UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-15006
T CELL SCIENCES, INC.
(Exact name of registrant as specified in charter)
Delaware No. 13-3191702
(State of Incorporation) (I.R.S. Employer Identification No.)
119 Fourth Avenue, Needham, Massachusetts 02494-2725
(Address of principal executive offices) (Zip code)
(781) 433-0771
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
--- ---
Outstanding as of
Class August 10, 1998
----- ---------------
Common Stock, par value $.001 28,466,280
1
T CELL SCIENCES, INC.
Table of Contents
June 30, 1998
Page
----
Part I -- Financial Information
- -------------------------------
Condensed Consolidated Balance Sheet at June 30, 1998 and December 31, 1997............ 3
Condensed Consolidated Statement of Operations for the Quarters Ended
June 30, 1998 and 1997............................................................. 4
Condensed Consolidated Statement of Operations for the Six Months Ended
June 30, 1998 and 1997............................................................. 5
Condensed Consolidated Statement of Cash Flows for the Six Months Ended
June 30, 1998 and 1997............................................................. 6
Notes to Condensed Consolidated Financial Statements................................... 7
Management's Discussion and Analysis of Financial Condition and Results of
Operations......................................................................... 9
Part II -- Other Information
- ----------------------------
Item 1. Legal Proceedings............................................................. 12
Item 2. Changes in Securities......................................................... 12
Item 3. Defaults Upon Senior Securities............................................... 12
Item 4. Submission of Matters to a Vote of Security Holders........................... 12
Item 5. Other Information............................................................. 12
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits.................................................................. 12
B. Reports on Form 8-K....................................................... 12
Signatures............................................................................. 13
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
T CELL SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1998 and December 31, 1997
June 30, December 31,
1998 1997
=======================================================================================================
(audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 5,217,400 $ 6,436,300
Current Portion Restricted Cash 750,000 750,000
Accounts Receivable 6,400 22,900
Inventories 100 15,000
Prepaid Expenses and Other 690,100 165,400
- -------------------------------------------------------------------------------------------------------
Total Current Assets 6,664,000 7,389,600
- -------------------------------------------------------------------------------------------------------
Property and Equipment, Net 341,900 364,500
Restricted Cash 1,195,000 525,000
Other Noncurrent Assets 1,635,400 1,547,500
- -------------------------------------------------------------------------------------------------------
Total Assets $ 9,836,300 $ 9,826,600
=======================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 296,500 $ 201,200
Accrued Expenses 644,300 1,059,900
Deferred Revenue 250,000 750,000
Short-Term Note Payable 750,000 750,000
- -------------------------------------------------------------------------------------------------------
Total Current Liabilities 1,940,800 2,761,100
- -------------------------------------------------------------------------------------------------------
Long-Term Note Payable 750,000 750,000
- -------------------------------------------------------------------------------------------------------
Stockholders' Equity:
Common Stock, $.001 Par Value 28,500 26,500
Additional Paid-in Capital 80,100,900 76,561,400
Less: Common Treasury Shares at Cost (31,300) (35,800)
Accumulated Deficit (72,952,600) (70,236,600)
- -------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 7,145,500 6,315,500
- -------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 9,836,300 $ 9,826,600
=======================================================================================================
See accompanying notes to condensed consolidated financial statements
3
T CELL SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Quarters Ended June 30, 1998 and 1997
June 30, June 30,
1998 1997
=========================================================================================
OPERATING REVENUE:
Product Development and Licensing Agreements $ 302,300 $ 693,300
Product Sales 7,600 --
- -----------------------------------------------------------------------------------------
Total Operating Revenue 309,900 693,300
- -----------------------------------------------------------------------------------------
OPERATING EXPENSE:
Cost of Product Sales 4,800 --
Research and Development 1,151,000 1,483,000
General and Administrative 747,100 1,024,600
Marketing and Sales 4,000 30,100
- -----------------------------------------------------------------------------------------
