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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q/A
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
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 No. 0-19153
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VIMRx PHARMACEUTICALS INC.
(Exact name of Registrant as specified in its Charter)
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Delaware
06-1192468
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
2751 Centerville Road, Wilmington, Delaware
19808
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code:(302) 998-1734
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
The aggregate number of Registrant's shares outstanding on November 14,
1996 was 51,430,437 shares of Common Stock, $.001 par value.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
VIMRx PHARMACEUTICALS INC. AND SUBSIDIARIES
(a development stage enterprise)
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
September 30,
1996 1995
---------------- -----------
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 1,564,060 $ 2,218,970
Securities held for sales 48,487,845 -0-
Deferred finance cost -0- 310,000
Other current assets 31,030 96,115
--------------- -----------
Total current assets $50,082,935 2,625,085
Equipment 661,964 107,942
Notes receivable -0- 225,000
Total assets $ 50,744,899 $ 2,958,027
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 206,377 $ 431,491
Notes payable -0- 1,802,048
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Total current liabilities 206,377 2,233,539
Other liabilities 17,920 464,000
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Total liabilities 224,297 2,697,539
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Shareholders' equity
Common stock, $.001 par value,
51,430,437 and 19,894,576 shares outstanding
on September 30, 1996 and December 31, 1995,
31September 30, 1995,\
respectively 51,431 19,895
Additional paid-in capital 80,404,207 23,244,460
Deficit accumulated during the development stage (29,292,523) (22,510,867)
Unearned compensation (744,449) (493,000)
Unearned gain from investment 101,936 -0-
Total shareholders' equity 50,520,602 260,488
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Total liabilities and shareholders' equity $ 50,744,899 $ 2,958,027
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VIMRx PHARMACEUTICALS INC. AND SUBSIDIARIES
(a development stage enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Nine Months December 30, 1986
Ended September 30, Ended September 30, (Inception)
1996 1995 1996 1995 to September 30, 1996
---- ----- ----- ------ ---------------------
Operating expenses:
Research and development.................. $ 717,408 $ 786,486 $1,693,569 $ 1,934,057 $ 14,682,886
Purchased research and development See Note 6 .162,989 - - 3,104,955 3,104,955
Royalty expense - See Note 4.......... - - 100,000 100,000 300,000
Termination of agreement - See Note 5 - - (464,000) - (464,000)
General and administrative................ 782,144 562,878 2,906,058 1,797,543 12,461,994
------- -------- ----------- ---------- -----------
Total operating expenses........... 1,662,541 1,349,364 7,340,582 3,831,600 30,085,835
---------- ---------- ---------- ---------- ----------
Other (income) expenses:
Interest (income)...................... (736,010) (32,605) (831,184) (146,780) (1,990,405)
Interest expense....................... - - 318,619 - 401,884
Provision for losses (recovery) on notes
receivables....................... - - - - 135,010
Investment in and advances to research and
development entities charged to expense - - - - 700,000
Other - net .......................... (46,693) 593 (46,361) 765 (39,801)
-------- ----------- ------------ ------- ----------
Total other (income) expenses (782,703) (32,012) (558,926) 146,015) (793,312)
--------- -------- --------- --------- ---------
NET LOSS.................................. $ 879,838 $ 1,317,352 $ 6,781,656 $3,685,585 $29,292,523
========= ============ =========== ========== ===========
NET LOSS PER SHARE........................ $0.02 $ 0.07 $ 0.19 $ 0.19
----- ------- ------ ------
Weighted average number of shares of
common stock outstanding.......... 51,334,833 19,744,185 35,149,061 19,743,118
----------- ----------- ========== ----------
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VIMRx PHARMACEUTICALS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
December 30, 1986
Nine Months Ended September 30, (Inception)
1996 1995 to September 30, 1996
----- ------ ---------------------
Cash flows from operating activities:
Net (loss)............................................. $ (6,781,656) $ (3,685,585) $ (29,292,523)
Adjustments to reconcile net (loss) to net cash
(used in) operating activities:
Depreciation and amortization........................ 31,206 16,591 130,662
Amortization of debt cost. . . . . . . . . . .. . .. 310,000 310,000
Interest expense settled through issuance of stock..... 72,260
Accretion of compensatory option. . . . . . . . . . . 148,551 246,551
Amortization of debt discount. . . . . . . . . . . . 197,952 200,000
Termination of agreement. . . . . . . . . . . . . (464,000) -
Consulting fees settled through issuance of stock...... 75,000
Research & Development fees to be settled through the
issuance of stock . . . . . . . . . . . 212,500
Provision for (recovery of) losses on notes receivable. 135,010
Investment in and advances to research and development
entities charged to expense 700,000
Loss from disposal of equipment........................ 8,202
Warrants issued & other non-cash consideration for
purchase research & development. . . 1,562,200 1,562,200
Changes in operating assets and liabilities:
(Increase) decrease in prepayments under research
contracts 47,334
(Increase) in organization costs..................... (3,463)
(Increase) decrease in other current assets.......... 65,085 125,691 (31,030)
Increase in accounts payable and accrued liabilities. 17,806 240,978 399,296
----------- ------------ -------
