Form 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities and Exchange Act of 1934
For the period of November 2000
--------------------------------------------------------------
Immune Network Ltd.
--------------------------------------------------------------------
(Translation of registrant's name into English)
3650 Wesbrook Mall, Vancouver, BC, V6S 2L2, Canada
--------------------------------------------------------------------
(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
-------------------- -------------------
[Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
-------------------- -------------------
[If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with
Rule 12g3-2(b): 82-
-----------------------------
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.
Immune Network Ltd.
----------------------------------
(Registrant)
Date December 13, 2000 By /s/Ronald G. Paton
------------------------- ----------------------------------
(Signature)*
Ronald G. Paton, Corporate Secretary
*Print the name and title of the signing officer under his signature.
FOR IMMEDIATE RELEASE
Immune Network Approved to Trade on OTC Bulletin Board
------------------------------------------------------
VANCOUVER, CANADA, November 13, 2000 -- Immune Network Ltd. (OTCBB: IMMKF; CDNX:
IMM) is pleased to report that the company's common shares have been approved
for listing on the NASD OTC Bulletin Board. Trading on the OTC BB under the
symbol IMMKF commenced today. J. Alexander Securities of Los Angeles has agreed
to serve as the initial market maker for the Company (contact number
213-687-8400).
Dr. Allen Bain, President and CEO of Immune Network said, "The OTC Bulletin
Board listing is a stepping stone for gaining access into the U.S. securities
market. With our current drug development activities throughout the world, this
listing will provide an additional avenue for our international investors to
share in our future developments."
About Immune Network
- --------------------
Immune Network is a biotech merchant developer. Immune Network identifies,
acquires, rapidly facilitates the development of, and profitably divests
undervalued drug development projects. Drug development projects are undertaken
based on strong science, protectable intellectual property, clearly identified
opportunities for rapid development, pre-identified exit strategy and
significant market potential.
Immune Network's current projects include drug candidates for the treatment of
Alzheimer Disease, AIDS, Herpes, Asthma, Cancer, Hepatitis, and Dermatitis. The
stage of development of Immune Network projects spans from early discovery to
late development.
Immune Network also holds a two-thirds controlling interest in BC Research Inc.,
a technology service company and incubator - a "technology integrator". As a
service company, BC Research has annual revenues of approximately $7 million.
As an incubator, BC Research has successfully launched two technology companies.
The 185,000 square foot BC Research complex is located on 10 acres adjacent to
the University of British Columbia ("UBC"), in Vancouver, Canada. Providing
access to facilities, new technology and expertise, the BC Research operation
helps put Immune Network at the forefront of the biotechnology explosion in the
Pacific northwest.
To learn more about Immune Network Ltd. and BC Research Inc., please visit our
websites: www.immunenetwork.com and www.bcresearch.com.
--------------------- ------------------
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
- -----------------------------------------------------------------------------
1995:
- -----
This news release contains forward looking statements that are not historical
facts and are subject to risks and uncertainties which could cause actual
results to differ materially from those set forth in or implied herein. These
risks are described in detail in the company's Securities and Exchange
Commission filings.
-30-
Media Contact: Ann Gibbs, Media Relations
Verlee Communications
Tel. (604) 970-5791
Email anngibbs@direct.ca
Company Contact: Rupinder Bagri, Corporate Communications
Immune Network Ltd.
3650 Wesbrook Mall, Vancouver, BC, Canada V6S 2L2
Tel. (604) 222-5541
Fax. (604) 222-5542
Internet http://www.immunenetwork.com
----------------------------
Email rbagri@immunenetwork.com
THE CANADIAN VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE
FORM 27
SECURITIES ACT
MATERIAL CHANGE REPORT UNDER SECTION 85(1) OF THE ACT
Item 1. Reporting Issuer
----------------
Immune Network Ltd. (the "Issuer")
3650 Wesbrook Mall
Vancouver, BC V6S 2L2
Item 2. Date of Material Change
-----------------------
November 13, 2000
Item 3. Press Release
-------------
News Release dated November 13, 2000 was disseminated through Canada
Stockwatch, George Cross Newsletter and Market News.
Item 4. Summary of Material Change
--------------------------
The Issuer reports that its common shares have been approved for
listing on the NASD OTC Bulletin Board. Trading on the OTC BB under
the symbol IMMKF commenced on November 13, 2000.
Item 5. Full Description of Material Change
-----------------------------------
The Issuer reports that its common shares have been approved for
listing on the NASD OTC Bulletin Board. Trading on the OTC BB under
the symbol IMMKF commenced on November 13, 2000. J. Alexander
Securities of Los Angeles, California has agreed to serve as the
initial market maker for the Issuer.
Item 6. Reliance on Section 85(2) of the Act
------------------------------------
If the report is being filed on a confidential basis in reliance on
Section 85(2) of the Act, state the reasons for such reliance.
Not applicable
Item 7. Omitted Information
-------------------
Not applicable
Page 2
Item 8. Senior Officers
---------------
Allen Bain, President and Chief Executive Officer
Telephone: (604) 222-5541
Item 9. Statement of Senior Officer
---------------------------
The foregoing accurately discloses the material change referred to
herein.
DATED at Vancouver, British Columbia, this 16th day of November, 2000.
IMMUNE NETWORK LTD.
Per: /s/ Allen Bain
-------------------------------------
Allen Bain
President and Chief Executive Officer
FOR IMMEDIATE RELEASE
IMMUNE NETWORK LTD.
FIRST PATIENTS COMMENCE TREATMENT IN MULTICENTER ALZHEIMER DISEASE CLINICAL
- ---------------------------------------------------------------------------
TRIAL - DAD2000
---------------
VANCOUVER, CANADA, November 16, 2000 -- Immune Network Ltd. (CDNX: IMM; OTC:
IMMKF) today announced that first patients have been enrolled and are receiving
treatment in the "Dapsone in Alzheimer Disease 2000" (DAD2000) Phase II clinical
trial.
Alzheimer disease (AD) is one of the leading causes of death in the elderly
population. One in 10 people over 65 and nearly half of those over 85 have
Alzheimer disease, resulting in a progressive loss of brain function, including
memory and cognition. Worldwide, 12 million individuals have been afflicted and
by 2025 that number will increase to 22 million.
Immune Network is developing a new drug (IQ201) that is intended to slow or stop
the progress of AD. The company's current international, multi-center clinical
trial (DAD2000) is testing the efficacy of an existing anti-inflammatory drug,
dapsone, against AD. Inflammation is a pathological hallmark of AD, and it is
thought to be among the major causes of the brain cell death associated with
that disease.
DAD2000 involves several leading clinicians at 17 hospitals in 4 countries,
including Brazil, South Africa, Poland and Israel. Over 200 patients will be
recruited and treated with either placebo or dapsone. Treatment will continue
for one full year and results from an interim data analysis are expected in
2001.
Patients eligible for the DAD2000 trial are between the ages of 50 and 90 and
have been diagnosed with mild to moderate Alzheimer disease. The first patients
in the DAD2000 trial began treatment in a clinical sites located in Cape Town,
South Africa.
DAD2000 is a double blind, placebo control, prospective clinical trial that is
managed under contract by CroMedica Global Inc. (www.cromedica.com) in
accordance with the regulatory requirements of each participating country and in
compliance with United States standards for Good Clinical Practice. The
CroMedica Group of Medicines Development Companies, headquartered in Victoria,
BC, Canada, operates on five continents and is considered to be a leader in the
development of new central nervous system therapies, particularly in the area of
Alzheimer disease.
