U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
|X| Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1999
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from __________ to
___________.
Commission file number 0-27282
ATLANTIC PHARMACEUTICALS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 36-3898269
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1017 Main Campus Drive, Suite 3900, Raleigh, North Carolina 27606
(Address of principal executive offices)
(919) 513-7020
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for 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 |_|
Number of shares of common stock outstanding as of June 30, 1999: 4,757,539
Transitional Small Business Disclosure Format (check one): Yes |_| No |X|
INDEX
Page
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
as of June 30, 1999 (unaudited) and December 31, 1998 1
Consolidated Statements of Operations (unaudited)
for the three months ended June 30, 1999 and 1998
for the six months ended June 30, 1999
and 1998 and the period from July 13, 1993
(inception) to June 30, 1999 2
Consolidated Statements of Cash Flows (unaudited)
for the six months ended June 30, 1999 and 1998
and the period from July 13, 1993 (inception) to June 30, 1999 3
Notes to Consolidated Financial Statements (unaudited) 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 5
PART II -- OTHER INFORMATION
Item 1. Legal Matters 8
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES
EXHIBIT INDEX
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
ATLANTIC PHARMACEUTICALS, INC. AND SUBSIDIARIES
(a development stage company)
Consolidated Balance Sheets
June 30, 1999 (unaudited) and December 31, 1998 (audited)
- ---------------------------------------------------------------------------------------------------------------
Assets 6/30/99 12/31/98
- ---------------------------------------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 4,122,209 $5,835,669
Prepaid expenses 21,633 42,108
Account receivable 381,573 381,015
- ---------------------------------------------------------------------------------------------------------------
Total current assets 4,525,415 6,258,792
===============================================================================================================
Furniture and equipment, net of accumulated depreciation
of $377,189 and $316,639 at June 30,1999 (unaudited) and December 31,
1998, respectively 206,320 262,173
- ---------------------------------------------------------------------------------------------------------------
4,731,735 6,520,965
===============================================================================================================
Liabilities and Stockholders' Equity
===============================================================================================================
Current liabilities:
Accrued expenses 379,513 657,001
- ---------------------------------------------------------------------------------------------------------------
Total current liabilities 379,513 657,001
===============================================================================================================
Stockholders' equity
Preferred stock, $.001 par value. Authorized 10,000,000 shares; 1,375,000
designated as Series A convertible preferred stock Series A convertible
preferred stock, $.001 par value; authorized 1,375,000 shares, 554,746 and
632,468 shares issued and outstanding
at June 30, 1999 (unaudited) and December 31, 1998, respectively 555 632
Convertible preferred stock warrants, 117,195 issued and outstanding at
June 30, 1999 (unaudited) and December 31, 1998, respectively 540,074 540,074
Common stock $.001 par value. Authorized 50,000,000 shares;
4,757,539 and 4,503,388 shares issued and outstanding
at June 30, 1999 (unaudited) and December 31,1998, respectively 4,758 4,503
Common stock subscribed. 182 shares
at June 30,1999 (unaudited) and December 31,1998 -- --
Additional paid -in capital 21,662,704 21,662,881
Deficit accumulated during development stage (17,855,327 (16,343,584)
===============================================================================================================
4,352,764 5,864,506
Less common stock subscriptions receivable (218) (218)
Less treasury stock, at cost (324) (324)
- ---------------------------------------------------------------------------------------------------------------
Total stockholders' equity 4,352,222 5,863,964
- ---------------------------------------------------------------------------------------------------------------
$ 4,731,735 $ 6,520,965
===============================================================================================================
See accompanying notes to consolidated financial statements.
1
ATLANTIC PHARMACEUTICALS, INC. AND SUBSIDIARIES
(a development stage company)
Consolidated Statements of Operations (Unaudited)
Three months ended June 30, 1999 and 1998, the six-months ended June 30, 1999
and 1998 and the period from July 13, 1993 (inception) to June 30, 1999.