Net cash (used in) operating activities.............. (4,912,856) (3,042,491) (25,487,835)
- ----------- ------------- -----------
Cash flows from investing activities:
Net sales (purchases) of short-term investments........ (48,385,909) 2,590,268 (48,385,909)
Purchases of equipment................................. (585,228) (40,798) (823,915)
Proceeds from sale of equipment........................ 26,550
Loans to DNA Pharmaceuticals, Inc...................... (295,800)
Repayment of DNA Pharmaceuticals, Inc. loans........... 160,790
Loans to Ribonetics GmbH. . ........................... (600,000)
Investments in & loan to CambES Ltd. . . .......... (325,000)
----------- ------------- -------------
Net cash provided by (used in) investing activities.. (48,971,137) 2,549,470 (50,243,284)
----------- --------- ------------
Cash flows from financing activities:
Proceeds from sales of preferred and common stock,
exercise of wrrants and options 55,229,083 3,001 78,401,765
Costs incurred in connection with issuance of common
stock (2,325,050)
Purchase of treasury stock............................. (8,341)
Proceeds from bridge loans............................. 3,141,045
Repayment of bridge loans.............................. (2,000,000) (2,500,000)
Issuance of convertible demand notes payable........... 600,000
Return of capital...................................... (14,240)
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Net cash provided by financing activities......... 53,229,083 3,001 77,295,179
---------- ------------- ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...... (654,910) (490,020) 1,564,060
Cash and cash equivalents at beginning of period.......... 2,218,970 2,054,506
----------- ------------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................ $1,564,060 $ 1,564,486 $ 1,540,060
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VIMRx PHARMACEUTICALS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
(unaudited)
Financial Statement Presentation
The unaudited consolidated financial statements of VIMRx Pharmaceuticals Inc.
and subsidiaries (the "Company") herein have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission ("SEC") and, in the
opinion of management, reflect all adjustments (consisting only of normal
recurring accruals) necessary to present fairly the results of operations for
the interim periods presented. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. However, management believes that the disclosures are
adequate to make the information presented not misleading. These financial
statements and the notes thereto should be read in conjunction with the
consolidated financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1995. The results for the interim periods are not necessarily indicative of the
results for the full fiscal year.
(2) Principle of Consolidation
The consolidated financial statements include the accounts of VIMRx
Pharmaceuticals Inc., VIMRx Holdings, Ltd. (formerly VPI Holdings, Ltd.), and
its wholly-owned subsidiaries, VPI (U.K.) Limited, V.P.I. GmbH and Ribonetics
GmbH. In consolidation, all significant inter-company transactions and balances
have been eliminated.
(3) Cash Flows and Supplemental Cash Flow Disclosures
For purposes of the statements of cash flows, the Company considers investments
with original maturities of up to 90 days to be cash equivalents.
(4) Royalty Expense
Royalty expense represents the annual $100,000 minimum royalty payment under the
Company's license agreement with New York University Medical Center and the
Weizmann Institute of Science in Israel.
(5) Termination of Agreement
On January 26, 1996, the Company terminated a research and development agreement
with Ribonetics GmbH under which it was obligated to issue 500,000 shares of
common stock each year for three years if the research and development agreement
remained in force. The reversal of the accrual of that obligation resulted in a
credit to operating costs during the nine months ended September 30,1996.
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(6) Acquisition of Ribonetics
On May 23, 1996, the Company acquired all of the issued and outstanding
capital stock of Ribonetics GmbH ("Ribonetics") for $1,500,000 in cash
and warrants to purchase 365,000 shares of the Company's Common Stock
at an exercise price of $.01 per share. The seller also received a ten
percent equity interest in VIMRx Holdings, Ltd.
The acquisition was accounted for as a purchase. Substantially all of
the selling price ($3,062,200) was allocated to purchased research and
development costs and charged to operations.
(7) Investment in Epoch Pharmaceuticals, Inc.
Subsequent to September 30, 1996, the Company purchased for $800,000 an
aggregate of 457,143 shares of the common stock of Epoch
Pharmaceuticals Inc. ("Epoch"),warrants to purchase 450,000 shares of
Epoch's common stock at $2.00 per share and warrants to purchase an
additional 450,000 common shares at $3.00 per share, which warrants
expire on October 1, 1997 and October 1, 1998, respectively. In
connection therewith, Epoch released the Company and its affiliates
from any claims Epoch might have with respect to the Company's
subsidiary, Ribonetics GmbH.
(8) Reclassification
Certain balances at December 31, 1995 have been reclassified to conform
with current presentation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to its report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated:November 21, 1996
VIMRx PHARMACEUTICALS INC.
a Delaware Corporation
(Registrant)
By: __/S/ RICHARD L. DUNNING
Richard L. Dunning
President and
Chief Executive Officer
By: __/S/ FRANCIS M. O'CONNELL
Francis M. O'Connell
Chief Financial Officer
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to its report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated:November 21, 1996
VIMRx PHARMACEUTICALS INC.
a Delaware Corporation
(Registrant)
By:
Richard L. Dunning
President and
Chief Executive Officer
By:
Francis M. O'Connell
Chief Financial Officer
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