U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly report under Section 13 of 15(d) of the Securities Exchange Act
of 1934.
For the quarterly period ended FEBRUARY 28, 2001 or
-----------------
[] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from to .
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Commission file number 0-19866
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PROTIDE PHARMACEUTICALS, INC.
(Exact name of small business issuer
as specified in its charter)
MINNESOTA 36-3384240
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1311 HELMO AVENUE, SAINT PAUL, MINNESOTA 55128
- ---------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Issuers telephone number, including area code: (651) 730-1500
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Act of 1934 during the past 12 months (or
for such shorter periods that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes _X_ No ___
State the number of shares outstanding of each the issuer's classes of common
equity, as of the latest practicable date.
THE NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE, OUTSTANDING ON
APRIL 1, 2001 WAS 3,733,169.
Transitional small business format disclosure:
Yes ___ No _X_
1
Table of Contents
PROTIDE PHARMACEUTICALS, INC.
-----------------------------
Report on Form 10-QSB
for fiscal quarter ended
February 28, 2001
PART I-- FINANCIAL INFORMATION Page
----
ITEM 1. Financial Statements
Balance Sheet as of August 31, 2000
and February 28, 2001 3
Statement of Operations -- Three months ended
February 28, 2001 and February 29, 2000, and
six months ended February 28, 2001 and
February 29, 2000 5
Statement of Changes in Shareholders' Equity
for the year ended August 31, 2000 and the
six months ended February 28, 2001 6
Statement of Cash Flows -- Six months ended
February 28, 2001 and February 29, 2000 7
Notes to Financial Statements 8
ITEM 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations 9
PART II-- OTHER INFORMATION 14
2
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
PROTIDE PHARMACEUTICALS, INC.
BALANCE SHEET
February 28, August 31,
ASSETS 2001 2000
---------- ---------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 109,133 $ 63,935
Certificates of deposit 390,000 560,867
Trade receivables 27,564 33,816
Accrued interest receivable 9,283 11,901
Inventories 58,894 53,191
Other Assets 2,073 8,093
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Total current assets 596,947 731,803
--------- ---------
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Laboratory and production equipment 226,937 226,937
Office furniture and equipment 94,822 94,822
Leasehold improvements 138,426 138,426
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460,185 460,185
Less accumulated depreciation (369,072) (354,522)
--------- ---------
91,113 105,663
OTHER ASSETS
Patents, net 50,096 51,852
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TOTAL ASSETS $ 738,156 $ 889,318
========= =========
See Notes to Financial Statements.
3
PROTIDE PHARMACEUTICALS, INC.
BALANCE SHEET
February 28, August 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 2001 2000
----------- -----------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 12,964 $ 7,277
Accrued liabilities 32,691 36,923
Bank note payable - current 73,146 73,926
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Total current liabilities 118,801 118,126
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SHAREHOLDERS' EQUITY
Common stock 36,882 36,832
Additional paid-in capital 5,696,596 5,691,646
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5,733,478 5,728,478
Accumulated deficit (5,114,123) (4,957,286)
----------- -----------
Total shareholders' equity 619,355 771,192
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 738,156 $ 889,318
=========== ===========
See Notes to Financial Statements.
4
PROTIDE PHARMACEUTICALS, INC.
STATEMENT OF OPERATIONS
(Unaudited)
- -------------------------------------------------------------------------------------------------------------------
Three months ended Six months ended
February 28, February 29, February 28, February 29
2001 2000 2001 2000
- -------------------------------------------------------------------------------------------------------------------
REVENUES
Net sales 50,461 42,442 $ 99,180 $ 94,817
Cost of products sold 19,512 18,488 40,395 37,881
- -------------------------------------------------------------------------------------------------------------------
GROSS MARGIN 30,949 23,954 58,785 56,936
- -------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Research and development 43,483 36,093 78,874 71,948
Marketing and sales 24,262 23,336 49,195 47,266
Administration 55,832 50,119 120,549 118,830
- -------------------------------------------------------------------------------------------------------------------
Total operating expenses 123,577 109,548 248,618 238,044
OPERATING LOSS (92,628) (85,594) (189,833) (181,108)
OTHER INCOME (EXPENSE)
Interest and investment income 6,756 4,175 14,178 9,174
Other income 0 0 20,539 350
Interest expense (684) (1,275) (1,721) (2,233)
- -------------------------------------------------------------------------------------------------------------------
Total other income, net 6,072 2,900 32,996 7,291
NET LOSS (86,556) (82,694) ($ 156,837) ($ 173,817)
===================================================================================================================
BASIC AND DILUTED LOSS PER
COMMON SHARE (0.02) (0.03) ($ 0.04) ($ 0.06)
- -------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 3,715,947 2,950,279 3,699,467 2,929,724
===================================================================================================================
See Notes to Financial Statements.
