Cortex Reports Operating Results.Business Editors IRVINE Irvine, town, Scotland Irvine (ûr`vĭn), town (1991 pop. 32,507), North Ayrshire, SW Scotland, on the Irvine River estuary. Industries include iron and brass foundries. Other products are chemicals, electric goods, and clothing. , Calif.--(BUSINESS WIRE)--Feb. 12, 2004 Cortex Pharmaceuticals, Inc. (AMEX AMEX See: American Stock Exchange : COR cor (kor) [L.] heart. acute cor pulmonale acute overload of the right ventricle due to pulmonary hypertension, usually due to acute pulmonary embolism. ) reported net income of $512,000 ($0.02 per share) for the quarter ended December December: see month. 31, 2003. This compares with a net loss of $276,000 ($0.02 per share) for the corresponding prior year period. For the six month period ended December 31, 2003, Cortex reported a net loss of $3,806,000 ($0.20 per share). This compares with a net loss of $950,000 ($0.06 per share) for the corresponding prior year period. Revenues for the quarter and six-month period ended December 31, 2003 reflect the $2,000,000 milestone payment received from Organon or·ga·non or or·ga·num n. pl. or·ga·nons or or·ga·nums or or·ga·na 1. An organ. 2. A set of principles for use in scientific investigation. organon pl. organa [Gr.] organ. at the end of December, as previously reported. As provided in the related agreement, Organon paid Cortex the milestone in order to retain its rights to Cortex's AMPAKINE ampakine Neuropharmacology Any compound that facilitates synaptic transmission by binding to glutamate and enhance long-term potentiation, a critical component in long term memory, by enhancing the activity of AMPA receptor-rich neurons which enhance AMPA receptor (R) technology in the field of depression. Excluding non-cash stock compensation charges, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the quarter and six-month period ended December 31, 2003 increased relative to costs for the corresponding prior year periods primarily due to preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. expenses to advance the second generation AMPAKINE compound, CX717. "During the quarter we continued our required toxicology toxicology, study of poisons, or toxins, from the standpoint of detection, isolation, identification, and determination of their effects on the human body. Toxicology may be considered the branch of pharmacology devoted to the study of the poisonous effects of drugs. studies for CX717, as we progress toward our plan to enter human testing with this molecule during the second quarter of the calendar year," said Roger Stoll Stoll is a surname, and may refer to:
"In early January January: see month. we announced a $19 million private placement of our common stock and warrants. The proceeds from this financing will allow us to significantly accelerate the development of CX717, as well as other AMPAKINE compounds," continued Dr. Stoll. The Company also recorded non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. in its results for the quarter ended September 30, 2003 related to common stock warrants issued in connection with the Company's August 2003 private placement. The non-cash charges are required by EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation 00-19, "Accounting for Derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. Financial Instruments Indexed To, and Potentially Settled In a Company's Own Stock." The non-cash charges had no impact on the Company's working capital or its liquidity. As is customary for private placement transactions, the Company had an obligation to register for resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. the shares underlying the warrants under the Securities Act of 1933. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with EITF 00-19, the value of the warrants is recorded as a liability until such registration statement is effective. The increase in market value of the Company's common stock from the closing of its financing on August 21, 2003 to September 30, 2003 resulted in non-cash charges to reflect the increase in Black-Scholes value of the warrants between those two dates. As a result, the Company incurred an increase in liabilities and additional non-cash charges as of September 30, 2003. With the non-cash charges of $3,844,000 for the increased Black-Scholes value of the warrants, the Company's net loss for the quarter ended September 30, 2003 increased from $475,000 ($0.03 per share), as previously reported, to $4,319,000 ($0.24 per share), as adjusted. The Company again re-measured the fair value of the warrants on December 8, 2003, the date that the registration statement filed for the shares underlying the warrants was declared effective by the Securities and Exchange Commission, as required by EITF 00-19. This re-measurement resulted in a reversal of $367,000 of the non-cash charges recorded as of September 30, 2003. During the quarter ended December 31, 2003, when the related registration statement was declared