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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO _________
COMMISSION FILE NUMBER: 000-25132
MYMETICS CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 25-1741849
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
European Executive Office
14, rue de la Colombiere
1260 Nyon (Switzerland)
(Address of principal executive offices)
011 41 22 363 13 10
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes No X
---
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date:
Class Outstanding at November 12, 2004
----- ------------------------------
Common Stock, $0.01 66,447,864
par value
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MYMETICS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS OF EUROS)
SEPTEMBER 30, 2004 DECEMBER 31, 2003
------------------ -----------------
ASSETS
Current Assets
Cash e 8 e 125
Receivables 108 100
Prepaid expenses 5 6
----------- -------------
Total current assets 121 231
Patents and Other 92 136
----------- -------------
e 213 e 367
=========== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable e 1,251 e 1,232
Taxes and social costs payable 37 53
Note payable 3,319 3,127
Other 120 113
----------- -------------
Total current 4,727 4,525
liabilities
Payable to shareholders 242 242
Shareholders' Equity
Common stock 689 607
Paid-in capital 19,052 18,142
Deficit accumulated during the
development stage (25,137) (23,799)
Cumulative translation adjustment 640 650
----------- -------------
(4,756) (4,400)
----------- -------------
e 213 e 367
=========== =============
The accompanying notes are an integral part of these financial statements.
MYMETICS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
(IN THOUSANDS OF EUROS, EXCEPT FOR PER SHARE AMOUNTS)
FOR THE NINE FOR THE NINE TOTAL ACCUMULATED
MONTHS ENDED MONTHS ENDED DURING THE
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 DEVELOPMENT STAGE
------------------ ------------------ -----------------
Revenue
Sales e - e - e 224
Interest - - 34
------------- -------------- ---------------
- - 258
------------- -------------- ---------------
Expenses
Research and development 555 792 4,540
General and administrative 586 711 4,584
Bank fee - - 14,932
Interest 148 129 479
Goodwill impairment - - 209
Amortization 45 49 367
Directors' fees - - 274
Other 4 - 4
------------- -------------- ---------------
1,338 1,681 25,389
------------- -------------- ---------------
Loss before income tax provision (1,338) (1,681) (25,131)
Income tax provision - - 6
------------- -------------- ---------------
Net loss (1,338) (1,681) (25,137)
Other comprehensive income
Foreign currency translation
adjustment (10) 189 640
------------- -------------- ---------------
Comprehensive loss e (1,348) e (1,492) e (24,497)
============= ============== ===============
Basic and diluted loss per share e (0.02) e (0.03) e (0.66)
============= ============== ===============
The accompanying notes are an integral part of these financial statements.
MYMETICS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
(IN THOUSANDS OF EUROS, EXCEPT FOR PER SHARE AMOUNTS)
FOR THE THREE FOR THE THREE
MONTHS ENDED MONTHS ENDED
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003
------------------ ------------------
Revenue
Sales e - e -
Interest - -
----------- ------------
- -
----------- ------------
Expenses
Research and development 140 279
General and administrative 233 198
Bank fee - -
Interest 50 49
Goodwill impairment - -
Amortization 15 15
Directors' fees - -
Other (1) -
----------- ------------
437 541
----------- ------------
Loss before income tax provision (437) (541)
Income tax provision - -
----------- ------------
Net loss (437) (541)
Other comprehensive income
Foreign currency translation
adjustment 15 33
----------- ------------
Comprehensive loss e (422) e (508)
=========== ============
Basic and diluted loss per share e (0.01) e (0.01)
=========== ============
The accompanying notes are an integral part of these financial statements.
