UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
ISOLAGEN, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-12666 87-0458888
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
2500 Wilcrest, 5th Floor
Houston, Texas 77042
(Address of principal executive offices, including zip code)
(713) 780-4754
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for any shorter period that the registrant was required to file the
reports), and (2) has been subject to those filing requirements for the past 90
days. [X] Yes [ ] No
As of April 18, 2002, issuer had 15,189,563 shares of issued and outstanding
common stock, par value $0.001.
1
Documents Incorporated by Reference: NONE
Transitional Small Business Issuer Format: Yes [X] No [ ]
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, 2002 (unaudited) and December 31, 2001......................3
Consolidated Statements of Operations
Three months ended March 31, 2002 (unaudited)
and March 31, 2001 (unaudited)........................................4
Consolidated Statements of Cash Flows
Three months ended March 31, 2002 (unaudited) and
March 31, 2001 (unaudited)............................................5
Notes to Unaudited Consolidated Financial Statements...........................6
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition..............................................10
Part II. Other Information
Item 1. Legal Proceedings.............................................................12
Item 2. Changes in Securities.........................................................12
Item 3. Defaults Upon Senior Securities...............................................12
Item 4. Submission of Matters to a Vote of Security Holders...........................12
Item 5. Other Information.............................................................12
Item 6. Exhibits and Reports on Form 8-K..............................................12
The Consolidated Financial Statements of the Company required to be filed with
this 10-QSB Quarterly Report were prepared by management and commence on the
following page, together with related Notes. In the opinion of management, the
Consolidated Financial Statements fairly present the financial condition of the
Company.
2
Isolagen, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
March 31, December 31,
2002 2001
------------ ------------
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 827,771 $ 1,380,824
Accounts receivable 1,228 1,067
------------ ------------
Total current assets 828,999 1,381,891
------------ ------------
Property and equipment, net 7,489 7,357
Other assets 156,635 174,666
------------ ------------
Total assets $ 993,123 $ 1,563,914
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 257,736 $ 208,196
Accrued expenses 69,525 23,318
Deferred revenue 260,000 280,000
------------ ------------
Total current liabilities 587,261 511,514
Total liabilities 587,261 511,514
------------ ------------
Commitments and contingencies
Shareholders' equity (deficit)
Preferred stock, $.001 par value; 5,000,000
shares authorized -- --
Common stock, $.001 par value; 50,000,000
shares authorized 15,190 15,190
Additional paid-in capital 5,166,205 5,166,205
Accumulated deficit during development stage (4,775,533) (4,128,995)
------------ ------------
Total shareholders' equity (deficit) 405,862 1,052,400
------------ ------------
Total liabilities and shareholder's equity $ 993,123 $ 1,563,914
------------ ------------
The accompanying notes are an integral part of these statements.
3
Isolagen, Inc.
(A Development Stage Company)
Consolidated Statements of Operations
(unaudited)
Cumulative
Period from
December 28,
Three Months Ended 1995 (date of
March 31, inception) to
------------------------------ March 31,
2002 2001 2002
------------ ------------ -------------
Revenues
Sales $ 2,518 $ 3,625 $ 1,392,632
License fees 20,000 20,000 240,000
------------ ------------ ------------
Total revenues 22,518 23,625 1,632,632
Cost of sales -- 2,360 402,459
------------ ------------ ------------
Gross profit 22,518 21,265 1,230,173
Selling, general and administrative expenses 673,594 118,568 5,718,791
------------ ------------ ------------
Operating loss (651,076) (97,303) (4,488,618)
Other income (expense)
Interest income 4,538 8 32,935
Loss on disposal of asset -- -- (8,222)
Interest expense -- (33,739) (311,628)
------------ ------------ ------------
Net loss $ (646,538) $ (131,034) $ (4,775,533)
------------ ------------ ------------
Per share information
Net loss per common share - basic and diluted $ (0.04) $ (0.05) $ (1.24)
------------ ------------ ------------
Weighted average number of basic and diluted
common shares outstanding 15,189,563 2,692,993 3,853,895
------------ ------------ ------------
The accompanying notes are an integral part of these statements.
