UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended June 30, 2003
Or
TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to______
Commissions file number 000-26775
-------------
Samaritan Pharmaceuticals Inc.
(Name of small business issuer in its charter)
Nevada 88-0431538
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
101 Convention Center Drive, Suite 310, Las Vegas, Nevada 89109
(Address of Principal Executive Offices) (Zip Code)
(702) 735-7001
Issuer's telephone number
The company had 82,249,212 shares issued and outstanding of Common Stock issued
as of June 30, 2003.
Transitional Small Business Disclosure Format (Check one): Yes___ No X
--
SAMARITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheet as of June 30, 2003 2
Consolidated Statements of Operations for the period
from Inception (September 5, 1994) to June 30, 2003,
and for the Six Months Ended June 30, 2003 and 2002 3
Consolidated Statements of Stockholders' Equity (Deficit) for
the period from Inception (September 5, 1994) to
June 30, 2003 4-5
Consolidated Statements of Cash Flows for the period from
Inception (September 5, 1994) to June 30, 2003 and
for the Six Months Ended June 30, 2003 and 2002 6
Notes to Interim Financial Statements 7
Item 2. Management's Discussion and Analysis of Plan of Operations 8
Item 3. Controls and Procedures 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 5. Other Information 16
Item 6. Exhibits 16
Signatures 18
SAMARITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED, BALANCE SHEET
(UNAUDITED)
June 30, 2003
ASSETS
CURRENT ASSETS:
Cash $ 295,904
Prepaid expense 8,040
-------------------
TOTAL CURRENT ASSETS 303,944
-------------------
PROPERTY AND EQUIPMENT 33,453
OTHER ASSETS:
Patent registration costs 200,339
Purchased technology rights 47,223
Deposits 15,720
-------------------
263,282
-------------------
TOTAL ASSETS $ 600,679
===================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 241,612
Accrued expenses 278,926
Common stock to be issued 116,000
Short-term borrowings 179,392
-------------------
TOTAL CURRENT LIABILITIES 815,930
-------------------
DEFERRED REVENUE 250,000
-------------------
STOCKHOLDERS' DEFICIT:
Common stock, 200,000,000 share authorized at $.001
par value, 82,225,012 issued and outstanding 82,225
Additional paid-in capital 18,729,129
Deferred compensation (437,500)
Accumulated deficit (18,839,105)
-------------------
TOTAL STOCKHOLDERS' DEFICIT (465,251)
-------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 600,679
===================
See accompanying notes to the consolidated financial statements (unaudited).
-2-
SAMARITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FROM INCEPTION (SEPTEMBER 5, 1994), AND FOR THE FOR THE SIX MONTHS
AND THREE MONTHS ENDED JUNE 30, 2003 AND 2002
From
Inception For the Six For the Three
(September 5, 1994) Months Ended June 30, Months Ended June 30,
To ------------------------------- --------------------------
June 30, 2003 2003 2002 2003 2002
------------------- ------------- --------------- -------------- ------------
REVENUES: $ 50,000 $ - $ - $ - $ -
------------------- ------------- --------------- -------------- ------------
EXPENSES:
Research and development 4,288,036 386,695 329,199 199,000 168,186
Interest 49,760 6,088 11,740 2,141 5,371
General and administrative 13,829,823 889,951 1,041,697 449,953 511,369
Forgiveness of debt (137,780) - - - -
Depreciation and amortization 1,109,514 12,674 10,540 6,337 5,270
------------------- ------------- --------------- -------------- ------------
19,139,353 1,295,408 1,393,176 657,431 690,196
------------------- ------------- --------------- -------------- ------------
NET INCOME (LOSS) $ (19,089,353) $ (1,295,408) $ (1,393,176) $ (657,431) $ (690,196)
=================== ============= =============== ============== ============
Loss per share, basic & diluted: $ (0.98) $ (0.02) $ (0.03) $ (0.01) $ (0.02)
------------------- ------------- --------------- -------------- ------------
Basic and diluted $ 0.00 $ (0.02) $ (0.03) $ (0.01) $ (0.02)
=================== ============= =============== ============== ============
Weighted average number of shares outstanding:
Basic and diluted 19,396,237 70,589,969 42,748,802 75,939,791 44,970,271
=================== ============= =============== ============== ============
See accompanying notes to the consolidated financial statements.
-3-
SAMARITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
FROM INCEPTION (SEPTEMBER 5, 1994) TO JUNE 30, 2003
Number Par Value Reserved Additional Total
of Common for Paid in Deferred Accumulated Shareholders'
Shares Stock Conversion Capital Warrants Compensation Deficit Deficit
----------- -------- ---------- ---------- ----------- ------------ ----------- -----------
Inception at September 5, 1994 - $ - $ - $ - $ - $ - $ - $ -
Shares issued for cash, net of
offering costs 6,085,386 609 - 635,481 - - - 636,090
Warrants issued for cash - - - - 5,000 - - 5,000
Shares issued as compensation
for services 714,500 71 - 1,428,929 - - - 1,429,000
Net loss - - - - - - (2,152,843) (2,152,843)
----------- -------- ---------- ---------- ----------- ------------ ----------- -----------
December 31, 1996 6,799,886 680 - 2,064,410 5,000 - (2,152,843) (82,753)
Issuance of stock, prior to
acquisition 206,350 21 - 371,134 - - - 371,155
Acquisition of subsidiary for
stock 1,503,000 150 - 46,545 - - - 46,695
Shares of parent redeemed,
par value $.001 (8,509,236) (851) - 851 - - - -
Shares of public subsidiary
issued, par value $.001 7,689,690 7,690 820 (8,510) - - - -
Net loss - - - - - - (979,635) (979,635)
----------- -------- ---------- ---------- ----------- ------------ ----------- -----------
December 31, 1997 7,689,690 7,690 820 2,474,430 5,000 - (3,132,478) (644,538)
Conversion of parent's shares 696,022 696 (696) - - - - -
Shares issued for cash, net of
offering costs 693,500 694 - 605,185 - - - 605,879
Shares issued in cancellation
of debt 525,000 525 - 524,475 - - - 525,000
Shares issued as compensation 400,000 400 - 349,600 - - - 350,000
Net loss - - - - - - (1,009,945) (1,009,945)
----------- -------- ---------- ---------- ----------- ------------ ----------- -----------
December 31, 1998 10,004,212 10,005 124 3,953,690 5,000 - (4,142,423) (173,604)
Conversion of parent's shares 13,000 13 (13) - - - - -
Shares issued in cancellation
of debt 30,000 30 - 29,970 - - - 30,000
Shares issued for cash, net
of offering costs 45,000 45 - 41,367 - - - 41,412
Shares issued as compensation 3,569,250 3,569 - 462,113 - - - 465,682
Detachable warrants issued - - - - 152,125 - - 152,125
Detachable warrants exercised 100,000 100 - 148,900 (149,000) - - -
Debentures converted to stock 1,682,447 1,682 - 640,438 - - - 642,120
Net loss - - - - - - (1,671,255) (1,671,255)
----------- -------- ---------- ---------- ----------- ------------ ----------- ----------
December 31, 1999 15,443,909 15,444 111 5,276,478 8,125 - (5,813,678) (513,520)
See accompanying notes to the consolidated financial statements.
