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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB\A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1998
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR
15 (d) OF THE EXCHANGE ACT OF 1934 For
the transition period from to
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Commission file number: 333-34765
Ixion Biotechnology, Inc.
(Exact Name of Small Business Issuer as Specified in Its Charter)
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Delaware 59-3174033
(State of incorporation) (I.R.S. Employer Identification
No.)
12085 Research Drive
Alachua, FL 32615
(Address of principal executive offices)
Registrant's telephone number: 904-418-1428
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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
The number of shares of the registrant's common stock, par value $0.01 per
share, outstanding as of July 31, 1998 was 2,481,694.
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<PAGE>
Ixion Biotechnology, Inc
Index to Form 10QSB
Part 1 - Financial Information Page
----
Item 1. Financial Statements (unaudited)
Condensed Balance Sheet - June 30, 1998.............................2
Condensed Statements of Operations - Three and Six Months
Ended June 30, 1998 and 1997 and for the period March 25,
1993(Date of Inception) through
June 30, 1998.......................................................3
Condensed Statements of Cash Flows - Six Months Ended June 30, 1998 and
1997 and for the period
March 25, 1993 (Date of Inception) through June 30, 1998............5
Notes to Condensed Financial Statements.............................6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations or Plan of Operation............8
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders.................13
Item 6. Exhibits and Reports on Form 8-K...................................13
Signatures..................................................................14
Exhibit Index...............................................................15
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
Balance Sheet
June 30, 1998
Unaudited
Assets
Current Assets:
Cash and cash equivalents $ 18,961
Accounts receivable 2,061
Prepaid expenses 560
Other current assets 500
--------------------
Total current assets 22,082
Property and Equipment, net 29,767
Other Assets:
Patents and patents pending, net 245,192
Other, net 7,011
Total other assets 252,203
-----------------
Total Assets $ 304,052
================
Liabilities and Capital Deficiency
Current Liabilities:
Accounts payable $ 61,565
Bridge loans payable to officers 145,000
Current portion of notes payable 10,770
Accrued expenses 47,184
Interest payable 1,797
Total current liabilities 266,316
Long-Term Liabilities:
Notes payable 607,141
Liability under research agreement 42,317
Deferred rent, including accrued interest 14,043
Deferred fees and salaries, including accrued interest 596,163
----------------
Total long-term liabilities 1,259,664
Total liabilities 1,525,980
Capital Deficiency:
Common stock, $.01 par value; authorized 4,000,000,
issued and outstanding 2,476,694 shares at June 30 24,767
Common stock warrants outstanding 35,494
Additional paid-in capital 1,267,246
Deficit accumulated during the development stage (2,422,127)
Less unearned compensation (127,308)
Total capital deficiency (1,221,928)
Total Liabilities and Capital Deficiency $ 304,052
===============
See accompanying notes to condensed financial statements
<PAGE>
Statements of Operations
Three Months Ended
June 30,
__1998__ __1997__
Unaudited
Revenues:
Income under research agreement $ 0 $ 62,688
Income from SBIR Grant 0 18,000
Interest income 69 3,043
Other income 1,295 899
----------- -----------
Total revenues 1,364 84,630
----------- -----------
Expenses:
Operating, general and administrative 80,909 67,800
Research and development 101,310 184,374
Interest 28,204 12,999
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Total expenses 210,423 265,173
----------- -----------
Net Loss $ (209,059) $ (180,543)
=========== ===========
Basic and Diluted Net Loss per Share $ (0.08) $ (0.07)
=========== ===========
Weighted Average Common Shares 2,475,201 2,454,777
=========== ===========
See accompanying notes to condensed financial statements
<PAGE>
<TABLE>
<CAPTION>
For the Period
March 25,
Statements of Operations 1993 (Date
of inception)
Six Months Ended through
June 30, June 30,
__1998__ __1997__ ____1998____
Unaudited Unaudited
