10-Q 1 0001.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 ------------- or ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________________ to __________________ Commission File Number 0-6533 ------ BOSTON LIFE SCIENCES, INC. -------------------------- (Exact name of registrant as specified in its charter) Delaware 87-0277826 ------------------------------- -------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 137 Newbury Street, 8th Floor, Boston, Massachusetts 02116 ---------------------------------------------------- --------------------- (Address of principal executive offices) (Zip code) (617) 425-0200 ---------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable -------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (X) Yes ( ) No As of August 3, 2000 there were 20,572,837 shares of Common Stock outstanding. BOSTON LIFE SCIENCES, INC. INDEX TO FORM 10-Q Page (s) -------- Part I - Financial Information Item 1 - Financial Statements (Unaudited)
Consolidated Balance Sheets as of June 30, 2000 1 and December 31, 1999 Consolidated Statements of Operations for the three and 2 six months ended June 30, 2000 and 1999, and for the period from inception (October 16, 1992) to June 30, 2000 Consolidated Statements of Cash Flows for the six months 3 ended June 30, 2000 and 1999, and for the period from inception (October 16, 1992) to June 30, 2000 Notes to Consolidated Financial Statements 4 - 6 Item 2 - Management's Discussion and Analysis of Financial 7 - 10 Condition and Results of Operations Item 3 - Quantitative and Qualitative Disclosures about Market Risk 10 Part II - Other Information Item 1 - Legal Proceedings 11 Item 2 - Changes in Securities 11 Item 3 - Defaults Upon Senior Securities 11 Item 4 - Submission of Matters to a Vote of Security Holders 11 - 12 Item 5 - Other Information 12 Item 6 - Exhibits and Reports on Form 8-K 12 Signatures 13
Part I - Financial Information Item 1 - Financial Statements Boston Life Sciences, Inc. (A Development Stage Enterprise) Consolidated Balance Sheets (Unaudited) June 30, December 31, 2000 1999 --------------------- --------------------- Assets Current assets: Cash and cash equivalents $ 4,628,538 $ 260,134 Short-term investments 17,781,978 14,690,308 Other current assets 414,892 599,943 --------------------- --------------------- Total current assets 22,825,408 15,550,385 Fixed assets, net 48,144 10,796 Other assets 191,600 511,031 --------------------- --------------------- Total assets $ 23,065,152 $ 16,072,212 ===================== ===================== Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $ 1,484,965 $ 1,803,667 8% convertible redeemable debentures - 4,647,192 Series C convertible redeemable preferred stock, $.01 par value; 475,000 shares authorized; 53,669 shares issued and outstanding at December 31, 1999 - 1,046,546 Stockholders' equity: Series A convertible preferred stock, $.01 par value; 15,000 shares authorized; 4,983 shares issued and outstanding at December 31, 1999 - 50 Common stock, $.01 par value; 40,000,000 shares authorized; 20,422,537 and 16,280,473 shares issued and outstanding at June 30, 2000 and December 31, 1999, respectively 204,225 162,805 Additional paid-in capital 82,195,293 63,093,089 Accumulated other comprehensive loss (412,002) (553,157) Deficit accumulated during development stage (60,407,329) (54,127,980) --------------------- --------------------- Total stockholders' equity 21,580,187 8,574,807 --------------------- --------------------- Total liabilities and stockholders' equity $ 23,065,152 $ 16,072,212 ===================== ===================== The accompanying notes are an integral part of the consolidated financial statements.
