SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from __________ to __________
Commission File Number 0-21972
INNOVIR LABORATORIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3536290
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
510 EAST 73RD STREET, NEW YORK, NEW YORK 10021
----------------------------------------------
(Address of principal executive offices)
(212) 249-4703
----------------------------------------------------
(Registrant's telephone number, including area code)
FORMER ADDRESS: NOT APPLICABLE
-----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 number of shares of the registrant's common stock outstanding as of
August 12, 1997 was 26,750,529.
<PAGE>
INDEX
INNOVIR LABORATORIES, INC. AND SUBSIDIARIES
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets (unaudited) at
June 30, 1997 and December 31, 1996 ................. 3
Condensed Consolidated Statements of Operations
(unaudited) for the three and six months ended
June 30, 1997 and 1996 and for the period from
January 6, 1995 (inception) through
June 30, 1997 ........................................ 4
Condensed Consolidated Statements of Changes in
Stockholders' Equity (Deficit) (unaudited) for
the six months ended June 30, 1997 ................... 5
Condensed Consolidated Statements of Cash Flows
(unaudited) for the six months ended June 30, 1997
and 1996 and for the period from January 6, 1995
(inception) through June 30, 1997 .................... 6
Notes to Condensed Consolidated Financial Statements .... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .................. 8
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders ..... 11
Item 6. Exhibits and Reports on Form 8-K ........................ 11
-2-
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
INNOVIR LABORATORIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
June 30, 1997 and December 31, 1996
1997 1996
ASSETS: ----------- -----------
Current assets:
Cash and cash equivalents $ 1,807,000 $ 6,412,000
Prepaid expenses and other current assets 146,000 203,000
----------- -----------
Total current assets 1,953,000 6,615,000
Fixed assets less accumulated depreciation and
amortization 2,805,000 2,439,000
Amount due from VIMRx Pharmaceuticals Inc. -- 535,000
Goodwill 1,030,000 1,236,000
Other assets 234,000 249,000
----------- -----------
Total assets $ 6,022,000 $11,074,000
=========== ===========
LIABILITIES and STOCKHOLDERS' EQUITY (DEFICIT):
Current liabilities:
Accounts payable and accrued expenses $ 1,023,000 $ 1,319,000
Capital lease - current portion 492,000 472,000
Term note payable - warrantholder; current
portion includes accrued interest of $5,000 36,000 36,000
Other liabilities 96,000 --
----------- -----------
Total current liabilities 1,647,000 1,827,000
Amount due to VIMRx Pharmaceuticals Inc. 135,000
Term note payable -- warrantholder; includes
accrued interest of $39,000 227,000 227,000
Capital leases 333,000 463,000
----------- -----------
Total liabilities 2,342,000 2,517,000
----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $.06; 15,000,000 shares
authorized:
Class B Convertible Preferred Stock; 2,500,000
shares designated; 295,000 shares issued and
outstanding at June 30, 1997, 297,000 shares
issued and outstanding at December 31, 1996
(liquidation value, $1,475,000 and $1,485,000
at June 30, 1997 and December 31, 1996,
respectively) 18,000 18,000
Class D Convertible Preferred Stock; 8,667,000
shares designated, issued and outstanding at
June 30, 1997 and December 31, 1996
(liquidation value, $13,000,000) 520,000 520,000
Common stock, par value $.013; 70,000,000 shares
authorized; 18,061,000 shares issued and
outstanding at June 30, 1997, 17,946,000 shares
issued and outstanding at December 31, 1996 235,000 233,000
Additional paid-in capital 29,694,000 29,667,000
Cumulative translation adjustment (64,000) (8,000)
Unearned compensation -- (181,000)
Deficit accumulated during the development stage (26,723,000) (21,692,000)
----------- -----------
Total stockholders' equity (deficit) 3,680,000 8,557,000
Total liabilities and stockholders' equity $ 6,022,000 $11,074,000
=========== ===========
-3-
<PAGE>
INNOVIR LABORATORIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Six Months Ended June 30, 1997
<CAPTION>
PERIOD
JANUARY 6, 1995
(INCEPTION)
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30 THROUGH
1997 1996 1997 1996 JUNE 30, 1997
---------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Revenue:
Interest income $ 58,000 -- $ 131,000 -- $ 144,000