5
PROTIDE PHARMACEUTICALS, INC.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
- ----------------------------------------------------------------------------------------------------------------------
Common Stock Additional
-------------- Paid-in Accumulated
Shares Amount Capital Deficit Total
- ----------------------------------------------------------------------------------------------------------------------
BALANCE AT AUGUST 31, 1999 2,909,169 $ 29,092 $ 5,312,486 ($4,649,940) $ 691,638
Shares issued in
private placement 774,000 7,740 379,160 386,900
Net loss for the year (307,346) (307,346)
- ----------------------------------------------------------------------------------------------------------------------
BALANCE AT AUGUST 31, 2000 3,683,169 $ 36,832 $ 5,691,646 ($4,957,286) $ 771,192
Shares issued in
private placement 50,0 50 4,950 5,000
Net loss for the period (156,837) (156,837)
- ----------------------------------------------------------------------------------------------------------------------
BALANCE AT FEBRUARY 28, 2001 3,733,169 $ 36,882 $ 5,696,596 ($5,114,123) $ 619,355
See Notes to Financial Statements.
6
PROTIDE PHARMACEUTICALS, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
- ------------------------------------------------------------------------------------------------------
Six months ended
February 28 February 29
----------------------------
2001 2000
- ------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss for the period (156,837) ($173,817)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 16,306 18,149
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 6,252 3,350
Accrued interest receivable 2,618 (1,507)
Inventories (5,703) 4,462
Other assets 6,020 (833)
Increase (decrease) in:
Accounts payable 5,687 (6,540)
Accrued liabilities (4,232) 7,759
- ------------------------------------------------------------------------------------------------------
Net cash used in operating activities (129,889) (148,977)
- ------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturity (Purchase) of bank certificates of deposit, net 170,867 (65,756)
Capital expenditures 0 (5,518)
- ------------------------------------------------------------------------------------------------------
Net cash from (used in) investing activities 170,867 (71,274)
- ------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING:
Issuance of common stock 5,000 175,150
Principal payments on bank note payable (780) (889)
- ------------------------------------------------------------------------------------------------------
Net cash from financing activities 4,220 174,261
Net increase (decrease) in cash
and cash equivalents 45,198 (45,990)
CASH AND CASH EQUIVALENTS:
Beginning of period 63,935 150,824
- ------------------------------------------------------------------------------------------------------
End of period $ 109,133 $ 104,834
======================================================================================================
See Notes to Financial Statements.
7
PROTIDE PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 28, 2001
NOTE A - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Item 310 of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) considered necessary for a fair presentation have been
included.
The organization and business of the Company, accounting policies followed
by the Company and other information are contained in the notes to the Company's
financial statements filed as part of the Company's August 31, 2000 Form 10-KSB.
This quarterly report should be read in connection with such annual report.
NOTE B - CASH AND CASH EQUIVALENTS
For purposes of reporting the statements of cash flows, the Company
considers all highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.
NOTE C - SHORT-TERM INVESTMENTS
As of February 28, 2001 the Company had investments of $390,000 in
certificates of deposit. Certificates of deposit are made only with the highest
rated banks. The Company also utilizes a money market fund, which is restricted
by its charter to Tier 1 instruments, for a portion of its investments. At times
throughout the year, the Company's cash, cash equivalents and certificates of
deposit in financial institutions may exceed FDIC insurance limits. The Company
has not experienced any losses in such accounts.