Revenues:
<S> <C> <C> <C>
Income under research agreement $ 0 $ 150,000 $ 275,001
Income from SBIR Grant 0 18,000 91,650
Interest income 215 7,478 23,182
Other income 2,276 1,799 16,824
-------------- --------------- ---------------
Total revenues 2,491 177,277 406,657
-------------- --------------- ---------------
Expenses:
Operating, general and admin. 199,793 160,131 1,297,903
Research and development 188,872 347,590 1,275,003
Interest 56,594 26,154 255,878
-------------- --------------- ---------------
Total expenses 445,259 533,875 2,828,784
-------------- --------------- ---------------
Net Loss $ (442,768) $ (356,598) $ (2,422,127)
============== =============== ===============
Basic & Diluted Net Loss per Share $ (0.18) $ (0.15)
============== ===============
Weighted Average Common Shares 2,471,228 2,452,094
============== ===============
</TABLE>
See accompanying notes to condensed financial statements
<PAGE>
Statements of Cash Flows
<TABLE>
<CAPTION>
For the Period
March 25,
1993 (Date
of inception)
Six Months Ended through
June 30, June 30,
__1998__ __1997__ ____1998____
Unaudited Unaudited
Cash Flows from Operating Activities:
<S> <C> <C> <C>
Net loss $ (442,768) $ (344,098) $ (2,422,127)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 5,928 5,676 30,328
Amortization 1,578 1,110 5,422
Amortization of debt discount 28,584 - 104,808
Stock warrants issued under license
agreement - 20,465 20,465
Stock options/warrants issued for
consulting services - - 30,000
Stock compensation 50,181 78,658 306,994
Decrease (increase) in prepaid
expenses and other current assets 841 4,035 (886)
Decrease (increase) in accounts
receivable (291) (44,351) (2,061)
Increase (decrease) in deferred revenue - (100,000) -
Increase (decrease) in liability under
research agreement - 38,963 42,317
Increase (decrease) in accounts payable
and accrued expenses 16,921 3,232 112,114
Increase in deferred fees and salaries 119,747 15,218 569,611
Increase in deferred rent 7,557 - 14,043
Increase in interest payable - - 33,198
---------------- ---------------- ----------------
Net cash used in
operating activities (211,722) (321,092) (1,155,774)
---------------- ---------------- ----------------
Cash Flows from Investing Activities:
Purchase of property and equipment - (1,702) (31,897)
Organization Costs - - (436)
Payments for patents and patents pending (29,156) (77,802) (238,926)
---------------- ---------------- ----------------
Net cash used in investing activities (29,156) (79,504) (271,259)
---------------- ---------------- ----------------
Cash Flows from Financing Activities:
Proceeds from issuance of subordinated
notes payable to related parties 70,000 - 175,307
Proceeds from issuance of convertible
notes payable - - 787,270
Proceeds from issuance of common stock 195,500 - 618,200
Principal reductions in notes payable (6,282) (7,381) (17,252)
Payment of deferred offering costs (43,822) - (106,451)
Payment of loan costs - - (11,080)
---------------- ---------------- ----------------
Net cash provided by (used in)
financing activities 215,396 (7,381) 1,445,994
---------------- ---------------- ----------------
Net Increase (Decrease) In Cash and
Cash Equivalents (25,482) (407,977) 18,961
Cash and Cash Equivalents at
Beginning of Period 44,443 611,539 -
---------------- ---------------- ----------------
Cash and Cash Equivalents at
End of Period $ 18,961 $ 203,562 $ 18,961
================ ================ ================
</TABLE>
See accompanying notes to condensed financial statements
<PAGE>
Notes to Condensed Financial Statements
Six Month Period Ended June 30, 1998
1. Basis Of Presentation:
The accompanying unaudited condensed financial statements for the three and
six months ended June 30, 1998 and 1997, and for the period March 25, 1993 (date
of inception) through June 30, 1998 have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements.
These interim financial statements should be read in conjunction with the
December 31, 1997 financial statements and related notes included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1997. In
the opinion of the Company, the accompanying unaudited condensed financial
statements contain all adjustments, consisting only of normal recurring
accruals, necessary to present fairly the Company's financial position, results
of operations, and cash flows for the periods presented. The results of
operations for the interim period ended June 30, 1998 are not necessarily
indicative of the results to be expected for the full year.