4
Isolagen, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
Cumulative
Period from
December 28,
Three Months Ended 1995 (date of
March 31, inception) to
------------------------------ March 31,
2002 2001 2002
------------ ------------ -------------
Cash flows from operating activities
Net loss $ (646,538) $ (131,034) $ (4,775,533)
Adjustments to reconcile net loss to net
cash used in operating activities:
Common stock issued for services 18,031 -- 1,070,110
Depreciation 4,069 4,068 71,786
Loss on sale of property and equipment -- -- 8,222
Change in operating assets and liabilities:
Increase in accounts receivable (161) (2,433) (1,228)
Increase in inventory -- (2,131) --
Increase in accounts payable 49,540 2,080 257,736
Increase in accrued expenses 46,207 116,876 69,525
Increase (decrease) in deferred revenue (20,000) (20,000) 260,000
------------ ------------ ------------
Net cash used in operating activities (548,852) (32,574) (3,039,382)
------------ ------------ ------------
Cash flows from investing activities
Purchase of property and equipment (4,201) -- (88,497)
Proceeds from the sale of property
and equipment -- -- 1,000
------------ ------------ ------------
Net cash provided by (used in)
operating activities (4,201) -- (87,497)
------------ ------------ ------------
Cash flows from financing activities
Proceeds from convertible debt -- -- 1,450,000
Proceeds from notes payable to shareholders -- 30,000 135,667
Proceeds from the issuance of common stock -- -- 2,467,810
Merger and acquisition expenses -- -- (48,547)
Repurchase of common stock -- -- (50,280)
------------ ------------ ------------
Net cash provided by financing activities -- 30,000 3,954,650
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents (553,053) (2,574) 827,771
Cash and cash equivalents, beginning of period 1,380,824 (2,574) --
------------ ------------ ------------
Cash and cash equivalents, end of period $ 827,771 $ -- $ 827,771
------------ ------------ ------------
Supplemental cash flow information:
Cash paid for interest $ -- $ -- $ 150,283
------------ ------------ ------------
The accompanying notes are an integral part of these statements.
5
Isolagen, Inc.
(A Development Stage Company)
Notes to Unaudited Consolidated Financial Statements
NOTE 1 - BASIS OF PRESENTATION, BUSINESS AND ORGANIZATION
Isolagen, Inc. f/k/a American Financial Holding, Inc., a Delaware corporation
("Isolagen" or the "Company"), is the parent company of Isolagen Technologies,
Inc., a Delaware corporation and wholly-owned subsidiary of the Company
("Isolagen Technologies"). Isolagen Technologies is the parent company of
Isolagen Europe Limited, a company organized under the laws of the United
Kingdom and wholly-owned subsidiary of Isolagen Technologies ("Isolagen
Europe"). The common stock, par value $0.001 per share, of the Company ("Common
Stock") is quoted on the Over-the-Counter Bulletin Board under the ticker symbol
"ISLG.OB"
Isolagen was organized to specialize in the development and commercialization of
autologous cellular system ("ACS") for hard and soft tissue regeneration and
other therapies. Isolagen currently holds four patents with one additional
patent pending. Representing breakthrough technology in the overall approach to
cosmetic and medical therapy, ACS is a process whereby a patient's own cells are
extracted, reproduced through Isolagen's proprietary process, and then
reintroduced back into the patient for specific cosmetic and medical
applications. Unlike other collagen development companies, Isolagen uses only
the patient's unique living cells for the source of its collagen production.
Isolagen's goal is to become the industry leader in the research, development
and commercialization of ACS tissue regeneration.
