UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2002
File # 0-24875
BIOENVISION, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-4025857
-------- ----------
State of Incorporation IRS Employer ID No.
One Rockefeller Plaza, Suite 1600, New York, NY 10020
-----------------------------------------------------
(Address of principal Executive Offices)
Registrant's Telephone Number (212) 445-6582
Check here whether the issuer (1) has filed all reports required to be
filed by Sections 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
----- -----
As of April 30, 2002, the following shares of the Registrant's common
stock were issued and outstanding: Common Stock, $0.001 par value per share
16,687,786.
INDEX
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Operations 2
Condensed Consolidated Statements of Cash Flows 3
Note A. Organization and Significant Accounting Policies 4
Note B. Property, Plant, and Equipment 5
Note C. Patent and Licensing Rights 6
Note D. License and Co-Development Agreement 7
Note E. Stockholders' Transactions 7
Note F. Related Party Transactions 8
Note G. Subsequent Events 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other information 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
Bioenvision, Inc. and Subsidiaries
(a Development Stage company)
--------------------------------------------------------------------------------
Condensed Consolidated Balance Sheets
March 31, June 30,
2002 2001
(Unaudited)
ASSETS
Current assets
Cash $ -- $ --
Deferred costs 245,455 337,500
Deferred financing costs 1,096,875 --
--------------- ---------------
Total current assets 1,342,330 337,500
Property, plant and equipment, net 4,012 18,097
Other assets
Patents and licensing rights,net 12,234,357 15,698
Deferred costs -- 184,091
Deferred financing costs -- 207,500
--------------- ---------------
$ 13,580,699 $ 762,885
=============== ===============
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Liabilities
Current liabilities
Bank overdraft $ 160,335 $ 127,241
Accounts payable 622,786 785,134
Other accrued liabilities 316,365 317,799
Deferred revenue 552,273 736,364
Loan payable 797,937 --
--------------- ---------------
Total current liabilities 2,449,696 1,966,538
Long term liabilities
Deferred revenue -- 368,182
Officer's salaries 105,067 910,681
--------------- ---------------
Total long term liabilities 105,067 1,278,863
--
Stockholders' equity (deficit)
Common stock, $.001 par value 16,688 8,249
Authorized 25,000,000 shares
Issued and outstanding : 16,687,786 shares at March 31, 2002
and 8,248,919 shares at June 30, 2001
Additional paid in capital 18,637,321 3,165,540
Accumulated other comprehensive income 152,346 152,346
Deficit accumulated during development stage (7,780,419) (5,808,651)
--------------- ---------------
Total stockholders equity (deficit) 11,025,936 (2,482,516)
--------------- ---------------
$ 13,580,699 $ 762,885
=============== ===============
The accompanying footnotes are an integral part of these financial statements.
Bioenvision Inc. and Subsidiaries
(a Development Stage company)
--------------------------------------------------------------------------------
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended Nine Months Ended Period from August 16
March 31, March 31, 1996 (inception) through
2002 2001 2002 2001 March 31, 2002
Contract revenue $ 184,091 $ 1,108,000 $ 552,273 $ 1,350,000 $ 833,244
--------------- --------------- --------------- --------------- ---------------
Costs and expenses
Research & development costs 283,805 1,015,327 687,020 1,441,164 3,401,638
Administrative expenses 185,181 277,875 488,837 869,900 3,495,659
Interest and finance charges 458,628 4,909 912,258 12,279 1,179,906
Depreciation and amortization 496,209 296 505,926 8,103 606,459
--------------- --------------- --------------- --------------- ---------------
1,423,823 1,298,407 2,594,041 2,331,446 8,683,662
--------------- --------------- --------------- --------------- ---------------
Net loss $ (1,239,732) $ (190,407) $ (2,041,768) $ (981,446) $ (7,850,418)
=============== =============== =============== =============== ===============
Basic & diluted net loss per
share $ (0.09) $ (0.02) $ (0.20) $ (0.12)
Weighted average shares
used in computing basic
and diluted net loss
per share 14,045,109 7,976,419 10,435,997 7,976,419
The accompanying footnotes are an integral part of these financial statements.
- 2 -
Bioenvision, Inc. and Subsidiaries
(a Development Stage company)
--------------------------------------------------------------------------------
Condensed Consolidated Statements of Cash Flow
(Unaudited)
Period from August
Nine Nine 16, 1996
months months (inception)
ended ended through
March 31, March 31, March 31,
2002 2001 2002
------------ ------------ ------------
Cash flows from operating activities
Net loss $ (2,041,718) $ (981,733) $ (7,850,418)
------------ ------------ ------------
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 505,926 11,049 590,389
Financing charges - non-cash 906,125 -- 1,113,625
Gain on sale of fixed assets -- -- (8,228)
Provision of free rent -- -- 28,665
Compensation cost for options issued to non employees -- -- 124,500
Compensation cost for shares issued to non employees -- -- 365,776
Changes in operating assets and liabilities
Accounts receivable -- -- (11,750)
Deferred costs 276,136 -- (245,454)
Deferred revenue (552,273) -- 552,272
Accounts payable (28,860) 513,899 761,001
Officers' salaries 105,067 -- 1,015,748
Other accrued expenses and liabilities (1,434) -- 35,759
------------ ------------ ------------
Net cash used in operating activities (831,031) (456,785) (3,528,115)
------------ ------------ ------------
Cash flows from investing activities
Capital expenditures, net -- -- (165,596)
Proceeds from sale of fixed assets, net -- -- 63,089
Purchase of intangible assets -- -- (24,500)
------------ ------------ ------------
Net cash used in investing activities -- -- (127,007)
------------ ------------ ------------
Cash flows from financing activities
Bank overdraft 33,094 15 160,335
Proceeds from issuance of common stock -- -- 2,268,512
Loan financing 797,937 456,774 1,090,254
------------ ------------ ------------
Net cash provided by financing activities 831,031 456,789 3,519,101
------------ ------------ ------------
Effect of exchange rate on cash -- 11 136,021
------------ ------------ ------------
--
Net increase in cash and equivalents -- 15 --
Cash and equivalents, beginning of year -- -- --
------------ ------------ ------------
Cash and equivalents, end of year -- 15 --
============ ============ ============
Supplemental disclosure of cash flow information
Interest paid $ 1,625 $ 5,935 $ 144,288
Supplemental disclosure of non-cash financing and investing activities:
Non cash issuance of warrants related to Jano financing agreement $ -- $ 415,000 $ 415,000
Non cash conversion of officers salary into common stock 910,681 -- 910,681
Non cash conversion of trade payables into common stock 322,613 322,613
Non cash issuance of warrants related to SCO financing agreement 1,755,000 -- 1,755,000
Non cash issuance of stock related to Pathagon acquisition 12,600,000 -- 12,600,000
The accompanying footnotes are an integral part of these financial statements.
