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 June 30, 2005
[ ] 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 000-26775
SAMARITAN PHARMACEUTICALS, INC.
(Exact name of registrant as specified in charter)
Nevada 88-0431538
---------- ----------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
101 Convention Center Drive, Suite 310
Las Vegas, Nevada 89109
----------------- -------
(Address of principal executive offices) (Zip)
Issuer's telephone number, including area code 702-735-7001
------------
--------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if changed,
Since Last Report
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 filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes[x] No[ ]
The number of shares of common stock issued and outstanding as of June 30, 2005
was 135,715,721.
Transitional Small Business Disclosure Format (check one).
Yes[ ] No[x]
SAMARITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
Consolidated Balance Sheet as of June 30, 2005...................... 3
Consolidated Statements of Operations for the period from
Inception (September 5, 1994) to June 30, 2005, and for the
Three Months and Six Months Ended June 30, 2005 and 2004............ 4
Consolidated Statements of Shareholders' Equity (Deficit) for
the period from Inception (September 5, 1994) to June 30, 2005...... 5
Consolidated Statements of Cash Flows for the period from
Inception (September 5, 1994) to June 30, 2005 and for the
Six Months Ended June 30, 2005 and 2004............................. 6
Notes to Interim Financial Statements............................... 7
Item 2. Management's Discussion and Analysis of Plan of Operations..........10
Item 3. Controls and Procedures.............................................26
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...................................................26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.........26
Item 4. Submission of Matters to a Vote of Security Holders.................27
Item 5. Other Information...................................................27
Item 6. Exhibits ...........................................................27
Signatures.
PART I
Financial Information
Item 1. Financial Statements
SAMARITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
JUNE 30, 2005
ASSETS
CURRENT ASSETS:
Cash $ 1,806,797
Accounts receivable 15,250
Interest receivable 30,012
Prepaid expenses 21,960
Marketable securities 745,710
-----------------
TOTAL CURRENT ASSETS 2,619,729
-----------------
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $98,047 210,375
-----------------
OTHER ASSETS:
Patent registration costs 532,852
Purchased technology rights 25,431
Marketable securities 493,405
Note receivable 250,000
Deposits 2,779
-----------------
TOTAL OTHER ASSETS 1,304,467
-----------------
$ 4,134,571
=================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 250,705
-----------------
TOTAL CURRENT LIABILITIES 250,705
-----------------
SHAREHOLDERS' EQUITY:
Common stock, 250,000,000 shares authorized at $.001
par value, 135,715,721 issued and outstanding 135,716
Additional paid-in capital 36,344,290
Deferred compensation (1,408,842)
Accumulated other comprehensive income (26,261)
Treasury stock, at cost (250,248)
Deficit accumulated during development stage (30,910,789)
-----------------
TOTAL SHAREHOLDERS' EQUITY 3,883,866
-----------------
$ 4,134,571
=================
See accompanying notes to the consolidated financial statements (unaudited).
3
SAMARITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FROM INCEPTION (SEPTEMBER 5, 1994), TO JUNE 30, 2005, AND FOR THE FOR THE
SIX MONTHS S AND THREE MONTHS ENDED JUNE 30, 2005 AND 2004
From For the Six For the Three
Inception Months Ended Months Ended
(September 5, 1994) June 30, June 30,
To --------------------------------- ------------------------------
June 30, 2005 2005 2004 2005 2004
-------------------- ----------------- ------------- ------------- --------------
REVENUES: $ 315,250 $ 15,250 $ - $ 15,250 $ -
-------------------- ----------------- ------------- ------------- --------------
EXPENSES:
Research and development 7,824,369 1,540,899 420,589 813,803 315,436
Interest (21,201) (34,477) - (17,459) 0
General and administrative 22,619,415 1,216,028 1,417,370 671,844 700,626
Forgiveness of debt (369,130) - - - -
Depreciation and amortization 1,172,586 24,752 13,461 17,458 6,773
-------------------- ----------------- ------------- ------------- --------------
31,226,039 2,747,202 1,851,420 1,485,646 1,022,835
-------------------- ----------------- ------------- ------------- --------------
NET INCOME (LOSS) (30,910,789) (2,731,952) (1,851,420) (1,470,396) (1,022,835)
Other Comprehensive Income
Unrealized loss on marketable
securities (10,884) 5,696 - 4,200 -
Foreign currency translation
adjustment (15,377) (15,377) - (9,753) -
-------------------- ----------------- ------------- ------------- --------------
Total Comprehensive Income $ (30,937,050) $ (2,741,633) $ (1,851,420) $ (1,475,949) (1,022,835)
==================== ================= ============= ============= ==============
Loss per share, basic and
diluted: $ (0.82) $ (0.02) $ (0.02) $ (0.01) $ (0.01)
==================== ================= ============= ============= ==============
Weighted average number of
shares outstanding:
Basic and diluted 37,548,017 132,962,584 118,456,277 133,894,970 127,560,957
==================== ================= ============= ============= ==============
See accompanying notes to the consolidated financial statements (unaudited).
4
SAMARITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
(UNAUDITED)
FROM INCEPTION (SEPTEMBER 5, 1994) TO June 30, 2005
Shares
Number Par Value Reserved Additional
of Common for Paid in
Shares Stock Conversion Capital Warrants
------------- ---------- ---------- ------------ -----------
Inception at September 5, 1994 - $ - $ - - $ -
Shares issued for cash, net of
offering costs 6,085,386 609 - 635,481 -
Warrants issued for cash - - - - 5,000
Shares issued as compensation
for services 714,500 71 - 1,428,929 -
Net loss - - - - -
------------- ---------- ---------- ------------ -----------
December 31, 1996 6,799,886 680 - 2,064,410 5,000
Issuance of stock, prior to
acquisition 206,350 21 - 371,134 -
Acquisition of subsidiary for
stock 1,503,000 150 - 46,545 -
Shares of parent redeemed, par
value $.0001 (8,509,236) (851) - 851 -
Shares of public subsidiary
issued, par value $.001 7,689,690 7,690 820 (8,510) -
Net loss - - - - -
------------- ---------- ---------- ------------ -----------
December 31, 1997 7,689,690 7,690 820 2,474,430 5,000
Conversion of parent's shares 696,022 696 (696) - -
Shares issued for cash, net of
offering costs 693,500 694 - 605,185 -
Shares issued in cancellation
of debt 525,000 525 - 524,475 -
Shares issued as compensation 400,000 400 - 349,600 -
Net loss - - - - -
------------- ---------- ---------- ------------ -----------
December 31, 1998 10,004,212 10,005 124 3,953,690 5,000
Conversion of parent's shares 13,000 13 (13) - -
Shares issued in cancellation
of debt 30,000 30 - 29,970 -
Shares issued for cash, net of
offering costs 45,000 45 - 41,367 -
Shares issued as compensation 3,569,250 3,569 - 462,113 -
Detachable warrants issued - - - - 152,125
Detachable warrants exercised 100,000 100 - 148,900 (149,000)
Debentures converted to stock 1,682,447 1,682 - 640,438 -
Net loss - - - - -
------------- ---------- ---------- ------------ -----------
December 31, 1999 15,443,909 15,444 111 5,276,478 8,125
Conversion of parent's shares 128,954 129 (111) (18) -
Shares issued for cash, net of
offering costs 1,575,192 1,575 - 858,460 -
Shares issued in cancellation
of debt 875,000 875 - 660,919 -
Shares issued in cancellation
of accounts payable 100,000 100 - 31,165 -
Shares issued as compensation 3,372,945 3,373 - 2,555,094 -
Warrants exercised 38,807 39 - 3,086 (3,125)
Warrants expired - - - 5,000 (5,000)
Net loss - - - - -
------------ --------- ---------- ------------ -----------
December 31, 2000 21,534,807 21,535 - 9,390,184 -
See accompanying notes to the consolidated financial statements
5
Shares issued for cash, net of
offering cost 6,497,088 6,497 - 1,257,758 -
Shares issued as compensation 9,162,197 9,162 - 1,558,599 -
Shares issued for previously
purchased shares 342,607 342 - 188,208 -
Shares issued in cancellation
of accounts payable 200,000 200 - 68,880 -
Amortization of deferred
compensation - - - - -
Stock options issued for
services - - - 439,544 -
Net loss - - - - -
------------ ---------- ---------- ------------ -----------
December 31, 2001 37,736,699 37,736 - 12,903,173 -
Shares issued for cash, net of
offering costs 18,657,500 18,658 - 2,077,641 -
Shares issued as compensation 3,840,525 3,841 - 1,044,185 -
Shares issued for previously
purchased shares 50,000 50 - 4,950 -
Shares issued in cancellation
of accounts payable 4,265,184 4,265 - 539,291 -
Amortization of deferred
compensation - - - - -
Shares issued in cancellation
of notes payable - - - - -
Stock options issued for
services - - - 225,000 -
Net loss - - - - -
------------ ---------- ---------- ------------ -----------
December 31, 2002 64,549,908 64,550 16,794,240
Shares issued for cash, net of
offering costs 17,493,664 17,493 - 2,392,296 -
Shares issued as compensation 4,062,833 4,063 - 549,779 -
Shares issued for previously
purchased shares 1,160,714 1,161 - 161,339 -
Shares issued in cancellation
of accounts payable and
accrued compensation 9,615,870 9,616 - 3,448,950 -
Shares issued in cancellation
of notes payable - - - - -
Shares issued in connection
with equity financing 3,125,000 3,125 (3,125) -
Exercise of stock options 7,770,892 7,771 - 1,112,077 -
Shares reacquired in settlement
of judgement (1,564,048) (1,564) - 251,812 -
Stock options issued for
services - - - 145,000 -
Net loss - - - - -
------------ ---------- ---------- ------------ -----------
December 31, 2003 106,214,833 106,215 - 24,852,368 -
Shares issued for cash, net
of offering costs 11,426,733 11,427 - 4,289,511 -
Shares issued as compensation,
expensed 2,081,249 2,081 - 1,788,397 -
Amortization of deferred
compensation - - - - -
Shares issued for previously
purchased shares 83,332 83 - 12,417 -
Exercise of stock options 16,950,468 16,951 - 4,841,869 -
Exercise of warrants 635,000 635 - 449,365 -
Shares issued in connection
with equity financing 8,758,240 8,758 - 3,091,243 -
Stock retired in settlement of
subscriptions receivable (13,869,656) (13,870) - (5,964,798) -
Shares reacquired in settlement
of judgement (250,000) (250) - (231,100) -
