<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-QSB
----------
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED
JUNE 30, 1996
[ ] 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 0-27368
ORTEC INTERNATIONAL, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 11-3068704
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3690 BROADWAY
NEW YORK, NEW YORK 10032
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 740-6999
8000 COOPER AVENUE, BLDG. 28, GLENDALE, NEW YORK 11385
(FORMER ADDRESS OF SMALL BUSINESS ISSUER)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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
-- --
----------
The number of shares outstanding of the Issuer's common stock is 3,623,932 (as
of August 12, 1996).
<PAGE> 2
ORTEC INTERNATIONAL, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-QSB
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
QUARTER ENDED JUNE 30, 1996
ITEMS IN FORM 10-QSB
Page
----
Facing page
Part I
- ------
Item 1. Financial Statements. 1
Item 2. Plan of Operation. 10
Part II
- -------
Item 1. Legal Proceedings and Claims. 12
Item 2. Changes in Securities. None
Item 3. Default Upon Senior Securities. None
Item 4. Submission of Matters to 12
a Vote of Security Holders.
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K. 13
Signatures
<PAGE> 3
PART I
Item 1. FINANCIAL STATEMENTS
ORTEC INTERNATIONAL, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
---- ----
ASSETS
<S> <C> <C>
Current assets:
Cash and equivalents $3,155,970 $ 2,364
Other current assets 70 57
---------- ----------
Total current assets 3,156,040 2,421
---------- ----------
Property and equipment, at cost:
Laboratory equipment 235,219 223,888
Office furniture and equipment 119,556 54,527
Construction in progress 340,522 49,847
---------- ---------
695,297 328,262
Accumulated depreciation and
amortization 200,774 171,075
---------- ----------
494,523 157,187
---------- ----------
Other assets:
Patent application costs 394,602 369,600
Deferred offering costs 314,697
Organization costs, net of
amortization 509
Deposits 6,121 4,056
---------- ----------
Total other assets 400,723 688,862
---------- ----------
Total Assets $4,051,286 $ 848,470
========== ==========
</TABLE>
See notes to condensed unaudited financial statements.
1
<PAGE> 4
ORTEC INTERNATIONAL, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
---- ----
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 336,995 $ 790,869
Current portion of long-term
liabilities 21,465
Notes payable 515,500
----------- -----------
Total current liabilities 358,460 1,306,369
Long-term liabilities:
Note payable, less current portion 184,799
Obligations under capital leases,
less current portion 22,669
Deferred occupancy costs 1,327
----------- -----------
Total liabilities 565,928 1,307,696
----------- -----------
Commitments and contingencies
Stockholders' equity:
Common stock, $.001 par value;
authorized, 10,000,000 shares;
issued and outstanding shares -
3,623,932 at June 30, 1996 and
2,408,972 at December 31, 1995 3,624 2,409
Additional paid-in capital 9,622,455 4,749,384
Deficit accumulated - during the
development stage (6,140,721) (5,211,019)
----------- -----------
Total stockholders' equity 3,485,358 ( 459,226)
----------- -----------
Total Liabilities and
Stockholders' Equity $ 4,051,286 $ 848,470
=========== ===========
</TABLE>
See notes to condensed unaudited financial statements.
2
<PAGE> 5
ORTEC INTERNATIONAL, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Cumulative from
March 12, 1991
Quarter ended June 30, Six months ended June 30, (inception) to
--------------------- ------------------------ June 30, 1996
---------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenue
Interest income $ 37,314 $ 581 $ 71,785 $ 2,626 $ 138,943
--------- --------- ----------- --------- ------
Expenses
Research and development 166,397 124,886 387,852 240,155 2,777,404
Rent 8,195 5,433 14,638 10,866 92,511
Consulting 29,510 12,706 70,443 38,541 566,206
Personnel 125,473 66,406 265,489 135,727 1,410,530
General and administrative 135,044 47,315 261,888 81,136 1,369,068
Other expense, net 150 1,177 63,945
--------- --------- ----------- --------- -----------
464,769 256,746 1,001,487 506,425 6,279,664
--------- --------- ----------- --------- -----------
Net loss $(427,455) $(256,165) $(929,702) $(503,799) $(6,140,721)
========= ========= =========== ========= ===========
Net loss per share $(.11) $(.09) $(.24) $(.19) $(2.33)
========= ========= =========== ========= ===========
Weighted average common and
common equivalent shares
outstanding 3,941,686 2,720,208 3,809,433 2,720,208 2,631,859
========= ========= ========= ========= =========
</TABLE>
See notes to condensed unaudited financial statements.