- 3 -
BIOENVISION, INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Description of business:
Bioenvision, Inc. ("Bioenvision" or "the Company") is a development stage
biopharmaceutical company whose primary business focus is the acquisition,
development and distribution of products and technologies for the treatment of
cancer. The Company has acquired development and marketing rights to a portfolio
of four platform technologies. These platforms have resulted in the development
of the Company's two leading products, Modrenal(R) and clofarabine, as well as
twelve other products that are in various stages of development. The Company has
received regulatory approval in the United Kingdom to market Modrenal(R) for the
treatment of post-menopausal breast cancer. In January 2002, the Company's
European orphan drug application for use of clofarabine to treat acute leukemia
in adults was approved. A co-development partner has also applied for orphan
drug status in the United States of America for clofarabine. The application is
currently pending.
The Company was incorporated as Express Finance, Inc. under the laws of the
State of Delaware on August 16, 1996, and changed its name to Ascot Group, Inc.
in August 1998 and further to Bioenvision, Inc. in December 1998.
On February 1, 2002, the Company completed the acquisition of Pathagon Inc.
("Pathagon"), the successor in interest to Bridge Blood Technologies L.L.C.,
d/b/a Pathagon , a privately held company focused on the development of novel
anti-infective products and technologies. Pathagon's principal products,
OLIGON(R) and methylene blue, are ready for market. Affiliates of SCO Capital
Partners LLC, the Company's financial advisor and consultant, owned 82% of
Pathagon prior to the acquisition. The Company acquired 100% of the outstanding
shares of Pathagon in exchange for 7,000,000 shares of the Company's common
stock. The acquisition has been accounted for as a purchase business combination
in accordance with SFAS 141. With the acquisition, the Company adds rights to
OLIGON(R) and methylene blue to its portfolio of products.
Basis of presentation:
The accompanying condensed consolidated financial statements include the
accounts of the Company and its wholly owned subsidiaries. Inter-company
accounts and transactions have been eliminated. The financial information
included in these financial statements is unaudited but, in the opinion of
management, reflects all normal recurring adjustments necessary for a fair
presentation of the results for the interim periods. The interim results of
operations and cash flows are not necessarily indicative of those results and
cash flows for the entire year. These financial statements should be read in
conjunction with the financial statements and notes to the financial statements
contained in the Annual Report on Form 10-K for the fiscal year ended June 30,
2001 of the Company. The balance sheet information as of June 30, 2001 has been
derived from audited statements at that date.
Operations to date and financing plans:
The Company plans to continue to fund its development expenses through
additional capital raising activities, including one or more offerings of equity
and/or debt through private placements and/or public offerings. The Company is
also actively seeking strategic alliances in order to develop and market its
range of products.
In August 2001, the Company obtained an unsecured financing facility with Jano
Holdings for $1,000,000, bearing interest at a rate of 8% per annum. The Company
had utilized approximately $290,000 of the available facility as of March 31,
2002. Accrued interest on the facility utilized amounted to $9,811 as of March
31, 2002.
In November 2001, the Company announced the appointment of SCO Financial Group
LLC as its financial advisor, and that SCO Capital Partners LLC ("SCO Capital")
extended a $1 million secured credit line (the "Facility") to the Company. The
Facility provides for up to $1,000,000 in short term financing available in four
tranches of $250,000, subject to criteria, conditions, and covenants set forth
in the agreement. The Facility is secured by the pledge of certain assets of the
Company and bears interest at a rate of 6% per annum. The Company had utilized
the maximum availability through March 31, 2002 of $500,000 as of March 31,
2002. Accrued interest on the facility utilized amounted to $8,125 as of March
31, 2002
The Company's officers and former outside counsel have agreed to defer salaries
and certain fees, respectively, until the Company has obtained sufficient
long-term funding. Deferred salaries and fees amounted to approximately $105,000
through March 31, 2002. In May 2001, the Company's officers agreed to accept
705,954 shares of the Company's common stock in settlement of $ 910,681 of the
outstanding accrued salaries through June 30, 2001. The shares were issued
during the quarter ended March 31, 2002. On October 17, 2001, the Company's
officers agreed to accept 134,035 shares in settlement of $154,140 of additional
outstanding accrued salaries to September 30, 2001. On October 17, 2001, the
Company's Board approved a plan to repay certain trade debt with shares of the
Company's common stock, and a total of 146,499 shares of common stock were
issued for the repayment of $168,473.
