10QSB 1 protide022026_10qsb.txt PROTIDE PHARMACEUTICALS, INC. FORM 10-QSB U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (X) Quarterly report under Section 13 of 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended FEBRUARY 28, 2002 or ----------------- ( ) Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ____________ to ____________ Commission file number 0-19866 ------------------------- PROTIDE PHARMACEUTICALS, INC. (Exact name of small business issuer as specified in its charter) MINNESOTA 36-3384240 ------------------------------------ ----------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1311 HELMO AVENUE, SAINT PAUL, MINNESOTA 55128 -------------------------------------------- ----------------------------- (Address of principal executive offices) (Zip Code) Issuers telephone number, including area code: (651) 730-1500 Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the past 12 months (or for such shorter periods that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ State the number of shares outstanding of each the issuer's classes of common equity, as of the latest practicable date. THE NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE, OUTSTANDING ON MARCH 31, 2002 WAS 3,733,169. Transitional small business format disclosure: Yes _____ No __X__ 1 Table of Contents PROTIDE PHARMACEUTICALS, INC. Report on Form 10-QSB for fiscal quarter ended February 28, 2002 PART I -- FINANCIAL INFORMATION Page ---- ITEM 1. Financial Statements Balance Sheet as of August 31, 2001 and February 28, 2002 3 Statement of Operations -- Three months ended February 28, 2002 and February 28, 2001, and six months ended February 28, 2002 and February 28, 2001 5 Statement of Changes in Shareholders' Equity for the year ended August 31, 2001 and the six months ended February 28, 2002 6 Statement of Cash Flows -- Six months ended February 28, 2002 and February 28, 2001 7 Notes to Financial Statements 8 ITEM 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations 9 PART II -- OTHER INFORMATION 14 2 PART I -- FINANCIAL INFORMATION ITEM 1 -- FINANCIAL STATEMENTS PROTIDE PHARMACEUTICALS, INC. BALANCE SHEET
February, 28 August 31, ASSETS 2002 2001 ------------ ------------ (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 88,055 $ 197,200 Certificates of deposit 175,000 215,000 Trade receivables 74,611 26,448 Accrued interest receivable 6,329 6,074 Inventories 58,059 52,711 Other 4,084 1,593 ------------ ------------ Total current assets 406,138 499,026 ------------ ------------ EQUIPMENT AND LEASEHOLD IMPROVEMENTS Laboratory and production equipment 226,937 226,937 Office furniture and equipment 94,822 94,822 Leasehold improvements 138,426 138,426 ------------ ------------ 460,185 460,185 Less accumulated depreciation (397,817) (383,622) ------------ ------------ 62,368 76,563 OTHER ASSETS Patents, net 46,584 48,340 ------------ ------------ TOTAL ASSETS $ 515,090 $ 623,929 ============ ============
See Notes to Financial Statements. 3 PROTIDE PHARMACEUTICALS, INC. BALANCE SHEET
February 28, August 31, LIABILITIES AND SHAREHOLDERS' EQUITY 2002 2001 ------------ ------------ (Unaudited) CURRENT LIABILITIES Accounts payable $ 7,336 $ 12,174 Accrued liabilities 31,169 53,563 Bank note payable - current 71,508 72,157 ------------ ------------ Total current liabilities 110,013 137,894 ------------ ------------ SHAREHOLDERS' EQUITY Common stock issued and outstanding 37,332 37,332 Common stock subscribed 2,959 1,577 Additional paid-in capital 5,832,291 5,768,669 ------------ ------------ 5,872,582 5,807,578 Accumulated deficit (5,467,505) (5,321,543) ------------ ------------ Total shareholders' equity 405,077 486,035 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 515,090 $ 623,929 ============ ============
See Notes to Financial Statements. 4 PROTIDE PHARMACEUTICALS, INC. STATEMENT OF OPERATIONS (Unaudited)
---------------------------------------------------------------------------------------------------- Three months ended Six months ended February 28, February 28, 2002 2001 2002 2001 ---------------------------------------------------------------------------------------------------- REVENUES Net sales $ 118,245 $ 50,461 $ 161,940 $ 99,180 Cost of products sold 52,140 19,512 73,086 40,395 ---------------------------------------------------------------------------------------------------- GROSS MARGIN 66,105 30,949 88,854 58,785 ---------------------------------------------------------------------------------------------------- OPERATING EXPENSES Research and development 38,486 43,483 74,107 78,874 Marketing and sales 26,747 24,262 56,116 49,195 Administration 55,230 55,832 110,224 120,549 ---------------------------------------------------------------------------------------------------- Total operating expenses 120,463 123,577 240,447 248,618 OPERATING LOSS (54,358) (92,628) (151,593) (189,833) OTHER