The DAD2000 clinical trial is designed to give definitive support for pivotal
clinical testing of Immune Network's new product, IQ201, scheduled to start in
2001. IQ201 is a new composition based on dapsone that is designed to possess
enhanced properties to combat Alzheimer disease.
"Recently, there have been many anti-inflammatory drugs studied as possible AD
therapeutics with little success. We feel that IQ201 will be a breakthrough for
the treatment of AD as it has a much broader spectrum of anti-inflammatory
activity than seen with previously investigated compounds. In addition, the
putative mechanisms of dapsone and IQ201 could be more relevant to the actual
inflammatory processes occurring in the AD brain," says Matt Sadler, Project
Director at Immune Network.
Other types of anti-inflammatory drugs that have been investigated by other
companies include arthritis drugs such as Celebrex by Searle, Monsanto (NYSE:
MON), and Vioxx by Merck (NYSE:MRK).
Dapsone and Alzheimer Disease:
- ------------------------------
The brain has its own unique immune system that serves to keep the brain free
from foreign invaders and debris. In the case of AD, this immune system is
chronically activated against certain stimuli (beta amyloid plaques and
neurofibrillary tangles), arising as a result of underlying disease processes.
In a futile effort to destroy these stimuli, activated immune cells constantly
release chemical mediators that are directly and indirectly toxic to brain
cells. Thus, rather than destroying the intended target, the immune system in
the AD brain actually destroys the brain itself.
Immune Network's anti-inflammatory approach to treating Alzheimer disease is
based on a 3,700 patient retrospective study conducted by Dr. Patrick McGeer of
the University of British Columbia, and colleagues. This study indicated a 37%
lower prevalence of dementia in patients taking dapsone for leprosy treatment.
In further support of positive retrospective clinical studies with dapsone to
date, there is growing evidence from animal models and in vitro studies
demonstrating that dapsone can significantly reduce the toxic potential of
neuro-immune cells known to be primarily responsible for brain cell death.
Thus, dapsone appears to be an anti-inflammatory that is relevant to the disease
processes occurring in AD.
About Immune Network
- ----------------------
To learn more about Immune Network Ltd., biotech's merchant developer, please
visit our website: www.immunenetwork.com
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
- -----------------------------------------------------------------------------
1995:
- -----
This news release contains forward looking statements that are not historical
facts and are subject to risks and uncertainties which could cause actual
results to differ materially from those set forth in or implied herein. These
risks are described in detail in the company's Securities and Exchange
Commission filings.
-30-
Media Contact: Ann Gibbs, Media Relations
Verlee Communications
Tel. (604) 970-5791
Email anngibbs@direct.ca
Company Contact: Rupinder Bagri, Corporate Communications
Immune Network Ltd.
3650 Wesbrook Mall, Vancouver, BC, Canada V6S 2L2
Tel. (604) 222-5541
Fax. (604) 222-5542
Internet http://www.immunenetwork.com
----------------------------
Email rbagri@immunenetwork.com
THE CANADIAN VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE
FORM 27
SECURITIES ACT
MATERIAL CHANGE REPORT UNDER SECTION 85(1) OF THE ACT
Item 1. Reporting Issuer
----------------
Immune Network Ltd. (the "Issuer")
3650 Wesbrook Mall
Vancouver, BC V6S 2L2
Item 2. Date of Material Change
-----------------------
November 16, 2000
Item 3. Press Release
-------------
News Release dated November 16, 2000 was disseminated through
Canada Stockwatch, George Cross Newsletter and Market News.
Item 4. Summary of Material Change
--------------------------
The Issuer reports that first patients have been enrolled and are
receiving treatment in the "Dapsone in Alzheimer Disease 2000" Phase
II clinical trial.
Item 5. Full Description of Material Change
-----------------------------------
The Issuer reports that first patients have been enrolled and are
receiving treatment in the "Dapsone in Alzheimer Disease 2000"
("DAD2000") Phase II clinical trial.
Alzheimer disease ("AD") is one of the leading causes of death in
the elderly population. One in 10 people over 65 and nearly half of
those over 85 have Alzheimer disease, resulting in a progressive
loss of brain function, including memory and cognition. Worldwide,
12 million individuals have been afflicted and by 2025 that number
will increase to 22 million.
The Issuer is developing a new drug ("IQ201") that is intended to
slow or stop the progress of AD. The Issuer's current
international, multi-center clinical trial (DAD2000) is testing the
efficacy of an existing anti-inflammatory drug, dapsone, against AD.
Inflammation is a pathological hallmark of AD, and it is thought to
be among the major causes of the brain cell death associated with
that disease.
DAD2000 involves several leading clinicians at 17 hospitals in 4
countries, including Brazil, South Africa, Poland and Israel. Over
200 patients will be recruited and treated with either placebo or
dapsone. Treatment will continue for one full year and results from
an interim data analysis are expected in 2001.
Page 2
Patients eligible for the DAD2000 trial are between the ages of 50
and 90 and have been diagnosed with mild to moderate Alzheimer
disease. The first patients in the DAD2000 trial began treatment in
a clinical sites located in Cape Town, South Africa.
DAD2000 is a double blind, placebo control, prospective clinical
trial that is managed under contract by CroMedica Global Inc. in
accordance with the regulatory requirements of each participating
country and in compliance with United States standards for Good
Clinical Practice. The CroMedica Group of Medicines Development
Companies, headquartered in Victoria, BC, Canada, operates on five
continents and is considered to be a leader in the development of
new central nervous system therapies, particularly in the area of
Alzheimer disease.
The DAD2000 clinical trial is designed to give definitive support
for pivotal clinical testing of the Issuer's new product, IQ201,
scheduled to start in 2001. IQ201 is a new composition based on
dapsone that is designed to possess enhanced properties to combat
Alzheimer disease.
Item 6. Reliance on Section 85(2) of the Act
------------------------------------
If the report is being filed on a confidential basis in reliance on
Section 85(2) of the Act, state the reasons for such reliance.
Not applicable
Item 7. Omitted Information
-------------------
Not applicable
Item 8. Senior Officers
---------------
Allen Bain, President and Chief Executive Officer
Telephone: (604) 222-5541
Item 9. Statement of Senior Officer
---------------------------
The foregoing accurately discloses the material change referred to
herein.
DATED at Vancouver, British Columbia, this 24th day of November, 2000.
IMMUNE NETWORK LTD.
Per: /s/ Allen Bain
-------------------------------------
Allen Bain
President and Chief Executive Officer
FOR IMMEDIATE RELEASE
Immune Network Licenses New AIDS Therapies from Nissin
------------------------------------------------------
Lead product believed to inactivate HIV virus
VANCOUVER, CANADA, November 22, 2000 -- Immune Network Ltd. (OTC: IMMKF; CDNX:
IMM), the world's first biotech merchant developer, announced today that it has
acquired an exclusive world wide license, from a major Japanese company, for a
new drug candidate for the treatment of HIV infection.
The agreement is with Nissin Shokuhin Kabushiki, Kaisha, doing business as
Nissin Food Products Ltd., Osaka, Japan. The hNMO1 antibody was first
discovered and patented by Nissin's R&D team at the Nissin Molecular Biology
Institute Inc., Boston MA.
The hNM01 monoclonal antibody is believed to act by inactivating the HIV virus,
which may delay the development of AIDS in HIV infected individuals. An
investigational new drug application (IND) for the hNMO1 antibody has been
reviewed by the FDA and Phase I clinical trials were initiated at the Beth
Israel Deaconess Medical Center of Boston, MA. Immune Network will commence the
production of hNMO1 for continued Phase I clinical development of the hNMO1
antibody.
