SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1998
Commission file number 0-16177
ONCOR, Inc.
(Exact name of registrant as specified in its charter)
Maryland 52-1310084
(State of Incorporation) (I.R.S Employer Identification No.)
209 Perry Parkway
Gaithersburg, Maryland 20877
(Address of principal executive offices)
(Zip code)
(301) 963-3500
(Registrant's telephone number, including area code)
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.
YES x NO
At April 30, 1998, there were 30,203,299 shares of Common Stock outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The unaudited consolidated balance sheet as of March 31, 1998, the
audited consolidated balance sheet as of December 31, 1997 and the unaudited
consolidated statements of operations for the three month period ended March
31, 1998 and 1997 and of cash flows for the three month period ended March 31,
1998 and 1997 set forth below, have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission (the
"Commission"). Certain information and note disclosures normally included in
the annual financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to those rules
and regulations. Oncor, Inc. (the "Company") believes that the disclosures
made are adequate to make the information presented not misleading.
In the opinion of management of the Company, the accompanying
consolidated financial statements reflect all adjustments (consisting only of
normal recurring adjustments) that are necessary for a fair presentation of
results for the periods presented. Management suggests that this financial
information be read in conjunction with the Form 10-K, including "Item 1.
Business - Additional Risk Factors," filed with the Commission for the year
ended December 31, 1997.
The results for the first quarter ended March 31, 1998, presented in the
accompanying financial statements, are not necessarily indicative of the
results for the entire year.
ONCOR, INC.
CONSOLIDATED BALANCE SHEETS
As of
-----------------------------
Mar. 31, 1998 Dec. 31, 1997
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $2,660,794 $2,873,765
Short-term investments, at market 578,934 110,547
Restricted cash 1,368,998 2,012,611
Accounts receivable, net of allowance
for doubtful accounts of approxi-
mately $441,000 and $419,000 2,189,065 2,028,239
Receivable from Officer/Director 221,874 296,874
Inventories 3,423,218 3,161,141
Receivable from affiliates 149,153 50,439
Other current assets 2,592,791 3,036,676
------------- ------------
Total current assets 13,184,827 13,570,292
------------- ------------
NON-CURRENT ASSETS:
Property and equipment, net 4,988,460 4,175,768
Deposits and other non-current assets 394,634 397,801
Investment in and advances to affiliates 121,600 856,064
Intangible assets, net 4,473,062 4,884,234
------------- ------------
Total non-current assets 9,977,756 10,313,867
------------- ------------
Total assets $23,162,583 $23,884,159
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $3,949,107 $3,141,845
Accrued expenses and other current
liabilities 1,669,476 1,697,744
Notes payable 3,012,647 3,013,131
Affiliate stock issuable under warrants 3,787,500 3,787,500
Current portion of long-term debt 470,805 551,242
------------- -------------
Total current liabilities 12,889,535 12,191,462
------------- -------------
NON-CURRENT LIABILITIES:
Long-term debt 2,395,901 5,867,079
Deferred rent 247,562 259,351
------------- -------------
Total non-current liabilities 2,643,463 6,126,430
------------- -------------
Total liabilities 15,532,998 18,317,892
------------- -------------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARY 2,258,069 2,378,157
------------- -------------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 1,000,000
shares authorized, 500 shares issued,
entitled to $12,000 per share in
liquidation 5,260,833 -
Common stock, $.01 par value,
50,000,000 shares authorized,
29,996,706 and 27,302,384 issued;
29,917,297 and 27,222,975 outstanding 299,967 273,024
Common stock warrants outstanding 1,190,880 909,630
Additional paid-in capital 147,467,158 137,873,399
Deferred compensation (702,414) (879,020)
Unrealized gain on investments (77) -
Cumulative translation adjustment (2,413,170) (2,184,342)
Accumulated deficit (145,511,149) (132,584,069)
Less - 79,409 shares of common
stock held in treasury, at cost (220,512) (220,512)
------------- -------------
Total stockholders' equity 5,371,516 3,188,110
------------- -------------
Total liabilities and
stockholders' equity $23,162,583 $23,884,159
============ =============
The accompanying notes are an integral part
of these consolidated financial statements.
/TABLE
ONCOR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
March 31,
------------------------------
1998 1997
------------------------------
GROSS REVENUES:
Product sales $3,566,504 $3,204,386
Grants and contracts 268,274 122,750
------------- ------------
Gross revenues 3,834,778 3,327,136
OPERATING EXPENSES:
Direct cost of sales 1,739,898 1,930,049
Amortization of
intangibles 276,909 307,119
Write off of acquired
research & development
projects in process 5,726,803 -
Selling, general and
administrative 4,687,386 3,241,100
Research and development 1,810,596 1,540,530
Clinical and regulatory 296,197 456,166
------------- ------------
Total operating expenses 14,537,789 7,474,964
LOSS FROM OPERATIONS (10,703,011) (4,147,828)
OTHER INCOME (EXPENSE):
Investment income 77,791 193,845
Interest and other expenses,
net (685,435) (2,745,923)
Foreign exchange loss (1,314) (4,787)
Equity in net loss of
affiliates (1,038,028) (1,299,087)
------------- ------------
(1,646,986) (3,855,952)
Net loss ($12,349,997) ($8,003,780)
============= ============
Dividends and accretion on
convertible preferred
stock (577,083) -
------------- ------------
NET LOSS APPLICABLE TO
COMMON STOCK ($12,927,080) ($8,003,780)
============= ============
BASIC AND DILUTED
NET LOSS PER SHARE ($0.46) ($0.32)
============= ============
WEIGHTED-AVERAGE COMMON
SHARES OUTSTANDING 28,392,882 24,865,816
============= ============
The accompanying notes are an integral part of these
consolidated financial statements.
