Harvard Scientific Announces 2nd Qtr. Results And Improvement In Its Financial Condition
Business Wire - October 15, 1998 10:18
LAKE MARY, Fla.--(BUSINESS WIRE)--Oct. 15, 1998--Harvard Scientific Corp. (OTCBB: HVSF), a Nevada corporation, announced today its third quarter financial results for the three months ended September 30, 1998, show a loss of $(0.21) per share versus a loss of $(0.09) per share over the same reporting period last year. For the nine months ended September 30, 1998, the Company reported a loss of $(0.59) per share vs. $(3.25) per share as its total assets increased to $6,307,049 from $2,044,613 over the same reporting period. The Company is developing treatment products for male and female sexual disorder and has reported no revenues for the nine month period.
President and Chief Executive Officer, Thomas E. Waite stated, that "fundamentally, the Company is in better financial condition than at any time in its operational history. Management has made great strides to correct the problems it faced when it began its tenure last November. The Company*s total assets have more than tripled in that time and shareholders book value per common share has risen to over $0.82 per common share from a deficit last year at this time. At this time, the Company is virtually debt-free with only $6,317 in Long-Term Liabilities reported this quarter."
The Company stated that this quarters increase in its loss on a per share basis was primarily due to a change in accounting procedure in that during the first and second quarters of 1997, the Company began spending for research & development ("R&D") which was initially booked to General & Administrative ("G&A") expense. During the third quarter 1997, these costs were reclassified to accurately reflect expenditures in R&D. Furthermore, a funding fee of approximately $625,000 previously recorded was re-classed and amortized over 12 months beginning in September 1997. Consequently, by comparison, for the three months ending September 30, 1997, the records show a distorted amount in G&A due to these reclassifications incurred during that period. As a result, the costs for the three months ending September 30th should be reviewed by comparing the overall Total Operating Expense for the three months of $1,100,841 in 1998 less the reclassification of $625,000 for a total of $475,841 vs. $121,449 in 1997, for an increase of approximately $354,000 in 1998 over 1997. This increase is primarily a result of increased salaries and consulting fees of approximately $157,000 and an increase in legal fees of approximately $197,000.
Mr. Waite also added that, "Management is also very pleased with the results from its recently completed toxicity and MRI studies conducted on female rabbits. These results confirmed the beliefs of the Company's scientific team that vaginal capillary blood flow (which is believed to be an important cause for FSAD or "Female Sexual Arousal Disorder") could be substantially enhanced from the topical application of the Company's LLPGE1 treatment product. The Company's scientific team has done a tremendous job thus far and we look forward to continuing our quest for becoming a leader in the treatment of FSAD which affects approximately 10 million U.S. women."
Harvard Scientific Corp., is a biopharmaceutical drug development company that is developing oral and topically administered treatment products for male and female sexual disorder and an intraurethrally administered treatment product for male sexual disorder. The intraurethrally delivered treatment product as well as the topically applied treatment products utilize the Company's patented intellectual property of lyophilized liposomal delivery of Prostaglandin E-1 ("PGE-1"). The lyophilized liposomal delivery of Apomorphine treatment product for male and female sexual disorder is administered orally as a capsule to the patient. This capsule is designed to pass through the stomach without degradation or uptake of the drug and into the small intestine whereby the Apomorphine is then gradually released. The Company plans to license these products to pharmaceutical companies for worldwide distribution upon approval by the U.S. Food and Drug Administration and/or other foreign regulatory agencies.
Prostaglandin E-1 is a naturally occurring vasodilator originally approved by the U.S. Food and Drug Administration for intravenous infusion in neonates. In 1995, PGE-1 was approved by the FDA for use in Pharmacia & Upjohn Inc.'s (NYSE: PNU) Caverject(R), which is administered by needle injection as a treatment for male erectile disorder. In November 1996, Vivus, Inc.'s (NASDAQ:VVUS) MUSE(R) solid pellet delivery system was approved by the FDA. Recently, the FDA approved PGE-1 again by needle administration via Edex(R), (Schwartz-Pharma). Viagra(R), Pfizer, Inc.'s (NYSE: PFE) oral medication treatment was approved by the FDA in March, 1998. Zonagen Inc. (NASDAQ: ZONA) has in development an oral treatment product as well. Apomorphine has been effective as a therapeutic agent for Parkinson's disease and as a treatment for animal and human ingestion of toxins. It has also shown to be an effective agent for inducing male erections. The Company believes that its products will represent a substantial treatment advantage over other delivery systems currently being utilized in the industry.
From time to time the Company may issue forward looking statements which involve risks and uncertainties. This statement may contain 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 could differ and any forward looking statements should be considered accordingly.
HARVARD SCIENTIFIC CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended 1/13/87
Sept. 30, Sept. 30, Sept. 30, Sept. 30, (Inception)
1998 1997 1998 1997 to 9/30/98
(Unaudited) (Unaudited) (Unaudited)
Net Sales $ - $ - $ - $ - $ 187,387
Cost of Sales - - - - 221,557
Gross Profit - - - - (34,170)
Operating Expenses:
General and
administrative
expenses 718,944 (732,309) 1,770,464 1,966,508 6,106,672
Research and
development 352,443 701,185 862,534 894,401 2,666,093
Depreciation and
amortization 29,454 152,573 67,939 342,899 703,787
Total Operating
Expenses 1,100,841 121,449 2,700,937 3,203,808 9,476,552
Loss from
Operations(1,100,841) (121,449)(2,700,937) (3,203,808)(9,510,722)
Other Income
(Expense):
Settlements
(Note 9) (165,000) (10,000) (165,000) (10,000) (880,629)
Interest Income 72,528 26 77,256 217 78,821
Dividend Income 3,782 19,523 11,410 37,711 62,864
Interest Expense (22,524) (68,175) (257,026)(1,411,296)(2,242,160)
Loss on
disposition
of Fixed-Assets
or Secur. - - (11,580) - (36,080)
Total Other
Income and
Expense (111,214) (58,626) (344,940) (1,383,368) (3,017,185)
Net
Loss $(1,212,055) $(180,075) $(3,045,877) $(4,587,176) $(12,527,907)
Loss per
Common Share $ (0.21) $ (0.09) $ (0.59) $ (3.25)
Weighted Average
Shares
Outstanding
(Note 2) 5,643,101 1,904,102 5,150,154 1,410,839
CONTACTS: Hal Schweig Michael Snell
Martin E. Janis & Co. Harvard Scientific Corp.
(312) 943-1100 (407) 324-1606
or
www.harvardscientific.com
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