6-K 1 e6-k.txt NYMOX PHARMACEUTICAL CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 6-K Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of The Securities Exchange Act of 1934 For the month of June 30, 2000 Nymox Pharmaceutical Corporation 9900 Cavendish Blvd., St. Laurent, QC, Canada, H4M 2V2 (Indicate by check mark whether the registrant files or will file annual reports under cover Form 20F or Form 40F) Form 20 F [X] Form 40 F [ ] (Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934) Yes [ ] No [X] 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. NYMOX PHARMACEUTICAL CORPORATION -------------------------------- (Registrant) Date: August 14, 2000 /s/ Paul Averback ------------------------------------------ Paul Averback, MD - President 2 MESSAGE TO SHAREHOLDERS ----------------------- Nymox is pleased to present its results for the second quarter of 2000. A peer-reviewed publication in the April issue of Neurology again independently verified the utility of Nymox's AD7CTM test as an aid to the diagnosis of Alzheimer's disease. Neurology is the official journal of the American Academy of Neurology. The clinical researchers in this independent study, led by Dr. Philipp Kahle of Stanford, were from the Departments of Neurobiology, Psychiatry, Behavioral Sciences, and Neurosurgery at Stanford, the Parkinson's Institute of Sunnyvale California, and the Department of Psychiatry of Ludwig-Maximilians-University School of Medicine in Munich, Germany. The study found that neural thread protein (AD7C-NTP), a brain protein, was significantly elevated in patients with Alzheimer's disease compared to controls. AD7C-NTP levels also were found to correlate significantly with the severity of dementia symptoms. The article stated "levels of AD7C-NTP correlated with severity of dementia as assessed by MMSE (mini mental status examination), consistent with the previous study using the Blessed dementia scale". In June, Nymox announced that it had completed the development stage for its 7C Gold kit for urine and was proceeding to the manufacturing stage and the obtaining of regulatory approvals where needed. The 7C Gold test is designed as an aid to the physician in the diagnosis of Alzheimer's disease. The test provides a simple and accurate means to determine from a urine sample whether a patient has an elevated level of neural thread protein (AD7C-NTP), a brain protein that has extensively been proven in the past decade as a peripheral marker for Alzheimer's disease. Fourteen peer-reviewed studies published in medical journals have documented the usefulness and relevance of testing for AD7C-NTP, including the recent confirmatory independent study published in Neurology in April and described above. The 7C Gold kit will be in packaged units consisting of monoclonal antibody bound to colloidal gold particles and special membranes with coated antibodies and relands. The test measures gold particle migration after treatment with the patient's urine. The gold migrates further where the urine sample contains elevated levels of AD7C-NTP. The unique and patented test is easy to perform and produces visible results in less than half an hour. In April, Nymox announced the appointment of Michael R. Sonnenreich to the Board of Directors. Mr. Sonnenreich has vast experience in the global pharmaceutical industry. He is a graduate of Harvard University Law School, and is currently Chairman and CEO of Kikaku America International, Senior Partner of Sonnenreich, Roccograndi & Woo P.C., President and CEO of Glocal Communications Corp. Ltd. of London, Vice Chairman of PharMa International Corporation of Tokyo, Director of Asset Advisory Services of Zurich, Member of the Board of Advisors of John Hopkins University School of Advanced International Studies and Member of the Board of Overseers of Tufts University Medical School. Mr. Sonnenreich has in the past been a Board Member and a Trustee of numerous important companies and universities, such as ABD American Capital Market Funds, the Integra Fund, Continental Steel Inc., Scientific American, Medical Tribune International, Clark University, the Maret School and has long-term involvements with many non-profit institutions such as the Smithsonian Institution, the Washington Opera, the New England Conservatory of Music, the North Carolina Museum of Art Foundation, the University of Virginia Art Museum, the Richard Tucker Music Foundation, and served as President of the National Coordinating Council on Drug Education. In May, Nymox announced the appointment of Professor Walter P. von Wartburg to the Board of Directors. Professor von Wartburg is an international authority on biotechnology and the pharmaceutical industry. He was a Member of the Executive Committee of Novartis Inc. and was Chief Communications Officer of Novartis until 1999. He is a graduate of the Universities of Basel, Paris, Princeton, Stanford and Harvard Law School; Professor on public health policy at the Saint Gall Graduate School of Economics, Business and Public Administration, and author of various books and articles on drug abuse, pharmaceutical legislation, biotechnology, and on issues of management, communications and business administration. Professor von Wartburg is a Partner in the private law practice of Law & Life Sciences in Basel; the Founder-President of the Swiss Foundation for the Mentally Handicapped "PRO MENTE SANA"; Member of the National Advisory Board of the Bioethics Institute of the Johns Hopkins University; Member of the Advisory Council of the Bologna Center of the Paul H Nitze School of Advanced International Studies, Bologna (Italy); Chairman of the Board of Directors of the Basel Opera and Theatre, and Chairman of the Board of the University Hospital of Basel. Also in June, Nymox announced that Mizuho Medy Co. Ltd. of Japan had signed a memorandum of agreement with Serex Inc. (majority owned by Nymox) for the manufacture of Serex's nicotine test for tobacco exposure by Mizuho's American subsidiary, Mizuho USA. Mizuho Medy Co. Ltd. will market Serex's nicotine tests in Japan, and will be responsible for packaging and labeling in the Japanese market. The nicotine test is a urinary assay for determination of tobacco product exposure. The nicotine test uses Serex's unique patented reland LabtabTM point of care quantitative immunoassay platform. The LabtabTM platform system can be used for a broad range of point of care quantitative tests for diagnostic applications, therapeutic drug monitoring, and toxic exposures. The test will be marketed to individuals, laboratories, and insurance companies. /s/ Paul Averback ------------------------------------- Paul Averback MD - President & C.E.O. August 15, 2000 3 MANAGEMENT'S DISCUSSION AND ANALYSIS (IN US DOLLARS) REVENUES Total revenues amounted to $107,720 for the six months ended June 30, 2000, compared with $122,901 for the same period in 1999. Sales revenues amounted to $73,488 for the six months ended June 30, 2000, compared with $104,962 for the same period last year. All of the sales revenue was derived in the United States from our various products and services. Interest revenue was $34,232 for the period ended June 30, 2000 compared to $17,939 for the same period in 1999, derived from interest earned on the cash received from the private placements. RESEARCH AND DEVELOPMENT Research and development expenditures were $797,366 for the six month period ended June 30, 2000, compared with $588,548 for the same period in 1999. Expenses in this area were budgeted to increase in 2000 with the new financing secured by the Company. MARKETING EXPENSES Marketing expenses were $454,863 for the first half of 2000 compared to $529,494 for the same period in 1999. Increased expenditures are also budgeted in this area in 2000. ADMINISTRATIVE EXPENSES AND COST OF SALES General, administrative and cost of sales expenses were $850,109 for the period ended June 30, 2000, compared with $537,345 for the same period in 1999. The increase is principally attributable to professional fees. LONG-TERM COMMITMENTS Nymox has no financial obligations of significance other than long-term lease commitments for its premises in the United States and Canada of $16,203 per month and ongoing research funding payments to a U.S. medical facility totaling $172,000 for 2000. RESULTS OF OPERATIONS Net losses for the six months ended June 30, 2000 were $2,090,596, or $0.10 per share, compared to $1,555,318, or $0.08 per share, for the same period in 1999. LIQUIDITY AND CAPITAL RESOURCES As of June 30, 2000, cash totaled $1,551,074. In November 1999, the Corporation signed a common stock purchase agreement whereby the investor is committed to purchase up to $12 million of the Corporation's common shares over a thirty-month period commencing March 2000, when our F-1 registration statement was declared effective. The Company also completed a private placement in March 2000 comprising 666,667 common shares at $6.00 per share, for total proceeds of $4,000,000. A total of 93,334 warrants were issued as well, exercisable at a price of $9.375 per share (66,667) and $7.8125 per share (26,667). These warrants expire on March 6, 2004. 4 Consolidated Financial Statements of (Unaudited) NYMOX PHARMACEUTICAL CORPORATION Periods ended June 30, 2000, 1999 and 1998 5 NYMOX PHARMACEUTICAL CORPORATION Consolidated Financial Statements (Unaudited) Periods ended June 30, 2000, 1999 and 1998 FINANCIAL STATEMENTS Consolidated Balance Sheets............................................ 1 Consolidated Statements of Operations.................................. 2 Consolidated Statements of Deficit..................................... 3 Consolidated Statements of Cash Flows.................................. 4 Notes to Consolidated Financial Statements............................. 5 6 NYMOX PHARMACEUTICAL CORPORATION Consolidated Balance Sheets (Unaudited) June 30, 2000 and 1999, with comparative figures as at December 31, 1999 (in US dollars)