Stock options issued for services - - - 567,771 -
Other comprehensive income (loss) - - - - -
Net loss - - -
------------ ---------- ---------- ------------ -----------
December 31, 2004 132,030,199 132,030 - 33,697,043 -
Shares issued as compensation,
expensed 1,933,900 1,934 - 1,350,100 -
Amortization of deferred
compensation - - - - -
Shares issued in connection
with equity financing 1,751,622 1,752 - 1,248,247 -
Stock options issued for services - - - 48,900 -
Other comprehensive income (loss) - - - - -
Net loss - - - - -
------------ ---------- ---------- ------------ -----------
June 30, 2005 135,715,721 $ 135,716 $ - $36,344,290 $ -
============ ========== ========== ============ ===========
See accompanying notes to the consolidated financial statements
5
SAMARITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STATE COMPANY)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
FROM INCEPTION (SEPTEMBER 5, 1994) TO June 30, 2005
Accumulated
Other Stock Total
Deferred Comprehensive Subscriptions Treasury Accumulated Shareholders'
Compensation Income Receivable Shares Deficit (Deficit)
------------- ------------ ------------ ----------- ------------- ---------------
Inception at September 5, 1994 $ - - $ - $ - $ - $ -
Shares issued for cash, net of
offering costs - - - - - 636,090
Warrants issued for cash - - - - - 5,000
Shares issued as compensation
for services - - - - - 1,429,000
Net loss - - - - (2,152,843) (2,152,843)
------------ ------------- ------------ ----------- ------------- ---------------
December 31, 1996 - - - - (2,152,843) (82,753)
Issuance of stock, prior to
acquisition - - - - - 371,155
Acquisition of subsidiary
for stock - - - - - 46,695
Shares of parent redeemed,
par value $.0001 - - - - - -
Shares of public subsidiary
issued, par value $.001 - - - - - -
Net loss - - - - (979,635) (979,635)
------------ ------------- ------------ ----------- ------------- ---------------
December 31, 1997 - - - - (3,132,478) (644,538)
Conversion of parent's shares - - - - - -
Shares issued for cash, net
of offering costs - - - - - 605,879
Shares issued in cancellation
of debt - - - - - 525,000
Shares issued as compensation - - - - - 350,000
Net loss - - - - (1,009,945) (1,009,945)
------------ ------------- ------------ ----------- ------------- ---------------
December 31, 1998 - - - - (4,142,423) (173,604)
Conversion of parent's shares - - - - - -
Shares issued in cancellation
of debt - - - - - 30,000
Shares issued for cash, net of
offering costs - - - - - 41,412
Shares issued as compensation - - - - - 465,682
Detachable warrants issued - - - - - 152,125
Detachable warrants exercised - - - - - -
Debentures converted to stock - - - - - 642,120
Net loss - - - - (1,671,255) (1,671,255)
------------ ------------- ------------ ----------- ------------- ---------------
December 31, 1999 - - - - (5,813,678) (513,520)
Conversion of parent's shares - - - - - -
Shares issued for cash, net of
offering costs - - - - - 860,035
Shares issued in cancellation
of debt - - - - - 661,794
Shares issued in cancellation
of accounts payable - - - - - 31,265
Shares issued as compensation (759,560) - - - - 1,798,907
Warrants exercised - - - - - -
Warrants expired - - - - - -
Net loss - - - - (3,843,308) (3,843,308)
------------ ------------- ------------ ----------- ------------- ---------------
December 31, 2000 (759,560) - - - (9,656,986) (1,004,827)
See accompanying notes to the consolidated financial statements
5
Shares issued for cash, net
of offering costs - - - - - 1,264,255
Shares issued as compensation (230,512) - - - - 1,337,249
Shares issued for previously
purchased shares - - - - - 188,550
Shares issued in cancellation
of accounts payable - - - - - 69,080
Amortization of deferred
compensation 495,036 - - - - 495,036
Stock options issued for
services - - - - - 439,544
Net loss - - - - (4,079,806) (4,079,806)
----------- ------------- ------------ ----------- ------------- ---------------
December 31, 2001 (495,036) - - - (13,736,792) (1,290,919)
Shares issued for cash, net
of offering costs - - - - - 2,096,299
Shares issued as compensation - - - - - 1,048,026
Shares issued for previously
purchased shares - - - - - 5,000
Shares issued in cancellation
of accounts payable - - - - - 543,556
Amortization of deferred
compensation 495,036 - - - - 495,036
Shares issued in cancellation
of notes payable - - - - - -
Stock options issued for
services - - - - - 225,000
Net loss - - - - (4,057,153) (4,057,153)
----------- ------------- ------------ ----------- ------------- ---------------
December 31, 2002 - - - - (17,793,945) (935,155)
Shares issued for cash, net of
offering costs - - - - - 2,409,789
Shares issued as compensation - - - - - 553,842
Shares issued for previously
purchased shares - - - - - 162,500
Shares issued in cancellation
of accounts payable and
accrued compensation - - - - - 3,458,566
Shares issued in cancellation
of notes payable - - -
Shares issued in connection
with equity financing - - - - - -
Exercise of stock options - - (1,119,848) - - -
Shares reacquired in settlement
of judgement - - - (250,248) - -
Stock options issued for
services - - - - - 145,000
Net loss - - - - (5,520,531) (5,520,531)
----------- ------------- ------------ ----------- ------------- ---------------
December 31, 2003 - - (1,119,848) (250,248) (23,314,476) 274,011
Shares issued for cash, net
of offering costs - - - - - 4,300,938
Shares issued as compensation,
expensed (544,416) - - - - 1,246,062
Amortization of deferred
compensation 240,000 - - - - 240,000
Shares issued for previously
purchased shares - - - - - 12,500
Exercise of stock options - - (4,858,820) - - -
Exercise of warrants - - - - - 450,000
Shares issued in connection
with equity financing - - - - - 3,100,001
Stock retired in settlement of
subscriptions receivable - - 5,978,668 - - -
Shares reacquired in settlement
of judgement - - - - (231,350)
Stock options issued for services - - - - 567,771
Other comprehensive income (loss) - (16,580) - - (16,580)
Net loss - - - - (4,864,361) (4,864,361)
------------ ------------- ----------- ---------- ------------ ----------------
December 31, 2004 (304,416) (16,580) 0 (250,248) (28,178,837) 5,078,992
Shares issued as compensation,
expensed (1,352,034) - - - - -
Amortization of deferred
compensation 247,608 - - - - 247,608
Shares issued in connection with
equity financing - - - - - 1,249,999
Stock options issued for services - - - - - 48,900
Other comprehensive income (loss) - (9,681) - - - (9,681)
Net loss - - - - (2,731,952) (2,731,952)
------------ ------------- ----------- ---------- ------------ ----------------
June 30, 2005 $(1,408,842) $ (26,261) $ - $(250,248) $(30,910,789) $ 3,883,866
============ ============= =========== ========== ============ ================
See accompanying notes to the consolidated financial statements
5
SAMARITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FROM INCEPTION (SEPTEMBER 5, 1994) TO JUNE 30,2005 AND FOR THE SIX MONTHS
ENDED JUNE 30, 2005 AND 2004
From For the Six Months
Inception Ended
(September 5, 1994) June 30,
To ---------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: June 30, 2005 2005 2004
-------------------- --------------- ---------------
Net loss $ (30,910,789) $ (2,731,952) $ (1,851,420)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 1,172,586 24,752 13,461
Stock based compensation 9,590,130 - 161,706
Stock options issued for services 1,426,215 48,900 503,269
Amortization of deferred compensation 1,477,680 247,608 -
Foreign currency loss (15,377) (15,377) -
Other income (231,350) - -
(Increase) decrease in assets:
Accounts receivable (15,250) (15,250) -
Interest receivable and prepaids (65,212) 24,377 (4,136)
Deposits 12,941 - -
Increase (decrease) in liabilities: - - -
Deferred revenue - - -
Accounts payable and accrued expenses 2,111,520 80,540 (42,691)
-------------------- --------------- ---------------
NET CASH USED IN OPERATING ACTIVITIES (15,446,906) (2,336,402) (1,219,811)
-------------------- --------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in note receivable (250,000) - -
Purchase of technology (108,969) - -
Purchase of furniture and equipment (308,421) (192,458) (10,951)
Redemption of marketable security (1,250,000) 750,000 (2,000,000)
Patent registration costs (542,272) (102,793) (43,862)
-------------------- --------------- ---------------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (2,459,662) 454,749 (2,054,813)
-------------------- --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from warrants 607,125 - 517,500
Proceeds from debentures 642,120 - -
Proceeds from stock issued for cash 12,789,620 - 7,385,939
Proceeds from equity financing 4,350,000 1,249,999 -
Short-term loan repayments (288,422) - -
Short-term loan proceeds 1,612,922 - -
-------------------- --------------- ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 19,713,365 1,249,999 7,903,439
-------------------- --------------- ---------------
CHANGE IN CASH 1,806,797 (631,654) 4,628,815
CASH AT BEGINNING OF PERIOD - 2,438,451 370,585
-------------------- --------------- ---------------
CASH AT END OF PERIOD $ 1,806,797 $ 1,806,797 $ 4,999,400
==================== =============== ===============
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 36,783 $ 468 -
NON-CASH FINANCING & INVESTING ACTIVITIES:
Purchase of net, non-cash assets of subsidiary
for stock $ 195 $ - $ -
Short-term debt retired through issuance
of stock $ 1,890,695 $ - $ -
Issuance of common stock, previously subscribed $ 180,000 $ - $ 12,500
Treasury stock acquired through settlement
of judgement $ 250,248 $ - $ -
Stock subscriptions receivable $ 1,119,848 $ - $ -
Stock received in settlement $ (231,350) $ -
Stock as compensation for services $ 6,527,826 $ 1,352,034 $ -
Stock issued in cancellation of accounts payable $ 4,248,938 $ - $ -
Exercise of stock options $ 4,858,820 $ - $ -
Stock retired in settlement of subscriptions
receivable $ (5,978,668) $ $ (1,440,787)
See accompanying notes to the consolidated financial statements (unaudited)
6
Samaritan Pharmaceuticals, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
June 30, 2005
Note 1. - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial statements and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all the information and
disclosures required for annual financial statements. These financial statements
should be read in conjunction with the consolidated financial statements and
related footnotes for the year ended December 31, 2004, included in the Form
10-KSB for the year then ended.