Total Operating Expenses 1,906,900 2,537,700
- -----------------------------------------------------------------------------------------
Operating Loss (1,597,000) (1,844,400)
Non-Operating Income, Net 296,500 163,600
- -----------------------------------------------------------------------------------------
Net Loss $(1,300,500) $(1,680,800)
=========================================================================================
Net Loss Per Common Share (0.05) (0.07)
=========================================================================================
Weighted Average Common Shares Outstanding 28,494,300 24,948,400
=========================================================================================
See accompanying notes to condensed consolidated financial statements
4
T CELL SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1998 and 1997
June 30, June 30,
1998 1997
==========================================================================================
OPERATING REVENUE:
Product Development and Licensing Agreements $ 635,900 $ 755,400
Product Sales 35,000 1,300
- ------------------------------------------------------------------------------------------
Total Operating Revenue 670,900 756,700
- ------------------------------------------------------------------------------------------
OPERATING EXPENSE:
Cost of Product Sales 17,900 400
Research and Development 2,259,800 2,818,900
General and Administrative 1,482,800 1,798,700
Marketing and Sales 22,000 70,900
- ------------------------------------------------------------------------------------------
Total Operating Expenses 3,782,500 4,688,900
- ------------------------------------------------------------------------------------------
Operating Loss (3,111,600) (3,932,200)
Non-Operating Income, Net 395,600 315,800
- ------------------------------------------------------------------------------------------
Net Loss $(2,716,000) $(3,616,400)
==========================================================================================
Net Loss Per Common Share $ (0.10) $ (0.14)
==========================================================================================
Weighted Average Common Shares Outstanding 27,638,900 24,948,400
==========================================================================================
See accompanying notes to condensed consolidated financial statements
5
T CELL SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 1998 and 1997
June 30, June 30,
1998 1997
=====================================================================================================
Cash Flows from Operating Activities:
Net Loss $(2,716,000) $(3,616,400)
Adjustments to Reconcile Net Loss to Net Cash
Used by Operating Activities:
Depreciation and Amortization 177,300 186,900
Write-off of Capitalized Patent Costs 12,300 51,100
Gain on Sale of Equipment (20,000) --
Returned Stock (165,600) --
Net Change in Current Assets and Current Liabilities (1,313,600) (231,700)
- -----------------------------------------------------------------------------------------------------
Net Cash Used by Operating Activities (4,025,600) (3,610,100)
- -----------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Acquisition of Property and Equipment (74,500) (57,100)
Proceeds from the Sale of Equipment 23,000 --
Other Noncurrent Assets (183,400) (58,500)
(Increase) Decrease in Long-Term Restricted Cash (670,000) --
Sale of Investment in Common Stock of Endogen, Inc. -- 1,802,700
- -----------------------------------------------------------------------------------------------------
Net Cash Provided (Used) by Investing Activities (904,900) 1,687,100
- -----------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from the Exercise of Stock Options 9,700 --
Proceeds from the Issuance of Common Stock 3,699,900 --
Proceeds from Sale of Stock 2,000 2,500
- -----------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 3,711,600 2,500
- -----------------------------------------------------------------------------------------------------
Increase (Decrease) in Cash and Cash Equivalents (1,218,900) (1,920,500)
Cash and Cash Equivalents at Beginning of Period 6,436,300 12,591,800
- -----------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period $ 5,217,400 $10,671,300
=====================================================================================================
See accompanying notes to condensed consolidated financial statements
6
T CELL SCIENCES, INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1998
(1) Nature of Business
------------------
T Cell Sciences, Inc. (the "Company") is a biopharmaceutical company
engaged in the discovery and development of innovative drugs using novel
applications of immunology to prevent and treat cardiovascular, pulmonary and
immune disorders. The Company develops and commercializes products on a
proprietary basis and in collaboration with pharmaceutical partners, including
Novartis Pharma AG, Astra AB and Yamanouchi Pharmaceutical Co., Ltd.
The condensed consolidated financial statements include the accounts of
T Cell Sciences, Inc. and its wholly owned subsidiary, T Cell Diagnostics, Inc.
All intercompany transactions have been eliminated.
