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EX-32.2 - EXHIBIT 32.2 - AngioGenex, Inc.ex32_2apg.htm
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EX-31.2 - EXHIBIT 31.2 - AngioGenex, Inc.ex31_2apg.htm
EX-31.1 - EXHIBIT 31.1 - AngioGenex, Inc.ex31_1apg.htm



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, 2018.

[  ]

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: 000-26181


[aggx10q_093018apg002.gif]


AngioGenex, Inc.

(Name of small business issuer in its charter)


Nevada

 

86-0945116

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

425 Madison Ave, Ste 902, New York, NY

 

10017

(Address of principal executive offices)

 

(Zip Code)


Issuer’s telephone number: (347) 468 6799


Securities registered pursuant to Section 12(b) of the Act:

None


Securities registered pursuant to Section 12(g) of the Act:


Title of each class

 

Name of each exchange on which registered

Common Stock, $0.001 par value per share

 

None



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 has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T, (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [  ]





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer       [   ]

Accelerated filer                    [   ]

Non-accelerated filer         [   ]

(Do not check if a smaller reporting company)

Smaller reporting company   [X]

 

Emerging growth company   [   ]

If an emerging growth company, indicate by checkmark if the registrant has elected

not to use the extended transition period for complying with any new or revised

financial accounting standards provided pursuant to section 13(a) of the Exchange Act         [   ]


As of November 9, 2018, there were 29,386,667 shares of the registrant‘s common stock issued and outstanding.




2



Special Note Regarding Forward-Looking Statements


In this document we make a number of statements, referred to as “forward-looking statements,” that are intended to convey our expectations or predictions regarding, among other things, our product development and commercialization goals and expectations, our plans and anticipated timing and results of clinical development activities, potential market opportunities, revenue expectations and the potential advantages and applications of our products and product candidates under development. Such forward-looking statements involve risks and uncertainties.


These forward-looking statements are derived, in part, from various assumptions and analyses we have made in the context of our current business plan and information currently available to us and in light of our experience and perceptions of historical trends, current conditions and expected future developments and other factors we believe to be appropriate in the circumstances.


You can generally identify forward-looking statements through words and phrases such as “WILL,” “SEEK,” “ANTICIPATE,” “BELIEVE,” “ESTIMATE,” “EXPECT,” “INTEND,” “PLAN,” “BUDGET,” “PROJECT,” “MAY BE,” “MAY CONTINUE,” “MAY LIKELY RESULT” and similar expressions. When reading any forward looking-statement, you should remain mindful that all forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of our Company, and that actual results or developments may vary substantially from those expected as expressed in or implied by that statement for a number of reasons or factors, including those relating to:

·

expectations for the clinical and pre-clinical development, manufacturing, regulatory approval, and commercialization of our pharmaceutical product candidates or any other products we may acquire or in-license;

·

expectations for increases or decreases in expenses;

·

our use of clinical research organizations and other contractors;

·

whether or not markets for our products develop and, if they do develop, the pace at which they develop;

·

expectations for generating revenue or becoming profitable on a sustained basis;

·

expectations for or ability to enter into marketing and other partnership agreements;

·

our ability to attract and retain qualified personnel to implement our growth strategies;

·

our ability to obtain approval from the United States Food and Drug Administration for our products;

·

acceptance of our products by doctors, patients or payors;

·

availability of reimbursement for our products;

·

our ability to obtain and then protect the patents on our proprietary technology;

·

our ability to fund our short-term and long-term operating needs;

·

estimates of the sufficiency of our existing cash and cash equivalents and investments to finance our operating requirements, including expectations regarding the value and liquidity of our investments;

·

changes in our business plan and corporate strategies; and

·

other risks and uncertainties discussed in greater detail in this document, including those captioned Risk Factors and Financial Information.

Any of the assumptions underlying any forward-looking statement could be inaccurate. You are cautioned not to place undue reliance on any forward-looking statement included in this Quarterly Report for the period ended September 30, 2018 filed on Form 10-Q (this “Form 10-Q”). All forward-looking statements are made as of the date of this Form 10-Q and the risk that our actual results will differ materially from the expectations expressed in this Form 10-Q will increase with the passage of time. Except as otherwise required by law, we undertake no obligation to publicly update or revise any forward-looking statement after the date of this Form 10-Q, whether as a result of new information, future events, changed circumstances or any other reason. In light of the significant uncertainties inherent in the forward-looking statements included in this Form 10-Q, the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and expectations set forth in this Form 10-Q will be achieved.




3



AngioGenex, Inc.

Table of Contents

PART I – FINANCIAL INFORMATION

 

 

Item 1.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

5

 

Condensed Consolidated Balance Sheets at September 30, 2018 (unaudited) and December 31, 2017

 

5

 

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2018 and 2017 (unaudited)

 

6

 

Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the nine months ended September 30, 2018 and 2017 (unaudited)

 

7

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017 (unaudited)

 

9

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

10

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

19

Item 4.

Controls and Procedures

 

19

PART II – OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

 

21

Item 1A.

Risk Factors

 

21

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

21

Item 3.

Defaults Upon Senior Securities

 

21

Item 4.

Mine Safety Disclosures

 

21

Item 5.

Other Information

 

21

Item 6.