In the opinion of the Company's management, all adjustments (consisting of
normal recurring accruals) necessary to present fairly the Company's financial
position as of June 30, 2005, and the results of operations and cash flows for
the six-month period ending June 30, 2005 have been included. The results of
operations for the six-month period ended June 30, 2005 are not necessarily
indicative of the results to be expected for the full year. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Form 10-KSB as filed with the Securities and
Exchange Commission for the year ended December 31, 2004.
Note 2. - Summary of Significant Accounting Policies.
A. Samaritan Pharmaceuticals, Inc. trades on the American Stock Exchange under
the symbol LIV and its principal executive office are located in Las Vegas,
Nevada.
Samaritan Pharmaceuticals is working to ensure a longer and better life, for
patients suffering with AIDS, Alzheimer's, Cancer, and Cardiovascular disease.
Samaritan is a pipeline-driven biopharmaceutical company, with a clear focus on
advancing early stage innovative drugs through clinical development, to become
commercially valuable compounds.
B. Basis of Consolidation
The accompanying financial statements include the accounts of the Company and
its wholly owned subsidiary. All intercompany balances and transactions have
been eliminated in consolidation.
7
C. Cash Equivalents
The Company considers all highly liquid temporary cash investments with an
original maturity of three months or less to be cash equivalents.
D. Property and Equipment
Property and equipment are recorded at cost. Depreciation is provided using the
straight line method over the estimated useful lives of the assets.
E. Intangibles
1) Legal fees associated with filing patents are recorded at cost. Amortization,
once the patent is approved, will be calculated using the straight-line method,
over the estimated useful lives of the patents.
The Company has been issued 1 U.S. patent and has 17 pending liscensed patent
applications in the U.S. to protect its proprietary methods and processes. The
Company also has several licenses corresponding to foreign patent applications
for some of these U.S. patent applications. As of June 30, 2005, its patent
portfolio outside the U.S. comprised of 2 licensed issued patents and 17
licensed pending patent applications. The issued U.S. patent and pending
patent applications relate to Alzheimer's, Cancer, Cardiovascular, and HIV
indications.
Certain U.S. patents may be eligible for patent term extensions under the
Hatch-Waxman Act for the lost opportunity to market and sell the invention
during the regulatory review process.
The Company reviews patent costs for impairment by comparing the carrying value
of the patents with the fair value. Fair value is estimated using the present
value of expected future cash flows. The Company believes it will recover the
full amount of the patent costs based on forecasts of sales of the products
related to the patents.
2) Purchased technology rights are recorded at cost and are being amortized
using the straight line method over the estimated useful life of the technology.
F. Earnings (loss) per share
The Company reports loss per common share in accordance with Statement of
Financial Accounting Standards ("SFAS") no. 128, "Earnings Per Share." The per
share effects of potential common shares such as warrants, options, convertible
debt and convertible preferred stock have not been included, as the effect would
be antidilutive. The Company had 23,966,018 options outstanding at June 30,
2005, which were not included.
G. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
8
H. Income Taxes
Pursuant to Statement of Financial Accounting Standards No. 109 ("SFAS 109")
"Accounting for Income Taxes", the Company accounts for income taxes under the
liability method. Under the liability method, a deferred tax asset or liability
is determined based upon the tax effect of the differences between the financial
statement and tax basis of assets and liabilities as measured by the enacted
rates, which will be in effect when these differences reverse.
I. Research and Development Costs
Research and development costs are expensed when incurred. Research and
development costs for the three months and six months ended June 30, 2005, were
$813,803 and $1,540,899, respectively.
J. Impairment of Long-Lived Assets
The Company reviews long-lived assets and certain identifiable assets related to
those on a quarterly basis for impairment whenever circumstances and situations
change such that there is an indication that the carrying amounts may not be
recovered.
K. Fair Value of Financial Instruments
Statement of Financial Accounting Standard No. 107 "Disclosures about Fair Value
of Financial Instruments" ("SFAS 107") requires the disclosure of fair value
information about financial instruments whether or not recognized on the balance
sheet, for which it is practicable to estimate the value. Where quoted market
prices are not readily available, fair values are based on quoted market prices
of comparable instruments. The carrying amount of cash, accounts payable and
accrued expenses approximates fair value because of the short maturity of those
instruments.
L. Marketable Securities
At June 30, 2005, the Company held two brokered Certificates of Deposit with a
total market value of $1,239,115. Unrealized gains and losses, determined by the
difference between historical purchase price and the market value at each
balance sheet date, are recorded as a component of Accumulated Other
Comprehensive loss in Shareholder's Equity. Realized gains and losses will be
determined by the difference between historical purchase price and gross
proceeds received when the marketable securities are sold.
Note 3 - Stock Based Compensation
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," ("SFAS 123"), encourages, but does not require, companies to
record compensation cost for stock-based employee compensation plans at fair
value. The Company has chosen to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees", and related Interpretations.
Accordingly, compensation cost for the Company's stock at the date of the grant
over the amount of an employee must pay to acquire the stock. The Company has
adopted the "disclosure only" alternative described in SFAS 123 and SFAS 148,
which require pro forma disclosures of net income and earnings per share as if
the fair value method of accounting had been applied.
9
Had the Company determined compensation cost based on the fair value at the
grant date for its stock options under SFAS No. 123, "Accounting for Stock-Based
Compensation," the Company's net loss would have been reported as follows:
Three months Three months Six Months Six Months
Ended Ended Ended Ended
June 30, 2005 June 30, 2004 June 30, 2005 June 30, 2004
--------------- ------------- ------------- -------------
Net Loss:
As reported $(1,470,396) $(1,022,835) $(2,731,952) $(1,851,420)
Pro Forma $(1,502,396) $(2,122,835) $(4,061,783) $(2,951,420)
Basic and diluted loss per common share:
As reported $ (0.01) $ (0.01) $ (0.02) $ (0.02)
Pro Forma $ (0.01) $ (0.02) $ (0.03) $ (0.02)
The Company utilizes the Black-Scholes option-pricing model to calculate the
fair value of each individual issuance of options with the following assumptions
used for grants during the three months and six months ended June 30, 2005. The
per-share weighted average fair value of stock options granted during the three
months and six months ended June 30, 2005 was and 2003 was $0.08 and $0.44,
respectively, on the date of grant using the Black Scholes pricing model and the
following assumptions for the three and and six months ended June 30, 2005 and
2004:
Three Six
Months Months
---------- ---------
Expected dividend yield 0% 0%
Risk-free interest rate 5% 5%
Annualized volatility 46% 44%
At June 30, 2005 the range of exercise price for all of the Company's
outstanding stock options was $.10 - $1.26, with an average remaining life of
five years and an average exercise price of $.60.
Note - 4 Stockholders' Equity
a. Stock as compensation and settlement of debt
The Company issues stock as compensation for services valuing such issues
premised upon the fair market value of the stock.
During the three months ended June 30, 2005, the Company issued an aggregate of
1,933,900 shares of common stock in consideration of services rendered or to be
rendered to the Company. Such shares were valued at an aggregate of $1,352,034
ranging from $.64 - $.72 per share, representing the fair value of the shares
issued. The issuances were recorded as non-cash compensation expense and
deferred compensation.
During the three months ended June 30, 2005, the Company issued an aggregate of
1,700,000 shares of common stock to Fusion Capital. Such shares were valued at
$1,224,000. The issuance was recorded as deferred compensation and will be
charged against additional paid-in capital.