-------------------------------------------------------------------------------------------------------------- June 30, June 30, December 31, 2000 1999 1999 -------------------------------------------------------------------------------------------------------------- (Unaudited) (Unaudited) (Audited) Assets Current assets: Cash $ 1,551,074 $ 1,018,105 $ 449,363 Short-term investments - 181,771 - Accounts receivable 54,693 56,334 24,611 Research tax credits receivable 10,818 5,296 3,180 Notes receivable - 183,225 181,280 Other receivables 80,030 14,017 18,390 Prepaid expenses 128,500 101,365 100,000 -------------------------------------------------------------------------------------------------------------- 1,825,115 1,560,113 776,824 Capital assets 1,296,022 1,122,172 1,168,316 Deferred share issuance costs 242,732 - 195,351 Intellectual property rights acquired (note 2)720,602 - - -------------------------------------------------------------------------------------------------------------- $ 4,084,471 $ 2,682,285 $ 2,140,491 -------------------------------------------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 513,078 $ 61,320 $ 486,916 Note payable - - 346,428 -------------------------------------------------------------------------------------------------------------- 513,078 61,320 833,344 Shareholders' equity: Share capital 21,570,789 16,467,803 16,912,963 Deficit (17,999,396) (13,846,838) (15,605,816) -------------------------------------------------------------------------------------------------------------- 3,571,393 2,620,965 1,307,147 -------------------------------------------------------------------------------------------------------------- $ 4,084,471 $ 2,682,285 $ 2,140,491 --------------------------------------------------------------------------------------------------------------