==================================================================================================================================
Cumulative
Three Months Ended Six Months Ended from July 13,
------------------ ---------------- -------------
June 30, June 30, June 30, June 30, 1993 (inception) to
1999 1998 1999 1998 June 30,1999
- ----------------------------------------------------------------------------------------------------------------------------------
Revenue:
License Revenue -- 2,500,000 -- 2,500,000 $ 2,500,000
Grant revenue -- -- -- -- $ 99,932
- ----------------------------------------------------------------------------------------------------------------------------------
Total Revenue -- 25,000,000 -- 2,500,000 $ 2,599,932
- ----------------------------------------------------------------------------------------------------------------------------------
Costs and expenses:
Research and development $ 365,139 $ 651,532 $ 925,478 $ 1,408,258 8,208,752
License fees -- -- -- -- 173,500
General and administrative 337,938 972,714 708,788 1,596,705 12,435,791
- ----------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 703,077 1,624,246 1,634,266 3,004,963 20,818,043
- ----------------------------------------------------------------------------------------------------------------------------------
Other expense (income):
Interest income (58,302) (146,800) (122,523) (255,284) (988,359)
Interest expense -- -- -- -- 625,575
- ----------------------------------------------------------------------------------------------------------------------------------
Total other expense (income) (58,302) (146,800) (122,523) (255,284) (362,784)
==================================================================================================================================
Net income (loss) (644,775) 1,022,554 (1,511,743) (249,679) (17,855,327)
==================================================================================================================================
Imputed convertible preferred stock dividend -- 505,540 -- 1,522,242 5,331,555
==================================================================================================================================
Net income (loss) applicable to common shares (644,775) 517,014 (1,511,743) (1,771,921) (23,186,882)
==================================================================================================================================
Net income (loss) per common share -basic ($0.14) $0.14 ($0.37) ($0.52) ($12.49)
==================================================================================================================================
Shares used in calculation
of net income ( loss) per share 4,699,454 3,682,763 4,080,398 3,438,980 1,856,108
==================================================================================================================================
See accompanying notes to consolidated financial statements.
2
ATLANTIC PHARMACEUTICALS, INC. AND SUBSIDIARIES
(a development stage company)
Consolidated Statements of Cash Flows (Unaudited)
Six-months ended June 30, 1999 and 1998 and the period
from July 13, 1993 (inception) to June 30, 1999
Cumulative from
Period ended July 13, 1993
30-Jun (inception) to
------------------------ 30-Jun
1999 1998 1999
- ------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net loss $ (1,511,743) (249,679) (17,855,327)
Adjustments to reconcile net loss to net
cash used in operating activities:
Expense relating to issuance of warrants -- 69,036 298,202
Expense relating to issuance of options -- -- 81,952
Expense related to Channel merger -- -- 657,900
Compensation expense relating to stock options -- -- 208,782
Discount on notes payable - bridge financing -- -- 300,000
Depreciation 60,550 80,805 377,189
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses 20,475 (61,449) (21,633)
Increase (decrease) in accrued expenses (277,488) 205,269 379,513
Increase (decrease) in accrued interest -- -- 172,305
(Increase) decrease in account receivable (558) (100,000) (381,573)
- ------------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (1,708,764) (56,018) (15,782,690)
- ------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities - acquisition
of furniture and equipment (4,696) (177,762) (583,509)
- ------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from exercise of warrants -- -- 5,500
Proceeds from exercise of options -- -- 52,500
Proceeds from issuance of demand notes payable -- -- 2,395,000
Repayment of demand notes payable -- -- (125,000)
Proceeds from the issuance of notes payable -
bridge financing -- -- 1,200,000
Proceeds of issuance of warrants -- -- 300,000
Repayment of notes payable - bridge financing -- -- (1,500,000)
Repurchase of common stock -- -- (324)
Proceeds from the issuance of common stock -- 5,444 7,547,548
Proceeds from the issuance of convertible preferred stock -- -- 10,613,184
- ------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities -- 5,444 20,488,408
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (1,713,460) (228,336) 4,122,209
- ------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period 5,835,669 8,543,495 --
- ------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 4,122,209 8,315,159 --
========================================================================================================================
Supplemental disclosure of noncash financing
activities:
Issuance of common stock in exchange for
common stock subscriptions -- -- 7,027
Conversion of demand notes payable and the
related accrued interest to common stock -- -- $ 2,442,304
Cashless exercise of preferred warrant -- -- $ 30,069
Conversion of preferred to common stock $ 140 -- $ 1,555
See accompanying notes to consolidated financialstatements.