/TABLE
ONCOR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended March 31,
------------------------------------
1998 1997
------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($12,349,997) ($8,003,780)
Adjustments to reconcile net loss to
net cash used in operating activities:
Issuance of common stock for interest
on convertible notes 41,282 2,175,000
Issuance of common stock in
connection with research and
development agreements - 111,681
Write off of acquired research &
development 5,726,803 -
Depreciation and amortization 630,846 649,547
Expenses for non-employee stock options 176,606 107,118
Equity in net loss of affiliate
and other 1,038,028 1,319,670
Changes in operating assets
and liabilities:
Accounts receivable (200,073) 235,403
Inventories (292,911) (295,661)
Other current assets 451,562 29,129
Deposits and other non-current assets (8,540) (24,743)
Accounts payable 678,595 (153,407)
Accrued expenses and other
liabilities (217,258) 384,941
Deferred rent (11,789) -
------------- -------------
Net cash used in operating
activities (4,336,846) (3,465,102)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (98,252) (114,303)
Cash acquired in Codon acquisition 52,044
Purchases of investments (468,464) (2,421,755)
------------- -------------
Net cash used in investing
activities (514,672) (2,536,058)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of preferred stock 4,965,000 -
Exercise of stock options and warrants 37,500 19,950
Reduction in restricted funds 613,561 4,732,478
Payment on bank loans (236,752) (96,201)
Loan to unconsolidated affiliate (674,415) (250,000)
Proceeds from borrowings and issuance
of warrants - 2,000,000
------------- -------------
Net cash provided by (used in)
financing activities 4,704,894 6,406,227
------------- -------------
------------- -------------
EFFECT OF CHANGE IN EXCHANGE RATE ON CASH (66,347) (522,532)
------------- -------------
Net decrease in cash and cash
equivalents (212,971) (117,465)
CASH AND CASH EQUIVALENTS, beginning of
the period 2,873,765 13,058,657
------------- -------------
CASH AND CASH EQUIVALENTS, end of the
period $2,660,794 $12,941,192
============= =============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
In February 1998, the Company exchanged approximately 1,650,013
shares of common stock for all the outstanding shares of Codon
Pharmaceuticals, Inc.
During the first quarter of 1998, the Company issued 1,034,309
shares of common stock in connection with the conversion of
$3,380,377 of convertible debt.
The accompanying notes are an integral part of these
consolidated financial statements.
/TABLE
ONCOR, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 1998
(Unaudited)
1. Cash Equivalents and Investments
Cash equivalents and investments consist primarily of funds invested in
money market instruments, commercial paper and U.S. government treasury bills.
Investments with maturities between three months and one year are classified
as short-term investments. Investments in securities with original maturities
of three months or less are considered cash equivalents. Approximately $0.4
million in restricted cash is pledged as collateral for a loan of a director.
The loan was paid in full in April 1998 and the restricted cash was released
as collateral. Cash of approximately $1.0 million is held in escrow pursuant
to a lawsuit brought by a former employee in France.
Investments that are classified as available-for-sale securities are
carried at fair market value. Unrealized holding gains and losses are
excluded from earnings and reported as a net amount in a separate component of
shareholders' equity until realized.
2. Intangible Assets
The intangible assets are the result of an acquisition made in 1994.
They comprise (i)technology acquired, and (ii) the excess of the purchase
price over the fair market value of the tangible assets acquired. The
intangible assets are being amortized on a straight line method over
periods of five to ten years, with a weighted average amortization period of
eight years.
3. Net Loss Per Share
In March 1997, the Financial Accounting Standards Board issued Statement
of Financial accounting Standards ("SFAS") No. 128, Earnings Per Share. SFAS
No. 128 is effective for financial statements issued after December 15, 1997.
The Company has implemented SFAS No. 128. SFAS No. 128 requires the dual
presentation of basic and diluted net loss per share. Basic net loss per
share includes no dilution and is computed by dividing net loss available to
common stockholders by the weighted average number of common shares
outstanding for the period. Diluted loss per share includes the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock. Options, warrants and
convertible securities that were outstanding at the end of each period
presented were not included in the computation of diluted net loss per share
as their effect would be antidilutive. As a result the basic and diluted loss
per share amounts are identical.
4. Investments in Debt Securities at March 31, 1998
The aggregate fair value of investments in debt securities, comprising
commercial paper, as of March 31, 1998 is as follows:
U.S. government securities $242,015
Commercial Paper 445,399
---------
Total $687,414
=========
5. Acquisition of Codon Pharmaceuticals, Inc.
Effective February 28, 1998, the Company exchanged approximately 1.65
million shares of common stock for all the outstanding shares of Codon
Pharmaceuticals, Inc., formerly known as OncorPharm, Inc. ("Codon"). The
effect of this transaction was to increase the Company's ownership of Codon to
100%. This transaction has been accounted for as a purchase. Of the
purchase price of $6.2 million, $5.7 million has been allocated to in-process
research and development projects acquired and recorded as a charge in the
Company's statement of operations for the three months in the period ended
March 31, 1998. As a result of this transaction, 100% of Codon's operating
expenses and losses have been and will continue to be included in the
operating results of the Company from the effective date of the acquisition.
Prior to the date of the acquisition, the Company increased its advances to
Codon from $2.1 million to $2.8 million. All intercompany balances have been
eliminated in consolidation as of March 31, 1998.
The preliminary allocation of the purchase price is as follows:
Cash $52,044
Prepaid expenses and other current assets 45,887
Property and equipment 1,078,487
Accounts payable and accrued expenses (715,672)
Research and Development projects in process 5,726,803
-----------
$6,187,549
===========
6. Contingency
A former employee brought suit against the Company in France for
approximately $0.4 million and instituted arbitration proceedings for $0.6
million, all related to the employee's termination. The plaintiff has
obtained a ruling that the Company must retain in escrow an amount of funds
equal to the aggregate amount of the claims. Such amounts are shown on the
balance sheet as restricted cash. Management believes that the outcome of
these matters will not be material to the results of operations or financial
condition of the Company.
7. Series A Convertible Stock
In January 1998, the Company completed a $5 million equity financing in a
private placement of 500 shares of Series A preferred stock. The preferred
stock is convertible into common stock of the Company under certain
circumstances, generally in a period beginning after 90 days, at prices equal
to the lower of (i) 100% (reducing over time to 90%) of the average of the
lowest closing bid price of the common stock on any two of the most recent 22
trading days preceding the date of conversion and (ii) $4.56. Dividends at a
rate of 6% are payable upon conversion in cash or common stock. In addition,
the Company issued warrants to purchase 125,000 shares of common stock in
connection with the transaction, with an exercise price of $5.16 per share.