effective, the fair value of the warrants was reclassified to equity, evidencing the non-impact of these adjustments to the Company's financial position or its business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . Cortex Pharmaceuticals, Inc. Cortex, located in Irvine, California Irvine is an incorporated city in Orange County, California, United States. It is a planned city, mainly developed by the Irvine Company since the 1960s. Formally incorporated on December 28 1971, the 69.7 square mile (180.5 km²) city has a population of 202,079 (as of 2007). , is a neuroscience neu·ro·sci·ence n. Any of the sciences, such as neuroanatomy and neurobiology, that deal with the nervous system. neuroscience the embryology, anatomy, physiology, biochemistry and pharmacology of the nervous system. company focused on novel drug therapies for neurological neurological, neurologic pertaining to or emanating from the nervous system or from neurology. neurological assessment evaluation of the health status of a patient with a nervous system disorder or dysfunction. and psychiatric psy·chi·at·ric adj. Of or relating to psychiatry. psychiatric adjective Pertaining to psychiatry, mental disorders disorders. The Company is pioneering a class of proprietary pharmaceuticals called AMPAKINE compounds, which act to increase the strength of signals at connections between brain cells. The loss of these connections is thought to be responsible for memory and behavior problems in Alzheimer's disease Alzheimer's disease (ăls`hī'mərz, ôls–), degenerative disease of nerve cells in the cerebral cortex that leads to atrophy of the brain and senile dementia. . Many psychiatric diseases, including schizophrenia schizophrenia (skĭt'səfrē`nēə), group of severe mental disorders characterized by reality distortions resulting in unusual thought patterns and behaviors. , occur as a result of imbalances in the brain's neurotransmitter neurotransmitter, chemical that transmits information across the junction (synapse) that separates one nerve cell (neuron) from another nerve cell or a muscle. Neurotransmitters are stored in the nerve cell's bulbous end (axon). system. These imbalances may be improved by using the AMPAKINE technology. Cortex has alliances with N.V. Organon for the treatment of schizophrenia The concept of a cure as such in the treatment of schizophrenia remains controversial, as there is no consensus on the definition of "treatment" in the case of schizophrenia, although some criteria for the remission of symptoms have recently been suggested. and depression and with Les Laboratoires Servier for the development of AMPAKINE compounds to treat the neurodegenerative neurodegenerative /neu·ro·de·gen·er·a·tive/ (-de-jen´er-ah-tiv) relating to or marked by nervous degeneration. neu·ro·de·gen·er·a·tive adj. effects associated with aging and disease, including Mild Cognitive Impairment mild cognitive impairment (MCI), n memory loss generally associated with aging; does not affect normal independent functioning of an individual. , Alzheimer's disease and anxiety disorders Anxiety disorders A group of distinct psychiatric disorders characterized by marked emotional distress and social impairment, including generalized anxiety disorder, panic disorder, obsessive-compulsive disorder, and posttraumatic stress disorder. . Cortex is currently developing CX717, a second generation AMPAKINE compound, for the Alzheimer's disease and Mild Cognitive Impairment indications. Forward-Looking Statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Note -- This press release contains forward-looking statements concerning the Company's research and development activities, clinical trials and business development plans. Actual results may differ materially, depending on a number of risk factors, including the risks that the agreements with Organon and Servier will not result in any commercial products or that any additional milestone payments will be earned by the Company; that the Company may be unable to arrive at additional corporate partnerships with other pharmaceutical companies on acceptable terms and therefore be required to independently fund clinical development of AMPAKINE compounds through the sale of additional equity securities or otherwise; that the Company's proposed products may at any time be found to be unsafe or ineffective for any or all of their proposed indications; that competitors may challenge or design around the Company's patents or develop competing technologies; and that clinical studies may at any point be suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. or take substantially longer than anticipated to complete. As discussed in the Company's Securities and Exchange Commission filings, the Company's proposed products will require additional research, lengthy and costly clinical testing and regulatory approval. AMPAKINE compounds are investigational drugs and have not yet been shown to have efficacy in the treatment of any disease.
Cortex Pharmaceuticals, Inc.