During the three months ended June 30, 2005, the Company also issued 523,418
shares in connection with the common stock purchase agreement with Fusion
Capital. The gross proceeds for these shares were $250,000.
b. The Company increased its authorized shares from 200,000,000 to 250,000,000
in June 2005.
c.Stock Options:
The following table summarizes the Company's stock options outstanding at June
30, 2005:
Weighted average
Shares exercise price
----------- -----------------
Outstanding and exercisable
at December 31, 2004 20,924,930 $ .56
Granted 3,091,088 .90
Exercised 0 .00
Expired (50,000) (1.00)
----------------- -----------------
Outstanding and exercisable
at June 30, 2005 23,966,018 $ .60
================= ==================
Item 2. Management's Discussion and Analysis or Plan of Operation
THE FOLLOWING ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION OF
THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED FINANCIAL
STATEMENTS, INCLUDING THE NOTES THERETO OF THE COMPANY, CONTAINED ELSEWHERE IN
THE FORM 10-KSB.
This Plan of Operation should be read in conjunction with the accompanying
consolidated financial statements and notes included in this report.
General Overview
We are a small cap biopharmaceutical company focused on the development of novel
therapeutic and diagnostic products. We have devoted substantially all of our
resources to undertaking our drug discovery and development programs. The
majority of our resources have been expended in the pursuit of FDA required
preclinical studies, and Phase II/III clinical trials, for Samaritan's HIV drug
SP-01A, an oral entry inhibitor.
10
In addition, and at the same time, Samaritan has devoted major resources to its
Alzheimer's technology, which features: three therapeutics, SP-04, SP-08, and
SP-233; two stem cell, neuron differentiation therapies, SP-sc4 and SP-sc7; a
predictive Alzheimer's diagnostic; and an Alzheimer's animal model. Samaritan,
as well, has devoted resources to its cancer drug, SP-C007, and a breast cancer
diagnostic; plus, its cholesterol recognition peptide, which plays a role in
transforming and binding LDL cholesterol while subsequently raising HDL.
Plan and Results of Operations
We have used the proceeds from private placements of our capital stock primarily
to expand our preclinical and clinical efforts as well as for general working
capital. At this time we are beginning to commit additional resources to the
development of SP-01A as well as for the development of our other drugs.
Additional details regarding the human trials and INDs that the Company plans to
file are discussed in Part I, Item 1, Description of Business, of the 10-KSB
annual report filed on April 15, 2005.
I. Three months ended June 30, 2005 as compared to the three months ended June
30, 2004
During the quarter ended June 30, 2005, we incurred research expenditures
pursuant to a grant received from the US Department of Health and Human
Services. We recognized grant revenue of $15,250, the extent of such qualifying
expenditures.
We incurred research and development expenses of $813,803 for the quarter ended
June 30, 2005, as compared to $315,436 in the year-earlier period, an increase
of $498,367 or 158%. This increase was primarily due to continuation of our
Phase IIb HIV Clinical trial, to our increase in financial commitment with
Georgetown University, additional expenses related to development of SP-01A
including payments to Pharmaplaz, Ireland for the manufacturing of SP-01A and
performing the work necessary to complete the chemistry, manufacturing and
controls (CMC) section of New Drug Application for the FDA which will be
submitted with studies conducted under the IND for SP-01A. We expect that
research and development expenditures related to drug discovery and development
will increase during the remainder of 2005 and subsequent years due to FDA
clinical trials which include the continuation and expansion of clinical trials
for our HIV drug program, Alzheimer's drug program, the initiation of trials for
other potential indications and additional study expenditures for potential
pharmaceutical candidates. Research and development expenses may fluctuate from
period to period depending upon the stage of certain projects and the level of
pre-clinical testing and clinical trial-related activities. In conjunction with
the additional research and development activities we expect to conduct, we
anticipate adding two administrative staff and four research and development
support personnel in the next 12 months. In June 2004, we also hired a Chief
Drug Development Officer at an annual salary of $300,000 plus benefits.
General and administrative expenses decreased to $671,844 for the quarter ended
June 30, 2005, from $700,626 in the same period in 2004. The decrease of $28,782
(-4%) was primarily due to a material reduction in stock-based consulting and
compensation costs.
Depreciation and amortization amounted to $17,458, as compared to $6,773 for the
quarter ended June 30, 2005 and 2004, respectively, an increase of $10,685
(158%). The increase was primarily due to purchasing research equipment during
the second quarter of 2005.
11
Net interest expense for 2005 amounted to $(17,459) for the quarter ended June
30, 2005 as opposed to $0 as reflected last year. The credit balance in the
interest expense account is due to offsetting interest earned from holding our
cash in marketable securities and certificates of deposits. The initial
investment in marketable securities was made during the quarter ended June 30,
2004. However, the investments were not held for the entire quarter and the
amount earned was less, $5,914. In the interim statements last year, these
earnings were offset to general and administrative expense.
We had a net loss of $1,470,396 as compared to $1,022,835 for the quarter ended
June 30, 2005 and 2004, respectively. Both years' calculated to a loss per share
of $.01 for the quarter ending June 30. The quarter's increased loss of $484,011
relates primarily to increased research expenditures.
II. Six months ended June 30, 2005 as compared to the Six months ended June 30,
2004
We incurred research and development expenses of $1,540,899 for the six months
ended June 30, 2005, as compared to $420,589 in the year-earlier period, an
increase $1,120,310 or 266%. This increase was primarily due to initiation and
continuation of our Phase IIb HIV Clinical trial, to our increase in financial
commitment with Georgetown University, additional expenses related to
development of SP-01A including payments to Pharmaplaz, Ireland for the
manufacturing of SP-01A and performing the work necessary to complete the
chemistry, manufacturing and controls (CMC) section of New Drug Application for
the FDA which will be submitted with studies conducted under the IND for SP-01A.
We expect that research and development expenditures related to drug discovery
and development will increase during the remainder of 2005 and subsequent years
due to FDA clinical trials which include the continuation and expansion of
clinical trials for our HIV drug program, Alzheimer's drug program, the
initiation of trials for other potential indications and additional study
expenditures for potential pharmaceutical candidates. Research and development
expenses may fluctuate from period to period depending upon the stage of certain
projects and the level of pre-clinical testing and clinical trial-related
activities. In conjunction with the additional research and development
activities we expect to conduct, we anticipate adding two administrative staff
and four research and development support personnel in the next 12 months. In
June 2004, we also hired a Chief Drug Development Officer at an annual salary of
$300,000 plus benefits.
General and administrative expenses decreased to $1,216,028 for the six months
ended June 30, 2005, respectively, $1,417,370 in the same period in 2004,
respectively. The decrease of $201,342 (-14%) was primarily due to a reduction
in stock-based consulting and compensation costs.
Depreciation and amortization amounted to $24,752, as compared to $13,461 for
six months ended June 30, 2005 and 2004, respectively, an increase of $11,291
(84%) The increase was primarily due to purchasing research equipment during the
second quarter of 2005.
12
Net interest expense for 2005 amounted to $(34,477) for six ended June 30, 2005.
The credit balance in the interest expense account is due to offsetting interest
earned from holding our cash in marketable securities and certificates of
deposits. The initial investment in marketable securities was made during the
quarter ended June 30, 2004. Therefore, the investments were not held for the
entire six months and the amount earned was less, $5,914. In the interim
statements last year, these earnings were offset to general and administrative
expense.
We had a net loss of $2,731,952, as compared to $1,851,420 for the six months
ended June 30, 2005 and June 30, 2004, respectively. Both years calculated to a
loss per share of $.02 for the six month period ending June 30. The year-to-date
loss increase ($880,532) reflects the increase in research expenses but it is
offset somewhat by the decline in stock-based compensation.
The net loss since inception on September 5, 1994 to June 30, 2005 was
$30,910,789. We expect losses to continue for the near future, and such losses
will likely increase as human clinical trials are undertaken in the United
States for drugs. Future profitability will be dependent upon our ability to
complete the development of our pharmaceutical products, obtain necessary
regulatory approvals and effectively market such products. In addition, future
profitability will require that the Company establish agreements with other
parties for the clinical testing, manufacturing, commercialization and sale of
its products.
As of June 30, 2005, the Company's cash position is $1,806,797 and the Company
has $1,239,115 of marketable securities. We are continuing efforts to raise
additional capital and execute our research and development plans. Even if we
are successful in raising sufficient money to carry out these plans, additional
clinical development, necessary to bring our products to market, we will require
significant additional capital.
Liquidity and Capital Resources
Cash used in operating activities during the six-month period ended June 30,
2005 was $2,336,402 compared to $1,219,811 for the same period a year earlier.
The increase is primarily due to the additional expenses related to development
of SP-01A, initiation of our clinical trial including payments to Pharmaplaz for
performing work to complete the chemistry, manufacturing and controls (CMC)
information that will be submitted for studies conducted under the IND for
SP-01A.
Cash provided by investing activities was $454,749 for the six-month period
ended June 30, 2005, compared to $(2,054,813) in for the same period in 2004.
During the quarter ended June 30, 2004, we invested $2,000,000 proceeds from an
offering of our common stock into marketable securities until such time as the
money was needed. During the quarter ended June 30, 2005, we redeemed one CD in
the amount of $750,000. Proceeds from the redemption of the CD during the
quarter ended June 30, 2005 were offset to some degree by the purchase of
research equipment.
13
Cash provided by financing activities was $1,249,999 for the six-month period
ended June 30, 2005, compared to $7,903,439 in the same period for 2004, a
decrease of $6,653,440 or 84.2%. Last year's results include proceeds from a
private placement, which is not the case for the same period 2005 when no
private placements were held. The decrease in private placement is offset to
some degree by an increase in funding through an equity finance agreement.