In 1997, the U.S. Food and Drug Administration ("FDA") began regulating the
science of biologics. Biologic products like ACS, in contrast to drugs that are
chemically synthesized, are derived from living sources (such as humans,
animals, and microorganisms). From 1995 to 1999, management of Isolagen
Technologies believed that FDA approvals were not required for use of the
Isolagen Process, based on advice from FDA consultants. In 1999, the FDA advised
Isolagen Technologies that use of the Isolagen Process would require FDA
approval, and Isolagen Technologies filed an investigational new drug
application ("IND") covering the Isolagen Process with the FDA. An IND is a
request for authorization from the FDA to administer an investigational drug or
biological product to humans. Such authorization must be secured prior to
commercialization of any new drug or biological product. After its review of
Isolagen Technologies' IND on December 9, 1999 the FDA placed the IND on
clinical hold until the Company's manufacturing processes and procedures were
changed to meet these new standards, and FDA approval is obtained. The use of
the Isolagen Process was discontinued after the FDA placed the IND on hold, and
Isolagen Technologies did not have sufficient funding to pursue regulatory
approvals.
Through March 31, 2002, the Company has been primarily engaged in developing its
initial product technology, recruiting personnel and raising capital. In the
course of its development activities, the Company has sustained losses and
expects such losses to continue through at least 2002. The Company will finance
its operations primarily through its existing cash, future financing and
revenues.
Acquisition and Merger
On August 10, 2001, the Company, pursuant to an Agreement and Plan of Merger,
dated August 1, 2001, by and among the Company, ISO Acquisition Corp, a Delaware
corporation and wholly-owned subsidiary of the Company ("Merger Sub"), Isolagen
Technologies, a Delaware corporation, Gemini IX, Inc., a Delaware corporation
("Gemini"), and William J Boss, Jr., Olga Marko and Dennis McGill, stockholders
of Isolagen Technologies (the "Merger Agreement"), acquired in a privately
negotiated transaction 100% of the issued and outstanding capital stock of
Isolagen Technologies. Pursuant to the terms of the Merger
6
Agreement, Merger Sub, together with Gemini, merged with and into Isolagen
Technologies (the "Merger"), and Isolagen Technologies was the surviving
corporation of the Merger. The Company issued an aggregate of 9,756,372 shares
of restricted common stock, par value $0.001 per share, of the Company ("Common
Stock") as consideration for the Merger, to retire certain debts of Isolagen
Technologies and in connection with certain bridge loans of Isolagen
Technologies.
Prior to the Merger, Isolagen Technologies had no active business and was
seeking funding to begin U.S. Food and Drug Administration ("FDA") trials of
this process.
Simultaneous with the Merger, the Company sold 1,346,669 shares of restricted
common stock to certain accredited investors in a private placement transaction.
The consideration paid by such investors for the shares of Common Stock
aggregated $2,020,000 in transactions exempt from the registration requirements
of the Securities Act. The net cash proceeds of this private placement will be
used to fund the Company's research and development projects and the initial FDA
trials of the Isolagen process, to explore the viability of entering foreign
markets, to provide working capital and for general corporate purposes.
Basis of Presentation
The financial statements presented include the consolidated balance sheet of
Isolagen, Inc. and its wholly-owned subsidiary, Isolagen Technologies, Inc., at
March 31, 2002 and December 31, 2001. The consolidated statements of operations
and cash flows for the three-month period ended March 31, 2002 include Isolagen,
Inc. and its wholly-owned subsidiary, Isolagen Technologies, Inc. The
consolidated statements of operations and cash flows for the three-month period
ended March 31, 2001 include Isolagen Technologies, Inc. only.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Information
The financial statements included herein, which have not been audited pursuant
to the rules and regulations of the Securities and Exchange Commission, reflect
all adjustments which, in the opinion of management, are necessary for a fair
presentation of financial position, results of operations and cash flows for the
interim periods on a basis consistent with the annual audited statements. All
such adjustments are of a normal recurring nature. The results of operations for
interim periods are not necessarily indicative of the results that may be
expected for any other interim period of a full year. Certain information,
accounting policies and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been omitted pursuant to such rules and
regulation, although the Company believes that the disclosures are adequate to
make the information presented not misleading, These financial statements should
be read in conjunction with the Company's audited financial statements included
in the Company's current report on Form 10K-SB filed with the Securities and
Exchange Commission on March 21, 2002.
Statement of cash flows
For purposes of the statements of cash flows, the Company considers all highly
liquid debt instruments purchased with an original maturity of three months or
less to be cash equivalents.