Other 151,000
----------- ----------- ----------- ----------- ------------
Total revenue 58,000 -- 131,000 -- 295,000
----------- ----------- ----------- ----------- ------------
Expenses:
Research and development $ 1,671,000 $ 382,000 $ 3,334,000 $ 610,000 $ 6,715,000
General and administrative 770,000 236,000 1,537,000 332,000 2,610,000
Interest 48,000 -- 85,000 -- 113,000
Purchased in process research
and development -- 2,717,000 -- 2,942,000 17,374,000
Amortization of Goodwill 103,000 -- 206,000 -- 206,000
----------- ----------- ----------- ----------- ------------
Total expenses 2,592,000 3,335,000 5,162,000 3,884,000 27,018,000
----------- ----------- ----------- ----------- ------------
Net loss $(2,534,000) $(3,335,000) $(5,031,000) $(3,884,000) $(26,723,000)
=========== =========== =========== =========== ============
Loss-per-share data:
Weighted average number of
common shares outstanding 18,051,230 9,500,000 18,053,162 9,500,000
=========== =========== =========== ===========
Net loss per share $(0.14) $(0.35) $(0.28) $(0.41)
=========== =========== =========== ===========
</TABLE>
-4-
<PAGE>
INNOVIR LABORATORIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
For the Six Months Ended June 30, 1997
<CAPTION>
CLASS B CONVERTIBLE CLASS D CONVERTIBLE
PREFERRED STOCK PREFERRED STOCK COMMON STOCK
------------------- ---------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------- ------ --------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996 297,000 $18,000 8,667,000 $520,000 17,946,000 $233,000
Exercise of options and
warrants 120,000 2,000
Costs incurred in connection
with issuance of equity
securities
Conversion of Class B
Convertible Stock (2,000) 3,000
Adjustment for shares held
in escrow in connection with
stockholder's litigation (19,000)
Compensation expense
incurred in connection with
the issuance of stock
options
Amortization of unearned
compensation
Cumulative transaction
adjustment
Net loss for the three months
ended March 31, 1997
------- ------- --------- -------- ---------- --------
Balance at March 31, 1997 295,000 $18,000 8,667,000 $520,000 18,050,000 $235,000
------- ------- --------- -------- ---------- --------
Exercise of options and
warrants 11,000
Compensation expense
incurred in connection with
the issuance of stock
options
Amortization of unearned
compensation
Cumulative transaction
adjustment
Net loss for the three months
ended June 30, 1997
------- ------- --------- -------- ---------- --------
Balance at June 30, 1997 295,000 $18,000 8,667,000 $520,000 18,061,000 $235,000
======= ======= ========= ======== ========== ========
<CAPTION>
DEFICIT
ACCUMULATED
ADDITIONAL CUMULATIVE DURING THE
PAID-IN TRANSLATION UNEARNED DEVELOPMENT
CAPITAL ADJUSTMENT COMPENSATION STAGE TOTAL
----------- ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996 $29,667,000 $ (8,000) $(181,000) $(21,692,000) $ 8,557,000
Exercise of options and
warrants 12,000 14,000
Costs incurred in connection
with issuance of equity
securities (24,000) (24,000)
Conversion of Class B
Convertible Stock
Adjustment for shares held
in escrow in connection with
stockholder's litigation
Compensation expense
incurred in connection with
the issuance of stock
options 20,000 20,000
Amortization of unearned
compensation 93,000 93,000
Cumulative transaction
adjustment (8,000) (8,000)
Net loss for the three months
ended March 31, 1997 $ (2,497,000) $(2,497,000)
----------- -------- --------- ------------ -----------
Balance at March 31, 1997 $29,675,000 $(16,000) $ (88,000) $(24,189,000) $ 6,155,000
----------- -------- --------- ------------ -----------
Exercise of options and
warrants
Compensation expense
incurred in connection with
the issuance of stock
options 19,000 19,000
Amortization of unearned
compensation 88,000 88,000
Cumulative transaction
adjustment (48,000) (48,000)
Net loss for the three months
ended June 30, 1997 (2,534,000) (2,534,000)
----------- -------- --------- ------------ -----------
Balance at June 30, 1997 $29,694,000 $(64,000) -- $(26,723,000) $ 3,680,000
=========== ======== ========= ============ ===========
</TABLE>
-5-
<PAGE>
INNOVIR LABORATORIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>
PERIOD
JANUARY 6, 1995
SIX MONTHS ENDED (INCEPTION)
JUNE 30 THROUGH
1997 1996 JUNE 30, 1997
------------ ------------ -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $(5,031,000) $(3,884,000) $(26,723,000)
Adjustments to reconcile net (loss) to net cash (used in)
operating activities:
Depreciation 287,000 4,000 437,000
Amortization of goodwill 206,000 -- 206,000
Amortization of unearned compensation 181,000 -- 388,000
Purchased in process research and development -- 2,942,000 17,374,000
Provision for losses on notes receivable -- -- 85,000
Non-cash compensation 40,000 -- 40,000
Changes in operating assets and liabilities:
Decrease (increase) in other current assets 57,000 (12,000) 17,000
Decrease in other assets 15,000 -- 15,000
(Decrease) increase in accounts payable
and accrued expenses (296,000) (24,000) 287,000
(Decrease) in other current liabilities 96,000 -- 96,000
----------- ----------- ------------
Net cash (used in) operating activities (4,445,000) (974,000) (7,778,000)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (587,000) (24,000) (1,241,000)
Cash acquired in acquisitions -- 145,000 3,532,000
----------- ----------- ------------
Net cash provided by (used in) investing activities (587,000) 121,000 2,291,000
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of common stock 14,000 -- 26,000
Advances and contributed capital from
VIMRx Pharmaceuticals Inc. 670,000 1,181,000 7,536,000
Costs incurred in connection with issuance
of equity securities (24,000) -- (24,000)
Repayment of capital leases (176,000) -- (176,000)
----------- ----------- ------------
Net cash provided by financing activities 484,000 1,181,000 7,362,000
----------- ----------- ------------
Effect of exchange rate changes on cash (57,000) -- (68,000)
----------- ----------- ------------
Net increase in cash and cash equivalents 4,605,000 328,000 1,807,000
Cash and cash equivalents at beginning of period 6,412,000 68,000 --
Cash and cash equivalents at end of period $ 1,807,000 $ 396,000 $ 1,807,000
=========== =========== ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 85,000
-----------
</TABLE>
-6-
<PAGE>
INNOVIR LABORATORIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) The condensed interim consolidated financial statements of Innovir
Laboratories, Inc. and Subsidiaries (the "Company") reflect all
adjustments, consisting only of normal recurring accruals, which are, in
the opinion of the Company's management, necessary for a fair presentation
of the Company's results of operations for the respective periods
presented. Operating results for any interim period are not necessarily
indicative of results for a full year. These notes do not include all the
information required by generally accepted accounting principles. The
condensed interim consolidated financial statements should be read in
conjunction with the audited financial statements included in the Company's
Annual Report on Form 10-K for the year ended September 30, 1996 and in the
transition report for the transition period from October 1, 1996 to
December 31, 1996, filed on Form 10-Q.
(2) Statements of Cash Flows - Supplemental schedule of noncash activities:
During the six months ended June 30, 1997, the Company converted 2,000
shares of Class B Convertible Preferred Stock into 3,000 shares of Common
Stock.
(3) Contingency:
The Company may be considered to be in violation of the terms of its office
and laboratory sublease by not obtaining the required approval from the
owner of the property prior to the consummation of the transactions with
VIMRx Pharmaceuticals Inc. ("VIMRx") whereby VIMRx acquired 68% of Innovir
Laboratories, Inc. ("Innovir") and Innovir acquired all of the issued and
outstanding shares of VIMRx Holding, Ltd. ("VHL"), a wholly owned
subsidiary of VIMRx, in December 1996. In addition, the owner of the
property has alleged, and the Company's sublandlord disputes, that the
sublandlord may also be in breach of its lease with the owner of the
property. If the sublandlord is evicted, the Company would lose its right
to occupy its current space. While the Company believes these matters may
be resolved without a materially adverse effect on the Company's business
or financial position, no assurance can be given as to the ultimate
outcome.
(4) During February 1996, Innovir was named as defendant in an action filed by
an investor alleging that Innovir wrongfully refused to honor the
investor's request to convert certain shares of Innovir's preferred stock
into Innovir's Common Stock. During February 1997, the investor and Innovir
settled the action at no material cost to Innovir or the Company. In
connection with the settlement, 19,000 shares of Common Stock, which had
been held in escrow pending the resolution of the action, were returned to
the Company.
