<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(MARK ONE)
[x] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-21994
GLYKO BIOMEDICAL LTD.
(Exact name of small business issuer as specified in its charter)
Canada 68-0230537
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
81 Digital Drive, Novato, California 94949
(address of principal executive offices)
(415) 382-6653
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 17,243,044 common shares outstanding
as of July 31, 1996.
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GLYKO BIOMEDICAL LTD.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements.
Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995............................ 3
Consolidated Statements of Operations for the
three and six month periods ended June 30, 1996 and 1995....... 4
Consolidated Statements of Cash Flows for the
six month periods ended June 30, 1996 and 1995................. 5
Notes to Consolidated Financial Statements..................... 6
ITEM 2.
Management's Discussion and Analysis of
Financial Conditions and Results of Operations................. 8
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings..................................... 14
ITEM 2. Changes in Securities................................. 14
ITEM 3. Defaults upon Senior Securities....................... 14
ITEM 4. Submission of Matter to a Vote of Security Holders ... 14
ITEM 5. Other Information..................................... 14
ITEM 6. Exhibits and Reports on Form 8-K...................... 14
Signatures ............................................................. 15
</TABLE>
2
<PAGE> 3
PART I.
ITEM 1. FINANCIAL STATEMENTS
GLYKO BIOMEDICAL LTD.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN U.S. DOLLARS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
Current assets:
Cash $ 974,982 $ 620,720
Trade receivables 170,542 356,806
Inventories 110,715 108,518
Other current assets 5,653 5,132
------------ ------------
Total current assets 1,261,892 1,091,176
Property, plant and equipment, net 89,303 112,169
Other assets 2,200 2,239
------------ ------------
Total assets $ 1,353,395 $ 1,205,584
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 88,388 $ 122,375
Accrued liabilities 188,075 221,424
Deferred revenue 68,907 174,386
Payable to stockholder 219,811 219,811
------------ ------------
Total current liabilities 565,181 737,996
Deferred facilities costs 243,677 166,535
Deferred rent 69,564 76,590
------------ ------------
Total liabilities 878,422 981,121
Stockholders' equity:
Common stock, no par value, unlimited shares
authorized, 17,243,044 shares issued and
outstanding (14,567,944 in 1995) 12,203,065 11,304,356
Common stock warrants 433,897 278,085
Accumulated deficit (12,161,989) (11,357,978)
------------ ------------
Total stockholders' equity 474,973 224,463
------------ ------------
Total liabilities and stockholders' equity $ 1,353,395 $ 1,205,584
============ ============
</TABLE>
See accompanying notes
3
<PAGE> 4
GLYKO BIOMEDICAL LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN U.S. DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Sales of products and services $ 247,979 $ 361,206 $ 652,930 $ 567,734
Other revenues 11,740 30,000 49,830 130,000
----------- ----------- ----------- -----------
Total revenues: 259,719 391,206 702,760 697,734
Expenses:
Cost of products and services 112,189 141,861 258,819 227,040
Research and development 267,393 311,982 544,814 590,698
Selling, general and administrative 348,464 441,802 723,706 769,146
----------- ----------- ----------- -----------
728,046 895,645 1,527,339 1,586,884
----------- ----------- ----------- -----------
Loss from operations (468,327) (504,439) (824,579) (889,150)
Interest income 3,794 12,488 7,439 12,828
Other income and expense 9,341 (1,241) 13,129 (7,438)
----------- ----------- ----------- -----------
Net loss $ (455,192) $ (493,192) $ (804,011) $ (883,760)
=========== =========== =========== ===========
Net loss per common share $ (0.03) $ (0.04) $ (0.05) $ (0.07)
=========== =========== =========== ===========
Weighted average number of shares
used in computing per share amounts 15,155,922 14,038,033 14,863,557 11,921,536
=========== =========== =========== ===========
</TABLE>
See accompanying notes
4
<PAGE> 5
GLYKO BIOMEDICAL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in U.S. dollars)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------
JUNE 30, JUNE 30,
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (804,011) $ (883,760)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 31,959 46,479
Interest accrued on bridge loan -- 4,777
Change in assets and liabilities:
Trade receivables 186,264 32,160
Inventories (2,197) (17,812)
Other assets (482) 1,066
Accounts payable (33,987) (106,574)
Accrued liabilities and deferred rent (29,979) 48,003
Deferred revenue (105,479) --
Deferred compensation -- (81,083)
Deferred facilities costs 77,142 (112,649)
---------- -----------
Total adjustments 123,241 (185,633)