- 4 -
BIOENVISION, INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - continued
In May 2002, the Company sold shares of its newly-created Series A Convertible
Participating Preferred Stock to raise capital (the "May 2002 Private
Placement"). Through May 14, 2002, the Company has sold 5,683,332 shares of
Series A Convertible Participating Preferred Stock in the May 2002 Private
Placement for aggregate gross proceeds of $17,049,999. A portion of the proceeds
were used to repay the Jano Holdings and SCO Capital obligations as well as the
deferred salaries and fees amounting to $105,000 and fees related to the
transaction. (See note G)
Foreign currency translation
Through June 30, 2001, the functional currency of the Company was the Pound
Sterling and its reporting currency was the United States dollar. Translation
adjustments arising from differences in exchange rates from these transactions
were reported as accumulated other comprehensive income in stockholders' equity
(deficit). Effective July 1, 2001, the functional and reporting currency is the
United States dollar.
Impact of recently issued accounting pronouncements
In August 2001, the FASB issued SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets". This statement is effective for fiscal years
beginning after December 31, 2001. This supercedes SFAS 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of",
while retaining many of the requirements of such statement. The Company does not
believe that this statement will have a material effect on the Company's
financial statements.
NOTE B - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
March 31, 2002
--------------
Office equipment $ 4,303
Motor vehicles 36,603
------------
40,906
Less: Accumulated depreciation 36,894
------------
$ 4,012
============
- 5 -
BIOENVISION, INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)
NOTE C - PATENT AND LICENSING RIGHTS
March 31, 2002
--------------
Patent and licensing rights $ 12,660,122
Less: Accumulated amortization 425,765
------------
$ 12,234,357
============
On February 1, 2002, the Company completed the acquisition of Pathagon. The
acquisition was accounted for as a purchase business combination in accordance
with SFAS 141. The Company issued 7,000,000 shares of common stock to complete
the acquisition, which was valued at $12,600,000 based on the 5-day average
trading price of the stock ($1.80) from November 22, 2001, the day of the
Company's announcement of the agreed upon acquisition. The purchase price was
allocated to the acquired patent and licensing rights of OLIGON(R) and methylene
blue, respectively, net of assumed liabilities of $108,000. The patent and
licensing rights acquired are being amortized over 5 years, which is the
estimated remaining contractual life of these assets. No goodwill was recorded
on the transaction. Pathagon had no operations other than holding the patents
and licenses acquired. As Pathagon had no operations, its pro-forma results and
balances since the beginning of the fiscal year are not materially different.
Amortization of patents and licensing rights amounted to $421,350 for the three
months ended March 31, 2002, and for the next five fiscal years will amount to:
June 30, 2002, 1,042,000; 2003, 2,520,000; 2004, 2,520,000; 2005, 2,520,000;
2006, 2,520,000.
The Company now has the worldwide rights to the use of thiazine dyes, including
methylene blue, for in vitro and in vivos inactivation of pathogens in
biological fluids. Methylene blue is one of only two compounds used commercially
to inactivate pathogens in blood products, and is currently used in many
European countries to inactivate pathogens in fresh frozen plasma. The Company
believes that, as a result of the mechanism of action of its proprietary
technology, its systems also have the potential to inactivate many new pathogens
before they are identified and before tests have been developed to detect their
presence in the blood supply. Because the Company's systems are being designed
to inactivate rather than merely test for pathogens, the Company's systems also
have the potential to reduce the risk of transmission of pathogens that would
remain undetected by testing.
The OLIGON(R) technology is a patented antimicrobial technology that can be
incorporated into the manufacturing process of many implantable devices. The
patented process, involving two dissimilar metals (silver and platinum) creates
an electrochemical reaction that releases silver ions which destroy bacteria,
fungi and other pathogens. The Company intends to commercialize the technology
in partnership with leading medical devices manufacturers.
NOTE D - LICENSE AND CO-DEVELOPMENT AGREEMENTS
Southern Research Institute
In August 1998, Southern Research Institute, Birmingham, Alabama, entered into
an agreement with a wholly-owned subsidiary of the Company, which was
subsequently assigned to the Company, to co-develop purine nucleoside analogs
which, based on third-party studies conducted to date, may be effective in the
treatment of leukemia and lymphoma. Under the terms of a co-development
agreement with Southern Research Institute, the Company acquired the exclusive
worldwide license, excluding Japan and Southeast Asia, to make, use and sell
products derived from the technology for a term expiring on the date of
expiration of the last patent covered by the license (subject to earlier
termination under certain circumstances), and to utilize technical information
related to the technology to obtain patent and other proprietary rights to
products developed by the Company and by Southern Research Institute from the
technology. The lead compound of these purine-based nucleosides is known as
clofarabine.
Ilex Oncology, Inc.
In March 2001, the Company entered into a co-development agreement with Ilex
Oncology, Inc. ("Ilex") on March 9, 2001 for the development of clofarabine.
Under the terms of that co-development agreement, Ilex is required to pay all
development costs of clofarabine in the United States of America ("United
States") and Canada, and 50% of approved development costs worldwide outside the
United States and Canada (excluding Japan and Southeast Asia). Ilex is
responsible for conducting all clinical trials and the filing and prosecution of
applications with applicable regulatory authorities in the United States and
Canada. The Company has retained the right to handle those matters in all
territories outside the United States and Canada (excluding Japan and Southeast
Asia). The Company also retained the exclusive manufacturing and distribution
rights in Europe and elsewhere worldwide, except for the United States, Canada,
Japan and Southeast Asia. Assuming completion of development responsibilities by
Ilex, the Company will pay Ilex a royalty on sales of clofarabine outside the
United States, Canada, Japan and Southeast Asia, and Ilex will have United
States and Canadian distribution rights and will pay the Company a royalty on
sales of clofarabine in the United States and Canada. In addition, the Company
is entitled to receive certain milestone payments from Ilex. The Company also
granted Ilex an option to purchase $1 million of common stock after completion
of the pivotal Phase II clinical trial, and Ilex has an additional option to
purchase $2 million of common stock after the filing of a new drug application
in the United States for the use of clofarabine in the treatment of lymphocytic
leukemia. The exercise price per share for each option is determined by a
formula based upon an average price of the Company's common stock around the
date of exercise. Under the co-development agreement, Ilex also pays royalties
to Southern Research Institute based upon achievement of certain milestones. The
Company continues to pay royalties to Southern Research Institute in respect to
clofarabine.
