SEC Filing | Lisata Therapeutics, Inc.

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________ FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number: 0-10909 CORNICHE GROUP INCORPORATED (Exact name of registrant as specified in its charter) Delaware 22-2343568 (State or other jurisdiction of (I.R.S. employer incorporation or organization) Identification No.) Wayne Interchange Plaza I 145 Route 46 West, Wayne, NJ 07470 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: 201-785-3338 Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _________ ___________ 4,572,743 shares, $.10 par value (Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date) ________________________ Page 1 of 13 pages

CORNICHE GROUP INCORPORATED TABLE OF CONTENTS Page PART I - FINANCIAL INFORMATION Item 1. Financial Statement (Unaudited) Balance Sheet at June 30, 1997 and March 31, 1997 . . . . . . . . . . . . . . . . . . 3 Statement of Operations for the three months ended June 30, 1997 and June 30, 1996 . . . . . . . . . . . . . . . . . . . . . 4 Statement of Cash Flows for the three months ended June 30, 1997 and June 30, 1996 . . . . . . . . . 5 Notes to Unaudited Financial Statements . . . . . . . . . . . 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . 11 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 13 The financial statements are unaudited. However, the management of the registrant believes that all necessary adjustments (which include only normal recurring accruals) have been reflected to present fairly the financial position of the registrant at March 31, 1997 and June 30, 1997, the results of its operations for the three months ended June 30, 1997 and 1996 and the results of its operations and changes in its cash flows for the three months ended June 30, 1997 and 1996.

2 CORNICHE GROUP INCORPORATED Balance Sheet ASSETS June 30, March 31, 1997 1997 (unaudited) (audited) Current assets: Cash $263,428 $13,167 Other receivables and prepaid expenses 1,087 1,000 ---------- -------- Total current assets 264,515 14,167 Other assets: Property and equipment, net 650 747 ------------ -------- Total assets $265,165 $14,914 ============ ======== LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY Current liabilities: Notes payable $0 $400,000 Trade accounts payable 574 4,929 Dividends payable - preferred stock 162,086 148,397 Accrued liabilities 19,900 113,297 ------------ ----------- Total current liabilities 182,560 666,623 ------------ ----------- Stockholders' (deficiency) equity: Stockholders (deficiency) equity Preferred stock, $.01 par value, authorized 5,000,000 shares including 1,000,000 shares of Series A 7% cumulative convertible preferred stock, issued and outstanding 896,967 shares of Series A preferred stock at June 30, 1997 (909,267 shares of Series A preferred stock at June 30, 1996) 896,967 909,267 Common stock, $0.10 par value, authorized - 30,000,000 shares, issued 4,572,743 shares at June 30, 1996 (June 30, 1997 shares June 30, 1996) 457,274 263,037 Additional paid-in capital 1,521,149 830,086 (Accumulated deficit) retained earnings (2,588,075) (2,449,398) ---------------- ------------- 287,315 ( 446,999) Treasury stock-at cost, 218,100 shares. ( 204,710) ( 204,710) ------------------ ------------- Total stockholders' (deficiency) equity 82,605 ( 651,709) ------------------ ------------- Total liabilities and stockholders' (deficiency) equity $265,165 $14,914 ================== ============== See accompanying notes

3 CORNICHE GROUP INCORPORATED Statement of Operations (UNAUDITED) ------ 3 Months Ended ------ June 30, June 30, 1997 1996 Net Sales $0 $0 Cost of Sales 0 0 - - Gross profit 0 0 - - Selling, General and Administrative Expenses (120,816) (32,250) ------------- ---------- Operating Loss (120,816) (32,250) Interest (net) (4,181) (1,800) --------- ---------- Net loss before Preferred Dividend (124,997) (34,050) Preferred dividend (13,689) (15,912) ----------- ----------- Net Loss (138,686) (49,962) Loss per share common stock $(0.04) $(0.02) Weighted average number of common shares outstanding 3,083,159 2,412,278 See Accompanying Notes

4 CORNICHE GROUP INCORPORATED Statement of Cash Flows (Unaudited) ------ 3 Months Ended ------ June 30, June 30, 1997 1996 Cash Flows from Operations: Net Loss from Continuing Operations $(138,686) $(49,962) Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: Depreciation 97 97 Changes in Assets and Liabilities: (Inc)/Dec in Notes Receivable 0 35,000 (Inc)/Dec in Other Receivables 50 10,000 (Inc)/Dec in Prepaid Expenses (137) 0 Inc/(Dec) in Accounts Payable (4,355) (16,938) Inc/(Dec) in Accrued Liabilities (93,397) 6,274 Increase in Dividends Payable 13,689 15,912 ------------- --------- Net Cash Used in Continuing Operations (222,739) 383 -------------- --------- Cash Flows from Financing Activities: Net proceeds from issuance of common stock for cash 873,000 0 Payment of notes payable (450,000) 0 Additional borrowings 50,000 0 ------------- ----------- Net Cash Provided by Financing Activities 473,000 0 ------------- ----------- Net Increase in Cash 250,261 383 Cash at Beginning of Period 13,167 66 ------------ ----------- Cash at End of Period $263,428 $449 =========== =========== See accompanying notes.