Current assets as of June 30, 2005 were $2,619,729 as compared to $5,024,793 for
the comparable 2004 period, a decrease of $2,405,064 or 47.9%. The decrease is
primarily due to using the proceeds from the 2004 private placement to fund
development stage activities. This is offset somewhat by proceeds received
through the equity financing arrangement. Current liabilities as of June 30,
2004 were $250,705 as compared to $410,118 for the same period in 2004, a
decrease of $159,413 or 38.9%.
On April 22, 2003, we entered into a common stock purchase agreement with Fusion
Capital Fund II, LLC, pursuant to which Fusion Capital has agreed to purchase
our common stock from time to time at our option up to an aggregate amount of
$10,000,000. The SEC declared effective the Company's registration statement on
Form SB-2, Commission Registration No. 333-105818 on October 9, 2003. The amount
of shares remaining under this Registration Statement as of June 30, 2005 was
1,267,933.
On May 12, 2005, we entered into a new common stock purchase agreement with
Fusion Capital pursuant to which Fusion Capital has agreed to purchase our
common stock from time to time at our option up to an aggregate amount of
$40,000,000 additional funding over 50 months from the date the SEC declares
effective a registration statement covering the shares of common stock to be
purchased by Fusion Capital under the new agreement. Under the new agreement,
the shares will be priced based on the market price of our shares at the time of
sale to Fusion Capital. In general, we have the right to sell up to $40,000 of
our common stock on each business day and can increase that amount to as much as
$1,000,000 in any one day depending on the market price of our shares. We have
the right to control timing and the amount of shares we sell to Fusion Capital.
This new agreement does not constitute an offer to sell securities, and an offer
to sell securities will only be made if certain conditions are met, including
the termination of the common stock purchase agreement dated April 22, 2003 and
the declaration of effectiveness by the SEC of a registration statement covering
the shares of common stock to be purchased by Fusion Capital under the new
agreement.
The Company's dependence on raising additional capital will continue at least
until the Company is able to commercially market one of its products at
significant sales level. Depending on profit margins and other factors, the
Company may still need additional funding to continue research and development
efforts. The Company's future capital requirements and the adequacy of its
financing depend upon numerous factors, including the successful
commercialization of the Company's drug candidates, progress in its product
development efforts, progress with preclinical studies and clinical trials, the
cost and timing of production arrangements, the development of effective sales
and marketing activities, the cost of filing, prosecuting, defending and
enforcing intellectual property rights, competing technological and market
developments, and the development of strategic alliances for the marketing of
its products.
14
We do not believe that debt financing from financial institutions will be
available until at least the time that one of our products is approved for
commercial production. To date, none of our proprietary products has reached a
commercial stage, and hence, we do not have, nor do we anticipate revenue in the
near future. We have been unprofitable since our inception and have incurred
significant losses. We will continue to have significant general and
administrative expenses, including expenses related to clinical studies, our
collaboration with Georgetown University, and patent registration costs. We have
funded our operations through a series of private placements and through our
agreement with Fusion Capital, which we believe will assist the Company in
meetings its cash needs. Except for an agreement to sell shares to Fusion
Capital, discussed above, no commitment exists for continued investments, or for
any underwriting.
Even with our financing arrangement with Fusion Capital, we may require
substantial additional funds to sustain our operations and grow our business.
The amount of which will depend, among other things, on the rate of progress and
the cost of our research and product development programs and clinical trial
activities, the cost of preparing, filing, prosecuting, maintaining and
enforcing patent claims and other intellectual property rights, and the cost of
developing manufacturing and marketing capabilities, if we decide to undertake
those activities. The clinical development of a therapeutic product is a very
expensive and lengthy process and may be expected to utilize $5 to $20 million
over a three to six year development cycle. Although we believe we could license
the manufacturing and marketing rights to our products in return for up-front
licensing and other fees and royalties on any sales, there can be no assurance
that we will be able to do so in the event we seek to do so. We need to obtain
additional funds to develop our therapeutic products and our future access to
capital is uncertain. The allocation of limited resources is an ongoing issue
for us as we move from research activities into the more costly clinical
investigations required to bring therapeutic products to market.
The extent we rely on Fusion Capital as a source of funding will depend on a
number of factors, including the prevailing market price of our common stock and
the extent to which we are able to secure working capital from other sources.
Even if we are able to access the full amount under the common stock purchase
agreement with Fusion Capital, we may still need additional capital to fully
implement our business, operating and development plans. If we are unable to
obtain additional financing we might be required to delay, scale back or
eliminate certain of our research and product development programs or clinical
trials, or be required to license third parties to commercialize products or
technologies that we would otherwise undertake ourselves, or cease certain
operations all together, any of which might have a material adverse effect upon
us. If we raise additional funds by issuing equity securities, dilution to
stockholders may result, and new investors could have rights superior to
existing holders of shares. Should the financing we require to sustain our
working capital needs be unavailable or prohibitively expensive when we require
it, the consequences would be a material adverse effect on our business,
operating results, financial condition, and prospects.
15
We have been able to meet our cash needs during the past 12 months through a
combination of funds received through private placements and funds received
under a common stock purchase agreement with Fusion Capital. We will continue to
explore avenues to obtain the capital needed for our operations through private
placements and by sale of our shares to Fusion Capital.
Quantitative and Qualitative Information About Market Risk
We do not engage in trading market-risk sensitive instruments and do not
purchase hedging instruments or "other than trading" instruments that are likely
to expose us to market risk, whether interest rate, foreign currency exchange,
commodity price or equity price risk. We have no outstanding debt instruments,
have not entered into any forward or future contracts, and have purchased no
options and entered into no swaps. We have no credit lines or other borrowing
facilities, and do not view ourselves as subject to interest rate fluctuation
risk at the present time.
Recently Issued Accounting Standards
In December 2004, the FASB issued Statement of Financial Accounting Standards
No. 123 (revised 2004), "Share-Based Payment", or SFAS 123R, which establishes
standards for transactions in which an entity exchanges its equity instruments
for goods or services. SFAS 123R requires companies to expense the value of
employee stock options and similar awards.
Share-based payments will be measured at fair value on the grant date, based on
the estimated number of awards that are expected to vest. SFAS 123R applies to
all unvested share-based awards outstanding at the company's adoption date. SFAS
123R eliminates the exception to account for such awards using the intrinsic
method previously allowable under Accounting Principals Board Opinion No. 25
"Accounting for Stock Issued to Employees". SFAS 123R will be effective for our
fiscal year beginning January 1, 2006.
In April, 2005, the FASB issued Interpretation No. 47, "Accounting for
Conditional Asset Retirement Obligations", which clarifies that an entity is
required to recognize a liability for the fair value of a conditional asset
retirement obligation when incurred if the liability's fair value can be
reasonably estimated. The fair value of a liability for the conditional asset
retirement obligation should be recognized when incurred, which is generally
upon acquisition, construction, or development and (or) through the normal
operation of the asset. Uncertainty about the timing and (or) method of
settlement of a conditional asset retirement obligation should be factored into
the measurement of the liability when sufficient information exists.
Interpretation No. 47 is effective no later than the end of fiscal years
beginning after December 15, 2005. The adoption of these new pronouncements did
not have, or are not expected to have, a material effect on the Company's
consolidated financial position or results of operations.
16
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks described below are not the only ones facing our
Company. Additional risks not presently known to us or that we currently deem
immaterial may also impair our business operations.
Our business, financial condition or results of operations could be adversely
affected by any of these risks. The trading price of our common stock could
decline due to any of these risks, and you may lose all or part of your
investment.
We have a substantial accumulated deficit and limited access to debt financing.
The Company had an accumulated deficit of $30,910,789 as of June 30, 2005. Since
the Company presently has no source of revenues and is committed to continuing
its product research and development program, significant expenditures and
losses will continue until development of new products is completed and such
products have been clinically tested, approved by the FDA and successfully
marketed. In addition, the Company has funded its operations primarily through
the sale of Company securities, and has had limited access to debt financing for
its product development and other activities. We do not believe that debt
financing from financial institutions will be available until at least the time
that one of our products is approved for commercial production.
We have no current product sales revenues or profits.
The Company has devoted its resources to developing a new generation of
therapeutic drug products, but such products cannot be marketed until clinical
testing is completed and governmental approvals have been obtained. Accordingly,
there is no current source of revenues, much less profits, to sustain the
Company's present activities and no revenues will likely be available until, and
unless the new products are clinically tested, approved by the FDA and
successfully marketed, either by the Company or a marketing partner, an outcome
which the Company is not able to guarantee.
It is uncertain that the Company will have access to future capital or
government grants.
It is not expected that the Company will generate positive cash-flow from
operations for at least the next several years. As a result, substantial
additional equity or debt financing or the receipt of one or more government
grants for research and development and/or clinical development will be required
to fund our activities. We cannot be certain that we will be able to consummate
any such financing on favorable terms, if at all, or receive any such government
grants or that such financing or government grants will be adequate to meet our
capital requirements. Any additional equity financing could result in
substantial dilution to stockholders, and debt financing, if available, will
most likely involve restrictive covenants which preclude the Company from making
17
distributions to stockholders and taking other actions beneficial to
stockholders. If adequate funds are not available, the Company may be required
to delay or reduce the scope of its drug development program or attempt to
continue development by entering into arrangements with collaborative partners
or others that may require the Company to relinquish some or all of its rights
to proprietary drugs. The inability to fund its capital requirements would have
a material adverse effect on the Company.