- 6 -
BIOENVISION, INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)
NOTE D - LICENSE AND CO-DEVELOPMENT AGREEMENTS - continued
As of March 31, 2002, the Company has reported deferred revenue of $552,273
related to the contract with Ilex Oncology Inc. The Company is amortizing the
deferred revenue, and recognizing revenues ratably, on a straight-line basis
concurrent with certain development activities described in the contract,
through December 2002.
Deferred costs represents royalty payments that became due and payable upon the
Company's execution of the co-development agreement with Ilex Oncology. Since
the revenue related to the co-development agreement will be realized over the
life of the agreement, the Company has deferred the costs related to the Ilex
agreement. The Company will amortize such costs ratably, on a straight-line
basis concurrent with development activities through December 2002. As of March
31, 2002, the Company has deferred costs of $245,455.
In January 2002, the Company's European orphan drug application for use of
clofarabine to treat acute leukemia in adults was approved. Ilex has also
applied for orphan drug status in the United States for clofarabine. The
application is currently pending.
Dana Farber
On August 20, 2001 the Company entered into a three year agreement with
Dana-Farber / Partners Cancer Care, Inc., ("DF/PCC"). The agreement calls for
DF/PCC to conduct a clinical study of trilostane. The Company holds an exclusive
license, until the expiration of existing and new patents related to trilostane,
to market trilostane in major international territories, and an agreement with a
United Kingdom company to co-develop trilostane for other therapeutic
indications. The DF/PCC study will be a Phase II study of trilostane for
androgen independent prostate cancer. The Company has agreed to provide DF/PCC
with a $40,000 grant in support of the study.
Note E - STOCKHOLDERS' TRANSACTIONS
In August 2001, the Company issued 208,333 shares to officers of the Company.
In August 2001, the Company converted 150,000 of options previously issued to
outside consultants to 150,000 shares of common stock.
In October 2001, the Company issued 134,035 shares to officers as payment for
salaries accrued to September 30, 2001. In October 2001, the Company issued
146,499 shares as payment for trade payables to certain creditors.
In connection with securing the Facility with SCO Capital in November 2001, the
Company issued warrants to purchase 1,500,000 shares of the Company's common
stock at a strike price of $1.25 per share, subject to certain anti-dilution
adjustments. The warrants expire five years from the date of issuance. The
Company measured the fair market value of the warrants and recorded deferred
financing costs of $1,755,000, which will be amortized over the term of the
Facility. During the quarter ended March 31,2002, the Company recorded interest
expense of $438,750 relating to the amortization of such costs. Unamortized
costs amounted to $1,096,875 as of March 31, 2002.
Additional warrants to acquire 1,500,000 shares with similar terms were also
granted to SCO Capital. The warrants expired unexercised on February 16, 2002
and could only have been exercised if the Company had failed to complete the
acquisition of Pathagon. On February 1, 2002 the Company completed the
acquisition of Pathagon.
- 7 -
BIOENVISION, INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)
Note E - STOCKHOLDERS' TRANSACTIONS - continued
On February 1, 2002, in connection with the Company's acquisition of Pathagon,
the Company issued 7,000,000 shares of its common stock. In connection with the
closing of the acquisition of Pathagon, the Company also entered into
Registration Rights Agreements with the persons or entities, who were
shareholders of Pathagon registering the offer and resale of the shares of
common stock issued in the acquisition. The Company is required to prepare and
file with the U.S. Securities and Exchange Commission a registration statement
on Form SB-1 or such other form as may then be available and appropriate for use
by the Company to register the offer and resale of those shares upon the earlier
to occur of (a) the date which is six (6) months after February 1, 2002, or (b)
the Company's preparation and filing of a registration statement to register the
offer and resale of securities of the Company in connection with any other
financing. Those shareholders also have certain demand registration and
piggyback registration rights. However, each shareholder party to the
Registration Rights Agreement also agreed not to dispose of any securities in a
market transaction, if so requested by the Company or any underwriters managing
an underwritten offering of the Company's securities, or any regulatory
authority, for 180 days from the effective date of such registration with
respect to the underwriter's request or such longer period as requested by any
such regulatory authority.
On March 12, 2002, a majority of the Company's shareholders delivered a written
consent to authorize amendment of the Company's certificate of incorporation,
approved by the Company's Board of Directors, to increase the number of
authorized shares of common stock from 25,000,000 to 50,000,000 and to authorize
the issuance of 10,000,000 shares of the Company's Preferred Stock. The
shareholder action became effective, and the amendment was filed and became
effective, on April 30, 2002.
In March 2002, the Company issued 735,984 shares of common stock to its officers
and directors as payment for salaries accrued through June 30, 2001 of $910,000.
NOTE F - RELATED PARTY TRANSACTIONS
On September 8, 1998, the Company entered to an agreement with Glen Investments
Limited, a Jersey (Channel Islands) corporation wholly owned by Kevin R. Leech,
whereby Glen Investments agreed to loan funds to the Company on an as-needed
basis based upon previously agreed budgets. Mr. Leech is a private investor who
is also the sole owner of Phoenix Ventures Limited, a Guernsey (Channel Islands)
corporation and the holder of approximately 19% of the outstanding shares of
common stock of the Company. The loan facility was not utilized during the year
and was terminated in August 2001. In connection with this facility, the
residual finance charge of $207,500 related to the remaining life of the
facility was amortized through August 2001.
Included in accounts payable and accrued liabilities are interest free loans
payable to Christopher B. Wood, the Company's Chairman of the Board and Chief
Executive Officer, amounting to $124,338 as of March 31, 2002.