NEW ACCOUNTING PRONOUNCEMENTS
(5) In February 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 128, "Earnings Per Share." This Statement establishes standards
for computing and presenting earnings per share (EPS) and applies to
entities with publicly held common stock or potential common stock. This
Statement simplifies the standards for computing earnings per share
previously found in APB Opinion No. 15, "Earnings Per Share," and makes
them comparable to international EPS standards. It replaces the
presentation of primary EPS with a presentation of basic EPS. It also
requires dual presentation of basic and diluted EPS on the face of the
income statement for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation. This Statement is effective for financial statements issued
for periods ending after December 15, 1997, including interim periods;
earlier application is not permitted. This Statement requires restatement
of all prior-period EPS data presented. The adoption of this Statement will
not have any impact on the Company's EPS disclosure, as the Company's stock
options and warrants are anti-dilutive and will be excluded from the
denominator of earnings per share; thus, earnings per common share is equal
to basic earnings per share as computed under SFAS No. 128.
-7-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
----------------------------------------------------------------
This report contains forward-looking statements which involve risks and
uncertainties. Such statements are subject to certain factors which may cause
the Company's plans to differ. Factors that may cause such differences include,
but are not limited to, the progress of the Company's research and development
programs, the Company's ability to obtain additional funds, the Company's
ability to compete successfully, the Company's ability to attract and retain
qualified personnel, the Company's ability to successfully enter into
collaborations with third parties, the Company's ability to enter into and
progress in clinical trials, the time and costs involved in obtaining regulatory
approvals, the costs involved in obtaining and enforcing patents and any
necessary licenses, the ability of the Company to establish development and
commercialization relationships, the cost of manufacturing, and those other
risks discussed under the heading Risk Factors included in the Company's Form
S-3 Registration Statement (Reg. No. 333-12865).
The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto contained herein and the Company's
Annual Report on Form 10-K for the year ended September 30, 1996 and the
transition report for the transition period from October 1, 1996 to December 31,
1996, filed on Form 10-Q.
BACKGROUND
On December 23, 1996, Innovir Laboratories, Inc. ("Innovir"), VIMRx
Pharmaceuticals Inc. ("VIMRx") and certain stockholders of Innovir ("The Aries
Funds") consummated a transaction (the "Transaction") whereby VIMRx acquired 68%
of the outstanding stock of Innovir and Innovir acquired all of the issued and
outstanding shares of VIMRx Holdings, Ltd. ("VHL"), a wholly-owned subsidiary of
VIMRx. Innovir's acquisition of VHL and VIMRx's partial acquisition of Innovir
have been accounted for as a purchase in accordance with APB Opinion No. 16,
Business Combinations and Emerging Issues Task Force Issue No. 90-13, Accounting
for Simultaneous Common Control Mergers (EITF No. 90-13"). The application of
APB No. 16 and EITF No. 90-13 requires that the Transaction be accounted for as
a reverse acquisition and accordingly, for accounting purposes, (i) VHL is
deemed to be the acquirer and surviving entity, (ii) because Innovir is deemed
to be the legal acquirer, VHL's historic capital accounts have been
retroactively restated (recapitalized) to reflect Innovir's capital accounts and
the equivalent number of shares received by VIMRx in the Transaction, (iii)
Innovir has fair valued its assets and liabilities to the extent acquired by
VIMRx (68%) and (iv) the assets and liabilities of VHL are carried at VHL's
historic cost. Since VHL is deemed to be the surviving entity, the statement of
operations includes the operations of VHL for the period from January 6, 1995
(inception). The operations of Innovir are included only since the date of
acquisition, i.e., for the period from December 23, 1996 to June 30, 1997. For
accounting purposes, VHL assumed the name of Innovir Laboratories, Inc. and
Subsidiaries, and, for purposes of this Quarterly Report, all references to the
"Company" shall mean the consolidated entity consisting of Innovir, VHL and
subsidiaries.
On February 11, 1997, Innovir elected to change its fiscal year end date
from September 30 to December 31 of each year, effective January 1, 1997. This
change was made to conform Innovir's fiscal year end date with that of VHL. This
Quarterly Report on Form 10-Q covers the first half of the new fiscal year, that
is January 1 to June 30, 1997.