---------- -----------
Net cash used in operating activities (680,770) (1,069,393)
Cash flows from investing activities:
Capital expenditures (9,093) (6,516)
---------- -----------
Net cash used in investing activities (9,093) (6,516)
Cash flows from financing activities:
Proceeds from issuance of common stock and warrants 1,077,138 2,364,907
Offering costs (22,617) (76,514)
Repayments on capital lease obligation (10,396) (9,112)
---------- -----------
Net cash provided by financing activities 1,044,125 2,279,281
---------- -----------
Net increase in cash 354,262 1,203,372
Cash and cash equivalents, beginning of period 620,720 79,294
---------- -----------
Cash and cash equivalents, end of period $ 974,982 $ 1,282,666
========== ===========
Supplemental disclosure of noncash financing activities:
Conversion of deferred compensation to common stock and warrants $ -- $ 33,000
Conversion of accounts payable to common stock and warrants -- 10,300
Conversion of bridge loan to common stock and warrants -- 257,808
Common stock and common stock warrants issued in exchange
for financing services 129,539 118,403
</TABLE>
See accompanying notes
5
<PAGE> 6
GLYKO BIOMEDICAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements and related footnotes
have been prepared in conformity with U.S. generally accepted accounting
principles using U.S. dollars. The consolidated financial statements
include the accounts of the Company and its subsidiary, Glyko, Inc. All
significant intercompany accounts and transactions have been eliminated.
The balance sheet as of June 30, 1996 and the related statements of
operations and cash flows for the periods ended June 30, 1996 and 1995 are
unaudited but have been prepared on substantially the same basis as the
annual audited financial statements. Certain reclassifications have been
made to the consolidated financial statements in the prior periods to
conform to classifications used in the current period. In the opinion of
the Company, the unaudited consolidated financial statements reflect all
adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the consolidated financial position, operating
results and cash flows for those periods presented. The unaudited results
for the periods ended June 30, 1996 are not necessarily indicative of
results to be expected for the entire year.
The accompanying financial statements should be read in conjunction with
the Company's annual report on form 10-KSB for the fiscal year ended
December 31, 1995.
Product sales
At times, the Company has received payment in advance for future product
shipments. Such payments are classified as deferred revenue on the
accompanying Balance Sheet. Upon shipment of products revenue is recognized
and the corresponding liability (deferred revenue) is reduced.
In the second quarter of 1996, net revenues to one distributor were 18
percent of total net revenues.
Loss per Common Share
Loss per common share is computed using the weighted average number of
shares outstanding during each period presented.
2. Termination of Millipore marketing agreement
Through 1993 and the first quarter of 1994 the Company sold its products
directly and through sales to Millipore Corporation, ("Millipore") for
resale. During this time Millipore held marketing rights to Glyko products
under the terms of a distribution agreement between Millipore and the
Company. Late in 1993 Millipore announced their intention to exit the
bioscience business and in April 1994 Millipore and the Company agreed to
terminate their distribution agreement. Millipore has granted the Company
all marketing rights to Glyko analytic products and has waived its option
to purchase the Company's analytic business. In turn, Millipore will
receive 500,000 shares of Glyko Biomedical Ltd. common stock. The issuance
of stock pursuant to this agreement is subject to Canadian regulatory
approval, and that approval is pending.
6
<PAGE> 7
GLYKO BIOMEDICAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Private Equity Placement Offerings
During the second quarter of 1995, the Company closed a private equity
placement offering (the Q295 Financing). Investors participating in the
Q295 Financing purchased approximately 4.786 million units which each
consisted of one share of common stock and one five year warrant to
purchase one share of common stock. The Company issued units in exchange
for cash, and also in exchange for the settlement of certain outstanding
liabilities. The units were priced at Cdn.$0.80 with an exercise price on
the warrant of Cdn.$0.90. The Company established a balance sheet value for
the common stock warrants by subtracting the discounted fair market value
for one share of the Company's common stock from the price of one unit. The
common stock warrants expire in 2000. The Q295 Financing raised
approximately $2.78 million, consisting of approximately $2.36 million in
cash and $420,000 for the settlement of a stockholder/director bridge loan
and certain other liabilities.