In May 1998, Bioheal Limited, a subsidiary of Bioenvision, entered into an
agreement with Mr. Wood to co-develop a gene marker and immunomodulator system
for use in gene therapy and related technologies. Under the terms of the
agreement, Bioheal was granted the exclusive license to make, use and sell
products derived from technology, and to utilize technical information related
to the technology to obtain patent and other proprietary rights to products
developed by Bioheal and its collaborators from the technology for a term
expiring on the date of expiration of all current and future patents covered by
the agreement, subject to earlier termination under certain circumstances. In
consideration of the licenses granted to Bioheal, Bioheal agreed to pay to Dr.
Wood, among other things, a royalty of 10% of the gross sales revenues of all
products, less and discounts or deductions for value-added taxes. In addition,
Bioheal has agreed to pay, among other things, certain costs associated with
pre-clinical development and clinical trials of such products. Under the terms
of the agreement, the pre-clinical costs are not to exceed $1,500,000, and the
clinical trial costs are not to exceed $4,000,000, unless agreed by both
parties.
- 8 -
BIOENVISION, INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)
NOTE G - SUBSEQUENT EVENTS
On May 7, 2002 the Company authorized the issuance and sale of up to 5,920,000
shares of Series A Convertible Participating Preferred Stock, par value $0.001
per share ("Series A Preferred Stock"). Series A Preferred Stock may be
converted into shares of common stock at an initial conversion price of $1.50
per share of common stock, subject to adjustment for stock splits, stock
dividends, mergers, issuances of cheap stock and other similar transactions.
Holders of Series A Preferred Stock also received, in respect of each share of
Series A Preferred Stock purchased in the May 2002 Private Placement by the
Company, one warrant to purchase one share of the Company's common stock at an
initial exercise price of $2.00, subject to adjustment. The purchasers of Series
A Preferred Stock also received certain demand and piggyback registration
rights.
Through May 14, 2002, the Company has sold 5,683,332 shares of Series A
Convertible Participating Preferred Stock in the May 2002 Private Placement
$3.00 per share, resulting in aggregate gross proceeds of $17,049,999. A portion
of the proceeds to the Company were used to retire the outstanding loan
obligations to Jano Holdings and SCO Capital, and the related credit facilities
were terminated. A portion of the proceeds were also used to repay deferred
salaries and fees to officers of the Company amounting to $105,000.
On May 7, 2002, the Company executed an amendment to the original license
agreement between Oklahoma Medical Research Foundation ("OMRF") and Bridge
Therapeutic Products, Inc. ("BTP"), a predecessor of Pathagon, relating to the
licensing of methylene blue. Under the terms of the amendment, OMRF agreed to
the assignment of the original license agreement by BTP to Pathagon. The Company
is required to pay OMRF $100,000 and issue 200,000 shares of the Company's
common stock and a five-year warrant to purchase an additional 200,000 shares of
common stock and an annual license fee of $10,000. The exercise price of the
warrant is $2.33 per share, subject to adjustment.
- 9 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information set forth in this Report on Form 10-QSB including, without
limitation, that contained in this Item 2, Management's Discussion and Analysis
and Plan of Operation, contains forward looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Actual results may differ
materially from those projected in the forward-looking statements as a result of
certain risks and uncertainties set forth in this report. Although management
believes that the assumptions made and expectations reflected in the
forward-looking statements are reasonable, there is no assurance that the
underlying assumptions will, in fact, prove to be correct or that actual future
results will not be different from the expectations expressed in this report.
Summary of Significant Accounting Policies
Financial Reporting Release No. 60, which was recently released by the
Securities and Exchange Commission, requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
the consolidated financial statements. In addition, Financial Reporting Release
No. 61 was recently released by the SEC, which requires all companies to include
a discussion to address, among other things, liquidity, off-balance sheet
arrangements, contractual obligations and commercial commitments. The following
discussion is intended to supplement the summary of significant accounting
policies as described in Note 1 of the Notes To Consolidated Financial
Statements for the year ended June 30, 2001 included in the Company's annual
report on Form 10-K.
These policies were selected because they represent the more significant
accounting policies and methods that are broadly applied in the preparation of
the consolidated financial statements.
Revenue Recognition - Non-refundable up-front payments received in connection
with research and development collaboration agreements are deferred and
recognized on a straight-line basis over the relevant periods in the agreement,
generally the research or development period. Milestone and royalty payments, if
any, are recognized pursuant to collaborative agreements upon the achievement of
the specified milestones or sales transaction.
Stock Based Compensation - In accordance with the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based
Compensation, the Company applies Accounting Principles Board Opinion 25 and
related interpretations in accounting for its stock option plan and,
accordingly, does not recognize compensation expense for employee stock options
granted with exercise prices equal to or greater than fair market value.
Non-employee stock-based compensation arrangements are accounted for in
accordance with the provisions of SFAS No. 123 and Emerging Issues Task Force
No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services.
Under EITF No. 96-18, as amended, where the fair value of the equity instrument
is more reliably measurable than the fair value of services received, such
services will be valued based on the fair value of the equity instrument
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles of the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements as well as the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates, and such differences may be material to the
financial statements.