Dr. Brian Conway, a leading physician in the field of HIV virology and member of
Immune Network's Scientific Advisory Network said, "Immune Network's approach to
immune-based therapies for HIV, developing multiple agents with varying
mechanisms of action, has great potential for strengthening current approaches
to the treatment of HIV infection. As such, hNMO1 is an ideal candidate for
further evaluation in clinical trials."
Talieh Shahrokhi, Immune Network Project Coordinator, said: "The hNMO1 antibody
is an ideal addition to our AIDS therapeutics portfolio. Our current 1F7
antibody works to reset the immune system, in short by targeting the host's
immune system. The hNM01 antibody is targeted to, and is believed to inactivate
the HIV virus and could thus complement the effect of 1F7."
Dr. Bruce Dezube, M.D., of Beth Israel Deaconess Medical Center in Boston,
Massachusetts, and Associate Professor of Medicine at the Harvard Medical
School, will continue as lead investigator for the hNMO1 clinical trial. Dr.
Dezube's research, clinical contribution and teaching focuses on AIDS and
AIDS-related cancer. He is a prominent investigator in the multi-institutional
AIDS Malignancy Consortium / National Cancer Institute / National Institute of
Health. Dr. Dezube is also a member of Immune Network's Scientific Advisory
Network.
Dr. Dezube said, "In our initial Phase I trial, hNMO1 was well tolerated even at
the highest dose tested. We are eager about studying this novel agent in a much
larger group of patients."
As of the end of 1999, an estimated 34.3 million people worldwide -- 33.0
million adults and 1.3 million children younger than 15 years -- were living
with HIV/AIDS. Through 1999, cumulative HIV/AIDS-associated deaths worldwide
numbered approximately 18.8 million -- 15.0 million adults and 3.8 million
children younger than 15 years (http://www.niaid.nih.gov/factsheets/
-----------------------------------
aidsstat.htm).
- ------------
About Immune Network
To learn more about Immune Network Ltd., biotech's merchant developer, please
visit our website: www.immunenetwork.com
---------------------
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
- -----------------------------------------------------------------------------
1995:
- -----
This news release contains forward looking statements that are not historical
facts and are subject to risks and uncertainties which could cause actual
results to differ materially from those set forth in or implied herein. These
risks are described in detail in the company's Securities and Exchange
Commission filings.
-30-
Media Contact: Ann Gibbs, Media Relations
Verlee Communications
Tel. (604) 970-5791
Email anngibbs@direct.ca
Company Contact: Rupinder Bagri, Corporate Communications
Immune Network Ltd.
3650 Wesbrook Mall, Vancouver, BC, Canada V6S 2L2
Tel. (604) 222-5541
Toll Free 1-877-644-5541
Fax. (604) 222-5542
Internet http://www.immunenetwork.com
----------------------------
Email rbagri@immunenetwork.com
THE CANADIAN VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE
FORM 27
SECURITIES ACT
MATERIAL CHANGE REPORT UNDER SECTION 85(1) OF THE ACT
Item 1. Reporting Issuer
----------------
Immune Network Ltd. (the "Issuer")
3650 Wesbrook Mall
Vancouver, BC V6S 2L2
Item 2. Date of Material Change
-----------------------
November 22, 2000
Item 3. Press Release
-------------
News Release dated November 22, 2000 was disseminated through
Canada Stockwatch, George Cross Newsletter and Market News.
Item 4. Summary of Material Change
--------------------------
The Issuer reports that it has acquired an exclusive world wide
license, from a major Japanese company, for a new drug candidate for
the treatment of HIV infection.
Item 5. Full Description of Material Change
-----------------------------------
The Issuer reports that it has acquired an exclusive world wide
license, from a major Japanese company, for a new drug candidate for
the treatment of HIV infection.
The agreement is with Nissin Shokuhin Kabushiki, Kaisha, doing
business as Nissin Food Products Ltd., Osaka, Japan. The hNMO1
antibody was first discovered and patented by Nissin's research and
development team at the Nissin Molecular Biology Institute Inc.,
Boston, MA.
The hNM01 monoclonal antibody is believed to act by inactivating the
HIV virus, which may delay the development of AIDS in HIV infected
individuals. An investigational new drug application (IND) for the
hNMO1 antibody has been reviewed by the U.S. Food and Drug
Administration and Phase I clinical trials were initiated at the
Beth Israel Deaconess Medical Center of Boston, MA. The Issuer will
commence the production of hNMO1 for continued Phase I clinical
development of the hNMO1 antibody.
Item 6. Reliance on Section 85(2) of the Act
------------------------------------
If the report is being filed on a confidential basis in reliance on
Section 85(2) of the Act, state the reasons for such reliance.
Not applicable
Page 2
Item 7. Omitted Information
-------------------
Not applicable
Item 8. Senior Officers
---------------
Allen Bain, President and Chief Executive Officer
Telephone: (604) 222-5541
Item 9. Statement of Senior Officer
---------------------------
The foregoing accurately discloses the material change referred to
herein.
DATED at Vancouver, British Columbia, this 29th day of November, 2000.
IMMUNE NETWORK LTD.
Per: /s/ Allen Bain
-------------------------------------
Allen Bain
President and Chief Executive Officer
FOR IMMEDIATE RELEASE
Azure Dynamics Announces Merger, Close of Financing,
----------------------------------------------------
and Appointment of New CEO
--------------------------
VANCOUVER, CANADA, November 28, 2000 - Immune Network Ltd. (OTC: IMMKF, CDNX:
IMM) reports Azure Dynamics Inc. has signed an arm's length Business Combination
Agreement to merge with Wild Horse Resources Ltd. (CDNX: WHR.A). Azure Dynamics
has also closed its equity financing to raise gross proceeds of $2.3 million
dollars. Azure reports this financing will enable it to complete a test
conversion contract for a major national commercial fleet of short haul delivery
vehicles.
Azure Dynamics Inc. was founded by Immune Network's subsidiary and technology
incubator, BC Research Inc. Immune Network currently retains an approximate 25%
indirect interest in this successful BC Research spin-off company.
Azure is developing its proprietary intelligent control systems technology for
hybrid electric vehicles. A hybrid electric vehicle ("HEV") is an electric
vehicle that also has an additional energy source, such as a small internal
combustion engine. The system increases the range of the vehicle compared to
fully electric vehicles and also serves to recharge the vehicles' batteries.
Azure's proprietary adaptive control systems technology includes software and
hardware which integrates the operations of the HEV with each individual's
driving patterns and other driving conditions in order to achieve optimal
efficiency and vehicle performance while also significantly reducing the vehicle
emissions and energy consumption. Azure is located at the B.C. Research and
Innovation Complex near the University of British Columbia in Vancouver, B.C.,
Canada.
Wild Horse is a Canadian Venture Exchange Inc. ("CDNX") listed company whose
shares have been suspended from trading since November, 1999. The Merger of
Wild Horse and Azure will constitute a Reverse Take-Over and Change of Business
of Wild Horse under the policies of CDNX and the shareholders of Wild Horse will
be asked to approve the Merger in accordance with the requirements of CDNX. In
the event that the Merger proceeds by way of amalgamation, shareholder approval
pursuant to applicable corporate laws will also be required. It is also the
intention of Wild Horse to present a resolution to its shareholders for approval
of a consolidation of the common shares of Wild Horse on the basis of one common
share for every ten common shares currently outstanding.
Wild Horse has retained Yorkton Securities Inc. as sponsor in connection with
the Merger, pursuant to which Yorkton Securities Inc. will receive a fee.
Yorkton Securities Inc.'s retainer as sponsor is subject to completion of
satisfactory due diligence. An agreement to sponsor should not be construed as
any assurance with respect to the merits of this transaction or the likelihood
of completion.