During the second quarter of 1996, the Company closed a second private
equity placement offering (the Q296 Financing). Investors participating in
the Q296 Financing purchased 2.5 million units which each consisted of one
share of common stock and one half of a two year warrant to purchase one
share of common stock. The units were priced at Cdn.$0.60 with an exercise
price on the warrant of Cdn.$0.80. Also, 175,000 units and an additional
250,000 warrants were distributed to brokers in exchange for services
rendered in the amount of $129,539 in connection with the Q296 Financing.
The Company established a balance sheet value for the common stock warrants
by subtracting the discounted fair market value for one share of the
Company's common stock from the price of one unit. The common stock
warrants expire in 1998. The Q296 Financing raised approximately $1.077
million.
7
<PAGE> 8
ITEM 2.
GLYKO BIOMEDICAL LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This report contains certain forward looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from the
results anticipated in these forward looking statements as a result of certain
factors set forth under "Risk Factors" and elsewhere in this report.
Overview:
Glyko Biomedical Ltd. is a Canadian holding company that owns all of the capital
stock of Glyko, Inc. Glyko, Inc. is an operating company based in California.
The following discussion and the accompanying consolidated financial statements
include the accounts of Glyko Biomedical Ltd. and Glyko, Inc. presented on a
consolidated basis. Numerical references in the following discussion are rounded
to the nearest thousand. Since its inception in October 1990, Glyko has engaged
in research and development of new techniques to analyze and manipulate
carbohydrates for research, diagnostic and pharmaceutical purposes. The Company
has developed a line of analytic instrumentation laboratory products that
include an imaging system, analysis software and chemical analysis kits. The
Company is continuing to develop additional chemical kits for use with the
imaging system, and is also developing a line of carbohydrate diagnostic
products. The Company has incurred a net loss in each period since its inception
and expects to continue to incur losses at least through 1996. For the period
from its inception to June 30, 1996, the Company has incurred cumulative losses
of $12,162,000.
The Three Month Periods Ended June 30, 1996 and June 30, 1995
Revenue for the second quarter of 1996 was $260,000 and consisted of sales of
products and services of $248,000 and other revenues of $12,000. Sales of
products and services were composed of sales of chemical analysis kits, imaging
systems and fees for custom and contract analytical services. Revenue for the
second quarter of 1995 was $391,000 and consisted of sales of products and
services of $361,000 and grant fee revenue of $30,000. Sales of products and
services included sales of imaging systems, chemical analysis kits, and fees for
custom analytical services. The decline in revenues in the second quarter of
1996 compared to the same period in 1995 was due principally to reduced sales
volumes of imaging systems to distributors for resale.
Cost of goods and services in the second quarter of 1996 was $112,000 compared
to $142,000 for the same period in 1995. The primary reason for the decrease in
cost of goods sold was reduced sales volumes of imaging systems.
Research and development expenses were $267,000 for the second quarter of 1996
compared to $312,000 for the same period in 1995. Higher charges of research and
development expense to cost of products and services were primarily responsible
for the decreased operating expense. These charges resulted principally from
increased volumes of custom and contract analytical services.
Selling, general and administrative expenses were $348,000 in the second quarter
of 1996, compared to $442,000 for the same period in 1995. Reduced travel and
advertising costs were principally responsible for the reduced expense level.
8
<PAGE> 9
The Six Month Periods Ended June 30, 1996 and June 30, 1995
Revenue for the first six months of 1996 was $703,000 and consisted of sales of
products and services of $653,000 and other revenues of $50,000. Sales of
products and services consisted of sales of chemical analysis kits, imaging
systems, custom and contract analytical services and other revenues. Other
revenues consisted principally of grant fees. Revenue for the first six months
of 1995 was $698,000 and consisted of sales of products and services of
$568,000, development and supply agreement fee revenue of $100,000, and grant
fee revenue of $30,000. Sales of imaging systems were responsible for over half
of all sales of products and services. Remaining sales of products and services
consisted of sales of chemical analysis kits and fees for custom analytical
services. The slight increase in revenue in the first six months of 1996
compared to the same period in 1995 was primarily due to increased sales volumes
of chemical analysis kits, partially offset by the effect of supply agreement
fee revenue realized in 1995 but not in 1996.