3
ATLANTIC PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1999 AND 1998
(1) Basis of Presentation
The accompanying financial statements of Atlantic Pharmaceuticals, Inc.,
and its subsidiaries (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, the accompanying financial statements reflect all
adjustments, which consist of only normal recurring adjustments considered
necessary for fair presentation. Operating results are not necessarily
indicative of results that may be expected for the year ending December 31, 1999
or for any subsequent period. These financial statements should be read in
conjunction the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1998.
(2) Computation of Net Loss per Common Share
The Company has adopted Statement of Financial Accounting Standards No.
128 "Earnings Per Share" ("SFAS No. 128"). In accordance with this statement,
primary net loss per common share is replaced with basic loss per common share,
which is calculated by dividing net loss by the weighted average number of
common shares outstanding for the period. Fully-diluted net income per common
share is replaced with diluted net income per common share reflecting the
maximum dilutive effect of common stock issuable upon exercise of stock options,
stock warrants, stock subscriptions and conversion of preferred stock. Diluted
net loss per common share is not shown, as common equivalent shares from stock
options, stock warrants, stock subscriptions and convertible preferred stock
would have an antidilutive effect.
(3) Liquidity
The accompanying financial statements have been prepared assuming that the
Company will operate as a going concern. Management expects to raise adequate
capital to fund its research, product development and administrative expenses.
The ability of the Company to raise these funds is dependent on raising adequate
funds from investors and corporate partners. The financial statements do not
include any adjustments that might be necessary if the Company is unable to
raise these funds.
(4) Subsequent Events
On July 12, 1999, Stephen R. Miller and Margaret A. Schalk filed suit
against the Company in Wake County Superior Court, North Carolina (see Part II,
Item 1).
- 4 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion of the Company's results of operations and
financial condition should be read in conjunction with the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1998 filed with the
Securities and Exchange Commission on March 25, 1999. Except for the historical
information contained herein, this Quarterly Report may contain certain forward
looking statements that involve risks and uncertainties, such as statements of
the Company's plans, objectives, expectations and intentions. In addition to
historical information, this report contains predictions, estimates and other
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended.
Actual results could differ materially from any future performance suggested in
this report as a result of many factors, including the risk factors set forth in
the Company's Annual Report on Form 10-KSB as well as those set forth elsewhere
herein.
Results of Operations for the Quarter Ended June 30, 1999
In accordance with its license and development agreement with the Company,
Bausch & Lomb Surgical ("Bausch & Lomb") reimbursed Atlantic's subsidiary, Optex
Ophthalmologics, Inc. ("Optex") in the amount of $381,572 for Optex's costs
related to development of the Catarex(TM) technology in the second quarter. This
reimbursement reduced the Company's research and development expense by $369,332
and general and administrative expenses by $12,240.
For the second quarter ended June 30, 1999, research and development
expense was $734,471 compared to $651,532 in the second quarter of 1998, an
increase of 13%. (The Company was reimbursed $369,332 by Bausch & Lomb and the
net research and development expense was $365,139.) The increase is largely due
to accelerated spending on the CT-3 program.
For the second quarter ended June 30, 1999, general and administrative
expense was $351,078 compared to $972,714 in the second quarter of 1998, a
decrease of 64%. (The Company was reimbursed $12,240 by Bausch & Lomb and the
net general and administrative expense was $337,938.) This decrease is largely
due to a reduction in travel, marketing and compensation expenses.
For the second quarter ended June 30, 1999, interest income was $58,302
compared to $146,800 the second quarter of 1998, a decrease of 60%. This
decrease is due to the decline in the Company's cash reserves.
Results of Operations for the Six-Month Period Ended June 30, 1999
In accordance with its license and development agreement with the Company,
Bausch & Lomb reimbursed Optex in the amount of $921,919 for Optex's costs
related to development of the Catarex(TM) technology in the six-month period
ended June 30, 1999. This reimbursement reduced the Company's research and
development expense by $878,199 and general and administrative expenses by
$43,720.