INCOME (EXPENSE) Interest and investment income 1,745 6,756 3,861 14,178 Other income 3,645 0 3,645 20,539 Interest expense (853) (684) (1,875) (1,721) ---------------------------------------------------------------------------------------------------- Total other income, net 4,537 6,072 5,631 32,996 NET LOSS ($ 49,821) ($ 86,556) ($ 145,962) ($ 156,837) ===================================================================================================== BASIC AND DILUTED LOSS PER COMMON SHARE ($ 0.01) ($ 0.02) ($ 0.04) ($ 0.04) ---------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 3,733,169 3,715,947 3,733,169 3,699,467 =====================================================================================================
See Notes to Financial Statements. 5 PROTIDE PHARMACEUTICALS, INC. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
Balance at Shares Net loss for Balance at August 31, 2001 Subscribed the period February 28, 2002 --------------------------------------------------------------------------------------------------- Common Stock Shares 3,733,169 3,733,269 Amount $ 37,332 $ 37,332 Common Stock Subscribed Shares 157,659 138,306 295,965 Amount $ 1,577 $ 1,382 $ 2,959 Additional Paid- in Capital $ 5,768,669 $ 63,622 $ 5,832,291 Accumulated Deficit ($ 5,321,543) ($ 145,962) ($ 5,467,505) --------------------------------------------------------------------------------------------------- Total $ 486,035 $ 65,004 ($ 145,962) $ 405,077
See Notes to Financial Statements. 6 PROTIDE PHARMACEUTICALS, INC. STATEMENT OF CASH FLOWS (Unaudited)
Six months ended February 28, ---------------------------- 2002 2001 ---------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss for the period ($ 145,962) ($ 156,837) Adjustments to reconcile net loss to Net cash used in operating activities: Depreciation and amortization 15,951 16,306 Changes in assets and liabilities: (Increase) decrease in: Accounts receivable (48,163) 6,252 Accrued interest receivable (255) 2,618 Inventories (5,348) (5,703) Other (2,491) 6,020 Increase (decrease) in: Accounts payable (4,838) 5,687 Accrued liabilities (22,394) (4,232) ---------------------------------------------------------------------------------------------- Net cash used in operating activities (213,500) (129,889) ---------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Maturity of bank certificates of deposit, net 40,000 170,867 Capital expenditures 0 0 ---------------------------------------------------------------------------------------------- Net cash from investing activities 40,000 170,867 ---------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING: Proceeds from issuing common stock subscriptions 65,004 5,000 Principal payments on bank note payable (649) (780) ---------------------------------------------------------------------------------------------- Net cash provided by (used in) financing 64,355 4,220 activities Net increase (decrease) in cash and cash equivalents (109,145) 45,198 CASH AND CASH EQUIVALENTS: Beginning of period 197,200 63,935 ---------------------------------------------------------------------------------------------- End of period $ 88,055 $ 109,133 ==============================================================================================
See Notes to Financial Statements. 7 PROTIDE PHARMACEUTICALS, INC. NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 28, 2002 NOTE A - BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310 of Regulation S-B. 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. The organization and business of the Company, accounting policies followed by the Company and other information is contained in the notes to the Company's financial statements filed as part of the Company's August 31, 2001 Form 10-KSB. This quarterly report should be read in connection with such annual report. NOTE B - CASH AND CASH EQUIVALENTS For purposes of reporting the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. NOTE C - SHORT-TERM INVESTMENTS As of February 28, 2002, the Company had investments of $175,000 in certificates of deposit. Certificates of deposit are made only with the highest rated banks. The Company also utilizes a money market fund, which is restricted by its charter to Tier 1 instruments, for a portion of its investments. At times throughout the year, the Company's cash, cash equivalents and certificates of deposit in financial institutions may exceed FDIC insurance limits. The Company has not experienced any losses in such accounts. NOTE D - NOTES PAYABLE BANK During April 1997 the Company borrowed $100,000 from a local bank with the proceeds used for financing a portion of the tenants' improvements in the Company's new facility. In February 2001 the loan was renegotiated with a different Bank. The new loan is secured by a certificate of deposit at this bank. The interest rate for this loan, currently 5.5%, is tied to the certificate of deposit rate. NOTE E - LOSS PER COMMON SHARE Basic loss per share is computed based upon the weighted average number of common shares outstanding during the period. Stock options for 307,000 shares were not included in the computation of diluted loss per share as the results were antidilutive. 