Cost of goods and services was $258,000 in the first six months of 1996 and
$227,000 in the same period in 1995. The increase in cost of goods and services
in 1996 was primarily due to increased sales volumes of chemical analysis kits
and custom analytical services in 1996.
Research and development expenses were $545,000 for the first six months of 1996
compared to $591,000 for the same period in 1995. Higher charges of research and
development expense to cost of products and services were primarily responsible
for the lower operating expense in 1996. These charges resulted principally from
increased volumes of custom and contract analytical services.
Selling, general and administrative expenses were $724,000 in the first six
months of 1996, compared to $769,000 for the same period in 1995. Reductions in
travel and advertising costs were primarily responsible for the decreased
operating expense in 1996.
9
<PAGE> 10
Liquidity and Capital Resources
During the second quarter of 1995, the Company closed a private equity placement
offering (the Q295 Financing). Investors participating in the Q295 Financing
purchased approximately 4.786 million "units" that consisted of one share of
common stock and one five year warrant to purchase one share of common stock.
The Company issued units in exchange for cash, and also in exchange for the
settlement of certain outstanding liabilities. The units were priced at
Cdn.$0.80 with an exercise price on the warrant of Cdn.$0.90. The Q295 Financing
raised approximately $2.78 million, consisting of approximately $2.36 million in
cash and $420,000 million for the settlement of a stockholder/director bridge
loan and other liabilities.
During the second quarter of 1996, the Company closed a second private equity
placement offering (the Q296 Financing). Investors participating in the Q296
Financing purchased 2.5 million units which each consisted of one share of
common stock and one half of a two year warrant to purchase one share of common
stock. The units were priced at Cdn.$0.60 with an exercise price on the warrant
of Cdn.$0.80. Also, 175,000 units and an additional 250,000 warrants were
distributed to brokers in exchange for services rendered in the amount of
$130,000 in connection with the Q296 Financing. The Company established a
balance sheet value for the common stock warrants by subtracting the discounted
fair market value for one share of the Company's common stock from the price of
one unit. The common stock warrants expire in 1998. The Q296 Financing raised
approximately $1.077 million.
Total cash used in operating activities in the first six months of 1996 was
$694,000. The effect upon cash of the net operating loss of $804,000 was
partially offset by collections on accounts receivable. Gross proceeds from the
Q296 Financing were $1.077 million leading to net cash provided by financing
activities of $1.058 million.
Management believes the proceeds of the Q296 Financing will allow the Company to
maintain liquidity through 1996. However, management's expectation of future
liquidity presumes that revenues for the remainder of 1996 will equal or exceed
revenues realized in prior periods. There can be no assurance that revenues in
the second half of 1996 will equal or exceed revenues realized in the second
half of 1995. The Company will seek additional funding through various means
including but not limited to licensing and marketing agreements and
collaborative research agreements with strategic partners. However, there can be
no assurance that such agreements will be reached and that additional funding
will be obtained.
The Company is not committed to make any significant capital expenditures. In
the event that the Company enters into collaborative research arrangements,
spending levels will increase to conduct such funded research. Scientific
progress in the analytical and diagnostic fields, as well as in clinical trials,
will influence spending levels.
10
<PAGE> 11
RISK FACTORS
Future Capital Requirements - Uncertainty of Future Funding
The Company believes that its available cash will allow it to fund planned
operations through the remainder of 1996. The Company's Report of Independent
Public Accountants for the year ended December 31, 1995 contains a going concern
qualification reflecting both the necessity and the uncertainty of future
funding. Such funding may come individually or collectively from equity or debt
placements, licensing and marketing agreements or by collaborative research
agreements with strategic partners. Additional funds may be raised through the
issuance of securities or other financing arrangements on terms and at prices
that might have the effect of diluting the holdings of then existing
stockholders. No assurance can be given that additional financing will be
available or, if available, that it will be on terms acceptable to the Company
or its stockholders. If adequate funding is not obtained, operations will be
materially adversely affected. The Company will delay or eliminate expenditures
in respect of certain products under development such as additional analytical
kits and diagnostic tests in the event sufficient funding is unavailable. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources".