The Company is not certain that it will be successful in the development of its
drug candidates.
The successful development of any new drug is highly uncertain and is subject to
a number of significant risks. Our drug candidates, all of which are in a
development stage, require significant, time-consuming and costly development,
testing and regulatory clearance. This process typically takes several years and
can require substantially more time. Risks include, among others, the
possibility that a drug candidate will (i) be found to be ineffective or
unacceptably toxic, (ii) have unacceptable side effects, (iii) fail to receive
necessary regulatory clearances, (iv) not achieve broad market acceptance, (v)
be subject to competition from third parties who may market equivalent or
superior products, or (vi) be affected by third parties holding proprietary
rights that will preclude the Company from marketing a drug product. There can
be no assurance that the development of drug candidates will demonstrate the
efficacy and safety of a drug candidate as a therapeutic drug, or, even if
demonstrated, that there will be sufficient advantages to its use over other
drugs or treatments so as to render the drug product commercially viable. In the
event that the Company is not successful in developing and commercializing one
or more drug candidates, investors are likely to realize a loss of their entire
investment. Positive results in preclinical and early clinical trials do not
ensure that future clinical trials will be successful or that drug candidates
will receive any necessary regulatory approvals for the marketing, distribution
or sale of such drug candidates.
Success in preclinical and early clinical trials does not ensure that
large-scale clinical trials will be successful. Clinical results are frequently
susceptible to varying interpretations that may delay, limit or prevent
regulatory approvals. The length of time necessary to complete clinical trials
and to submit an application for marketing approval for a final decision by a
regulatory authority varies significantly and may be difficult to predict.
The Company will face intense competition from other companies in the
pharmaceutical industry.
The Company is engaged in a segment of the pharmaceutical industry that is
highly competitive and rapidly changing. If successfully developed and approved,
any of the Company's drug candidates will likely compete with several existing
therapies. In addition, other companies are pursuing the development of
pharmaceuticals that target the same diseases as are targeted by the drugs being
developed by the Company. The Company anticipates that it will face intense and
increasing competition in the future as new products enter the market and
advanced technologies become available. We cannot assure that existing products
or new products developed by competitors will not be more effective, or more
effectively marketed and sold than those by the Company. Competitive products
may render the Company's drugs obsolete or noncompetitive prior to the Company's
recovery of development and commercialization expenses.
18
Many of the Company's competitors will also have significantly greater
financial, technical and human resources and will likely be better equipped to
develop, manufacture and market products. In addition, many of these competitors
have extensive experience in preclinical testing and clinical trials, obtaining
FDA and other regulatory approvals and manufacturing and marketing
pharmaceutical products. A number of these competitors also have products that
have been approved or are in late-stage development and operate large,
well-funded research and development programs. Smaller companies may also prove
to be significant competitors, particularly through collaborative arrangements
with large pharmaceutical and biotechnology companies. Furthermore, academic
institutions, government agencies and other public and private research
organizations are becoming increasingly aware of the commercial value of their
inventions and are actively seeking to commercialize the technology they have
developed. Accordingly, competitors may succeed in commercializing products more
rapidly or effectively than the Company, which would have a material adverse
effect on the Company.
There is no assurance that the Company's products will have market acceptance.
The success of the Company will depend in substantial part on the extent to
which a drug product, once approved, achieves market acceptance. The degree of
market acceptance will depend upon a number of factors, including (i) the
receipt and scope of regulatory approvals, (ii) the establishment and
demonstration in the medical community of the safety and efficacy of a drug
product, (iii) the product's potential advantages over existing treatment
methods and (iv) reimbursement policies of government and third party payors. We
cannot predict or guarantee that physicians, patients, healthcare insurers or
maintenance organizations, or the medical community in general, will accept or
utilize any drug product of the Company.
The unavailability of health care reimbursement for any of our products will
likely adversely impact our ability to market effectively such products and
whether health care reimbursement will be available for any of our products is
uncertain.
The Company's ability to commercialize its technology successfully will depend
in part on the extent to which reimbursement for the costs of such products and
related treatments will be available from government health administration
authorities, private health insurers and other third-party payors. Significant
uncertainty exists as to the reimbursement status of newly-approved medical
products. The Company cannot guarantee that adequate third-party insurance
coverage will be available for the Company to establish and maintain price
levels sufficient for realization of an appropriate return on its investments in
developing new therapies. Government, private health insurers, and other
third-party payors are increasingly attempting to contain health care costs by
limiting both coverage and the level of reimbursement for new therapeutic
products approved for marketing by the FDA. Accordingly, even if coverage and
reimbursement were provided by government, private health insurers, and
third-party payors for uses of the Company's products, the market acceptance of
these products would be adversely affected if the amount of reimbursement
available for the use of the Company's therapies proved to be unprofitable for
health care providers.
19
Uncertainties related to health care reform measures may affect the Company's
success. There have been a number of federal and state proposals during the last
few years to subject the pricing of health care goods and services, including
prescription drugs, to government control and to make other changes to the U.S.
health care system. It is uncertain which legislative proposals will be adopted
or what actions federal, state, or private payors for health care treatment and
services may take in response to any health care reform proposals or
legislation. The Company cannot predict the effect health care reforms may have
on its business, and there is no guarantee that any such reforms will not have a
material adverse effect on the Company.
Further testing of our drug candidates will be required and there is no
assurance of FDA approval.
The FDA and comparable agencies in foreign countries impose substantial
requirements upon the introduction of medical products, through lengthy and
detailed laboratory and clinical testing procedures, sampling activities and
other costly and time-consuming procedures. Satisfaction of these requirements
typically takes several years or more and varies substantially based upon the
type, complexity, and novelty of the product.
The effect of government regulation and the need for FDA approval will delay
marketing of new products for a considerable period of time, impose costly
procedures upon the Company's activities, and provide an advantage to larger
companies that compete with the Company. There can be no assurance that FDA or
other regulatory approval for any products developed by the Company will be
granted on a timely basis or at all. Any such delay in obtaining or failure to
obtain, such approvals would materially and adversely affect the marketing of
any contemplated products and the ability to earn product revenue. Further,
regulation of manufacturing facilities by state, local, and other authorities is
subject to change. Any additional regulation could result in limitations or
restrictions on the Company's ability to utilize any of its technologies, hereby
adversely affecting the Company's operations.
Human pharmaceutical products are subject to rigorous preclinical testing,
clinical trials, and other approval procedures mandated by the FDA and foreign
regulatory authorities. Various federal and foreign statutes and regulations
also govern or influence the manufacturing, safety, labeling, storage, record
keeping and marketing of pharmaceutical products. The process of obtaining these
approvals and the subsequent compliance with appropriate U.S. and foreign
statutes and regulations are time-consuming and require the expenditure of
substantial resources. In addition, these requirements and processes vary widely
from country to country.
Among the uncertainties and risks of the FDA approval process are the
following:(i) the possibility that studies and clinical trials will fail to
prove the safety and efficacy of the drug, or that any demonstrated efficacy
will be so limited as to significantly reduce or altogether eliminate the
acceptability of the drug in the marketplace, (ii) the possibility that the
costs of development, which can far exceed the best of estimates, may render
commercialization of the drug marginally profitable or altogether unprofitable,
and (iii) the possibility that the amount of time required for FDA approval of a
20
drug may extend for years beyond that which is originally estimated. In
addition, the FDA or similar foreign regulatory authorities may require
additional clinical trials, which could result in increased costs and
significant development delays. Delays or rejections may also be encountered
based upon changes in FDA policy and the establishment of additional regulations
during the period of product development and FDA review. Similar delays or
rejections may be encountered in other countries.
The Company's success will be dependent on licenses and proprietary rights it
receives from other parties, and on any patents it may obtain.
Our success will depend in large part on the ability of the Company and its
licensors to (i) maintain license and patent protection with respect to their
drug products, (ii) defend patents and licenses once obtained, (iii) maintain
trade secrets, (iv) operate without infringing upon the patents and proprietary
rights of others and (iv) obtain appropriate licenses to patents or proprietary
rights held by third parties if infringement would otherwise occur, both in the
U.S. and in foreign countries. The Company has obtained licenses to patents and
other proprietary rights from Georgetown University.
The patent positions of pharmaceutical companies, including those of the
Company, are uncertain and involve complex legal and factual questions. There is
no guarantee that the Company or its licensors have or will develop or obtain
the rights to products or processes that are patentable, that patents will issue
from any of the pending applications or that claims allowed will be sufficient
to protect the technology licensed to the Company. In addition, we cannot be
certain that any patents issued to or licensed by the Company will not be
challenged, invalidated, infringed or circumvented, or that the rights granted
thereunder will provide competitive disadvantages to the Company.
Litigation, which could result in substantial cost, may also be necessary to
enforce any patents to which the Company has rights, or to determine the scope,
validity and unenforceability of other parties' proprietary rights, which may
affect the rights of the Company. U.S. patents carry a presumption of validity
and generally can be invalidated only through clear and convincing evidence.
There can be no assurance that the Company's licensed patents would be held
valid by a court or administrative body or that an alleged infringer would be
found to be infringing. The mere uncertainty resulting from the institution and
continuation of any technology-related litigation or interference proceeding
could have a material adverse effect on the Company pending resolution of the
disputed matters.
