-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T1psSYK0wlHX+xJDlL6m5YLsz0lKgs1klii+qPqIO5bNHo+GAFelCwjwHnbiiDEw okNDXtPjaglcXySOchbjTw== 0001095811-01-502421.txt : 20010521 0001095811-01-502421.hdr.sgml : 20010521 ACCESSION NUMBER: 0001095811-01-502421 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010518 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HELIX BIOMEDIX INC CENTRAL INDEX KEY: 0000831749 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 841080717 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 033-20897 FILM NUMBER: 1643850 BUSINESS ADDRESS: STREET 1: 2151 EAST LAKESHORE DR CITY: BATON ROUGE STATE: LA ZIP: 70808 BUSINESS PHONE: 2253871112 MAIL ADDRESS: STREET 1: 2151 EAST LAKESHORE DRIVE CITY: BATON ROUGE STATE: LA ZIP: 70808 10QSB 1 v72861e10qsb.txt FORM 10-QSB FOR QUARTER ENDED MARCH 31, 2001 1 [HELIX BIOMEDIX, INC. LETTERHEAD] HELIX BIOMEDIX, INC. 10QSB SEC QUARTERLY REPORT FOR THE PERIOD ENDING MARCH 31, 2001 2 TABLE OF CONTENTS - --------------------------------------------------------------------------------
10QSB OTHER DOC PART I...................................................................... 2 ITEM 1...................................................................... 2 ITEM 2...................................................................... 2 PART II..................................................................... 5 ITEM 1...................................................................... 5 ITEM 2...................................................................... 5 ITEM 3...................................................................... 5 ITEM 4...................................................................... 5 ITEM 5...................................................................... 5 ITEM 6...................................................................... 5 Balance Sheet............................................................... F-1 Income Statement............................................................ F-2 Cash Flow Statement......................................................... F-3 Notes to Financial Statements............................................... F-4
3 U. S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from ____________ to ______________ *********** COMMISSION FILE NO. 33-20897-D HELIX BIOMEDIX, INC. Delaware 91-2099117 210 BARONNE ST., SUITE 1004, NEW ORLEANS, LA (504) 525-2090 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: NONE Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] The number of shares outstanding of Registrant's common stock, par value $0.001 per share, at March 31, 2001 was 5,022,196 shares. DOCUMENTS INCORPORATED BY REFERENCE: YES. SEE INDEX ON PAGE 5. EXHIBITS: Indexed at Page 5. PAGES: This Form 10-QSB consists of 6 pages, plus pages F-1 through F-4. - 1 - 4 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL INFORMATION Please see Pages F-1 through F-4. The following financial statements are filed as part of this Report:
Page ---- Balance Sheet as at March 31, 2001.......................... F-1 Statements of Operations.................................... F-2 Statements of Cash Flows.................................... F-3 Notes to Financial Statements............................... F-4
These financial statements should be read in conjunction with the audited financial statements at December 31, 2000. Those statements are incorporated herein by reference as part of Exhibit No. 99-a. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION This item incorporates by reference Items 1 and 2 of Part I and Item 6 of Part II of Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000 as amended on May 18, 2001 (Exhibit No. 99-a). (A) PLAN OF OPERATION The Company's general plan of operation is outlined in detail in Item 1 and Item 6 of Exhibit 99-a. The Company has maintained operations from 1990 until October 1999 primarily with limited capital provided by loans from key investors. A major financial and managerial corporate restructuring initiative was undertaken in 1999. During late 1999 and throughout 2000, the Company began implementation of a new, short-term Strategic Plan of operation. As set forth in Exhibit 99-a, during the year 2000 the Company made progress toward achieving major goals of the new operating plan. These efforts have continued throughout the first quarter of 2001. This operating plan contemplates revenues from licensing and strategic alliances for long-term development of prescription pharmaceutical products as well as introduction within the near-term of products subject to fewer regulatory restraints. COMPETITION AND THE COMPANY'S PROPRIETARY POSITION The Company believes it is