3
<PAGE> 6
ORTEC INTERNATIONAL, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Deficit
Common Stock accumulated
Additional in the
Paid-in development
Shares Amount Capital stage Total
------ ------ ------- --------------- -----
<S> <C> <C> <C> <C> <C>
Issuance of stock:
Founders 1,553,820 $1,554 $( 684) $ 870
First private placement 217,440 217 64,783 65,000
The Director 149,020 149 249,851 250,000
Second private placement 53,020 53 499,947 500,000
Share issuance expenses ( 21,118) ( 21,118)
Net loss for the period from
March 12, 1991 (inception) to
December 31, 1991 $( 281,644) ( 281,644)
--------- ------ ----------- ----------- ------------
Balance - December 31, 1991 1,973,300 1,973 792,779 ( 281,644) 513,108
Issuance of stock:
Second private placement 49,320 49 465,424 465,473
Stock purchase agreement with
The Director 31,820 32 299,966 299,998
Share issuance expenses ( 35,477) ( 35,477)
Net loss for the year ended
December 31, 1992 ( 785,941) ( 785,941)
--------- ------ ----------- ----------- -----------
Balance - December 31, 1992 2,054,440 2,054 1,522,692 (1,067,585) 457,161
Issuance of stock:
Third private placement 132,150 132 1,321,368 1,321,500
Stock purchase agreement with
Home Insurance Company 111,111 111 999,888 999,999
Stock purchase agreement with
The Director 21,220 21 199,979 200,000
Shares issued in exchange
for commissions earned 600 1 5,999 6,000
Share issuance expenses ( 230,207) ( 230,207)
Net loss for the year ended
December 31, 1993 (1,445,624) (1,445,624)
--------- ------ ----------- ----------- -----------
Balance - December 31, 1993 2,319,521 $2,319 $3,819,719 $(2,513,209) $ 1,308,829
========= ====== ========== =========== ===========
</TABLE>
See notes to condensed unaudited financial statements.
4
<PAGE> 7
ORTEC INTERNATIONAL, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Deficit
Common Stock accumulated
----------------- Additional in the
Paid-in development
Shares Amount Capital stage Total
------ ------ ------- ----------- -----
<S> <C> <C> <C> <C> <C>
(brought forward) 2,319,521 $2,319 $ 3,819,719 $(2,513,209) $ 1,308,829
Issuance of stock:
Fourth private placement 39,451 40 397,672 397,712
Stock purchase agreement with
Home Insurance Company 50,000 50 499,950 500,000
Share issuance expenses ( 8,697) ( 8,697)
Net loss for the year ended
December 31, 1994 (1,675,087) (1,675,087)
--------- ------ ----------- ----------- -----------
Balance - December 31, 1994 2,408,972 2,409 4,708,644 (4,188,296) 522,757
Rent forgiveness 40,740 40,740
Net loss for the year ended
December 31, 1995 (1,022,723) (1,022,723)
--------- ------ ----------- ----------- -----------
Balance - December 31, 1995 2,408,972 2,409 4,749,384 (5,211,019) ( 459,226)
Issuance of stock:
Public offering 1,200,000 1,200 5,998,800 6,000,000
Exercise of warrants 14,960 15 14,945 14,960
Share issuance expenses (1,140,674) (1,140,674)
Net loss for the six months
ended June 30, 1996 ( 929,702) ( 929,702)
--------- ------ ----------- ----------- -----------
Balance - June 30, 1996 3,623,932 $3,624 $ 9,622,455 $(6,140,721) $ 3,485,358
========= ====== =========== =========== ===========
</TABLE>
See notes to condensed unaudited financial statements.
5
<PAGE> 8
ORTEC INTERNATIONAL, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Cumulative from
March 12, 1991
Quarter ended June 30, Six months ended June 30, (inception) to
--------------------- ------------------------ June 30, 1996
---------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $( 427,455) $(256,165) $( 929,702) $(503,799) $( 6,140,721)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Deferred occupancy costs ( 482) ( 1,327) ( 2,784)
Depreciation and amortization 15,529 14,433 30,208 28,865 211,012
Unrealized loss on marketable
securities 67,204
Realized loss on marketable
securities 5,250 5,250
Changes in operating assets and
liabilities
Other current assets 1 ( 13) 9,197 ( 70)
Accounts payable and accrued
liabilities ( 173,984) 75,341 ( 453,874) 34,815 377,735
----------- --------- ----------- --------- ------------
Net cash used in operating
activities ( 585,909) (166,873) ( 1,354,708) (428,456) (5,479,590)
----------- --------- ----------- --------- ------------
Cash flows from investing activities:
Purchases of property and equipment ( 150,586) ( 367,035) ( 695,297)
Payments for patent application ( 21,222) ( 13,553) ( 25,002) ( 48,967) ( 394,602)
Organization costs ( 10,238)
Deposits ( 1,734) 1 ( 2,065) 39 ( 6,121)
Purchases of marketable securities ( 398) ( 594,986)
Sale of marketable securities 398 153,561 522,532
---------- --------- ------------ --------- ------------
Net cash (used in) provided by
investing activities ( 173,542) ( 13,154) ( 394,102) 104,235 ( 1,178,712)
----------- --------- ----------- --------- ------------
</TABLE>
See notes to condensed unaudited financial statements.