-4-
Conversion of parent's shares 128,954 129 (111) (18) - - - -
Shares issued for cash, net
of offering costs 1,575,192 1,575 - 858,460 - - - 860,035
Shares issued in cancellation
of debt 875,000 875 - 660,919 - - - 661,794
Shares issued in cancellation
of accounts payable 100,000 100 - 31,165 - - - 31,265
Shares issued as compensation 3,372,945 3,373 - 2,555,094 - (759,560) - 1,798,907
Warrants exercised 38,807 39 - 3,086 (3,125) - - -
Warrants expired - - - 5,000 (5,000) - - -
Net loss - - - - - - (3,843,308) (3,843,308)
----------- -------- ---------- ---------- ----------- ------------ ----------- -----------
December 31, 2000 21,534,807 21,535 - 9,390,184 - (759,560) (9,656,986) (1,004,827)
Shares issued for cash, net
of offering costs 6,497,088 6,497 - 1,257,758 - - - 1,264,255
Shares issued as compensation 9,162,197 9,162 - 1,558,599 - (230,512) - 1,337,249
Shares issued on previously
purchased shares 342,607 342 - 188,208 - - - 188,550
Shares issued in cancellation
of accounts payable 200,000 200 - 68,880 - - - 69,080
Amortization of deferred
compensation - - - - - 495,036 - 495,036
Stock options issued for services - - - 439,544 - - - 439,544
Net loss - - - - - - (4,079,806) (4,079,806)
----------- -------- ---------- ---------- ----------- ------------ ----------- -----------
December 31, 2001 37,736,699 37,736 - 12,903,173 - (495,036) (13,736,792) (1,290,919)
Shares issued for cash, net
of offering costs 18,657,500 18,658 - 2,077,641 - - - 2,096,299
Shares issued as compensation 3,840,525 3,841 - 1,044,185 - - - 1,048,026
Shares issued on previously
purchased shares 50,000 50 - 4,950 - - - 5,000
Shares issued in cancellation
of accounts payable 4,265,184 4,265 - 539,291 - - - 543,556
Amortization of deferred
compensation - - - - - 495,036 - 495,036
Stock options issued for services - - - 225,000 - - - 225,000
Net loss - - - - - - (4,057,153) (4,057,153)
----------- -------- ---------- ---------- ----------- ------------ ----------- -----------
December 31, 2002 64,549,908 $ 64,550 $ - $16,794,240 $ - $ - $(17,793,945) $ (935,155)
Shares issued for cash, net of
offering costs 8,985,793 8,986 - 946,754 - - - 955,740
Shares issued as compensation 3,193,943 3,194 - 508,746 - (500,000) - 11,940
Shares issued in cancellation
of accounts payable 7,059,416 7,059 - 728,073 - - - 735,132
Amortization of deferred
compensation - - - - - 62,500 - 62,500
Shares reacquired in settlement
of judgement (1,564,048) (1,564) - (248,684) - - 250,248 -
Net loss - - - - - - (1,295,408) (1,295,408)
----------- -------- ---------- ---------- ----------- ------------ ----------- -----------
June 30, 2003 82,225,012 82,225 - $18,729,129 $ - $ (437,500) $(18,839,105) $ (465,251)
=========== ======== ========== ========== =========== ============ =========== ===========
See accompanying notes to the consolidated financial statements (unaudited)
-5-
SAMARITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FROM INCEPTION (SEPTEMBER 5, 1994) AND FOR THE SIX MONTHS
ENDED JUNE 30, 2003 AND 2002
From For the Six Months
Inception Ended
(September 5, 1994) June 30,
To June 30, ------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: June 30, 2003 2003 2002
-------------------- ----- -----
Net loss $ (19,089,353) $ (1,295,408) $ (1,393,176)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 1,171,085 75,174 258,058
Expenses paid through issuance of stock 6,487,304 11,940 160,652
Stock options issued for services 664,544 - -
(Increase) decrease in assets:
Prepaids and other current assets (21,281) (5,040) 13,352
Increase (decrease) in liabilities:
Deferred revenue 250,000 - -
Accounts payable and accrued expenses 1,801,282 65,682 (143,715)
-------------------- ----------------- -----------------
NET CASH USED IN OPERATING ACTIVITIES (8,736,419) (1,147,652) (1,104,829)
--------------------- ----------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of technology (108,969) 0 0
Purchase of furniture and equipment (90,219) (5,474) 0
Patent registration costs (209,758) (2,973) (15,700)
--------------------- ----------------- ----------------
NET CASH USED IN INVESTING ACTIVITIES (408,946) (8,447) (15,700)
--------------------- ----------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from warrants 157,125 - -
Proceeds from debentures 642,120 - -
Proceeds from stock sales 6,839,653 955,740 762,305
Common stock to be issued 309,550 116,000 121,000
Offering costs (11,071) - -
Short-term loan repayments (271,530) (140,063) (66,513)
Short-term loan proceeds 1,775,422 162,500 212,500
--------------------- ----------------- ----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 9,441,269 1,094,177 1,029,292
--------------------- ----------------- ----------------
CHANGE IN CASH 295,904 (61,922) (91,237)
CASH AT BEGINNING OF PERIOD - 357,826 304,367
--------------------- ----------------- ----------------
CASH AT END OF PERIOD $ 295,904 $ 295,904 $ 213,130
===================== ================= ================
NON-CASH FINANCING & INVESTING ACTIVITIES:
Purchase of net, non-cash assets of subsidiary
for stock $ 195 $ - $ -
Short-term debt retired through issuance
of stock $ 2,433,735 $ - $ 335,019
Issuance of common stock, previously subscribed $ 5,000 $ - $ 5,000
See accompanying notes to the consolidated financial statements.