8 ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION a. BACKGROUND AND PRODUCTS In January 2001 Celox Laboratories, Inc. and Protide Pharmaceuticals, Inc., merged with the surviving corporation named Protide Pharmaceuticals, Inc. Protide Pharmaceuticals, Inc. ("Protide" or the "Company") is a biotechnology company devoted to the discovery, development and commercialization of technologies and processes in clinical cell therapy and transfusion medicine, specifically in the areas of cancer, genetic disorders, cell engineering and transplantation. The focus of Protide is in the area of gene therapy, cell therapy and contract manufacturing for companies and educational institutions that are working in these areas. Celox Laboratories, Inc. will continue to market products that are sold for research purposes. Celox was formed in 1985 as a Company that researches, develops, manufactures, and markets cell biology products that are used in the propagation of cells derived from mammals, including humans, and other species. These specialized cell growth products are used primarily in academic, pharmaceutical and other commercial laboratories to improve the growth, productivity and quality of cell-derived medical and other biological products such as vaccines, monoclonal antibodies, interferons, and human growth factor. Since its inception, the Company has pursued a strategy of developing non-serum based products for the growth of human and other mammalian cells which management believes will have significant commercial potential. The Company markets more than 20 different products. The Company's proprietary products consist of six different serum-free supplements: TCM(TM), TM-235(TM), TCH(TM), Nephrigen(TM), HemaPro(TM) and VaxMax(TM)and two cell freezing solutions, Cellvation(TM) and pZerve(TM). VaxMax(TM), introduced in September of 1993, was developed specifically for use in the production of veterinary vaccines. Nephrigen(TM) was introduced in fiscal 1998 and is a serum-free growth medium developed specifically for the culturing of Human Embryonic Kidney (293) cells. As part of the Nephrigen(TM) system, the Company also introduced a non-enzymatic dissociation solution that is used instead of an enzyme such as trypsin. HemaPro(TM) was also introduced in fiscal 1998 and is a low protein, serum-free medium for clonogenic assays or EX VIVO expansion of human progenitor cells. The Company intends to obtain IN VITRO diagnostic status for HemaPro(TM). pZerve(TM) was introduced in 1999 and is used primarily for cryopreserving human cells. pZerve(TM) is used as a research product only, it is not for human use. An additional proposed clinical product, ViaStem(TM), has completed preclinical testing. This product was developed to improve the preservation of critical cells (e.g., stem cells), which are required for bone marrow transplantation. During the first quarter of fiscal 2001 the Company introduced the new product STEMSOL(TM). STEMSOL(TM) is a sterile filtered, USP Grade Dimethyl Sulfoxide (DMSO) used in a cryopreservation solution for, among other things, bone marrow, peripheral-blood stem cells and cord blood preservations. In addition, DMSO/Dextran was introduced in the first quarter of fiscal 2001 and is also used as a cryopreservative for these critical cells. The Company has received a Drug Master File classification from the Food and Drug Administration (FDA) for TCM(TM). This classification will expedite the FDA approval process for customers who want to use the Company's TCM(TM) product for manufacturing purposes. 9 The Company also manufactures five basal media formulations, a series of buffered saline solutions, other cell biology reagents, and a variety of custom formulations. During the third quarter of fiscal 2000, the Company entered into an agreement to manufacture specialized solutions for the processing of pancreatic islet cells for transplants. These cells may be used instead of whole organ transplants. During the first quarter of fiscal 2002 an order was received from a second transplant center for these specialized solutions. The revenue from this order was reflected in the second quarter of fiscal 2002. b. VIASTEM(TM) In March 1995, the Company filed a patent application for ViaStem(TM) in the U.S. Patent and Trademark Office. The Company received the U.S. Patent in early December 1996. This patent provides protection of the Company's ViaStem(TM) technology through March of 2015. A second U.S. Patent was received in August 1998. This second patent