7
Concentration of credit risk
The Company maintains its cash with a major U.S. domestic bank. The amounts held
in this bank exceed the insured limit of $100,000 from time to time. The terms
of these deposits are on demand to minimize risk. The Company has not incurred
losses related to these deposits.
The Company is subject to risks common to companies in the development stage
including, but not limited to, development of new products, development of
markets and distribution channels, dependence on key personnel, and the ability
to obtain additional capital as needed to fund its product plans. The Company
has a limited operating history and has yet to generate any significant revenues
from customers. To date, the Company has been funded by private debt and equity
financings. The Company's ultimate success is dependent upon its ability to
raise additional capital and to successfully develop and market its products.
The products developed by the Company require approvals from the United States
FDA or other international regulatory agencies prior to commercial sales. There
can be no assurance that all of the Company's products will receive the
necessary approvals. If the Company was denied such approvals or such approvals
were delayed, it may have a materially adverse impact on the Company.
Property and equipment
Property and equipment, consisting primarily of lab equipment, computer
equipment, office furniture and fixtures is carried at cost less accumulated
depreciation. Depreciation for financial reporting purposes is provided by the
straight-line method over the estimated useful lives of three to five years
subject to half year convention. The cost of repairs and maintenance is charged
against income as incurred.
Earnings per share data
Basic earnings (loss) per share is calculated based on the weighted average
common shares outstanding during the period. Diluted earnings per share also
gives effect to the dilutive effect of stock options, warrants and convertible
preferred stock (calculated based on the treasury stock method). The Company
does not present diluted earnings per share for periods in which it incurred net
losses as the effect of potentially dilutive shares from convertible debt is
antidilutive.
Shares of Isolagen Technologies common stock outstanding prior to the Merger
were deemed converted to its equivalent shares of the Company's common stock
using a conversion factor as defined in the Merger Agreement.
Stock-based compensation
The Company accounts for its stock-based compensation under the provisions of
SFAS No. 123 - "Accounting for Stock Based Compensation." Under SFAS No. 123,
the Company is permitted to either record expenses for stock options and other
employee compensation plans based on their fair value at the date of grant or to
continue to apply its current accounting policy under Accounting Principles
Board Opinion No. 25 "Accounting for Stock Issued to Employees," ("APB No. 25"),
and recognize compensation expense, if any, based on the intrinsic value of the
equity instrument at the measurement date. The Company elected to continue
following the provisions of APB No. 25.
Income taxes
An asset and liability approach is used for financial accounting and reporting
for income taxes. Deferred income taxes arise from temporary differences between
income tax and financial reporting and principally
8
relate to recognition of revenue and expenses in different periods for financial
and tax accounting purposes and are measured using currently enacted tax rates
and laws. In addition, a deferred tax asset can be generated by net operating
loss carryforwards ("NOLs"). If it is more likely than not that some portion or
all of a deferred tax asset will not be realized, a valuation allowance is
recognized.
NOTE 3 - CONTINGENCIES
On October 9, 1996, the Company was advised by the Enforcement Division of the
Securities and Exchange Commission (the "Commission") that it is considering
recommending that the Commission bring an enforcement action, which could
include a civil penalty, against the Company in U.S. District Court for failing
to file timely periodic reports in violation of Section 13(a) of the Securities
and Exchange Act of 1934 and the rules thereunder.
In October 1996, the Company also received a request for the voluntary
production of information to the Enforcement Division of the Commission related
to the resignation of Coopers & Lybrand LLP and the termination of Arthur
Andersen LLP and the appointment of Jones, Jensen & Company as the Company's
independent public accountants and the reasons therefore. In addition, the
Company was requested to provide certain information respecting its previous
sales of securities. The Company cooperated in providing information in response
to these inquiries in early 1997. The Company has not been advised of the
outcome of the foregoing, and has had no further contact by the Enforcement
Division of the Commission.
NOTE 4 - COMMITMENTS
The Company has entered into a placement agent agreement with an investment bank
with respect to the sale of up to 2,295,000 shares of Series A Convertible
Preferred Stock at an offering price of $3.50 per share. Each share of preferred
stock will be convertible into two shares of common stock at any time after
issuance and accrues interest at 8% per annum.