Completion of this transaction is subject to a number of conditions, including
but not limited to CDNX acceptance and disinterested shareholder approval. The
transaction cannot close until the required shareholder approval is obtained.
There can be no assurance that the transaction will be completed as proposed or
at all.
Azure's Board of Directors are also pleased to announce the appointment of Mr.
Donald Campbell Deacon as the new CEO of Azure Dynamics. Mr. Deacon's extensive
experience in the formation and structuring of companies in the public markets
is exemplified in his previous position as Chairman and CEO of Deacon BZW. While
Chairman of Deacon BZW, Mr. Deacon served as Vice-Chairman and then Chairman of
the Investment Dealers Association of Canada from 1991 - 1993. In addition,
during the same period, he served as a Governor of the Canadian Investor
Protection Fund. Mr. Deacon has also served as President and Director of UTS
Energy Corporation, a TSE-listed company with a 22% interest in the billion
dollar Fort Hills Oil Sands Project. Mr. Deacon is associated with the
TSE-listed AZCAR Technologies Inc. and Turbo Genset Inc.
Mr. Deacon, commented, "Azure possesses all the ingredients for success. We
have an exciting, experienced, imaginative team of engineers that have developed
a prototype "smart energy management system" for class 2 to class 6 vehicles
that should have a considerable positive impact on reducing the volume of
emissions while simultaneously significantly reducing operating costs."
About Immune Network
- --------------------
Immune Network Ltd. (CDNX: IMM) is the world's first biotech merchant developer.
Its subsidiary, BC Research Inc., is a biotech and general technology services
and incubator company. To learn more about Immune Network Ltd. and BC Research
Inc., please visit our websites: www.immunenetwork.com and www.bcresearch.com.
--------------------- ------------------
To learn more about Azure Dynamics Inc., a BC Research spin off, please visit
their website: www.azuredynamics.com
---------------------
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
- -----------------------------------------------------------------------------
1995:
- -----
This news release contains forward looking statements that are not historical
facts and are subject to risks and uncertainties which could cause actual
results to differ materially from those set forth in or implied herein. These
risks are described in detail in the company's Securities and Exchange
Commission filings.
-30-
Company Contact: Rupinder Bagri, Corporate Communications
Immune Network Ltd.
3650 Wesbrook Mall, Vancouver, BC, Canada V6S 2L2
Tel. (604) 222-5541
Toll Free 1-877-644-5541
Fax. (604) 222-5542
Internet http://www.immunenetwork.com
----------------------------
Email rbagri@immunenetwork.com
THE CANADIAN VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE
Immune Network Ltd.
3650 Wesbrook Mall
Vancouver, BC V6S 2L2
Tel: 604-222-5541
Fax: 604-224-5542
Via Sedar/Electronic Filing
28 November 2000
Executive Director
BC Securities Commission
Suite 200 - 865 Hornby Street
Vancouver, BC
V6Z 2H4
Attention : Regulatory Filings
Ref : Unaudited Financials at September 30, 2000
Dear Reader:
Enclosed please find the following:
1) Unaudited financial statements for the nine months ended September 30,
2000; and
2) Form 61, along with Schedules "A", "B", and "C".
We hereby confirm that the unaudited financial statements for the nine months
ended September 30, 2000, along with Schedules "A", "B", and "C", as per
supplemental mail list.
This mailing was done November 28, 2000
---------------------------------------
Please contact our office if you have any questions.
Yours truly,
/s/ David Goold
David Goold, CA
Chief Financial Officer
Encl.
British Columbia QUARTERLY REPORT
Securities Commission Form 61
- --------------------------------------------------------------------------------
================================================================================
Issuer Details Date of Report
Name of Issuer For Quarter Ended Y M D
IMMUNE NETWORK LTD. SEPTEMBER 30, 2000 00 11 27
- --------------------------------------------------------------------------------
Issuer's Address
3650 WESBROOK MALL
- --------------------------------------------------------------------------------
City Province Postal Code Issuer Fax No. Issuer Telephone No
VANCOUVER B.C. V6S 2L2 (604) 222-5542 (604) 222-5541
- --------------------------------------------------------------------------------
Contact Person Contact's Position Contact Telephone No.
ALLEN BAIN PRESIDENT & CEO (604) 222-5541
================================================================================
CERTIFICATE
The three schedules required to complete this Quarterly Report are attached and
the disclosure contained therein has been approved by the Board of Directors. A
copy of this Quarterly Report will be provided to any shareholder who requests
it.
================================================================================
Director's Signature Print Full Name Date Signed
Y M D
/s/ Allen I. Bain ALLEN I. BAIN 00 11 27
- --------------------------------------------------------------------------------
Director's Signature Print Full Name Date Signed
Y M D
/s/ Robert J. Gayton ROBERT J. GAYTON 00 11 27
================================================================================
IMMUNE NETWORK LTD.
INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
IMMUNE NETWORK LTD.
Amalgamated under the Company Act of British Columbia
CONSOLIDATED BALANCE SHEET
(unaudited - prepared by management)
(expressed in Canadian Dollars)
As at September 30
-------------------------------------
2000 1999
ASSETS $ $
- --------------------------------------------------------------------------------
Current
Cash and cash equivalents $ 4,488,455 $ 632,609
Short-term investment 5,000 -
Restricted investment 75,000 -
Amounts receivable 1,337,253 8,085
Unbilled revenue 185,972 -
Investment tax credits recoverable 116,000 -
Government grants receivable 23,874 3,776
Deposits and prepaid expenses 296,235 93,470
- --------------------------------------------------------------------------------
6,527,789 737,940
- --------------------------------------------------------------------------------
Loan receivable 50,000 -
Deferred Charges 47,653 -
Capital assets 5,264,048 33,887
Intellectual properties 487,150 158,017
Investments 8,374,000 -
Goodwill 4,368,927 -
- --------------------------------------------------------------------------------
$ 25,119,567 $ 929,844
================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 1,622,416 $ 56,682
Current portion of obligations under
capital leases 113,953 -
- --------------------------------------------------------------------------------
1,736,369 56,682
- --------------------------------------------------------------------------------
Loan payable to shareholder - 50,000
Obligations under capital leases 276,120 -
Long-term debt 1,603,675 -
Minority interests in subsidiaries 4,067,412 -
Deferred dilution gain 249,181 -
Future income taxes-non current 2,150,938 -
- --------------------------------------------------------------------------------
10,083,696 106,682
- --------------------------------------------------------------------------------
Shareholders' equity
Common shares 17,775,833 3,816,365
Special warrants 112,500 -
Class A convertible preferred shares 7,532,021 -
Deficit (10,384,482) (2,993,203)
- --------------------------------------------------------------------------------
15,035,872 823,162
- --------------------------------------------------------------------------------
$ 25,119,567 $ 929,844
================================================================================
On behalf of the Board:
/s/ Allen I. Bain /s/ Robert J. Gayton
Allen I. Bain, Director Robert J. Gayton, Director
IMMUNE NETWORK LTD.
INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
IMMUNE NETWORK LTD.