establishing a strong patent position with respect to proprietary compositions of matter and use of proprietary and or other lytic peptides. There is increasing interest in the biopharmaceutical industry in the potential for such antimicrobial peptides as therapeutic drug agents. To the best of the Company's knowledge there are five or six other U.S. or Canadian biotechnology companies actively working in the field. Although they have had greater financial resources available to them, the Company believes the - 2 - 5 early priority dates on its patents and patent applications are a competitive asset, as is the proprietary technical and product know-how which it has gained over a period of 14 years. The Company further believes that the activity of a few competitors, who have all entered the antimicrobial peptide technology field after the Company, is helping to accelerate the advance of this basic technology to the commercial stage. The Company's basic business plan embraces a concept of (i) long-term strategic partnering for the development of pharmaceutical products and (ii) introduction of near term proprietary non-drug products (e.g. topical antiseptics and industrial disinfectants and biocides) to niche markets where regulatory constraints are less of an obstacle. Company management believes its business plans take full cognizance of the emerging presence of several well financed competitors in the general field of endeavor. In 1999 the Company (i) attained many objectives of its short-term Strategic Plan for financial and managerial restructuring, (ii) successfully completed a major recapitalization through a private offering of its securities, (iii) executed a number of important agreements with related parties on September 30, 1999 pursuant to the terms of its private offering, and (iv) increased the tempo of Company operations with the availability of adequate operating capital and a strengthened management organization. Accordingly, during 2000, operating losses sharply increased to an average of approximately $296,000 per quarter from an average quarterly level of $162,000 in 1999. During the period ending March 31, 2001, this operating loss continued due to (i) substantial cost increases in legal, accounting, and other professional services associated with the restructuring initiatives including the reincorporation of the Company in Delaware, (ii) continued preparation and prosecution of new patent applications for the "third generation" Cytoporins (iii) higher administrative expenses associated with the anticipated addition of key personnel to the staff and Scientific Advisory Board (SAB) and (iv) ongoing efforts to present technical information to prospective strategic alliance partners in the pharmaceutical community. During the first quarter 2001, the Company made technical presentations to a number of prominent scientists in the antimicrobial peptide field in anticipation of the SAB. The SAB is anticipated to assist the Company and ultimately its Chief Scientific Officer in the application and commercialization of selected Cytoporin lead compounds to specific disease states or targeted commercial non-pharmaceutical development. With the expanded operations of the Company in year 2000 and continued efforts into 2001, the quarterly net losses for the period ending March 31, 2001 increased to a level of $338,304. As noted in the Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000(Exhibit No. 99-a) the losses through 12/31/00 increased to a level of $5,820,160. As seen from the Audit Report for the fiscal year ended December 31, 2000, and the unaudited financial statements presented herein for the quarterly period ended March 31, 2001, the Company has an average monthly cash outflow (net) of $93,000. As a result of the declining liquidity evidenced as of December 31, 2000, it was clear to management that the Company would immediately - 3 - 6 require additional funding from (i) licensing activities, (ii) outside research support, or (iii) additional capital raised from private and/or public financing. Following closing of the quarter and prior to the date hereof, the Company raised $300,000 in interim financing pursuant to a private placement of 6% promissory notes. Management projects that currently available cash on hand is adequate to fund planned operations for the next three months. During 2001, the Company intends to continue key activities described in Exhibit 99a to advance its commercial prospects. First, the Company intends to seek out and retain a Chief Scientific Officer. Through the services of such an individual, the Company will endeavor to promote its proprietary technologies, further refine its understanding of the mechanisms