1 Boston Life Sciences, Inc. (A Development Stage Enterprise) Consolidated Statements of Operations (Unaudited)
From Inception (October 16, Three Months Ended Six Months Ended 1992) TO June 30, June 30, June 30, 2000 1999 2000 1999 2000 ------------------------------------------------------------------------ Revenues $ - $ - $ - $ - $ 900,000 Operating expenses: Licensing fees 100,000 - 200,000 - 933,683 Research and development 2,570,726 745,330 4,421,975 1,678,793 26,959,410 Therafectin related - 503,937 - 1,081,621 8,781,458 General and administrative 906,730 622,558 1,672,834 1,319,025 14,589,503 Purchased in-process research and development - - - - 12,146,544 ------------------------------------------------------------------------ Total operating expenses 3,577,456 1,871,825 6,294,809 4,079,439 63,410,598 ------------------------------------------------------------------------ Loss from operations (3,577,456) (1,871,825) (6,294,809) (4,079,439) (62,510,598) Interest expense - - (344,870) - (2,252,457) Interest income 249,257 235,783 360,330 364,612 4,355,726 ------------------------------------------------------------------------ Net loss $(3,328,199) $(1,636,042) $(6,279,349) $(3,714,827) $(60,407,329) ======================================================================== Calculation of net loss available to common shareholders: Net loss $(3,328,199) $(1,636,042) $(6,279,349) $(3,714,827) Preferred stock preferences - - - (4,240,000) ------------------------------------------------------ Net loss available to common shareholders $(3,328,199) $(1,636,042) $(6,279,349) $(7,954,827) ====================================================== Calculation of basic and diluted net loss per share available to common shareholders: Net loss per share $ (0.17) $ (0.11) $ (0.34) $ (0.26) Preferred stock preferences per share - - - (0.30) ------------------------------------------------------ Basic and diluted net loss per share available to common shareholders $ (0.17) $ (0.11) $ (0.34) $ (0.56) ====================================================== Weighted average shares outstanding 19,450,197 14,492,526 18,252,815 14,120,048 ====================================================== The accompanying notes are an integral part of the consolidated financial statements.
2 Boston Life Sciences, Inc. (A Development Stage Enterprise) Consolidated Statements of Cash Flows (Unaudited)
From Inception Six Months Ended (October 16, June 30, 1992) to 2000 1999 June 30, 2000 ------------------------ ------------------------ -------------------- Cash flows from operating activities: Net loss $(6,279,349) $(3,714,827) $(60,407,329) Adjustments to reconcile net loss to net cash used for operating activities: Purchased in-process research and development - - 12,146,544 Debenture interest expense 142,861 - 142,861 Compensation charge related to options and warrants 260,630 6,000 2,075,800 Write-off of acquired technology - - 3,500,000 Accretion of discount on convertible debentures 189,632 - 436,824 Amortization and depreciation 17,854 10,500 1,509,236 Changes in current assets and liabilities: Decrease in other current assets 185,051 315,139 248,933 (Decrease) increase in accounts payable and accrued expenses (143,702) (116,117) 712,300 ------------------------ ------------------------ ------------------- Net cash used for operating activities (5,627,023) (3,499,305) (39,634,831) ------------------------ ------------------------ -------------------- Cash flows from investing activities: Cash acquired through merger - - 1,758,037 Purchases of fixed assets (42,825) (28,184) (311,905) Increase in other assets (211) (190,654) (350,097) Short term investments: Purchases (9,969,870) (7,318,466) (67,696,290) Sales and maturities 7,019,355 2,434,373 49,502,310 ------------------------ ------------------------ -------------------- Net cash used for investing activities (2,993,551) (5,102,931) (17,097,945) ------------------------ ------------------------ -------------------- Cash flows from financing activities: Proceeds from issuance of common stock 13,049,758 3,218,746 29,822,015 Proceeds from issuance of preferred stock - 6,150,000 27,022,170 Preferred stock conversion inducement - - (600,564) Proceeds from issuance of notes payable - - 2,585,000 Proceeds from issuance of convertible debentures - - 9,000,000 Principal payments of notes payable - - (2,796,467) Payment of note issuance costs - - (399,702) Payment of convertible debenture issuance costs - - (343,208) Payment of stock issuance and merger transaction costs (60,780) (512,852) (2,927,930) ------------------------ ------------------------ ------------------- Net cash provided by financing activities 12,988,978 8,855,894 61,361,314 ------------------------ ------------------------ ------------------- Net increase in cash and cash equivalents 4,368,404 253,658 4,628,538 Cash and cash equivalents, beginning of period 260,134 71,834 - ------------------------ ------------------------ ------------------- Cash and cash equivalents, end of period $ 4,628,538 $ 325,492 $ 4,628,538 ======================== ======================== =================== Supplemental cash flow disclosures: Non cash transactions (see note 3) The accompanying notes are an integral part of the consolidated financial statements.