Exhibits

 

21

SIGNATURES

 

 

22





4



PART I – FINANCIAL INFORMATION


ITEM 1. Condensed Consolidated Financial Statements


ANGIOGENEX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

As of

 

 

As of

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

 

 

 

2018

 

 

2017

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

Cash

 

$

117,341 

 

$

493,676 

 

 

Prepaid expenses

 

 

31,245 

 

 

21,634 

 

 

 

TOTAL CURRENT ASSETS

 

 

148,586 

 

 

515,310 

 

 

TOTAL ASSETS

 

$

148,586 

 

$

515,310 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

459,760 

 

$

383,695 

 

 

Accounts payable and accrued expenses - related parties

 

 

402,537 

 

 

495,536 

 

 

Notes payable

 

 

1,000 

 

 

11,000 

 

 

Notes payable - related parties

 

 

127,750 

 

 

127,750 

 

 

Accrued interest

 

 

45,052 

 

 

51,081 

 

 

Accrued interest - related parties

 

 

78,458 

 

 

73,321 

 

 

 

TOTAL CURRENT LIABILITIES

 

 

1,114,557 

 

 

1,142,383 

 

LONG-TERM LIABILITIES

 

 

 

 

 

 

 

 

Notes payable, related parties

 

 

27,450 

 

 

27,450 

 

COMMITMENTS AND CONTINGENCIES (Note 10)

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Preferred stock, 5,000,000 shares authorized, $0.001 par value;

 

 

 

 

 

 

 

 

 

no shares issued and outstanding

 

 

 

 

 

 

Common stock, 150,000,000 shares authorized, $0.001 par value;

 

 

 

 

 

 

 

 

 

29,386,667 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively

 

 

29,387 

 

 

29,387 

 

 

Additional paid-in capital

 

 

5,903,242 

 

 

5,892,359 

 

 

Accumulated deficit

 

 

(6,926,050)

 

 

(6,576,269)

 

 

 

TOTAL STOCKHOLDERS' DEFICIT

 

 

(993,421)

 

 

(654,523)

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$

148,586 

 

$

515,310 



See accompanying notes to condensed consolidated financial statements (unaudited).




5




ANGIOGENEX, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

2018

 

2017

 

 

2018

 

 

2017

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

$

(1,291)

$

17,997 

 

$

10,975 

 

$

252,923 

 

General and administrative

 

79,621 

 

99,980 

 

 

332,101 

 

 

357,890 

 

 

 

TOTAL OPERATING EXPENSES

 

78,330 

 

117,977 

 

 

343,076 

 

 

610,813 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

(78,330)

 

(117,977)

 

 

(343,076)

 

 

(610,813)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

29 

 

(207)

 

 

206 

 

 

(662)

 

Interest income

 

138 

 

92 

 

 

653 

 

 

92 

 

Interest expense

 

(2,468)

 

(3,019)

 

 

(7,564)

 

 

(8,386)

 

 

 

TOTAL OTHER EXPENSE

 

(2,301)

 

(3,134)

 

 

(6,705)

 

 

(8,956)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

(80,631)

 

(121,111)

 

 

(349,781)

 

 

(619,769)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAXES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

(80,631)

$

(121,111)

 

$

(349,781)

 

$

(619,769)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE -

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

$

(0.00)

$

(0.00)

 

$

(0.01)

 

$

(0.02)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF

 

 

 

 

 

 

 

 

 

 

COMMON STOCK SHARES OUTSTANDING -

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

 

29,386,667 

 

28,878,624 

 

 

29,386,667 

 

 

27,213,187 



See accompanying notes to condensed consolidated financial statements (unaudited).




6





ANGIOGENEX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT (UNAUDITED)

 

 

Nine Month Period Ended September 30, 2018

 

 

 Common Stock

 

 

 

 

 

 

 

 

Total

 

 

 Number

 

 

Additional

 

Shares

 

 Accumulated

 

 Stockholders'

 

 

 of Shares

Amount

 

Paid-in Capital

 

Issuable

 

 Deficit

 

 Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2018

 

29,386,667

$

29,387

$

5,892,359 

$

-

 

$

(6,576,269)

 

$

(654,523)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

-

 

-

 

(10,530)

 

-

 

 

 

 

(10,530)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Net loss

 

-

 

-

 

 

-

 

 

(180,941)

 

 

(180,941)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  March 31, 2018

 

29,386,667

 

29,387

 

5,881,829 

 

-

 

 

(6,757,210)

 

 

(845,994)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

-

 

-

 

18,562 

 

-

 

 

 

 

18,562 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Net loss

 

-

 

-

 

 

-

 

 

(88,209)

 

 

(88,209)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2018

 

29,386,667

 

29,387

 

5,900,391 

 

-

 

 

(6,845,419)

 

 

(915,641)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

-

 

-

 

2,851 

 

-

 

 

 

 

2,851 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Net loss

 

-

 

-

 

 

-

 

 

(80,631)

 

 

(80,631)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2018

 

29,386,667

$

29,387

$

5,903,242 

$

-

 

$

(6,926,050)

 

$

(993,421)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


See accompanying notes to condensed consolidated financial statements (unaudited).




7





ANGIOGENEX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT (UNAUDITED)

 

 

Nine Month Period Ended September 30, 2017

 

 

 Common Stock

 

 

 

 

 

 

 

 

Total

 

 

 Number

 

 

Additional

 

Shares

 

 Accumulated

 

 Stockholders'

 

 

 of Shares

Amount

 

Paid-in Capital

 

Issuable

 

 Deficit

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2017

 

25,366,667

$

25,367

$

5,116,065 

$

1,000 

 

$

(5,893,240)

 

$

(750,808)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock

 

1,000,000

 

1,000

 

 

(1,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

-

 

-

 

25,316 

 

 

 

 

 

25,316 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Net loss

 

-

 

-

 

 

 

 

(89,787)

 

 

(89,787)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  March 31, 2017

 

26,366,667

 

26,367

 

5,141,381 

 

 

 

(5,983,027)

 

 

(815,279)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

-

 

-

 

60,558 

 

 

 

 

 

60,558 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Net loss

 

-

 

-

 

 

 

 

(408,871)

 

 

(408,871)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2017

 

26,366,667

 

26,367

 

5,201,939 

 

 

 

(6,391,898)

 

 

(1,163,592)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

-

 

-

 

(76,329)

 

 

 

 

 

(76,329)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sale of common stock

 

-

 

-

 

747,000 

 

3,000 

 

 

 

 

750,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for services

 

-

 

-

 

3,180 

 

20 

 

 

 

 

3,200 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Net loss

 

-

 

-

 

 

 

 

(121,111)

 

 

(121,111)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2017

 

26,366,667

$

26,367

$

5,875,790 

$

3,020 

 

$

(6,513,009)

 

$

(607,832)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


See accompanying notes to condensed consolidated financial statements (unaudited).