MYMETICS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS OF EUROS)
FOR THE NINE FOR THE NINE TOTAL ACCUMULATED
MONTHS ENDED MONTHS ENDED DURING THE
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 DEVELOPMENT STAGE
------------------ ------------------ -----------------
Cash flow from operating activities
Net Loss e (1,338) e (1,681) e (25,137)
Adjustments to reconcile net loss to
net cash used in operating activities
Amortization 45 49 367
Goodwill impairment - - 209
Fees paid in warrants 148 - 14,286
Services and fee paid in common stock 168 - 1,119
Changes in current assets and
liabilities, net of
effects from reverse purchase
Decrease(increase) in receivable (8) (29) (70)
Increase(decrease) in accounts payable 19 359 953
Increase(decrease) in taxes and
social costs payable (16) (60) 37
Other 8 (106) 163
----------- ------------- -------------
Net cash used in operating activities (974) (1,468) (8,073)
----------- ------------- -------------
Cash flows from investing activities
Patents and other - - (338)
Cash acquired in reverse purchase - - 13
----------- ------------- -------------
Net cash used in investing activities - - (325)
----------- ------------- -------------
Cash flows from financing activities
Proceeds from issuance of common stock 675 - 3,651
Borrowing from shareholders - - 242
Increase in note payable and other
short-term advances 192 1,121 4,003
Loan fees - - (130)
----------- ------------- -------------
Net cash provided by financing activities 867 1,121 7,766
----------- ------------- -------------
Effect on foreign exchange rate on cash (10) 189 640
----------- ------------- -------------
Net change in cash (117) (158) 8
Cash, beginning of period 125 183 -
----------- ------------- -------------
Cash, end of period e 8 e 25 e 8
=========== ============= =============
The accompanying notes are an integral part of these financial statements.
MYMETICS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
(UNAUDITED)
(IN THOUSANDS OF EUROS, EXCEPT FOR PER SHARE AMOUNTS)
NOTE 1. BASIS OF PRESENTATION
The accompanying interim period consolidated financial statements of Mymetics
Corporation (the "Company") set forth herein have been prepared by the Company
pursuant to the rules and regulations of the U.S. Securities and Exchange
Commission (the "SEC"). Certain information and footnote disclosure normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to such SEC rules and regulations. The interim period
consolidated financial statements should be read together with the audited
financial statements and the accompanying notes included in the Company's latest
annual report on Form 10-K for the fiscal year ended December 31, 2003. The
accompanying financial statements of the Company are unaudited. However, in the
opinion of the Company, the unaudited consolidated financial statements
contained herein contain all adjustments necessary to present a fair statement
of the results of the interim periods presented. All adjustments made during the
three month period ended September 30, 2004 were of a normal and recurring
nature. The amounts presented for the nine month period ended September 30,
2004, are not necessarily indicative of the results of operations for a full
year.
NOTE 2. EARNINGS (LOSS) PER SHARE
In accordance with SFAS No. 128, Earnings Per Share, and SEC Staff Accounting
Bulletin (SAB) No. 98, basic net income (loss) per common share is computed by
dividing the net income (loss) for the period by the weighted average number of
common shares outstanding during the period. Under SFAS No. 128, diluted net
income (loss) per share is computed by dividing the net income (loss) for the
period by the weighted average number of common and common equivalent shares,
such as stock options and warrants, outstanding during the period.
The weighted average number of shares outstanding for the purpose of calculating
basic and diluted earnings per share for the nine month periods ended September
30, 2004 and September 30, 2003 were 60'575'513 and 50,944,454, respectively.
The weighted average number of shares outstanding for the purpose of calculating
basic and diluted earnings per share for the three month periods ending
September 30, 2004 and September 30, 2003 were 63,189,455 and 50,944,454
respectively. The weighted average number of shares outstanding for the purpose
of calculating basic and diluted earnings per share for the development stage
period is 37'771'160. Common equivalent shares, such as stock options and
warrants, were excluded from the calculations of diluted earnings per share for
the three and nine month periods ended September 30, 2004 and 2003 as well as
the cumulative period as their effect would be antidilutive.
NOTE 3. STOCK-BASED COMPENSATION
The Company has a stock-based employee compensation plan. The Company accounts
for the plan under the recognition and measurement principles of APB Opinion No.