6
<PAGE> 9
ORTEC INTERNATIONAL, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
March 12, 1991
Quarter ended June 30, Six months ended June 30, (inception) to
--------------------- ------------------------ June 30, 1996
------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cash flows from financing activities:
Proceeds from issuance of notes
payable $ 197,118 $ 75,000 $ 197,118 $ 125,000 $ 712,618
Repayment of notes payable ( 515,500) ( 515,500)
Capitalized leases obligations 31,815 31,815 31,815
Proceeds from issuance of common
stock 2,094 6,014,960 11,015,512
Share issuance expenses 120 ( 825,977) ( 1,430,173)
----------- --------- ----------- --------- ------------
Net cash provided by financing
activities 231,147 75,000 4,902,416 125,000 9,814,272
----------- --------- ----------- --------- ------------
Net increase (decrease) in cash ( 528,304) (105,027) 3,153,606 (199,221) 3,155,970
Cash at beginning of period 3,684,274 131,960 2,364 226,154
----------- --------- ----------- ---------
Cash at end of period $ 3,155,970 $ 26,933 $ 3,155,970 $ 26,933 $ 3,155,970
=========== ========= =========== ========= ============
</TABLE>
See notes to condensed unaudited financial statements.
7
<PAGE> 10
ORTEC INTERNATIONAL, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995 AND 1996
NOTE 1 - FINANCIAL STATEMENTS
The condensed balance sheet as of June 30, 1996 and the statements of
operations, shareholders' equity and cash flows for the three and six month
periods ended June 30, 1996 and 1995 and for the period from March 12, 1991
(inception) to June 30, 1996 have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only normal recurring
accrual adjustments) necessary to present fairly the financial position, results
of operations and cash flows at June 30, 1996 and for all periods presented have
been made. Certain information and footnote disclosure normally included in the
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these condensed
financial statements be read in conjunction with the financial statements and
notes thereto in the Company's December 31, 1995 annual report on Form 10-KSB
filed with the Securities and Exchange Commission. The results of operations for
the quarter ended June 30, 1996 are not necessarily indicative of the operating
results for the full year.
NOTE 2 - FORMATION OF THE COMPANY AND BASIS OF PRESENTATION
Formation of the Company
Ortec International, Inc. ("Ortec" or the "Company") was incorporated in March
1991 as a Delaware corporation to secure and provide funds for the further
development of the technology developed by Dr. Mark Eisenberg of Sydney,
Australia, to replicate in the laboratory, composite cultured skin for use in
skin replacement procedures (the "Technology"). Pursuant to a license agreement
dated June 7, 1991, Dr. Eisenberg has granted Ortec a license for a term of ten
years, which may be automatically renewed by Ortec for two additional ten-year
periods, to commercially use and exploit the Technology for the development of
products, subject to certain limitations. At the expiration or earlier
termination of the agreement, Dr. Eisenberg is entitled to the exclusive rights
in the Technology, and Ortec is entitled to the exclusive rights to all
improvements to the Technology developed during the license period.
8
<PAGE> 11
The Skin Group, Ltd. (the "Skin Group") also was formed as a Delaware
corporation, in March 1991, to raise funds for development of the Technology. On
July 27, 1992, the Skin Group was merged with and into Ortec. Owners of Skin
Group shares were given .83672 of an Ortec share for each Skin Group share. The
merger was accounted for as if it were a pooling of interests and, accordingly,
the accompanying financial statements include the accounts of Skin Group for all
periods presented.
Basis of Presentation
The Company is a development stage enterprise, and has neither realized any
operating revenue nor has any assurance of realizing any future operating
revenue. Successful future operations depend upon the successful development and
marketing of the composite cultured skin to be used in skin replacement
procedures.