See accompanying notes to unaudited consolidated financial statements. 7 NYMOX PHARMACEUTICAL CORPORATION Consolidated Statements of Operations (Unaudited) Periods ended June 30, 2000, 1999 and 1998 (in US dollars)

----------------------------------------------------------------------------------------------------------------------------- Three months ended June 30, Six months ended June 30, ----------------------------------------- ------------------------------------------ 2000 1999 1998 2000 1999 1998 ----------------------------------------------------------------------------------------------------------------------------- Revenue: Service fees $ 35,227 $ 47,487 $ 20,360 $ 73,488 $ 104,962 $ 23,123 Interest 32,159 6,164 59,499 34,232 17,939 68,334 ----------------------------------------------------------------------------------------------------------------------------- 67,386 53,651 79,859 107,720 122,901 91,457 Expenses: Research and development 522,852 228,178 449,653 805,019 589,841 882,825 Less investment tax credits (4,115) (1,293) (2,319) (7,653) (1,293) (3,705) ----------------------------------------------------------------------------------------------------------------------------- 518,737 226,885 447,334 797,366 588,548 879,120 Marketing 232,973 142,338 470,356 454,863 529,494 1,155,683 General, administrative and costs of sales 525,540 207,154 232,529 850,109 537,345 329,042 Depreciation and amortization 44,694 31,027 30,798 93,128 67,294 59,981 Interest and bank charges 1,018 1,303 1,878 2,850 2,222 3,171 ----------------------------------------------------------------------------------------------------------------------------- 1,322,962 608,707 1,182,895 2,198,316 1,724,903 2,426,997 Gain on disposal of capital assets - 46,684 - - 46,684 - ----------------------------------------------------------------------------------------------------------------------------- Net loss $ (1,255,576) $ (508,372) $ (1,103,036) $ (2,090,596) $ (1,555,318) $ (2,335,540) ----------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------- Loss per share $ (0.06) $ (0.03) $ (0.06) $ (0.10) $ (0.08) $ (0.12) ----------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------- Weighted average number of common shares outstanding 20,858,422 19,837,354 19,383,390 20,582,761 19,799,854 19,052,938 -----------------------------------------------------------------------------------------------------------------------------

See accompanying notes to unaudited consolidated financial statements. 8 NYMOX PHARMACEUTICAL CORPORATION Consolidated Statements of Deficit (Unaudited) Periods ended June 30, 2000, 1999 and 1998 (in US dollars)

------------------------------------------------------------------------------------------------------------------------------------ Three months ended June 30, Six months ended June 30, ---------------------------------- --------------------------------- 2000 1999 1998 2000 1999 1998 ------------------------------------------------------------------------------------------------------------------------------------ Deficit, beginning of period $(16,743,820) $(13,338,466) $ (8,705,770) $(15,605,816) $(12,256,479) $(7,415,759) Net loss (1,255,576) (508,372) (1,103,036) (2,090,596) (1,555,318) (2,335,540) Share issue costs - - - (302,984) (35,041) (57,507) ------------------------------------------------------------------------------------------------------------------------------------ Deficit, end of period $(17,999,396) $(13,846,838) $ (9,808,806) $(17,999,396) $(13,846,838) $ (9,808,806) ------------------------------------------------------------------------------------------------------------------------------------