broadened the patented uses of ViaStem(TM) in bone marrow transplantation and related therapies. The Company has also filed the documents needed for an International Patent Application as required by the Patent Cooperation Treaty. In October 1998 the Company received notice from the New Zealand and Australian Patent Office that a patent on ViaStem(TM) had been granted by each of the respective countries. In March 2000 notice was received from the Patent Office in Canada that a patent had been issued for ViaStem(TM). The Company received notice from the Russian Patent Office in May 2000 of the official issue date for the patent for ViaStem(TM) in Russia. In March 2002 a patent for ViaStem(TM) was received from the Mexican Patent Office. Protide received notice from the Japan Patent Office that a patent on ViaStem(TM) had been granted in Japan. Initial reports from other countries that have reviewed the international patent application have been positive. Due to the unique nature of ViaStem(TM), the Company pursued the patent process for this product. On March 31, 2000, Protide Pharmaceuticals, Inc. (the wholly owned subsidiary of Celox) entered into an agreement with Fairview-University Medical Center (FUMC), Minneapolis, MN. FUMC will provide collecting, processing and assaying of human peripheral blood stem cells as part of Protide's clinical investigation of ViaStem(TM). In the second quarter of fiscal 2002, the Company named a new Principal Investigator (PI) at the University of Minnesota to complete the additional information requested by the FDA after the depature of the original PI from the University. During May 2000 the Company submitted an application to the Food and Drug Administration (FDA) to initiate human clinical trials for ViaStem(TM). This was the first submission ever made by the Company to the FDA for testing in human subjects. In August 2000 the Company announced that it had received notice from the FDA that the clinical trial on had been placed on clinical hold pending further information. The Company intends to submit the additional requested information to the FDA in the near future. c. DISTRIBUTION/MARKETING The Company continues to sell its products on a direct basis to customers around the world. In addition the Company has formed the following distribution avenues: The Company has a nonexclusive worldwide distribution agreement with ICN Pharmaceuticals, Inc. (NYSE:ICN), Costa Mesa, CA. Under the agreement, ICN is marketing Celox' TCM(TM), TCH(TM), TM-235(TM) serum replacement products as well as Cellvation(TM). The Company has also entered into an agreement with ICN to custom manufacture certain of the Company's basal media and balanced salt solutions to ICN for worldwide distribution. ICN manufactures and markets a broad range of prescription and over-the-counter pharmaceuticals, medical diagnostic products and biotechnology research products in North and Latin America, Eastern and Western Europe and the Pacific Rim countries. 10 In 1997, the Company began providing its proprietary products to Sigma Chemical Company (NASDAQ:SIAL), St. Louis, MO. under a private label distribution agreement for worldwide distribution. In 1997, the Company entered into a nonexclusive distribution agreement with TaKaRa Shuzo Co., Ltd., Biomedical Group, Kyoto, Japan. Under the agreement, TaKaRa will initially market Celox' proprietary product Cellvation(TM). TaKaRa's Biomedical Group leads the industry in several areas owing to the international scope of its research operations which span from the People's Republic of China to North America and Europe. TaKaRa will market Cellvation(TM) in Japan, Taiwan, Korea and People's Republic of China. The Company also has distribution of its products in Japan through Funakoshi Co., LTD, a well- established Japanese distributor. In March 2000, the Company entered into an agreement with SciQuest.com, Inc. (NASDAQ:SQST) to sell its products online. This agreement was canceled in the third quarter of fiscal 2001 after SciQuest.com made changes to the agreement which were unfavorable to Protide. RESULTS OF OPERATIONS During the quarter ended February 28, 2002, the Company had net sales of $118,245 which was an increase of $67,784 or 134% from $50,461 reported in the same quarter for the prior year. For the six month period ended February 28, 2002 net sales totaled $161,940 resulting in an increase of $62,760 (63%) from $99,180 reported in the comparable period in the previous fiscal period. The increase between years for both of the reporting periods results primarily from the amount and timing of custom orders, orders received from distributors and increased sales of the new products. The Company had a net loss of $49,821 for the quarter ended February 28, 2002 compared to a net loss of $86,556 for the same period in the previous year. For the six months ended February 