(2) Interim Financial Statements
----------------------------
The accompanying condensed consolidated financial statements for the
three and six months ended June 30, 1998 and 1997 include the consolidated
accounts of the Company, and have been prepared in accordance with generally
accepted accounting principles and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. In the opinion of management, the information
contained herein reflects all adjustments, consisting solely of normal recurring
adjustments, that are necessary to present fairly the financial positions at
June 30, 1998 and December 31, 1997, the results of operations for the quarters
and six months ended June 30, 1998 and 1997, and the cash flows for the six
months ended June 30, 1998 and 1997. The results of operations for the quarter
and six months ended June 30, 1998 are not necessarily indicative of results for
any future interim period or for the full year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted, although the Company believes that the disclosures
included are adequate to make the information presented not misleading. The
condensed consolidated financial statements and the notes included herein should
be read in conjunction with footnotes contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997.
(3) Issuance of Common Stock
------------------------
In March 1998, the Company completed a private placement of
approximately 2,043,000 shares of common stock to institutional investors at a
price of $1.90 per share. Net proceeds from the common stock issuance totaled
approximately $3,699,900. The Company believes that its current cash and cash
equivalents, which includes the private placement proceeds, together with cash
flows from existing SBIR grants and collaborations and interest income on
invested funds, will be sufficient to meet working capital requirements and fund
operations into 1999. The working capital requirements will depend on several
factors including, but not limited to, the progress and costs associated with
research and development programs, preclinical and clinical studies, and the
timing and scope of collaborative arrangements.
7
(4) Statement of Financial Accounting Standards Nos. 130, 131 and 133
-----------------------------------------------------------------
In June 1997, the Financial Accounting Standards Board issued Statement
of Accounting Standards Nos. 130, "Reporting Comprehensive Income" ("SFAS 130"),
and 131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131") to become effective for interim and annual periods beginning after
December 15, 1997. The Company adopted SFAS 130 and SFAS 131 on January 1, 1998.
SFAS 130 establishes standards for the reporting of comprehensive income and its
components in the consolidated financial statements. To date the Company has not
had material adjustments between net income as reported and comprehensive income
as defined by SFAS 130. SFAS 131 establishes standards for the reporting of
information on operating segments in interim and annual financial statements
beginning with the annual financial statements for the year ending December 31,
1998.
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("SFAS 133"). SFAS 133 is effective for all fiscal
quarters of all fiscal years beginning after June 15, 1999 (January 1, 2000 for
the Company). SFAS 133 requires that all derivative instruments be recorded on
the balance sheet at their fair value. Changes in the fair value of derivatives
are recorded each period in current earnings or other comprehensive income,
depending on whether a derivative is designated as part of a hedge transaction
and, if it is, the type of hedge transaction. Management of the Company
anticipates that, due to its limited use of derivative instruments, the adoption
of SFAS 133 will not have a significant effect on the Company's results of
operations or its financial position.
(5) Recent Developments
On May 12, 1998, the Company announced that it had signed a definitive
agreement to acquire Virus Research Institute, Inc. ("VRI"). Under the terms of
the merger agreement, which is subject to shareholder and regulatory approval,
the Company will issue 1.55 shares of its common stock and 0.20 warrants for
each share of VRI common stock. Each warrant represents the right to purchase
one share of the Company's common stock for $6.00 per share and will expire five
years from the closing date. It is anticipated that a significant portion of the
purchase price will be written off as in-process technology.
VRI is engaged in the discovery and development of systems for the
delivery of vaccines and immunotherapeutics and improved and novel vaccines for
adults and children. VRI is developing a portfolio of proprietary vaccine and
immunotherapeutic delivery systems designed to improve the efficacy, lower cost
of administration and improve patient compliance for a variety of vaccine and
immunotherapeutic products.
Consummation of the merger is subject to the fulfillment of certain
conditions, including approval of the merger by VRI's stockholders, approval of
the issuance of the Company's common stock and the Company's warrants by its
stockholders and listing of the shares of the Company's common stock issuable in
connection with the merger or upon exercise of the Company's warrants on the
Nasdaq National Market. It is expected that the consummation of the merger will
occur as soon as practicable after the satisfaction of all such conditions. The
Company has filed a Registration Statement on Form S-4 covering the shares of
the Company's common stock to be issued in connection with the merger.