Overview
Bioenvision is an emerging biopharmaceutical company. Our primary business focus
is the acquisition, development and distribution of drugs to treat cancer. Our
two lead drugs are Modrenal(R), which is our first product to receive regulatory
approval (in the United Kingdom) for marketing for treatment of post-menopausal
breast cancer treatment, and clofarabine, which we licensed from Southern
Research Institute in 1998. To facilitate our development of clofarabine, we
entered into a co-development agreement with Ilex Oncology, Inc. ("Ilex") in
March 2001, under which Phase II clinical trials of clofarabine are currently
being conducted. In January 2002, the Company's European orphan drug application
for use of clofarabine to treat acute leukemia in adults was approved. Ilex has
also applied for orphan drug status in the United States of America ("United
States") for clofarabine. The application is currently pending. We have made
solid progress in developing our product portfolio over the past twelve months,
and have multiple products in clinical trials. We have continued to incur losses
during this development stage. Our management believes that we have the
opportunity to become a leading oncology-focused pharmaceutical company in the
next five years if we successfully market and distribute our two lead drugs. We
anticipate that revenues derived from the two lead drugs will permit us to
further develop the twelve other products currently in our development
portfolio. We currently plan to have as many as twelve products at market by the
end of 2006. We intend to commence marketing our lead product, Modrenal(R), and
to continue developing our existing platform technologies with a primary
business focus on drugs to treat cancer, and commercializing products derived
from such technologies, but a key element of our business strategy is to
continue to acquire, obtain licenses for, and develop new technologies and
products that we believe offer unique market opportunities and/or complement our
existing product lines. As a result of the acquisition of Pathagon Inc. in
February 2002, we are also developing anti-infective technologies, including the
OLIGON(R) technology, an advanced biomaterial that has been approved for certain
indications by the FDA in the U.S., and is being sold by Edwards Lifesciences
Corp. (NYSE:EW), and the use of thiazine dyes, such as methylene blue, which we
intend to commercialize for in vitro and in vivos inactivation of pathogens in
biological fluids.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - continued
We plan to commence marketing our first lead product, Modrenal(R), by late 2002
in the United Kingdom, where we have obtained regulatory approvals for its use
in the treatment of post- menopausal breast cancer. Modrenal(R) has a unique and
previously unrecognized mode of action and is the first drug in a new class of
agents that modulates hormone binding to the newly described second estrogen
receptor, ER. We intend to seek regulatory approval for Modrenal(R) in the
United States as a second line therapy for hormone sensitive breast cancers. We
believe that the potential market for Modrenal(R), based upon the sales of
currently available drugs for hormonal therapy for breast cancers, is in excess
of $1.8 billion of sales per annum worldwide. The results of extensive clinical
trails to date with Modrenal(R) show that it is at least as effective in second
line treatment of advanced breast cancer as the currently available hormonal
treatments, such as the SERM's and aromatase inhibitors, and more effective than
these agents in certain specific patient types, such as those who have become
tamoxifen-refractory. Furthermore, our management currently intends to price
Modrenal(R) in such a way as to make treatment with Modrenal(R) compare very
favorably, on a price basis, with the cost of treatment with the existing drugs
used for second line therapy. We believe that this should result in cost
benefits for physicians, patients and health-care systems.
Modrenal(R) has other applications as well. We expect to commence marketing
Modrenal(R) in other European countries for the treatment of Cushing's disease
in the second quarter of 2002, and in the United States for the treatment of
Cushing's disease in the third quarter of 2002, subject to obtaining the
necessary regulatory approvals.
Based on third party studies conducted to date, we believe that our second lead
product, clofarabine, may be effective in the treatment of leukemia and
lymphoma. To expedite the commercialization of our second lead product,
clofarabine, we have recently entered into a co-development agreement with Ilex.
At a recent IX International Workshop On Chronic Lymphocytic Leukemia (IWCLL),
in San Diego, Professor William Plunkett from the Leukemia Section of the MD
Anderson Cancer Center presented an update on the metabolic effects of
clofarabine, a new purine nucleoside analogue that is currently in advanced
clinical trials for acute leukemia. Cellular pharmacodynamic data from Dr.
Plunkett's group was also presented in abstract form at the 93rd Annual Meeting
of the American Association of Cancer Research (AACR) in San Francisco. The data
presented at both forums reinforces previous study results suggesting that
clofarabine has novel anti-cancer activity and a pharmacokinetic/dynamic profile
that clearly differentiates it from other currently marketed purine analogues
such as Fludara(R) (fludarabine) and Leustatin(R) (cladribine).
Extensive preclinical and mechanistic studies, like the work presented, have
provided much of the rationale for the rapidly advancing clofarabine clinical
development program. Preliminary results from two ongoing advanced clinical
studies, indicate that clofarabine may be an effective treatment for acute
relapsed/refractory leukemias in adult and pediatric patients. According to
researchers at the MD Anderson Cancer Center, interim Phase II study results
showed that adults with acute myelogenous leukemia (AML) achieved a 45 percent
CR rate and acute lymphocytic leukemia (ALL) patients achieved a 20 percent CR
rate when treated with clofarabine as a single agent. Data from a separate Phase
I dose-escalation study demonstrated a 45 percent CR rate in children with acute
leukemias who were refractory to previous therapy. Trials in pediatric acute
leukemias are currently ongoing in the US and are planned to commence in Europe
later this year.
Clofarabine exhibits the mechanistically favorable properties of both Fludara
and cladribine in terms of DNA chain termination and inhibition of
ribonucleotide reductase, respectively. In several preclinical models, when
compared to Fludara, clofarabine has shown several-fold greater lymphocytic
potency. It also appears to work through a unique additional mechanism, whereby
it directly damages the mitochondria in cancer cells and induces apoptosis
(Blood 2000 96: 3537). Additionally, because clofarabine is a potent inhibitor
of DNA repair, the Company, along with its North American licensee ILEX, plans
to explore the potential use of clofarabine in combination with DNA damaging
agents. This type of strategy has already been validated through the combination
of Fludara with Cytoxan (cyclophosphamide) in the treatment of CLL.