25. "Accounting for Stock Issued to Employees," and related interpretations. No
stock-based employee compensation cost is reflected in net income, as all
options granted under the plan had an exercise price equal to or greater than
the market value of the underlying common stock on the date of grant. The
following table illustrates the effect on net income and earnings per share if
the Company had applied the fair value recognition provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," to stock-based employee compensation.
For the nine For the nine
months ended months ended
September 30, September 30,
2004 2003
------------- -------------
Net Loss
As reported E (1,338) E (1,681)
Deduct: Total stock-based employee compensation
expense determined under fair value based methods for
all awards, net of any related tax effects - (26)
----------- ----------
Pro forma E (1,338) E (1,707)
========== ==========
Basic and Diluted Loss Per Share
As reported E (0.02) E (0.03)
Pro forma E (0.02) E (0.03)
In connection with the issuance of common stock in the three months ended
September 30, 2004, the Company issued warrants that entitle investors to
acquire an additional 700,000 common shares at prices ranging from $0.10 to
$0.12 per share. The total fair value of these warrants at their respective
grant dates was E46, which amount was expensed during the three months ended
September 30, 2004. All warrants expire July 31, 2005.
NOTE 4. REPORTING CURRENCY
Consistent with the location of its activities, beginning January 1, 1999, the
Company adopted the euro (E) as its corporate currency. Accordingly, the Company
prepared all accompanying financial statements in euros.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This report contains forward-looking statements that involve risks and
uncertainties. The statements contained in this report are not purely
historical, but are forward-looking statements within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended, and Section 27A of the
Securities Act of 1933, as amended. These forward looking statements concern
matters that involve risks and uncertainties that could cause actual results to
differ materially from those projected in the forward-looking statements. Words
such as "may," "will," "should," "could," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential," "continue", "probably" or similar
words are intended to identify forward looking statements, although not all
forward looking statements contain these words.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of the forward-looking
statements. We are under no duty to update any of the forward-looking statements
after the date hereof to conform such statements to actual results or to changes
in our expectations.
Readers are urged to carefully review and consider the various disclosures made
by us which attempt to advise interested parties of the factors which affect our
business, including without limitation disclosures made under the captions
"Management Discussion and Analysis of Financial Condition and Results of
Operations," "Risk Factors," "Consolidated Financial Statements" and "Notes to
Consolidated Financial Statements" included in our annual report on Form 10-K
for the year ended December 31, 2003 and, to the extent included therein, our
quarterly reports on Form 10-Q filed during fiscal year 2004.
OVERVIEW
In March 2001, we acquired substantially all of the shares of Mymetics SA
(formerly Hippocampe SA) as our primary operating business. Mymetics SA is a
biotechnology research and development company devoted to fundamental and
applied research in the areas of human and veterinary biology and medicine. The
Company's primary objective is to develop therapies to treat certain
retroviruses including human immunodeficiency virus, or HIV, the virus that
leads to acquired immunodeficiency syndrome, or AIDS. Additional applications of
our research include potential treatments and/or vaccines for animal AIDS, human
and animal oncoviral leukemias, multiple sclerosis and organ transplantation.
Since the acquisition of Mymetics SA, our financial statements have been
prepared treating us as a development stage company. We currently do not make,
market or sell any products or services. As of September 30, 2004, we had not
performed any clinical testing and a commercially viable product is not expected
for several more years. As such, we have not generated any significant revenues.
Revenues reported by us consist of incidental serum by-products of our research
and development activities and interest income. For the purpose of our financial
reporting, the development stage started on May 2, 1990, which is the date that
Mymetics SA was originally organized in France.
As of September 30, 2004, we have an accumulated deficit of approximately E 25.1
million. Our losses have resulted primarily from research and development
activities, related general and administrative expenses and bank fees incurred
in connection with the acquisition of Mymetics SA. To date, our principal
sources of funding have been private equity financings and bank financings. We
expect to continue to incur substantial operating losses for the foreseeable
future as we continue our research and development activities.