of those technologies, and develop commercially viable avenues for the utilization of those technologies. The Company's efforts on this front will be strengthened by the implementation of its planned Scientific Advisory Board, and by continuing to strengthen corporate governance through attracting qualified individuals to serve on the Board of Directors. The Company anticipates that it will continue its program of in-vitro research and development and move vigorously into in-vivo testing to establish lead compounds for selected applications with apparent commercial promise. This research will emphasize those properties of the Company's Cytoporin technologies that demonstrate promise in commercially viable applications. In particular, the Company will emphasize areas of research that appear to show promise for the formulation and delivery of prescription pharmaceuticals to treat specific, targeted disease states. Such formulations and delivery mechanisms are expected to include compounds designed to enhance the efficacy of traditional antibiotics, adjuvant cancer therapies and wound healing applications. Additionally, the Company expects to continue its work to develop commercially viable non-drug applications of its Cytoporin technologies, including but not limited to topical antiseptics and industrial biocides. The Company intends to actively evaluate its existing portfolio of proprietary technologies in efforts to seek out opportunities to license those technologies to third parties for both pharmaceutical and non-pharmaceutical applications. The Company believes that such licensing efforts may generate the potential for both near-term and long-term revenues and may initiate contacts with strategic partners. The Company expects that its success may depend on its ability to enter into strategic partnerships and alliances with well-established companies to provide the necessary capital to develop the Company's platform technology to the stage of commercial viability. In this regard, the Company intends to seek out such relationships and may explore opportunities for amalgamation with other, more established, companies. - 4 - 7 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is currently not involved in any litigation. ITEM 2. CHANGES IN SECURITIES During the quarter ended March 31, 2001, the Company issued options to employees to purchase an aggregate of 31,600 common shares at a price of $0.70 per share. These options were issued for services rendered during the quarter pursuant to existing employment agreements. The Company recorded $19,485 in compensation expense in consideration for the issuance of these options. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) EXHIBITS
EXHIBIT NO. DESCRIPTION AND LOCATION - ----------- --------------------------------- 99-a Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000 Incorporated by reference to Form 10-KSB for 2000 filed by Registrant with the SEC (File No. 33-20897-D) on April 14, 2000 and as subsequently amended on May 18, 2001.
(B) REPORTS ON FORM 8-K--NONE SIGNATURE 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. - 5 - 8 HELIX BIOMEDIX, INC. DATE: MAY 18, 2001 BY:/S/ THOMAS L. FRAZER -------------------- Thomas L. Frazer, Director, Vice President and Chief Financial Officer - 6 - 9 HELIX BIOMEDIX, INC. (A DEVELOPMENT STAGE COMPANY) FINANCIAL STATEMENTS MARCH 31, 2001 CONTENTS Page ---- BALANCE SHEET F-1 STATEMENTS OF LOSS AND ACCUMULATED DEFICIT F-2 STATEMENTS OF CASH FLOWS F-3 NOTES TO FINANCIAL STATEMENTS F-4 10 HELIX BIOMEDIX, INC. (A Development Stage Company) BALANCE SHEET March 31, 2001 ASSETS CURRENT ASSETS Cash and cash equivalents $ 60,004 Prepaid expenses 11,144 ----------- TOTAL CURRENT ASSETS 71,148 PROPERTY AND EQUIPMENT Machinery and equipment 1,591 Furniture and fixtures 393 ----------- 1,984 Less: Accumulated depreciation 650 ----------- 1,334 OTHER ASSETS Antimicrobial technology (net) 95,938 Patents pending and approved (net) 495,833 ----------- 591,771 ----------- TOTAL ASSETS $ 664,253 =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable - trade $ 30,225 Payroll taxes payable 1,371 Notes payable - related parties -- Accrued interest payable -- ----------- TOTAL CURRENT LIABILITIES 31,596 LONG-TERM LIABILITIES 326,308 STOCKHOLDERS' EQUITY Preferred stock, no par value; 2,000,000 shares authorized; no shares issued and outstanding -- Common stock, no par value; 10,000,000 shares authorized; 4,843,450 shares issued and outstanding 5,022 Additional paid-in capital, net of deferred compensation component 6,121,487 Deficit accumulated during the development stage (5,820,160) ----------- 306,349 ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 664,253 ===========
