-----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, F0ryxgSO0j8bMU7nUHzVjjBzegoCXCYrEsWdxqIa8qeJlzPvPqm/eg/n1qo9fPiy plYm3EZcweQg7NdxQQdk+Q== 0000897101-03-000266.txt : 20030404 0000897101-03-000266.hdr.sgml : 20030404 20030404151416 ACCESSION NUMBER: 0000897101-03-000266 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030228 FILED AS OF DATE: 20030404 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CELOX LABORATORIES INC CENTRAL INDEX KEY: 0000883720 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 363384240 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-19866 FILM NUMBER: 03640032 BUSINESS ADDRESS: STREET 1: 1311 HELMO AVE CITY: ST PAUL STATE: MN ZIP: 55128 BUSINESS PHONE: 6517301500 MAIL ADDRESS: STREET 1: 1311 HELMO AVE CITY: ST PAUL STATE: MN ZIP: 55128 FORMER COMPANY: FORMER CONFORMED NAME: CELOX CORPORATION DATE OF NAME CHANGE: 19930328 10QSB 1 protide031654_10qsb.txt PROTIDE PHARMACEUTICALS INC. 10-QSB - 2/28/2003 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, 2003 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 FEBRUARY 28, 2003 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 February 28, 20032
PART I-- FINANCIAL INFORMATION Page ---- ITEM 1. Financial Statements Balance Sheet as of August 31, 2002 and February 28, 2003 3 Statement of Operations -- Three months ended February 28, 2003 and February 28, 2002 and six months ended February 28, 2003 and February 28, 2002 5 Statement of Changes in Shareholders' Equity for the year ended August 31, 2002 and the six months ended February 28, 2003 6 Statement of Cash Flows -- Six months ended February 28, 2003 and February 28, 2002 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 2003 2002 --------- --------- (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 169,491 $ 200,751 Certificates of deposit 80,934 80,934 Trade receivables 49,706 37,191 Accrued interest receivable 1,971 1,057 Inventories 61,869 56,997 Other 2,891 1,787 --------- --------- Total current assets 366,862 378,717 --------- --------- 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 (425,565) (412,012) --------- --------- 34,620 48,173 OTHER ASSETS Patents, net 43,072 44,828 --------- --------- TOTAL ASSETS $ 444,554 $ 471,718 ========= ========= See Notes to Financial Statements. 3 PROTIDE PHARMACEUTICALS, INC. BALANCE SHEET February 28, August 31, LIABILITIES AND SHAREHOLDERS' EQUITY 2003 2002 ----------- ----------- (Unaudited) CURRENT LIABILITIES Accounts payable $ 12,269 $ 23,427 Accrued liabilities 33,918 30,056 Bank note payable - current 71,498 71,498 ----------- ----------- Total current liabilities 117,685 124,981 ----------- ----------- SHAREHOLDERS' EQUITY Common stock issued and outstanding 40,291 40,291 Additional paid-in capital 5,832,291 5,832,291 ----------- ----------- 5,872,582 5,872,582 Accumulated deficit (5,545,713) (5,525,845) ----------- ----------- Total shareholders' equity 326,869 346,737 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 444,554 $ 471,718 =========== =========== See Notes to Financial Statements. 4 PROTIDE PHARMACEUTICALS, INC. STATEMENT OF OPERATIONS (Unaudited)
- ------------------------------------------------------------------------------------------------------- Three months ended Six months ended February 28, February 28, 2003 2002 2003 2002 - ------------------------------------------------------------------------------------------------------- REVENUES Net sales $ 160,897 $ 118,245 $ 282,057 $ 161,940 Cost of products sold 26,939 52,140 61,987 73,086 - ------------------------------------------------------------------------------------------------------- GROSS MARGIN 133,958 66,105 220,070 88,854 - ------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Research and development 37,670 38,486 73,121 74,107 Sales and operations 27,849 26,747 56,489 56,116 Administration 51,673 55,230 110,673 110,224 - ------------------------------------------------------------------------------------------------------- Total operating expenses 117,192 120,463 240,283 240,447 OPERATING INCOME (LOSS) 16,766 (54,358) (20,213) (151,593) OTHER INCOME (EXPENSE) Interest and investment income 848 1,745 1,807 3,861 Other income 0 3,645 0 3,645 Interest expense (731) (853) (1,462) (1,875) - ------------------------------------------------------------------------------------------------------- Total other income, net 117 4,537 345 5,631 NET INCOME (LOSS) $ 16,883 ($ 49,821) ($ 19,868) ($ 145,962) ======================================================================================================= BASIC AND DILUTED LOSS PER COMMON SHARE $ 0.00 ($ 0.01) ($ 0.00) ($ 0.04) - ------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 4,029,134 3,733,169 4,029,134 3,733,169 =======================================================================================================
See Notes to Financial Statements. 5 PROTIDE PHARMACEUTICALS, INC. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
Common Stock Additional -------------- Paid-in Accumulated Shares Amount Capital Deficit Total - ------------------------------------------------------------------------------------------------------------------- BALANCE AT AUGUST 31, 2002 4,029,134 $40,291 $5,832,291 ($5,525,845) $346,737 Net loss for the period (19,868) (19,868) - -------------------------------------------------------------------------------------------------------------------- BALANCE AT FEBRUARY 28, 2003 4,029,134 $40,291 $5,832,291 ($5,545,713) $326,869
6 PROTIDE PHARMACEUTICALS, INC. STATEMENT OF CASH FLOWS (Unaudited)