Initial Public Offering
On January 19, 1996, the Company completed an initial public offering ("IPO") of
1,200,000 units. Each unit consists of one share of the Company's common stock,
one Class A warrant to purchase one share of common stock at $10, expiring July
1997 and one Class B warrant to purchase one share of common stock at $15,
expiring January 1999. The Class A and B warrants will be redeemable by the
Company at $.01 per warrant, if the market price of the Company's common stock
equals or exceeds $10 for 10 consecutive trading days during a specified period,
as defined.
The IPO raised gross proceeds of $6,000,000, of which $800,000, $515,500 and
approximately $341,000 were used to pay underwriting commissions, notes payable
and deferred offering costs, respectively, thereby providing the Company with
net proceeds of approximately $4,343,500. The Company has used and intends to
use the proceeds for continued research and development of composite cultured
skin replacements, performing human clinical trials and general corporate
purposes.
9
<PAGE> 12
ITEM 2. PLAN OF OPERATION
OPERATIONS FOR THE NEXT TWELVE MONTHS
For the next twelve months the Company will continue to conduct human
clinical trials. To that end, the Company intends to continue to recruit
hospital burn centers which will provide the necessary patients.
The Company estimates that the cost to it of each human clinical trial
will be approximately $8,000, which includes testing for pathogens and payments
to the hospital, but does not include any allocation to the cost of such trials
of salaries, rent or other overhead expenses.
The Company presently employs eleven persons. When the Company's new
laboratory in New York City is fully operational (expected to be in October
1996), the Company will initially employ at least two additional persons to work
in that laboratory.
CASH REQUIREMENTS
The Company anticipates that the net proceeds received by it on January
19, 1996 from the public offering of its Common Stock, Class A Warrants and
Class B Warrants will be sufficient to fund its operations until approximately
October, 1997. The Company will have to secure additional funds prior thereto or
thereafter to complete its human clinical trials, if not then already completed,
to secure FDA pre-market approval for commercial sales and thereafter to produce
and market its composite cultured skin in commercial quantities.
CLINICAL TRIALS AND PRODUCT RESEARCH AND DEVELOPMENT
The Company has used and intends to use approximately $1,105,000 of the
net proceeds from the recent public Offering of its securities to continue the
human clinical trials and approximately $2,506,000 for research and development.
These amounts include the salaries of its officers and employees and payments to
consultants who will be involved in producing the composite cultured skin and in
research and development and regulatory matters, payments to members of the
Company's Scientific Advisory board, performing quality control, securing
hospital burn centers to participate in the human clinical trials, monitoring
the progress of the patients thereafter and to prepare reports to be filed with
the FDA.
10
<PAGE> 13
NEW LABORATORY
In March 1996, the Company entered into a five-year lease with Columbia
University ("Columbia") for 5,765 square feet of space at 3960 Broadway, New
York, New York, in Columbia's new Audubon Biomedical Science and Technology
Park. The Company relocated its executive offices to its new laboratory facility
in July 1996. The Company initially pays rent of $10,809 per month, with
increases in the fourth and fifth years of the lease. The Company granted
Columbia a warrant expiring March 10, 2001, to purchase 5,000 shares of Common
Stock at an exercise price of $10.00 per share. The Company has the option to
renew the lease for an additional five-year term at a modest increase in base
rent. Columbia has provided the Company with a $400,000 grant and has loaned and
agreed to lend the Company up to $600,000 in aggregate to construct the new
laboratory and office, to pay for architectural and engineering costs for such
construction and for equipment for such new laboratory. As of July 19, 1996,
Columbia has paid the full $400,000 grant for construction costs and $197,118 of
its $600,000 loan commitment for the construction and equipping of such
laboratory and office facility and related engineering costs. The Company
anticipates that Columbia will lend it an additional $402,882 for such purposes
under the terms of the lease and that the Company will use $100,000 of its own
funds to purchase the equipment for its new laboratory.
The Company will use its new laboratory when it is fully operational to
produce its composite cultured skin for use in the remaining FDA approved human
clinical trials and for further research to develop the Company's proprietary
technology for treatment of other wounds. The Company intends to further equip
its new laboratory as a pilot production facility for its composite cultured
skin. Audubon's new center will be a dedicated biomedical research facility and
the Company, as a tenant, will be entitled to utilize the resources of Columbia
University's Health Sciences Research facility at the Center as well as those at
Columbia University-Presbyterian Medical Center across the street from the
Center.
NUMBER OF EMPLOYEES
The Company presently employs eleven persons, including its three
executive officers. Only one executive officer is employed on a full time basis.