8





ANGIOGENEX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

 

 

 

For the Nine Months

 

 

 

 

 

 

Ended September 30,

 

 

 

 

 

 

2018

 

2017

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net loss

 

 

$

(349,781)

 

$

(619,769)

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation issuance of common stock options

 

 

10,883 

 

 

9,545 

 

 

Issuance of common stock for services rendered – related party

 

 

 

 

3,200 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

    Prepaid expenses

 

 

19,444 

 

 

(30,600)

 

 

    Accounts payable and accrued expenses

 

 

52,126 

 

 

131,967 

 

 

    Accounts payable and accrued expenses, related party

 

 

(92,999)

 

 

102,326 

 

 

    Accrued interest

 

 

(6,029)

 

 

1,899 

 

 

    Accrued interest – related parties

 

 

5,137 

 

 

4,090 

 

Net cash used in operating activities

 

 

(361,219)

 

 

(397,342)

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Repayment of notes payable

 

 

(10,000)

 

 

 

Repayment of financed insurance premiums

 

 

(5,116)

 

 

 

Proceeds from common stock subscription

 

 

 

 

750,000 

 

 

Net cash (used in) provided by financing activities

 

 

(15,116)

 

 

750,000 

 

 

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash

 

 

(376,335)

 

 

352,658 

Cash, beginning of period

 

 

493,676 

 

 

272,471 

Cash, end of period

 

$

117,341 

 

$

625,129 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW DISCLOSURES:

 

 

 

 

 

 

 

Cash paid for interest and income taxes:

 

 

 

 

 

 

 

 

Interest paid

 

$

8,371 

 

$

2,397 

 

 

Income taxes

 

$

 

$

 

Supplemental non-cash financing activity:

 

 

 

 

 

 

 

 

Insurance premiums financed by a note

 

$

29,055 

 

$



See accompanying notes to condensed consolidated financial statements (unaudited).




9




ANGIOGENEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS


The condensed consolidated financial statements include AngioGenex, Inc. (“AngioGenex” or the “Company”) and its wholly owned subsidiary AngioGenex Therapeutics, Inc.  AngioGenex was incorporated in the State of New York on March 31, 1999. AngioGenex is a bio-pharmaceutical company dedicated to the development and commercialization of a novel, inexpensive treatment for vascular diseases including many forms of cancer, and macular degeneration.


NOTE 2 – LIQUIDITY AND BASIS OF PRESENTATION


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.


As shown in the accompanying financial statements, the Company has incurred substantial net losses since inception. The future of the Company is dependent upon obtaining additional financing and generating revenue to fund research and development activities and to support operations. However, there is no assurance that the Company will be able to obtain additional financing. Furthermore, there is no assurance that the United Stated Food and Drug Administration (the “FDA”) will grant future approval of the Company’s prospective products or that profitable operations can be attained as a result thereof. Our financial statements do not include any recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.


The Company anticipates that its principal source of funds for the next year will be the issuance of additional equity or debt instruments for cash. Management plans to seek additional capital from new equity securities issuances that will provide funds needed to increase liquidity, fund internal growth and fully implement its business plan.


Based on the Company's current cash usage expectations, management believes it will not have sufficient liquidity to fund its operations through December 2018. Further, management cannot provide any assurance that it is probable that the Company will be successful in accomplishing any of its plans to raise debt or equity financing. Collectively, these factors raise substantial doubt regarding the Company's ability to continue as a going concern.


NOTE 3 – BASIS OF REPORTING AND SIGNIFICANT ACCOUNTING POLICIES


The accompanying condensed consolidated financial statements reflect the accounts of the Company and its wholly-owned subsidiary and have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). All intercompany balances and transactions have been eliminated.


The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.


In the opinion of management, these interim unaudited condensed consolidated financial statements contain all of the adjustments of a normal and recurring nature which are considered necessary for a fair presentation of the financial position of the Company and the results of its operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2018, are not necessarily indicative of the operating results for the entire year. The accompanying Condensed Consolidated Balance Sheets at December 31, 2017, were derived from audited annual financial statements but do not contain all of the footnote disclosures from the annual financial statements. These financial statements should be read in conjunction with the annual financial statements and related disclosures included in the audited financial statements for the year ended December 31, 2017.





10



The accompanying interim unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes. As of September 30, 2018, the Company’s significant accounting policies and estimates remain unchanged from those detailed in the audited financial statements for the year ended December 31, 2017.


Recent Accounting Pronouncements Not Yet Adopted


The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (the “FASB”). ASUs not discussed below were considered by management and either determined to be not applicable or expected to have minimal impact on our consolidated balance sheets or statements of operations.


In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard requires that all lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about its leasing arrangements. The new standard will be effective for us on January 1, 2019. The adoption of this standard is not expected to have a material impact on the Company's financial position or results of operations, as the Company has not entered into any lease agreements.


In June 2018, FASB issued ASU No. 2018-07 to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The new guidance expands the scope of Accounting Standards Codification, or ASC, 718 to include share-based payments granted to nonemployees in exchange for goods or services used or consumed in an entity’s own operations and supersedes the guidance in ASC 505-50. The guidance is effective for public business entities in annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted, including in an interim period for which financial statements have not been issued, but not before an entity adopts ASC 606. We are currently evaluating the effect of this guidance on our consolidated financial statements and disclosures.


NOTE 4 – AGREEMENT WITH MEMORIAL SLOAN KETTERING CANCER CENTER (“MSKCC”)


In March 2000, in exchange for $30,000, the Company obtained from MSKCC, a related party, an exclusive worldwide right and license in the field of use, including to make, have made, use, lease, commercialize and sell licensed products and to use licensed processes derived from the invention of our two leading drug candidates. In 2014, the Company issued 810,000 shares of common stock in exchange for previously agreed milestone, royalty and sub-license payments. The aforementioned issuance of shares of common stock released the Company from any future obligations and there are no remaining obligations under the agreement.


In July 2017 the Company executed a service agreement with MSKCC, a related party, to provide pre-clinical research services in connection with the development and Investigational New Drug (IND) Application for the Company’s lead compound and its derivatives. The effective date of the agreement is February 2, 2017, and $250,000 of fees and costs have been incurred as of September 30, 2018.


