-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WvyKcHQ0SnCjSlevzBc5qv+p/nhXaa40nxU05gdvBwm5pusILn1OV4Oug3JRHkD4 6PkG9WhLN2SZYnmiXdgKmg== 0000950134-97-003534.txt : 19970509 0000950134-97-003534.hdr.sgml : 19970509 ACCESSION NUMBER: 0000950134-97-003534 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970508 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMARILLO BIOSCIENCES INC CENTRAL INDEX KEY: 0001014763 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 751974352 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-20791 FILM NUMBER: 97598277 BUSINESS ADDRESS: STREET 1: 800 W 9TH AVE CITY: AMARILLO STATE: TX ZIP: 79101-3206 BUSINESS PHONE: 8063761741 MAIL ADDRESS: STREET 1: AMARILLO BIOSCIENCES INC STREET 2: 800 W 9TH AVE CITY: AMARILLO STATE: TX ZIP: 79101-3206 10QSB 1 FORM 10-QSB FOR QUARTER ENDED MARCH 31, 1997 1 United States SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 1997 ------------------------------------------------ [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-20791 AMARILLO BIOSCIENCES, INC. - ------------------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) TEXAS 75-1974352 - ------------------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization Identification No.) 800 West Ninth, Amarillo, TX 79101 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) 806-376-1741 FAX 806-376-9301 - ------------------------------------------------------------------------------- (Issuer's telephone number, including area code) 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 . ---- --- As of March 31, 1997, there were 5,414,232 shares of the issuer's common stock outstanding. This report contains 12 pages. 1 2 AMARILLO BIOSCIENCES, INC. INDEX
PART I: FINANCIAL INFORMATION PAGE NO. -------- Item 1. Financial Statements Consolidated Balance Sheets - December 31, 1996 and March 31, 1997 . 3 Consolidated Statements of Operations - Three Months Ended March 31, 4 1996 and 1997 and Cumulative from June 25, 1984 (Inception) through March 31, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . Condensed Consolidated Statements of Cash Flows - Three Months Ended 5 March 31, 1996 and 1997 and Cumulative from June 25, 1984 (Inception) through March 31, 1997 . . . . . . . . . . . . . . . . . . . . . . . Notes to Consolidated Financial Statements . . . . . . . . . . . . . 6 Item 2. Management's Discussion and Analysis of Results of Operations and 7 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . PART II: OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . 9 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2 3 AMARILLO BIOSCIENCES, INC. AND SUBSIDIARIES (COMPANIES IN THE DEVELOPMENT STAGE) CONSOLIDATED BALANCE SHEETS
December 31, March 31, 1996 1997 ----------- ------------ ASSETS Current assets: Cash and cash equivalents $ 2,799,297 $ 2,114,119 Marketable securities 5,984,370 5,984,370 Prepaid expenses 107,535 86,326 Other current assets -- 76,305 ----------- ------------ Total current assets 8,891,202 8,261,120 Property and equipment, net 144,507 139,207 Patent license, net of accumulated amortization of $66,471 and 58,529 56,716 $68,284 at December 31, 1996 and March 31, 1997, respectively Organization cost, net of accumulated amortization of $4,667 and 330 198 $4,799 at December 31, 1996 and March 31, 1997, respectively Investment in ISI common stock 471,500 463,500 ----------- ------------ Total assets $ 9,566,068 $ 8,920,741 =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 138,298 $ 61,055 Accrued interest expense 273,296 302,921 Other accrued expenses 65,357 19,673 ----------- ------------ Total current liabilities 476,951 383,649 Notes payable to related party 2,300,000 2,300,000 ----------- ------------ Total liabilities 2,776,951 2,683,649 STOCKHOLDERS' EQUITY: Common stock, $.01 par value: Authorized shares - 10,000,000 Issued shares - 5,414,232 54,142 54,142 Additional paid-in capital 13,312,638 13,312,638 Deficit accumulated during the development stage (6,574,163) (7,118,188) Unrealized loss on marketable securities (3,500) (11,500) ----------- ------------ Total stockholders' equity 6,789,117 6,237,092 ----------- ------------ Total liabilities and stockholders' equity $ 9,566,068 $ 8,920,741 =========== ============