The Company may also rely on unpatented trade secrets and expertise to maintain
its competitive position, which it seeks to protect, in part, by confidentiality
agreements with employees, consultants and others. There can be no assurance
that these agreements will not be breached or terminated, that the Company will
have adequate remedies for any breach, or that trade secrets will not otherwise
become known or be independently discovered by competitors.
21
The Company's license agreements can be terminated in the event of a breach.
The license agreements pursuant to which the Company has licensed its core
technologies for its potential drug products permit the licensors, primarily
Georgetown University, to terminate the agreement under certain circumstances,
such as the failure by the licensee to use its reasonable best efforts to
commercialize the subject drug or the occurrence of any other uncured material
breach by the licensee. The license agreements also provide that the licensor is
primarily responsible for obtaining patent protection for the technology
licensed, and the licensee is required to reimburse it for the costs it incurs
in performing these activities. The license agreements also require the payment
of specified royalties. Any inability or failure to observe these terms or pay
these costs or royalties could result in the termination of the applicable
license agreement in certain cases. The termination of any license agreement
would have a material adverse effect on the Company.
Protecting our proprietary rights is difficult and costly.
The patent positions of pharmaceutical and biotechnology companies can be highly
uncertain and involve complex legal and factual questions. Accordingly, we
cannot predict the breadth of claims allowed in these companies' patents or
whether the Company may infringe or be infringing these claims. Patent disputes
are common and could preclude the commercialization of our products. Patent
litigation is costly in its own right and could subject us to significant
liabilities to third parties. In addition, an adverse decision could force us to
either obtain third-party licenses at a material cost or cease using the
technology or product in dispute.
The Company's success is dependent on its key personnel.
The Company is dependent on a small management group and on independent
researchers, some of whom are inventors of the patents licensed to the Company
for core technologies and drugs developed at Georgetown University. Scientific
personnel may from time to time serve as consultants to the Company and may
devote a portion of their time to the Company's business, as well as continue to
devote substantial time to the furtherance of the Company's sponsored research
at Georgetown University and other affiliated institutions as may be agreed to
in the future, but such personnel are not employees of the Company and are not
bound under written employment agreements. The services of such persons are
important to the Company, and the loss of any of these services may adversely
affect the Company.
Our success is dependent upon the continued services and performance of Dr.
Janet Greeson, our Chief Executive Officer, President and Chairman and Dr.
Vassilios Papadopoulos from Georgetown University. We do not maintain key man
insurance on Dr. Greeson. We do however, have a 5-year employment agreement with
Dr. Greeson that expires in 2006. The loss of their services could delay our
product development programs and our research and development efforts at
Georgetown University. In addition, the loss of Dr. Janet Greeson or Dr.
Vassilios Papadopoulos is grounds for termination of the collaboration with
Georgetown University. In addition, competition for qualified employees among
companies in the biotechnology and biopharmaceutical industry is intense and we
cannot assure you that we would be able to recruit qualified personnel on
acceptable terms to replace Dr. Greeson or Dr. Papadopoulos.
22
We may be unable to retain skilled personnel and maintain key relationships.
The success of our business depends, in large part, on our ability to attract
and retain highly qualified management, scientific and other personnel, and on
our ability to develop and maintain important relationships with leading
research institutions and consultants and advisors. Competition for these types
of personnel and relationships is intense from numerous pharmaceutical and
biotechnology companies, universities and other research institutions. There can
be no assurance that the Company will be able to attract and retain such
individuals on commercially acceptable terms or at all, and the failure to do so
would have a material adverse effect on the Company.
We currently have no sales or marketing capability.
The Company does not have marketing or sales personnel. The Company will have to
develop a sales force, or rely on marketing partners or other arrangements with
third parties for the marketing, distribution and sale of any drug product that
is ready for distribution. There is no guarantee that the Company will be able
to establish marketing, distribution or sales capabilities or arrange with third
parties to perform those activities on terms satisfactory to the Company, or
that any internal capabilities or third party arrangements will be
cost-effective.
In addition, any third parties with which the Company may establish marketing,
distribution or sales arrangements may have significant control over important
aspects of the commercialization of a drug product, including market
identification, marketing methods, pricing, composition of sales force and
promotional activities. There can be no assurance that the Company will be able
to control the amount and timing of resources that any third party may devote to
the products of the Company or prevent any third party from pursuing alternative
technologies or products that could result in the development of products that
compete with, and/or the withdrawal of support for, the products of the Company.
The Company does not have internal manufacturing capabilities and may not be
able to develop efficient manufacturing capabilities or contract for such
services from third parties such as Pharmaplaz on commercially acceptable terms.
The Company does not have any manufacturing capacity. When required, the Company
will seek to establish relationships with third-party manufacturers for the
manufacture of clinical trial material and the commercial production of a drug
product just as it has with Pharmaplaz, Ltd. There can be no assurance that the
Company will be able to establish relationships with third-party manufacturers
on commercially acceptable terms or that third-party manufacturers will be able
to manufacture a drug product on a cost-effective basis in commercial quantities
under good manufacturing practices mandated by the FDA. The dependence upon
third parties for the manufacture of products may adversely affect future costs
23
and the ability to develop and commercialize a drug product on a timely and
competitive basis. Further, there can be no assurance that manufacturing or
quality control problems will not arise in connection with the manufacture of
the drug product or that third party manufacturers will be able to maintain the
necessary governmental licenses and approvals to continue manufacturing such
products. Any failure to establish relationships with third parties for its
manufacturing requirements on commercially acceptable terms would have a
material adverse effect on the Company.
The Company does not have its own research facilities and will be dependent on
third parties for drug development.
The Company does not have its own research and development facilities and
engages consultants and independent contract research organizations to design
and conduct clinical trials in connection with the development of a drug. As a
result, these important aspects of a drug's development will be outside the
direct control of the Company. In addition, there can be no assurance that such
third parties will perform all of their obligations under arrangements with the
Company or will perform those obligations satisfactorily.
In the future, we anticipate that we will need to obtain additional or increased
product liability insurance coverage and it is uncertain that such increased or
additional insurance coverage can be obtained on commercially reasonable terms.
The business of the Company will expose it to potential product liability risks
that are inherent in the testing, manufacturing and marketing of pharmaceutical
products. There can be no assurance that product liability claims will not be
asserted against the Company. The Company intends to obtain additional limited
product liability insurance for its clinical trials, directly or through its
marketing development partners or CRO (contract research organization) partners,
when they begin in the U.S. and to expand its insurance coverage if and when the
Company begins marketing commercial products. However, there can be no assurance
that the Company will be able to obtain product liability insurance on
commercially acceptable terms or that the Company will be able to maintain such
insurance at a reasonable cost or in sufficient amounts to protect against
potential losses. A successful product liability claim or series of claims
brought against the Company could have a material adverse effect on the Company.
Insurance coverage is increasingly more difficult to obtain or maintain.
Obtaining insurance for our business, property and products is increasingly more
costly and narrower in scope, and we may be required to assume more risk in the
future. If we are subject to third-party claims or suffer a loss or damage in
excess of our insurance coverage, we may be required to share that risk in
excess of our insurance limits. Furthermore, any first- or third-party claims
made on any of our insurance policies may impact our ability to obtain or
maintain insurance coverage at reasonable costs or at all in the future.
24
The market price of our shares, like that of many biotechnology companies, is
highly volatile.
Market prices for the Company's Common Stock and the securities of other medical
and biomedical technology companies have been highly volatile and may continue
to be highly volatile in the future. Factors such as announcements of
technological innovations or new products by the Company or its competitors,
government regulatory action, litigation, patent or proprietary rights
developments, and market conditions for medical and high technology stocks in
general can have a significant impact on any future market for our Common Stock.
We do not intend to pay dividends on our Common Stock.
The Company has never paid cash dividends on our Common Stock, and does not
intend to do so in the foreseeable future.
The issuance of more common shares or our preferred stock may adversely affect
our Common Stock.
Our Board of Directors is authorized to issue more common stock and designate
one or more series of preferred stock and to fix the rights, preferences,
privileges and restrictions thereof, without any action by the stockholders. The
designation and issuance of such shares of our preferred stock may adversely
affect the Common Stock, if the rights, preferences and privileges of such
preferred stock (i) restrict the declaration or payment of dividends on our
Common Stock, (ii) dilute the voting power of our Common Stock, (iii) impair the
liquidation rights of the Common Stock or (iv) delay or prevent a change in
control of our Company from occurring, among other possibilities.
Under provisions of the Company's certificate of incorporation, bylaws and
Nevada law, the Company's management may be able to block or impede a change in
control.
The issuance of preferred stock may make it more difficult for a third party to
acquire, or may discourage a third party from acquiring, a majority of the
voting stock. These and other provisions of the Certificate of Incorporation and
the by-laws, as well as certain provisions of Nevada law, could delay or impede
the removal of incumbent directors and could make more difficult a merger,
tender offer or proxy contest involving a change of control of the Company, even
if such events could be beneficial to the interest of the stockholders as a
whole. Such provisions could limit the price that certain investors might be
willing to pay in the future for our Common Stock.
Officers' and directors' liabilities are limited under Nevada law.
Pursuant to the Company's Certificate of Incorporation and by-laws, as
authorized under applicable Nevada law, directors are not liable for monetary
damages for breach of fiduciary duty, except in connection with a breach of the
duty of loyalty, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, for dividend payments or
stock repurchases illegal under Nevada law or for any transaction in which a
director has derived an improper personal benefit. Our Certificate of
Incorporation and by-laws provide that the Company must indemnify its officers
and directors to the fullest extent permitted by Nevada law for all expenses
incurred in the settlement of any actions against such persons in connection
with their having served as officers or directors.