NOTE 5 – RELATED PARTY TRANSACTIONS


The Company owes MSKCC for research and development expenses $25,000 and $100,000 as of September 30, 2018 and 2017, respectively.


An officer of the Company allows the Company to use space in his offices for file keeping and other business purposes. The Company pays no rent for this space. This same officer also provides services to the Company in the form of accounting, bookkeeping and tax preparation, for which the Company is billed. As of September 30, 2018 and 2017, the Company owed the officer’s business $145,376 and $153,315, respectively, which is included in accounts payable and accrued expenses – related parties in our financial statements.


At September 30, 2018 and 2017, the Company owed a former officer $95,000 for unpaid salary pursuant to an agreement. In addition, two former officers are owed $99,159 for unreimbursed business expenses as of September 30, 2018 and 2017, respectively, which is included in accounts payable and accrued expenses - related parties in our financial statements.




11




Two shareholders provided legal services to the Company, for which the Company is billed. As of September 30, 2018 and 2017, the Company owed these shareholders $38,002, which is included in accounts payable and accrued expenses – related parties in the financial statements.


NOTE 6 – FINANCED INSURANCE PREMIUMS


In August 2018, the Company entered into an agreement to finance $29,055 of its insurance premiums. The agreement provides for monthly repayments of principal and interest accrued at 8.54% per annum, commencing on September 10, 2018. At September 30, 2018 the balance was $23,939 and has been included with accounts payable and accrued expenses in the financial statements.


NOTE 7 – NOTES PAYABLE


At September 30, 2018, the Company’s loans from related parties total $155,200 of principal and accrued interest of $78,458. The interest rate on these notes vary from 0% to 6%. Related parties include directors, officers, stockholders and stock option holders.


At September 30, 2018, the Company’s loans from unrelated parties total $1,000 in principal and $771 of accrued interest. The interest rate on these notes is 6%, and the principal and accrued interest is due on demand.


On November 19, 2007, the Company obtained an unsecured loan in the amount of $10,000 from an unrelated party. The loan was repaid on April 6, 2018. The Company paid interest payments of $6,171 on March 5, 2018 and $61 on April 6, 2018, totaling $6,232 of interest accrued and paid on this loan.


The principal maturity on all of these notes payable (including related parties and non-related parties) is as follows:


September 30, 2019

$

128,750

September 30, 2020

4,700

September 30, 2021

-

September 30, 2022

-

Thereafter

22,750

 

$

156,200



NOTE 8 – CAPITAL STOCK


Common Stock


The Company is authorized to issue 150,000,000 shares of $0.001 par value common stock.


In July 2017, the Company sold 3,000,000 shares of common stock to related parties at $0.25 per share for proceeds of $750,000.


NOTE 9 – STOCK OPTIONS


The Company did not grant any options during the nine months ended September 30, 2018. As of September 30, 2018, 3,890,000 options are available under the stock option plan approved by the board of directors and the stockholders of the Company on September 27, 2012 (the “2012 Plan”).


The following table summarizes information regarding outstanding stock option grants as of September 30, 2018:








12






 

 

Outstanding

 

Exercisable

Range of Exercise Prices

 

Granted
Stock Options
Outstanding

 

Weighted-
Average
Remaining
Contractual
Life (Years)

 

Weighted-
Average
Exercise
Price

 

Granted
Stock Options
Exercisable

 

Weighted-
Average
Exercise
Price

$

 

 

0.01-0.05

 

 

 

 

6,659,999

 

2.10

 

$

0.04

 

 

6,659,999

 

$

0.04

 

 

 

0.08-0.10

 

 

 

3,570,000

 

2.63

 

0.08

 

 

3,220,000

 

0.08

 

 

 

0.17

 

 

 

1,560,000

 

1.05

 

0.17

 

 

1,560,000

 

0.17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

0.01-0.17

 

 

 

 

11,789,999

 

2.12

 

$

0.07

 

 

11,439,999

 

$

0.07

 


Compensation expense of $2,851 and $(76,329) has been recognized for stock options for the three months ended September 30, 2018 and 2017, and $10,883 and $9,545 has been recognized for stock options for the nine months ended September 30, 2018 and 2017, respectively. The aggregate intrinsic value of the outstanding and exercisable options at September 30, 2018 was $2,134,300 and $2,074,800 respectively. At September 30, 2018, $17,010 of unamortized compensation expense for unvested options is expected to be recognized over the next year.


During 2016, the Company granted 200,000 stock options to a consultant, 100,000 of which will vest upon obtaining certain regulatory approval and submission of an IND application to the FDA, and 100,000 of which will vest upon the commencement of the Phase I human clinical trial. The first 100,000 stock options described above are accounted for as variable performance based option awards, as the performance is probable of occurring, and will be adjusted each reporting period to reflect the estimated fair value until such approvals and filings are obtained. The second 100,000 stock options are contingent upon an event (initiation of a clinical trial) in the future, and management cannot determine if this event is probable at this time. The fair value of these options as of September 30, 2018 and 2017 was $18,341 and $24,933, respectively. The change in value of $14,650 and ($15,988) has been included with stock based compensation in research and development for the nine months ended September 30, 2018 and 2017, respectively.


NOTE 10 — COMMITMENTS AND CONTINGENCIES


In July 2006, Comparative Biosciences Inc. (“CompBio”) , a company that AngioGenex hired to breed and house a colony of its proprietary “Id-Knockout” mice, sued the Company claiming approximately $200,000 in unpaid invoices. AngioGenex’s response included counter-claims for CompBio’s breaches of contract, as well as a number of business torts. On November 6, 2007, the parties agreed to a disposition of the suit under a stipulated judgment and settlement agreement pursuant to which: CompBio must return the laboratory mice and all scientific data from the research, CompBio agreed to forego all intellectual property rights in the mice and in the research that it acknowledged belong to AngioGenex, and AngioGenex agreed to pay CompBio $55,000 in installments over a 5-year period, plus accumulated interest at 5% per annum. The stipulated judgment and settlement agreement was filed with the court in November 2007. The Company has not made the required payments since the fourth quarter of 2008, and is in default of this settlement agreement. Under the terms of the agreement, upon receipt of written notification of default from CompBio the Company has five days to cure. Failure by the Company to cure the default results in an increase in the settlement amount to $75,000 plus retroactive interest of 5% on the balance. The Company has not received any notification of default from CompBio as of report date. In November 2007 and various dates in 2008, the Company has made $17,500 payments to CompBio pursuant to the settlement agreement, and had accrued interest of $44,281. Since those dates, no payments have been made.