The offering of the first 900,000 shares will be on a "best efforts,
all-or-none" basis. If the minimum number of shares are not sold within 90 days
of March 11, 2002, the commencement of the offering, the Company may elect to
extend the offering for an additional 60 days or terminate it in its entirety.
In the event that the minimum shares are sold within the initial subscription
period, the Company will automatically extend the offering period for up to 60
days or until the maximum number of shares are sold.
For each 15,000 shares of preferred stock sold, the placement agent will receive
warrants to purchase 6,000 shares of common stock with an exercise price of
$1.93 per share. The warrants are exercisable immediately after grant and expire
five years thereafter.
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.
The following discussions of Isolagen, Inc. results of operations and financial
position should be read in conjunction with the financial statements and notes
pertaining to them that appear elsewhere in this Form 10-QSB.
Forward-Looking Information
This report contains certain forward-looking statements and information relating
to Isolagen, Inc. that are based on the beliefs of management as well as
assumptions made by and information currently available to management. When used
in the document, the words "anticipate," "believe," "estimate," "expect,"
"intend," and similar expressions, as they relate to the Company or its
management, are intended to identify forward-looking statements. Such statements
reflect the current view of the Company respecting future events and are subject
to certain risks, uncertainties, and assumptions, including the risks and
uncertainties noted. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described herein as anticipated, believed,
estimated, expected, or intended.
SUMMARY REVIEW AND OUTLOOK
Isolagen, Inc. f/k/a American Financial Holding, Inc., a Delaware corporation
("Isolagen" or the "Company"), is the parent company of Isolagen Technologies,
Inc., a Delaware corporation and wholly-owned subsidiary of the Company
("Isolagen Technologies"). Isolagen Technologies is the parent company of
Isolagen Europe Limited, a company organized under the laws of the United
Kingdom and wholly-owned subsidiary of Isolagen Technologies ("Isolagen
Europe"). The common stock, par value $0.001 per share, of the Company ("Common
Stock") is quoted on the Over-the-Counter Bulletin Board under the ticker symbol
"ISLG.OB"
Isolagen was organized to specialize in the development and commercialization of
autologous cellular system ("ACS") for hard and soft tissue regeneration and
other therapies. Isolagen currently holds four patents with one additional
patent pending. Representing breakthrough technology in the overall approach to
cosmetic and medical therapy, ACS is a process whereby a patient's own cells are
extracted, reproduced through Isolagen's proprietary process, and then
reintroduced back into the patient for specific cosmetic and medical
applications. Unlike other collagen development companies, Isolagen uses only
the patient's unique living cells for the source of its collagen production.
Isolagen's goal is to become the industry leader in the research, development
and commercialization of ACS tissue regeneration.
In 1997, the U.S. Food and Drug Administration ("FDA") began regulating the
science of biologics. Biologic products like ACS, in contrast to drugs that are
chemically synthesized, are derived from living sources (such as humans,
animals, and microorganisms). From 1995 to 1999, management of Isolagen
Technologies believed that FDA approvals were not required for use of the
Isolagen Process, based on advice from FDA consultants. In 1999, the FDA advised
Isolagen Technologies that use of the Isolagen Process would require FDA
approval, and Isolagen Technologies filed an investigational new drug
application ("IND") covering the Isolagen Process with the FDA. An IND is a
request for authorization from the FDA to administer an investigational drug or
biological product to humans. Such authorization must be secured prior to
commercialization of any new drug or biological product. After its review of
Isolagen Technologies' IND on December 9, 1999 the FDA placed the IND on
clinical hold until the Company's manufacturing processes and procedures were
changed to meet these new standards, and FDA approval is obtained. The use of
the Isolagen Process was discontinued after the FDA placed the IND on hold, and
Isolagen Technologies did not have sufficient funding to pursue regulatory
approvals.
10
Through March 31, 2002, the Company has been primarily engaged in developing its
initial product technology, recruiting personnel and raising capital. In the
course of its development activities, the Company has sustained losses and
expects such losses to continue through at least 2002. The Company will finance
its operations primarily through its existing cash, future financing and
revenues.