-6-
Samaritan Pharmaceuticals, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)
June 30, 2003
PART I --- FINANCIAL INFOMRATION
Item 1. Financial Statements.
SAMARITAN PHARMACEUTICALS
Notes to Interim, Consolidated Financial Statements
BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial statements and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all the information and
disclosures required for annual financial statements. These financial statements
should be read in conjunction with the consolidated financial statements and
related footnotes for the year ended December 31, 2002, included in the
Form10-KSB for the year then ended.
In the opinion of the Company's management, all adjustments (consisting of
normal recurring accruals) necessary to present fairly the Company's financial
position as of June 30, 2003, and the results of operations and cash flows for
the six-month period ending June 30, 2003 and 2002 have been included. The
results of operations for the six-month period ended June 30, 2003 are not
necessarily indicative of the results to be expected for the full year. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Form 10-KSB as filed with the
Securities and Exchange Commission for the year ended December 31, 2002.
Management notes that stock was issued as follows during the three months ended
June 30, 2003:
No. of shares Issued Pursuant To Price/valuation
------------- ------------------ ---------------
3,193,943 Services Rendered $511,940
5,898,702 In settlement of accounts payable $572,632
3,417,000 Sale of restricted stock $341,700
2,558,793 Sale of common stock $313,040
Cancellation Pursuant To
---------------------------
(1,564,048) Settlement Agreement, Alfred T Sapse ($250,248)
Cortisol Medical Research Shares
Management notes that in addition to the shares stated above, 594,352 shares
were reacquired in settlement with Alfred T. Sapse. Management also notes that
the Company, from time to time, is involved in various legal proceedings in the
ordinary course of our business and are currently executing a settlement
agreement signed by all parties to resolve previously reported pending lawsuits.
We believe based on the settlement agreement that the resolution of any
currently pending legal proceedings, either individually or taken as a whole,
will not have a material adverse effect on our business, financial condition or
results of operations.
7
This quarter report contains forward-looking statements. These statements relate
to future events or Samaritan Pharmaceutical's future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"may," "will," "should," "expect," "plan," "intend," "anticipates," "believes,"
"estimates," "predicts," "potential," or "continue," the negative of these terms
or other comparable terminology. These statements are only predictions. Actual
events or results may differ materially. In evaluating these statements, you
should specifically consider various factors, including the risks outline in
"Risk Factors." These Factors may cause Samaritan Pharmaceuticals, Inc. actual
results, to differ materially from any forward-looking statement.
Although Samaritan Pharmaceuticals, Inc. believes that the expectations
reflected in the forward-looking statements are reasonable, Samaritan
Pharmaceuticals, Inc. cannot guarantee future results, events, levels of
activity, performance, or achievements. Moreover, neither Samaritan
Pharmaceuticals, Inc. nor any other person assumes responsibility for the
accuracy and completeness of these forward-looking statements. Samaritan
Pharmaceuticals, Inc. does not assume any obligation to update any of the
forward-looking statements after the date of this report to conform such
statements to actual results or to changes in Samaritan's expectations.
Item 2. Management's Discussion and Analysis or Plan of Operation
PLAN OF OPERATION
Overview
Samaritan Pharmaceuticals, Inc. is a development stage biotechnology company
engaged in the research and development of novel therapeutic and diagnostic
products to treat chronic debilitating diseases such as Alzheimer's, Cancer,
central nervous system ("CNS") disorders, cardiovascular disease and HIV.
Our overall corporate strategy is to build a robust technology pipeline by (1)
in-licensing early-stage patented technologies from Academic Research Centers,
and (2) focus on the discovery and the development of new drug compounds and
technology to add to our pipeline at Samaritan Laboratories, in collaboration
with Georgetown University.
Samaritan principal executive office is located at 101 Convention Center Drive,
Suite 310, Las Vegas, NV 89109, and our main telephone number is (702) 735-7001.
Business Model
Our business model is primarily focused on the commercialization of our product
pipeline and patent portfolio. We seek potential products and then focus on the
continual development of these products. Our first development objective for a
potential drug candidate is to file for an Investigational New Drug (IND)
application, to conduct human clinical trials, with the eventual goal of
obtaining marketing approval for each of the selected technologies.
We currently have several technologies in our product pipeline: SP001 and its
bioequivalents for HIV; an animal (rat) model for Alzheimer's disease; Novel
Neuroprotective compounds; a Peptide to bind cholesterol; an Alzheimer's and
Breast Cancer Diagnostic/Theranostic; and a series of novel compounds.
8
Business Value
Samaritan's strategy to build value is predicated on developing the Companies
proprietary drugs, and bridging pre-human, preclinical, discovery studies
through Samaritan's drug development roadmap with human trials. What separates
Samaritan, and the promise of Samaritan, is the development of true medical
advances based on the insights, intuition and creativity of its scientists.