28, 2002 the Company had a net loss of $145,962 compared to $156,837 for the comparable period in the previous year. The decreased loss for both of the reporting periods results from substantially increased sales coupled with reduced operating expenses offset by a decrease in other income of $16,894 for the six month reporting period. The six month period in the previous year included the receipt of a check in the amount of $20,539 from the KPMG Litigation Settlement Fund in fiscal 2001. This check was the result of a settlement with the Piper Jaffray Institutional Government Fund's auditors, KPMG. The check was recognized as other income in the first quarter of fiscal 2001. On a per share basis, the loss for the quarter ended February 28, 2002 equaled 1 cent versus a 2 cent loss in the comparable period in fiscal 2001. For the six months ended February 28, 2002 the Company had a 4 cent loss per share compared to a 4 cent loss per share in the comparable period in the previous year. The cost of products sold was $52,140 or 44% of net sales for the three months ended February 28, 2002, as compared to $19,512 or 39% of net sales for the three months ended February 28, 2001 The cost of products sold for the six months ended February 28, 2002 was $73,086 or 45% of net sales compared to $40,395 or 41% of net sales for the six months ended February 28, 2001. The increased percentage for the current quarter and the six month reporting period results from the mix of products sold. An operating loss of $54,358 was generated for the quarter ended February 28, 2002 compared to an operating loss of $92,628 for the same period in the previous year. For the six months ended February 28, 2002 an operating loss of $151,593 was incurred compared to an operating loss of $189,833 for the six months ended February 28, 2002. The decrease between years for the three month and six reporting periods resulted from substantial sales increases along with decreases in administrative and research and development expenses offset by increased marketing and sales expenses associated with the introduction of new products. 11 The Company received interest and investment income of $1,745 during the quarter ended February 28, 2002 as compared to $6,756 in the prior year. For the six month period ended February 28, 2002 the Company received $3,861 in interest and investment income compared to $14,178 received in the comparable period in the previous year. Investment income is derived primarily from the investment of the proceeds of the Company's March 1992 initial public offering as well as from subsequent private placements. The decrease in investment income during the quarter and the six month reporting period as compared to the previous year results from significantly lower interest rates available for investment balances. Operating expenses decreased $3,114 (3%) to $120,463 from $123,577 for the quarter ended February 28, 2002 as compared to the prior year. For the six months ended February 28, 2002 operating expenses decreased by $8,171 to $240,447 from $248,618 in the previous year. The decrease for the three month reporting period as well as the six month period as compared to the prior fiscal year results from lower administrative expenses and lower research and development expenses offset by an increase in marketing and sales costs, which fluctuate based on timing of promotional activities. Research and development costs decreased by $4,997 (11%) to $38,486 from $43,483 in the current quarter as compared to the previous fiscal year. For the six month period, research and development costs decreased by $4,767 to $74,107 from $78,874 in the previous year. The decrease for the current quarter and the six month period reflects lower expenditures in the areas of salaries and professional fees as compared to the prior year. The Company expects the costs of research and development to fluctuate based on the status of preclinical and clinical trials for ViaStem(TM). Marketing expenses increased by $2,485 (10%) to $26,747 from $24,262 for the quarter ended February 28, 2002 as compared to the previous year. For the six months ended February 28, 2002, marketing expenses increased by $6,921 to $56,116 from $49,195 in fiscal 2001. The increase for the current quarter and the six month reporting period as compared to the previous year results primarily from promotional activities connected with the marketing of STEMSOL(TM) and DMSO/Dextran, a companion product, during the quarter. The Company expects that marketing and sales expenses will fluctuate based on introduction of new products, new studies, and as new advertising materials are developed. Administrative expenses decreased by $602 (1%) for the quarter ended February 28, 2002 compared to the previous fiscal year to $55,230 from $55,832 Administrative expenses decreased by $10,325 (9%) to $110,224 