See accompanying notes to unaudited consolidated financial statements. 9 NYMOX PHARMACEUTICAL CORPORATION Consolidated Statements of Cash Flows (Unaudited) Periods ended June 30, 2000, 1999 and 1998 (in US dollars)

--------------------------------------------------------------------------------------------------------------------------------- Three months ended June 30, Six months ended June 30, ---------------------------------------------------------------------------------------------------------------------- 2000 1999 1998 2000 1999 1998 --------------------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net loss $ (1,255,576) $ (508,372) $ (1,103,036) $ (2,090,596) $ (1,555,318) $ (2,335,540) Adjustments for: Depreciation and amortization 44,694 31,027 30,798 93,128 67,294 59,981 Gain on disposal of capital assets - (46,684) - - (46,684) - Change in operating assets and liabilities 69,451 (172,440) 418,395 (38,716) 131,673 (201,540) --------------------------------------------------------------------------------------------------------------------------------- (1,141,431) (696,469) (653,843) (2,036,184) (1,403,035) (2,477,099) Cash flows from financing activities: Proceeds from issuance of share capital - 155,148 2,655,967 4,000,000 524,094 5,178,737 Share issue costs (10,338) - (350,365) (35,041) (57,507) Repayment of note payable - - - (346,428) - - --------------------------------------------------------------------------------------------------------------------------------- (10,338) 155,148 2,655,967 3,303,207 489,053 5,121,230 Cash flows from investing activities: Additions to capital assets (108,198) (6,730) (28,253) (165,312) (48,274) (157,046) Proceeds on disposal of capital assets - 202,591 - - 202,591 - Net proceeds on maturity of (purchases of) short-term investments - 195,359 (2,007,154) - 1,282,864 (773,810) ---------------------------------------------------------------------------------------------------------------------------------- (108,198) 391,220 (2,035,407) (165,312) 1,437,181 (930,856) ---------------------------------------------------------------------------------------------------------------------------------- (Decrease) increase in cash (1,259,967) (150,101) (33,283) 1,101,711 523,199 1,713,275 Cash, beginning of period 2,811,041 1,168,206 2,098,016 449,363 494,906 351,458 ---------------------------------------------------------------------------------------------------------------------------------- Cash, end of period $ 1,551,074 $ 1,018,105 $ 2,064,733 $ 1,551,074 $ 1,018,105 $ 2,064,733 ---------------------------------------------------------------------------------------------------------------------------------- Supplemental disclosure to statements of cash flows: (a) Interest paid $ 1,018 $ 1,303 $ 1,878 $ 2,850 $ 2,222 $ 3,171 (b) Non-cash transaction: Acquisition of Serex, Inc. by issuance of common shares - - - 657,825 - - -----------------------------------------------------------------------------------------------------------------------------------