The investors and the Company each have rights to increase the amount of the
investment under certain circumstances. Approximately $0.3 million of the net
proceeds was allocated to the value of the warrants. The guaranteed discount
of 10%, or approximately $0.6 million is being recognized as a dividend. The
value allocated to the warrant and the dividend from the guaranteed discount
are being recorded over the period from issuance to the expected conversion
date.
8. Subsequent Events
During the second quarter of 1998, the Company has increased a secured
line of credit from $3.0 million to $3.5 million. The Company has borrowed
the full amount of the line.
Effective April 10, 1998, the Company conveyed its non-oncology genetic
probes business unit and cash of $0.5 million to Vysis, Inc. as consideration
for obtaining certain key royalty-bearing licenses and for settling claims of
past patent infringement and related claims made against the Company.
9. New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued SFAS No.
130, Reporting Comprehensive Income. SFAS No. 130 is effective for fiscal
years beginning after December 15, 1997. SFAS No. 130 establishes standards
for reporting and display of comprehensive income and its components in a full
set of general purpose financial statements. Comprehensive income is the
total of net income and all other non-owner changes in equity. The Company
implemented SFAS No. 130 effective January 1998. Foreign currency translation
adjustments are the significant component of Comprehensive Income under SFAS
No. 130.
Disclosure of Comprehensive Loss
For the Three Months Ended
March 31,
------------------------------
1998 1997
------------------------------
Net Loss ($12,349,997) ($8,003,780)
Foreign currency translation
adjustments (228,828) (1,022,033)
Unrealized loss on securities:
Unrealized holding losses
arising during the period (77) (2,110)
-------------- -------------
Comprehensive loss ($12,578,902) ($9,027,923)
In June 1997, the Financial Accounting Standards Board issued SFAS No.
131, Disclosures about Segments of an Enterprise and Related Information.
SFAS No. 131 is effective for the Company's 1998 year-end financial
statements. SFAS No. 131 requires an enterprise to report certain additional
financial and descriptive information about its reportable operating segments.
Management does not expect that the implementation of SFAS No. 131 disclosures
will have a material impact.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of the
Company's results of operations and financial condition. The discussion
should be read in conjunction with the consolidated financial statements of
the Company and notes thereto found elsewhere in this Form 10-Q, and the
audited consolidated financial statements of the Company and notes thereto,
which were included in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997. This Report contains certain statements of a
forward-looking nature relating to future events or the future financial
performance of the Company. Readers are cautioned that such statements are
only predictions and that actual events or results may differ materially. In
evaluating such statements, readers should specifically consider the various
factors identified in this Report and in the Company's other public filings
which could cause actual results to differ materially from those
indicated by such forward-looking statements, including the matters set forth
under the caption "Risk Factors."
Overview
The Company has incurred significant cash losses throughout its existence
and has no immediate expectations to achieve cash positive operations until
during 1999. The Company's current cash resources are nearly depleted and any
cash infusions would likely be required to be utilized first to repay, in
whole or in part, bank debt obligations of $3.5 million. As described in
"Liquidity and Capital Resources" below, the Company has identified several
potential sources of additional capital. There can be no assurance that any
of these sources will provide the capital necessary for the Company to
continue its operations at their current levels, or at all. The inability
of the Company to obtain additional financing would have a material adverse
effect on the Company's business, financial condition and results of
operations, including possibly requiring the Company to curtail or cease its
operations.
Effective February 28, 1998, the Company exchanged approximately 1.65
million shares of common stock for all the outstanding shares of Codon
Pharmaceuticals, Inc., formerly known as OncorPharm, Inc. ("Codon"). The
effect of this transaction was to increase the Company's ownership of Codon to
100%. This transaction has been accounted for as a purchase. Of the
purchase price of approximately $6.2 million, $5.7 million has been allocated
to research and development projects in process and expensed in the first
quarter of 1998. As a result of this transaction, Codon's operating expenses
and losses have been and will continue to be included in the operating results
of the Company from the effective date of the acquisition.
Effective April 10, 1998, the Company conveyed its non-oncology genetic
probe business unit and cash of $0.5 million to Vysis, Inc. as consideration
for obtaining certain key royalty-bearing licenses and for settling claims of
past patent infringement and related claims made against the Company. As a
result of this transaction, beginning in the second quarter of 1998, the
Company will report significantly reduced sales, costs of sales and selling,
general, administrative, research and development expenses of the Company.
1997 revenues for this business unit were approximately $3 million. The
Company believes that the total costs and expenses associated with the
business unit in 1997 were greater than $3.0 million. As a result, the
Company expects that results of operations starting in the second quarter of
1998 will reflect the decreased sales and expenses attributable to that
business unit. The Company is currently seeking a purchaser for its
non-strategic research products business unit. If such transaction were to be
completed, the sales, costs and expenses noted above will be further reduced
by a substantial amount. Collectively, these two units are referred to as the
non-strategic operating units of the Company.
Results of Operations
Product sales increased by 11% to $3.6 million in the first quarter of
1998 from $3.2 million in the corresponding period of the previous year. The
increase in 1998 was due to improved demand in the United States for the
Company's products and to sales of the Company's recently approved breast
cancer prognostic test (INFORM ). As noted in Overview above, the
Company divested its non-oncology DNA probe business unit effective in April
of 1998, which will reduce the Company's revenue run rate, as well as reducing
the associated expense run rate. In addition, the Company is seeking a
purchaser for its research products business unit. If and when such business
unit is sold, revenues and expenses associated with that unit would be
similarly reduced.
Contracts and grants revenue increased by 119% to $0.3 million in the
first quarter of 1998 from $0.1 million in the corresponding period of the
previous year. The increase was due to the inclusion of Codon's grant revenue
subsequent to its acquisition and to the receipt of grants from the National
Institutes of Health. Such grants cover multiple years; grant revenue is
expected to remain at or above current levels for at least the next year.
Product gross margins improved to 51% in the first quarters of 1998 from
40% in the corresponding period of the previous year. The increase in 1998
was due to reductions in spending levels in the manufacturing department and
to the beneficial effect of spreading fixed costs over larger manufacturing
volumes, principally of INFORM.
