10QSB 1 protide023503-10qsb.txt PRODITE 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 MAY 31, 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 JUNE 30, 2002 WAS 4,029,134. Transitional small business format disclosure: Yes _____ No __X__ 1 Table of Contents PROTIDE PHARMACEUTICALS, INC. ----------------------------- Report on Form 10-QSB for fiscal quarter ended May 31, 2002
PART I -- FINANCIAL INFORMATION Page ---- ITEM 1. Financial Statements Balance Sheet as of August 31, 2001 and May 31, 2002 3 Statement of Operations -- Three months ended May 31, 2002 and May 31, 2001, and nine months ended May 31, 2002 and May 31, 2001 5 Statement of Changes in Shareholders' Equity for the year ended August 31, 2001 and the nine months ended May 31, 2002 6 Statement of Cash Flows -- Nine months ended May 31, 2002 and May 31, 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
May 31, August 31, ASSETS 2002 2001 -------------------- -------------------- (Unaudited) CURRENT ASSETS Cash and cash equivalents $98,343 $197,200 Certificates of deposit 175,000 215,000 Trade receivables 46,741 26,448 Accrued interest receivable 7,794 6,074 Inventories 56,851 52,711 Other 2,552 1,593 -------------------- -------------------- Total current assets 387,281 499,026 -------------------- -------------------- 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 (404,915) (383,622) -------------------- -------------------- 55,270 76,563 OTHER ASSETS Patents, net 45,707 48,340 -------------------- -------------------- TOTAL ASSETS $488,258 $623,929 ==================== ====================
See Notes to Financial Statements. 3 PROTIDE PHARMACEUTICALS, INC. BALANCE SHEET
May 31, August 31, LIABILITIES AND SHAREHOLDERS' EQUITY 2002 2001 -------------------- -------------------- (Unaudited) CURRENT LIABILITIES Accounts payable $7,489 $12,174 Accrued liabilities 30,658 53,563 Bank note payable - current 71,508 72,157 -------------------- -------------------- Total current liabilities 109,655 137,894 -------------------- -------------------- SHAREHOLDERS' EQUITY Common stock issued and outstanding 40,291 37,332 Common stock subscribed 0 1,577 Additional paid-in capital 5,832,291 5,768,669 -------------------- -------------------- 5,872,582 5,807,578 Accumulated deficit (5,493,979) (5,321,543) -------------------- -------------------- Total shareholders' equity 378,603 486,035 -------------------- -------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $488,258 $623,929 ==================== ====================
See Notes to Financial Statements. 4 PROTIDE PHARMACEUTICALS, INC. STATEMENT OF OPERATIONS (Unaudited)
Three months ended Nine months ended May 31, May 31, 2002 2001 2002 2001 -------------------------------------------- --------------------------------------- --------------------------------------- REVENUES Net sales $123,503 $47,648 $285,443 $146,828 Cost of products sold 36,484 18,896 109,570 59,291 -------------------------------------------- --------------- ---------------------- ----------------- --------------------- GROSS MARGIN 87,019 28,752 175,873 87,537 -------------------------------------------- --------------- ---------------------- ----------------- --------------------- OPERATING EXPENSES Research and development 37,185 37,365 111,292 116,239 Marketing and sales 27,702 32,811 83,818 82,006 Administration 49,481 51,396 159,705 171,945 -------------------------------------------- --------------- ---------------------- ----------------- --------------------- Total operating expenses 114,368 121,572 354,815 370,190 OPERATING LOSS (27,349) (92,820) (178,942) (282,653) OTHER INCOME (EXPENSE) Interest and investment income 1,693 4,271 5,554 18,449 Other income 0 0 3,645 20,538 Interest expense (818) (1,361) (2,693) (3,082) -------------------------------------------- --------------- ---------------------- ----------------- --------------------- Total other income, net 875 2,910 6,506 35,905 NET LOSS ($26,474) ($89,910) ($172,436) ($246,748) ============================================ =============== ====================== ================= ===================== BASIC AND DILUTED LOSS PER COMMON SHARE ($0.01) ($0.02) ($0.05) ($0.07) -------------------------------------------- --------------- ---------------------- ----------------- --------------------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 3,736,386 3,733,169 3,734,253 3,710,825 ============================================ =============== ====================== ================= =====================
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 Issued the period May 31, 2002 --------------------------------------------------------------------------------------------------------- Common Stock Shares 3,733,169 295,965 4,029,134 Amount $37,332 $2,959 $40,291 Common Stock Subscribed Shares 157,659 (157,659) 0 Amount $1,577 ($1,577) 0 Additional Paid-in Capital $5,768,669 $63,622 $5,832,291 Accumulated Deficit ($5,321,543) ($172,436) ($5,493,979) --------------------------------------------------------------------------------------------------------- Total $486,035 $65,004 ($172,436) $378,603
See Notes to Financial Statements. 6 PROTIDE PHARMACEUTICALS, INC. STATEMENT OF CASH FLOWS (Unaudited)
Nine months ended May 31, ------------------------------------------ 2002 2001 --------------------------------------------------------------------------- ------------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss for the period ($172,436) ($246,748) Adjustments to reconcile net loss to Net cash used in operating activities: Depreciation and amortization 23,926 24,458 Changes in assets and liabilities: (Increase) decrease in: Accounts receivable (20,293) 10,965 Accrued interest receivable (1,720) 3,209 Inventories (4,140) (5,694) Other (959) 3,974 Increase (decrease) in: Accounts payable (4,685) 579 Accrued liabilities (22,905) 316 --------------------------------------------------------------------------- ------------------- ---------------- Net cash used in operating activities (203,212) (208,941) --------------------------------------------------------------------------- ------------------- ---------------- CASH FLOWS FROM INVESTING ACTIVITIES: Maturity of bank certificates of deposit, net 40,000 245,867 Capital expenditures 0 0 --------------------------------------------------------------------------- ------------------- ---------------- Net cash from investing activities 40,000 245,867 --------------------------------------------------------------------------- ------------------- ---------------- CASH FLOWS FROM FINANCING: Proceeds from issuing common stock 65,004 5,000 Principal payments on bank note payable (649) (1,265) --------------------------------------------------------------------------- ------------------- ---------------- Net cash provided by financing activities 64,355 3,735 Net increase (decrease) in cash and cash equivalents (98,857) 40,661 CASH AND CASH EQUIVALENTS: Beginning of period 197,200 63,935 --------------------------------------------------------------------------- ------------------- ---------------- End of period $98,343 $104,596 =========================================================================== =================== ================
