FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: March 31, 1997; 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 1-11352
-------
DynaGen, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-3029787
- ------------------------------------- -----------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
99 Erie Street
Cambridge, MA 02139
- --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(617) 491-2527
- --------------------------------------------------------------------------------
(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 (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
-------- --------
As of May 12, 1997, there were outstanding 30,122,477 shares of common stock,
$.01 par value per share.
DYNAGEN, INC.
FORM 10-Q
QUARTERLY REPORT
----------------------
TABLE OF CONTENTS
Facing Page 1
Table of Contents 2
PART I. FINANCIAL INFORMATION (*)
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Loss 5
Condensed Consolidated Statements of Changes
in Stockholders' Equity 6
Condensed Consolidated Statements of
Cash Flows 7
Notes to Unaudited Condensed Consolidated
Financial Statements 9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11
PART II. OTHER INFORMATION
Item 2. Changes in Securities 15
Item 4. Submission of Matters to a Vote
of Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 18
(*) The financial information at December 31, 1996 has been derived from
the audited financial statements at that date and should be read in
conjunction therewith. All other financial statements are unaudited.
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
DYNAGEN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1997 1996
--------- ------------
Current assets:
Cash and cash equivalents
(including interest-bearing
deposits of $589,443 and
$1,835,000) $ 764,540 $ 2,112,300
Investment securities available
for sale at fair value 2,101,626 3,004,700
Accounts receivable 267,279 261,932
Inventory (Note 3) 765,229 451,883
Notes receivable 185,000 185,000
Accrued interest receivable 29,694 40,179
Prepaid expenses and other
current assets 222,930 255,434
------------- ------------
Total current assets 4,336,298 6,311,428
------------- ------------
Property and equipment, net of
accumulated depreciation and
amortization of $370,884 and $337,813 756,636 673,969
------------- ------------
Other assets:
Patents and trademarks, net of
accumulated amortization of
$71,287 and $65,639 260,192 265,840
Deferred debt financing costs,
net of accumulated amortization
of $42,866 and $119,039 30,618 119,039
Deferred acquisition and
financing costs 107,432 -
Deposits 92,873 92,873
------------- ------------
Total other assets 491,115 477,752
------------- ------------
$ 5,584,049 $ 7,463,149
============= ============
See accompanying notes to unaudited consolidated financial statements.
3
DYNAGEN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
1997 1996
------------- -------------
Current liabilities:
Convertible note payable $ 535,000 $ -
Accounts payable 602,283 712,239
Accrued payroll and
payroll taxes 229,419 96,894
------------- -------------
Total current liabilities 1,366,702 809,133
Convertible note payable - 1,600,000
------------- -------------
Total liabilities 1,366,702 2,409,133
------------- -------------
Stockholders' equity:
Preferred stock, $.01 par value,
10,000,000 shares authorized,
none outstanding - -
Common stock, $.01 par value,
75,000,000 shares authorized,
30,114,206 and 29,106,231 shares
issued and outstanding 301,142 291,062
Additional paid-in capital 30,119,278 29,076,838
Accumulated deficit (26,203,803) (24,315,191)
------------- -------------
4,216,617 5,052,709
Unrealized gain on
investment securities 730 1,307
------------- -------------
Total stockholders' equity 4,217,347 5,054,016
------------- -------------
$ 5,584,049 $ 7,463,149
============= =============
See accompanying notes to unaudited consolidated financial statements.