NOTE 11 — NET LOSS PER SHARE


Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding and issuable during the periods presented. The computation of diluted loss per share is similar to the computation of basic loss per share, except that the denominator is increased for the assumed exercise of dilutive options and other potentially dilutive securities using the treasury stock method unless the effect is antidilutive.


The Company has 11,789,999 and 12,289,999 common stock options outstanding as of September 30, 2018 and 2017, respectively. These options are excluded from the calculation as they are antidilutive.




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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations


This management’s discussion and analysis (“MD&A”) of the financial condition and results of operations of the Company should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes for the three and nine months ended September 30, 2018 and 2017, which have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). All dollar amounts are in U.S. dollars (“US$” or “$”) unless stated otherwise.


Our MD&A is intended to enable readers to gain an understanding of our current operating results and financial position. To do so, we provide information and analysis comparing the results of operations and financial position for the current period to those of the preceding comparable period. We also provide analysis and commentary that we believe is required to assess our future prospects. Accordingly, certain sections of this report contain forward-looking statements that are based on current plans and expectations. These forward-looking statements are affected by risks and uncertainties that are discussed in Item 1A of this Form 10-Q and Item 1A of our Annual Report on Form 10-K filed on April 2, 2018 (the “2017 Annual Report on Form 10-K”), and above in the section titled “Special Note Regarding Forward-Looking Statements”; such risks and uncertainties could have a material impact on future prospects. Readers are cautioned that actual results could vary from those forecasted in this MD&A.


1. Executive Summary


Background and History of the Company. AngioGenex, Inc. (“AngioGenex”, “we”, “us”, “our”, or the “Company”) is a public bio-pharmaceutical company dedicated to the development and commercialization of a novel, inexpensive treatment for vascular diseases including many forms of cancer and macular degeneration. The Company was incorporated in the state of Nevada in March 1999.


The Science – Discovering the Target. Since the discovery of “Id” genes more than 20 years ago, Dr. Robert Benezra, the Company’s Chief Scientific and Executive Officer (“CEO” and “CSO”) and a Member at Memorial Sloan Kettering Cancer Center (“MSKCC”), has been pursuing the role of Id genes, and the proteins they express, in stimulating intrinsic tumor cell growth and blood vessel development to support such growth that occurs both in early fetal development and in the pathology of numerous important diseases. Subsequent experiments by Dr. Benezra with an “Id knock-out” mouse suggested that interfering with Id protein activity might prevent the establishment and spread of tumors that normally “dupe” the body into activating the Id mechanism for cancer cell proliferation and the creation of the new blood vessels cancer cells need to grow and spread. The role of the Id proteins as targets for neovessels and tumor cell proliferation, as well as metastasis, was further discussed in numerous scientific articles. The articles also discuss the Id mechanism and potential for disease prevention.


The Company’s bio-pharmaceutical technology and its development plans are based on the hypothesis that Id protein-supported cell proliferation and neo-vascularization is central to the pathology of many forms of cancer and macular degeneration (a disease characterized by unregulated blood vessel growth in the eye), and that the inhibition of Id has a powerful positive effect on preventing the progression of many forms of cancer and macular degeneration.


The Company – Business Strategy. AngioGenex was created to capture the full potential of the Id platform. We currently own what we believe are unencumbered exclusive worldwide rights under issued and pending patents to a novel class of drugs that target the Id proteins. Central to this strategy is our symbiotic relationship with MSKCC, which includes a coordinated research and development program and clinical trial plan. MSKCC holds common stock in the Company that was granted in return for the efforts it contributed to Dr. Benezra’s early efforts in discovering the role of the Id proteins and their potential as targets for disease intervention.


Product Development – Designing and Testing Novel Drugs. With the Company confident that the cell biology suggesting the importance of the target was established (as suggested in the following publications:  “Angiogenesis impairment in Id-deficient mice cooperates with an Hsp90 inhibitor to completely suppress HER2 neu-dependent breast tumors” (Candia et al, Proceedings of The National Academy of Sciences 2003) and “The Id proteins and Angiogenesis”  (Benezra, Rafii, Lyden, Oncogene 2001)), the next step was to try to hit that target with a drug that would inhibit Id, and prevent the process of tumor cell proliferation and new blood vessel formation, thereby impeding the spread of cancer cells. Attempting to do so required the creation of a company to complete the medicinal chemistry and preclinical development. Commercializing the concept required raising seed capital,




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organizing a team with the expertise to identify the target’s molecular structure, conducting high through-put screening and rational drug design modeling, securing the intellectual property protecting its findings and conducting the pre-clinical experiments with the most active “hits.” The Company was created for that purpose and focused on developing this platform technology into the first Id-inhibitor drug. AngioGenex has accomplished key benchmarks since its inception by incubating the technology and concretizing the concept in the form of active proprietary chemical compounds, which are small molecules such as our two lead drug candidates that, based on unpublished data, the Company believes to have shown specific activity in various animal models of various cancers and macular degeneration.