NOTE D - NOTES PAYABLE BANK
During April, 1997 the Company borrowed $100,000 from a local bank with the
proceeds used for financing a portion of the tenant improvements in the
Company's new facility. In February, 2001 the loan was renegotiated with a
different bank. The new loan is secured by a certificate of deposit at this
bank. The interest rate for this loan, currently 5.5%, is tied to the
certificate of deposit rate.
NOTE E - LOSS PER COMMON SHARE
Basic loss per share is computed based upon the weighted average number of
common shares outstanding during the period. Stock options for 292,000 shares
were not included in the computation of diluted loss per share as the results
were antidilutive.
NOTE F - RECLASSIFICATION
Certain fiscal 2000 amounts have been reclassified to conform to the fiscal
2001 classifications. These reclassifications had no effect on the net loss or
shareholders' equity as previously reported.
8
ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION
a. BACKGROUND AND PRODUCTS
In January, 2001 Celox Laboratories, Inc. and its wholly owned subsidiary,
Protide Pharmaceuticals, Inc., merged with the surviving corporation named
Protide Pharmaceuticals, Inc. A new ticker symbol, "PPMD", became effective
January 12, 2001.
Protide Pharmaceuticals, Inc. ("Protide" or the "Company") is a cell
technology company formed in 1985 that researches, develops, manufactures and
markets cell biology products used in the propagation of cells derived from
mammals, including humans, and other species. These specialized cell growth
products are used primarily in academic, pharmaceutical, diagnostic and other
commercial laboratories to improve the growth condition, productivity and
quality of cell-derived medical and other biological products such as vaccines,
monoclonal antibodies, interferons and human growth factor. The Company focuses
primarily on solving the fundamental problems associated in culturing cells with
the use of serum, which is derived from the whole blood of animals and humans.
One of these fundamental problems is the possibility of the "mad cow disease"
(Bovine Spongiform Encephalopathy) to exist in the serum derived from the whole
blood of animals. The Company's research activities have resulted in proprietary
technology which has been used to commercialize its non-serum growth media, cell
freezing solutions and other cell biology products.
The Company markets over 25 different products. The Company's proprietary
products consist of six different serum-free supplements: TCM(TM), TM-235(TM),
TCH(TM), Nephrigen(TM), HemaPro(TM) and VaxMax(TM) and two cell freezing
solutions, Cellvation(TM) and pZerve(TM). VaxMax(TM), introduced in September of
1993, was developed specifically for use in the production of veterinary
vaccines. Nephrigen(TM) was introduced in fiscal 1998 and is a serum-free growth
medium developed specifically for the culturing of Human Embryonic Kidney (293)
cells. As part of the Nephrigen(TM) system, the Company also introduced a
non-enzymatic dissociation solution that is used instead of an enzyme such as
trypsin. HemaPro(TM) was also introduced in fiscal 1998 and is a low protein,
serum-free medium for clonogenic assays or EX VIVO expansion of human progenitor
cells. The Company intends to obtain IN VITRO diagnostic status for HemaPro(TM).
pZerve(TM) was introduced in 1999 and is used primarily for cryopreserving human
cells. pZerve(TM) is used as a research product only, it is not for human use.
An additional proposed clinical product, ViaStem(TM), has completed preclinical
testing. This product was developed to improve the preservation of critical
cells (e.g., stem cells), which are required for bone marrow transplantation.
During the first quarter of fiscal 2001 the Company introduced the new
product STEMSOL(TM). STEMSOL(TM) is a sterile filtered, USP Grade Dimethyl
Sulfoxide (DMSO) used in a cryopreservation solution for, among other things,
peripheral-blood stem cells and cord blood preservations.
The Company has received a Drug Master File classification from the Food
and Drug Administration (FDA) for TCM(TM). This classification will expedite the
FDA approval process for customers who want to use the Company's TCM(TM) product
for manufacturing purposes.
The Company also manufactures eleven basal media formulations, a series of
buffered saline solutions, other cell biology reagents, and a variety of custom
formulations.
During the third quarter of fiscal 2000, the Company entered into an
agreement to manufacture specialized solutions for the processing of pancreatic
islet cells for transplants.