The Company also retains three consultants. The Company intends to employ at
least two additional full time employees when its new laboratory is fully
operational, both of whom will be involved in the clinical trials and in
research and development. The Company expects that it will employ additional
persons as its needs may otherwise require.
11
<PAGE> 14
PART II
ITEM 1. LEGAL PROCEEDINGS AND CLAIMS
The Company is not a party to any legal proceedings. However, Cornell
University Medical College ("Cornell") has recently advised the Company that the
Company owes Cornell $132,722, in addition to payments already made to Cornell
by the Company, under the Company's agreement with Cornell. The Company has
denied any liability to Cornell.(1)
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its 1996 Annual Meeting of Stockholders on June 19,
1996 at the Audubon Biomedical Science and Technology Park, 3960 Broadway, New
York City, New York. At such meeting, the stockholders voted on three matters
and each was approved.
The first matter was the re-election of the members of the Board of
Directors. The five directors elected and the tabulation of the votes (both in
person and by proxy) was as follows:
<TABLE>
<CAPTION>
For Withheld Abstentions
--- -------- -----------
<S> <C> <C> <C>
Steven Katz 3,117,680 0 9,079
Mark Eisenberg 3,117,380 300 9,079
Ron Lipstein 3,117,680 0 9,079
Alain Klapholz 3,117,680 0 9,079
Joseph Stechler 3,117,680 0 9,079
</TABLE>
The second matter upon which the stockholders voted was the proposal to
ratify the appointment by the Board of Directors of Grant Thornton LLP as
independent certified public accountants for the Company for 1996. The
tabulation of the votes (both in person and by proxy) was as follows:
<TABLE>
<CAPTION>
For Against Abstentions
--- ------- -----------
<S> <C> <C> <C>
3,121,859 950 3,950
</TABLE>
The third matter upon which the stockholders voted was the proposal to
adopt the Company's 1996 Stock Option Plan. The tabulation of the votes (both in
person and by proxy) was as follows:
<TABLE>
<CAPTION>
For Against Abstentions
--- ------- -----------
<S> <C> <C> <C>
2,260,367 20,819 22,700
</TABLE>
- -------------
(1) For descriptions of the Company's agreement with Cornell and
another claim asserted against the Company, see the
Company's (a) Annual Report on Form 10-KSB for 1995,
filed with the Securities and Exchange Commission on
March 28, 1996, and (b) Quarterly Report on Form 10-QSB
for the quarter ended March 31, 1996, filed with the
12
<PAGE> 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit No. Description
3.1 Agreement of Merger of the Skin Group, Ltd. and
the Company dated July 9, 1992 (1)
3.2 Original Certificate of Incorporation (1)
3.3 By-Laws (1)
4.1 Form of Certificate evidencing shares of Common
Stock (1)
4.2 Form of Underwriter's Option (1)
4.3 Form of Warrant Agreement for the public Class A
and Class B Common Stock Purchase Warrants (1)
4.4 Form of Certificate for the public Class A Common
Stock Purchase Warrants filed as Exhibit A to
Exhibit 4.3 (1)
4.6 Form of Certificate for public Class B Warrants
filed as Exhibit B to Exhibit 4.3 (1)
28 FDA approval for human clinical trials (1)
----------
(1) Filed as an Exhibit to the Company's Registration Statement
on Form SB-2 (File No. 33-96090), or Amendment 1 thereto,
and incorporated herein by reference.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the second quarter of 1996.
13
<PAGE> 16
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereto duly authorized.
Registrant:
ORTEC INTERNATIONAL, INC.
By: /s/ Steven Katz
--------------------------
President and
Chief Executive Officer
Dated: August 13, 1996
14
<PAGE> 17
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
27 FINANCIAL DATA SCHEDULE
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ORTEC
INTERNATIONAL, INC. (A DEVELOPMENT STAGE ENTERPRISE) FINANCIAL STATEMENTS AS
PRESENTED IN THE COMPANY'S FORM 10-QSB FOR THE QUARTER ENDED JUNE 30, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,155,970
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,156,040
<PP&E> 695,297
<DEPRECIATION> 200,774
<TOTAL-ASSETS> 4,051,286
<CURRENT-LIABILITIES> 358,460
<BONDS> 0
0
0
<COMMON> 3,624
<OTHER-SE> 3,481,734
<TOTAL-LIABILITY-AND-EQUITY> 4,051,286
<SALES> 0
<TOTAL-REVENUES> 71,785
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,001,487
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (929,702)
<INCOME-TAX> 0
<INCOME-CONTINUING> (929,702)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (929,702)
<EPS-PRIMARY> (.24)
<EPS-DILUTED> 0
</TABLE>