2. Income Taxes:
The components of the Company's net deferred tax asset and the tax effects
of the primary temporary differences giving rise to the Company's deferred tax
asset are as follows as of June 30, 1998:
Deferred compensation $ 235,000
Net operating loss carryforward 722,000
------
Deferred tax asset 957,000
Valuation allowance $(957,000)
Net deferred tax asset $ __0__
=======
3. Stockholder's Equity
In December, 1997, the Company commenced the public offering of up to
400,000 Units of newly-issued securities for an aggregate of $4,000,000.
Each Unit consists of one share of Common Stock, $0.01 par value, and a .25
Charitable Benefit Warrants. Each whole Charitable Benefit Warrant entitles
the holder to purchase one share of the Common Stock at a price of $20.00
per share. The Company requires the proceeds of the public offering to meet
its planned operating requirements through December 31, 1998. The Company
had received proceeds of $255,500 through July 31, 1998. The offering will
continue until all Units have been sold or until December 10, 1998, unless
sooner terminated or extended. If the proceeds from the offering prove to
be insufficient, then the Company would be required to obtain additional
funds through equity or debt financing, strategic alliances with corporate
partners, or through other sources.
There can be no assurance that the Company will be successful in
obtaining the required financing. Under current circumstances, the
Company's ability to continue as a going concern depends upon obtaining
additional financing.
Offering costs of $100,774 have been offset against the proceeds of
the offering through June 30, 1998.
In February of 1998, 8,400 shares of stock previously issued to an
employee in exchange for services to be rendered were returned to the
Company when the employee resigned. This resulted in a reversal of paid-in
capital and unearned compensation, but had no net effect on capital
deficiency.
4. Related Party Transactions
In 1997, the Company engaged the services of a printer in connection with
its public offering. The printer is partially-owned by the Company's
President, who is also CEO of the printer. Through June 30, 1998, the
printer has charged $13,033 in connection with its services.
5. Subsequent Events
Through July 31, 1998, the Company has received proceeds of $255,500
by selling 25,550 units of Common Stock and Charitable Benefit Warrants in
its initial public offering at $10.00 per unit
Effective July 1, 1998, the Company granted ten-year options under the
1994 Stock Option Plan to purchase 62,000 shares of Common Stock at an
exercise price of $10.00 per share. Stock options are exerciseable only if
vested. 12,500 of such options, granted to members of the Scientific
Advisory Board, vest over one year; the remainder vest over five years.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations or Plan of Operations.
The following discussion and analysis should be read in conjunction
with the Condensed Financial Statements and the related Notes thereto included
elsewhere in this report. This report contains forward-looking statements that
involve risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in the forward-looking statements.
These and additional risk factors are identified in our annual report to the
Securities and Exchange Commission filed on forms 10-KSB and in other SEC
filings.
Overview
The Company is a development stage, biotechnology company. The Company
is considered to be in the development stage because it is devoting
substantially all of its efforts to establishing its business and its planned
principal operations have not commenced.
Since its inception in March of 1993, the Company's efforts have been
principally devoted to research and development, securing patent protection, and
raising capital. The Company has not received any revenues from the sale of
products. In June, the Company reached an agreement in principle with the
University of Florida Diagnostic Referral Laboratories (the "DRL"), pursuant to
which the DRL will offer the Company's initial product, a molecular diagnostic
test, the XentrIx TM Oxalobacter formigenes Monitor, to physicians. Under this
agreement, the Company may generate revenue during 1998; however it does not
expect any of its other product candidates to be commercially available for at
least the next several years. From inception through June 30, 1998, the Company
has sustained cumulative losses of $2,407,127. These losses have resulted
primarily from expenditures incurred in connection with general and
administrative activities, research and development, patent preparation and
prosecution, and interest.
The Company expects to continue to incur substantial research and
development costs in the future resulting from ongoing research and development
programs, manufacturing of products for use in clinical trials and preclinical
and clinical testing of the Company's products. The Company also expects that
general and administrative costs, including patent and regulatory costs,
necessary to support clinical trials, research and development, manufacturing,
and the creation of a marketing and sales organization, if warranted, will
increase in the future. Accordingly, the Company expects to incur increasing
operating losses for the foreseeable future. There can be no assurance that the
Company will ever achieve profitable operations.