For the six-month period ended June 30, 1999, research and development
expense was $1,803,677 compared to $1,408,258 over the similar period in 1998,
an increase of 28%. (The Company was reimbursed $878,199 by Bausch & Lomb and
the net research and development expense was $925,478.) The increase is due to
accelerated spending on the Catarex(TM) technology and the CT-3 technology.
For the six-month period ended June 30, 1999, general and administrative
expense was $752,508 compared to $1,596,705 in the similar period of 1998, a
decrease of 53%. (The Company was reimbursed $43,720 by Bausch & Lomb and the
net general and administrative expense was $708,788.) This decrease is largely
due to reduction in compensation, marketing and travel expenses.
- 5 -
For the six-month period ended June 30, 1999, interest income was
$122,523, compared to $255,284 for the six-month period ended June 30, 1998, a
decrease of 52%. This decrease is due to the decline in the Company's cash
reserves.
Liquidity and Capital Resources
From inception to June 30, 1999, the Company incurred an accumulated
deficit of $17,855,327, and the Company expects to continue to incur additional
losses through the year ending December 31, 1999 and the foreseeable future.
The Company anticipates that its current resources will be sufficient to
finance the Company's currently anticipated needs for operating and capital
expenditures for at least the next fifteen months. In addition, the Company may
attempt to generate additional capital through a combination of collaborative
agreements, strategic alliances and public and private equity and debt
financings. However, no assurance can be provided that additional capital will
be obtained through these or other sources. If the Company is not able to obtain
continued financing, the Company may cease operation and in all likelihood all
the Company's security holders will lose their entire investment.
Research and Development Activities
Preclinical studies with all four of the Company's primary technologies
are proceeding according to plan.
Optex's development of the Catarex(TM) cataract removal device is
continuing in cooperation with Bausch & Lomb. We are currently constructing a
clean room laboratory that we will use to further develop the manufacturing
process for the Catarex(TM) device. The Company anticipates that Bausch & Lomb
will file a 510(k) application with the U.S. Food and Drug Administration by the
first quarter of the year 2000, with clinical studies to begin shortly
thereafter.
Gemini Technologies, Inc. ("Gemini"), a subsidiary of the Company, is
continuing research on its antisense-enhancing technology. Gemini's lead
therapeutic compound targets respiratory syncytial virus, or "RSV," a major
cause of lower-respiratory-tract disease in infants, young children, and the
elderly. Primate proof-of-principle studies with this compound were started in
July and will be completed in the third quarter of 1999. Also in July, Gemini
was awarded a Small Business Innovation Research, or "SBIR," grant, which Gemini
will use to fund a Phase I pre-clinical study of this compound. In addition to
the RSV work, refinements to the chemical synthesis process are continuing,
along with basic work on the anti-telomerase molecules.
The toxicology program for CT-3 has completed all dosing. Bioanalytical
analyses are ongoing, as is completion of reports on the toxicology studies. To
date, these studies have not resulted in any data that would cause the
development of CT-3 to be discontinued or delayed. The results of these studies
were submitted to an Ethics Committee. The Ethics Committee approved a Phase I
Study, the design of which has been finalized. Phase I testing is set to begin
shortly.
Studies are also underway on CT-3's on mechanism of action. These studies
are designed to determine if CT-3 has any potential for patient addiction or
tolerance, attributes that constitute significant drawbacks of narcotic
analgesics. These studies will be completed in the third quarter.
No work was conducted on the Company's cyclodextrin technology during the
second quarter of 1999. The Company is currently seeking an alliance to continue
the development of CT-1.
- 6 -
Year 2000 Compliance
We have reviewed our internal computer systems and have concluded that
they are Year 2000 compliant. All of our hardware and software was purchased or
licensed less than four years ago. Additionally, we have received verbal
assurances from our service providers that they will be Year 2000 compliant in a
timely fashion. Accordingly, we do not expect Year 2000 issues to have any
material effect on our business, financial condition or operating results.
Recent Developments
On May 18, 1999, as a result of a consent solicitation conducted by A.