The following discussion and analysis of our results of operations and financial
condition for the nine months ended September 30, 2004 should be read in
conjunction with our consolidated financial statements and related notes
included in this report on Form 10-Q.
NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO
NINE MONTHS ENDED SEPTEMBER 30, 2003
Revenues for the nine months ended September 30, 2004 and 2003 were nil.
Costs and expenses decreased to E1,338,000 for the nine months ended September
30, 2004 from E1,681,000 (-20.3%) for the nine months ended September 30, 2003.
Research and development expenses decreased to E555,000 in the current period
from E792,000 (-29.9%) in the comparative period of 2003 as a result of our
difficult financial condition. General and administrative expenses decreased to
E586,000 in the nine months ended September 30, 2004 from E711,000 (-17.6%)in
the comparative period of 2003 due mostly to lower consulting fees.
The Corporation reported a net loss of E1,338,000, or E0.02 per share, for the
nine months ended September 30, 2004, compared to E1,681,000, or E0.03, for the
nine months ended September 30, 2003.
THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO
THREE MONTHS ENDED SEPTEMBER 30, 2003
Revenue was nil for the three months ended September 30, 2004 and September 30,
2003.
Costs and expenses decreased to E437,000 for the three months ended September
30, 2004 from E541,000 (-19.2%)for the three months ended September 30, 2003.
Research and development expenses decreased to E140,000 in the current period
from E279,000 (-49.3%)in the comparative period of 2003 due to our difficult
financial situation. General and administrative expenses increased to E233,000
in the three months ended September 30, 2004 from E198,000 (+16.5%)in the
comparative period of 2003 due to the cost of shares issued, whether for cash or
services rendered, as disclosed hereafter under Item 5, "NEW INVESTORS".
We reported a net loss of E437,000, or E0.01 per share, for the three months
ended September 30, 2004, compared to E541,000, or E0.01, for the three months
ended September 30, 2003.
LIQUIDITY AND CAPITAL RESOURCES
These financial statements have been prepared assuming we will continue as a
going concern. We have experienced significant losses since inception resulting
in a deficit in shareholders' equity of E4.8 million as of September 30, 2004,
which raises substantial doubt about our ability to remain a going concern.
Deficits in operating cash flows since inception have been financed through debt
and equity sources.
As of September 30, 2004, we had approximately E8,000 in cash compared to
E125,000 at December 31, 2003.
Net cash used by operating activities was E974,000 for the nine months ended
September 30, 2004, compared to E1,468,000 for the nine months ended September
30, 2003. A increase in accounts payable provided cash of E19,000 for the nine
months ended September 30, 2004 compared to E359,000 for the nine months ended
September 30, 2003.
Financing activities provided cash of E867,000 (of which E675,000 was from the
issuance of common stock to three new investors) for the nine months ended
September 30, 2004 compared to E1,121,000 in the same period last year (of which
the entire amount was from proceeds of a note payable). We have a non-revolving
term facility in the principal amount of up to E3.3 million, which matures on
December 31, 2004. The only increase of this line authorized by the bank are the
interests accrued during the period as well as payments in connection with the
maintenance of our patents portfolio, pledged as collateral to the bank. We are
confident that this facility will be extended.
In order to remain a going concern, we intend to seek additional financial
resources to continue our research and development, pre-clinical and clinical
studies and regulatory activities necessary to bring our potential products to
market and to establish production, marketing and sales capabilities. The timing
and amount of spending of such financial resources cannot be accurately
predicted and will depend on several factors, including the progress of our
efforts in raising such financial resources, the progress of our research and
development efforts and pre-clinical and clinical activities, competing
technological and market developments, the time and costs of obtaining
regulatory approvals, the time and costs involved in filing, prosecuting and
enforcing patent claims, the progress and cost of commercialization of products
currently under development, market acceptance and demand for our products and
other factors beyond our control.
As reported hereafter under "Subsequent events" and as disclosed in our filing
8-K dated October 25, 2004, with the Securities and Exchange Commission, we have
obtained a firm commitment of $5 million under a Standby Equity Distribution
Agreement signed with Cornell Capital Partners, LLP on October 20, 2004.