With the completion of the acquisition of Pathagon in February 2002, the Company
acquired patent and licensing rights of OLIGON(R) and methylene blue. The
Company now has the worldwide rights to the use of thiazine dyes, including
methylene blue, for in vitro and in vivos inactivation of pathogens in
biological fluids. Methylene blue is one of only two compounds used commercially
to inactivate pathogens in blood products, and is currently used in many
European countries to inactivate pathogens in fresh frozen plasma. The Company
believes that, as a result of the mechanism of action of its proprietary
technology, its systems also have the potential to inactivate many new pathogens
before they are identified and before tests have been developed to detect their
presence in the blood supply. Because the Company's systems are being designed
to inactivate rather than merely test for pathogens, the Company's systems also
have the potential to reduce the risk of transmission of pathogens that would
remain undetected by testing.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - continued
The OLIGON(R) technology is a patented antimicrobial technology that can be
incorporated into the manufacturing process of many implantable devices. The
patented process, involving two dissimilar metals (silver and platinum) creates
an electrochemical reaction that releases silver ions which destroy bacteria,
fungi and other pathogens. The Company intends to commercialize the technology
in partnership with leading medical devices manufacturers.
We have had discussions with potential product co-development partners over the
past year and plan to continue to explore the possibilities for co-development
and sub-licensing in order to implement our development plans.
We are considered a development-stage company for accounting purposes because we
have not generated any material revenues to date. Accordingly, we have no
relevant operating history upon which an evaluation of our performance and
prospects can be made. We are prone to all of the risks to the establishment of
any new business venture. You should consider the likelihood of our future
success to be highly speculative in light of our limited operating history, as
well as the limited resources, problems, expenses, risks and complications
frequently encountered by similarly situated companies. To address these risks,
we must, among other things:
o satisfy our future capital requirements for the implementation of our
business plan;
o commercialize our existing products;
o complete development of products presently in our pipeline and obtain
necessary regulatory approvals for use;
o implement and successfully execute our business and marketing strategy to
commercialize products;
o establish and maintain our client base;
o continue to develop new products and upgrade our existing products;
o respond to industry and competitive developments; and
o attract, retain, and motivate qualified personnel.
We may not be successful in addressing these risks. If we were unable to do so,
our business prospects, financial condition and results of operations would be
materially adversely affected. The likelihood of our success must be considered
in light of the development cycles of new pharmaceutical products and
technologies and the competitive and regulatory environment in which we operate.
Results of Operations
We have acquired development and marketing rights to a portfolio of four
platform technologies developed over the past fifteen years, from which a range
of products have been derived and additional products may be developed in the
future. Although we intend to commence marketing our lead product, Modrenal(R),
and to continue developing our existing platform technologies and
commercializing products derived from such technologies, a key element of our
business strategy is to continue to acquire, obtain licenses for, and develop
new technologies and products that we believe offer unique market opportunities
and/or complement our existing product lines. Once a product or technology has
been launched into the market for a particular disease indication, we plan to
work with numerous collaborators, both pharmaceutical and clinical, in the
oncology community to extend the permitted uses of the product to other
indications. In order to market our products effectively, we intend to develop
marketing alliances with strategic partners and may co-promote and/or co-market
in certain territories.
The Company reported revenues of $184,000 and $1,108,000 for the three-month
periods ended March 31, 2002 and 2001, respectively. For the nine months ended
March 31, 2002 and 2001, the Company reported revenues of $552,000 and
$1,358,000, respectively. Revenues reflect the Company's agreement with Ilex.
Research and development costs for the three-month and nine month period ended
March 31, 2002 were $284,000 and $687,000, respectively, compared to the
three-month and nine-month period ended March 31, 2001 of $1,015,000 and
$1,441,000, respectively. Administrative expenses for the three month and
nine-month period ended March 31, 2002 were $185,000 and $489,000, respectively,
a decrease of $304,000 and $592,000 from the three and nine month periods ended
March 31, 2001 of $278,000 and $870,000, respectively. The decrease reflects the
Company's reduction of its non-development expenses until additional funding is
secured. Administrative expenses are comprised mainly of legal, accounting and
other professional fees. The Company reported interest and finance charges of
$912,000 for the nine months ended March 31, 2002, an increase of $900,000 from
the nine months ended March 31, 2001. This increase reflects deferred charges
related to the Company's financing agreement in August 2001, with Kevin Leech
and SCO Capital in November 2001. Depreciation and amortization expense totaled
$496,000 and $506,000 in the three and nine-month period ended March 31, 2002,
respectively, compared to $300 and $8,000 in the three and nine-month period
ended March 31, 2001, respectively. The increase in amortization is related to
the amortization of certain intangible assets acquired by the Company in its
acquisition of Pathagon.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - continued
Liquidity and Capital Resources
The Company anticipates that we may continue to incur significant operating
losses for the foreseeable future. There can be no assurance as to whether or
when we will generate material revenues or achieve profitable operations.
We are actively seeking strategic alliances in order to develop and market our
range of products. In August 2001, we obtained a $1 million unsecured line of
credit facility from Jano Holdings Limited, bearing interest at 8% per annum. As
of March 31, 2002, the Company has utilized $290,000 of the facility. In
November 2001, the Company entered into a senior, Secured Credit Facility (the
"Facility") with SCO Capital Partners LLC. The Facility was established for up
to $1,000,000 in short term financing, in four tranches of $250,000, subject to
satisfaction of certain conditions, secured by the pledge of certain assets of
the Company, and was established to bear interest on drawings at a rate of 6%
per annum. As of March 31, 2002 the Company had utilized $500,000 of the
available facility. In addition, the Company's officers agreed to defer
salaries, and our former outside counsel agreed to defer certain fees, until the
Company obtained sufficient long-term funding. Deferred salaries and fees
amounted to approximately $105,000 through March 31, 2002. In May 2001, the
Company's officers agreed to accept 705,954 shares of the Company's common stock
in settlement of $910,681 of the outstanding accrued salaries through June 30,
2001. The shares were issued during the quarter ended March 31, 2002. On October
17, 2001, the Company's officers agreed to accept 134,035 shares in settlement
of $154,140 of additional outstanding accrued salaries to September 30, 2001. On
October 17, 2001, the Company's Board approved a plan to repay certain trade
debt with shares of the Company's common stock, and a total of 146,499 shares of
common stock were issued for the repayment of $168,473.
