-----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, KzveH08qkXyTrM75Q0/lK1UeebWOycn+N0p+w+YUOMwuoul7BS5tTep0zRW/RQj3 gkT1//wCivXXJXTSfQc5Hw== 0000912057-97-026373.txt : 19970808 0000912057-97-026373.hdr.sgml : 19970808 ACCESSION NUMBER: 0000912057-97-026373 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970807 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VYREX CORP CENTRAL INDEX KEY: 0000933972 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 880271109 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-27866 FILM NUMBER: 97652967 BUSINESS ADDRESS: STREET 1: 2159 AVENIDA DE LA PLAYA CITY: LA JOLLA STATE: CA ZIP: 92037 10QSB 1 10QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-QSB / X / Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period ended JUNE 30, 1997 /_ / Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission file number : 000-27866 VYREX CORPORATION (Name of small business issuer as specified in its charter) NEVADA 88-0271109 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 2159 AVENIDA DE LA PLAYA, LA JOLLA, CALIFORNIA 92037 (Address of principal executive offices) (619) 454-4446 (Issuer's telephone number including area code) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Applicable Only to Issuers Involved in Bankruptcy Proceedings During the Preceding Five Years Check whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan by a court. Yes No ----- ----- Applicable Only to Corporate Issuers State the number of shares outstanding of each of the issuers classes of common equity, as of latest practicable date: As of June 30, 1997 there are 7,121,409 shares of common stock outstanding and warrants to purchase 1,239,701 shares of common stock outstanding. Transitional Small Business Disclosure Format Yes No X ----- ----- VYREX CORPORATION INDEX TO FORM 10-QSB PART I FINANCIAL INFORMATION Item 1 - Financial Information Balance Sheets 3 Statements of Operations 4 Statements of Cash Flows 5 Notes to Financial Statements 6 Item 2 - Management's Discussion and 6 Analysis of Financial Condition And Results of Operations PART II OTHER INFORMATION 7 Item 1 - Legal Proceedings 7 Item 2 - Changes in Securities 7 Item 3 - Defaults upon Senior Securities 7 Item 4 - Submission of Matters to a Vote of Security Holders 7 Item 5 - Other Information 7 Item 6 - Exhibits and Reports on Form 8-K 8 Signatures 8 2 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VYREX CORPORATION (a development stage enterprise) Balance Sheets
JUNE 30, DECEMBER 31, 1997 1996 ----------- ----------- (Unaudited) Note ASSETS Current assets: Cash and cash equivalents $ 353,588 $ 3,187,906 Short-term investment, available-for-sale 3,387,205 1,893,830 Interest receivable 65,831 47,979 Prepaid assets 42,812 -- ----------- ----------- Total current assets 3,849,436 5,129,715 Furniture and equipment, net of accumulated depreciation of $63,467 in 1997 and $54,394 in 1996 58,458 54,256 Notes receivable from related parties 51,804 313,304 Patents, trademarks and copyrights, net of accumulated amortization of $20,325 in 1997 and $16,201 in 1996 119,894 124,018 ----------- ----------- Total assets $ 4,079,592 $ 5,621,293 ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 338,885 $ 504,646 ----------- ----------- Total current liabilities 338,885 504,646 Stockholders' equity: Preferred stock, $.001 par value; 10,000,000 shares authorized; none issued -- -- Common stock, $.001 par value; 50,000,000 shares authorized; 7,121,409 issued and outstanding in 1997 and 7,121,209 issued and outstanding in 1996 7,121 7,121 Additional paid-in capital 10,339,939 10,338,339 Deficit accumulated during the development stage (6,606,353) (5,228,813) ----------- ----------- Total stockholders' equity 3,740,707 5,116,647 ----------- ----------- Total liabilities and stockholders' equity $ 4,079,592 $ 5,621,293 ----------- ----------- ----------- -----------