Our two lead drug candidates are AGX51 and its derivative AGX51-α, with AGX51-α being the first drug candidate we are testing towards an Investigational New Drug Application (IND). The Company also has a number of other proprietary small molecules. Focusing on the exact three-dimensional atomic structure of the Id protein, our chemists designed drugs that we believe bind to the Id proteins and inhibit their activity, based on unpublished experimental data regarding the drugs’ activity in in vitro tests, and from animal models of breast cancer and macular degeneration. The goal of these experiments was to see if, in pre-clinical models, AGX51-α and AGX51s other derivatives can reproduce the impact of Id gene deletion in preventing the Id proteins from performing their role in support of the establishment and spread of cancer. The Companys working hypothesis is that the Company’s drugs interfere with Id activity both in the tumor cells themselves and the vessels that support their growth, and that this dual activity might support the Company’s attempts to establish the superior performance of AGX51-α over other drugs which only inhibit blood vessel growth.


Competition. We believe that there is no other company developing an Id-based therapeutic, diagnostic or prognostic product. However, there are a large number of competitors developing cancer therapeutics based on an anti-angiogenic approach. There are also a significant number of companies developing therapeutics and diagnostics based on other technologies.


The leading drugs in the field of anti-angiogenic drug therapy are Genentech’s Avastin for cancer (approximately $5.98 billion in sales in 2016) and Regeneron’s Eylea for macular degeneration (whose sales have lifted the company’s market cap to over $50 billion in 2017). Both target a different molecule (Vascular Endothelial Growth Factor) that is active in normal adult biology with anti-bodies or biologics.


Corporate Strategy Pre-Clinical and Clinical Development. The Companys drugs (including our two lead drug candidates AGX51 and its derivative AGX51-α) are at the pre-clinical stage of development. Our Company would like to ultimately develop different Id-inhibitor drugs to treat cancer and macular degeneration. As a corporate strategy, the cancer program (i.e. AGX51) is on hold pending the receipt of sufficient resources or partnerships and we have determined to move first with the macular degeneration program (i.e. AGX51-α).


For AGX51, the estimated timeframe and cost for completion of pre-clinical work is approximately 15 to 18 months and approximately $1.5 million to $2 million so that we can file an IND and the estimated cost to complete Phase I/IIA clinical trials is approximately $12 million. For AGX51-α, the estimated timeframe and cost for completion of pre-clinical work is approximately 12 to 15 months and approximately $1.7 million so that we can file an IND and the estimated cost to complete Phase I/IIA clinical trials is approximately $8 million to $12 million. We estimate that we are only able to fund our current operations through December 2018 and will need to raise at least $1.5 million in capital to fund our pre-clinical development plan and related operational expenses.


Our team is poised to take one of our two lead compounds, AGX51-α, through this pre-clinical testing in 12 to 15 months and then into clinical trials for testing in age-related macular degeneration (ARMD). We elected to pursue the ARMD indication first, rather than any form of cancer, because of the relatively lower cost of doing so and our belief, based on the work we have done on AGX51-α at the Wilmer Eye Institute, that there is greater predictability in relation to the pre-clinical animal model data for the ARMD indication. Our current plan is to complete pre-clinical work for the filing of an IND in the ocular indication initially and conduct a Phase I/IIA clinical trial thereafter. The Company will need to raise between $6 million and $10 million in additional capital to do so, but has chosen to wait until the completion of the IND as it expects to be able to do so on better terms at that time, depending on the results of the pre-clinical work. If sufficient additional funds are raised, or if a partnership is obtained for eye disease drug development, those IND funds would be re-allocated to a cancer IND for AGX51 or one of its other identified proprietary molecules derivative of AGX51. If successful, that IND would be followed by Phase I/II clinical trials in patients with high risk of metastatic progression at MSKCC, under the supervision of Dr.




15



Larry Norton (Deputy Physician-in-Chief at MSKCC and Medical Director of the Evelyn H. Lauder Breast Center), the Head of the AngioGenex Scientific Advisory Board. With the initiation of these trials, designed to establish safety and proof of principle in humans, the Id story will have come full circle, from a basic biological finding in an academic lab to the discovery of an active chemical inhibitor to be tested on real patients in a clinic at the very institute where it all began. If we raise sufficient resources, we would conduct both the oncology and ocular programs simultaneously.


Our Experiments. The essential non-confidential information describing the scientific foundation of AngioGenex’s proprietary technology and its experimental support is described in detail in the Patent Cooperation Treaty (“PCT”) patent application (as described in Item 1.3 of our 2017 Annual Report on Form 10-K and filed as Exhibit 99.1 to our Form 10 (the “Form 10”) filed with the SEC on August 22, 2017) and the following publication: “Angiogenesis impairment in Id-deficient mice cooperates with an Hsp90 inhibitor to completely suppress HER2 neu-dependent breast tumors” (Candia et al, Proceedings of The National Academy of Sciences 2003). The aforementioned PCT patent application describes numerous experiments that produced the data supporting the patent claims. Additionally, the aforementioned publication describes experiments with a widely accepted model of breast cancer with experimental breast cancer prone “herceptin” mice.


The Path Forward. If we successfully complete the pre-clinical work, the next step will be the first human clinical testing of AGX51-α regarding safety and preliminary efficacy. To do so, we will seek further financing or a corporate partner for the completion of testing and the ultimate marketing of the drug. Our goal is to achieve interim milestones toward FDA approval in a number of disease indications with distinct proprietary pharmaceutical products.


Financial History. As a research and development company, we have incurred significant losses since inception. We had an accumulated deficit of $6,926,050 as of September 30, 2018.  These losses have resulted principally from costs incurred in connection with research and development activities, license fees and general and administrative expenses.


2. Financial Information


Overview


The Companys drugs (including our two lead drug candidates AGX51 and its derivative AGX51-α) are at the pre-clinical stage of development. Our Company would like to ultimately develop different Id-inhibitor drugs to treat cancer and macular degeneration. As a corporate strategy, the cancer program (i.e. AGX51) is on hold pending the receipt of sufficient resources or partnerships and we have determined to move first with the macular degeneration program (i.e. AGX51-α).


For AGX51, the estimated timeframe and cost for completion of pre-clinical work is approximately 15 to 18 months and approximately $1.5 million to $2 million so that we can file an IND and the estimated cost to complete Phase I/IIA clinical trials is approximately $12 million. For AGX51-α, the estimated timeframe and cost for completion of pre-clinical work is approximately 12 to 15 months and approximately $1.7 million so that we can file an IND and the estimated cost to complete Phase I/IIA clinical trials is approximately $8 million to $12 million.