4
DYNAGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(Unaudited)
Three Months Ended
-----------------------------
March 31, March 31,
1997 1996
-------------- --------------
Revenues:
Fees and royalties $ 232 $ 35,000
Product sales 457,438 93,325
-------------- --------------
Total revenues 457,670 128,325
-------------- --------------
Costs and expenses:
Cost of sales 453,545 46,624
Research and development 487,412 851,686
Selling, general and
administrative 1,474,930 880,233
-------------- --------------
Total costs and expenses 2,415,887 1,778,543
-------------- --------------
Operating loss (1,958,217) (1,650,218)
-------------- --------------
Other income (expense):
Investment income, net 92,330 109,183
Interest expense (13,539) (24,000)
Amortization of debt
financing costs (9,186) (22,892)
-------------- --------------
Other income, net 69,605 62,291
-------------- --------------
Net loss $ (1,888,612) $ (1,587,927)
============== ==============
Net loss per share $ (.06) $ (.06)
============== ==============
Weighted average shares outstanding
(Note 2) 29,977,519 26,061,519
============== ==============
See accompanying notes to unaudited consolidated financial statements.
5
DYNAGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Three Months Ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Series A Convertible Unrealized
Common Stock Preferred Stock Additional Gain on
------------------- -------------------- Paid-in Accumulated Investment
Shares Amount Shares Amount Capital Deficit Securities Total
------ ------ ------ ------ ------- ------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1995 25,196,963 $251,970 - $ - $23,094,903 $ (16,721,448) $ 1,142 $ 6,626,567
Increase in unrealized
gain on investment
securities - - - - - - 346 346
Costs related to exercise
of public warrants - - - - (3,756) - - (3,756)
Shares issued in private
placements 1,520,686 15,207 1,178,264 3,461,150 1,376,204 - - 4,852,561
Exercise of stock options 73,800 738 - - 2,370 - - 3,108
Employee stock and
stock option grants 117,250 1,172 - - 557,685 - - 558,857
Stock options issued for
future services - - - - 55,225 - - 55,225
Net loss - - - - - (1,587,927) - (1,587,927)
---------- -------- --------- ---------- ----------- ------------ -------- -----------
Balance at March 31, 1996 26,908,699 $269,087 1,178,264 $3,461,150 $25,082,631 $(18,309,375) $ 1,488 $10,504,981
========== ======== ========= ========== =========== ============ ======== ===========
Balance at
December 31, 1996 29,106,231 $291,062 - $ - $29,076,838 $(24,315,191) $ 1,307 $ 5,054,016
Decrease in unrealized
gain on investment
securities - - - - - - (577) (577)
Exercise of stock options 1,500 15 - - 1,110 - - 1,125
Issuance of common stock
purchase warrants - - - - 200 - - 200
Stock options issued
for services - - - - 37,691 - - 37,691
Stock issued for
interest obligation 16,881 169 - - 27,570 - - 27,739
Conversion of note payable 989,594 9,896 - - 975,869 - - 985,765
Net loss - - - - - (1,888,612) - (1,888,612)
---------- -------- --------- ---------- ----------- ------------ -------- -----------
Balance at March 31, 1997 30,114,206 $301,142 - $ - $30,119,278 $(26,203,803) $ 730 $ 4,217,347
========== ======== ========= ========== =========== ============ ======== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
6
DYNAGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
------------------------------
March 31, March 31,
1997 1996
-------------- -------------
Cash flows from operating activities:
Net loss $ (1,888,612) $ (1,587,927)
Adjustments to reconcile
net loss to net cash used for
operating activities:
Employee stock and
stock option grants - 558,857
Stock options issued
for services 37,691 -
Depreciation and amortization 47,905 40,715
Amortization and accretion
of (discounts) premiums on
investment securities (11,048) (55,228)
Stock issued for
interest obligation 27,739 -
Write-off of patent costs - 25,094
(Increase) decrease in operating assets:
Accounts receivable (5,347) 18,109
Inventory (313,346) -
Prepaid expenses and
other current assets 42,989 14,278
Increase (decrease) in operating
liabilities:
Accounts payable and
accrued expenses 22,569 72,117
Deferred revenue - (27,092)
-------------- -------------
Net cash used for
operating activities (2,039,460) (941,077)
-------------- -------------
Cash flows from investing activities:
Purchase of investment securities (1,186,455) (10,428,180)
Proceeds from sales and maturities
of investment securities 2,100,000 6,574,000
Purchase of property and
equipment (115,738) (22,968)
Patent and trademark costs - (9,721)
Increase in deferred financing
and acquisition costs (107,432) -
-------------- -------------
Net cash provided by
investing activities 690,375 (3,886,869)
-------------- -------------
(Continued)
See accompanying notes to unaudited consolidated financial statements.