Note: The balance sheet at December 31, 1996 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying notes. 3 VYREX CORPORATION (a development stage enterprise) Statements of Operations (Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED CUMULATIVE FROM JUNE 30,1997 JUNE 30,1996 JUNE 30,1997 JUNE 30,1996 INCEPTION ------------ ------------ ------------ ------------ --------------- Revenue and licensing agreement $ -- $ -- $ -- $ -- $ 310,000 Operating expenses: Research and development 335,842 53,796 739,973 114,244 2,729,628 General and administrative 413,360 311,558 754,259 359,711 2,410,908 ---------- ---------- ----------- ---------- ----------- Total operating expenses 749,202 365,354 1,494,232 473,955 5,140,536 ---------- ---------- ----------- ---------- ----------- Loss from operations (749,202) (365,354) (1,494,232) (473,955) (4,830,536) Other income (expense): Interest income 55,751 45,165 116,692 45,350 258,171 Charge from issuance of stock options for arranging bridge financing costs -- -- -- -- (1,349,900) ---------- ---------- ----------- ---------- ----------- Total other income (expense) 55,751 45,165 116,692 45,350 (1,091,729) ---------- ---------- ----------- ---------- ----------- Net loss $ (693,451) $ (320,189) $(1,377,540) $ (428,605) $(5,922,265) ---------- ---------- ----------- ---------- ----------- ---------- ---------- ----------- ---------- ----------- Net loss per common share $ (0.10) $ (0.05) $ (0.19) $ (0.07) $ (0.97) ---------- ---------- ----------- ---------- ----------- ---------- ---------- ----------- ---------- ----------- Shares used in per share computations 7,121,290 6,308,954 7,121,246 5,805,566 6,076,851 ---------- ---------- ----------- ---------- ----------- ---------- ---------- ----------- ---------- -----------
SEE ACCOMPANYING NOTES. 4 VYREX CORPORATION (a development stage enterprise) Statements of Cash Flows (Unaudited)
SIX MONTHS ENDED CUMULATIVE JUNE 30, JUNE 30, FROM 1997 1996 INCEPTION ----------- ----------- ----------- OPERATING ACTIVITIES Net loss $(1,377,540) $(428,605) $(6,606,353) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 13,197 7,503 83,507 Interest receivable (17,852) -- (65,831) Issuance of compensatory notes, stock and stock options -- -- 1,561,052 Prepaid assets (42,812) -- (42,812) Accounts payable and accrued liabilities (165,761) 150,542 338,888 ----------- ----------- ----------- Net cash used in operating activities (1,590,768) (270,560) (4,731,549) ----------- ----------- ----------- INVESTING ACTIVITIES Purchase of short-term investments (2,439,785) (2,927,034) (7,381,002) Sale of short-term investments 946,410 -- 3,994,775 Purchases of furniture and equipment (13,275) (49,780) (121,925) Cost of patent, trademarks and copyrights -- -- (133,519) Other assets, including notes receivable from related parties 261,500 (25,208) (52,500) ----------- ----------- ----------- Net cash used in investing activities (1,245,150) (3,002,022) (3,694,171) ----------- ----------- ----------- FINANCING ACTIVITIES Proceeds (repayment) from note payable -- (50,000) 400,000 Exercise of stock options and sale of option -- -- 950,100 Net proceeds from issuance of common stock 1,600 5,787,711 7,429,208 ----------- ----------- ----------- Net cash provided by financing activities 1,600 5,737,711 8,779,308 ----------- ----------- ----------- Net increase (decrease) in cash and cash equivalents (2,834,318) 2,465,129 353,588 Cash and cash equivalents, beginning of the period 3,187,906 65,995 -- ----------- ----------- ----------- Cash and cash equivalents, end of the period $353,588 $2,531,124 $353,588 ----------- ----------- ----------- ----------- ----------- -----------
SEE ACCOMPANYING NOTES 5 VYREX CORPORATION (A Development Stage Enterprise) Notes To Financial Statements (Unaudited) 1. BASIS OF PRESENTATION The accompanying financial statements have been prepared by the Company in accordance with generally accepted accounting principles for interim financial information. Certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. In the opinion of the Company's management, the unaudited financial statements contain all adjustments necessary (consisting of normal recurring accruals) for a fair presentation of the financial position as of June 30, 1997, and the results of operations for the three and six month periods ended June 30, 1997 and 1996. The results of operations for the periods ended June 30, 1997 are not necessarily indicative of the results to be expected for the full year. For further information, refer to the financial statements and footnotes thereto included in Vyrex's Form 10-KSB for the year ended December 31, 1996. 2. ACCOUNTING STANDARD ON EARNINGS PER SHARE In February 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings per Share," which is required to be adopted on December 31, 1997. At that time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Under the new requirements for calculating primary earnings per share, the dilutive effect of stock options will be excluded. The impact of the adoption of this statement is not expected to be material. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996 Research and development expenses increased $282,046, to $335,842 in the three months ended June 30, 1997, compared to $53,796 for the same period during 1996. The increase is primarily due to higher salaries as the Company built up its research organization as well as higher expenses for CD-Tagging-TM- development and for Vantox-Registered Trademark-preclinical efforts. General and administrative expenses increased $101,802, to $413,360 in the current period, compared to $311,558 for the same period in 1996. The increase is due to higher salaries and consulting as the Company built up its administrative structure. Net loss increased $373,262, to $693,451 in the current period, compared to $320,189 for the same period during 1996 as the Company built up its research efforts and administrative structure. Net loss per common share increased $0.05 to $0.10, compared to $0.05 for the same period during 1996. Higher operating expenses were partially offset by higher average shares outstanding during the period. SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996 Research and development expenses increased $625,729, to $739,973 in the six months ended June 30, 1997, compared to $114,244 for the same period during 1996. The increase is primarily due to higher salaries as the Company built up its research organization as well as higher expenses for CD-Tagging-TM- development and for Vantox-Registered Trademark-preclinical efforts. General and 6 administrative expenses increased $394,548, to $754,259 in the six months ended June 30, 1997, compared to $359,711 for the same period during 1996. The increase is due to higher salaries and consulting as the Company built up its administrative structure as well as higher legal costs for patent and acquisition efforts. Net loss increased $948,935, to $1,377,540 in the six months ended June 30, 1997, compared to $428,605 for the same period during 1996 as the Company built up its research efforts and administrative structure. Net loss per common share increased $0.12 to $0.19, compared to $0.07 per share for the same period during 1996. Higher operating expenses were partially offset by higher average shares outstanding during the period. LIQUIDITY AND CAPITAL RESOURCES The Company has financed it operations since inception solely through the sales of debt and equity securities. As of June 30, 1997, the Company had working capital of $3,511,000 which includes $3,741,000 of cash, cash equivalents and short-term investments. Cash flow used in operating activities during the six months ended June 30, 1997 was $1,591,000, compared to $271,000 for the same period during 1996. The increase in cash used was primarily related to the net loss from operations as the Company accelerated its research activities. The Company also used $1,245,000 for investing activities during the current period, compared to $3,002,000 for the same period during 1996, as proceeds from the initial public offering during the first half of 1996 were invested in short-term investments with maturities greater than three months. The Company believes that its current cash reserves will fund the business for at least the next twelve months from the balance sheet date. The Company does not anticipate have revenues in the foreseeable future and will be required to raise additional funds to continue operations. There can be no assurance that funds will be available through the public or private markets. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Not applicable ITEM 2. CHANGES IN SECURITIES Not applicable ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable ITEM 5. OTHER INFORMATION Not applicable ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 7 The Company did not file any reports on Form 8-K during the three months ended June 30, 1997. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. VYREX CORPORATION Registrant By: /s/ Steven J. Kemper ------------------------------------ Steven J. Kemper, Chief Financial Officer (Principal Financial Officer) 8 EX-27 2 EXHIBIT 27
5 3-MOS DEC-31-1997 APR-01-1997 JUN-30-1997 353,588 3,387,205 65,831 0 0 3,849,436 121,925 63,467 4,079,592 338,885 0 0 0 7,121 3,733,586 4,079,592 0 0 0 0 749,202 0 (55,751) (693,451) 0 (693,451) 0 0 0 (693,451) (.10) 0
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