25
Item 3. Controls and Procedures.
a. Evaluation of Disclosure Controls and Procedures
Samaritan Pharmaceuticals' Principal Executive Officer and Principal Accounting
and Financial Officer, after evaluating the effectiveness of Samaritan
Pharmaceuticals' disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period
covered by this report, have concluded that as of such date, Samaritan
Pharmaceuticals' disclosure controls and procedures were adequate and effective
to ensure that material information relating to Samaritan Pharmaceuticals that
is required to be disclosed by Samaritan Pharmaceuticals in reports that it
files or submits under the Exchange Act, is recorded, processed, summarized and
reported within the time periods specified in SEC rules and accumulated and
communicated to Samaritan Pharmaceuticals' management, including its Principal
Executive Officer and Principal Accounting and Financial Officer, to allow
timely decisions regarding required disclosure.
b. Changes In Internal Controls Over Financial Reporting
In connection with the evaluation of Samaritan Pharmaceuticals' internal
controls during Samaritan Pharmaceuticals' last fiscal quarter, Samaritan
Pharmaceuticals' Principal Executive Officer and Principal Accounting and
Financial Officer have reviewed and determined that there are no changes to
Samaritan Pharmaceuticals' internal controls over financial reporting that have
materially affected, or are reasonably likely to materially effect, Samaritan
Pharmaceuticals' internal controls over financial reporting.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
We are, from time to time, involved in various legal proceedings in the ordinary
course of our business. While it is impossible to predict accurately or to
determine the eventual outcome of these matters, the Company believes that the
outcome of these proceedings will not have a material adverse effect on the
financial statements of the Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
26
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Company held its Annual meeting on June 10, 2005 with 115,848,689 shares
present for a quorum. The total outstanding shares for the record date of April
20, 2005 were 133,283,603. (b) The four matters voted upon at the meeting were:
(i) To elect three directors for a term expiring at the Annual Meeting of
Stockholders in year indicated ("Proposal 1"); (ii) To Amend the Articles of
Incorporation to increase the Number of Authorized shares of Common Stock to
250,000,000 shares authorized ("Proposal 2"); (iii) Approval of the Adoption of
the Samaritan Pharmaceuticals, Inc. 2005 Stock Incentive Plan ("Proposal 3");
and (iv) Ratify the appointment of Sherb & Co., LLP, as our independent auditors
for the fiscal year ending December 31, 2005 ("Proposal 4").
(i) With respect to "Proposal 1", Doug Bessert (2008) received 115,121,327
shares in favor for, 114,100 shares against; H Thomas Winn (2008) received
107,211,854 shares in favor for, 8,023,573 shares against, and Laurent Lecanu
(2008) received 115,181,377 shares in favor for, 54,050 shares against, and
there were 613,262 abstentions for each director. All nominees were declared to
have been elected as directors to hold office until the annual meeting of
stockholders in the year indicated. (ii) With respect to "Proposal 2", there
were 94,114,871 shares in favor for, 21,393,985 shares were against, and 339,833
shares abstained. Proposal 2 was declared approved. (iii) With respect to
"Proposal 3", there were 62,819,726 shares in favor for, 19,770,687 shares were
against, and 254,268 shares abstained. Proposal 3 was declared approved. (iv)
With respect to "Proposal 4", there were 111,459,202 shares were in favor for
and 775,235 shares were against, 3,614,252 shares abstained. Proposal 4 was
declared approved.
Item 5. Other Information.
The Company has formed, by determination of the Board of Directors, an Audit
Committee with Lead Independent Director Winn as Chairman, who is independent
and a qualified financial expert as used in Item 7(d)(3)(iv) of Schedule 14 A
(240.14a-101 of this chapter) under the Exchange Act. The Company has also
formed a Compensation Committee, with Independent Director Thompson, as
Chairman; a Nomination Committee, with Independent Director Holden, as Chairman;
and a Science and Technology Advisory Committee, with Dr. Papadopoulos, as Chief
Scientist (Consultant) to the Board of Directors. Dr. Papadopoulos served as
Director until June 2005 and has been recently promoted into a more prestigious
position at Georgetown University, which has conflicted him out of holding any
position on boards of public Companies. His position as a consultant has
resolved any conflict issues and he will remain as chief scientist of the
Science and Technology Advisory Committee, which serves as an advisor to the
board. It should also be noted that no Director or executive officer of the
Company has any family relationships with any other director or executive
officer of the Company, except that Mr. Boyle is the son of Dr. Greeson.
Item 6. Exhibits
a. Exhibits
DESIGNATION OF
EXHIBIT AS SET FORTH
IN ITEM 601 OF
REGULATION S-B DESCRIPTION LOCATION
------------------------- ---------------------------------------------- ----------------------------------------
2.1 Agreement and Plan of Reorganization Filed as an exhibit to Samaritan
Pharmaceutical's Form 10-SB, filed on
July 21, 1999, and incorporated herein
by reference.
3.1 Articles of Incorporation, Filed as an exhibit to Samaritan
as amended and restated Pharmaceutical's Form 8-K, filed on
July 8, 2005, and incorporated herein
by reference.
3.2 Bylaws Filed as an exhibit to Samaritan
Pharmaceutical's Form 8-K, filed on
July 8, 2005, and incorporated herein
by reference.
27
4.1 Form of common stock certificate Filed as an exhibit to Samaritan
Pharmaceutical's Form 10-SB, filed on
July 21, 1999, and incorporated herein
by reference.
4.2 2001 Stock Option Plan Filed as an exhibit to Form 10-QSB on
August 16, 2004 and incorporated herein
by reference.
10.1 Assignment between Linda Johnson Filed as exhibit to Samaritan
and the Company dated Pharmaceutical's Quarterly Report on
September 6, 2000 Form 10-QSB filed on August 14, 2002,
and incorporated herein by reference.
10.2 Assignment between Linda Johnson Filed as exhibit to Samaritan
and Spectrum Pharmaceuticals Pharmaceutical's Quarterly Report
Corporation dated May 14, 1999 on Form 0-QSB filed on August 14, 2002,
and incorporated herein by reference.
10.3 Agreement containing the assignment Filed as exhibit to Samaritan
of U.S. Patent Application 07/233,247 Pharmaceutical's Quarterly Report
with improvements dated May 22, 1990 on Form 10-QSB filed on August 14,
2002, and incorporated herein
by reference.
10.4 Common Stock Purchase Agreement Filed as an exhibit to Samaritan
between Company and Fusion Pharmaceutical's Report on
Capital Fund II, LLC dated Form 8-K filed on April 25, 2003,
April 22, 2003 and incorporated herein by reference.
10.5 Registration Rights Agreement Filed as an exhibit to Samaritan
between Company and Fusion Pharmaceutical's Report on Form 8-K
Capital Fund II, LLC dated filed on April 25, 2003, and
April 22, 2003 incorporated herein by reference.
10.6 Agreement between Samaritan Filed as an exhibit to Form 10-QSB
Pharmaceuticals, Inc. and on August 16, 2004 herein by
Thomas Lang and incorporate reference.
10.7 Agreement between Samaritan Filed as an exhibit to Samaritan
Pharmaceuticals, Inc. and Eugene Boyle Pharmaceutical's Quarterly Report on
Form 10-QSB filed on August 14, 2002,
and incorporated herein by reference.
10.8 Agreement between Samaritan Filed as an exhibit to Samaritan
Pharmaceuticals, Inc. and Janet Greeson Pharmaceutical's Quarterly Report
on Form 10-QSB filed on August 14,
2002, and incorporated herein by
reference.
10.9 Research Collaboration and Licensing Filed as an exhibit to Samaritan
Agreement between Georgetown University Pharmaceutical's Registration
and Samaritan Pharmaceuticals, Inc., Statement on Form SB-2 (SEC file
dated June 8, 2001 File number 333-105818) and
incorporated herein by reference.
10.10 Master Clinical Trial and Full Filed as an exhibit to Form 10-QSB on
Scale Manufacturing Agreement November 15, 2004 and incorporated
dated October 5, 2004 herein by reference.
10.11 Common Stock Purchase Agreement between Filed as an exhibit to Samaritan
Company and Fusion Capital Fund II, LLC, Pharmaceutical's Quarterly Report on
dated May 12, 2005 Form 10-QSB filed on May 13, 2005, and
incorporated herein by reference.
10.12 Registration Rights Agreement between Filed as an exhibit to Samaritan
Company and Fusion Capital Fund II, LLC Pharmaceutical's Quarterly Report on
dated May 12, 2005 Form 10-QSB filed on May 13, 2005, and
incorporated herein by reference.
14.1 Code of Ethics Filed as an exhibit to Form 10-KSB on
April 15, 2003 and incorporated herein
by reference.
16.1 Letter on change in certifying Filed as an exhibit to Form 8-K, on
accountant September 27, 2002 and incorporated
herein by reference.
21.1 List of Subsidiaries Provided herewith
31.1 Certification of Chief Executive Officer Provided herewith
31.2 Certification of Chief Financial Officer Provided herewith
32.1 Certification re: Section 906 Provided herewith
32.2 Certification re: Section 906 Provided herewith
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SAMARITAN PHARMACEUTICALS, INC.
Dated: August 15, 2005 By: /s/ Eugene Boyle
------------------------
Eugene Boyle
Chief Operating Officer,
Chief Financial Officer
and Director