Currently, the average drug discovery and preclinical testing time is six and a
half years, with Phase I being one and a half years and Phase II averaging two
to three years. Samaritan strives to, reduce the average time to
commercialization, and attract licensing opportunities.
Samaritan plans to license its drug candidate's late stage, after the technology
is validated with "proof of concept" science, thereby capturing the greater
portion of the potential value of its drug candidates. The closer the technology
is to "proof of concept" FDA Phase I and II, corporate marketing and/or
development partnerships are sought, in a manner that strategically fits with
the Company's overall goal of building shareholder value. In certain disease
categories, Samaritan may process its drug candidates through all human clinical
trials.
Summary Of Research And Development
We have a series of therapeutic projects either in "discovery research",
"preclinical trials", "product development" or "clinical development"; and we
utilize these formal stages of product progression to track progress,
performance, competition, and cost for each project. Our research programs are
aimed at satisfying defined medical needs in the areas of Alzheimer's, Cancer,
Cardiovascular, Infectious Diseases, and Neurology and are based on an
intellectual property position that, we believe, is both broad and strong.
Several of our development programs involve ex vivo technologies in which
patients' tissues are manipulated outside the body and, as such, may be less
costly to investigate and quicker to develop than in vivo agents. We expect to
apply to the U.S. FDA for and receive IND status (Investigational New Drug) for
certain technologies to initiate human trials that may commence in the future.
We have concentrated our efforts on setting up the operations,
increasing efficiencies, and streamlining structure. We have an impressive
portfolio of technology and opportunities, each of which must compete for
resources and priority status.
A key currency in the biotechnology and pharmaceutical markets are patents and
intellectual property. Our central intellectual property activity has been, and
continues to be, the acquisition of patents, development and patent maintenance,
directly in support of our product development. We continue to expend
significant funds and efforts on licensed technology and patent protection. In
addition, we are continually examining our intellectual property positions in
relation to competitive activities and our ability to operate and defend our
patent positions in relation to products. We believe that this is a key value
element for our continued development.
Samaritan Pharmaceuticals
Product Pipeline
xxx = Completed x = In Progress
Drug Candidates Patent Pre-Clinical IND Phase I Phase II Phase III
---------------------------------------------------------------------------------------------------------------------------
HIV........................Procaine HCl (SP-01) xxx xxx xxx xxx xxx
HIV, Alzheimer's(AD),Dementia...........(SP-10) x x
HIV, AD...........................(SP-02 to 25) x x
HIV, AD...........................(SP-26 to 50) x x
Alzheimer's............................(SP-222) x x
Alzheimer's............................(SP-233) x x
Alzheimer's ........................(SP234-250) x x
Nerve Gas Inhibitor.....................(SP-04) x
Stem Cell Therapy......................(SP-sc2) x x
Stem Cell Therapy......................(SP-sc7) x x
Cancer................................(SP-222c) x x
Cancer...........................(SP-234c-250c) x x
Cancer Diagnostic and Drug............(SP-5000) x x
8
Pharmacologic AD Rat Model In Vitro Testing In Vivo Testing
Alzheimer's Rat Model.....(New Drug Test) xxx xxx
Diagnostics In Vitro Testing Human Test Small Human Test Large
-------------------------------------------------------------------------------------------------------------
Breast Cancer...(BC Tumor Agress-Analysis) xxx xxx x
Alzheimer's..........(AD Blood Test Diagnostic) xxx xxx x
Alzheimer's Generation II xxx xxx
Alzheimer's Generation III xxx xxx
Highlights Of The Main Products Or Technologies Closest To Or Ready For
Out-Licensing Or Commercialization
SP001 and its bioequivalent HIV drugs with promising Phase II results -
Early data suggest no serious side effects and (CD4) immune system
improvement. The analysis of data is presently being prepared for FDA
submission.
A Pharmacological (rat) model for Alzheimer's disease -- Four weeks
treatment of a rat results in its loss of memory and Alzheimer's disease-like
brain pathology. This model is ideal for pharmaceutical companies and
scientists to screen their Alzheimer's drugs for prevention, stabilization of
the disease and cures for Alzheimer's disease.
Alzheimer's disease compounds -- Compounds offer protection against
beta-amyloid neurotoxicity, a condition associated with Alzheimer's disease.
A peptide therapeutic that binds cholesterol -- Peptide can be used
to clean the blood of excessive cholesterol in acute high cholesterol
conditions.
An Alzheimer's diagnostic kit -- A simple blood test that identifies
specific circulating brain steroids that have been oxidized in the brains of
Alzheimer's patients.
A breast cancer theranostic kit. -- A biopsy test that predicts the
aggressiveness of a breast cancer tumor which allows a physician, in a timely
manner, to recommend the best and possibly the least invasive treatment for a
patient.
Promising Alzheimer's Drug Candidates
Background for Alzheimer's thesis: Cortisol, the stress hormone, is the main
hormone associated with immunity, memorization and learning with excessive
cortisol being well known to produce cognitive impairment.
Why do we care: It is estimated that 16 million Americans will be diagnosed with
Alzheimer's by 2050. Early diagnosis and treatment with Cortisol modulating
drugs before the onset of symptoms could possibly lengthen the progression of
Alzheimer's whereas a patient might die of natural causes rather than
Alzheimer's.
Promising Alzheimer's Drug Candidates:
-- SP001
-- SP010
-- SP222
-- SP223
-- SP232
-- SP238
9
Alzheimer's Related Patent Application Titles:
-- Neuroprotective spirostenol pharmaceutical compositions.
-- Methods and compositions for modulating serum cortisol levels.
Journals:
-- Journal of Neurochemistry, 2002, 83:1110-1119
-- Endocrine Society 2003, abstract.
Stem Cell Therapy for Alzheimer's, Neuron Differentiation
Background: Stem cell therapy, the manipulation of stem cells to combat disease,
is on the threshold of a new era in medicine. Neuronal stem cells can be induced
to rapidly differentiate to adult neuron cells as a novel treatment for
Alzheimer's.