Acquisition and Merger
On August 10, 2001, the Company, pursuant to an Agreement and Plan of Merger,
dated August 1, 2001, by and among the Company, ISO Acquisition Corp, a Delaware
corporation and wholly-owned subsidiary of the Company ("Merger Sub"), Isolagen
Technologies, a Delaware corporation, Gemini IX, Inc., a Delaware corporation
("Gemini"), and William J Boss, Jr., Olga Marko and Dennis McGill, stockholders
of Isolagen Technologies (the "Merger Agreement"), acquired in a privately
negotiated transaction 100% of the issued and outstanding capital stock of
Isolagen Technologies. Pursuant to the terms of the Merger Agreement, Merger
Sub, together with Gemini, merged with and into Isolagen Technologies (the
"Merger"), and Isolagen Technologies was the surviving corporation of the
Merger. The Company issued an aggregate of 9,756,372 shares of restricted common
stock, par value $0.001 per share, of the Company ("Common Stock") as
consideration for the Merger, to retire certain debts of Isolagen Technologies
and in connection with certain bridge loans of Isolagen Technologies.
Prior to the Merger, Isolagen Technologies had no active business and was
seeking funding to begin U.S. Food and Drug Administration ("FDA") trials of
this process.
Simultaneous with the Merger, the Company sold 1,346,669 shares of restricted
common stock to certain accredited investors in a private placement transaction.
The consideration paid by such investors for the shares of Common Stock
aggregated $2,020,000 in transactions exempt from the registration requirements
of the Securities Act. The net cash proceeds of this private placement will be
used to fund the Company's research and development projects and the initial FDA
trials of the Isolagen process, to explore the viability of entering foreign
markets, to provide working capital and for general corporate purposes.
With regards to the proposed activities described above, no assurances can be
made that the Company will implement any of these potential actions, and if so,
whether any of them will prove successful or the degree of that success.
RESULTS OF OPERATIONS
Comparison of three-month period ending March 31, 2002 and March 31, 2001
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $555,026 for the three-month period ending
March 31, 2002, as compared to the same period in the prior year. The increase
is attributed primarily to travel, consulting and promotional expenses.
INTEREST EXPENSE. Interest expense decreased $33,739 for the three months ended
March 30, 2002, as compared to the same period last year due primarily to the
retirement of debt during the Merger.
NET LOSS. Net loss for the three months ended March 31, 2002, was $646,538, as
compared to a net loss of $131,034 for the three months ended March 31, 2001.
This increase in net loss is attributed primarily to an increase in travel,
consulting, and promotional expenses.
11
Historical Cash Flows
OPERATING ACTIVITIES. Cash used in operating activities during the three months
ended March 31, 2002, amounted to $548,852 as compared to $32,574 used for the
three month-period ending March 31, 2001 attributable primarily to an increase
in travel, consulting and promotional expenses.
INVESTING ACTIVITIES. Cash used by investing activities during the three months
ended March 31, 2002, amounted to $4,201, due to the purchase of property and
equipment.
FINANCING ACTIVITIES. The Company has financed its operating and investing
activities primarily from the proceeds of private placements of its common
stock. During the three months ended March 31, 2001, the Company received
$30,000 from the issuance of notes payable to shareholders.
Liquidity and Capital Resources
As of March 31, 2002, the Company had a cash balance of $827,771. The Company
believes the existing working capital will be adequate to meet anticipated
capital and liquidity requirements for the next three months. Management expects
to obtain additional funds through the sale of Series A Convertible Preferred
Stock to provide working capital. The long-term viability of the Company is
dependent upon successful operation of its business and the ability to raise
additional debt and equity within the near future.
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not currently subject to any legal proceedings. The Company may
from time to time become a party to various legal proceedings arising in the
ordinary course of its business.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None.
12
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ISOLAGEN, INC.
Date: April 22, 2002 By: /s/ Jeffrey W. Tomz
--------------------------------------
Jeffrey W. Tomz, CFO and Secretary
(Principal Executive and
Financial Officer)
13