We received initial payment from Ilex of $1,350,000 which became non-refundable
in March 2001 upon execution of the agreement with Ilex to co develop
clofarabine. That sum will be recognized as income for accounting purposes on a
straight line basis over the period from March 2001, when the payment was
received, through December 31, 2002, when Ilex is scheduled to complete Phase II
trials of clofarabine and make another payment to us. A total of $552,000 of
that payment was recognized as contract revenue for the nine-month period ended
March 31, 2002.
On May 7, 2002 the Company authorized the issuance and sale of up to 5,920,000
shares of Series A Preferred Stock. The Series A Preferred Stock may be
converted into shares of common stock at an initial conversion price of $1.50
per share of common stock, subject to adjustment for stock splits, stock
dividends, mergers, issuances of cheap stock and other similar transactions.
Holders of Series A Preferred Stock also received, in respect of each share of
Series A Preferred Stock purchased in the May 2002 Private Placement, one
warrant to purchase one share of the Company's common stock at an initial
exercise price of $2.00 subject to adjustment. The purchasers of Series A
Preferred Stock also received certain demand and piggyback registration rights.
Through May 14, 2002 the Company has sold 5,683,332 shares of Series A
Convertible Participating Preferred Stock in the May 2002 Private Placement for
$3.00 per share, resulting in aggregate gross proceeds of $17,049,999. A portion
of the proceeds were used to repay the Jano Holdings and SCO Capital
obligations, upon which those facilities were terminated as well as to repay
deferred salaries and fees amounting to $105,000 and to pay fees and expenses
related to the transaction.
Plan of Operation
Our management believes that the net proceeds to the Company from the May 2002
Private Placement will be sufficient to continue currently planned operations
over the next 12 months, and the Company will not intend to raise any additional
funds during that period in order to fund operations. However, a key element of
our business strategy is to continue to acquire, obtain licenses for, and
develop new technologies and products that we believe offer unique market
opportunities and/or complement our existing product lines. We are not presently
considering any such transactions, and we do not presently expect to acquire or
sell any significant assets over the coming 12 month period, but if any such
opportunity presents itself and we deem it to be in the interests of the Company
to pursue such an opportunity, it is possible that additional financing would be
required for such a purpose.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - continued
We are a development stage biopharmaceutical company with a primary business
focus on the acquisition, development and distribution of drugs to treat cancer.
We plan to utilize a portion of the proceeds of the May 2002 Private Placement
to conduct clinical trials of our receptor modulation drug, trilostane, in the
treatment of breast and prostate cancer. Further laboratory studies will be
conducted to examine the effect of the drug on the hormone receptor.
In addition, a provisional product license has been granted in the United
Kingdom for the use of trilostane for the treatment of Cushing's disease in
dogs. In November 2001, we granted to Arnolds Ltd. ("Arnolds"), a major
distributor of animal products in the United Kingdom, the right to market the
drug for a six month trial period, after which time, if the results were
satisfactory to Arnolds, we would enter into a licensing arrangement whereby
Arnolds would pay royalties to us on sales from April 2002 onward. During the
trial period, Arnolds has posted more than $400,000 of sales of the drug, which
is marketed in the United Kingdom as Veteryl. Arnolds has licensed the drug from
us for sale in the United Kindom market in consideration of a payment of a 10%
royalty to us on sales from April 2002.
We also plan to utilize a portion of the proceeds of the May 2002 Private
Placement to initiate clinical trials of clofarabine in Europe. The emphasis
will be on the use of clofarabine in the treatment of refractory acute leukemia
in children and adults. The drug has received orphan drug designation in Europe.
We plan to identify licensing partners for OLIGON(R) and to continue developing
new aspects of the technology. We also plan to continue development of
methlylene blue and other products in our pipeline.
In order to implement our business plan, we anticipate utilizing a portion of
the proceeds of the May 2002 Private Placement to hire several key executives
over the next few months, including a Chief Operating Officer and a Financial
Officer, and to locate those individuals, as well as our President, in the
United States. We also plan to gradually hire additional personnel to manage
regulatory affairs, investor relations and certain administrative functions.
Recent Accounting Pronouncements
In August 2001, the FASB issued SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets". This statement is effective for fiscal years
beginning after December 31, 2001. This supercedes SFAS 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of",
while retaining many of the requirements of such statement. The Company does not
believe that this statement will have a material effect on the Company's
financial statements.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are currently no pending legal proceedings against the Company.
Item 2. Changes in Securities
During the quarter ended March 31, 2002, the Company issued 7,000,000 shares of
common stock related to the acquisition of Pathagon. In March 2002, the Company
issued 735,984 shares of common stock to its officers and directors as payment
for salaries accrued through June 20, 2001 of $910,000. The issuances of these
securities were exempt from the registration requirements of the Securities Act
under Section 4(2) and Regulation D of the Securities Act, as a transaction by
an issuer not involving a public offering.
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
No matter has been submitted to a vote of security holders during the period
covered by this report.
Item 5. Other information
There is no other information to report that is material to the Company's
financial condition not previously reported.
Item 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K:
The registrant filed a report on Form 8-K/A on January 8, 2002, reporting the
closing of a credit facility with SCO Capital Partners.
The registrant filed a report on form 8-K on February 21, 2002 with respect to
the Company's acquisition of Pathagon Inc., the successor in interest to Bridge
Therapeutic Products, Inc.
The registrant filed a report on form 8-K/A on April 16, 2002, which included
financial information of Pathagon as well as certain Pro-forma financial
information.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: May 22, 2002 By: /s/ Christopher B. Wood, M.D.
Christopher B. Wood, M.D.
President.
/s/ Thomas S. Nelson, C.A.
Thomas S. Nelson C.A.
Chief Financial Officer
End of Filing
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