We will seek to raise additional funds from US or European government agencies
such as NIH or Eurovac, from humanitarian donors such as the International AIDS
Vaccine Initiative (IAVI) or the Bill and Melinda Gates Foundation, lenders
and/or equity or debt issuance and/or potential partnership with major
international pharmaceutical and biotechnology firms. However, there can be no
assurance that we will be able to obtain grants and/or raise additional capital
on terms satisfactory to us, or at all. In the event that we are not able to
obtain such additional capital or grants, we would be required to restrict or
even halt our operations. If adequate funds are not available, we could be
required to delay development or commercialization of our products or
technologies that we would otherwise seek to commercialize for ourselves, or
reduce the marketing, customer support or other resources devoted to our
products, any of which could have a material adverse effect on our business,
financial condition and result of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk from changes in interest rates which could affect
our financial condition and results of operations. We have not entered into
derivative contracts for our own account to hedge against such risk.
INTEREST RATE RISK
Fluctuations in interest rates may affect the fair value of financial
instruments sensitive to interest rates. An increase in interest rates may
decrease the fair value and a decrease in interest rates may increase the fair
value of such financial instruments. We have debt obligations which are
sensitive to interest rate fluctuations. The following tables provide
information about our exposure to interest rate fluctuations for the carrying
amount of such debt obligations as of September 30, 2004 and 2003 and expected
cash flows from these debt obligations:
AS AT SEPTEMBER 30, 2004
(IN THOUSANDS)
EXPECTED FUTURE CASH FLOW
YEAR ENDING DECEMBER 31,
CARRYING FAIR ---------------------------------------------------
VALUE VALUE 2004 2005 2006 2007 2008 THEREAFTER
- ----------------------------------------------------------------------------------------------------------------
Debt obligations E3,319 E3,319 E3,319 E - E - E - E - E -
- ----------------------------------------------------------------------------------------------------------------
AS AT SEPTEMBER 30, 2003
(IN THOUSANDS)
EXPECTED FUTURE CASH FLOW
YEAR ENDING DECEMBER 31,
CARRYING FAIR ----------------------------------------------------
VALUE VALUE 2003 2004 2005 2006 2007 THEREAFTER
- -----------------------------------------------------------------------------------------------------------------
Debt obligations E3,110 E3,110 E - E3,110 E - E - E - E -
- -----------------------------------------------------------------------------------------------------------------
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Within 90 days prior to the
filing date of this report, our principal executive officer and principal
financial officer, carried out an evaluation of the effectiveness and design of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-14(c) and 15d-14(c)) and have concluded that, based on such evaluation, our
disclosure controls and procedures were adequate and effective to ensure that
material information relating to us, including our consolidated subsidiaries,
was made known to them by others within those entities, particularly during the
period in which this Quarterly Report on Form 10-Q was being prepared.
CHANGES IN INTERNAL CONTROLS
None.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
During the three month period ending September 30, 2004, we had to face two
legal proceedings brought against the Company or its French affiliate. The total
amount involved is approximately E34,000, of which we believe E4,000 to be
without merit. We expect to settle the remaining case out of court as soon as we
will be able to obtain additional funds.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
NEW INVESTORS
Between August 2, 2004 and September 1, 2004, four new investors have acquired
1,516,667 new common restricted shares in a price range from $0.10 to 0.13 per
share, representing a total amount of $179,000. Of these investors, two have
also received warrants entitling them to acquire until July 31, 2005, an
additional 700,000 shares for a total price of $74,000.