Promising Stem Cell Drug Candidates:
-- SP222b
-- SP237
New Alzheimer's Pharmacologic (Rat) Model Tool:
Brand New Tool-Used by pharmaceuticals companies to test their preventive,
stabilizing or curative therapies under development for Alzheimer's. Advantage:
Pharmacologic. Only four weeks to induce full blown Alzheimer's disease compared
to lengthy transgenics.
Alzheimer's Predictive Diagnostic:
Advantage: Simple blood test with 70% success rate.
Patent Title:
-- Neurosteroids: Markers of Alzheimer's disease pathology
Journals:
-- Neurobiology of Aging, 2003, 24:57-65.
AIDS Related Dementia Research and Drug Candidates
Background: Elevated cortisol levels are associated with many disease states of
which AIDS Related Dementia is included. SP001 has indicated to be a safe and
effective cortisol modulator; therefore, SP001 and its bioequivalents could
change the way patients are treated, either as a single agent or in combination
with other conventional therapies for AIDS.
Promising AIDS and Related Dementia Drug Candidates:
-- SP001
-- SP010
-- SP014
-- SP016
-- SP017
Patent and Patent Application Titles:
-- Protected Complex of Procaine...
-- Composition of Anti-HIV Drugs and Anticortisol Compounds...
-- Methods and Compositions for Modulating Serum Cortisol Levels...
10
Proof of Concept HIV FDA Phase II Study Results
-- Safe, Tolerable, CD8 improvement, Cortisol modulation.
-- Statistically Significant
1. Decreased HIV symptoms (Whalen Scale-Quality of Life)
2. Decreased viral load.
-- Orphan drug status requested
Research Agreement
On June 8, 2001, Samaritan Pharmaceuticals signed a seven-year research
collaboration with Georgetown University. The objectives of the Georgetown
University Samaritan Pharmaceuticals research collaboration are (1) to develop
"one molecule" drugs and extend clinical studies to in vivo experiments in
animal models simulating Alzheimer's disease, (2) to develop an accurate,
reliable diagnostic for nuero-degeneration (Alzheimer's), and (3) to focus on
new drug development in Oncology and Neurology with the ability to protect the
brain from neuronal damage and tumor growth.
Under the agreement, Samaritan receives worldwide exclusive rights to any novel
therapeutic agents or diagnostic technologies that may result from the research
collaboration directed by Dr. Vassilios Papadopoulos with his team of seven
research professionals (including five Ph.D. level research scientists) who have
expertise in the fields of endocrinology, pharmacology, cell biology, organic
and steroid chemistry and computer modeling.
On April 8, 2003, Samaritan strengthened its scientific technology research by
expanding its Georgetown University seven year Sponsored Research Agreement with
an additional financial commitment. These funds shall be used by Samaritan
Laboratories/Georgetown to screen for additional new drug compounds, their
binding capabilities to specific receptors and their direct effects on
mitochondrial function. Mitochondria are the key to life and death. Quite
possibly, the process of aging itself may be intimately linked to mitochondria.
A sampling of some major health disorders where mitochondrial dysfunction may be
linked to large segments of a diseased population are Alzheimer's, Lou Gehrig's,
Cancer, Heart disease, Parkinson's and Type II Diabetes.
Our Financial Position And Our Need To Raise Additional Capital
We are a biopharmaceutical company in a research and development stage. Since
our inception, we have primarily focused our resources on research and
development. To date, none of our proprietary products have reached a commercial
stage, and hence, we do not have, nor do we anticipate revenue in the near
future. As is normal for a biotechnology company, we have been unprofitable
since our inception and have incurred significant losses. These losses consist
primarily of research and related expenditures, marketing costs, consulting, and
administrative overhead and expenses, incurred while the Company seeks to
complete development of its product, which includes studies to obtain FDA final
approval. No significant revenues have been earned by the Company, or cash flow
from operations, to help pay these operating needs.
We will continue to have significant general and administrative expenses,
including expenses related to clinical studies, our collaboration with
Georgetown University, and patent prosecution. We have funded our operations
through a series of private placements and through our previous agreement dated
November 2, 2000 with Fusion Capital. We believe potential private placements,
the new agreement with Fusion Capital dated April 22, 2003, described below will
assist the Company in meetings its cash needs, but there is no guarantee. Except
for an agreement to sell shares to Fusion Capital, discussed below, no
commitment exists for continued investments, or for any underwriting.
We have the right to receive $20,000 per trading day under the agreement with
Fusion Capital unless our stock price equals or exceeds $0.45, in which case the
daily amount may be increased at our option. Generally, Fusion Capital shall not
be obligated to purchase any shares of our common stock on any trading days that
the market price of our common stock is less than $0.10. Since we initially
registered 15,000,000 shares for sale by Fusion Capital pursuant to a prospectus
(excluding the total of 3,125,000 shares issuable to Fusion Capital as a
commitment fee), the selling price of our common stock to Fusion Capital will
have to average at least $0.67 per share for us to receive the maximum proceeds
of $10.0 million without registering additional shares of common stock. Assuming
a purchase price of $0.22 per share (the closing sale price of the common stock
on July 24, 2003) and the purchase by Fusion Capital of the full 15,000,000
shares under the common stock purchase agreement, proceeds to us would be
$3,300,000.
11
Even with our financing arrangement with Fusion Capital, we may require
substantial additional funds to sustain our operations and to grow our business.
The amount of which will depend, among other things, on the rate of progress and
the cost of our research and product development programs and clinical trial
activities, the cost of preparing, filing, prosecuting, maintaining and
enforcing patent claims and other intellectual property rights, and the cost of
developing manufacturing and marketing capabilities, if we decide to undertake
those activities. The clinical development of a therapeutic product is a very
expensive and lengthy process and may be expected to utilize $5 to $20 million
over a three to six year development cycle. We currently do not have available
the financial resources to complete the clinical development of any of our
therapeutic products without a strategic partner. Although we believe we could
license the manufacturing and marketing rights to our products in return for
up-front licensing and other fees and royalties on any sales, there can be no
assurance that we will be able to do so in the event we seek to do so. We need
to obtain additional funds to develop our therapeutics products and our future
access to capital is uncertain. The allocation of limited resources is an
ongoing issue for us as we move from research activities into the more costly
clinical investigations required to bring therapeutic products to market.