Condensed Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three months ended Six months ended
December 31, December 31,
----------------- -----------------
2003 2002 2003 2002
------- -------- ------- --------
Operating revenues $ 3,256 $ 1,381 $ 4,594 $2,504
Operating expenses:
Research and development 1,837 835 2,870 1,949
General and administrative 695 815 1,155 1,444
Non-cash stock compensation
charges 566 11 889 72
------- ------ ------ ------
Total operating expenses 3,098 1,661 4,914 3,465
------- ------ ------ ------
Income (loss) from operations 158 (280) (320) (961)
Interest income, net 9 4 13 11
Change in fair value of
common stock warrants 345 -- (3,499) --
------- ------ ------ ------
Net income (loss) $ 512 $ (276) $(3,806) $ (950)
======= ======= ======== =======
Income (loss) per share:
Basic and diluted $ 0.02 $ (0.02) $ (0.20) $(0.06)
Shares used in computing per
share amounts
Basic 20,640 16,854 19,480 16,852
Diluted 23,909 16,854 19,480 16,852
Cortex Pharmaceuticals, Inc.
Condensed Balance Sheets
(in thousands)
December 31,
2003 June 30,
(Unaudited) 2003
-------------- ----------
Assets:
Cash and cash equivalents $ 4,847 $ 1,125
Marketable securities 399 --
Restricted cash 3 84
Accounts receivable 678 428
Other current assets 319 211
-------- --------
6,246 1,848
Furniture, equipment and
leasehold improvements, net 249 298
Other assets 33 33
-------- --------
Total assets $ 6,528 $ 2,179
======== ========
Liabilities and stockholders' equity (deficit):
Accounts payable and accrued expenses $ 1,887 $ 1,335
Unearned revenue -- current 412 2,017
Unearned revenue -- non-current 378 247
Stockholders' equity (deficit) 3,851 (1,420)
-------- --------
Total liabilities and stockholders'
equity (deficit) $ 6,528 $ 2,179
======== ========
Cortex Pharmaceuticals, Inc.
Condensed Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three months ended
September 30,
-------------------------------
2003,
As Previously 2003,
Reported As Adjusted
-------------- --------------
Research, license and grant revenues $ 1,337 $ 1,337
Operating expenses:
Research and development 1,033 1,033
General and administrative 460 460
Non-cash, stock compensation charges 323 323
--------- ---------
Total operating expenses 1,816 1,816
--------- ---------
Loss from operations (479) (479)
Interest income, net 4 4
Increase in fair value of
common stock warrants -- (3,844)
--------- ---------
Net loss $ (475) $ (4,319)
========= =========
Net loss per share, basic and diluted $ (0.03) $ (0.24)
========= =========
Shares used in computing per share amounts
Basic and diluted 18,321 18,321
Cortex Pharmaceuticals, Inc.
Condensed Balance Sheets
(in thousands)
September 30,
2003, September 30,
As Previously 2003,
Reported As Adjusted June 30,
(Unaudited) (Unaudited) 2003
--------------- -------------- --------
Assets:
Cash and cash equivalents $ 4,469 $ 4,469 $ 1,125
Marketable securities 200 200 --
Restricted cash 40 40 84
Accounts receivable 94 94 428
Other current assets 98 98 211
---------- -------- -------
4,901 4,901 1,848
Furniture, equipment and leasehold
improvements, net 276 276 298
Capitalized financing costs -- 634 --
Other assets 33 33 33
---------- -------- -------
Total assets $ 5,210 $ 5,844 $ 2,179
========== ======== =======
Liabilities and stockholders'
equity (deficit):
Accounts payable and accrued
expenses $ 1,174 $ 1,174 $ 1,335
Unearned revenue -- current 988 988 2,017
Unearned revenue -- non-current -- -- 247
Common stock warrants -- 8,833 --
Stockholders' equity (deficit) 3,048 (5,151) (1,420)
--------- --------- --------
Total liabilities and
stockholders' equity (deficit) $ 5,210 $ 5,844 $ 2,179
========= ======== =======
MORE INFORMATION AT www.cortexpharm.com |
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