As has been the case since our management changes of July 31, 2003, the proceeds
of these transactions have been used to i) settle, either totally or partially,
amounts owed to critical service suppliers to Mymetics Corporation, thus
allowing a gradual return to normal operations of the Company, ii) launch
certain research projects having a high potential for strengthening our
negotiating position with major pharmaceutical companies and iii) pay for
minimal current operating expenses. As of this day, all officers of the Company
are still working full time with neither pay nor liability insurance and shall
continue to do so until the Company will be able to draw under the $5 million
Standby Equity Distribution Agreement signed with Cornell Capital Partners, LLP
on October 20, 2004, as reported hereafter under "Subsequent events" and as
disclosed in our filing 8-K dated October 25, 2004, with the Securities and
Exchange Commission.
In addition to the shares issued for cash as above, we have also issued 770,000
common restricted shares to six individuals who accepted to receive them instead
of cash as compensation for services rendered.
SCIENTIFIC ADVANCES
Recent work conducted with our French scientific partners has shown that one of
our non-optimized aids vaccine candidate had produced neutralizing antibodies
against primary strains of the HIV-AIDS virus. We are presently testing
generations 2 and 3 of our candidate vaccine and expect results during the first
quarter of 2005.
Such results come on the heels of our previous work, conducted with our partner
Protein'eXpert SA, which positively demonstrated the biological functionality of
the large scale, conformational mimicry between the gp41 HIV transmembrane
protein and IL-2, a key protein sometimes referred to as "the immune system's
conductor".
We believe that understanding the functionality of such large scale,
conformational mimicry, which we first identified in 1997, opens the way to an
original and innovative approach to developing vaccines against AIDS.
Mymetics' scientists and Protein'eXpert SA have been able to produce at low cost
the synthetic, trimeric and soluble gp41 proteins used in such work and which we
believe to be potential AIDS vaccine candidates. This has now been vindicated by
the actual production of neutralizing antibodies as explained above.
Mymetics holds several patents and patent applications based on this discovery,
which we believe to be reinforced and vindicated by the above referenced
results.
SUBSEQUENT EVENTS
As disclosed in our filing 8-K dated October 25, 2004, with the Securities and
Exchange Commission, we have obtained a firm commitment of $5 million under a
Standby Equity Distribution Agreement signed with Cornell Capital Partners, LLP
on October 20, 2004. Under this agreement, we may, at our discretion, issue
shares to Cornell at any time over the next two years. The maximum aggregate
amount of the equity placements pursuant to the agreement is $5 million. Subject
to this limitation, we may draw down up to $175,000 per advance. The facility is
to be used in whole or part entirely at our discretion, subject to an effective
registration which we expect to file within a few days. There are no minimum
draw downs required in the agreement. In addition, the Cornell shares carry an
anti-shorting provision.
As part of this agreement, we had to increase the 85 million shares limit set in
our Certificate of Incorporation, of which 5 million are preferred and 80
million are common shares. On October 18, 2004, the Board of directors
authorized a new limit of 500 million shares, of which 5 million are preferred
and 495 million are common shares, subject to the approval of shareholders
representing a majority of the 66,407,864 shares outstanding on that day. A
written consent is presently being circulated amongst 15 shareholders
representing 35'641'314 shares or 53.7% of the outstanding total. Most such
investors have already signed this written consent and those remaining have
indicated that they will do so before November 19, 2004. The Amended and
Restated Certificate of Incorporation is included as Exhibit 10.5.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
10.1 Standby Equity Distribution Agreement
10.2 Registration Rights Agreement
10.3 Escrow Agreement
10.4 Placement Agent Agreement
10.5 Amended and Restated Certificate of Incorporation
31.1 Section 302 Certification of Chief Executive Officer
31.2 Section 302 Certification of Chief Financial Officer
32 Section 906 Certification of Chief Executive Officer
and Chief Financial Officer
(b) REPORTS ON FORM 8-K
On October 25, 2004, we announced the Standby Equity Distribution Agreement
signed with Cornell Capital Partners, LLP on October 20, 2004 described under
SUBSEQUENT EVENTS above.
No financial statements were filed in connection with these reports on Form 8-K.
SIGNATURES
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.
Dated: November 12, 2004 MYMETICS CORPORATION
By: /s/ Christian Rochet
-------------------------------------
President and Chief Executive Officer