The amortization of intangibles has not changed significantly in 1998
from 1997 and are not expected to change materially for more than the next
year.
Selling, general and administrative expenses increased 45% to $4.7
million in the first quarter of 1998 from $3.2 million in the corresponding
period of the previous year. The increase in 1998 was due principally to the
increase in legal expenses related to patent litigation settled in April 1998
by approximately $0.7 million, and to a lesser extent to marketing expenses
for the introduction of Inform, expenses related to salary and relocation for
a Vice President of Sales and Marketing, legal expenses related to certain
corporate transactions in progress and the inclusion of Codon in the
consolidated financial statements. The legal expenses related to patent
litigation are expected to cease. The completed divestiture of one of the
Company's non-strategic operating units will cause selling, general and
administrative expenses to decline substantially.
Research and development expenses increased 18% to $1.8 million in the
first quarters of 1998 from $1.5 million in the corresponding period of the
previous year. The increase is due primarily to the inclusion of Codon in the
consolidated financial statements of the Company in 1998. The completed
divestiture of one of the Company's non-strategic operating units will cause
research and development expenses to decline substantially.
The charge for research projects in process of $5.7 million in the first
quarter of 1998 was a result of the acquisition of Codon. This charge
represents the estimated value of the Company's proprietary position in
certain technologies under development by Codon for future products which have
not yet been developed to a stage of technological feasibility and for which
the ultimate realizability is uncertain.
Clinical and regulatory expenses decreased by 35% to $0.3 million in the
first quarter of 1998 from $0.5 million in the corresponding period of the
previous year. The decline was due to abnormally high expenses in 1997
related to the engagement of regulatory consultants who assisted the Company
to meet the manufacturing standards required by the US Food and Drug
Administration for the approval of Inform.
Other net operating expenses declined 57% to a net expense of $1.6
million in the first quarter of 1998 from a net expense of $3.9 million in the
corresponding period of the previous year. The decline in 1998 was due to
reductions in interest expense related to the amortization of the beneficial
conversion features of convertible debentures issued in the first quarter of
1997. The decline in the charges for the Company's equity in the net loss of
each affiliate in the first quarter of 1998 was due to the fact that the
Company acquired all of the outstanding ownership interest in Codon, in the
first quarter of 1998, thereafter recognizing the revenues and operating
expenses of Codon in the consolidated operating results of the Company rather
than recognizing the Company's equity in the net losses of the affiliate.
As a result of the factors discussed above, net loss increased 54% to
$12.3 million in the first quarter of 1998 from $8.0 million in the
corresponding period of the previous year.
Liquidity and Capital Resources
Overview
The consolidated cash and liquid investments balances of the Company were
$4.1 million and $4.6 million at April 30, 1998 and March 31, 1998,
respectively, compared to $5.0 million at December 31, 1997. Approximately
$2.1 million and $2.8 million of the cash and liquid investments at April 30,
1998 and March 31, 1998, respectively, are limited to fund operations of the
Company's European subsidiary. Liquid investments include restricted cash,
cash equivalents and short-term investments as set forth on the consolidated
balance sheet included elsewhere in this filing.
Analysis of Historical Cash Losses
The following table sets forth the most significant elements of the cash
flows of the Company in the first quarter of 1998 (in millions of dollars):
Cash and liquid investments at January 1, 1998 $5.0
Net cash used in operating activities (4.3)
Proceeds from issuance of convertible preferred stock 5.0
Loans to affiliate (0.7)
Purchases of equipment (0.1)
Other (0.3)
-----
Cash and liquid investments at March 31, 1998 $4.6
=====
Approximately $1.0 million of the cash and liquid investments is held in
escrow in France pending the outcome of legal disputes between the Company and
the former President of Appligene. Such disputes are scheduled to be
adjudicated in the second quarter of 1998.
The net cash loss from operations is the result of the losses of the
Company discussed in"Results of Operations" above in this management's
discussion and analysis.
Proceeds from issuance of convertible preferred stock relate to a private
placement of securities made by the Company in January 1998. The loans to
affiliate represent funds advanced to Codon to finance the operations of this
affiliate. The Company expects such advances to continue at a rate of $0.6
million per quarter until such time, if ever, as Codon secures funding
from third parties sufficient to support its operating needs.
Purchases of equipment are for the on-going replacement of office and
laboratory equipment; the Company expects such purchases to increase as larger
scale facilities are prepared for the anticipated manufacture of certain
products, including INFORM. Any substantial leasehold improvements which may
be required in manufacturing facilities are expected to be funded by the
Company's primary landlord in accordance with the Company's current lease
agreements.
The Company leases most of its facilities under operating leases with
aggregate annual obligations for 1998 of $1.1 million. The Company has
committed to expend $0.8 million in support of various research agreements in
1998.
As of April 30, 1998, the Company had an available consolidated cash
balance of approximately $3.2 million, of which approximately $2.0 million is
available for use in North America after the recent payment for the
acquisition of a strategic license. The divestiture of certain non-strategic
assets and other cost-cutting actions, which are expected to be completed by
June 30, 1998, will reduce the Company's ongoing cash requirements
significantly. The Company expects that its current liquid resources will not
be sufficient to fund operations after the end of 1998.
The Company received in May 1998 a definitive term sheet to increase a
secured line of credit from $3.5 million to $4.0 million. The Company is
considering additional alternative forms of financing, including among other
things, (1) equity or debt financing, (2) sale of significant assets,
including its nonstrategic research products business unit, which may result
from the previously announced retention of Lehman Brothers by the Company to
explore strategic alternatives to increase stockholder value, including sale
of the Company, (3) sale of publicly-traded OncorMed common stock, (4) third
party funding of Codon for future cash requirements and recovery of Oncor
advances to Codon and (5) other alternatives. After the acquisition of
Codon, Oncor includes in its consolidated cash position any amounts raised
through the separate financing efforts of Codon. Funds, if any, raised from
most of these possible sources must first be utilized to repay, in whole or in
part, the Company's bank debt of $3.5 million in accordance with the terms of
the underlying line of credit and related guarantees.