5 CORNICHE GROUP INCORPORATED NOTES TO UNAUDITED FINANCIAL STATEMENTS Note 1 The Company Corniche Group Incorporated (hereinafter referred to as the "Company" or "CGI") as a result of a reverse acquisition with Corniche Distribution Limited and its Subsidiaries ("Corniche"), was engaged in the retail sale and wholesale distribution of stationery products and related office products, including office furniture, in the United Kingdom. The operating subsidiaries of Corniche were Chessbourne International Limited ("Chessbourne") and The Stationery Company Limited ("TSCL"). Corniche experienced large operating losses and net cash outflows from operating activities in fiscal 1995 and 1996 resulting in a significant reduction in working capital during that period. The Company was unsuccessful in its efforts to raise interim financing to resolve its liquidity problems. Additionally, the Company was not able to convert a significant portion of its bank debt to equity. As a result receivers were appointed to Corniche's subsidiaries, Chessbourne and TSCL on February 7, 1996 by their primary bankers and secured lender, Bank of Scotland and Corniche Distribution Limited was placed in receivership on February 28, 1996. (See Note 2). Since then the Company has been inactive. Note 2 Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position as of June 30, 1997 and the results of operations and cash flows for the three months ended June 30, 1997 and 1996. The results of operations for the three months ended June 30, 1997 are not necessarily indicative of the results to be expected for the full year. The March 31, 1997 balance sheet has been derived from the audited financial statements at that date included in the Company's annual report on Form 10-K. These unaudited financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K.

6 CORNICHE GROUP INCORPORATED NOTES TO UNAUDITED FINANCIAL STATEMENTS Note 2 Basis of Presentation (continued) The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company's ability to continue as a going concern may depend on its ability to obtain outside financing sufficient to support it pending identification and completion of a suitable acquisition or acquisitions and its ability to obtain financing and consummate such acquisition or acquisitions. There can be no assurance given that the Company will obtain such short-term or long-term outside financing or complete the acquisition of new business operations. Effective October 1, 1995 the Company declared a one-for-ten reverse stock split and all numbers of shares and share values stated herein reflect such reverse split unless otherwise noted. Note 3 Income Taxes Effective October 1993, the Company adopted SFAS 109, "Accounting for Income Taxes", which recognizes (a) the amount of taxes payable or refundable for the current year and (b) deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an enterprise's financial statements or tax returns. Income tax expense/benefit was calculated on a separate company basis between CGI and Corniche. The Tax Reform Act of 1986 enacted a complex set of rules limiting the utilization of net operating loss carryforwards to offset future taxable income following a corporate ownership change. The Company's ability to utilize its NOL carryforwards is limited following a change in ownership in excess of fifty percentage points. The Company has fully reserved the balance of tax benefits of its operating losses because the likelihood of realization of the tax benefits cannot be determined.

7 CORNICHE GROUP INCORPORATED NOTES TO UNAUDITED FINANCIAL STATEMENTS Note 4 New Accounting Standards Effective fiscal 1996 the Company adopted Statement of Financial Accounting Standards No. 107, "Disclosure About Fair Value of Financial Instruments", and Statement of Position 94-6, "Disclosure of Certain Significant Risks and Uncertainties". Note 5 Notes Payable The Company was in Default on a Note Payable dated January 12, 12995 in the principal sum of $17,000. In March 1997 the Company entered into a settlement agreement with the note holder pursuant to which the note holder accepted $5,000 in full satisfaction of all remaining sums due including accrued interest, payment of which was made in April 1997. During the period July 1996 through December 1996, the Company engaged in a private offering of securities pursuant to Rule 506 Regulation D of the Securities Act of 1933, as amended. The offering of up to $300,000 was conducted on a "best efforts" basis through Robert M. Cohen & Co., Inc. ("RMCC"), a New York based broker-dealer and was offered and sold in the form of $25,000 units. Each unit consisted of one $25,000 face amount 90-day, 8% promissory note and one redeemable common stock purchase warrant to purchase 60,000 shares of the Company's common stock at price of $0.50 per share during a period of three years from issuance. The offering was terminated in December 1996 upon the sale of 4 units resulting in $100,000 in gross proceeds. In connection with such offering, RMCC was paid sales commissions equal to 10% of the aggregate purchase price of the units sold resulting in aggregate sales commissions of $10,000. During the period January 1997 through April 30, 1997, the Company engaged in a private offering of securities pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended. The offering consisted of up to 19 units being sold at an offering price of $25,000 per unit. Each unit consisted of one $25,000 face-amount 90-day, 8% promissory note and one redeemable common stock purchase warrant to purchase 60,000 shares of the Company's common stock at price of $0.50 per share during a period three year from issuance. The offering of up to $475,000 was conducted on "best efforts" basis through RMCC. Part of the proceeds were used to pay the promissory notes and redeem the common stock purchase warrants issued in the prior offering. In connection with such offering, RMCC was paid sales commissions equal to 10% of the purchase price for each unit sold or $2,500 per unit. RMCC sold 17 units. The notes issued in this offering were paid and the common stock purchase warrants issued in this offering were redeemed during the quarter ended June 30, 1997.