8
Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995: Statements contained in the following, Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations, that
are not historical facts are forward-looking statements as the term is defined
under the Private Securities Litigation Reform Act of 1995. Such statements are
subject to a variety of risks and uncertainties. There are a number of important
factors that could cause the actual results to differ materially from those
expressed in any forward-looking statements made by the Company. These factors
include, but are not limited to: (i) the Company's ability to successfully
complete product research and development, including pre-clinical and clinical
studies, and commercialization; (ii) the Company's ability to obtain substantial
additional funding; (iii) the Company's ability to obtain required governmental
approvals; (iv) the Company's ability to attract manufacturing, sales,
distribution and marketing partners and other strategic alliances; and (v) the
Company's ability to develop and commercialize its products before its
competitors.
Item 2. Management's Discussion And Analysis Of Financial Condition And
---------------------------------------------------------------
Results Of Operations
---------------------
Overview
T Cell Sciences is a biopharmaceutical company engaged in the discovery
and development of innovative drugs using novel applications of immunology to
prevent and treat cardiovascular, pulmonary and immune disorders. The Company's
technology platforms are based on its understanding of the ways in which the
body triggers its natural defense mechanisms. Product development efforts focus
on three therapeutic programs: (i) developing compounds that inhibit
inappropriate complement activation, which is part of the body's immune defense
system; (ii) discovery and development of T cell activation inhibitors for the
prevention of transplant rejection and treatment of autoimmune diseases; and
(iii) development of a therapeutic vaccine for the management of
atherosclerosis.
Results of Operations
Quarter Ended June 30, 1998 Compared to Quarter Ended June 30, 1997 --
The Company reported a net loss of $1,300,500, or $.05 per share, for the second
quarter ended June 30, 1998, a decrease of $380,300, or 22.6%, compared to a net
loss of $1,680,800, or $.07 per share, for the second quarter ended June 30,
1997. The net operating loss for the second quarter of $1,597,000 decreased
$247,400, or 13.4%, compared to net operating loss of $1,844,400 for the same
period last year.
Operating revenue of $309,900 for the second quarter of 1998 decreased
$383,400, or 55.3% compared to $693,300 for the second quarter of 1997. Product
development and licensing agreements revenue of $302,300 decreased $391,000 or
56.4% for the second quarter of 1998 compared to $693,300 for the same period
last year. The decrease is primarily due to milestone payments of $650,000
received under the Company's agreement with Astra AB in the second quarter of
1997 compared to $250,000 recognized in the second quarter of 1998 from a
nonrefundable option fee associated with the Company's agreement with Novartis
Pharma AG which is being recognized over the option term. Product sales were
$7,600 for the quarter ended June 30, 1998 compared to no sales in 1997.
Operating expense decreased $630,800, or 24.9%, to $1,906,900 for the
quarter ended June 30, 1998 compared to $2,537,700 for the quarter ended June
30, 1997. The decrease in operating expense is due to a $332,000 decrease in
research and development expense combined with a $277,500 decrease in general
and administrative expense for the quarter compared to the same period last
year. For the second quarter of 1998 research and development expense decreased
22.4% to $1,151,000 compared to $1,483,000 for the second quarter of 1997
primarily due to costs associated with ongoing clinical trials in 1997 compared
to no clinical trial costs in 1998 combined with a decrease in research and
development payroll and benefits costs in 1998 compared to 1997. General and
administrative expense decreased 27.1% to $747,100 for the second quarter of
1998 compared to $1,024,600 for the second quarter of 1997 primarily due to
legal costs in 1997 associated with the ongoing litigation which was settled in
November 1997 and consulting fees incurred in the second quarter of 1997 related
to business development.