The extent we rely on Fusion Capital as a source of funding will depend on a
number of factors including, the prevailing market price of our common stock and
the extent to which we are able to secure working capital from other sources. If
obtaining sufficient financing from Fusion Capital were to prove prohibitively
expensive, we will need to secure another source of funding in order to satisfy
our working capital needs. Even if we are able to access the full $10.0 million
under the common stock purchase agreement with Fusion Capital, we may still need
additional capital to fully implement our business, operating and development
plans. Other than the agreement with Fusion Capital, we do not have any
commitments or arrangements to obtain any such funds and there can be no
assurance that any additional funds, whether through exercise of warrants and
stock options, additional sales of securities or collaborative or other
arrangements with corporate partners or from other sources, will be available to
us upon terms acceptable to us or at all. If we are unable to obtain additional
financing we might be required to delay, scale back or eliminate certain of our
research and product development programs or clinical trials, or be required to
license third parties to commercialize products or technologies that we would
otherwise undertake ourselves, or cease certain operations all together, any of
which might have a material adverse effect upon us. If we raise additional funds
by issuing equity securities, dilution to stockholders may result, and new
investors could have rights superior to holders of shares purchased in previous
offering. Should the financing we require to sustain our working capital needs
be unavailable or prohibitively expensive when we require it, the consequences
would be a material adverse effect on our business, operating results, financial
condition and prospects.
We have been able to substantially meet our cash needs during the past 12
months. We believe we will be able to continue to find avenues to obtain the
capital needed for our operations through private placements and by sale of our
shares to Fusion Capital.
Press Release Highlights
On July 2, 2003, Samaritan Pharmaceuticals Inc., Samaritan Research Labs,
Georgetown University, announced it has completed licensing of several new
discoveries for Alzheimer's, under its Georgetown University collaboration with
Samaritan Labs. Samaritan is well-positioned to become a "force" in the
treatment of Alzheimer's with breakthrough compounds that could change the way
patients are treated today, Chairman and Chief Executive Officer, Dr. Janet
Greeson, said at the company's 2003 Annual Meeting of Shareholders. Speaking to
shareholders at one of the largest shareholders meeting to date, Greeson noted
that the combination of Samaritan Pharmaceuticals and Georgetown University
brings more than seven technologies into Samaritan, rapidly moving along "a
continuum of development" to drive valuation and increase shareholder value. The
continuum for value begins with "in vitro" studies and ends with the more
advanced "proof of concept" Phase II studies in humans, to test a drug's safety
and its ability to prolong lives. "The research collaboration with Georgetown
University has not only given us a chance to dramatically increase our
technology valuation but also strengthened every aspect of, an already strong
expertise with business development, intellectual property, regulatory affairs,
and governmental grants," Greeson continued, "We are dedicated to driving
valuation and will continue to aggressively 'bridge' technology from Georgetown
University to potential pharmaceutical partners throughout the year
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On April 8, 2003, Samaritan Pharmaceuticals Inc., Samaritan Research Labs and
Georgetown University, announced they strengthened its scientific technology
pipeline by expanding its Georgetown University seven year Sponsored Research
Agreement with an additional financial commitment this year. These funds shall
be used by Samaritan Laboratories/Georgetown to screen for additional new drug
compounds, their binding capabilities to specific receptors and their direct
effects on mitochondrial function. Mitochondria are the key to life and death.
Quite possibly, the process of aging itself may be intimately linked to
mitochondria. A sampling of some major health disorders where mitochondrial
dysfunction may be linked to large segments of a diseased population are
Alzheimer's, Lou Gehrig's, Cancer, Heart disease, Parkinson's and Type II
Diabetes.
On April 3, 2003 Samaritan Pharmaceuticals Inc. announced it obtained the
services of Octagon Research Solutions, a regulatory consulting service
specializing in electronic regulatory submissions, clinical information
management, technical writing and dossier preparation. Samaritan hopes to
expedite its HIV drug time-to-market by using FDA preferred fully electronic
submissions which are FDA reviewer friendly. E-Submissions are increasingly
becoming a key component of the regulatory approval process and save both money
and precious time to regulatory approval.
On March 31, 2003 Samaritan Pharmaceuticals Inc., Samaritan Research Labs and
Georgetown University, announced that its Chief Scientific Officer, Dr.
Vassilios Papadopoulos was interviewed and featured in BioPeople
Magazine-Therapy Focus, written by Allis Kane. In the article, Allis Kane
investigates current research approaches in the search for a cure of
Alzheimer's. Alzheimer's is a progressive, degenerative disease of the brain,
and is the most common form of dementia.
BioPeople Spring 2003 Excerpt regarding Samaritan and Stem Cells:
"The team of Dr. Vassilios Papadopoulos made a fortuitous discovery that
could potentially regenerate dormant stem cells in the brain. He is CSO of
Samaritan Pharmaceuticals and professor of cell biology, pharmacology and
neuroscience at Georgetown University, both based in Washington, DC. The
discovery was made while his group was investigating the effect of a series
of cholesterol derivatives on neural stem cells. 'We used the cells as a
human model for beta-amyloid neuroprotection and we found that some of the
compounds are not only neuroprotective in terms of beta-amyloid toxicity
but in two weeks will induce the differentiation of stem cells into adult
neurons.'
Papadopoulos explains that this is a significant advantage over retinoic
acid, currently used for the maturation of stem cells, which is toxic, in
vivo, and takes several months. 'Now we have a tool that not only protects
against beta-amyloid toxicity in the brain, but also switches on a
mechanism in the few stem cells that exist in the human brain to make them
differentiate into adult cells to replace, potentially, the neurons which
have died,' he says.
