-----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, WSYzbrdrJcu8saHry6hj0tjDRl6PzOBKCoMRiApwj+Ae3lZGmttCIe/RkMzkieIW iMKcAGFPFv7nSnZ7wT7dUg== 0000950134-99-004329.txt : 19990518 0000950134-99-004329.hdr.sgml : 19990518 ACCESSION NUMBER: 0000950134-99-004329 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 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: 99625345 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 10QSB FOR QUARTER ENDING MARCH 31, 1999 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, 1999 ------------------------------------------------ [ ] 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, 1999 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, 1998 and March 31, 1999........................................................... 3 Consolidated Statements of Operations - Three Months Ended March 31, 1998 and 1999 and Cumulative from June 25, 1984 (Inception) through March 31, 1999........................ 4 Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 1998 and 1999 and Cumulative from June 25, 1984 (Inception) through March 31, 1999.............. 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................................... 8 Signatures ................................................................... 9
2 3 AMARILLO BIOSCIENCES, INC. AND SUBSIDIARIES (COMPANIES IN THE DEVELOPMENT STAGE) CONSOLIDATED BALANCE SHEETS
December 31, March 31, 1998 1999 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 4,776,328 $ 3,855,571 Other current assets 43,415 46,268 ------------ ------------ Total current assets 4,819,743 3,901,839 Property and equipment, net 116,761 118,691 Patent license, net of accumulated amortization of $81,177 and $82,990 at December 31, 1998 and March 31, 1999, respectively 43,823 42,010 Investment in ISI common stock 5,735 5,735 ------------ ------------ Total assets $ 4,986,062 $ 4,068,275 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 88,920 $ 1,128,546 Accrued interest 208,356 237,205 Other accrued liabilities 20,722 19,995 ------------ ------------ Total current liabilities 317,998 1,385,746 Notes payable to related party 2,600,000 2,600,000 ------------ ------------ Total liabilities 2,917,998 3,985,746 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 (11,378,216) (13,363,751) ------------ ------------ Total stockholders' equity 2,068,064 82,529 ------------ ------------ Total liabilities and stockholders' equity $ 4,986,062 $ 4,068,275 ============ ============
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) through 1998 1999 March 31, 1999 ------------ ------------ ------------------- Revenues: Contract revenues $ -- $ -- $ 9,000,000 Interferon sales -- -- 420,974 Interest income 89,811 48,687 1,463,324 Sublicense fees -- -- 113,334 Royalty income -- -- 31,544 Gain on ISI stock -- -- 113,972 Other -- -- 604,431 ------------ ------------ ------------ 89,811 48,687 11,747,579 Expenses: Research and development expenses 368,517 1,681,044 13,033,488 Selling, general, and administrative expenses 298,679 324,329 11,197,049 Interest expense 29,250 28,849 845,793 ------------ ------------ ------------ 696,446 2,034,222 25,076,330 ------------ ------------ ------------ Loss before income taxes (606,635) (1,985,535) (13,328,751) Income tax expense -- -- 35,000 ------------ ------------ ------------ Net loss $ (606,635) $ (1,985,535) $(13,363,751) ============ ============ ============ Basic and diluted loss per share $ (0.11) $ (0.37) ============ ============ 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 March 31, from June 25,1984 ------------------------------ (Inception) through March 31, 1998 1999 1999 ------------ ------------ ------------ Net cash used in operating activities $ (575,470) $ (914,627) $(11,085,464) ------------ ------------ ------------ Net cash used in investing activities (4,441) (6,130) (535,984) ------------ ------------ ------------ Net cash provided by financing activities -- -- 15,477,019 Net increase (decrease) in cash and cash equivalents (579,911) (920,757) 3,855,571 ------------ ------------ ------------ Cash and cash equivalents at beginning of period 879,170 4,776,328 -- ------------ ------------ ------------ Cash and cash equivalents at end of period $ 299,259 $ 3,855,571 $ 3,855,571 ============ ============ ============ 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, 1998 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, 1999 are not necessarily indicative of the results that may be expected for the full year ending December 31, 1999. 2. Loss per share. Loss per share is computed based on the weighted average number of common shares outstanding. 6 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1999. In the first quarter of 1999 research and development expenses increased significantly to $1,681,044 compared to $368,517 for the first quarter of 1998. This increase was due primarily to the Phase 3 trial in progress for Sjogren's syndrome. Other research and development expenses were incurred for a Phase 2 clinical trial for fibromyalgia syndrome. Salary expense totalled $206,938 for the quarter ending March 31, 1999 including $159,000 allocated to research and development. For the first quarter of 1998 salary expense was $93,522 including $87,000 allocated to research and development. This increase was due to filling three new positions in the Company. These were a chief operating officer/vice president of business development, director of marketing and director of research and development. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1999 the Company had cash balances of $3,855,571 with accounts payable of $1,128,546. Research studies in Sjogren's syndrome and fibromyalgia syndrome represented $1,095,840 of the accounts payable. Of this amount, $753,840 was paid in the first week of April. The Company will need to raise additional funds to complete the Sjogren's syndrome Phase 3 clinical trial. If these funds are not obtained in the second quarter of this year the study will be halted along with a reduction in staff and administrative expenses. Management believes that based on the Company's ability to curtail clinical trial expense and to reduce staff and administrative expenses, available funds are sufficient to meet anticipated cash requirements for the remainder of 1999. Discussions are presently underway to raise additional funds, and the Company is also considering the possibility of a strategic alliance with another biotech company. SUBSEQUENT EVENTS On April 2, 1999 the Company entered into an agreement whereby two Promissory Notes totalling $2,600,000 plus accrued interest of $237,526 owed to Hayashibara Biochemical Laboratories ("Hayashibara") was converted into common stock. The total number of shares issued to Hayashibara was 946,094 raising its total shares owned to 34.3% of the 6.36 million shares outstanding. Prior to the conversion, total shares outstanding were 5.41 million of which Hayashibara owned 22.8%. The value of the shares issued was based on the weighted average sales price of the common stock for the ten days prior to April 2nd and amounted to $2.9992 per share. 7 8 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, 1999. 8 9 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 14, 1999 By: /s/ JOSEPH M. CUMMINS ------------------------------------------- Joseph M. Cummins President, Chief Executive Officer and Chief Financial Officer 10 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ----------- ----------- Exhibit 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, 1999 AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN THIS FORM 10-QSB FOR PERIOD ENDED MARCH 31, 1999. 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 3,855,571 0 0 0 0 3,901,839 250,507 131,817 4,068,275 1,385,747 2,600,000 0 0 54,142 28,386 4,068,275 0 48,687 0 1,681,044 324,329 0 28,849 (1,985,535) 0 (1,985,535) 0 0 0 (1,985,535) (.37) (.37)
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