7
DYNAGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Concluded)
(Unaudited)
Three Months Ended
--------------------------
March 31, March 31,
1997 1996
-------- --------
Cash flows from financing activities:
Net proceeds (costs) on exercise of
stock warrants and options $ 1,325 $ (648)
Net proceeds from private debt
and equity placements - 6,577,856
----------- -----------
Net cash provided by
financing activities 1,325 6,577,208
----------- -----------
Net change in cash and cash equivalents (1,347,760) 1,749,262
Cash and cash equivalents,
beginning of period 2,112,300 1,765,604
----------- -----------
Cash and cash equivalents,
end of period $ 764,540 $ 3,514,866
=========== ===========
Supplemental cash flow information:
Common stock issued for convertible
note payable $ 985,765 $ -
Stock options issued for
future services - 55,225
See accompanying notes to unaudited consolidated financial statements.
8
DYNAGEN, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of the
Company have been prepared in accordance with generally accepted accounting
principles for interim financial information and in accordance with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X and include the
accounts of DynaGen, Inc. and its wholly-owned subsidiary, Able Laboratories,
Inc. Accordingly, they do not include all information and footnotes required by
generally accepted accounting principles for complete financial statement
presentation. Significant intercompany balances and transactions have been
eliminated in consolidation.
As of December 31, 1996, the Company changed from a fiscal year ending
June 30 to a fiscal year ending December 31.
The results of operations for the periods reported are not necessarily
indicative of those that may be expected for a full year. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
which are necessary for a fair statement of operating results for the interim
periods presented have been made.
The financial information included in this report has been prepared in
conformity with the accounting policies reflected in the financial statements
included in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission.
2. NET LOSS PER SHARE
Net loss per share is calculated based on the weighted average number
of common shares outstanding for the three month periods ended March 31, 1997
and 1996. The effect of all common stock equivalents have been excluded from the
calculation of the weighted average number of common shares outstanding since
their inclusion would be anti-dilutive.
3. INVENTORY
Inventory at March 31, 1997 consists of the following:
Raw material $336,324
Work in-process 123,838
Finished goods 305,067
--------
$765,229
========
9
DYNAGEN, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
March 31, 1997
(Continued)
4. ACQUISITION OF ABLE LABORATORIES, INC.
On August 19, 1996, the Company acquired certain assets of Able
Laboratories, Inc., consisting primarily of machinery and equipment, raw
materials and finished goods inventory, and other assets of the tablet business.
The assets were transferred by the Company to a newly formed and wholly-owned
subsidiary named Able Laboratories, Inc. ("Able"). The purchase price consisted
of $550,000 in cash and acquisition costs of $150,000. The acquisition has been
accounted for as a purchase in accordance with the Accounting Principles Board
Opinion No. 16. The Company allocated $313,300 of the purchase price to
inventory and $386,700 to property and equipment. The results of operations
related to Able have been included with those of the Company since August 19,
1996.
Unaudited proforma consolidated operating results for the Company,
assuming the acquisition of Able had been made as of January 1, 1996, are as
follows:
Three Months Ended
------------------------------
March 31, March 31,
1997 1996
------------- -------------
Revenues $ 457,670 $ 1,117,125
Net loss $ (1,888,612) $ (2,002,440)
Net loss per share $ (.06) $ (.08)
The unaudited proforma information is not necessarily indicative either of the
results of operations that would have occurred had the purchase been made on
January 1, 1996 or of future results of operations of the combined companies.