-8-
<PAGE>
RESULTS OF OPERATIONS
Since its inception, substantially all of the Company's resources have been
applied to research and development, patent and licensing matters and other
general and administrative matters. The Company has no commercially viable
therapeutic products and does not anticipate having any for several years. The
Company is developing the technology to be used as a research tool to facilitate
determination gene function and to validate drug targets. No significant
revenues have been earned from this use. The Company has had no operating
revenues to date and has sustained net losses since its inception. The Company
expects losses to continue for the foreseeable future.
Three month period ended June 30, 1997 vs. June 30, 1996
- ---------------------------------------------------------
Research and development expenses increased $1,289,000 due to the
acquisition of Innovir's operations in December 1996 ($1,050,000) and increased
efforts in VHL ($239,000).
General and administrative expenses increased $534,000 due to the
acquisition of Innovir ($609,000) and a decrease in VHL expenses related to the
European operations ($75,000).
Purchased in process research and development in the three months ended
June 30, 1996 relate to the acquisition of Ribonetics GmbH in May 1996.
Amortization of goodwill relates to the asset recorded in the transaction
with VIMRx described under "Background" above.
Six Month Period Ended June 30, 1997 vs. June 30, 1996
- ------------------------------------------------------
Research and development expenses increased $2,724,000 due to the
acquisition of Innovir's operations in December 1996 ($2,096,000) and increased
efforts in VHL ($628,000).
General and administrative expenses increased $1,205,000 due to the
acquisition of Innovir ($1,327,000) and a decrease in VHL expenses from 1996. In
May 1996, VHL had acquired Ribonetics GmbH and had incurred expenses in
connection therewith.
Amortization of goodwill relates to the asset recorded in the transaction
with VIMRX described under "Background" above.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1997, the Company had cash and cash equivalents of $1,807,000
as compared to $6,412,000 at December 31, 1996. The Company had working capital
of $306,000 at June 30, 1997, as compared to working capital of $4,788,000 at
December 31, 1996. The decrease in cash and working capital positions resulted
from cash expended for operations and capital assets.
The Company may be considered to be in violation of the terms of its
sublease for its principal office and laboratory space by not obtaining the
required approval from the owner of the property prior to the consummation of
the transactions with VIMRx in December 1996. See the notes to the Company's
financial statements. In addition, the owner of the property has alleged, and
the Company's sublandlord disputes, that the sublandlord may also be in breach
of its lease with the owner of the property. If the sublandlord is evicted, the
Company would lose its right to occupy its current space. While the Company
believes that these
-9-
<PAGE>
matters may be resolved without a materially adverse effect on the Company's
business or financial position, no assurances can be given as to the ultimate
outcome.
VIMRx has been requested to exercise one million warrants of the Company
which will yield the Company aggregate proceeds of $1 million. In addition, The
Aries Funds have been requested to exercise two million warrants upon VIMRx's
exercise of its warrants, which will yield the Company additional aggregate
proceeds of $1 million. Subject to consideration of other financing
alternatives, the Company has been advised that VIMRx expects to continue to
fund the operations of the Company at least through the second quarter of 1998.
The Company expects to incur substantial expenditures in the foreseeable
future for the research and development and commercialization of its proposed
products. As of June 30, 1997, the Company had cash and cash equivalents of
approximately $1.8 million. Based on current projections, which are subject to
change (such change may be significant), the Company's management believes that
this, along with the proceeds from the exercise of warrants held by VIMRx and
the remaining warrants held by The Aries Funds and continued funding by VIMRx,
will be sufficient to fund its operations into the second quarter of the year
ended December 31, 1998. Thereafter, the Company will require additional funds,
which it may seek to raise through public or private equity or debt financings,
collaborative or other arrangements with corporate sources, or through other
sources of financing. There can be no assurance that such additional financing
can be obtained on terms reasonable to the Company, if at all. In the event the
Company is unable to raise additional capital, planned operations would need to
be scaled back or discontinued during 1998.
-10-
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) The Annual Meeting of Stockholders of the Company was held on
June 24, 1997.