History of Operating Losses - Uncertainty of Future Profitability
The Company commenced its research activities in December 1990 and first
recorded revenues in December 1992. While sales increased in 1994 and 1995, the
Company has not yet made a net annual operating profit. There is no assurance
that sales will increase in future quarters. The accumulated deficit as of March
30, 1996 was approximately $12.2 million. The Company anticipates that operating
losses will continue at least through 1996. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
Diagnostic Products - No Prior Commercial Manufacturing or Marketing
The Company has recently begun to market its first diagnostic product, the
Urinary Carbohydrate Analysis Kit. In order to manufacture its diagnostic
products in commercial quantities and to market products independently, the
Company will need to expand its production and marketing capabilities and/or
establish arrangements with third parties having the capacity for such
manufacturing or marketing. Anticipated operating revenues and cash resources
will not be sufficient to expand manufacturing and marketing capabilities for
diagnostic products currently under development. There can be no assurance that
the Company will be able to successfully market or manufacture its diagnostic
products. To the extent that the Company arranges with third parties to
manufacture or market any diagnostic products, the commercial success of such
products may depend upon the efforts of those third parties.
Early Stage of Diagnostic Product Development
Only one of the Company's diagnostic products has been approved for commercial
sale, the Urinary Carbohydrate Analysis Kit. See "Diagnostic Products -
Lysosomal Storage Diseases". Potential products currently under development by
the Company will require significant additional development, and some must
undergo several phases of clinical testing and will likely require significant
further investment prior to their final commercialization. Anticipated operating
revenues will not be sufficient to facilitate significant further development of
diagnostic products. There can be no assurance that any of the Company's
products under development, either now or in the future, will be successfully
developed, prove to be effective in clinical trials, receive required regulatory
approvals, be capable of being produced in commercial quantities at reasonable
costs, or be successfully marketed.
11
<PAGE> 12
Technology and Competition
The primary competitive factors in biotechnology are the ability to create and
maintain scientifically advanced technology, to attract and maintain personnel,
and to have available adequate financial resources to maintain the Company
through its research, development and commercialization of technology stages.
The technology on which the Company's business is based uses laboratory methods
of electrophoresis and bioseparation. Nevertheless there is a technical risk
associated with reducing-to-practice the basic technology for new applications.
There is no assurance that the Company will be able to develop an economical or
practical way to separate human materials for clinical diagnosis, or that it
will be able to devise specific reagents required to obtain a needed reaction.
Other companies may develop basic carbohydrate technology which directly
competes for the carbohydrate diagnostic market. Furthermore, conventional
diagnostic technology (such as enzyme or radioactive immunoassay) may accomplish
new breakthroughs in analyzing carbohydrates (which so far has been difficult).
Additionally, other newer technologies such as nucleic acid hybridization may
become competitive and erode the Company's potential shares of diagnostic
markets.
Competition in bioinstrumentation is intense. Many companies, universities, and
research organizations are engaged in the research and development of products
in the areas being developed by the Company. Many of these have financial,
technical, manufacturing and marketing resources greater than those of the
Company. As a result carbohydrate technology will become an area of more intense
competition. In order to compete successfully the Company must expand its
efforts to develop new products and uses for its current products in research
and diagnosis. There can be no assurance that the Company will be able to do so
effectively.
Patents and Proprietary Technology
The Company's success will depend in part on its ability to obtain patents,
protect trade secrets and not infringe the patents of others. The Company has
been issued patents as well as filed applications for U.S. and foreign patents
and has exclusive licenses to patents or patent applications of others. The
Company intends in the future to apply for patents in various jurisdictions for
inventions forming part of its technology. No assurance can be given that patent
applications will result in the issue of patents or that, if issued, patents
obtained by the Company will confer on the Company a preferred position with
respect to the technology or products claimed.