The Company holds 2.0 million shares of common stock in OncorMed, Inc., a
publicly traded affiliate of the Company, whose shares have traded in the past
three months in the range of $4.75 to $7.5 per share. The Company is
restricted from selling 1.0 million such shares in the public markets due to
outstanding options it has issued or anticipates issuing pursuant to which
the Company has offered to sell the shares to the option holders for $2.00 per
share. While exercise of such options would generate cash of approximately
$2.0 million, such exercise is outside the control of the Company. The
remaining 1.0 million shares of common stock of OncorMed can be sold in the
public markets only pursuant to restrictions on the sale of unregistered stock
by an affiliate pursuant to Rule 144 of the Securities Act of 1933 such that
the complete liquidation of this position in the public markets likely would
take a year or more. Trading activity in OncorMed stock is limited, which
would further restrict the Company's ability to liquidate a significant
portion of its position. The Company is also attempting to secure a purchaser
for a block of the stock in a private transaction and currently is holding
discussions with potential purchasers pursuant to this effort.
In April 1998, two of the alternative forms of financing, which the
Company had previously reported as being in more advanced stages of
discussions, subsequently were not converted from the term sheet stage to that
of definitive agreements. The Company continues actively to pursue similar
transactions with other parties.
There can be no assurance that any of the alternatives discussed above,
or any other such forms of financing, can be completed by the Company in
sufficient amounts in timely fashion on acceptable terms, or at all, which
would have a material adverse effect on the Company. Even if completed, each
of such financing alternatives may have certain terms, conditions or
ramifications which may have a material adverse effect on the Company's
business, financial condition and results of operations. For instance, any
such equity financings likely will be dilutive to stockholders; the terms of
any debt financing, as does the existing line of credit, may require
substantially all of the assets of the Company to be pledged as collateral,
may involve warrant or equity dilution and/or may contain restrictive
covenants which limit the Company's ability to pursue certain courses of
action; and the sale of assets will decrease the revenue base of the Company.
Cash Position in Europe
In the absence of any unforeseen downside of exceptional nature, the
Company believes that its current cash position in Europe is sufficient to
fund the European operation at least through the end of the year.
Effort to Obtain Strategic Transaction
In June 1997, the Company engaged Lehman Brothers to assist in securing
strategic alliances, including the possible sale of the Company, which would,
among other effects, alleviate the Company's cash requirements. There can be
no assurance that any such transaction will be concluded.
Year 2000 Compliance
Many currently installed computer systems and software products are coded
to accept only two digit entries in the date code field. Beginning in the
year 2000, these date code files will need to accept four digit entries to
distinguish 21st century dates from 20th century dates. While
uncertainty exists concerning the potential effects associated with such
compliance, the Company does not believe that year 2000 compliance will result
in a material adverse effect on its financial condition or results of
operations.
New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued SFAS No.
130, Reporting Comprehensive Income. SFAS No. 130 is effective for fiscal
years beginning after December 15, 1997. SFAS No. 130 establishes standards
for reporting and display of comprehensive income and its components in a full
set of general purpose financial statements. Comprehensive income is the
total of net income and all other non-owner changes in equity. The Company
implemented SFAS No. 130 effective January 1998. Foreign currency translation
adjustments are the significant component of Comprehensive Income under SFAS
No. 130.
In June 1997, the Financial Accounting Standards Board issued SFAS No.
131, Disclosures about Segments of an Enterprise and Related Information.
SFAS No. 131 is effective for the Company's 1998 year-end financial
statements. SFAS No. 131 requires an enterprise to report certain additional
financial and descriptive information about its reportable operating segments.
Management does not expect that the implementation of SFAS No. 131 will have a
material impact on the Company's financial position or results of future
operations.
Risk Factors
History of Operating Losses
Oncor has not been profitable since its inception in July 1983. For the
quarter ended March 31, 1998, the Company incurred net losses of approximately
$12.3 million and as of that date, the accumulated deficit of the Company was
$145.5 million. The Company expects to incur additional losses in future
periods. The Company believes it will become profitable sometime in 1999 but
cannot provide assurance as to when, if ever, it will achieve profitability.
Additional Financing Requirements and
Access to Capital Funding
The Company expects that its current liquid resources will not be
sufficient to fund operations after the end of 1998. Funds, if any, raised
from most of the possible sources during the intervening period must first be
utilized to repay, in whole or in part, the Company's bank debt of $3.5
million in accordance with the terms of the underlying line of credit and
related guarantees. The line of credit, which expires on October 31, 1998, is
guaranteed by certain shareholders whose guarantees are secured by
substantially all of the assets of the Company.
The Company is considering alternative forms of financing, including
among other things, equity or debt financing, sale of certain non-strategic
assets, including the Research Products Division and the Company's interests
in certain other affiliates, as well as the sale of other assets which may
result from the previously announced retention of Lehman Brothers by the
Company to explore strategic alternatives to increase stockholder value,
including sale of the Company, sale of publicly-traded OncorMed common stock,
third party funding of Codon for future cash requirements and recovery of
Oncor advances to Codon and other alternatives.
There can be no assurance that any of the alternatives discussed above,
or any other such forms of financing, can be completed by the Company in
sufficient amounts in timely fashion on acceptable terms, or at all, which
would have a material adverse effect on the Company. Even if completed, each
of such financing alternatives may have certain terms, conditions or
ramifications which may have a material adverse effect on the Company's
business, financial condition and results of operations. For instance, any
such equity financings likely will be dilutive to stock holders, the terms of
any debt financing, as does the existing line of credit, may require
substantially all of the assets of the Company to be pledged as collateral,
may involve warrant or equity dilution and/or may contain restrictive
covenants which limit the Company's ability to pursue certain courses of
action, and the sale of assets will decrease the revenue base of
the Company.
Risk Associated with the INFORM Her-2/neu Gene-Based Test System
Although the PMA for the Oncor INFORM HER-2/neu Gene Detection System
was approved for marketing by FDA in December 1997, there can be no assurance
that the Company will be capable of manufacturing the test system in
commercial quantities at reasonable costs or marketing the product
successfully, that the test system will be accepted by the medical diagnostic
community, or that the market demand for the test system will be sufficient to
allow profitable sales. In addition, product approvals may be withdrawn if
compliance with regulatory standards is not maintained or if substantial
problems occur after the product reaches the market.