- ---------------------------------------------------------------------------------------------------- Six months ended February 28, 2003 2002 - ---------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss for the period ($ 19,868) ($145,962) Adjustments to reconcile net loss to Net cash used in operating activities: Depreciation and amortization 15,309 15,951 Changes in assets and liabilities: (Increase) decrease in: Accounts receivable (12,515) (48,163) Accrued interest receivable (914) (255) Inventories (4,872) (5,348) Other (1,104) (2,491) Increase (decrease) in: Accounts payable (11,158) (4,838) Accrued liabilities 3,862 (22,394 - ---------------------------------------------------------------------------------------------------- Net cash used in operating activities (31,260) (213,500) - ---------------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Maturity of bank certificates of deposit, net 0 40,000 Capital expenditures 0 0 - ---------------------------------------------------------------------------------------------------- Net cash from investing activities 0 40,000 - ---------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING: Proceeds from issuing common stock subscriptions 0 65,044 Principal payments on bank note payable 0 (649) - ---------------------------------------------------------------------------------------------------- Net cash provided by financing activities 0 64,344 Net decrease in cash and cash equivalents (31,260) (109,145) CASH AND CASH EQUIVALENTS: Beginning of period 200,751 197,200 - ---------------------------------------------------------------------------------------------------- End of period $ 169,491 $ 88,055 ====================================================================================================
See Notes to Financial Statements. 7 PROTIDE PHARMACEUTICALS, INC. NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 28, 2003 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, 2002 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, 2003, the Company had investments of $80,934 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 and has been renewed annually. 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 - INCOME (LOSS) PER COMMON SHARE Basic income (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 for the six month period as the results were antidilutive. For the three month period the inclusion of the 307,000 shares in the computation of diluted earnings did not change the basic income per share. 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. 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. The Company has developed non-serum based products for the growth of human and other mammalian cells. The Company markets more than 16 different research products under the Celox Laboratories brand name. The Company's proprietary products consist of four 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 cord blood stem cells. These products are labeled for research use only, not for human use. 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. Orders for these solutions have continued in fiscal 2003. 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 12, 2003 the Company signed an agreement with the University of Minnesota Physicians Outreach Laboratories (UMPOL), a Minnesota nonprofit Corporation, to complete the preclinical testing for the Company's ViaStem(TM) product. This agreement supersedes an agreement which was executed on March 31, 2000, by Protide with Fairview-University Medical Center (FUMC) University of Minnesota, Minneapolis, MN. FUMC was to 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. This new PI will be part of the UMPOL preclinical test program. 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 10 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 China. In addition, the Company's Celox product line is distributed in Japan through Funakoshi Co., LTD, a well-established Japanese distributor. The Company also has distribution of its STEMSOL(TM) and DMSO/Dextran products in Europe and the Pacific Rim through various non-exclusive agreements with local distributors. RESULTS OF OPERATIONS During the quarter ended February 28, 2003, the Company had net sales of $160,897 which was an increase of $42,652 or 36% from $118,245 reported in the same quarter for the prior fiscal year. For the six months ended February 28, 2003 net sales totaled $282,057 versus $161,940 in the same period in the previous fiscal year. This is an increase of $120,117 or 74% from the previous year. The increase between years for both of the reporting periods results primarily from increased sales of new products, the amount and timing of custom orders, and orders received from distributors. The Company had net income of $16,883 for the quarter ended February 28, 2003 compared to a net loss of ($49,821) for the same period in the previous fiscal year. For the six months ended February 28, 2003 the company had a net loss of ($19,868) compared to a net loss of ($145,962) for the comparable period in the previous fiscal year. The net income in the three month reporting period compared to a loss in the previous fiscal year results from a substantial increase in sales coupled with a decrease in cost of sales and lower operating expenses. For the sixth month reporting period, the decreased loss results from substantially increased sales, lower cost of sales and a small decrease in operating expenses. On a per share basis, the income of $16,883 resulted in $0.00 for the quarter ended February 28, 2003 compared to a loss of ($0.01) in the three months ended February 28, 2002. For the sixth month reporting period, the loss of ($29,868) equaled ($0.00) on a per share basis compared to a loss of ($0.04) in the sixth months ended February 28, 2002. The cost of products sold was $26,939 or 17% of net sales for the three months ended February 28, 2003, as compared to $52,140 or 44% of net sales for the three months ended February 28, 2002. The decreased percentage for the current quarter results from substantially higher sales which causes fixed manufacturing costs to account for a much smaller percentage of sales, as well as the mix of products sold to higher margin products as compared to the previous fiscal year. For the six month period ending February 28, 2003 the cost of products sold was $61,987 or 22% of net sales compared to $73,086 or 45% of sales for the six months ended February 28, 2002. The