See Notes to Financial Statements. 7 PROTIDE PHARMACEUTICALS, INC. NOTES TO FINANCIAL STATEMENTS -- MAY 31, 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 May 31, 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 4%, 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. The Company markets more than 20 different research products under the Celox Laboratories brand name. The Company's proprietary products consist of six different serum-free supplements and two cell freezing solutions. 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 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. These products are labeled for research use only, not for human use. The Company has received a Drug Master File classification from the Food and Drug Administration (FDA) for TCM(TM). This classification could expedite the FDA approval process for customers who want to use the Company's TCM(TM) product for manufacturing purposes. 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. 9 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 then 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 FUMC named a new Principal Investigator (PI) at the University of Minnesota to complete the additional information requested by the FDA after the departure 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. 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. 10 The Company also has distribution of its products in Japan through Funakoshi Co., LTD, a well-established Japanese distributor. RESULTS OF OPERATIONS During the quarter ended May 31, 2002, the Company had net sales of $123,503 which was an increase of $75,855 or 159% from $47,648 reported in the same quarter for the prior year. For the nine month period ended May 31, 2002 net sales totaled $285,443 resulting in an increase of $138,615 (94%) from $146,828 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 $26,474 for the quarter ended May 31, 2002 compared to a net loss of $89,910 for the same period in the previous year. For the nine months ended May 31, 2002 the Company had a net loss of $172,436 compared to $246,748 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 $16,893 for the nine month reporting period. The nine month period in the previous year included the receipt of a check in the amount of $20,538 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 May 31, 2002 equaled .007 which was rounded up to 1 cent versus a 2 cent loss in the comparable period in fiscal 2001. For the nine months ended May 31, 2002 the Company had a 5 cent loss per share compared to a 7 cent loss per share in the comparable period in the previous year. The cost of products sold was $36,484 or 30% of net sales for the three months ended May 31, 2002, as compared to $18,896 or 40% of net sales for the three months ended May 31, 2001. The cost of products sold for the nine months ended May 31, 2002 was $109,570 or 38% of net sales compared to $59,291 or 40% of net sales for the nine months ended May 31, 2001. The decreased percentage for the current quarter and the nine month reporting period results from substantially higher sales as well as the mix of products sold. An operating loss of $27,349 was generated for the quarter ended May 31, 2002 compared to an operating loss of $92,820 for the same period in the previous year. For the nine months ended May 31, 2002 an operating loss of $178,942 was incurred compared to an operating loss of $282,653 for the nine months ended May 31, 2001. The decrease between years for the three month and nine 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 for the nine month reporting period. The Company received interest and investment income of $1,693 during the quarter ended May 31, 2002 as compared to $4,721 in the prior year. For the nine month period ended May 31, 2002 the Company received $5,554 in interest and investment income compared to $18,449 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 nine month reporting period as compared to the previous year results from significantly lower interest rates available for investment balances. 11 Operating expenses decreased $7,204 (6%) to $114,368 from $121,572 for the quarter ended May 31, 2002 as compared to the prior year. For the nine months ended May 31, 2002 operating expenses decreased by $15,375 to $354,815 from $370,190 in the previous year. The decrease for the three month reporting period as well as the nine 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 for the nine month reporting period, which fluctuate based on timing of promotional activities. Research and development costs decreased by $180 to $37,185 from $37,365 in the current quarter as compared to the previous fiscal year. For the nine month period, research and development costs decreased by $4,947 to $111,292 from $116,239 in the previous year. The small decrease for the current quarter and the larger decrease for the nine 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 decreased by $5,109 (16%) to $27,702 from $32,811 for the quarter ended May 31, 2002 as compared to the previous year. For the nine months ended May 31, 2002, marketing expenses increased by $1,812 to $83,818 from $82,006 in fiscal 2001. The decrease for the current quarter as compared to the prior fiscal year results from reduced promotional expenditures. For the nine month reporting period as compared to the previous year the increase results primarily from promotional activities connected with the marketing of STEMSOL(TM) and DMSO/Dextran, a companion product, during the period. 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 $1,915 (4%) for the quarter ended May 31, 2002 compared to the previous fiscal year to $49,481 from $51,396 Administrative expenses decreased by $12,240 (7%) to $159,705 from $171,945 in the current nine month reporting period as compared to the previous year. The decrease for both the three month reporting period and the nine 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 May 31, 2002 include cash and short-term investments of $273,343 and net working capital of $277,626. This represents a decrease of $138,857 (34%) in cash and short-term investments and a decrease of $83,506 (23%) 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. 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. 12 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 $90,000 during fiscal 2002 on capital expenditures. Through May 2002 the Company has made no capital expenditures. The majority of the planned expenditures will be used for research and development in connection with the development of ViaStem(TM). The Company believes that its capital resources on hand at May 31, 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 1. -- 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: July 10, 2002 By: /S/ Milo R. Polovina --------------------------------------------- Milo R. Polovina, President & CEO (Principal Financial Officer) 14