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(unaudited - prepared by management)
(expressed in Canadian Dollars)
Nine months ended
September 30
-------------------------------------
2000 1999
$ $
----------------- -----------------
Contract services and rental revenue $ 764,720 $ -
Interest and other income 180,032 6,215
- --------------------------------------------------------------------------------
944,752 6,215
Direct costs on service contracts 326,851 -
- --------------------------------------------------------------------------------
Gross margin 617,901 6,215
Research and development 5,817,819 154,095
General and administrative 1,387,995 166,484
Amortization 262,043 9,463
- --------------------------------------------------------------------------------
7,467,857 330,042
================================================================================
Loss from operations for the period 6,849,956 323,827
Loss from write down of investments and loans 120,156 -
Minority interests in losses of subsidiaries (70,990) -
- --------------------------------------------------------------------------------
Loss for the period 6,899,122 323,827
Deficit, beginning of period 3,485,360 2,669,376
- --------------------------------------------------------------------------------
Deficit, end of period $ 10,384,482 $ 2,993,203
================================================================================
Loss per common share 0.191 0.014
- --------------------------------------------------------------------------------
Weighted average number of
outstanding shares 36,121,116 23,010,972
================================================================================
IMMUNE NETWORK LTD.
INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
IMMUNE NETWORK LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited - prepared by management)
(expressed in Canadian Dollars)
Nine months ended
September 30
-------------------------------------
2000 1999
$ $
----------------- -----------------
OPERATING ACTIVITIES
Loss for the period $ (6,899,122) $ (323,827)
Items not involving cash
Amortization 262,043 9,463
Amortization of deferred charges 5,847 -
Write off of investments and loans 120,156 -
Minority interest in losses of subsidiaries (70,990) -
- --------------------------------------------------------------------------------
(6,582,066) (314,364)
Amounts receivable (512,830) (5,075)
Unbilled revenue 4,320 -
Government grants receivable (18,138) (3,776)
Deposits and prepaid expenses (181,972) (85,866)
Accounts payable and accrued liabilities 70,578 (30,972)
Deferred charges (53,500) -
- --------------------------------------------------------------------------------
Cash used in operating activities (7,273,608) (440,053)
- --------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from issuance of common shares 9,540,896 1,049,575
Issuance of special warrants 112,500 -
Long-term debt 1,603,675 -
Repayment (advance) of loan from (to) officer 32,213 -
Payment on obligations under capital lease (14,623) -
- --------------------------------------------------------------------------------
Cash provided by financing activities 11,274,661 1,049,575
- --------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of intellectual properties (245,997) (17,347)
Purchase of capital assets (211,183) (36,558)
Purchase of investment (90,260) -
Purchase of restricted investment (75,000) -
Sale (Purchase) of short-term investment 45,000 -
Net cash from acquisition of BC Research Inc. 947,784 -
- --------------------------------------------------------------------------------
Cash used in investing activities 370,344 (53,905)
- --------------------------------------------------------------------------------
Increase in cash and cash equivalents 4,371,397 555,617
Cash and cash equivalents, beginning of period 117,058 76,992
- --------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 4,488,455 $ 632,609
================================================================================
British Columbia QUARTERLY REPORT
Securities Commission Form 61
- --------------------------------------------------------------------------------
Issuer Details Date of Report
Name of Issuer For Quarter Ended Y M D
IMMUNE NETWORK LTD. SEPTEMBER 30, 2000 00 11 27
- --------------------------------------------------------------------------------
Issuer's Address
3650 WESBROOK MALL
- --------------------------------------------------------------------------------
City Province Postal Code Issuer Fax No. Issuer Telephone No
VANCOUVER B.C. V6S 2L2 (604) 222-5542 (604) 222-5541
- --------------------------------------------------------------------------------
Contact Person Contact's Position Contact Telephone No.
ALLEN BAIN PRESIDENT & CEO (604) 222-5541
================================================================================
CERTIFICATE
The three schedules required to complete this Quarterly Report are attached and
the disclosure contained therein has been approved by the Board of Directors. A
copy of this Quarterly Report will be provided to any shareholder who requests
it.
================================================================================
Director's Signature Print Full Name Date Signed
Y M D
/s/ Allen I. Bain ALLEN I. BAIN 00 11 27
- --------------------------------------------------------------------------------
Director's Signature Print Full Name Date Signed
Y M D
/s/ Robert J. Gayton ROBERT J. GAYTON 00 11 27
================================================================================
Page 1
IMMUNE NETWORK LTD.
SCHEDULE B: SUPPLEMENTAL INFORMATION
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
Section 1 - For the Fiscal Year-to-Date (January 1, 2000 to September 30, 2000)
a) Deferred costs - Patents, License and Technology
Accumulated Net Book
Cost Amortization Value
$ $ $
-------------------------------------------------------------------------
Technology 208,835 57,564 151,271
License 189,383 21,002 168,381
Patents 223,817 84,900 138,917
Trademark 31,040 2,459 28,581
-------------------------------------------------------------------------
653,075 165,925 487,150
=========================================================================
b) Research and development expenditures
Nine months ended
September 30
---------------------------
2000
$
---------------------------------------------------------------------
Consulting 85,166
Laboratory, office and sundry 536,579
Salaries and benefits 317,304
Clinical trials 4,764,721
Contract research and collaboration 74,022
Travel 67,168
---------------------------------------------------------------------
5,844,960
Less grants (26,793)
Research Royalty (348)
---------------------------------------------------------------------
5,817,819
=====================================================================
Page 2
IMMUNE NETWORK LTD.
SCHEDULE B: SUPPLEMENTAL INFORMATION
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
c) General and administrative expenditures
Nine months ended
September 30
---------------------------
2000
$
---------------------------------------------------------------------
Administrative expenses;
Advertising -
Consulting 100,165
Interest and bank charges 12,158
Legal, audit and accounting 211,586
Office expenses 184,116
Postage 6,246
Promotion and entertainment 157,131
Rent 137,306
Salaries and benefits 415,787
Securities, brokerage and transfer agent fees 43,836
Subscriptions 5,913
Telephone 19,948
Travel 93,803
---------------------------------------------------------------------
Total 1,387,995
=====================================================================
d). Aggregate amount of expenditures made to parties not at arm's length from
the issuer
I. During the nine months ended September 30, 2000, the Company incurred
$nil [nine months ended September 30, 1999 - $7,417] for consulting
services rendered by companies controlled by directors of the
Company.
II. Legal fees and expenses totaling $ 223,868, were incurred during the
nine months ended September 30, 2000 [1999 $ 24,247] to a legal firm
where one of the principals is an officer of the company.
III. Accounting fees of $ 46,067 were incurred during the nine months
ended September 30, 2000 [1999 $ 13,815] to an accounting firm where
one of the principals is an officer of the company.
Page 3
IMMUNE NETWORK LTD.