No Assurance of Regulatory Approvals; Government Regulation
The Company expects to pursue FDA approval or clearance of certain
existing products and products under development. There can be no assurance
that the Company will receive regulatory approval or clearance for any of its
products currently under development or, even if it does receive regulatory
approval or clearance for a particular product, that the Company will ever
recover its costs in connection with obtaining such approval or clearance.
The timing of regulatory decisions is not within the control of the Company.
The failure of the Company to receive requisite approval or clearance, or
significant delays in obtaining such approval or clearance, could have a
material and adverse effect on the business, financial condition and results
of operations of the Company.
Approval or clearance by the FDA requires lengthy, detailed and costly
laboratory procedures, clinical testing procedures and application preparation
and defense efforts to demonstrate a product's efficacy and safety (or
equivalence to a marketed product in the case of a 510(k) submission) before a
product can be sold for diagnostic use. Even if such regulatory approval or
clearance is obtained for a product, its manufacturer and its manufacturing
facilities are subject to continual review and periodic inspections by the FDA
and other regulatory agencies. The regulatory standards for manufacturing are
applied stringently by the FDA. Discovery of previously unknown problems with
a product, manufacturer or facility may result in restrictions on such product
or manufacturer, including costly recalls or even withdrawal of the product
from the market. Furthermore, approval may entail ongoing requirements for
postmarketing studies. Failure to maintain requisite manufacturing standards
or discovery of previously unknown problems could have a material and adverse
effect on the Company's business, financial condition or results of
operations.
Patents and Proprietary Rights
The Company's success will depend in large part on its, or its
licensors', ability to obtain patents, defend its patents, maintain trade
secrets and operate without infringing upon the proprietary rights of others,
both in the United States and in foreign countries. The patent position of
firms relying upon biotechnology is highly uncertain in general and involves
complex legal and factual questions. To date there has emerged no consistent
policy regarding the breadth of claims allowed in biotechnology patents or the
degree of protection afforded under such patents. The Company relies on
certain patents and pending U.S. and foreign patent applications relating to
various aspects of its products. These patents and patent applications are
either owned by the Company or rights under them are licensed to the Company.
There can be no assurance that patents will issue as a result of any such
pending applications or that, if issued, such patents will be sufficiently
broad to afford protection against competitors with similar technology. In
addition, there can be no assurance that any patents issued to the Company, or
for which the Company has license rights, will not be challenged, invalidated
or circumvented, or that the rights granted thereunder will provide
competitive advantages to the Company.
The commercial success of the Company will also depend upon avoiding the
infringement of patents issued to competitors and upon maintaining the
technology licenses upon which certain of the Company's current products are,
or any future products under development might be, based. Litigation, which
could result in substantial cost to the Company, may be necessary to enforce
the Company's patent and license rights or to determine the scope and validity
of others' proprietary rights. If competitors of the Company prepare and file
patent applications in the United States that claim technology also claimed by
the Company, the Company may have to participate in interference proceedings
declared by the PTO to determine the priority of invention, which could result
in substantial cost to the Company, even if the outcome is favorable to the
Company. An adverse outcome could subject the Company to significant
liabilities to third parties and require the Company to license disputed
rights from third parties or cease using the technology. A U.S. patent
application is maintained under conditions of confidentiality while the
application is pending in the PTO, so that the Company cannot determine the
inventions being claimed in pending patent applications filed by its
competitors in the PTO. Further, U.S. patents do not provide any remedies for
infringement that occurred before the patent is granted.
The University of California and its licensee, Vysis, Inc. ("Vysis"),
filed suit against Oncor on September 5, 1995 for infringement of U.S. Patent
No. 5,447,841 entitled Methods and Compositions for Chromosome Specific
Staining which issued on that same date. The patent relates to a method of
performing in situ hybridization using a blocking nucleic acid that is
complementary to repetitive sequences. On April 9, 1998, the Company, Vysis
and the University of California entered into a definitive agreement to settle
the litigation. As part of the agreement, the Company, Vysis and the Regents
of the University of California stipulated to a final judgment order which was
approved and issued by the U.S. District Court for the Northern District of
California. Under the terms of the definitive agreement, the Company obtained
a world-wide nonexclusive royalty-bearing license to U.S. Patent No. 5,447,841
and any divisionals, continuations, continuations-in-part, reissues,
extensions, reexaminations, substitutions, renewals and foreign counterparts
thereof throughout the world for use in the fields of human oncology for
both clinical and research applications. The Company also obtained a
nonexclusive royalty-bearing license to certain direct labeling technology
rights owned by Vysis in U.S. Patent 5,491,224 and any divisionals,
continuations, continuations-in-part, reissues, extensions, reexaminations,
substitutions, renewals and foreign counterparts thereof throughout the world.
In return, the Company has agreed to convey to Vysis its fluorescence in situ
hybridization (FISH) genetic probe business, retaining full rights to the
field of human oncology for research and clinical applications, including the
Company's recently FDA approved INFORM HER-2/neu breast cancer test. Sales of
the conveyed FISH products represented less than $3.0 million of the
Company's 1997 gross revenues. The Company also made initial cash payments to
Vysis of $0.5 million, and an additional payment of $1.5 million will be due
on April 10, 2000 in order to extend the licenses beyond that date.
On April 27, 1998, the Company received a summons and complaint in
connection with a lawsuit entitled Key Technology, Inc. v. Oncor, Inc. in the
Superior Court of the State of Washington for the County of Walla Walla. The
complaint alleges breach of contract and fraud in connection with a June 1996
asset purchase agreement between Key Technology and the Company relating to
the sale of the Company's 1300 video inspection system to Key Technology,
and seeks damages against the Company of $1,475,000. A failure to
successfully defend against or settle that suit would likely result in damages
being assessed against the Company and could have a material adverse effect on
the Company's financial condition and results of operation.