3 Boston Life Sciences, Inc. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Unaudited) June 30, 2000 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The interim unaudited consolidated financial statements contained herein include, in management's opinion, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. The results of operations for the interim period shown on this report are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the Company's consolidated financial statements and notes for the year ended December 31, 1999 included in the Company's Annual Report on Form 10-K. 2. Net Loss Per Share Basic and diluted net loss per share available to common stockholders has been calculated by dividing net loss, adjusted for preferred stock preferences, by the weighted average number of common shares outstanding during the period. All potential common shares have been excluded from the calculation of weighted average common shares outstanding since their inclusion would be anti-dilutive. Stock options and warrants to purchase approximately 7.2 million and approximately 4.5 million shares of common stock were outstanding at June 30, 2000 and 1999, respectively, but were not included in the computation of diluted net loss per common share because they were anti-dilutive. Also excluded were approximately 1.8 million shares of common stock issuable upon the conversion of Series A and Series C preferred stock outstanding at June 30, 1999. The exercise of these stock options and warrants, or the conversion of the preferred stock, could potentially dilute earnings per share in the future. 4 Boston Life Sciences, Inc. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Unaudited) 3. Supplemental Disclosure of Non-Cash Investing and Financing Activities During the six months ended June 30, 2000, the Company issued 87,121 and 300,614 shares of common stock resulting from the conversion of 4,983 and 53,669 shares of Series A and Series C preferred stock, respectively. During the six months ended June 30, 2000, the Company also issued 1,585,416 shares of common stock resulting from the conversion of convertible debentures with a face value of $8 million and the payment of accrued interest of approximately $318,000 in the form of shares of common stock. The carrying value of the debentures plus the accrued interest thereon, net of deferred financing costs of approximately $307,000, was reclassified to additional paid-in capital upon conversion of the debentures and the payment of accrued interest. During the six months ended June 30, 1999, the Company issued 206,296 shares of common stock resulting from the conversion of 11,763 shares of Series A preferred stock. 4. Comprehensive Loss The Company had total comprehensive loss of $3,307,880 and $1,902,666 for the three months ended June 30, 2000 and 1999, respectively. For the six months ended June 30, 2000 and 1999, total comprehensive loss was $6,138,194 and $4,111,745, respectively. 5. Stockholders' Equity In June 2000, the Company completed a private placement of 1,405,956 shares of common stock, which raised approximately $9.9 million in net proceeds. In connection with the financing, the Company issued 200,000 warrants to purchase common stock at $10.00 per share and 300,000 warrants to purchase common stock at $8.00 per share. In February 1999, the Company completed a private placement of Series C convertible preferred stock, $.01 par value, which raised approximately $5.6 million in net proceeds. In February 1999, the Company completed a private placement of 647,668 shares of common stock which raised approximately $2.3 million in net proceeds. 5 Boston Life Sciences, Inc. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Unaudited) 6. Accounting Pronouncements In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"), which was amended in March 2000 by Staff Accounting Bulletin No. 101B, "Amendment: Revenue Recognition in Financial Statements," and is effective for the Company's quarter ending December 31, 2000 and all future quarters. SAB 101 clarifies the SEC's views related to revenue recognition and disclosure. The Company does not expect the provisions of SAB 101 to have a material effect on the Company's financial position or results of operations. In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), which was amended by SFAS No. 137 and is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. The statement requires that all derivative investments be recorded in the balance sheet at fair value. Changes in the fair value of derivatives are recorded each period in current earnings or comprehensive income depending on whether a derivative is designated as part of a hedge transaction, and the type of hedge transaction. The Company does not expect the adoption of the statement to have a material effect on its financial statements. In March 2000, the FASB issued FASB Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation - an interpretation of APB Opinion No. 25" ("FIN 44"). FIN 44 clarifies the application of APB Opinion No. 25 to certain issues including: the definition of an employee for purposes of applying APB Opinion No. 25; the criteria for determining whether a plan qualifies as a noncompensatory plan; the accounting consequence of various modifications to the terms of previously fixed stock options or awards; and the accounting for the exchange of stock compensation awards in a business combination. FIN 44 is effective July 1, 2000, but certain conclusions in FIN 44 are applicable retroactively to specific events occurring after either December 15, 1998 or January 12, 2000. The Company does not expect the application of FIN 44 to have a material impact on the Company's financial position or results of operations. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (June 30, 2000) This Quarterly Report on Form 10-Q containS forward-looking statements. Specifically, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," and similar expressions are intended to identify forward-looking statements. There are a number of meaningful factors that could cause the Company's actual results to differ materially from those indicated by any such forward-looking statements. These factors include, without limitation, the duration and results of clinical trials and their effect on the Food & Drug Administration ("FDA") regulatory process, uncertainties regarding receipt of approvals for any possible products and any commercial acceptance of such products, possible difficulties with obtaining necessary patent protection, and uncertainties regarding the outcome of any of the Company's collaborations or alliances with third parties. Other factors include those set forth under the caption "Forward-Looking Statements" in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 and the documents referred to under such caption. Results of Operations Overview The Company is a biotechnology company engaged in the research and development of novel therapeutic and diagnostic products to treat chronic debilitating diseases such as cancer, central nervous system disorders and autoimmune diseases. The Company expects that its research and development costs will continue to increase as the Company attempts to gain regulatory approval for commercial introduction of its proposed products. At June 30, 2000, the Company is considered a "development stage enterprise" as defined in Statement of Financial Accounting Standards No. 7. Three Months Ended June 30, 2000 and 1999 The Company's net loss was $3,328,199 during the three months ended June 30, 2000 as compared with $1,636,042 during the three months ended June 30, 1999. Net loss per common share equaled $0.17 per share for the 2000 period as compared to $0.11 per share for the 1999 period. The higher net loss in the 2000 period was primarily due to higher research and development costs. These items were partially offset by lower Therafectin related expenses. Research and development expenses were $2,570,726 during the three months ended June 30, 2000 as compared with $745,330 during the three months ended June 30, 1999. The higher level of expenses during the 2000 period reflects the continued maturation and development of the Company's technologies. The increase was primarily attributable to expenditures related to higher enrollment levels in a phase III clinical trial and the development of a good manufacturing process ("GMP") in preparation for the expected filing of a new drug application, the initiation of a phase II clinical trial, and higher pre- clinical manufacturing costs for another technology. 7 Licensing fees expense was $100,000 during the three months ended June 30, 2000 as compared with zero during the three months ended June 30, 1999. The Company paid $100,000 during the 2000 period to license one new technology. In addition to an initial licensing fee payment, the Company is obligated to pay additional amounts upon the attainment of development milestones, as defined in each respective licensing agreement, as well as royalties upon the sales of any resulting products. The Company expects to pay future licensing fees, the timing and amounts of which will depend upon the progress attained in developing existing technologies and the terms of agreements which may be executed for technologies currently being developed or which may be developed in the future. There can be no assurance regarding the likelihood or materiality of any such future licensing agreements. Therafectin related expenses were zero during the three months ended June 30, 2000 as compared with $503,937 during the three months ended June 30, 1999. The Company is presently evaluating its future plans but does not plan to commit substantial additional financial resources on the development of Therafectin. Expenses during the 1999 period primarily related to manufacturing costs incurred in the production of three lots of GMP material. General and administrative expenses were $906,730 during the three months ended June 30, 2000 as compared with $622,558 during the three months ended June 30, 1999. This increase was primarily due to higher non-recurring, non-cash professional service costs during the 2000 period. These costs, representing the fair value (as determined under the Black Scholes pricing model) of warrants and options issued to purchase shares of common stock, totaled $260,630 during the three months ended June 30, 2000 as compared with zero during the three months ended June 30, 1999. Interest income was $249,257 during the three months ended June 30, 2000 as compared with $235,783 during the three months ended June 30, 1999. Six Months Ended June 30, 2000 and 1999 The Company's net loss was $6,279,349 during the six months ended June 30, 2000 as compared with $3,714,827 during the six months ended June 30, 1999. Net loss per common share, excluding preferred stock preferences, equaled $0.34 per share for the 2000 period as compared to $0.26 per share for the 1999 period. The higher net loss in the 2000 period was primarily due to higher research and development costs and interest expense incurred on the convertible debentures issued in September 1999. These items were partially offset by lower Therafectin