from $120,549 in the current six month reporting period as compared to the previous year. The decrease for both the three month reporting period and the six month reporting period is due to the amount and timing of legal and professional fees expended in connection with the introduction of new products, agreements and matters related to the advancement of ViaStem(TM). LIQUIDITY AND CAPITAL RESOURCES Capital resources on hand at February 28, 2002 include cash and short-term investments of $263,055 and net working capital of $296,125. This represents a decrease of $149,145 (36%) in cash and short-term investments and a decrease of $65,007 (18%) in net working capital as compared to August 31, 2001. The Company is leasing approximately 9,500 square feet of office, laboratory and warehouse space in St. Paul, MN under a seven year lease. The Company moved into the new facility during March 1997. As partial payment for tenant improvements in the new facility, the Company borrowed $100,000 from a local bank. In February 2000 the loan was renegotiated with a different bank. The new loan is secured by a certificate of deposit at this bank. The interest rate for this loan, currently 4%, is tied to the certificate of deposit rate. The loan is for a one year term with a maturity in February 2003. The balance of the tenant improvements over this amount was paid with Company funds. 12 During the second quarter of fiscal 2000 the Company raised $175,150 in additional capital by selling 145,000 units at $1.15 per unit to five investors through a private placement. Each unit consisted of one share of common stock and a warrant to purchase an additional two shares of common stock at an exercise price of $0.10 per share. During the third quarter of fiscal 2000 additional funds in the amount of $211,750 were raised by selling units at $1.15 per unit and common stock at $1.40 per share to other investors in a private placement. The additional funds raised will be primarily used for advancing ViaStem(TM) through the necessary testing before FDA approval can be obtained. During the second quarter of fiscal 2001, an additional 50,000 shares were issued as a result of a private placement participant exercising warrants. During the fourth quarter of fiscal 2001, the Company sold subscriptions for 157,659 units of common stock and a warrant at $0.47 per unit in a private offering. The Company sold additional subscriptions for 53,200 units of common stock and a warrant for $0.47 in the first quarter of fiscal 2002 and additional subscriptions for 85,106 units of common stock and a warrant for $0.47 in the second quarter of fiscal 2002. The Company intends to pursue additional financing, subject to prevailing market conditions. There is no guarantee however, that the Company will be able to successfully raise an adequate amount of additional funds with terms that are favorable to the Company. In addition, there can be no assurance that the Company will be able to obtain the necessary FDA approvals for ViaStem(TM). The Company anticipates spending approximately $20,000 during fiscal 2002 on capital expenditures. Through February 2002 the Company has made no capital expenditures. The majority of the planned expenditures will be used to fund new products, research and development and manufacturing growth. The Company believes that its capital resources on hand at February 28, 2002 together with revenues from product sales, will be sufficient to meet its cash requirements for the fiscal year. FORWARD LOOKING INFORMATION Information contained in this Form 10-QSB contains " forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by the use of forward-looking terminology such as "may", "will", "expect", "plan", "anticipate", "estimate" or "continue" or the negative thereof or other variations thereon or comparable terminology. There are certain important factors that could cause results to differ materially from those anticipated by some of these forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. The factors, among others, that could cause actual results to differ materially include the Company's ability to obtain FDA approval for its clinical products, the ability of the Company to raise additional capital and the ability to execute its business plan. 13 PART II -- OTHER INFORMATION ITEM I. -- LEGAL PROCEEDINGS The Company is not presently involved in any material legal proceedings. ITEM 2. -- CHANGES IN SECURITIES None ITEM 3. -- DEFAULTS UPON SENIOR SECURITIES None ITEM 4. -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. -- OTHER INFORMATION None ITEM 6. -- (A) EXHIBITS None (B) REPORTS ON FORM 8-K None 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. PROTIDE PHARMACEUTICALS, INC. Dated: April 12, 2002 By: /S/ Milo R. Polovina ------------------------------------ Milo R. Polovina, President & CEO (Principal Financial Officer) 14