Similar to Rhoades' suggestion that manipulation of neurotrophin targets
could promote both survival and regeneration, Samaritan's discovery has a
two-fold potential. When testing the steroid series, Papadopoulos came
across an important problem facing researchers in the field. Animal models
of the disease, such as the transgenic mouse model of Alzheimer's, are not
accurate analogues of the human disease. Papadopoulos says: 'Transgenic
mice for Alzheimer's disease have a few problems. First of all you need a
year to two years to develop the plaques, secondly (the mice) don't really
lose their memory, and thirdly their neurons never die.' Research on the
drug series was shelved temporarily while the teams looked for alternative
animal models. They believe that they have now got a rat model that is much
more representative of the human disease and the company is currently
looking to secure the intellectual property rights to the discovery. With
this hurdle overcome, Papadopoulos says his group has begun to assess the
efficacy of its potential treatments."
13
On March 7, 2003, Samaritan Pharmaceuticals Inc. and Samaritan Research Labs,
Georgetown University, announced that its HIV Phase Ib/IIa clinical trial data
and analysis, conducted at, and led by Dr. Steven J. Brown, of the AIDS Research
Alliance, Los Angeles, CA, has been provided to Samaritan.
These clinical trial results will be submitted for publication to several
medical journals. To prevent denial of publication for reasons of
"pre-publication," and to preserve Samaritan's rights under our patent
applications, the results will be kept confidential, pending publication.
Phase II is a dose finding and "proof of concept" study conducted in a
relatively small number of carefully selected HIV patients, plus a
placebo-controlled group. In the Clinical trial, patients received several doses
of the test drug (dose finding) and the resulting data allowed researchers and
statisticians to make a quantitative assessment of drug effects. Samaritan
believes our HIV drug has future potential and is developing its strategy for
further development in Phase III. In evaluating the company's statements about
Samaritan's HIV drug, you should specifically consider various factors,
including the risks outlined in "Risk Factors."
RISK FACTORS
The response to this item is incorporated by reference from the discussion
responsive thereto under the caption "Risk Factors" in our Form 10-KSB filed
April 15, 2003 and in our Form SB-2 filed June 4, 2003.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Such statements are based upon management's current expectations that are
subject to a number of factors and uncertainties that could cause actual results
to differ materially from those described in our forward-looking statements.
Such statements address the following subjects: our need for and ability to
obtain additional capital, including from the sale of equity and/or from federal
or other grant sources; our expected future losses; the sufficiency of cash and
cash equivalents; our ability to generate revenues; our ability to develop
commercially successful products, including our ability to obtain FDA approval
to initiate further studies of our potential products and our technologies; the
high cost and uncertainty of the research and development of pharmaceutical
products; the unpredictability of the duration and results of the U.S. Food and
Drug Administration's review of new drug applications; the possible impairment
of our existing, and the inability to obtain new, intellectual property rights
and the cost of protecting such rights as well as the cost of obtaining rights
from third parties when needed on acceptable terms; our ability to enter into
successful partnering relationships with respect to the development and/or
commercialization of our product candidates; our dependence on third parties to
research, develop, manufacture and commercialize and sell any products
developed; our ability to improve awareness and understanding of our company,
our technology and our business objectives; whether our predictions about market
size and market acceptability of our products will prove true; and our
understandings and predictions regarding the utility of our potential products
and our technology.
Statements in this report expressing our expectations and beliefs regarding our
future results or performance are forward-looking statements that involve a
number of substantial risks and uncertainties. When used in this quarterly
report the words "anticipate," "believe," "estimate," "expect," "intend," may
be," "seek," "plan," "focus," and "potential" and similar expressions as they
relate to the Company or its management are intended to identify such
forward-looking statements. Our actual future results may differ significantly
from those stated in any forward-looking statements. The company also undertakes
no duty to update forward-looking statements.
14
Item 3. Controls and Procedures
(a) Under the supervision and with the participation of our
management, including our principal executive officer and principal financial
officer, we conducted an evaluation of our disclosure controls and procedures,
as such term is defined under Rule 13a-14(c) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), within 90 days of the
filing date of this report. Based on their evaluation, our principal executive
officer and principal accounting officer concluded that Samaritan's disclosure
controls and procedures are effective.
(b) There have been no significant changes (including corrective
actions with regard to significant deficiencies or material weaknesses) in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation referenced in paragraph (a)
above.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We are, from time to time, involved in various legal proceedings in the ordinary
course of our business and are currently executing a settlement agreement signed
by all parties to resolve previously reported pending lawsuits. We believe based
on the settlement agreement that the resolution of any currently pending legal
proceedings, either individually or taken as a whole, will not have a material
adverse effect on our business, financial condition or results of operations.
Item 2. Changes in Securities.
Securities, unregistered, were sold by the Company in the second quarter of 2003
under an exemption from registration. The title of these securities was the
Common Stock of the Company. They were sold for cash unless otherwise noted in
this section. They were sold in private transactions to persons believed to be
of a class of private investors acting on their own comprised of "accredited
investors" (as such term is defined in Regulation D of the U.S. Securities and
Exchange Commission or "SEC") and a limited number of non-accredited investors.
All investors, to the best knowledge of the Company, not affiliated with the
Company, purchased the shares with an apparent investment intent. The Company
relied upon, among other possible exemptions, Section 4(2) of the Securities Act
of 1933, as amended. It's reliance on said exemption was based upon the fact
that no public solicitation was used by the Company in the offer or sale, and
that the securities were legended shares, along with a notation at the
respective transfer agent, restricting the shares from sale or transfer as is
customary with reference to Rule 144 of the SEC.