9
Non operating income increased $132,900, or 81.2%, to $296,500 for the
second quarter of 1998 compared to $163,600. Interest income decreased $32,700,
or 20.0%, to $130,900 for the quarter ended June 30, 1998 compared to $163,600
for the same period last year. The decrease in interest income is primarily due
to lower cash balances for the second quarter of 1998 compared to the second
quarter of 1997. In May 1998, the Company used cash as collateral for a $750,000
note due November 15, 1999 issued in connection with the settlement with its
former landlord and the landlord's mortgagee. In accordance with the settlement
agreement, 66,250 shares of the Company's common stock issued to secure the note
were returned to the Company. The common stock was valued at $165,600 as of
October 31, 1997 and its return is included in non operating income in the
second quarter of 1998.
Six Months Ended June 30, 1998 Compared to Six Months Ended June 30,
1997 -- The Company reported a net loss of $2,716,000, or $.10 per share, for
the six months ended June 30, 1998, a decrease of $900,400, or 24.9%, compared
to a net loss of $3,616,400, or $.14 per share, for the six months ended June
30, 1997. The net operating loss for 1998 of $3,111,600 decreased $820,600, or
20.9%, compared to net operating loss of $3,932,200 for the same period last
year.
Operating revenue of $670,900 for the period ended June 30, 1998
decreased $85,800, or 11.3%, compared to $756,700 for the period ended June 30,
1997. Product development and licensing agreements revenue of $635,900 decreased
$119,500 or 15.8% for the first six months of 1998 compared to $755,400 for the
same period last year. The decrease is primarily due to milestone payments of
$650,000 received under the Company's agreement with Astra AB in 1997 compared
to $500,000 recognized in 1998 from a nonrefundable option fee associated with
the Company's agreement with Novartis Pharma AG which is being recognized over
the option term. Product sales increased $33,700 to $35,000 for the six months
ended June 30, 1998 compared to $1,300 for the same period last year.
Operating expense decreased $906,400, or 19.3%, to $3,782,500 for the
six months ended June 30, 1998 compared to $4,688,900 for the six months ended
June 30, 1997. The decrease in operating expense is due to a $559,100 decrease
in research and development expense combined with a $315,900 decrease in general
and administrative expense for the first six months of 1998 compared to the same
period last year. For the first six months of 1998 research and development
expense decreased 19.8% to $2,259,800 compared to $2,818,900 for the first six
months of 1997 primarily due to costs associated with ongoing clinical trials in
1997 compared to no clinical trial costs in 1998 combined with a decrease in
research and development payroll and benefits costs in 1998 compared to 1997.
General and administrative expense decreased 17.6% to $1,482,800 for the six
months ended June 30, 1998 compared to $1,798,700 for same period last year
primarily due to legal costs in 1997 associated with the ongoing litigation
which was settled in November 1997 and consulting fees incurred in the second
quarter of 1997 related to business development.
Non operating income increased $79,800, or 25.3%, to $395,600 for the
six months ended June 30, 1998 compared to $315,800 for the same period last
year. Interest income decreased $123,700, or 37.1%, to $210,000 for the six
months ended June 30, 1998 compared to $333,700 for the same period last year.
The decrease in interest income is primarily due to lower cash balances in 1998
compared to 1997. In May 1998, the Company used cash as collateral for a
$750,000 note due November 15, 1999 issued in connection with the settlement
with its former landlord and the landlord's mortgagee. In accordance with the
settlement agreement, 66,250 shares of the Company's common stock issued to
secure the note were returned to the Company. The common stock was valued at
$165,600 as of October 31, 1997 and its return is included in non operating
income in 1998.
Liquidity and Capital Resources
The Company has $5,217,400 in cash and cash equivalents at June 30,
1998. In March 1998, the Company completed a private placement of approximately
2,043,000 shares of common stock to institutional investors at a price of $1.90
per share. Net proceeds from the private placement totaled approximately
$3,699,900. The Company believes that its current cash and cash equivalents, net
of restricted amounts, together with cash flows from existing SBIR grants and
collaborations, and interest income on invested funds will be sufficient to meet
working capital requirements and fund operations into 1999. The working capital
requirements will depend on several factors including, but not limited to, the
progress and costs
10
associated with research and development programs, preclinical and clinical
studies, and the timing and scope of collaborative arrangements. During 1998,
the Company expects to take steps to raise additional capital including, but not
limited to, licensing of technology programs with existing or new collaborative
partners, possible business combinations, or issuance of common stock via
private placement and public offering.