10
DYNAGEN, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------------------------------
The Private Securities Litigation Reform Act of 1995 contains safe
harbor provisions regarding forward-looking statements. Except for historical
information contained herein, the matters discussed in the Liquidity and Capital
Resources section below contain potential risks and uncertainties, including,
without limitation, risks related to the Company's ability to successfully
develop, test, produce and market its proposed products; obtain governmental
approvals in a timely manner; identify and attract marketing partners to help
commercialize the Company's products; attract and retain key employees; obtain
meaningful patent protection or otherwise over the Company's proprietary
technology; protect itself from product liability risks or limitations imposed
due to potential health care reform; raise capital for future operations and
commercialization of its products; integrate the products and personnel the
Company acquired in the acquisition of Able Laboratories, Inc. ("Able") and any
future acquisitions; and successfully respond to technological changes in the
marketplace. Specifically, regulatory approvals of the Company's products are
subject to factors beyond the Company's control, and there can be no assurance
that such approvals will not be delayed or ultimately denied. The Company will
need to attract marketing partners in order to exploit its products, and there
can be no assurance that the Company will be successful in attracting such
partners. Additional information on potential factors which could affect the
Company's financial results are included in the Company's public filings with
the Securities and Exchange Commission, including without limitation its Form
10-K for the period ended December 31, 1996.
RESULTS OF OPERATIONS
Three-Month Period Ended March 31, 1997
As Compared With The Three-Month Period Ended March 31, 1996
Revenues in the first quarter of the year ending December 31, 1997
("Fiscal 1997") were $458,000 versus $128,000 for the three months ended March
31, 1996. This increase of $329,000 is primarily the result of product sales by
the Company's wholly-owned subsidiary Able.
Cost of sales was 99% of product sales for the first quarter of Fiscal
1997 compared with 50% for the three months ended March 31, 1996. Production at
Able during the first quarter of Fiscal 1997 did not support the minimum level
of fixed manufacturing costs required at the facility.
11
DYNAGEN, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------------------------------
Research and development expenses for the first quarter of Fiscal 1997
were $487,000 versus $852,000 for the three months ended March 31, 1996, a
decrease of $364,000. This decrease primarily is the result of $285,000 in
compensation expense resulting from stock grants and below-market options
granted during the three months ended March 31, 1996. In addition, costs
associated with the Company's NicErase(R)-SL clinical trials decreased by
$349,000 as the Company nears completion of this trial. This decrease is
partially offset by an increase in therapeutic product development costs of
$273,000. The increase is primarily attributable to the Company's breast biopsy
technology and other technologies in an early stage development. The Company has
limited its diagnostic product development primarily to its NicCheck(R) product,
a test to detect the presence of nicotine.
Selling, general and administrative expenses for the first quarter of
Fiscal 1997 were $1,475,000 versus $880,000 for the three months ended March 31,
1996, an increase of $595,000. This increase is primarily due to the additional
payroll and plant operating costs of $557,000 for the Able facility. In
addition, selling, general and administrative expenses increased in the
following areas: product marketing and support - $76,000 (the increase in
product marketing and support was primarily attributable to the marketing of
NicCheck(R) I), public relations - $56,000 and patent expense - $33,000. These
increases were offset by a net decrease of $127,000 in other operating expenses
primarily related to compensation expense for stock grants and below market
options granted during the three months ended March 31, 1996.
Investment income decreased by $17,000 from $109,000 to $92,000 for the
first quarter of Fiscal 1997, respectively as compared to the three months ended
March 31, 1996, as the Company had less funds available for investment during
the first quarter of Fiscal 1997. In the first quarter of Fiscal 1997, the
Company incurred interest expense of $14,000 and amortized debt financing costs
of $9,000 associated with the private placement in February 1996 of a $2,000,000
convertible note. These debt financing costs aggregating $274,705 are being
amortized over a 24-month period.
12
DYNAGEN, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
-------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1997, the Company had working capital of $2,969,596
versus working capital of $5,502,295 at December 31, 1996. Cash and investment
securities were $2,866,166 at March 31, 1997 as compared to $5,117,000 at
December 31, 1996. Working capital and cash were used primarily for research and
development and to fund Able and its operations during the quarter.