8 CORNICHE GROUP INCORPORATED NOTES TO UNAUDITED FINANCIAL STATEMENTS Note 6 Commitments and Contingencies Legal Proceedings In the opinion of management there are no lawsuits or claims pending against the Company.

9 CORNICHE GROUP INCORPORATED NOTES TO UNAUDITED FINANCIAL STATEMENTS Note 7 Stockholders Equity Effective October 1, 1995 the Company declared a one-for-ten reverse stock split and all numbers of shares and share values stated herein reflect such reverse split unless otherwise noted. Equity Offering On May 15, 1997, the Company commenced a private securities offering pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended. The offering consists of up to 400 units, each unit consisting of 10,000 shares of common stock being offered at a price of $5,000 per unit. RMCC is the placement agent for such offering and is entitled to receive a sales commission equal to 10% of the offering price for each unit sold. The first 50 units were offered on a "best efforts, all or none" basis. The remaining 350 units are being offered on a "best-efforts" basis. Through June 30, 1997, 194 units were sold resulting in gross proceeds to the Company of $970,000. The proceeds of such offering are intended to be utilized to enable the Company to attempt to effect the acquisition of an operating business entity, for working capital and to pay off the promissory notes and to redeem the common stock purchase warrants issued in the Company's private securities offering which was completed on April 30, 1997. The proceeds raised to date have been utilized for working capital and to pay off the above described notes and redeem the above described common stock purchase warrants.

10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the Unaudited Financial Statements and notes thereto. Results of Operations The Company has not engaged in any operating activities nor generated any operating revenues since February 1996 when its then operating subsidiaries were placed in receivership in the UK. During the period March 1996 through the date hereof, the Company's primary activities have been to engage in three private securities offerings, one of which is still ongoing, and to settle and pay off certain of its outstanding liabilities thereby making it a more desirable acquisition candidate. The Company recorded losses in the three months ended June 30, 1997 of $120,816 before interest expense and preferred stock dividends accrual ($32,250 in 1996). Such losses arose from general and administrative expenses which principally comprise professional fees, travel expenses and general offices costs. Compared to the three months ended June 30, 1996 such costs were $88,566 higher. The increase is primarily due to the cost of redeeming common stock purchase warrants ($76,500) and higher year on year professional fees and general corporate costs.

11 Liquidity and Capital Resources During the three months ended June 30, 1997 the Company relied on the net proceeds of its securities offering which was completed on April 30, 1997 (see Note 5 of the Company's unaudited financial statements included in Part I - - Item I) and the securities offering described below and in Note 7 of the Company's unaudited financial statements included in Part I - Item 1 hereof to meet its cash needs. On May 15, 1997 the Company commenced a private securities offering. The proceeds raised in such offering have been used as working capital and to pay off the promissory notes, and redeem the common stock purchase warrants issued in the private securities offering which was completed April 30, 1997. Additional proceeds raised in such offering are intended to be utilized for working capital and to enable the Company to attempt to effect the acquisition of an operating business entity. The Company does not expect to generate any operating revenues until, at the earliest, the consummation of an acquisition. No assurance can be given however, that the Company will successfully consummate a business acquisition or that if consummated that the Company will derive any material revenues or profits therefrom.

12 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits filed herewith: None (b) Forms 8-K filed during quarter: None 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. CORNICHE GROUP INCORPORATED (Registrant) By /s/ James J. Fyfe JAMES J. FYFE, Vice President and Principal Financial Officer Date: July 10, 1997

5 1 3-MOS MAR-31-1998 JUN-30-1997 263428 0 76087 (75000) 0 264515 1426 (776) 265,165 182560 0 0 896967 457274 1271636 265165 0 0 0 120816 13689 0 4181 (138686) 0 (138686) 0 0 0 (138686) (0.04) (0.04)