Joseph Rudick, Steve H. Kanzer, and Frederic P. Zotos, the composition of the
Company's board of directors was changed (see Part II, Item 4). The new board of
directors is committed to reducing the Company's general and operating expenses
so as to allow the Company to devote a greater proportion of its resources to
research and development. With that aim in mind, one of the first decisions the
board of directors took was to close the Raleigh, North Carolina office (see
Part II, Item 5). The cash spending rate in the first six-month period of 1999
was $288,896 compared with $427,815 in the same period of 1998, a decrease of
32%.
- 7 -
PART II -- OTHER INFORMATION
Item 1. Legal Matters
Litigation Brought by Stephen R. Miller and Margaret A. Schalk
On July 12, 1999, Stephen R. Miller and Margaret A. Schalk filed suit
against the Company in Wake County Superior Court, North Carolina.
From September 21, 1995, through June 30, 1999, the Company employed Dr.
Miller as Vice President, Chief Medical Officer, and employed Ms. Schalk as Vice
President of Project Management and Investor Relations. The offer letter to each
of them from the Company provided that if they were terminated without cause,
they would be entitled to receive as severance their base salary for nine months
from termination, subject to a duty to mitigate damages and set-off for amounts
earned from alternative employment.
Effective July 1, 1999, Dr. Miller and Ms. Schalk ceased being employees
of Atlantic. It is the Company's position that this constituted voluntary
termination on their part: while the Company had embarked on a process of
closing the Raleigh, North Carolina office, with an initial target date of June
30, 1999, the Company had indicated to Dr. Miller and Ms. Schalk that it wished
them to continue their employment beyond June 30, 1999, for a limited period.
Consistent with this position, upon Dr. Miller and Ms. Schalk's ceasing to be
Company employees, the Company declined to pay them the severance payments
provided for in their offer letters, which in the aggregate would have amounted
to $138,750, in the case of Dr. Miller, and $101,250, in the case of Ms. Schalk.
The Company also declined to pay Dr. Miller and Ms. Schalk for their accrued
vacation days.
In their lawsuit, Dr. Miller and Ms. Schalk request unspecified monetary
damages in excess of $10,000 plus interest (based on claims of breach of
contract, bad faith, and failure to compensate Dr. Miller and Ms. Schalk for
accrued vacation days), unspecified punitive damages (based on a claim of bad
faith), liquidated damages (based on failure to compensate Dr. Miller and Ms.
Schalk for accrued vacation days), and attorneys' fees, and, in the alternative
to the claim of bad faith, a declaratory judgment that Dr. Miller and Ms.
Schalk's employment agreements were valid and enforceable and that the Company
is obligated to perform its obligations thereunder, including making the
severance payments.
The Company is making arrangements for representation by local counsel.
Litigation Brought by Christopher R. Richied
On May 13, 1999, Christopher R. Richied filed suit against a group of
defendants, including the Company, in the U.S. District Court for the Southern
District of New York. The other defendants are The Castle Group, Ltd. (the
"Castle Group"); Pacific Pharmaceuticals, Inc.; Binary Therapeutics, Inc.; XTL;
and Dr. Lindsay A. Rosenwald.
The plaintiff claims that he is owed compensation in connection with his
recruitment, during 1991 to 1994, of executive officers and directors for the
Castle Group's new ventures, including the Company. Of 27 causes of action,
three (based on breach of contract, quantum meruit, and promissory estoppel)
relate to the Company. The plaintiff claims that he was not paid the one-third
of the annual salary of the Company's Chief Executive Office that he was
required to be paid for recruiting Laurence Shaw at Chief Executive Office of
the Company, and $60,000 he was required to be paid for recruiting four
directors of the Company. In connection with each of these causes of action, the
plaintiff claims damages in an amount to be determined at trial, plus
prejudgment interest, punitive damages, attorneys' fees and costs.
The Company and all other defendants in this action are being jointly
represented by the Wilmington, Delaware office of Skadden, Arps, Slate, Meagher
& Flom LLP.
- 8 -
Item 4. Submission of Matters to a Vote of Security Holders
On March 25, 1999, Steve H. Kanzer, A. Joseph Rudick, and Frederic P.