The Company has only a limited operating history upon which an
evaluation of the Company and its prospects can be based. The risks, expenses
and difficulties encountered by companies at an early stage of development must
be considered when evaluating the Company's prospects. To address these risks,
the Company must, among other things, successfully develop and commercialize its
product candidates, secure all necessary proprietary rights, respond to
competitive developments, and continue to attract, retain and motivate qualified
persons. There can be no assurance that the Company will be successful in
addressing these risks.
The operating expenses of the Company will depend on several factors,
including the level of research and development expenses. Research and
development expenses will depend on the progress and results of the Company's
product development efforts, which the Company cannot predict. Management may in
some cases be able to control the timing of development expenses in part by
accelerating or decelerating preclinical testing and clinical trial activities.
As a result of these factors, the Company believes that period-to-period
comparisons in the future are not necessarily meaningful and should not be
relied upon as an indication of future performance. Due to all of the foregoing
factors, it is possible that the Company's operating results will be below the
expectations of market analysts, if any, and investors. In such event, the
prevailing market price, if any, of the Common Stock would likely be materially
adversely affected.
Results of Operations
Three Months Ended June 30, 1998 and 1997
Interest income decreased 97.7% from $3,043 in the second quarter of
1997 to $69 in the second quarter of 1998. This decrease was attributable to the
expenditure of the proceeds from the sale of Unsecured Convertible Notes in the
last quarter of 1996, which were invested during 1997. Interest income relating
to the proceeds of the Unsecured Convertible Notes ceased in 1998.
Operating, general and administrative expenses increased 19.3% from
$67,800 in the second quarter of 1997 to $80,909 in the equivalent period of
1998. These increased expenses reflect increased personnel, increased
advertising and promotion expense, and increased legal expenses in the second
quarter of 1998 compared to the second quarter of 1997. The Company expects its
general and administrative expense to increase during 1998 as a result of the
hiring of additional personnel, increased amortization of capitalized patent
costs as new patents are issued, continued amortization of capitalized private
placement expenses, and increased legal and accounting expenses resulting from
filings with the Securities and Exchange Commission under the Securities
Exchange Act of 1934.
Research and development expenditures consist primarily of
payroll-related expenses of research and development personnel, laboratory
supplies, animal supplies, laboratory rent, depreciation on laboratory
equipment, development activities, payments for sponsored research, and payments
to scientific and regulatory consultants. Research and development expenses
decreased 45% from $184,374 in the second quarter of 1997 to $101,310 in the
second quarter of 1998, mainly due to a reduction of one technician, the
termination of the Company's consulting contract with its regulatory advisor,
and a significant reduction in the compensation of the Company's scientific
advisors. The Company anticipates that its research and development expenses
will increase during the remainder of 1998 when the Company expands research and
development programs and preclinical testing for its product candidates and
technologies under development.
Interest expense increased 117% from $12,999 in the second quarter of
1997 to $28,204 in the second quarter of 1998 due primarily to cash interest on
the Company's 10% Notes, the amortization of debt discount (initially $285,835)
attributable to the beneficial conversion feature of the Company's Variable
Notes, both issued in the last quarter of 1996, interest on bridge loans to
officers, and the compounding of interest on deferred fees and salaries,
including deferred interest, payable to related parties. Interest expense will
continue to increase during 1998, as a result of the continued compounding of
interest on deferred fees and salaries accounts and additional bridge loans and
other working capital loans the Company expects to receive.
Six Months Ended June 30, 1998 and 1997
The Company's revenues under the GI research agreement decreased from
$150,000 in the six months ended June 30 of 1997 to $0 for that period in 1998.
Revenues under the Genetics Institute agreement ceased at the end of the
agreement in 1997.
Interest income decreased 97% from $7,478 in the first six months of
1997 to $215 in the first six months of 1998. This decrease was attributable to
the expenditure of the proceeds from the sale of Unsecured Convertible Notes in
the last quarter of 1996, which were invested during 1997. Interest income
relating to the proceeds of the Unsecured Convertible Notes ceased in the first
quarter of 1998.