See accompanying notes. 3 4 AMARILLO BIOSCIENCES, INC. AND SUBSIDIARIES (COMPANIES IN THE DEVELOPMENT STAGE) CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Cumulative from March 31, June 25,1984 -------------------------- (Inception) through 1996 1997 March 31, 1997 ---------- ---------- ------------------- Revenues: Contract revenues $ 402,574 $ -- $ 9,000,000 Interferon sales 2,000 -- 420,578 Interest income 11,154 101,068 807,186 Sublicense fees -- -- 113,334 Royalty income -- -- 31,544 Other -- 26,000 578,371 ---------- ---------- ------------ 415,728 127,068 10,951,013 Expenses: Research and development expenses 134,209 258,325 7,353,555 Selling, general, and administrative expenses 238,712 383,143 10,069,137 Interest expense 30,000 29,625 611,509 ---------- ---------- ------------ 402,921 671,093 18,034,201 ---------- ---------- ------------ Income (loss) before income taxes 12,807 (544,025) (7,083,188) Income tax expense -- -- (35,000) ---------- ---------- ------------ Net income (loss) $ 12,807 $ (544,025) $ (7,118,188) ========== ========== ============ Income (loss) per share $ -- $ (.10) ========== ========== Weighted average shares outstanding 3,035,232 5,414,232 ========== ==========
See accompanying notes. 4 5 AMARILLO BIOSCIENCES, INC. AND SUBSIDIARIES (COMPANIES IN THE DEVELOPMENT STAGE) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended Cumulative from March 31, June 25,1984 -------------------------- (Inception) through 1996 1997 March 31, 1997 ---------- ---------- ------------------- Net cash used in operating activities $ (381,780) $ (685,178) $ (6,042,806) ---------- ---------- ------------ Net cash provided by (used in) investing activities (2,467) -- (7,020,094) ---------- ---------- ------------ Net cash provided by financing activities -- -- 15,177,019 ---------- ---------- ------------ Net increase (decrease) in cash and cash equivalents (384,247) (685,178) 2,114,119 ---------- ---------- ------------ Cash and cash equivalents at beginning of period 1,108,527 2,799,297 -- ---------- ---------- ------------ Cash and cash equivalents at end of period $ 724,280 $2,114,119 $ 2,114,119 ========== ========== ============ Supplemental Disclosure of Cash Flow Information Cash paid for income taxes $ -- $ -- $ 37,084 ========== ========== ============ Cash paid for interest $ -- $ -- $ 6,466 ========== ========== ============
See accompanying notes. 5 6 AMARILLO BIOSCIENCES, INC. AND SUBSIDIARIES (COMPANIES IN THE DEVELOPMENT STAGE) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation. The accompanying consolidated financial statements, which should be read in conjunction with the consolidated financial statements and footnotes included in the Company's Form 10-KSB, are unaudited (except for the December 31, 1996 consolidated balance sheet which was derived from the Company's audited financial statements), but have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 1997 are not necessarily indicative of the results that may be expected for the full year ending December 31, 1997. 2. Loss per share. Loss per share is computed based on the weighted average number of common shares outstanding. During March 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings per Share". This statement currently has no effect on the computation of loss per share as the Company is in a net loss position and the potential dilutive effect of common stock equivalents is not considered in the computation. 3. Initial public offering. On August 13, 1996, the Company completed its initial public offering of 2,000,000 shares of its common stock. Net proceeds to the Company were approximately $8,072,000. On August 29, 1996, the underwriter exercised its option to acquire an additional 300,000 shares of common stock with net proceeds to the Company of $1,305,000. 