The Company currently has certain licenses from third parties and in the
future may require additional licenses from other parties to develop,
manufacture and market commercially viable products effectively. There can be
no assurance that such licenses will be obtainable on commercially reasonable
terms, if at all, that the patents underlying such licenses will be valid and
enforceable or that the proprietary nature of the patented technology
underlying such licenses will remain proprietary.
The Company relies substantially on certain technologies that are not
patentable or proprietary and are therefore available to the Company's
competitors. The Company also relies on certain proprietary trade secrets
and know-how that are not patentable. Although the Company has taken steps to
protect its unpatented trade secrets and know-how, in part through the use of
confidentiality agreements with its employees, consultants and certain of its
contractors, there can be no assurance that these agreements will not be
breached, that the Company would ave adequate remedies for any breach, or that
the Company's trade secrets will not otherwise become known or be
independently developed or discovered by competitors.
Uncertainties Relating to Product Development
The Company's actively marketed products other than the INFORM HER-2/neu
Gene Detection System have not been approved by the FDA and may be sold only
for research purposes in the United States and certain other countries. The
Company has undertaken to seek FDA approval for certain of these products, and
may in the future undertake to seek such approval or clearance for other
products, and substantial additional investment, laboratory development,
clinical testing, controlled manufacturing and FDA approval or clearance will
be required prior to the commercialization of such products for diagnostic
purposes. There can be no assurance that the Company will be successful in
developing such existing or future products, that such products will prove to
be efficacious in clinical trials, that required regulatory approvals or
clearances can be obtained for such products, that such products, if developed
and approved, will be capable of being manufactured in commercial quantities
at reasonable costs, will be marketed successfully or will be accepted by the
medical diagnostic community, or that market demand for such products will be
sufficient to allow profitable operations.
International Sales and Foreign Exchange Risk
The Company anticipates that a significant amount of its sales will take
place in European countries and Japan and likely will be denominated in
currencies other than the U.S. dollar. These sales may be adversely affected
by changing economic conditions in foreign countries and by fluctuations in
currency exchange rates. Any significant decline in the applicable rates of
exchange could have a material adverse effect on the Company's business,
financial condition and results of operations. Additional risks inherent in
the Company's international business activities generally include unexpected
changes in regulatory requirements, tariffs and other trade barriers,
lack of acceptance of products in foreign markets, longer accounts receivable
payment cycles, difficulties in managing international operations, potentially
adverse tax consequences, restrictions on repatriation of earnings and the
burdens of complying with a wide variety of foreign laws. There can be no
assurance that such factors will not have a material adverse effect on the
Company's future international revenues and, consequently, on the Company's
business, financial condition and results of operations.
Limited Manufacturing Experience
The Company's ability to conduct clinical trials on a timely basis, to
obtain regulatory approvals or clearances and to commercialize its products
will depend in part upon its ability to develop and maintain facilities to
manufacture its products, either directly or through third parties, at a
competitive cost in accordance with the FDA's prescribed current GMP and other
regulatory requirements. Any failure to maintain manufacturing facilities in
accordance with the FDA's GMP requirements could result in the inability of
the Company to manufacture its products and may limit the Company's ability to
deliver its products to its customers, which would have a material and adverse
effect on the Company's business, financial condition and results of
operations. No assurance can be given that the Company will be able to
maintain GMP facilities or engage third parties to do so at a cost acceptable
to the Company.
The Company has only limited experience in manufacturing products on a
commercial basis. The Company believes that its existing manufacturing
facilities, along with available contiguous space currently under option to
the Company, will enable it to produce commercial quantities of its products
through 1998. No assurance can be given, however, that manufacturing or
quality control problems will not arise if the Company increases production of
its products, or if additional facilities are required in the future.
Limited Marketing and Distribution Experience
The Company markets and sells its products for research purposes and,
once approved or cleared by the appropriate regulatory authority, for
diagnostic use, through its direct sales forces in both Europe and the United
States and indirectly through third parties in the Pacific Rim and other
areas. The Company only has limited experience in sales, marketing, training
and distribution. In order to market its products directly, the Company must
maintain a sales force with technical expertise and an understanding of the
Company's products. There can be no assurance that the Company will be able
to maintain such a sales force or that the Company's direct sales and
marketing efforts will be successful. In addition, the Company's products
compete with the products of many other companies that currently have
extensive and well-funded marketing and sales operations. There can be no
assurance that the Company's training, marketing and sales efforts will
compete successfully against such other companies. To the extent the Company
enters arrangements with third parties, any revenues received by the Company
will be dependent on the efforts of such third parties, and there can be no
assurance that such efforts will be successful.
Competition and Technological Change
The diagnostic and biotechnology industries are subject to intense
competition and rapid and significant technological change. Competitors of
the Company in the United States and in foreign countries are numerous and
include, among others, diagnostic, health care, pharmaceutical, biotechnology
and chemical companies, academic institutions, government agencies and other
public and private research organizations. Many of these competitors have
substantially greater financial and technical resources and production and
marketing capabilities than the Company. There can be no assurance that these
competitors will not succeed in developing technologies and products that are
more effective, easier to use or less expensive than those that have been or
are being developed by the Company or that would render the Company's
technology and products obsolete and noncompetitive. The Company also
competes with various companies in acquiring technology from academic
institutions, government agencies and research organizations. In addition,
many of the Company's competitors have significantly greater experience than
the Company in conducting clinical trials of new diagnostic products and in
obtaining FDA and other regulatory approvals of products for use in health
care. Accordingly, the Company's competitors may succeed in obtaining
regulatory approval for products more rapidly than the Company.
Investment in OncorMed, Appligene, and Codon
The Company owns approximately 25% and 80% of the common stock of its
publicly-traded affiliates, OncorMed and Appligene, respectively, and 100% of
the outstanding capital stock securities of its privately held subsidiary,
Codon. The shares of common stock of OncorMed, Appligene, and Codon held by
the Company are not currently freely tradeable and no public market exists for
the common stock of Codon. Therefore, there can be no assurance that the
Company will be able to realize the economic benefit of its investment or
predict the timing of such realization. The value of the Company's investment
in OncorMed and Appligene represents a significant portion of the total assets
of the Company and such value fluctuates with the market price of those
companies' common stock. Therefore, any event that has a material and adverse
effect on the market price of the common stock of OncorMed and Appligene will
have a material and adverse effect on the value of the Company's investment in
those companies. The Company does not control the day-to-day operations and
management of these companies and, therefore, has a varying but limited
direct control over their operations and financial results.