The Company recently entered into an agreement to acquire all of the
outstanding shares of Superior Pharmaceutical Company ("Superior"), a
privately-held distributor of generic pharmaceutical products, for a total
purchase price of $ 16.5 million, consisting of cash, three-year notes and
shares of the Company's Common Stock. The shareholders may also receive certain
cash incentive payments based on Superior's performance during the three years
following the close of the transaction. The acquisition of Superior is subject
to customary closing conditions and the Company intends to close this
acquisition during the second quarter of 1997. There can be no assurance that
the Superior acquisition will close in the second quarter of 1997, or at all.
Management anticipates that the available working capital will be
sufficient to fund the current level of operations, including the Able business,
through June 1997, but that the available working capital will not be sufficient
to fund the acquisition of Superior. The Company has realized limited revenues
from license fees and the sale of its diagnostic products. Its future prospects
and revenue potential from product sales cannot be determined with any certainty
at this time.
The Company plans to raise capital in order to finance the proposed
acquisition of Superior through the sale of its securities. There can be no
assurance that the Company will be able to secure this financing or that such
financing will be available on favorable terms. If the Company is unable to
obtain such financing, it will be unable to close the Superior acquisition.
Concurrently with the completion of the proposed Superior acquisition, Superior
and the Company intend to enter into a line of credit to provide financing for
Superior. The Company and Superior are currently in discussions with a
commercial bank regarding such line of credit. There can be no assurance that
the Company will be able to secure the line of credit or that the line of credit
will be available on favorable terms. If the Company is unable to obtain a line
of credit for Superior, it will be unable to close the Superior acquisition. The
Company intends to fund
13
DYNAGEN, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
-------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES (Continued)
Superior's operations with the line of credit and Superior's cash generated from
operations.
The Company also continues to pursue additional sources of capital in
order to fund the growth of the Able generic drug business and its product
development efforts. The Able financing may take the form of a line of credit or
equipment notes or leases. There can be no assurance that the Company will be
able to secure additional financing for the Able business or its continued
product development efforts or that financing will be available on favorable
terms. If the Company is unable to obtain such additional financing, the
Company's ability to maintain its current level of operations would be
materially and adversely affected and the Company will be required to reduce or
eliminate certain expenditures, including its research and development activity
with respect to certain proposed products.
14
DYNAGEN, INC.
PART II. OTHER INFORMATION
-------------------------------------------------------------
Item 2. Changes in Securities
a. Not applicable.
b. Not applicable.
c. On January 15, 1997, the Company issued to Leonardo G.
Zangani, a consultant providing services to the Company, a
warrant to purchase 50,000 shares of Common Stock of the
Company at an exercise price of $1.97, as partial
consideration for such services. The warrant is immediately
exercisable as to half of the shares subject thereto, and the
remaining shares become exercisable if the Company renews its
contract for Mr. Zangani's services after six months. As the
warrant was issued in a private transaction not involving a
public offering, the warrant was not required to be registered
under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to Section 4(2) thereof.
Item 4. Submission of Matters to a Vote of Security Holders
On January 30, 1997, the Company held its Annual Meeting of
Stockholders. At the meeting, the stockholders acted upon the
following proposals: (i) election of directors; (ii) increase
in the number of authorized shares of Common Stock from
40,000,000 to 75,000,000; and (iii) increase in the number of
authorized shares of Common Stock to be issued under the
Company's 1991 Stock Plan from 1,200,000 to 2,600,000 and
permit grants under the 1991 Stock Plan to comply with Section
162(m) of the Internal Revenue Code. All of the above matters
were approved by the stockholders.
Votes "For" represent affirmative votes and do not include
abstentions or broker non-votes. In cases where a signed proxy
was submitted without direction, the shares represented by the
proxy were voted "For" each proposal in the manner disclosed
in the Proxy Statement and Proxy. On the record date, December
24, 1996, 29,106,231 shares of the Company's common stock were
issued and outstanding.