SCHEDULE B: SUPPLEMENTAL INFORMATION
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
Section 2 - For the quarter Under Review (July 1, 2000 to September 30, 2000)
a) Summary of securities issued during the quarter
- -----------------------------------------------------------------------------------------------------------------------------------
Date of Type of Type of Number Price Total Type of Commission
Issue Security Issue Proceeds Consideration Paid
- -----------------------------------------------------------------------------------------------------------------------------------
7-Jul Common shares Warrants 33,327 0.15 4,999 Cash NIL
10-Jul Common shares Warrants 10,000 0.15 1,500 Cash NIL
10-Jul Common shares Warrants 100,000 0.15 15,000 Cash NIL
10-Jul Common shares Warrants 647,000 0.15 97,050 Cash NIL
10-Jul Common shares Warrants 33,000 0.15 4,950 Cash NIL
13-Jul Common shares Warrants 666,660 0.15 99,999 Cash NIL
14-Jul Common shares Warrants 153,327 0.15 22,999 Cash NIL
13-Jul Common shares Warrants 666,660 0.15 99,999 Cash NIL
13-Jul Common shares Warrants 30,000 0.15 4,500 Cash NIL
13-Jul Common shares Warrants 60,000 0.15 9,000 Cash NIL
21-Jul Common shares Special warrants 320,000 0.15 48,000 Cash NIL
Converted
10-Aug Common shares Warrants 133,000 0.18 23,940 Cash NIL
14-Aug Common shares Special warrants 500,000 0.15 75,000 Cash NIL
converted
14-Aug Common shares Special warrants 50,000 0.15 7,500 Cash NIL
converted
14-Aug Common shares Special warrants 300,000 0.15 45,000 Cash NIL
converted
18-Aug Common shares Special warrants 16,999,975 0.50 8,499,999 Cash NIL
converted
18-Aug Common shares Shares 7,532,021 0.58 4,368,572 Equity NIL
18-Aug Preferred shares Shares 7,532,021 1.00 7,532,021 Equity NIL
30-Aug Common shares Special warrants 200,000 0.15 30,000 Cash NIL
converted
1-Sep Common shares Warrants 50,000 0.15 7,500 Cash NIL
1-Sep Common shares Private Placement 727,272 0.55 400,000 Cash NIL
8-Sep Common shares Warrants 20,000 0.18 3,600 Cash NIL
13-Sep Common shares Agents Options 38,136 0.55 20,975 Cash NIL
14-Sep Common shares Warrants 80,000 0.18 14,400 Cash NIL
20-Sep Common shares Warrants 300,000 0.15 45,000 Cash NIL
30-Sep Common shares Warrants 33,000 0.18 5,940 Cash NIL
- -----------------------------------------------------------------------------------------------------------------------------------
Total 37,215,399 21,487,443
===================================================================================================================================
b) Summary of options granted during the quarter Nil
Page 4
IMMUNE NETWORK LTD.
SCHEDULE B: SUPPLEMENTAL INFORMATION
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
Section 3 - As at the End of the Quarter (September 30, 2000)
a) Authorized capital and summary of shares issued and outstanding
i) Common shares without par value,-200,000,000 authorized
Number Amount
of Shares $
----------------------------------------------------------------------------
Balance at December 31, 1996 and 1997 19,970,452 2,602,790
Issued for cash pursuant to private placement 400,000 80,000
Issued for cash upon exercise of options 200,000 30,000
----------------------------------------------------------------------------
Balance at December 31, 1998 20,570,452 2,712,790
Issued for cash pursuant to private placement 360,000 54,000
Issued for cash upon exercise of options 625,000 93,750
Issued for cash upon exercise of warrants 97,500 22,425
Issued for cash pursuant to private placement,
net of issuance costs of $9,576 6,286,513 933,400
----------------------------------------------------------------------------
Balance at December 31, 1999 27,939,465 3,816,365
Issued for cash upon exercise of options 2,428,000 492,885
Issued for cash upon exercise of warrants 5,563,301 843,975
Issued via conversion of shareholder's loan 200,000 50,000
Issued on acquisition of BC Research Inc. 7,532,021 4,368,572
Issue for cash appointed of Agents Compensation
Options 38,136 20,975
Issued for cash pursuant to private placement,
net of issuance costs of $922,438 19,097,247 8,183,061
----------------------------------------------------------------------------
Balance at September 30, 2000 62,798,170 17,775,833
============================================================================
ii) Class A convertible preferred shares, par value of $1.00 per share-
20,000,000 authorized
Number Amount
of Shares $
----------------------------------------------------------------------------
Balance at December 31, 1999 - -
Issued on acquisition of BC Research Inc. 7,532,021 7,532,021
----------------------------------------------------------------------------
Balance at September 30, 2000 7,532,021 7,532,021
============================================================================
b) Summary of options, warrants and convertible securities outstanding
i) Share Purchase Warrants Outstanding
Common share purchase warrants outstanding are as follows:
Number of Exercise
Common Shares Price
Issuable $ Expiry Date
----------------------------------------------------------------------------
1,023,212 0.18 July 13, 2001
1,820,000 0.15 and 0.17 January 23, 2001 and January 23, 2002
8,499,997 1.40 September 8, 2001
772,727(1) 1.40 September 8, 2001
363,636 1.40 August 31, 2002
----------------------------------------------------------------------------
12,479,563
============================================================================
1 Assuming the agent exercises the Agent's Compensation Options.
Page 5
IMMUNE NETWORK LTD.
SCHEDULE B: SUPPLEMENTAL INFORMATION
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
ii) Special Warrants Outstanding
----------------------------------------------------------------------------
Date of Type of Type of Number Price
Issue Security Issue
----------------------------------------------------------------------------
24-Jan Special Private 750,000 0.15
Warrants Placement
Each warrant can be converted by the warrant holders anytime up to
January 24, 2001, into one unit which is comprised of one common share
and one purchase warrant. If such warrants are not exercised by the
warrant holders by January 24, 2001, the special warrants will
automatically converted into units. Each purchase warrant entitles the
holder to acquire one common share at $0.15 up to January 23, 2001 and
at $0.17 up to January 23, 2002.
iii) Stock Option Outstanding
Number of
stock options Exercise
outstanding Price
and exercisable $ Expiry Date
----------------------------------------------------------------------------
50,000 0.15 May 19, 2003
70,000 0.15 May 21, 2004
80,500 0.23 June 9, 2004
230,000 0.23 July 25, 2004
831,500 0.40 January 24, 2005
1,140,000 1.20 April 19, 2005
----------------------------------------------------------------------------
2,402,000
============================================================================
iv) Agent's Compensation Options
----------------------------------------------------------------------------
Date of Type of Type of Number Price
Issue Security Issue
----------------------------------------------------------------------------
9-Mar Agent's Private 1,507,318 0.55
Options Placement
Each Agent's Compensation Option entitles the agent to acquire one unit
until September 8, 2001 at a price of $0.55 each. Each unit is
comprised of one common share and half of one purchase warrant. Each
whole purchase warrant entitles the holder to acquire one common share
at $1.40 per share until September 8, 2001
Page 6
IMMUNE NETWORK LTD.
SCHEDULE B: SUPPLEMENTAL INFORMATION
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
Section 3 - As at the End of the Quarter (September 30, 2000)
c) Number of shares in escrow or subject to a pooling agreement
The Company has 5,566,667 common shares held in escrow.
d) List of Directors:
Dr. Robert J. Gayton
Dr. Allen I. Bain
Mr. Oh, Kim Sun, CA
Dr. Don B. Rix
Page 1
IMMUNE NETWORK LTD.
SCHEDULE C: MANAGEMENT DISCUSSION
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
QUARTERLY REPORT TO SHAREHOLDERS -
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
FORM 61 - SCHEDULE C: MANAGEMENT DISCUSSION
The following information should be read in conjunction with the unaudited
consolidated financial statements included therein, which are prepared in
accordance with generally accepted accounting principles in Canada.
FINANCINGS
On August 10, 2000, the Company filed a final prospectus relating to the
distribution of 16,999,998 common shares and 8,499,999 common share purchase
warrants issuable upon the exercise of the 15,454,544 Special Warrants issued
previously, and up to 772,727 of the 1,545,544 agent's compensation options of
the Company issuable upon exercise of previously issued agent's special
warrants. Receipts of the final prospectus were issued by British Columbia,
Alberta, Ontario and Quebec securities commission on August 11, 2000.
On September 1, 2000 the Company closed the private placement, previously
announced on July 28, 2000, of 727,273 units at $0.55 per unit, for gross
proceeds of $400,000. Each unit consists of one common share and one-half of
one non-transferable share purchase warrant. Each whole warrant will entitle
its holder to purchase one additional common share of the company at price of
$1.40 for two years.