Zotos filed with the Securities and Exchange Commission a definitive proxy
statement seeking stockholder consent to the following three proposals:
1. RESOLVED, that (1) each current member of the Board of Directors of [the
Company], other than Steve H. Kanzer and Yuichi Iwaki (those current
members, the "Remaining Directors"), and (2) any other person or persons
(other than the persons elected pursuant to this consent) elected or
appointed to the Board of Directors of [the Company] prior to the
effective time of this resolution, in addition to or in lieu of any of
such current members (including any persons elected or appointed in lieu
of the Remaining Directors) to fill any newly created directorship or
vacancy on the Board of Directors of [the Company], or otherwise, is
hereby removed and the office of each such member of the Board of
Directors is hereby declared vacant.
2. RESOLVED, that A. Joseph Rudick and Frederic P. Zotos are hereby elected
as directors of [the Company], to serve until their respective successors
are duly elected and qualified.
3. RESOLVED, that all By-Laws adopted subsequent to January 11, 1999, and
prior to the effectiveness of this resolution are null and void and of no
force and effect.
On May 20, 1999, the Company announced that as of May 18, 1999, it had
received from stockholders representing more than 50% of the total number of
votes entitled to vote on the above three proposals consents approving those
proposals. Accordingly, effective as of May 18, 1999, Dr. Robert A. Fildes and
Mr. Martin Cleary ceased serving as members of the Board of Directors of the
Company, Dr. Rudick and Mr. Zotos were appointed to the Board of Directors in
their place, and Mr. Steve H. Kanzer and Dr. Yuichi Iwaki remained members of
the Board of Directors.
The consents received by the Company represent the following number of
shares and votes, with the total voting power represented by the Common Stock
and the Preferred Stock as of the record date of March 23, 1999, being
6,571,715:
=======================================================================================================
Proposal 1 Proposal 2 Proposal 3
- -------------------------------------------------------------------------------------------------------
Consenting shares of Common Stock 2,085,971 2,082,071 2,084,821
- -------------------------------------------------------------------------------------------------------
Votes represented by those shares of Common Stock 2,085,971 2,082,071 2,084,821
- -------------------------------------------------------------------------------------------------------
Consenting shares of Preferred Stock 487,511 487,511 487,511
- -------------------------------------------------------------------------------------------------------
Votes represented by those shares of Preferred Stock 1,594,161 1,594,161 1,594,161
- -------------------------------------------------------------------------------------------------------
Aggregate votes represented 3,680,132 3,676,232 3,678,982
- -------------------------------------------------------------------------------------------------------
Aggregate votes represented, expressed as percentage 56% 55.9% 56%
of votes represented by all shares
=======================================================================================================
Item 5. Other Information
In May 1998, the Company decided that it would close its Raleigh, North
Carolina office in order to reduce the Company's general and administrative
expense. The Company is in the process of closing the Raleigh office, but until
that process is completed, the principal offices of the Company will remain the
Raleigh office.
- 9 -
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits
Exhibit No. Description
- ----------- -----------
10.1 Consulting Agreement dated as of May 18, 1999, between Optex
Ophthalmologics, Inc., a wholly-owned subsidiary of the Company, and
Dr. A. Joseph Rudick (filed herewith)
27.1 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K
On June 2, 1999, the Company filed with the SEC a report on Form 8-K/A
describing the result of the consent solicitation conducted by A. Joseph Rudick,
Steve H. Kanzer, and Frederic P. Zotos. (See Item 4, above.)
- 10 -
SIGNATURES
In accordance with the requirements of the Exchange Act, the Company
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ATLANTIC PHARMACEUTICALS, INC.
Date: August 6, 1999 /s/ A. Joseph Rudick, M.D.
-------------------------------------------
A. Joseph Rudick, M.D.
President
Date: August 6, 1999 /s/ Shimshon Mizrachi
-------------------------------------------
Shimshon Mizrachi
Chief Financial Officer
(Principal Accounting and Financial Officer)
- 11 -
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
10.1 Consulting Agreement dated as of May 18, 1999, between Optex
Ophthalmologics, Inc., a wholly-owned subsidiary of the Company, and
Dr. A. Joseph Rudick (filed herewith)
27.1 Financial Data Schedule (filed herewith)