We have limited financial resources and we will need to raise substantial additional funding in order to execute these plans. If we raise sufficient resources, we would conduct both the oncology and ocular programs simultaneously.  However, there can be no assurance that such resources will be available or, if available, will be at rates or prices acceptable to us.


Comparison of Results of Operations for the Three Months ended September 30, 2018 and 2017


Revenues


We had no revenues for the three months ended September 30, 2018 and 2017.





16



Research and Development Expenses


For the three months ended September 30, 2018 and 2017, total research and development costs were ($1,291) and $17,997, respectively. The decrease is due to lower expenditures related to our continued research into the role of the Id genes and proteins, and its identification and development of molecules capable of inhibiting Id activity and preventing the neo-vascularization that supports the growth of cancerous tumors and characterizes other diseases including macular degeneration. The Company views this decrease to be temporary, as it continues its activities. The Company incurred $1,532 and $100,000 in connection with research performed at laboratories in the three months ended September 30, 2018 and 2017, respectively. The decrease is also due to change in stock compensation from ($82,003) to ($2,823) resulting from awards to a consultant that are accounted for as variable performance based option awards and are adjusted each reporting period.


General and Administrative Expenses


For the three months ended September 30, 2018 and 2017, total general and administrative expenses were $79,621 and $99,980, respectively. General and administrative expenses include professional fees for bookkeepers, auditors, and outside securities counsel who assisted with various aspects of the business and business development, and patent counsel fees and costs, including the maintenance of existing intellectual property. The decrease is primarily due to a decrease in professional fees.


We expect general and administrative expenses to increase overall through 2018 as we continue as a public reporting company. The non-recurring portions of the process of returning to a public reporting status are complete. We anticipate continued increased professional fee expenses associated with ongoing public reporting requirements and increased use of outside accounting and legal services for our continued operations and any financings.


Operating Loss


For the three months ended September 30, 2018, operating loss was $78,330 as compared with $117,977 for the three months ended September 30, 2017. The decrease in operating loss is due to research and development costs, as described in “Research and Development Expenses” above, and to professional fees, which are described in “General and Administrative Expenses” above.


We expect to incur continued operating losses through 2018 as we continue to develop Id inhibitor drugs.


Interest Expense


Interest expense is comprised primarily of interest accrued on our debt. For the three months ended September 30, 2018, our interest expense was $2,468 as compared to $3,019 for the three months ended September 30, 2017.


Comparison of Results of Operations for the Nine Months ended September 30, 2018 and 2017


Revenues


We had no revenues for the nine months ended September 30, 2018 and 2017.


Research and Development Expenses


For the nine months ended September 30, 2018 and 2017, total research and development costs were $10,975 and $252,923, respectively. The decrease is due to lower expenditures related to our continued research into the role of the Id genes and proteins, and its identification and development of molecules capable of inhibiting Id activity and preventing the neo-vascularization that supports the growth of cancerous tumors and characterizes other diseases including macular degeneration. The Company views this decrease to be temporary, as it continues its activities. The Company incurred $17,114 and $260,400 in connection with research performed at laboratories in the nine months ended September 30, 2018 and 2017, respectively. The change is also due to change in stock compensation from ($7,477) to ($6,139), resulting from awards to a consultant that are accounted for as variable performance based option awards and are adjusted each reporting period.  Stock-based compensation was negative for the nine months ended September 30, 2018 and 2017 due to the valuation of these contingent options.  




17




General and Administrative Expenses


For the nine months ended September 30, 2018 and 2017, total general and administrative expenses were $332,101 and $357,890, respectively. General and administrative expenses include professional fees for bookkeepers, auditors, and outside securities counsel who assisted with various aspects of the business and business development, and patent counsel fees and costs, including the maintenance of existing intellectual property. The decrease is due primarily to a decrease in professional fees and office expenses offset by increase in insurance costs.


We expect general and administrative expenses to increase overall through 2018 as we continue as a public reporting company. The non-recurring portions of the process of returning to a public reporting status are complete. We anticipate continued increased professional fee expenses associated with ongoing public reporting requirements and increased use of outside accounting and legal services for our continued operations and any financings.


Operating Loss


For the nine months ended September 30, 2018, operating loss was $343,076 as compared with $610,813 for the nine months ended September 30, 2017. The decrease in operating loss is due to research and development costs, as described in “Research and Development Expenses” above and to professional fees, which are described in “General and Administrative Expenses” above.


We expect to incur continued operating losses through 2018 as we continue to develop Id inhibitor drugs.


Interest Expense


Interest expense is comprised primarily of interest accrued on our debt. For the nine months ended September 30, 2018, our interest expense was $7,564 as compared to approximately $8,386 for the nine months ended September 30, 2017.


Liquidity and Capital Resources


We require significant additional cash resources to fund the expenditures necessary to maintain our operating infrastructure, to pay for research and development activities, and to pay our personnel and management team. Based on the Company's current cash usage expectations, management believes it will not have sufficient liquidity to fund its operations through December 2018. As we seek to further expand our pre-clinical and clinical programs and expand our intellectual property portfolio, we will need cash to fund such activities and enable in-licensing opportunities and other research and development endeavors.


The Company’s significant development milestone is the filing of its first IND with the FDA for its lead drug candidate, AGX51-α, for the treatment of macular degeneration. Reaching the goal of the filing of the IND will require that the Company conduct animal toxicity studies in two separate species, a series of tests to determine how the drug is absorbed, distributed and cleared from the body, and a series of chemistry experiments to determine, among other things, the stability and shelf life of the drug. The Company has contracted with MSKCC to perform some or all of this work under a Pre-Clinical Service Agreement with MSKCC (see Exhibit 10.1 to our Form 10 filed with the SEC on August 22, 2017). The timely and successful completion of this work will allow the Company to seek FDA permission in 2019 to test AGX51-α in human volunteers. The Company anticipates a total cost of approximately $1.7 million to accomplish this work in approximately 12-15 months under the current agreement with MSKCC. The Company lacks all of the funding necessary to complete these tasks and will require additional capital to do so. The Company intends to obtain the funds necessary to complete the pre-clinical work needed to accomplish this significant milestone from new and existing investors and insiders.