Codon is presently seeking additional funding from other sources to
continue its research efforts, although there can be no assurance that Codon
Company will be able to obtain such funding on commercially reasonable terms,
if at all. The Company expects to continue to advance funds to Codon until
such time, if ever, as Codon secures sufficient funding from third parties.
Nevertheless, the Company could elect to withdraw such support at any time,
which would likely necessitate Codon ceasing operations and which would have a
material and adverse effect on the value of the Company's investment in Codon.
Restricted Use of the Company's Products
The sale, distribution and use of the Company's FDA approved breast
cancer product in the United States is restricted to prescription use in that
the users of the product must be trained and demonstrated proficient in the
use of the product and the results of the proficiency testing provided as part
of the Company's training program must be provided in the Company's Annual
Reports to the FDA. The Company's products sold in the United States for
research purposes, only, must be labeled accordingly. The FDA imposes
distribution requirements and procedures on companies selling products for
research purposes only, including the requirement that the seller receive
specified certifications from its customer as to the customer's intended use
of the product. As a result of these requirements, the Company's research
products can only be sold in the United States to a limited number of
customers for limited use and can only be sold for broader commercial use with
FDA approval or clearance or pursuant to recent Analytic Specific Reagent
regulations for which no clinical claims can be made. No assurance can be
given that the Company will receive FDA approval or clearance for its research
products or that it will be able to sell its approved products in larger
quantities.
Attraction and Retention of Key Personnel
The Company's ability to successfully develop marketable products and to
maintain a competitive position will depend in large part on its ability to
attract and retain highly qualified scientific and management personnel. The
Company is highly dependent upon the principal members of its management,
scientific staff, and Medical and Science Advisory Boards. Competition for
such personnel and advisors is intense, and there can be no assurance that the
Company will be able to continue to attract and retain such personnel.
Uncertainty Related to Health Care Reform
Measures and Third-Party Reimbursement
Political, economic and regulatory influences are likely to lead to
fundamental change in the health care industry in the United States. In the
past year, the U.S. FDA Modernization Act ("FDAMA") was approved, bringing
many changes to FDA regulations and codifying some current practices. In
addition, numerous proposals for comprehensive reform of the nation's
health care system have been introduced in Congress over the past year. In
addition, certain states are considering various health care reform proposals.
The Company anticipates that Congress and state legislatures will continue to
review and assess alternative health care delivery systems and payment
methodologies, and that public debate of these issues will likely continue in
the future. Due to uncertainties regarding the ultimate features of reform
initiatives and their enactment and implementation, the Company cannot predict
which, if any, reforms will be adopted, when they may be adopted, or what
impact they may have on the Company. The Company's ability to earn sufficient
returns on its products may also depend in part on the extent to which
reimbursement for the costs of such products will be available from government
health administration authorities, private health insurers and other
organizations. Third-party payors are increasingly challenging the price and
cost effectiveness of medical products and services. Significant uncertainty
exists as to the reimbursement status of newly approved health care products,
and there can be no assurance that adequate reimbursement will be available or
sufficient to allow the Company to sell its products on a competitive basis.
Product Liability
The testing, marketing and sale of health care products could expose the
Company to the risk of product liability claims. A product liability claim
could have a material and adverse effect on the business, results of
operations or financial condition of the Company. The Company currently
maintains product liability insurance coverage of $5.0 million per occurrence.
There can be no assurance, however, that the insurance policy will respond to
any specific claim, that this coverage will be adequate to protect the Company
against future product liability claims or that product liability insurance
will be available to the Company in the future on acceptable terms, if at
all.
Environmental Risks
The manufacturing and research and development processes of the Company
involve the controlled use of hazardous materials. The Company is subject to
federal, state and local laws and regulations governing the use, manufacture,
storage, handling and disposal of such materials and certain waste products.
Although the Company believes that its activities currently comply with the
standards prescribed by such laws and regulations, the risk of accidental
contamination or injury from these materials cannot be eliminated. In the
event of such an accident, the Company could be held liable for any damages
that result and any such liability could exceed the resources of the Company.
In addition, there can be no assurance that the Company will not be required
to incur significant costs to comply with environmental laws and regulations
in the future.
Possible Volatility of Stock Price
The market prices for securities of life sciences companies, including
the Company, have been highly volatile and the market has experienced
significant price and volume fluctuations that are unrelated to the operating
performance of particular companies. Announcements of technological
innovations or new commercial products by the Company or its competitors,
developments concerning proprietary rights, including patents and litigation
matters, publicity regarding actual or potential clinical trial results with
respect to products under development by the Company or others, decisions
regarding regulatory approvals of the products of the Company or others,
regulatory developments in both the United States and foreign countries,
public concern as to the efficacy of new technologies, general market
conditions, as well as quarterly fluctuations in the Company's revenues and
financial results and other factors, may have a significant impact on the
market price of the Common Stock. In particular, the realization of any of
the risks described in these "Risk Factors" could have a dramatic and adverse
impact on such market price.
Item 6. Exhibits and Reports on Form 8-K.
a. The following exhibits are filed as part of this report on Form 10-Q.
Financial Data Schedule.
b. Reports on Form 8-K.
None.
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.
ONCOR, INC.
(Registrant)
Date: May 15, 1998
Jose J. Coronas, Chairman and
Acting Chief Executive Officer
Date: May 15, 1998
Cecil Kost, President and Chief
Operating Officer
Date: May 15, 1998
John L. Coker, Vice President
of Finance and Administration,
Chief Financial Officer
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.
ONCOR, INC.
(Registrant)
Date: May 15, 1998 /s/ Jose J. Coronas
Jose J. Coronas, Chairman and
Acting Chief Executive Officer
Date: May 15, 1998 /s/ Cecil Kost
Cecil Kost, President and Chief
Operating Officer
Date: May 15, 1998 /s/ John L. Coker
John L. Coker, Vice President
of Finance and Administration,
Chief Financial Officer