The accompanying notes are an integral part of the financial statements. F-1 11 HELIX BIOMEDIX, INC. (A Development Stage Company) STATEMENTS OF LOSS AND ACCUMULATED DEFICIT For the Period from Inception (November 7, 1988) to March 31, 2001
FOR THE THREE MONTHS INCEPTION TO ENDED MARCH 31, MARCH 31, -------------------------- 2001 2001 2000 ----------- ----------- ----------- REVENUES ............................. $ 19,500 $ -- $ -- ----------- ----------- ----------- OPERATING EXPENSES Accounting, legal and professional 929,433 72,823 82,505 Advertising ...................... 13,566 -- -- Amortization ..................... 202,707 10,445 6,954 Consulting fees .................. 1,394,930 44,484 582,500 Other general and administrative . 841,723 135,947 70,860 Research and development ......... 2,016,899 70,350 108,500 ----------- ----------- ----------- Total operating expenses ...... 5,399,258 334,049 851,319 ----------- ----------- ----------- NET LOSS FROM OPERATIONS ............. (5,379,758) (334,049) (851,319) OTHER (INCOME) EXPENSE Gain on settlement of lawsuit .... (48,574) -- -- Interest income .................. (74,855) (2,271) (13,929) Interest expense ................. 563,831 6,526 11,090 ----------- ----------- ----------- 440,402 4,255 (2,839) ----------- ----------- ----------- NET LOSS ............................. (5,820,160) (338,304) (848,480) ----------- ----------- ----------- NET LOSS PER SHARE ................... $ (4.06) $ (0.07) $ (0.18) =========== =========== =========== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING ............ 1,432,141 4,658,808 4,658,808 =========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. F-2 12 HELIX BIOMEDIX, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS For the Period from Inception (November 7, 1988) to March 31, 2001
FOR THE THREE MONTHS INCEPTION TO ENDED MARCH 31, MARCH 31, -------------------------- 2001 2001 2000 ----------- ----------- ----------- NET CASH FLOWS FROM OPERATING ACTIVITIES ...... $(3,861,800) $ (258,460) $ (222,394) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment ........ (1,984) -- -- Patents ................................... (312,189) (8,965) (1,919) ----------- ----------- ----------- NET CASH FLOWS FROM INVESTING ACTIVITIES .. (314,173) (8,965) (1,919) CASH FLOWS FROM FINANCING ACTIVITIES Issuance of stock for debt ................ 832,819 -- -- Issuance of stock for cash ................ 2,019,380 -- -- Cash received in reverse acquisition ...... 634,497 -- -- Notes payable ............................. 43,394 -- -- Related party notes payable (net) ......... 705,887 (163,154) -- ----------- ----------- ----------- NET CASH FLOWS FROM FINANCING ACTIVITIES 4,235,977 (163,154) -- ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ...................... 60,004 (430,579) (224,313) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ....................... -- 490,583 1,455,820 ----------- ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD ............................. $ 60,004 $ 60,004 $ 1,231,507 =========== =========== =========== SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES AND OTHER CASH INFORMATION Stock issued to acquire patents ........... $ 66,486 $ -- $ -- Debt issued to acquire technology ......... 200,000 -- -- Bridge loans outstanding at acquisition ... 200,000 -- -- Patent costs included in accounts payable.. 99,859 -- -- Accounts payable converted to notes ....... 704,559 -- -- Accrued interest rolled into notes ........ 403,463 -- 8,727 Notes converted to equity ................. 1,639,548 -- -- Cash paid for interest .................... 19,652 -- --
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. F-3 13 HELIX BIOMEDIX, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 1. MANAGEMENT'S REPRESENTATION OF INTERIM FINANCIAL INFORMATION The accompanying financial statements have been prepared by Helix BioMedix, Inc. without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all of the adjustments which, in the opinion of management, are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. These financial statements should be read in conjunction with the audited financial statements at December 31, 2000. 2. POST QUARTER-END FINANCING In April 2001, the Company issued debt of $300,000 pursuant to a private placement of 6% unsecured promissory notes and warrants. These notes are due and payable May 31, 2002. The attached warrants bear a per share exercise price of the lesser of (1) $2.00; or (ii) the price to the public of the Company's common stock in any offering by the Company within the next 12 months generating gross proceeds of at least $3,000,000. F-4 -----END PRIVACY-ENHANCED MESSAGE-----