9
b. VIASTEM(TM)
In March 1995, the Company filed a patent application for ViaStem(TM) with
the U.S. Patent and Trademark Office. The Company received the U.S. Patent in
early December 1996. This patent provides protection of the Company's
ViaStem(TM) technology through March of 2015. A second U.S. Patent was received
in August, 1998. This second patent broadened the patented uses of ViaStem(TM)
in bone marrow transplantation and related therapies. The Company has also filed
the documents needed for an International Patent Application as required by the
Patent Cooperation Treaty. In October, 1998 the Company received notice from the
New Zealand and Australia Patent Office that a patent on ViaStem(TM) had been
granted by each of the respective countries. In May, 2000 the Company received
notice from the Russian Patent Office of the official issue date for the Russian
patent. In March, 2000 notice was received from the Patent Office in Canada that
a patent had been issued for ViaStem(TM). Initial reports from other countries
that have reviewed the International Patent Application have been positive. Due
to the unique nature of ViaStem(TM)and its applications, the Company pursued the
patent process for this product.
On March 31, 2000, Protide Pharmaceuticals, Inc. entered into an agreement
with Fairview-University Medical Center (FUMC), Minneapolis, MN. FUMC will
provide collecting, processing and assaying of human peripheral blood stem cells
as part of Protide's clinical investigation of ViaStem(TM).
During May, 2000 the Company submitted an application to the Food and Drug
Administration (FDA) to initiate human clinical trials for ViaStem(TM). This was
the first submission ever made by the Company to the FDA for testing in human
subjects. In August, 2000 the Company announced that it had received notice from
the FDA that the clinical trial on had been placed on clinical hold pending
further information. The Company is currently working with the University of
Minnesota and possibly other transplant centers to complete and expedite the
submission of the additional requested information to the FDA.
c. DISTRIBUTION/MARKETING
The Company continues to sell its products on a direct basis to customers
around the world. In addition the Company has formed the following distribution
avenues:
The Company has a non-exclusive world-wide distribution agreement with ICN
Pharmaceuticals, Inc. (NYSE:ICN), Costa Mesa, CA. Under the agreement, ICN is
marketing Celox' TCM(TM), TCH(TM), TM-235(TM) serum replacement products as well
as Cellvation(TM). The Company has also entered into an agreement with ICN to
custom manufacture certain of the Company's basal media and balanced salt
solutions to ICN for worldwide distribution. ICN manufactures and markets a
broad range of prescription and over-the-counter pharmaceuticals, medical
diagnostic products and biotechnology research products in North and Latin
America, Eastern and Western Europe and the Pacific Rim countries.
In 1997, the Company began providing its proprietary products to Sigma
Chemical Company (NASDAQ:SIAL), St. Louis, MO. under a private label
distribution agreement for worldwide distribution.
In 1997, the Company entered into a non-exclusive distribution agreement
with TaKaRa Shuzo Co., Ltd., Biomedical Group, Kyoto, Japan. Under the
agreement, TaKaRa will initially market Celox' proprietary product
Cellvation(TM). TaKaRa's Biomedical Group leads the industry in several areas
owing to the international scope of its research operations which span from the
People's Republic of China to North America and Europe. TaKaRa will market
Cellvation(TM) in Japan, Taiwan, Korea and People's Republic of China.
10
The Company also has distribution of its products in Japan through
Funakoshi Co., LTD, a well established Japanese distributor.
In March, 2000, the Company entered into an agreement with SciQuest.com,
Inc. (NASDAQ:SQST) to sell its products online. SciQuest.com, Inc. is a leading
business-to-business e-marketplace for scientific products used by
pharmaceutical, clinical, biotechnology, chemical, industrial and educational
organizations worldwide.
RESULTS OF OPERATIONS
During the quarter ended February 28, 2001, the Company had net sales of
$50,461 which was an increase of $8,019 or 19% from $42,442 reported in the same
quarter for the prior year. For the six month period ended February 28, 2001 net
sales totaled $99,180 resulting in an increase of $4,363 (5%) from the $94,817
reported in the comparable period in the previous fiscal year. The increase
between years for both of the reporting periods results primarily from the
amount and timing of custom orders, orders resulting from new products as well
as orders received from distributors.