Operating, general and administrative expenses increased 24.7% from
$160,131 in the first six months of 1997 to $199,793 in the equivalent period of
1998. These increased expenses reflect increased legal expenses, increased
accounting fees relating to Securities and Exchange Commission reporting, and
increased advertising and promotion in the first six months of 1998 compared to
the first six months of 1997. The Company expects its general and administrative
expense to increase during 1998 as a result of the hiring of additional
personnel, increased amortization of capitalized patent costs as new patents are
issued, and increased legal and accounting expenses resulting from filings with
the Securities and Exchange Commission under the Securities Exchange Act of
1934.
Research and development expenditures consist primarily of
payroll-related expenses of research and development personnel, laboratory
supplies, animal supplies, laboratory rent, depreciation on laboratory
equipment, development activities, payments for sponsored research, and payments
to scientific and regulatory consultants. Research and development expenses
decreased 46% from $347,590 in the first six months of 1997 to $188,872 in the
first six months of 1998, primarily as a result of a temporary reduction in
research and development personnel during the first quarter of 1998, and
concomitant reduction in lab supplies, together with a reduction of one
technician, the termination of the Company's consulting contract with its
regulatory advisor, and a significant reduction in the compensation of the
Company's scientific advisors. The Company anticipates that its research and
development expenses will increase during the remainder of 1998 as the Company
expands research and development programs and preclinical and clinical testing
for its product candidates and technologies under development.
Interest expense increased 116% from $26,154 in the first six months
of 1997 to $56,594 in the first six months of 1998 due primarily to cash
interest on the Company's 10% Notes, the amortization of debt discount
(initially $285,835) attributable to the beneficial conversion feature of the
Company's Variable Notes, both issued in the last quarter of 1996, interest on
bridge loans to officers, and the compounding of interest on deferred fees and
salaries, including deferred interest, payable to related parties. Interest
expense will continue to increase during 1998, as a result of the continued
compounding of interest on deferred fees and salaries accounts and additional
bridge loans to officers that the Company expects to receive.
Liquidity and Capital Resources
In December, 1997, the Company commenced the public offering of 400,000
Units of newly issued securities, for an aggregate of $4,000,000. Each Unit
consists of one share of Common Stock, $0.01 par value, and .25 Charitable
Benefit Warrants. Each whole Charitable Benefit Warrant entitles the holder to
purchase one share of Common Stock at a price of $20.00 per share. The Offering
is being made in nine states, primarily over the Internet, directly by the
Company, except in Florida where sales must be made through a broker. There is
no minimum number of Units to be sold in the Offering, and all funds received
will go immediately to the Company. The offering will be terminated upon the
earliest of: the sale of all Units, December 10, 1998 (unless extended), or the
date on which the Company decides to close the offering. At July 31, 1998, a
total of 25,550 Units ($255,500) had been sold pursuant to the offering.
During 1997, the Company's development activities were funded primarily
by a private placement transaction in which it sold Unsecured Convertible Notes
for an aggregate gross consideration of $787,270. In addition, the Chairman and
Chief Executive Officer and the President of the Company have entered into an
agreements to extend the Company up to $150,000 and up to $25,000, respectively,
in bridge loans. Interest on the bridge loans from officers is at 6.54% but can
be reset annually, at the election of either party, to the prime rate in effect
on January 1 of any given year, plus 3%. Under these agreements, the Company
borrowed a total of $145,000, which was still outstanding at June 30, 1998. The
Company expects to borrow and repay under these facilities from time to time to
meet working capital needs. The Company does not have any bank financing
arrangements. The Company's long-term indebtedness consists primarily of
deferred fees and salaries payable to related individuals and the Unsecured
Convertible Notes.
At June 30, 1998, the Company had $18,961 in cash and cash equivalents.
Until required for operations, the Company's policy is to invest its cash
reserves in bank deposits, money market funds, certificates of deposit,
commercial paper, corporate notes, U.S. government instruments and other
investment-grade quality instruments.
On January 1, 1996, the Company purchased laboratory equipment pursuant
to a chattel mortgage agreement in the amount of $32,309. The agreement calls
for monthly payments of $897, commencing August 1, 1996. At June 30, 1998,
$11,667 in principal remains outstanding under this agreement.