15
DYNAGEN, INC.
PART II. OTHER INFORMATION (Continued)
-------------------------------------------------------------
Voting results were as follows:
<TABLE>
<CAPTION>
Matter For Against Withheld Abstain
------ --- ------- -------- -------
<S> <C> <C> <C> <C>
1. Election of Directors
Dr. Ian R. Ferrier 24,404,381 N/A 473,459 N/A
Mr. Steven Georgiev 24,402,381 N/A 475,459 N/A
Dr. Indu A. Muni 24,404,431 N/A 473,409 N/A
Dr. F. Howard Schneider 24,403,931 N/A 473,909 N/A
Dr. Michael Sorell 24,404,938 N/A 472,902 N/A
Mr. Dhananjay G. Wadekar 24,405,188 N/A 472,652 N/A
2. Increase in the number of
authorized shares of common stock 22,946,596 1,715,810 N/A 203,643
3. Increase in the number of
authorized shares issuable under
the 1991 Stock Plan 22,353,747 1,945,289 N/A 249,493
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits:
The following exhibits, required by Item 601 of Regulation
S-K, are filed as part of this Quarterly Report on Form 10-Q.
Exhibit numbers, where applicable, in the left column
correspond to those of Item 601 of Regulation S-K.
Exhibit
No. Description of Exhibit
- ------- --------------------------------------------------------------
2a Agreement and Plan of Merger among the Registrant, DynaGen
Acquisition Corporation, Superior Pharmaceutical Company and
the stockholders of Superior Pharmaceutical Company dated
March 7, 1997 (filed as Exhibit 2c to Registrant's Transition
Report on Form 10-K for the period July 1, 1996 to December
31, 1996, and incorporated herein by reference).
3a Certificate of Incorporation, as amended (filed as Exhibit 3a
to Registrant's Transition Report on Form 10-K for the period
July 1, 1996 to December 31, 1996, and incorporated herein by
reference).
16
DYNAGEN, INC.
PART II. OTHER INFORMATION (Continued)
-------------------------------------------------------------
Exhibit
No. Description of Exhibit
- ------- --------------------------------------------------------------
4a Common Stock Purchase Warrant issued to Leonardo G. Zangani
dated January 15, 1997 (filed as Exhibit 4s to Registrant's
Transition Report on Form 10-K for the period July 1, 1996 to
December 31, 1996, and incorporated herein by reference).
27 Financial Data Schedule (filed herewith in electronic format
only).
(b) Reports on Form 8-K:
During the quarter ended March 31, 1997, the Company filed on
March 24, 1997 a Current Report on Form 8-K dated March 10,
1997 reporting the Company's agreement to purchase the stock
of Superior Pharmaceutical Company.
17
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.
DYNAGEN, INC.
By: /s/ Indu A. Muni
------------------------------
Indu A. Muni, Ph.D.
President, Chief Executive Officer, and
Treasurer (Principal Executive,
Financial, and Accounting Officer)
Date: May 15, 1997
18
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 764,540
<SECURITIES> 2,101,626
<RECEIVABLES> 267,279
<ALLOWANCES> 0
<INVENTORY> 765,229
<CURRENT-ASSETS> 4,336,298
<PP&E> 1,127,520
<DEPRECIATION> 370,884
<TOTAL-ASSETS> 5,584,049
<CURRENT-LIABILITIES> 1,366,702
<BONDS> 0
0
0
<COMMON> 301,142
<OTHER-SE> 3,916,205
<TOTAL-LIABILITY-AND-EQUITY> 5,584,049
<SALES> 457,438
<TOTAL-REVENUES> 457,670
<CGS> 453,545
<TOTAL-COSTS> 2,415,887
<OTHER-EXPENSES> (92,331)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,539
<INCOME-PRETAX> (1,888,612)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,888,612)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,888,612)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> 0
</TABLE>