The Company had a net loss of $86,556 for the quarter ended February 28,
2001 compared to a net loss of $82,694 for the same period in the previous year.
For the six months ended February 28, 2001 the Company had a net loss of
$156,837 compared to a net loss of $173,817 for the comparable period in the
previous fiscal period. The increase in net loss for the three month reporting
period results from increased research and development costs as well as higher
administrative costs which are offset by higher net sales. The decrease between
years for the six month reporting periods results primarily from the receipt of
a check in the amount of $20,539 from the KPMG Litigation Settlement Fund offset
by higher research and development and administrative costs. The KPMG check was
the result of a settlement with the Piper Jaffray Institutional Government
Fund's auditors, KPMG. The check was recognized as other income in the first
quarter of fiscal 2001. On a per share basis, the loss for the quarter ended
February 28, 2001 equaled 2 cents versus a 3 cent loss in the comparable period
in fiscal 2000. For the six months ended February 28, 2001 the Company had a 4
cent loss per share compared to a 6 cent loss for the comparable period in the
previous fiscal year.
The cost of products sold was 39% of net sales for the three months ended
February 28, 2001, as compared to 44% of net sales for the three months ended
February 29, 2000. The cost of products sold for the six months ended February
28, 2001 was 41% of net sales compared to 40% of net sales for the six months
ended February 29, 2000. The decrease between years for the three month
reporting periods results from higher sales levels which results in a lower
percentage of fixed manufacturing costs as well as increased sales of contract
manufactured products. The small increase for the current six month period as
compared to the previous fiscal year results from the mix of products sold.
An operating loss of $92,628 was incurred for the quarter ended February
28, 2001 compared to an operating loss of $85,594 for the same period in the
previous year. For the six months ended February 28, 2001 an operating loss of
$189,833 was incurred compared to an operating loss of $181,108 for the six
months ended February 29, 2000. The increase between years for the three month
reporting period as well as the six month reporting period resulted from
increases in research and development expenses as well as administrative
expenses, offset by increased sales.
11
The Company received interest and investment income of $6,756 during the
quarter ended February 28, 2001 as compared to $4,175 in the prior year.
Interest and investment income was $14,178 for the six month period ended
February 28, 2001 versus $9,174 in the comparable period in fiscal 2000.
Investment income is derived primarily from the investment of the proceeds of
the Company's March 1992 initial public offering as well as from subsequent
private placements. The increase in investment income during the quarter as well
as for the six month period as compared to the previous year results from
investing the proceeds of the private placements in bank certificates of
deposit.
Operating expenses increased $14,029 (13%) to $123,577 from $109,548 for
the quarter ended February 28, 2001 as compared to the prior year. Operating
expenses increased $10,574 (4%) to $248,618 from $238,044 for the six months
ended February 28, 2001 compared to the six month period in the previous fiscal
year. The increase for both reporting periods as compared to the prior fiscal
year results from increased research and development expenses and higher
administrative expenses..
Research and development costs increased by $7,390 (20%) to $43,483 from
$36,093 in the current quarter as compared to the previous fiscal year. Research
and development expenses increase by $6,926 (10%) to $78,874 from $71,948 in the
six month reporting period as compared to the same period in the prior fiscal
year. The increase for both of the reporting periods results from increased
salaries and wages and professional fees as compared to the prior year. The
Company expects the costs of research and development to fluctuate based on the
status of preclinical and clinical trials for ViaStem(TM) .
Marketing expenses increased by $926 (4%) to $24,262 from $23,336 for the
quarter ended February 28, 2001 as compared to the previous year. For the six
months ended February 28, 2001 marketing and sales expenses increased by $1,929
(4%) to $49,195 from $47,266 in fiscal 2000. The increase for the six month
reporting period as compared to the previous year results primarily from
brochures and other marketing materials developed in connection with the
introduction of STEMSOL(TM). The Company expects that marketing and sales
expenses will fluctuate based on introduction of new products, new studies, and
as new advertising materials are developed.