related expenses. The net loss available to common stockholders for the 1999 period, including preferred stock preferences of $4,240,000, totaled $7,954,827. Net loss per common share available to common stockholders for the 1999 period, including $0.30 attributable to preferred stock preferences, totaled $0.56. In February 1999, the Company completed a private placement of Series C convertible preferred stock and warrants. Based on the market price of the Company's stock on the date of issuance, the preferred stock had a beneficial conversion feature with an intrinsic value of approximately $1.9 million and the warrants had a fair value of approximately $1.8 million, which amounts are included in the preferred stock preferences. Research and development expenses were $4,421,975 during the six months ended June 30, 2000 as compared with $1,678,793 during the six months ended June 30, 1999. The higher level of expenses during the 2000 period reflects the continued maturation and development of the Company's technologies. The increase was primarily attributable to expenditures related to higher enrollment levels in a phase III clinical trial and the development of a GMP in preparation for the expected filing of a new drug application, the initiation of a phase II clinical trial, and higher pre-clinical manufacturing costs for another technology. 8 Licensing fees expense was $200,000 during the six months ended June 30, 2000 as compared with zero during the six months ended June 30, 1999. The Company paid $100,000 during the 2000 period related to the expanded use, for a new medical indication, of a technology previously licensed by the Company. The Company also paid $100,000 during the 2000 period to license one new technology. In addition to the initial licensing fee payments, the Company is obligated to pay additional amounts upon the attainment of development milestones, as defined in each respective licensing agreement, as well as royalties upon the sales of any resulting products. The Company expects to pay future licensing fees, the timing and amounts of which will depend upon the progress attained in developing existing technologies and the terms of agreements which may be executed for technologies currently being developed or which may be developed in the future. There can be no assurance regarding the likelihood or materiality of any such future licensing agreements. Therafectin related expenses were zero during the six months ended June 30, 2000 as compared with $1,081,621 during the six months ended June 30, 1999. The Company is presently evaluating its future plans but does not plan to commit substantial additional financial resources on the development of Therafectin. Expenses during the 1999 period primarily related to manufacturing costs incurred in the production of three lots of GMP material. General and administrative expenses were $1,672,834 during the six months ended June 30, 2000 as compared with $1,319,025 during the six months ended June 30, 1999. This increase was primarily due to higher non-recurring, non-cash professional service costs during the 2000 period. These costs, representing the fair value (as determined under the Black Scholes pricing model) of warrants and options issued to purchase shares of common stock, totaled $260,630 during the six months ended June 30, 2000 as compared with $6,000 during the six months ended June 30, 1999. Interest income was $360,330 during the six months ended June 30, 2000 as compared with $364,612 during the six months ended June 30, 1999. Interest expense was $344,870 during the six months ended June 30, 2000 as compared with zero during the six months ended June 30, 1999. In September 1999, the Company issued $8 million of 8% convertible debentures, and incurred $142,861 in non- cash interest on the 8% coupon and $189,632 in non-cash interest associated with the accretion of the discounted carrying value of the debentures in the 2000 period. Liquidity and Capital Resources Since its inception, the Company has primarily satisfied its working capital requirements from the sale of the Company's securities through private placements. These private placements have included the sale of preferred stock and common stock, as well as notes payable and convertible debentures. Each private placement has included the issuance of warrants to purchase common stock. A summary of financings completed during the three years ended June 30, 2000 is as follows:
Date Net Proceeds Raised Securities Issued --------------------- ---------------------------- --------------------------- June 2000 $9.9 million Common stock September 1999 $7.4 million Convertible debentures February 1999 $2.3 million Common stock February 1999 $5.6 million Preferred stock
In the future, the Company's working capital and capital requirements will depend on numerous factors, including the progress of the Company's research and development activities, the level of resources that the Company devotes to the developmental, clinical, and regulatory aspects of its products, and the 9 extent to which the Company enters into collaborative relationships with pharmaceutical and biotechnology companies. At June 30, 2000, the Company had available cash, cash equivalents and short term investments of approximately $22.4 million and working capital of approximately $21.3 million. The Company believes that the level of financial resources available at June 30, 2000 will provide sufficient working capital to meet its anticipated expenditures for more than the next twelve months. The Company may raise additional capital in the future