In connection with the GI sponsored research agreement described above,
certain patent-related expenses were paid by the Company and reimbursed by GI.
The Company is contractually obligated to repay these reimbursed expenses in
installments over a 36 month period upon a determination by GI not to exercise
an option contained in the sponsored research agreement. Reimbursement has not
commenced, and the Company has accrued $42,317 as a long term liability pending
final action under the agreement.
Through June 30, 1998, the Company had paid offering-related expenses
of $100,774 which have been applied against the proceeds of the public offering.
On October 1, 1998, upon the expiration of its current lease, the
Company will relocate to comparable rental facilities near its present location.
The new lease will be for increased space and rent and for a three-year term
with two one-year renewal options. The estimated annual rent (including
amortization of an emergency generator which will belong to the Company at the
end of the lease) will be approximately $79,000 per year (including utilities)
compared to the current annual rent (including utilities) of $43,200. The
Company will continue to have access to the Biotechnology Development
Institute's specialized facilities, centralized equipment, and core
laboratories. Relocation will not materially affect the Company's research and
development operations; however, the Company will incur relocation expenses and
will be obliged to purchase or lease laboratory and office furnishings and
equipment currently available under its lease with the Biotechnology Development
Institute. The Company estimates that the principal amount of such lease or
purchase is approximately $80,000.
The Company has incurred negative cash flows from operations since its
inception, and has expended and expects to continue to expend in the future,
substantial funds to complete its planned product development efforts, commence
clinical trials, and diversify its technology. The Company's future capital
requirements and the adequacy of available funds will depend on numerous
factors, including the successful commercialization of the XEntrIx (TM)
Oxalobacter formigenes Monitor (the Company's new diagnostic test) and
IxC1-62/47 (the Company's lead therapeutic compound), progress in its product
development efforts, the magnitude and scope of such efforts, progress with
preclinical studies and clinical trials, the cost of contract manufacturing and
research organizations, cost of filing, prosecuting, defending and enforcing
patent claims and other intellectual property rights, competing technological
and market developments, and the development of strategic alliances for the
development and marketing of its products. The Company requires the proceeds of
the public offering commenced in December 1997 to meet its planned operating
requirements through December 31, 1998. In the event the Company's plans change
or its assumptions change or prove to be inaccurate or the proceeds of the
offering prove to be insufficient to fund operations (due to unanticipated
expenses, delays, problems or otherwise), the Company could be required to seek
additional financing sooner than currently anticipated. In addition, the Company
will be required to obtain additional funds in any event through equity or debt
financing, strategic alliances with corporate partners and others, or through
other sources in order to bring its products through regulatory approval to
commercialization. The terms and prices of any equity or debt financings may be
significantly more favorable than those of the units sold in the offering. The
Company does not have any material committed sources of additional financing,
and there can be no assurance that additional funding, if necessary, will be
available on acceptable terms, if at all. If adequate funds are not available,
the Company may be required to delay, scale-back, or eliminate certain aspects
of its operations or attempt to obtain funds through arrangements with
collaborative partners or others that may require the Company to relinquish
rights to certain of its technologies, product candidates, products, or
potential markets. If adequate funds are not available, the Company's business,
financial condition, and results of operations will be materially and adversely
affected.
Product Research and Development Plan
The Company's plan of operation for 1998 consists primarily of research
and development and related activities including:
* further development of the Company's IPSC research programs aimed at
proprietary populations of functioning islets for transplantation into
diabetic patients;
* continuing the funding of the ongoing discovery program in which the
Company intends to identify and characterize novel growth factors
associated with the IPSCs, to discover factors important in islet cell
differentiation and possible regulation of diabetes and to identify
stem cell markers to which the Company hopes to produce antibodies
useful in stem cell isolation;
* further preclinical development of a quantitative version of the
Company's molecular diagnostic, the XEntrIx (TM) Oxalobacter formigenes
Monitor,
* further development of IxC1-62/47, including formulation, product
characterization, method development, testing (including toxicology),
cell line characterization, process development, clinical lot
manufacturing, stability, research protocols, and preclinical studies
for the Company's proposed products, primarily its oxalate-related
products;
* continuing the prosecution and filing of patent applications; and
* hiring additional employees.