Administrative expenses increased by $5,713 (11%) for the quarter ended
February 28, 2001 compared to the previous fiscal year to $55,832 from $50,119
Administrative expenses increased by $1,719 (1%) for the six months ended
February 28, 2001 as compared to the comparable period in the previous fiscal
year to $120,549 from $118,830. The increase for the three month reporting
period results from higher utility expenses as well as increased professional
fees incurred in connection with the Company's name change. The small increase
for the six month reporting period is due to the increased utility expense and
name change professional fees offset somewhat by the amount and timing of other
legal and professional fees.
LIQUIDITY AND CAPITAL RESOURCES
Capital resources on hand at February 28, 2001 include cash and short-term
investments of $499,133 and net working capital of $478,146 This represents a
decrease of $125,669 (20%) in cash and short-term investments and a decrease of
$135,531 (22%) in net working capital as compared to August 31, 2000.
The Company is leasing approximately 9,500 square feet of office,
laboratory and warehouse space in St. Paul, MN under a seven year lease. The
Company moved into the new facility during March, 1997. As partial payment for
tenant improvements in the new facility, the Company borrowed $100,000 from a
local bank. In February, 2000 the loan was renegotiated with a different bank.
The new loan is secured by a certificate of deposit at this bank. The interest
rate for this loan, currently 5.5%, is tied to the certificate of deposit rate.
The loan is for a one year term with a maturity in February, 2001. The balance
of the tenant improvements over this amount was paid with Company funds.
12
During fiscal 1999 the Company raised $59,400 in additional capital by
selling 55,000 units at $1.00 per unit to five accredited investors through a
private placement. Each unit consisted of one share of common stock and a
warrant to purchase an additional two shares of common stock at an exercise
price of $0.04 per share. The units were sold at a premium to the share price on
the OTC Bulletin Board at the time of the placement.
During the second quarter of fiscal 2000 the Company raised $175,150 in
additional capital by selling 145,000 units at $1.15 per unit to five investors
through a private placement. Each unit consisted of one share of common stock
and a warrant to purchase an additional two shares of common stock at an
exercise price of $0.10 per share.
During the third quarter of fiscal 2000 additional funds in the amount of
$211,750 were raised by selling units at $1.15 per unit and common stock at
$1.40 per share to other investors in a private placement. The additional funds
raised will be primarily used for advancing ViaStem(TM) through the necessary
testing before FDA approval can be obtained. The Company intends to pursue
additional financing, subject to prevailing market conditions. There is no
guarantee however, that the Company will be able to successfully raise an
adequate amount of additional funds. In addition, there can be no assurance that
the Company will be able to obtain the necessary FDA approvals for ViaStem(TM).
The Company anticipates spending approximately $30,000 during fiscal 2001
on capital expenditures. Through February, 2001 the Company has made no capital
expenditures. The majority of the planned expenditures will be used to fund new
products, research and development and manufacturing growth. The Company
believes that its capital resources on hand at February 28, 2001 together with
revenues from product sales, will be sufficient to meet its cash requirements
for the fiscal year.
During the second quarter of fiscal 2001, an additional 50,000 shares were
issued as a result of a private placement participant exercising warrants.
FORWARD LOOKING INFORMATION
Information contained in this Form 10-QSB contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, which can be identified by the use of forward-looking terminology such
as "may", "will", "expect", "plan", "anticipate", "estimate" or "continue" or
the negative thereof or other variations thereon or comparable terminology.
There are certain important factors that could cause results to differ
materially from those anticipated by some of these forward-looking statements.
Investors are cautioned that all forward-looking statements involve risks and
uncertainty. The factors, among others, that could cause actual results to
differ materially include the Company's ability to obtain FDA approval for its
clinical products, the ability of the Company to raise additional capital and
the ability to execute its business plan.
13
PART II -- OTHER INFORMATION
ITEM 1. -- LEGAL PROCEEDINGS
The Company is not presently involved in any material legal proceedings.
ITEM 2. -- CHANGES IN SECURITIES
None
ITEM 3. -- DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. -- OTHER INFORMATION
None
ITEM 6. -- (A) EXHIBITS
None
(B) REPORTS ON FORM 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PROTIDE PHARMACEUTICALS, INC.
Dated: April 12, 2001 By: /S/ Milo R. Polovina
----------------------------------
Milo R. Polovina, President & CEO
(Principal Financial Officer)
14