CORPORATE DEVELOPMENT
1. BC Research Acquisition
-----------------------
On August 18, 2000 the Company completed its acquisition of an approximate
two-thirds controlling interest in BC Research Inc. ("BCR",www.bcresearch.com),
a leading technology innovation incubator. As payment for the BCR shares, the
Company has issued 7,532,021 common shares and 7,532,021 Class A convertible
preferred shares. These securities are subject to resale restrictions including
a hold period over the common shares expiring at midnight on December 18, 2000.
BCR is a leading innovation integrator with approximately $7 million in annual
revenues. There are 370 people at the BC Research and Innovation Complex working
in 22 high-tech companies, including over 100 workers employed by BC Research
itself. The 185,000 square foot BC Research and Innovation Complex is located on
10 acres at the University of British Columbia, in Vancouver.
Page 2
IMMUNE NETWORK LTD.
SCHEDULE C: MANAGEMENT DISCUSSION
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
BCR consists of three major components: infrastructure, services, and a
technology incubator. BCR infrastructure provides lab and office space for
several public and private companies, including Nortran Pharmaceuticals Inc.,
and Micrologix Biotech Inc. BCR's current services include specialized
laboratory testing, field studies, consulting, and applied research and
development. BCR's technology incubator has resulted in successful spin-offs
companies, including Azure Dynamics Inc. and CellFor Inc. (formerly Silvagen
Inc.).
2. Employee Stock Option Plan
--------------------------
The Company has implemented a stock option plan (the "Plan"), in accordance with
the policies of the Canadian Venture Exchange, to attract, retain and motivate
directors, officers, employees and consultants and reward them for their
contributions to the long term goals of the Issuer and to enable and encourage
such persons to acquire Common Shares as long term investments. The Plan was
accepted by the Exchange on June 16, 2000, and approved by the shareholders of
the Issuer at its annual general meeting held on June 21, 2000. The Plan will
permit the issuance of stock options entitling the holders to purchase up to a
total of 6,622,958 Common Shares, inclusive of the 2,402,000 Common Shares that
may be purchased upon the exercise of the outstanding stock options as at
September 30, 2000.
3. Shareholder Meeting
-------------------
On August 16, 2000 the Company received the approval of all resolutions
presented at its re-convened annual general meeting. The resolutions passed
include official change of the Company name from "Immune Network Research Ltd."
to "Immune Network Ltd." Also, by special resolution, the authorized share
capital of the Company was increased from one hundred million shares to a total
of two hundred million common shares without par value and 20 million Class A
convertible preferred shares with par value of $1.00 each. Class A convertible
preferred shares were created for the purpose of the acquisition of BC Research
Inc.
RESEARCH PROGRESS
AIDS Project (1F7)
In the quarter ended September 30, 2000 Immune Network continued activities in
preparation for production and further testing of the 1F7 antibody.
Alzheimer Disease Project (AD2)
In the second quarter of 2000 Immune Network and CroMedica Global carried out
preparations for the international phase II clinical trial of the company's
Alzheimer disease drug candidate. At the end of August, Cromedica convened a
worldwide clinical investigators' meeting for the DAD2000 Phase II trial of
dapsone in Alzheimer disease. First patients were started in the trial in
November 2000.
Page 3
IMMUNE NETWORK LTD.
SCHEDULE C: MANAGEMENT DISCUSSION
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
Asthma Project (BP1)
Immune Network and Bridge Pharma announced that they were expanding the scope of
their joint venture, which was initially established in August 1999 to develop
potential new treatments for asthma.
Bridge Pharma is contributing additional intellectual property and several new
compounds. The joint venture will also begin a program to study some of its
compounds for the treatment of atopic dermatitis (eczema). If the joint venture
proceeds into human clinical trials with two drug candidates, Immune Network
will contribute an additional US $1.5 million to the collaboration.
Atopic dermatitis, which may affect as many as 15 million Americans, is a
noncontagious hereditary allergic disease that causes chronic, and often
painful, inflammation of the skin.
In the quarter ended September 30, 2000 Immune Network and Bridge Pharma
continued laboratory studies on the asthma compounds towards the selection of a
clinical candidate.
APPOINTMENTS
On August 9th, the Company added Dr. Bruce Dezube, Dr. Luc Montagne, and Dr.
John Salmon to the Scientific Advisory Network
On September 18th, the Company announced the appointment of David Goold as Chief
Financial Officer.
FINANCIAL HIGHLIGHTS
Results of Operations
For the nine months ended September 30, 2000, Immune Network Ltd. incurred a
consolidated net loss of $6,899,122 or $0.191 per share. This compared to net
loss for the nine months ended September 30, 1999 of $323,827 or $0.014 per
share. The results for the nine months ended September 30, 2000, include the
consolidated results of operations of BC Research Inc. and Azure Dynamics Inc.,
for the period from August 19 to September 30, 2000.
Page 4
IMMUNE NETWORK LTD.
SCHEDULE C: MANAGEMENT DISCUSSION
SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
Research and development expenses, for the nine months ended September 30, 2000
were $5,817,819 as compared to $154,095 during the nine months ended September
30, 1999. Research and development expenses incurred in the first nine months
of 2000 were primarily due to the costs associated with the research program of
AIDS project 1F7 antibody and the Asthma BP1 project, the phase II clinical
trial cost of the Alzheimer project and the research and development program in
Azure Dynamics Inc., to develop the hybrid controller. General and
administrative expenses for the nine months ended September 30, 2000 were
$1,387,995 as compared to $166,484 during the nine months ended September 30,
1999. The consolidated general and administration expenses for the current
period include the consolidated operating expenses of BC Research for the period
from August 19 to September 30, 2000
The loss from the write down in loans and investments of $120,156 relates to
management's on-going evaluation of the Company's projects. It is management's
opinion that the equity investment in Skye Boat, Inc. and the investment in and
the loan to MindMyBody.com, Inc. are impaired and that realization is in doubt.
LIQUIDITY AND CAPITAL RESOURCES
Working Capital at September 30, 2000 was $4,791,418 (1999: $681,258). At
September 30, 2000, the Company had $4,488,455 in cash and cash equivalents
(1999: $632,609).
INVESTOR RELATIONS
All investor relations activities were carried out by company personnel.
SUBSEQUENT ACTIVITIES
a) On October 18th, 2000 Ron Kertesz resigned as an Officer and Commercial
Director of the Company.
b) On October 25th, 2000, the Company exercised its option to acquire
3,333,333 shares in Meditech Pharmaceuticals Inc. for US $ 100,000.
c) On November 13th, 2000, the Company commenced trading on the OTC NASDAQ
under the trade symbol (IMMKF).
d) On November 16th, 2000, the Company announced that first patients have
been enrolled and are receiving treatment in the Alzheimer Phase II
clinical trial.
e) On November 22nd, 2000, the Company announced that it has acquired an
exclusive world wide license, from a major Japanese company, for a new drug
candidate for the treatment of HIV infection.
FOR IMMEDIATE RELEASE
Immune Network Reports Third Quarter Results
--------------------------------------------
VANCOUVER, CANADA, November 29, 2000 -- Immune Network Ltd. (OTC: IMMKF; CDNX:
IMM) today reports their consolidated third quarter results for the period
ending September 30, 2000, which for the first time includes the consolidation
of the financial position of BC Research Inc.
"The third quarter of 2000 was an exciting one for Immune Network as it
completed its acquisition of two thirds controlling interest in BC Research
Inc., and signed an alliance agreement with NORAM Engineering and Constructors
Ltd., the other major BC Research shareholder. The company also completed a
strategic private placement which raised gross proceeds of $400,000," said Mr.
Dave Goold, CFO of Immune Network Ltd.