We have historically relied on financing activities to provide the cash needed for our operating expenses. As of September 30, 2018, we had cash of $117,341.


Management believes that in order for the Company to meet its obligations arising from normal business operations through November 2019, the Company requires additional capital either in the form of a private placement of common stock or debt that will generate sufficient operating cash flows to fund operations.




18




Without such additional capital, our ability to operate will be limited and we may be unable to continue operations altogether. There can be no assurance that such equity or borrowings will be available or, if available, will be at rates or prices acceptable to us.  These factors raise substantial doubt regarding our ability to continue as a going concern. Our unaudited consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments that might be necessary should we be unable to continue as a going concern.


Operating Activities


Cash used for operating activities for the nine months ended September 30, 2018 was $361,219 compared to $397,342 for the same period in 2017. The decrease is due to decreased cash payments for research and development expenditures offset by increased cash payments for insurance premiums in the current period.


Financing Activities


No cash was provided by financing activities for the nine months ended September 30, 2018. Cash used by financing activities for the nine months ended September 30, 2018 comprised repayment of a $10,000 note payable and repayment of insurance financing of $5,116. Cash provided by financing activities for the nine months ended September 30, 2017 was secured by the July 2017 issuance of 3,000,000 shares of common stock to related parties at $0.25 per share for proceeds of $750,000.


Off-Balance Sheet Arrangements


At September 30, 2018, we had no off-balance sheet arrangements.


Critical Accounting Policies, Judgments and Estimates


We have identified certain accounting policies that we believe are the most critical to the presentation of our financial information over a period of time. During the quarterly period ended September 30, 2018, there were no material changes to the critical accounting policies described in our 2017 Annual Report on Form 10-K.  See Item 7, “Critical Accounting Policies, Judgments and Estimates” in our 2017 Annual Report on Form 10-K.  


ITEM 3. Quantitative and Qualitative Disclosures about Market Risk


Market risk represents the risk of loss that may impact our financial position, results of operations, or cash flows due to adverse changes in financial and commodity market prices and rates. As of September 30, 2018, we do not believe we are exposed to significant market risks due to changes in United States interest rates or foreign currency exchange rates as measured against the United States dollar.


Inflation and Seasonality


We do not believe that our operations are significantly impacted by inflation. Our business is not seasonal in nature.


ITEM 4. Controls and Procedures


Evaluation of disclosure controls and procedures


Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.


In connection with the preparation of this Form 10-Q, the Company’s management, under the supervision of, and with the participation of, the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2018. Our




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disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and our management necessarily was required to apply its judgment in evaluating and implementing our disclosure controls and procedures. Based upon the evaluation described above, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date and subject to the discussion below, they believe that our disclosure controls and procedures are effective to ensure that information currently required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. However, there can be no assurances that these disclosure controls and procedures will be adequate in the future.


We note that we did not comment on internal control over financial reporting in our 2017 Annual Report on Form 10-K due to a transition period established by rules of the SEC for newly public companies (as further described in our 2017 Annual Report on Form 10-K). We encourage readers to carefully consider the risk factor included in our 2017 Annual Report on Form 10-K, captioned: “We do not have effective internal controls over our financial reporting and we may be unable to build an effective system of internal controls and accurately report our financial results or prevent fraud, which may cause current and potential stockholders to lose confidence in our financial reporting and adversely impact the business and the ability to raise additional funds in the future.”


Changes in Internal Control over Financial Reporting


Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated whether any change in our internal control over financial reporting occurred during the quarter ended September 30, 2018. Management concluded that no changes to our internal control over financial reporting occurred during the three months ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, we encourage readers to carefully consider the risk factor included in our 2017 Annual Report on Form 10-K, captioned: “We do not have effective internal controls over our financial reporting and we may be unable to build an effective system of internal controls and accurately report our financial results or prevent fraud, which may cause current and potential stockholders to lose confidence in our financial reporting and adversely impact the business and the ability to raise additional funds in the future.”





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PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings


From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We currently have no material legal proceedings pending.


ITEM 1A. Risk Factors


Our operations and financial results are subject to various risks and uncertainties, including those described in Item 1A, “Risk Factors” in our 2017 Annual Report on Form 10-K, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common and capital stock. During the quarterly period ended September 30, 2018, there were no material changes to the risk factors described in our 2017 Annual Report on Form 10-K.


ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds


None.


ITEM 3. Defaults Upon Senior Securities


None


ITEM 4. Mine Safety Disclosures


None.


ITEM 5. Other Information


None.


ITEM 6. Exhibits


3.1

Articles of Incorporation**

3.2

By-laws*

10.1

Pre-Clinical Service Agreement between Memorial Sloan Kettering Cancer Center and AngioGenex Inc., dated February 2, 2017*

10.2

Agreement to transfer AngioGenex Inc. Stock to Memorial Sloan Kettering Cancer Center, dated April 11, 2014*

16.1

Letter of Li & Company dated September 19, 2017**

31.1

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1

Section 1350 Certification of Chief Executive Officer

32.2

Section 1350 Certification of Chief Financial Officer

99.1

PCT patent application (WO 2015/08949 A2), published on June 18, 2015*

101

The following materials from AngioGenex, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Cash Flows, (iv) the Condensed Consolidated Statement of Changes in Stockholders Deficit and (v) Notes to Condensed Consolidated Financial Statements.

 

*Previously filed together with our Form 10 submitted on August 22, 2017

**Previously filed together with our Amendment No. 1 to our Form 10 submitted on September 19, 2017




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SIGNATURES


Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.



Dated: November 13, 2018


ANGIOGENEX INC.


By: /s/ Robert Benezra

Robert Benezra, Ph.D.,

Chief Executive Officer

(Principal Executive Officer)


By: /s/ Martin Murray

Martin Murray,

Chief Financial Officer

(Principal Financial and

Accounting Officer)




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