FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
Commission file number 0-12984
ADVANCED TOBACCO PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-2285214
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
16607 Blanco Road, Suite 1504, San Antonio, Texas 78232
(Address of principal executive offices) (Zip Code)
(210) 408-7077
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes No N/A
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date:
7,952,136 as of September 30, 1996
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
ADVANCED TOBACCO PRODUCTS, INC.
dba ADVANCED THERAPEUTIC PRODUCTS, INC.
BALANCE SHEETS
(Unaudited) (Audited)
September 30 June 30
1996 1996
ASSETS
CURRENT ASSETS:
Cash & cash equivalents $ 59,612 $ 84,918
Investments 240,476 237,434
Total current assets 300,088 322,352
LICENSE AGREEMENTS, Net 153,520 154,809
INVESTMENTS 1,022,691 1,007,837
Total assets $1,476,299 $1,484,998
LIABILITIES AND SHAREHOLDERS'
EQUITY:
LIABILITIES:
Accounts payable $ 15,940 $ 3,528
Accrued liabilities 17,500 -0-
Total liabilities $ 33,440 $ 3,528
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value;
30,000,000 shares authorized;
7,952,136 shares outstanding
as of September 1996 and
June 1996, respectively 79,522 79,522
Additional paid-in-capital 12,528,778 12,528,778
Accumulated deficit (11,165,441) (11,126,830)
Total stockholders' equity 1,442,859 1,481,470
Total liabilities and
stockholders' equity $1,476,299 $1,484,998
ADVANCED TOBACCO PRODUCTS, INC.
dba ADVANCED THERAPEUTIC PRODUCTS, INC.
STATEMENT OF INCOME
(Unaudited)
Three Months Ended September 30
1996 1995
REVENUES: $ -0- $ -0-
Total operating revenues: -0- -0-
EXPENSES:
General and administrative 57,342 41,180
Total operating expenses: 57,342 41,180
INCOME (LOSS) FROM OPERATIONS (57,342) (41,180)
OTHER INCOME:
Interest Income 18,731 19,866
Total other income 18,731 19,866
NET INCOME (LOSS): $(38,611) $(21,314)
WEIGHTED AVERAGED NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING: 7,952,136 7,792,136
EARNINGS (LOSS) PER COMMON SHARE: $ (.005) $ (.002)
ADVANCED TOBACCO PRODUCTS, INC.
dba ADVANCED THERAPEUTIC PRODUCTS, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended September 30
1996 1995
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss): $(38,611) $(21,314)
Adjustments to reconcile net
income (loss) to net cash:
Amortization 1,670 1,670
Accounts payable and accrued
liabilities 29,912 22,024
Net cash provided by (7,029) 2,380
operations:
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenses of license (381) (25,418)
agreements:
Net cash provided by
investments: (381) (25,418)
NET INCREASE (DECREASE) IN CASH: (7,410) (23,038)
CASH & INVESTMENTS AT BEGINNING
OF PERIOD: 1,330,189 1,363,058
CASH & INVESTMENTS AT END
OF PERIOD: $1,322,779 $1,340,020
NOTES TO FINANCIAL STATEMENTS
1. The condensed financial statements included herein were
prepared by the Company without audit. Certain information and
footnote disclosures normally included in financial statements have
been omitted. The condensed financial statements should be read in
conjunction with the financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K as of June 30,
1996.
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operation
RESULTS OF OPERATIONS
In 1987, the Company sold all of its nicotine technology to an
entity owned or controlled by Pharmacia & Upjohn, Inc. ("Pharmacia
& Upjohn"), a worldwide pharmaceutical company that manufactures
the Nicorette chewing gum and the Nicotrol patch.
Based upon the nicotine technology acquired from the Company,
Pharmacia & Upjohn developed a pharmaceutical nicotine vapor
inhaler for use in the nicotine replacement therapy industry. On
September 6, 1996, Pharmacia & Upjohn announced the launch of its
nicotine inhaler in Denmark as the first of a series of launches
planned throughout Europe and worldwide. The additional launches
are planned by Pharmacia & Upjohn to occur as regulatory approvals
are granted to add to those existing in Italy and the Netherlands.
Pharmacia & Upjohn filed new drug applications ("NDA's") with the
respective regulatory agencies in several major European countries.
Pharmacia & Upjohn filed an NDA with the United States Food and
Drug Administration ("FDA") for regulatory approval of its nicotine
inhaler in the Spring of 1996. The time required for the FDA and
similar European agencies to review and approve the NDA submissions
cannot be determined in advance because it is difficult to predict
the specific questions or comments which may be made by the FDA or
the other regulatory agencies.
The Company believes that the Pharmacia & Upjohn nicotine
inhaler has the potential for being the next generation of nicotine
replacement therapy products following the transdermal nicotine
patch. Unlike the patches, Pharmacia & Upjohn's nicotine inhaler
approximates the behavioral characteristics customarily experienced
by smokers.
The generation of significant royalties for the Company from
sales by Pharmacia & Upjohn of the nicotine inhaler will require
the approval of the FDA in the United States and similar agencies
in other countries and the successful marketing of the product by
Pharmacia & Upjohn.
During the three-month period ended September 30, 1996, the
Company's only source of revenues has been from interest income.
LIQUIDITY AND CAPITAL RESOURCES
Cash resources, including investments, available on September
30, 1996, were approximately $1,323,000, as compared to approx-
imately $1,340,020, for September 30, 1995.
COMPARISON OF SELECTED FINANCIAL DATA
Interest income for the three-month period ended September 30,
1996, decreased to $18,731, as compared to $19,866 for the three-
month period ended September 30, 1995. This decrease is primarily
due to minor interest rate fluctuations and a decrease in the cash
reserves of September 30, 1996, as compared to September 30, 1995.
Net loss for the three-month period ended September 30, 1996,
increased to $38,611, as compared to a net loss of $21,314 for the
three-month period ended September 30, 1995. This increase is
primarily due to increased general and administrative expenses.
General and administrative expenses for the three-month period
ended September 30, 1996, increased to $57,342, as compared to
$41,180 for the three-month period ended September 30, 1995. This
increase is primarily due to the award of a one-time bonus in the
amount of $17,500 to a consultant and a Director of the Company.
PART II - OTHER INFORMATION
Item 1: Legal Proceedings
None
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: Exhibits and Reports on Form 8-K
None
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.
ADVANCED TOBACCO PRODUCTS, INC.
(Registrant)
Dated: November 12, 1996
By: /s/ J. W. Linehan
J.W. Linehan, Chief
Executive Officer and
Chief Accounting Officer