(b) The following persons, comprising the entire Board of Directors,
were elected at the Annual Meeting pursuant to the following vote
tabulation:
Name Votes For Votes Withheld
---- --------- --------------
Richard L. Dunning 25,513,621 45,000
Laurence D. Fink 25,513,621 45,000
Allan R. Goldberg 25,513,621 45,000
David A. Jackson 25,513,621 45,000
Stanley Knowlton 25,513,621 45,000
William T. McCaffrey 25,513,621 45,000
Francis M. O'Connell 25,513,621 45,000
(c) In addition to the election of directors: (i) a proposal to
amend the Company's Certificate of Incorporation to increase the
number of authorized shares of Common Stock was approved, with
25,375,856 votes in favor, 154,165 votes against and 28,600 votes
abstaining; (ii) a proposal to amend the Company's Non-Employee
Director Stock Option Plan was approved, with 20,109,094 votes in
favor, 247,992 votes against, 36,500 votes abstaining and
5,165,035 broker non-votes; (iii) a proposal to amend the
Company's 1993 Stock Option Plan was approved, with 19,666,329
votes in favor, 241,097 votes against, 40,000 votes abstaining
and 5,611,195 broker non-votes; and (iv) a proposal to ratify the
selection of the Company's independent accountants was approved,
with 25,503,350 votes in favor, 24,400 votes against and 30,871
votes abstaining.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
---------
11 Statement of Computation of Per Share Data.
27 Financial Data Schedule.
(b) Reports on Form 8-K:
--------------------
No reports on Form 8-K were filed during the quarter for which this
report is filed.
All other Items of this report are inapplicable.
-11-
<PAGE>
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.
August 14, 1997 INNOVIR LABORATORIES, INC.
By: /s/ ALLAN R. GOLDBERG
-------------------------------------------
Name: Allan R. Goldberg
Title: Chairman and Chief Executive Officer
(Principal executive officer)
By: /s/ FRANCIS M. O'CONNELL
-------------------------------------------
Name: Francis M. O'Connell
Title: Chief Financial Officer
(Principal financial and accounting
officer)
-12-
Exhibit 11
INNOVIR LABORATORIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
<TABLE>
STATEMENT OF COMPUTATION OF PER SHARE DATA
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
--------------------------- ---------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY:
Net loss $(2,534,000) $(3,335,000) $(5,031,000) $(3,884,000)
=========== =========== =========== ===========
Per share data:
Weighted average number of common shares
outstanding 18,051,000 9,500,000 18,053,000 9,500,000
----------- ----------- ----------- -----------
Net loss per share
(0.14) (0.35) (0.28) (0.41)
=========== =========== =========== ===========
FULLY DILUTED:
Net loss $(2,534,000) $(3,335,000) $(5,031,000) $(3,884,000)
=========== =========== =========== ===========
Per share data:
Weighted average number of common shares
outstanding during the period 18,051,000 9,500,000 18,053,000 9,500,000
Shares issuable upon conversion of
convertible equity securities 9,121,000 8,667,000 9,121,000 8,667,000
Shares issuable upon exercise of
outstanding options and warrants 3,001,000 2,000,000 3,008,000 2,000,000
Shares assumed to be repurchased under
the treasury stock method (1,821,000) (783,000) (1,824,000) (801,000)
----------- ----------- ----------- -----------
Number of common shares used in
computing per share data 28,352,000 19,384,000 28,358,000 19,366,000
----------- ----------- ----------- -----------
Net loss per share $ (0.09) $ (0.17) $ (0.18) $ (0.20)
=========== =========== =========== ===========
</TABLE>
-13-
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<S> <C>
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,807,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
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<CURRENT-ASSETS> 1,953,000
<PP&E> 4,370,000
<DEPRECIATION> 1,565,000
<TOTAL-ASSETS> 6,022,000
<CURRENT-LIABILITIES> 1,647,000
<BONDS> 0
0
538,000
<COMMON> 235,000
<OTHER-SE> 2,907,000
<TOTAL-LIABILITY-AND-EQUITY> 6,022,000
<SALES> 0
<TOTAL-REVENUES> 131,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,077,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 85,000
<INCOME-PRETAX> (5,031,000)
<INCOME-TAX> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,031,000)
<EPS-PRIMARY> (0.28)
<EPS-DILUTED> (0.18)
</TABLE>