Results of operations for the nine months ended September 30, 2000
- ------------------------------------------------------------------
The following consolidated financial statements include the financial results of
BC Research Inc., for the period from August 19 through to September 30, 2000,
as well as the operation of Immune Network for the year to date. The reported
revenue of $765,000 resulted from the BC Research contract services and rental
operation for the period from August 19 to September 30, 2000.
Research and development expenses, for the nine months ended September 30, 2000
were $5,817,819 as compared to $154,095 during the nine months ended September
30, 1999. These expenses were incurred in the first nine months of 2000 and are
associated with the continuing research programs such as the AD2 Alzheimer
project, the 1F7 AIDS project and the Asthma BP1 project as well as the research
and development program in Azure Dynamics Inc. to further develop its adaptive
control technology.
The company has also stated the write down in loans and investments of $120,156
relating to management's on-going evaluation of company projects. Though project
development is ongoing, it is management's opinion that it is appropriate that
the equity investment in Skye Boat Inc., and the investment in and the loan to
MindMyBody.com Inc., be recorded as write downs at this time.
IMMUNE NETWORK LTD.
CONSOLIDATED BALANCE SHEET
(unaudited - prepared by management)
(expressed in Canadian Dollars)
- --------------------------------------------------------------------------------
As at September 30
-------------------------------------
2000 1999
ASSETS $ $
- --------------------------------------------------------------------------------
Current
Cash and cash equivalents $ 4,488,455 $ 632,609
Short-term investment 5,000 -
Restricted investment 75,000 -
Amounts receivable 1,337,253 8,085
Unbilled revenue 185,972 -
Investment tax credits recoverable 116,000 -
Government grants receivable 23,874 3,776
Deposits and prepaid expenses 296,235 93,470
- --------------------------------------------------------------------------------
6,527,789 737,940
- --------------------------------------------------------------------------------
Loan receivable 50,000 -
Deferred Charges 47,653 -
Capital assets 5,264,048 33,887
Intellectual properties 487,150 158,017
Investments 8,374,000 -
Goodwill 4,368,927 -
- --------------------------------------------------------------------------------
$ 25,119,567 $ 929,844
================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 1,622,416 $ 56,682
Current portion of obligations under
capital leases 113,953 -
- --------------------------------------------------------------------------------
1,736,369 56,682
- --------------------------------------------------------------------------------
Loan payable to shareholder - 50,000
Obligations under capital leases 276,120 -
Long-term debt 1,603,675 -
Minority interests in subsidiaries 4,067,412 -
Deferred dilution gain 249,181 -
Future income taxes-non current 2,150,938 -
- --------------------------------------------------------------------------------
10,083,696 106,682
- --------------------------------------------------------------------------------
Shareholders' equity
Common shares 17,775,833 3,816,365
Special warrants 112,500 -
Class A convertible preferred shares 7,532,021 -
Deficit (10,384,482) (2,993,203)
- --------------------------------------------------------------------------------
15,035,872 823,162
- --------------------------------------------------------------------------------
$ 25,119,567 $ 929,844
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(unaudited - prepared by management)
(expressed in Canadian Dollars)
Nine months ended
September 30
-------------------------------------
2000 1999
$ $
----------------- -----------------
Contract services and rental revenue $ 764,720 $ -
Interest and other income 180,032 6,215
- --------------------------------------------------------------------------------
944,752 6,215
Direct costs on service contracts 326,851 -
- --------------------------------------------------------------------------------
Gross margin 617,901 6,215
Research and development 5,817,819 154,095
General and administrative 1,387,995 166,484
Amortization 262,043 9,463
- --------------------------------------------------------------------------------
7,467,857 330,042
================================================================================
Loss from operations for the period 6,849,956 323,827
Loss from write down of investments and loans 120,156 -
Minority interests in losses of subsidiaries (70,990) -
- --------------------------------------------------------------------------------
Loss for the period 6,899,122 323,827
Deficit, beginning of period 3,485,360 2,669,376
- --------------------------------------------------------------------------------
Deficit, end of period $ 10,384,482 $ 2,993,203
================================================================================
Loss per common share 0.191 0.014
- --------------------------------------------------------------------------------
Weighted average number of
outstanding shares 36,121,116 23,010,972
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited - prepared by management)
(expressed in Canadian Dollars)
Nine months ended
September 30
-------------------------------------
2000 1999
$ $
----------------- -----------------
OPERATING ACTIVITIES
Loss for the period $ (6,899,122) $ (323,827)
Items not involving cash
Amortization 262,043 9,463
Amortization of deferred charges 5,847 -
Write off of investments and loans 120,156 -
Minority interest in losses of subsidiaries (70,990) -
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(6,582,066) (314,364)
Amounts receivable (512,830) (5,075)
Unbilled revenue 4,320 -
Government grants receivable (18,138) (3,776)
Deposits and prepaid expenses (181,972) (85,866)
Accounts payable and accrued liabilities 70,578 (30,972)
Deferred charges (53,500) -
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Cash used in operating activities (7,273,608) (440,053)
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FINANCING ACTIVITIES
Proceeds from issuance of common shares 9,540,896 1,049,575
Issuance of special warrants 112,500 -
Long-term debt 1,603,675 -
Repayment (advance) of loan from (to) officer 32,213 -
Payment on obligations under capital lease (14,623) -
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Cash provided by financing activities 11,274,661 1,049,575
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INVESTING ACTIVITIES
Purchase of intellectual properties (245,997) (17,347)
Purchase of capital assets (211,183) (36,558)
Purchase of investment (90,260) -
Purchase of restricted investment (75,000) -
Sale (Purchase) of short-term investment 45,000 -
Net cash from acquisition of BC Research Inc. 947,784 -
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Cash used in investing activities 370,344 (53,905)
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Increase in cash and cash equivalents 4,371,397 555,617
Cash and cash equivalents, beginning of period 117,058 76,992
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Cash and cash equivalents, end of period $ 4,488,455 $ 632,609
Appointments in the third quarter included the addition of Mr. David Goold as
Chief Financial Officer and Dr. Bruce Dezube, Dr. Luc Montagne, and Dr. John
Salmon to the Scientific Advisory Network. In this quarter, Mr. Ron Kertesz
resigned as an Officer and Commercial Director of the Company.
To review the complete quarterly report please visit Immune Network Ltd.'s
website (www.immunenetwork.com) or our Sedar filing (www.sedar.com), that will
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include the supplemental information and management discussion.
Immune Network will hold a conference call to present and discuss third quarter
results on November 30, 2000 at 8:30 am PST (11:30 am Eastern Time). The call
can be accessed by dialing 604-519-2100 (Vancouver) or toll free at
1-877-452-1114 (outside Vancouver). After dialing, participants must input the
security code 1490 to enter into the conference call. An internet slide show
accompanying the call will be available on the home page: www.immunenetwork.com.
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About Immune Network
To learn more about Immune Network Ltd., biotech's merchant developer, please
visit our website: www.immunenetwork.com
---------------------
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
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1995:
- -----
This news release contains forward looking statements that are not historical
facts and are subject to risks and uncertainties which could cause actual
results to differ materially from those set forth in or implied herein. These
risks are described in detail in the company's Securities and Exchange
Commission filings.
-30-
Company Contact: Rupinder Bagri, Corporate Communications
Immune Network Ltd.
3650 Wesbrook Mall, Vancouver, BC, Canada V6S 2L2
Tel. (604) 222-5541
Toll Free 1-877-644-5541
Fax. (604) 222-5542
Internet http://www.immunenetwork.com
----------------------------
Email rbagri@immunenetwork.com
THE CANADIAN VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE