revenue. The Company sustained losses
aggregating $21,061,377 for the period from inception (February 10, 1987)
through June 30, 1995 and a loss of $2,024,257 for the six-month period ended
December 31, 1995, for a cumulative loss from inception (February 10, 1987)
through December 31, 1995 of $23,085,634. The loss for the three-month period
ended December 31, 1995 of $1,069,647 compares with a net loss of $1,616,219
for the corresponding prior year period. The loss for the six-month period
ended December 31, 1995 was $2,024,257, compared to a loss of $3,072,104 for
the corresponding prior year period.
Research and development expenses decreased from $1,214,645 to $607,438, or
by $607,207 (50%), during the three-month period ended December 31, 1995
compared to the corresponding prior year period. The same expenses decreased
from $2,289,046 to $1,272,916, or by $1,016,130 (44%), during the six-month
period ended December 31, 1995. The decreases were primarily due to expenses
incurred during the three- and six-month periods ended December 31, 1994 in
connection with the commencement in October 1994 of human clinical testing. A
reduction in scientific personnel as of June 30, 1995, a resulting decrease
in laboratory supplies, lower outlays for scientific consulting and reduced
payments under technology rights agreements contributed most of the remaining
decreases.
General and administrative expenses increased slightly from $467,724 to
$487,731, or by $20,007 (4%) during the three-month period ended December 31,
1995 compared to the corresponding prior year period. The same expenses
decreased from $894,020 to $811,175, or by $82,845 (9%), during the six-month
period ended December 31, 1995 due to lower spending for consulting and
investor and public relations activities.
The Company believes that inflation and changing prices have not had a
material impact on its ongoing operations to date.
PLAN OF OPERATION; LIQUIDITY AND CAPITAL RESOURCES
Cortex has funded its organizational and research and development activities
primarily from the issuance of equity securities, with net proceeds from such
issuances from inception (February 10, 1987) through December 31, 1995
aggregating $28 million. An additional $3.6 million in research and license
payments was received from Alkermes, Inc. between January 1992 and June 1993
in connection with a development and license agreement with that firm.
Interest income from inception through December 31, 1995, which approximates
funds received, was $1.2 million.
Page 9 of 14
<PAGE>
As of December 31, 1995, the Company had cash, cash equivalents and
short-term investments totaling $5.4 million and working capital of $5.2
million. Cortex anticipates that its existing cash, cash equivalents and
short-term investments, combined with a modest amount of anticipated interest
income, will be sufficient to satisfy its capital requirements through
December 31, 1996 under current spending plans.
The Company leases approximately 30,000 square feet of research laboratory,
office and expansion space under an operating lease that expires on May 31,
1999, with an additional five-year option at 95% of the then fair market
rental rate. The commitments under the lease agreement for the years ending
June 30, 1996, 1997, 1998 and 1999 are $192,000, $198,000, $203,000 and
$192,000, respectively. Minimum obligations have not been reduced by minimum
sublease rentals of $60,500 receivable during the year ending June 30, 1996
under a noncancelable sublease.
As of December 31, 1995, Cortex had outstanding 110,000 shares of 9%
cumulative convertible preferred stock, which accrue cumulative dividends
semi-annually at an annual rate of $0.09 per share. To conserve capital for
operations, the Company has elected not to distribute the dividends that have
accrued from June 15, 1990. Accrued and unpaid dividends as of December 31,
1995 were $59,400.
The settlement in October 1995 of a license dispute with Alkermes, Inc.
involved the issuance by the Company of a $1,000,000 three-year promissory
note accruing interest semi-annually at the then federal funds rate, in
exchange for reacquisition of commercial rights to Cortex's calpain inhibitor
products. The Company also agreed to pay Alkermes, Inc. a graduated royalty
on calpain inhibitor development proceeds, as defined and subject to certain
limitations.
Over the next twelve months, the Company plans to conduct additional
preclinical and Phase I clinical studies on its AMPAKINE-TM- compounds. This
planned research involves a twelve-month expenditure of approximately $1.2
million. This amount includes approximately $550,000 of funding for sponsored
research in academic laboratories, to which the Company is committed under
various license, sponsored research and consulting agreements. Significant
investments in plant or equipment or substantial changes to staffing levels
are not contemplated under current spending plans for the next twelve
months. As of December 31, 1995, Cortex had 12 full-time employees and three
part-time employees.
Over the longer term, Cortex will require substantial additional capital,
which it intends to raise through a combination of corporate partnering and
financing activities, to complete its development phase and, assuming that
its proposed products can be successfully developed and marketed, to make the
transition to profitable operations. There can be no assurance that the
Company will be able to enter into corporate partnering arrangements on
favorable terms, or at all, or that any such arrangements will reduce the
Company's future funding requirements. There can also be no assurance that
any such arrangements that may be entered into will continue. Additional
equity or debt financings will be required, and any equity financings are
likely to cause dilution to then-existing shareholders.
Page 10 of 14
<PAGE>
The Company's proposed products are in the preclinical or early clinical
stage of development and will require significant further research,
development, clinical testing and regulatory clearances. They are subject to
the risks of failure inherent in the development of products based on
innovative technologies. These risks include the possibilities that any or
all of the proposed products will be found to be ineffective or toxic, or
otherwise fail to receive necessary regulatory clearances, that the proposed
products, although effective, will be uneconomical to market, that third
parties may now or in the future hold proprietary rights that preclude the
Company from marketing them, or that third parties will market a superior or
equivalent product. Accordingly, the Company is unable to predict whether its
research and development activities will result in any commercially viable
products or applications. Further, due to the extended testing and regulatory
review process required before marketing clearance can be obtained, the
Company does not expect to be able to commercialize any therapeutic drug for
at least five years, either directly or through its corporate partners or
licensees. There can be no assurance that the Company's proposed products
will prove to be safe or effective or receive regulatory approvals that are
required for commercial sale.
Page 11 of 14
<PAGE>
PART II. OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Board of Directors of the Company elected not to distribute the
semi-annual dividends that have accrued from June 15, 1990 on the Company's
9% cumulative convertible preferred stock, in order to conserve capital for
operations. As of December 31, 1995, accrued and unpaid dividends on the 9%
cumulative convertible preferred stock were $59,400.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On December 12, 1995, the Company held its Annual Meeting of Stockholders,
with stockholders holding 3,780,969 shares of common stock (representing 61%
of the total number of shares outstanding and entitled to vote) present in
person or by proxy at the meeting. Proxies for the meeting were solicited
pursuant to Regulation 14A of the Securities Exchanges Act of 1934. Jerome M.
Arnold, Carl W. Cotman, Ph.D., Michael G. Grey, Harvey S. Sadow, Ph.D., Davis
L. Temple, Jr., Ph.D. and Robert F. Allnutt were listed as management's
nominees in the Proxy Statement and were elected as directors at the meeting.
The votes for each nominee were as follows:
NUMBER OF NUMBER OF VOTES
NAME AFFIRMATIVE VOTES NEGATIVE VOTES WITHHELD
---- ----------------- -------------- --------
Jerome M. Arnold 3,712,503 68,466 0
Carl W. Cotman, Ph.D. 3,712,403 68,566 0
Michael G. Grey 3,712,503 68,466 0
Harvey S. Sadow, Ph.D. 3,712,503 68,466 0
Davis L. Temple, Jr., Ph.D. 3,712,473 68,496 0
Robert F. Allnutt 3,711,723 69,246 0
At the meeting, the Company also sought the approval of the stockholders of
an amendment to the Company's 1989 Incentive Stock Option, Non-Qualified
Stock Option and Stock Purchase Plan to increase the number of shares of
common stock issuable thereunder to 700,000. The proposal was approved by
3,425,886 affirmative votes. There were 165,578 negative votes and 30,656
abstentions with respect to this proposal.
At the meeting, the Company also sought the approval of the stockholders of
an amendment to the Company's 1989 Special Non-Qualified Stock Option and
Stock Purchase Plan to increase the number of shares of common stock issuable
thereunder to 400,000. There were 3,419,615 affirmative votes, 174,017
negative votes and 28,488 abstentions with respect to this proposal.
At the meeting, the Company also sought the approval of the stockholders of an
amendment to the Company's Non-Employee Director Formula Grant Plan to (i)
provide for the automatic grant of options to purchase 15,000 shares of common
stock to non-employee directors of the Company (other than those who serve on
the Board to oversee an investment of the Company) upon commencement of service
with the Company, and the automatic grant of options to purchase 2,500 shares of
common stock to such non-employee directors on the date of each annual meeting
of stockholders, and (ii) provide for the automatic grant of options to purchase
5,000 shares of common
Page 12 of 14
<PAGE>
stock to non-employee directors of the Company upon commencement of service
on the Board to oversee an investment in the Company and the automatic grant
of options to purchase 1,000 shares of the Company's common stock to such
non-employee directors on the date of each annual meeting of stockholders.
The proposal was approved by 3,456,337 affirmative votes. There were 157,527
negative votes and 30,296 abstentions with respect to this proposal.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K
On December 22, 1995, the Company filed a Report on Form 8-K to report
under Item 5 "Other Events" the sale of 160 shares of Series C
Preferred Stock in a private placement to overseas investors. See Note
4 of Notes to Financial Statements.
Page 13 of 14
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
CORTEX PHARMACEUTICALS, INC.
February 14, 1996 By: /S/ D. Scott Hagen
---------------------------------------------
D. Scott Hagen
Acting President and Chief Operating Officer;
Vice President and Chief Financial Officer;
Corporate Secretary
(Principal Executive Officer; Principal
Financial and Accounting Officer)
Page 14 of 14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AS OF DECEMBER 31, 1995, AND THE RELATED STATEMENTS OF
OPERATIONS, STOCKHOLDER'S EQUITY AND CASH FLOWS FOR THE SIX MONTHS
THEN ENDED, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 123,029
<SECURITIES> 5,235,830
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,456,109
<PP&E> 1,791,357
<DEPRECIATION> 970,537
<TOTAL-ASSETS> 6,300,588
<CURRENT-LIABILITIES> 255,410
<BONDS> 1,012,658 <F1>
0
3,644,542
<COMMON> 6,160
<OTHER-SE> 1,375,965
<TOTAL-LIABILITY-AND-EQUITY> 6,300,588
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,084,091
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,445
<INCOME-PRETAX> (2,024,257)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,024,257)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,024,257)
<EPS-PRIMARY> (0.33)
<EPS-DILUTED> (0.33)
<FN>
<F1>PROMISSORY NOTE ISSUABLE TO ALKERMES, INC.
</FN>
</TABLE>