The actual research and development and related activities of the
Company may vary significantly from current plans depending on numerous factors,
including changes in the costs of such activities from current estimates, the
results of the Company's research and development programs, the results of
clinical studies, the timing of regulatory submissions, technological advances,
determinations as to commercial potential and the status of competitive
products. The focus and direction of the Company's operations will also be
dependent upon the establishment of collaborative arrangements with other
companies, and other factors.
There can be no assurance that the Company will be able to
commercialize its technologies, or that profitability will ever be achieved. The
Company expects that its operating results will fluctuate significantly from
quarter to quarter in the future and will depend on a number of factors, many of
which are outside the Company's control.
<PAGE>
Part II - Other Information
Item 4. Submission of matters to a Vote of Security Holders.
The Company's annual meeting was held on June 12, 1998. The
shareholders of the Company elected the following directors of the Company to
serve until the next annual meeting. The total number of votes cast "For" and
"Withheld" in respect of the following nominees are as set forth opposite their
respective names:
Nominees Votes For Votes Withheld
Weaver H. Gaines 2,153,294 0
David C. Peck 2,153,294 0
David M. Margulies 2,153,294 0
Vincent P. Mihalik 2,153,294 0
Karl-E. Arfors 2,153,294 0
Finally, the shareholders of the Company ratified the selection of
Coopers & Lybrand LLP as independent accountant for its fiscal year ended
December 31, 1998, and the total number of shares cast "For," cast "Against" and
"Abstentions" are set forth below:
Votes For Votes Against Abstentions
2,153,294 0 0
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Description Page
(2) Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession None
(4) Instruments defining the Rights of Security Holders None
(10) Material Contracts None
(11) Statement re: Computation of Per Share Earnings None
(15) Letter re: Unaudited Interim Financial Information None
(18) Letter re: Change in Accounting Principles None
(19) Report Furnished to Security Holders None
(22) Published Report re: Matters Submitted to Vote of
Security Holders None
(23) Consents of Experts and Counsel None
(24) Power of Attorney None
(27) Financial Data Schedule
(99) Additional Exhibits None
(b) Reports on Form 8-K
None
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Ixion Biotechnology, Inc.
Dated: August 16, 1998 By: /S/
Weaver H. Gaines
Chairman and Chief Executive Officer
Dated: August 16, 1998 By: /S/
David C. Peck
President and Chief Financial Officer
(Principal Financial Officer)
Dated: August 16, 1998 By: /S/
Kimberly A. Ramsey
Controller (Principal Accounting Officer)
<PAGE>
Exhibit Index
Exhibit Exhibit
No. Description
(2) Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession None
(4) Instruments defining the Rights of Security Holders None
(10) Material Contracts None
(11) Statement re: Computation of Per Share Earnings None
(15) Letter re: Unaudited Interim Financial Information None
(18) Letter re: Change in Accounting Principles None
(19) Report Furnished to Security Holders None
(22) Published Report re: Matters Submitted to Vote of
Security Holders None
(23) Consents of Experts and Counsel None
(24) Power of Attorney None
(27) Financial Data Schedule
(99) Additional Exhibits None
(b) Reports on Form 8-K
None
- - -------- (*) Incorporated by reference from the Company's Registration
Statement on Form SB-2, file no. 333-34765
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Financial Statements for the 3 months ended June 30, 1998, and is qualified in
its entirety by reference to such Financial Statements filed with form 10QSB and
for the 3 month period ended June 30, 1998.
<MULTIPLIER> 1
<PERIOD-START> JAN-01-1998
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 18,961
<SECURITIES> 0
<RECEIVABLES> 2,061
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,082
<PP&E> 57,661
<DEPRECIATION> 27,894
<TOTAL-ASSETS> 304,052
<CURRENT-LIABILITIES> 266,316
<BONDS> 0
<COMMON> 24,767
0
0
<OTHER-SE> 1,302,740
<TOTAL-LIABILITY-AND-EQUITY> 304,052
<SALES> 0
<TOTAL-REVENUES> 1,364
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 182,219
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,204
<INCOME-PRETAX> (209,059)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (209,059)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> 0
</TABLE>
