-----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, JE6mdA8pTsEOsQvhM0tt0fDbWP2nZFTgWZfltPzNz8jtkSUdi9BIAgtt4WuhJcdt iGkcqS5J5D/akwm0NA9JkA== 0000950134-98-004105.txt : 19980513 0000950134-98-004105.hdr.sgml : 19980513 ACCESSION NUMBER: 0000950134-98-004105 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980512 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: SEC FILE NUMBER: 000-20791 FILM NUMBER: 98616996 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, 1998 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, 1998 --------------------------------------- [ ] 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, 1998, there were 5,414,232 shares of the issuer's common stock outstanding. This report contains 13 pages. 1 2 AMARILLO BIOSCIENCES, INC. INDEX PART I: FINANCIAL INFORMATION PAGE NO. -------- Item 1. Financial Statements Consolidated Balance Sheets - December 31, 1997 and March 31, 1998 . . . . 3 Consolidated Statements of Operations - Three Months Ended March 31, 1997 and 1998 and Cumulative from June 25, 1984 (Inception) through March 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 1997 and 1998 and Cumulative from June 25, 1984 (Inception) through March 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 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, 1997 1998 ---------- ---------- ASSETS Current assets: Cash and cash equivalents $ 879,170 $ 299,259 Marketable securities 6,007,182 6,089,092 Other current assets 70,779 57,142 ---------- ---------- Total current assets 6,957,131 6,445,493 Property and equipment, net 125,179 125,263 Patent license, net of accumulated amortization of $73,824 and $75,637 at December 31, 1997 and March 31, 1998, respectively 51,176 49,363 Organization cost, net of accumulated amortization of $4,962 and $6,084 at December 31, 1997 and March 31, 1998, respectively 1,122 -- Investment in ISI common stock 114,023 93,516 ---------- ---------- Total assets $7,248,631 $6,713,635 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 74,754 $ 166,284 Accrued interest expense 91,356 120,606 Other accrued expenses 47,958 19,324 ---------- ---------- Total current liabilities 214,068 306,214 Notes payable to related party 2,600,000 2,600,000 ---------- ---------- Total liabilities 2,814,068 2,906,214 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 13,392,138 13,392,138 Deficit accumulated during the development stage (9,045,415) (9,652,050) Unrealized gain (loss) on marketable securities 33,698 13,191 ---------- ---------- Total stockholders' equity 4,434,563 3,807,421 ---------- ---------- Total liabilities and stockholders' equity $7,248,631 $6,713,635 ========== ==========
See accompanying notes. 3 4 AMARILLO BIOSCIENCES, INC. AND SUBSIDIARIES (COMPANIES IN THE DEVELOPMENT STAGE) CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31, Cumulative from June ------------------------------- 25, 1984 (Inception) 1997 1998 through March 31, 1998 ------------- ------------- ---------------------- Revenues: Contract revenues $ -- $ -- $ 9,000,000 Interferon sales -- -- 420,974 Interest income 101,068 89,811 1,207,629 Sublicense fees -- -- 113,334 Royalty income -- -- 31,544 Gain on sale of ISI stock -- -- 188,562 Other 26,000 -- 604,371 ------------- ------------- ------------- 127,068 89,811 11,566,414 Expenses: Research and development expenses 349,680 368,517 10,348,111 Selling, general, and administrative expenses 291,788 298,679 10,106,159 Interest expense 29,625 29,250 729,194 ------------- ------------- ------------- 671,093 696,446 21,183,464 ------------- ------------- ------------- Loss before income taxes (544,025) (606,635) (9,617,050) Income tax expense -- -- 35,000 ------------- ------------- ------------- Net loss $ (544,025) $ (606,635) $ (9,652,050) ============= ============= ============= Basic and diluted loss per share $ (0.10) $ (0.11) ============= ============= Weighted average shares outstanding 5,414,232 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 June March 31, 25, 1984 (Inception) --------------------------------- through 1997 1998 March 31, 1998 ----------- ----------- --------------- Net cash used in operating activities $ (685,178) $ (575,470) $(8,647,351) ----------- ----------- ----------- Net cash provided by (used in) investing activities -- (4,441) (6,530,409) ----------- ----------- ----------- Net cash provided by financing activities -- -- 15,477,019 ----------- ----------- ----------- Net increase (decrease) in cash and cash equivalents (685,178) (579,911) 299,259 ----------- ----------- ----------- Cash and cash equivalents at beginning of period 2,799,297 879,170 -- ----------- ----------- ----------- Cash and cash equivalents at end of period $ 2,114,119 $ 299,259 $ 299,259 =========== =========== =========== 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, 1997 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, 1998 are not necessarily indicative of the results that may be expected for the full year ending December 31, 1998. 2. Loss per share. Loss per share is computed based on the weighted average number of common shares outstanding. 3. Reclassification. Certain amounts have been reclassified from selling, general and administrative expenses to research and development expenses for the three months ended March 31, 1997. The impact of the reclassification was approximately $91,000. 4. Comprehensive income. As of January 1, 1998, the Company adopted Financial Accounting Standards Board Statement No. 130, Reporting Comprehensive Income. Statement 130 establishes new rules for the reporting and display of comprehensive income and its components; however, the adoption of this Statement had no impact on the Company's net income or shareholders' equity. Statement 130 requires unrealized gains or losses on the Company's available-for-sale securities, which prior to adoption were reported separately in shareholders' equity, to be included in other comprehensive income. Prior year financial statements have been reclassified to conform to the requirements of Statement 130. During the first quarter of 1998 and 1997, total comprehensive income amounted to $627,142 and $552,025. 6 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS Three Months Ended March 31, 1997 Compared to Three Months Ended March 31, 1998. During the three months ended March 31, 1997, the Company had total revenues of $127,068 compared to total revenues of $89,811 during the three months ended March 31, 1998. 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. Revenues for the first quarter of 1998 consisted of interest income of $89,811. During the 1997 first quarter, research and development expenses were $349,680 as compared to $368,517 during the 1998 first quarter. The $18,837 increase in research and development expenses in 1998 was due to the completion of certain clinical studies and the commencement of new clinical studies. During 1997 and 1998, the Company incurred general and administrative expenses of $291,788 and $298,679, respectively. There was no significant difference reflected in 1998 compared to 1997. 7 8 LIQUIDITY AND CAPITAL RESOURCES At March 31, 1998, the Company had cash of $299,259 and marketable securities of $6,089,092 with accounts payable of $166,284 and other funding commitments for clinical studies of approximately $627,000. The Company intends to focus its development activities on the treatment of Sjogren's syndrome, fibromyalgia, opportunistic infections in patients who are HIV positive, myeloproliferative diseases, hepatitis B and hepatitis C. 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 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, the Company will need additional financing to fully fund such development. Moreover, the Company's estimate of the amount required to complete its 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 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, 1998. 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 11, 1998 By: /s/ JOSEPH M. CUMMINS ----------------------------------------- Joseph M. Cummins President, Chief Executive Officer and Chief Financial Officer 10 11 EXHIBIT INDEX
EXHIBIT NUMBER 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, 1998 AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN ITS FORM 10-QSB FOR THE PERIOD ENDED MARCH 31, 1998. 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 299,259 6,089,092 0 0 0 6,445,493 238,603 113,340 6,713,635 306,214 2,600,000 0 0 54,142 6,659,493 6,713,635 0 89,811 0 368,517 0 0 29,250 (606,635) 0 (606,635) 0 0 0 (606,635) (.11) (.11)
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