through collaborative agreements with other pharmaceutical or biotechnology companies, debt financings, or equity offerings. There can be no assurance, however, that the Company will be successful or that additional funds will be available on acceptable terms, if at all. Accounting Pronouncements In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"), which was amended in March 2000 by Staff Accounting Bulletin No. 101B, "Amendment: Revenue Recognition in Financial Statements," and is effective for the Company's quarter ending December 31, 2000 and all future quarters. SAB 101 clarifies the SEC's views related to revenue recognition and disclosure. The Company does not expect the provisions of SAB 101 to have a material effect on the Company's financial position or results of operations. In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), which was amended by SFAS No. 137 and is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. The statement requires that all derivative investments be recorded in the balance sheet at fair value. Changes in the fair value of derivatives are recorded each period in current earnings or comprehensive income depending on whether a derivative is designated as part of a hedge transaction, and the type of hedge transaction. The Company does not expect the adoption of the statement to have a material effect on its financial statements. In March 2000, the FASB issued FASB Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation - an interpretation of APB Opinion No. 25" ("FIN 44"). FIN 44 clarifies the application of APB Opinion No. 25 to certain issues including: the definition of an employee for purposes of applying APB Opinion No. 25; the criteria for determining whether a plan qualifies as a noncompensatory plan; the accounting consequence of various modifications to the terms of previously fixed stock options or awards; and the accounting for the exchange of stock compensation awards in a business combination. FIN 44 is effective July 1, 2000, but certain conclusions in FIN 44 are applicable retroactively to specific events occurring after either December 15, 1998 or January 12, 2000. The Company does not expect the application of FIN 44 to have a material impact on the Company's financial position or results of operations. Item 3 - Quantitative and Qualitative Disclosures about Market Risk There have been no material changes in the market risks reported in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. 10 PART II -- OTHER INFORMATION ---------------------------- ITEM 1: LEGAL PROCEEDINGS. ----------------- None. ITEM 2: CHANGES IN SECURITIES. --------------------- In June 2000, the Company issued 1,405,956 shares of its common stock to an institutional investment fund for $7.11 per share, resulting in aggregate proceeds to the Company of $10,000,000 before deducting offering expenses of $60,780. In connection with the financing, the Company issued 200,000 warrants to purchase common stock at $10.00 per share and 300,000 warrants to purchase common stock at $8.00 per share. ITEM 3: DEFAULTS UPON SENIOR SECURITIES. ------------------------------- None. ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. --------------------------------------------------- The annual meeting of stockholders was held on June 13, 2000. The holders of more than a majority of the shares entitled to vote were represented at the meeting in person or by proxy, constituting a quorom. At the meeting, the following matters were voted upon by the stockholders, receiving the number of affirmative and witheld or negative ("withheld") votes set forth below each matter. 1. To consider and act upon a proposal to elect seven directors for a term ending at the next annual meeting and until each such director's successor is duly elected and qualified:
For Withheld --------------- ------------- Colin B. Bier, Ph.D. 14,894,930 120,807 S. David Hillson, Esq. 14,735,446 280,291 Robert Langer, Sc. D. 14,910,380 105,357 Marc E. Lanser, M.D. 14,914,630 101,107 Ira W. Lieberman, Ph.D. 14,914,330 101,407 E. Christopher Palmer, CPA 14,883,309 132,428 Scott Weisman, Esq. 14,902,045 113,692
2. To approve an amendment to increase to 40,000,000 the number of shares of Common Stock authorized for issuance under the Company's Amended and Restated Certificate of Incorporation filed with the Secretary of the State of Delaware on March 29, 1996, as heretofore amended, an increase of 10,000,000 shares:
For Against Abstain ----------- -------- --------- 14,520,167 431,712 63,858
11 3. To approve an amendment to the Company's 1998 Omnibus Stock Option Plan to increase to 1,500,000 the number of shares issuable upon the exercise of options granted thereunder, an increase of 500,000 shares:
For Against Abstain ------------- -------- ----------- 14,224,191 720,153 71,393
ITEM 5: OTHER INFORMATION. ----------------- (a) Exhibits. None. Item 6: EXHIBITS AND REPORTS ON FORM 8-K. -------------------------------- (a) Exhibits. 27.1 Financial Data Schedule (b) Reports on Form 8-K: The Registrant filed the following reports on Form 8-K during the quarter ended June 30, 2000.
Date of Report Item Reported --------------- -------------------- May 9, 2000 5,7 June 1, 2000 5,7
12 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BOSTON LIFE SCIENCES, INC. -------------------------- (Registrant) DATE: August 11, 2000 /s/ S. David Hillson -------------------- S. David Hillson President and Chief Executive Officer (Principal Executive Officer) /s/ Joseph Hernon ------------------ Joseph Hernon Chief Financial Officer (Principal Financial and Accounting Officer) 13