6 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS Three Months Ended March 31, 1996 Compared to Three Months ---------------------------------------------------------- Ended March 31, 1997. -------------------- During the three months ended March 31, 1996, the Company had total revenues of $415,728 compared to total revenues of $127,068 during the three months ended March 31, 1997. Revenues for 1996 consisted primarily of interest income of $11,154 and contract revenues in the amount of $402,574. During the first quarter of 1997, the Company received a $26,000 partial payment for the preparation of a research agreement and business plan for a foreign country. Other 1997 revenues consisted of interest income of $101,068. The approximately $90,000 increase in interest income in 1997 compared to 1996 is due to the increased investment of funds resulting from the Company's initial public offering (IPO) completed in August 1996. During the 1996 first quarter, research and development expenses were $134,209 as compared to $258,325 during the 1997 first quarter. The $124,116 increase in R&D expenses in 1997 was due to the commencement of new clinical studies. During 1996 and 1997, the Company incurred general and administrative expenses of $238,712 and $383,143, respectively. The $144,431 increase in 1997 was due primarily to additional expenses resulting from the Company becoming a publicly held company. These expenses consisted primarily of legal and audit fees, public relations and investor relations fees, and additional insurance coverage. 7 8 LIQUIDITY AND CAPITAL RESOURCES At March 31, 1997, the Company had cash of $2,114,119 and marketable securities of $5,984,370 with accounts payable of $61,055 and other funding commitments for clinical studies of approximately $1.7 million. The Company intends to focus its development activities on the treatment of Sjogrens syndrome, oral mucositis in cancer patients, and hepatitis B and C ("Primary Development Projects"). The Company anticipates, based on its currently proposed plans and assumptions relating to its operations (including assumptions regarding the progress of its research and development and the timing and costs associated with its Primary Development Projects), that the Company's existing capital resources will be sufficient to satisfy the Company's estimated cash requirements for at least the next 21 months. Unless the Company generates significant revenues during such period, which the Company believes is unlikely, the Company will need additional financing to fully fund such development. Moreover, the Company's estimate of the amount required to complete its Primary Development Projects may prove to be inaccurate. The Company has no current arrangements with respect to, or sources of, additional financing and it is not anticipated that any of the officers, directors or shareholders of the Company will provide any portion of the Company's future financing requirements. There can be no assurance that, when needed, additional financing will be available to the Company on commercially reasonable terms, or at all. In the event that the Company's plans change, its assumptions change or prove inaccurate, or if the remaining net proceeds of the Company's recent public offering, together with other capital resources, otherwise prove to be insufficient to fund operations, the Company could be required to seek additional financing sooner than currently anticipated. Any inability to obtain additional financing when needed would have a material adverse effect on the Company, including requiring the Company to significantly curtail or possibly cease its operations. 8 9 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibit 27. Financial Data Schedule No reports on Form 8-K were filed during the quarter ended March 31, 1997. 9 10 SIGNATURES Pursuant to the requirements of Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMARILLO BIOSCIENCES, INC. Date: May 8, 1997 By: /s/ JOSEPH M. CUMMINS -------------------------------- Joseph M. Cummins President and Chief Executive Officer Date: May 8, 1997 By: /s/ CHARLES H. HUGHES -------------------------------- Charles H. Hughes Executive Vice President and Chief Financial Officer (Chief Accounting Officer) 10 11 EXHIBIT INDEX
Exhibit Description - ------- ----------- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1997 AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN ITS FORM 10-QSB FOR THE PERIOD ENDED MARCH 31, 1997. 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 2,114,119 5,984,370 0 0 0 8,261,120 265,080 125,873 8,920,741 383,649 2,300,000 0 0 54,142 6,182,950 8,920,741 0 127,068 0 258,325 0 0 29,625 (544,025) 0 (544,025) 0 0 0 (544,025) (.10) (.10)
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