There can be no assurance that others will not independently develop products
similar to the Company's, duplicate the Company's products or design around the
Company's patents. In addition the Company may be required to obtain licenses to
others' patents. No assurance can be given that such licenses can be obtained on
terms acceptable to the Company. These factors could cause the Company to
encounter delays in product market introductions or adversely affect the
Company's development or sale of products requiring licenses from third parties.
The Company's products and technologies could be subject to claims of
infringement by others. Patent conflicts and litigation can be expensive, and
could have a material adverse effect on the Company's results of operations.
Product Liability and Lack of Insurance
The Company is subject to the risk of exposure to product liability claims in
the event that the use of its technology results in adverse effects during
testing or commercial sale. The Company currently does not maintain product
liability insurance. There can be no assurance that the Company will be able to
obtain product liability insurance coverage at economically reasonable rates, or
that such insurance will provide adequate coverage against all possible claims.
12
<PAGE> 13
Uncertainty of Regulatory Approval
The Company's diagnostics products will require regulatory approval by
government agencies. This includes pre-clinical and clinical testing and
approval processes in the U.S. and other countries. Compliance can take several
years and require substantial expenditures. There can be no assurance that
difficulties or excessive costs will not be encountered by the Company in this
process or that required approvals will be obtained. The Company will not be
able to market its diagnostic products until required approvals have been
obtained.
Dependence on Key Personnel
The Company's success will depend in large part upon its ability to attract and
retain highly qualified scientific and management personnel. The Company faces
competition for such personnel from other companies, academic institutions,
government entities and other organizations. The Company depends on its key
management, including John Klock, John Dorson, and Christopher Starr, and the
departure of any of such persons could have a material adverse effect on the
Company. The Company maintains key person life insurance on Dr. Klock.
13
<PAGE> 14
PART II.
ITEM 1. Legal Proceedings. None
ITEM 2. Changes in Securities: None
ITEM 3. Defaults upon Senior Securities. None.
ITEM 4. Submission of Matter to a Vote of Security Holders
At the Company's Annual Meeting, held on June 25 1996, the Company's
shareholders took the following actions:
(a) The following directors were elected to serve until the next Annual
Meeting:
<TABLE>
<CAPTION>
Vote
Director Elected For Against Withheld
---------------- --- ------- --------
<S> <C> <C> <C>
John C. Klock, M.D. 7,196,487 Nil 100
R. William Anderson 7,196,487 Nil 100
John H. Craig 7,196,487 Nil 100
John S. Glass 7,196,487 Nil 100
F. Michael P. Warren 7,196,487 Nil 100
Gwynn R. Williams 7,196,487 Nil 100
</TABLE>
(b) The amendment to the Company's Stock Option plan was approved by a
vote of 3,447,174 shares in favor, 2,481,827 shares against, and nil
shares withheld.
(c) Arthur Andersen & Co. was appointed the Company's auditor, by a vote
of 7,196,522 shares in favor, nil shares against, and 600 shares
withheld.
There were 6,336,616 shares which abstained from all matters
presented to the meeting including broker non-votes.
ITEM 5. Other Information. None.
ITEM 6. Exhibits and Reports on Form 8-K.
(a) THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS REPORT
Exhibit 27, Financial Data Schedule.
(b) REPORTS ON FORM 8K
No reports were filed on Form 8-K during the three months ended June
30, 1996.
14
<PAGE> 15
SIGNATURES
June 30, 1996
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.
Glyko Biomedical Ltd.
Date: August 12, 1996 By: /s/ John C. Klock
---------------------- --------------------------------
John C. Klock, M.D.
President and Chief Executive
Officer
Date: August 12, 1996 By: /s/ John F. Hamilton
---------------------- --------------------------------
John F. Hamilton
Vice President, Finance and
Administration and Chief
Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-QSB FOR GLYKO BIOMEDICAL LTD FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000908401
<NAME> GLYKO BIOMEDICAL LTD
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-01-1996
<EXCHANGE-RATE> 1
<CASH> 974,982
<SECURITIES> 0
<RECEIVABLES> 170,542
<ALLOWANCES> 0
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0
0
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