decrease between reporting periods also results from substantially higher sales and the mix of products sold. An operating gain of $16,766 was generated for the quarter ended February 28, 2003 compared to an operating loss of ($54,358) for the same period in the previous fiscal year. For the six months ended February 28, 2003 an operating loss of ($20,213) was generated compared to an operating loss of ($151,593) for the six months ended February 28, 2002. The decrease between years for both of the respective reporting periods resulted from substantial sales increases along with flat to decreased operating expenses. The Company received interest and investment income of $848 during the quarter ended February 28, 2003 as compared to $1,745 in the prior fiscal year. Interest and investment income for the six months ended February 28, 2003 totaled $1,807 versus $3,861 in the comparable reporting period in the previous fiscal year. Investment income is derived primarily from the investment of the proceeds from recent 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 11 balances. Operating expenses decreased $3,371 (3%) to $117,192 from $120,463 for the quarter ended February 28, 2003 as compared to the comparable reporting period in the prior fiscal year. The decrease between the respective reporting periods resulted from lower administrative and research and development expenses offset by a small increase in sales and operations expenses. For the six months ended February 28, 2003 operating expenses decreased by $164 to $240,283 from $240,447 for the reporting period as compared to the prior fiscal year. Research and development costs decreased by $816 (2%) to $37,670 from $38,486 for the three months ended February 28, 2003 as compared to the three months ended February 28, 2002. For the six months ended February 28, 2003 research and development costs decreased by $986 (1%) to $73,121 from $74,107 from the same reporting period in the prior fiscal year. The small decrease between years for both of the respective reporting periods results from 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). Sales and operations expenses increased by $1,102 (4%) to $27,849 from $26,747 for the three months ended February 28, 2003 as compared the comparable reporting period in the previous fiscal year. For the six month reporting period ended February 28, 2003, sales and operations expenses increased by $373 (1%) to $56,489 from $56,116. The increase for the three month reporting period as well as the six month reporting period as compared to the comparable periods in the prior fiscal year results from increase commissions due to increased sales offset by reduced expenditures in several other areas in the sales and operations department. The Company expects that sales and operations expenses will fluctuate based on sales volume, introduction of new products, new studies, and as new advertising materials are developed. Administrative expenses decreased by $3,557 (6%) for the three months ended February 28, 2003 compared to the comparable period in the previous fiscal year to $51,673 from $55,230. The decrease for the three month reporting period as compared to the previous fiscal year is due to lower salaries and benefits offset by higher health insurance premiums. For the six months ended February 28, 2003 administrative expenses increased by $449 as compared to the previous fiscal year to $110,673 from $110,224. The small increase is a combination of lower salaries and benefits offset by increased health insurance premiums as well as 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, 2003 include cash and short-term investments of $169,491 and net working capital of $249,177 This represents a decrease of $31,260 (16%) in cash and short-term investments and a decrease of $4,559 (2%) in net working capital as compared to August 31, 2002. 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 lease term expires on January 31, 2004. The original lease contains provisions for a renewal option for the Company. There is no guarantee however, that the terms of a new lease will be equal to or better than the existing 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 2004. The balance of the tenant improvements over this amount was paid with Company funds. 12 During the second quarter of fiscal 2001, 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 2003 on capital expenditures. This does not include costs for preclinical and clinical trials for ViaStem(TM). Through February 2003 the Company has made no capital expenditures. The Company believes that its capital resources on hand at February 28, 2003 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 99.1 906 Certifications (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 4, 2003 By: /S/ Milo R. Polovina --------------------------------------- Milo R. Polovina, President & CEO (Principal Financial Officer) 14 EX-99.1 3 protide031654_ex99-1.txt CERTIFICATIONS EXHIBIT 99.1 CERTIFICATION PURSUANT TO U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Protide Pharmaceuticals, Inc. (the "Registrant") on Form 10-QSB for the period ended February 28, 2003 as filed with the Securities and Exchange Commission on April 4, 2003, hereof (the Report"), the undersigned officers certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. PROTIDE PHARMACEUTICALS, INC. Date: April 4, 2003 By: /s/ Milo R. Polovina -------------------- Milo R. Polovina Chairman of the Board, President & CEO CERTIFICATION PURSUANT TO U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Protide Pharmaceuticals, Inc. (the "Registrant") on Form 10-QSB for the period ended February 28, 2003 as filed with the Securities and Exchange Commission on April 4, 2003, hereof (the Report"), the undersigned officers certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. PROTIDE PHARMACEUTICALS, INC. Date: April 4, 2003 By: /s/ David E. Tess ----------------- David E. Tess Vice President Finance 15 -----END PRIVACY-ENHANCED MESSAGE-----