On May 12, 1998, the Company announced that it had signed a definitive
agreement to acquire Virus Research Institute, Inc. ("VRI"). Under the terms of
the merger agreement, which is subject to shareholder and regulatory approval,
the Company will issue 1.55 shares of its common stock and 0.20 warrants for
each share of VRI common stock. Each warrant represents the right to purchase
one share of the Company's common stock for $6.00 per share and will expire five
years from the closing date. It is anticipated that a significant portion of the
purchase price will be written off as in-process technology.
VRI is engaged in the discovery and development of systems for the
delivery of vaccines and immunotherapeutics and improved and novel vaccines for
adults and children. VRI is developing a portfolio of proprietary vaccine and
immunotherapeutic delivery systems designed to improve the efficacy, lower cost
of administration and improve patient compliance for a variety of vaccine and
immunotherapeutic products.
Consummation of the merger is subject to the fulfillment of certain
conditions, including approval of the merger by VRI's stockholders, approval of
the issuance of the Company's common stock and the Company's warrants by its
stockholders and listing of the shares of the Company's common stock issuable in
connection with the merger or upon exercise of the Company's warrants on the
Nasdaq National Market. It is expected that the consummation of the merger will
occur as soon as practicable after the satisfaction of all such conditions. The
Company has filed a Registration Statement on Form S-4 covering the shares of
the Company's common stock to be issued in connection with the merger.
Year 2000
The "Year 2000" issue affects computer systems that have date sensitive programs
that may not properly recognize the year 2000. Systems that do not properly
recognize such information could generate data or cause a system to fail,
resulting in business interruption. The Company is currently developing a plan
to provide assurances that its computer systems are Year 2000 compliant. Given
the relatively small size of the Company's internal systems and the relatively
new hardware, software and operating systems, management does not anticipate any
significant delays in becoming Year 2000 compliant. Further, management believes
at present that the costs associated with modifications to become Year 2000
compliant will be immaterial to the Company's continued internal operations.
The Year 2000 issue is expected to affect the systems of various
entities with which the Company interacts, including the Company's research and
development partners, suppliers and vendors. There can be no assurance that the
systems of other companies on which the Company's system rely will be timely
converted, or that a failure by another company's system to be Year 2000
compliant would not have a material adverse affect on the Company's business,
operating results and financial condition.
11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
There were no material changes since the Company's annual report of Form
10-K for the year ended December 31, 1997.
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submissions of Matters to a Vote of Security Holders
----------------------------------------------------
On May 12, 1998, the Company held its Annual Meeting of Stockholders at
which the voters elected five directors to its Board of Directors.
At the Company's Annual Meeting of Stockholders, the following were
elected to the Board of Directors:
Number of Shares/Votes
--------------------------------------------
For Authority Withheld
----------------- -----------------------
Una S. Ryan 20,216,454 109,670
Patrick C. Kung 20,216,454 109,670
Thomas R. Ostermueller 20,215,204 110,920
Harry H. Penner, Jr. 20,215,204 110,920
Ronald M. Urvater 20,215,454 110,670
The number of shares issued, outstanding and eligible to vote as of the
record date of March 20, 1998 were 28,477,000. A quorum was present with
20,326,124 shares represented by 206 proxies or 71.377% of the eligible voting
shares tabulated.
Item 5. Other Information
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
A. Exhibits
None
B. Reports on Form 8-K
None
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
T CELL SCIENCES, INC.
BY: /s/ Norman W. Gorin
-------------------
Norman W. Gorin
Vice President, Finance
and Chief Financial Officer
Dated: August 14, 1998
13
5
U.S. DOLLARS
6-MOS
DEC-31-1998
JAN-01-1998
JUN-30-1998
1
5,217,400
0
6,400
0
100
6,664,000
3,092,800
(2,750,900)
9,836,300
1,940,800
0
0
0
28,500
7,117,000
9,836,300
35,000
670,900
17,900
3,764,600
(185,600)
0
(210,000)
(2,716,000)
0
(2,716,000)
0
0
0
(2,716,000)
(0.10)
(0.10)