Management notes that stock was issued as follows during the six months ended
June 30, 2003
No. of shares Issued Pursuant To Price/valuation
------------- ------------------ ------------------
3,193,943 Services Rendered $511,940
5,898,702 In settlement of accounts payable $572,632
3,417,000 Sale of restricted stock $341,700
2,558,793 Sale of common stock $313,040
Cancellation Pursuant To
--------------------------
(1,564,048) Settlement Agreement, Alfred T Sapse & ($250,248)
Cortisol Medical Research Shares
The total offering price, during the second quarter as to these shares, was
$1,489,064 less expenses, estimated to be a total of $11,500 for printing,
legal, postage, and other expenses related to respective offering. Also,
management notes in addition to the shares stated above, 594,352 shares were
reacquired in settlement with Alfred T. Sapse.
15
Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------
(a) The company held its Annual meeting on June 27, 2003.
(b) The three matters voted upon at the meeting were: (i) To elect six directors
for a term expiring at the Annual Meeting of Stockholders in year indicated
("Proposal 1"); (ii) To approve and ratify an amendment to the Company's
Articles of Incorporation to increase the number of authorized shares of Common
Stock from 100,000,000 to 200,000,000 ("Proposal 2"); (iii) To ratify the
appointment of Sherb & Co., LLP, as our independent auditors for the fiscal year
ending December 31, 2003 ("Proposal 3").
(i) With respect to "Proposal 1", Eugene Boyle (2006) received 42,327,612 shares
in favor and 467,558 shares were withheld, Brian Sullivan (2006) received
40,596,170 shares in favor and 2,199,000 shares were withheld, Cynthia Thompson
(2006) received 42,739,770 shares in favor and 55,400 shares were withheld,
Douglas Bessert (2005) received 42,327,612 shares in favor and 467,558 shares
were withheld, H Thomas Winn (2005) received 40,944,170 shares in favor and
1,851,000 shares were withheld, and Vassilios Papadopoulos (2005) received
42,327,612 shares in favor and 467,558 shares were withheld, and there were
100,091 abstentions for each director, and no broker non-votes. All nominees
were declared to have been elected as directors to hold office until the annual
meeting of stockholders in the year indicated.
(ii) With respect to "Proposal 2", 41,488,738 shares were in favor, 1,181,800
shares were against, 224,723 shares abstained, and no non-votes were withheld
from voting with respect to such proposal. Proposal 2 was declared to have been
approved.
(iii) With respect to "Proposal 3", 42,549,338 shares were in favor, 46,073
shares were against, 299,850 shares abstained, and no non-votes were withheld
from voting with respect to such proposal. Proposal 3 was declared to have been
approved.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
(a) Reports on Form 8-K.
On April 22, 2003, Samaritan Pharmaceuticals, Inc. and Fusion
Capital Fund II, LLC, a Chicago-based institutional investor and Samaritan's
long-term financial partner, entered into a new $10 million Common Stock
Purchase Agreement. The previous Common Stock Purchase Agreement between
Samaritan and Fusion Capital dated November 2, 2000 by its original terms
expired.
Under the new Common Stock Purchase Agreement, Fusion Capital shall
buy from time to time over twenty-five months up to $10 million of Samaritan's
common stock. Samaritan has the right to control the timing and the amount of
stock sold to Fusion Capital with the purchase price based upon the market price
of Samaritan's common stock at the time of each sale without any discount.
Funding of the $10 million shall commence at the Samaritan's discretion after
the Securities & Exchange Commission has declared effective a registration
statement covering the shares of common stock to be purchased by Fusion Capital.
16
(b) Exhibits
Listed below are all exhibits filed as part of this report. Some
exhibits are filed by the Registrant with the Securities and Exchange Commission
pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, as amended.
Exhibits
No. Description
----------------------------------------------------------------------
2.1 Agreement and Plan of Reorganization (1)
3.1 Articles of Incorporation, as amended and restated (6)
3.2 By-laws (3)
4.1 Form of common stock certificate (1)
4.2 2001 Stock Option Plan (4)
10.1 Assignment between Linda Johnson and the Company dated
September 6, 2000. (5)
10.2 Assignment between Linda Johnson and Spectrum Pharmaceuticals
Corporation dated May 14, 1999. (5)
10.3 Agreement containing the assignment of U.S. Patent Application
07/233,247 with improvements dated May 22, 1990. (5)
10.4 Agreement between AIDS Research Alliance Agreement and the Company
dated March 5, 1999 (1)
10.5 Common Stock Purchase Agreement between Company and Fusion Capital
Fund II, LLC, dated April 22, 2003 (2)
10.6 Registration Rights Agreement between Company and Fusion Capital
Fund II, LLC dated April 22, 2003. (2)
10.7 Agreement between Samaritan Pharmaceuticals, Inc. and
Doug Bessert (5)
10.8 Agreement between Samaritan Pharmaceuticals, Inc. and
Eugene Boyle (5)
10.9 Agreement between Samaritan Pharmaceuticals, Inc and
Janet Greeson (5)
10.10 Research Collaboration and Licensing Agreement between Georgetown
University and Samaritan Pharmaceuticals, Inc., dated
June 8, 2001 (6)
------------------------------------------
(1) Filed as an exhibit to Samaritan Pharmaceutical's Form 10-SB, filed on July
21, 1999, and incorporated herein by reference.
(2) Filed as an exhibit to Samaritan Pharmaceutical's Report on Form 8-K filed
on April 25, 2003, and incorporated herein by reference.
(3) Filed as an exhibit to Samaritan Pharmaceutical's Annual Report on Form
10K-SB, filed on April 3, 2001, and incorporated herein by reference.
(4) Filed as an exhibit to Samaritan Pharmaceutical's Schedule 14A filed on
April 3, 2001, and incorporated herein by reference
(5) Filed as an exhibit to Samaritan Pharmaceutical's Quarterly Report on Form
10-QSB filed on August 14, 2002, and incorporated herein by reference.
(6) Filed as an exhibit to Samaritan Pharmaceutical's Report on Form SB-2a filed
on July 31,2003 an incorporated herein by reference.
17
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.
SAMARITAN PHARMACEUTICAL, INC
Dated: 14 August 2003 By: /s/ Eugene Boyle
-------------------------------
Eugene Boyle, CFO, COO, Director
18