See accompanying notes to unaudited consolidated financial statements. 10 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements (Unaudited) Periods ended June 30, 2000, 1999 and 1998 (in US dollars) -------------------------------------------------------------------------------- Nymox Pharmaceutical Corporation (the "Corporation"), incorporated under the Canada Business Corporations Act, is a development stage biopharmaceutical corporation which specializes in the research and development of neurological therapeutics and diagnostics for the aging population, with an emphasis on Alzheimer's disease. Since inception, the Corporation's activities have been primarily focused on developing certain pharmaceutical technologies and obtaining outside funding to support the continued development of its technologies. The Corporation is subject to a number of risks, including the successful development and marketing of its technologies. In order to achieve its business plan, the Corporation anticipates the need to raise additional capital. The Corporation is listed on the NASDAQ Stock Market. 1. BASIS OF PRESENTATION: (a) Consolidation and change in measurement currency: The consolidated financial statements of the Corporation have been prepared under Canadian generally accepted accounting principles and include the accounts of its wholly-owned US subsidiaries. Significant intercompany balances and transactions have been eliminated on consolidation. Effective January 1, 2000, the Corporation adopted the United States dollar as its measurement currency as a result of the significance of business activities conducted in the United States and the increasing proportion of operating, financing and investing transactions in the Canadian operations that are denominated in U.S. dollars. In accordance with Canadian GAAP, comparative figures for 1999 and 1998 included in these consolidated financial statements have been presented in US dollars using the convenience translation method whereby all Canadian dollar amounts were converted into US dollars at the closing exchange rate at December 31, 1999, which was $1.4433 Canadian dollar per US dollar. (b) Interim financial statements: The unaudited consolidated balance sheets as at June 30, 2000 and 1999 and the unaudited consolidated statements of operations, deficit and cash flows for the periods ended June 30, 2000, 1999 and 1998 reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results of the interim periods presented. There are no adjustments in these interim financial statements other than normal recurring adjustments. 11 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued (Unaudited) Periods ended June 30, 2000, 1999 and 1998 (in US dollars) -------------------------------------------------------------------------------- 2. BUSINESS ACQUISITION: On January 8, 2000, the Corporation entered into a share purchase agreement to acquire a controlling interest in Serex, Inc. ("Serex"), a privately-held development stage corporation based in New Jersey. The Corporation acquired 72.3% of the issued and outstanding common stock of Serex in exchange for 187,951 common shares of the Corporation having a fair value of approximately $657,825, and a warrant to purchase 115,662 of the Corporation's common shares at a price of $3.70 per share exercisable on the following dates: (i) January 8, 2001 - 35,783 shares, (ii) January 8, 2002 - 30,000 shares, (iii) January 8, 2003 - 30,000 shares, (iv) January 8, 2004 - 19,879 shares. In connection with this acquisition, the Corporation also issued 40,000 options to the selling shareholder to purchase the Corporation's shares. The options are exercisable at a price of $3.70/share over a four-year period. Details of the acquisition are as follows: --------------------------------------------------------------------------- Assets acquired: Current assets $ 98,746 Capital assets 19,056 Current liabilities (217,369) --------------------------------------------------------------------------- (99,567) Patents, technological platform and know-how acquired ("intellectual property rights") 757,392 --------------------------------------------------------------------------- Value of assets acquired $ 657,825 --------------------------------------------------------------------------- Consideration: Common shares $ 657,825 --------------------------------------------------------------------------- At June 30, 2000, the balance of intellectual property rights consisted of: --------------------------------------------------------------------------- Intellectual property rights, at cost $ 757,392 Less amortization (36,790) --------------------------------------------------------------------------- $ 720,602 --------------------------------------------------------------------------- 12 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued (Unaudited) Periods ended June 30, 2000, 1999 and 1998 (in US dollars) -------------------------------------------------------------------------------- 3. CANADIAN/US REPORTING DIFFERENCES: (a) Consolidated statements of earnings: The reconciliation of earnings reported in accordance with Canadian GAAP with U.S. GAAP is as follows:

----------------------------------------------------------------------------------------------------------------------------------- Three months ended June 30, Six months ended June 30, ---------------------------------------- -------------------------------------------- 2000 1999 1998 2000 1999 1998 ----------------------------------------------------------------------------------------------------------------------------------- Net loss, Canadian GAAP $(1,255,576) $(508,372) $(1,103,036) $(2,090,596) $(1,555,318) $(2,335,540) Adjustments: Amortization of patents (i) 2,343 (13,619) (10,585) 4,392 (27,139) (20,779) Change in reporting currency (iii) -- (1,501) 9,334 -- 45,606 (1,781) Intellectual property rights (iv) -- -- -- (757,392) -- -- Amortization of intellectual property rights (iv) 17,855 -- -- 36,790 -- -- ----------------------------------------------------------------------------------------------------------------------------------- 20,198 (15,120) (1,251) (716,210) 18,467 (22,560) ----------------------------------------------------------------------------------------------------------------------------------- Net loss, U.S. GAAP $(1,235,378) $(523,492) $(1,104,287) $(2,806,806) $(1,536,851) $(2,358,100) ----------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------- Loss per share, U.S. GAAP $ (0.06) $ (0.03) $ (0.06) $ (0.14) $ (0.08) $ (0.12) -----------------------------------------------------------------------------------------------------------------------------------

(b) Consolidated shareholders' equity: The reconciliation of shareholders' equity reported in accordance with Canadian GAAP with U.S. GAAP is as follows:

------------------------------------------------------------------------------------------------------------------------- June 30, ------------------------------------------------------------ 2000 1999 1998 ------------------------------------------------------------------------------------------------------------------------- Shareholders' equity, Canadian GAAP $3,571,393 $2,620,965 $5,317,018 Adjustments: Amortization of patents (i) (163,025) (193,588) (146,706) Stock-based compensation -- options granted to non-employees (ii): Cumulative compensation expense (1,000,416) (749,038) (518,700) Additional paid-in capital 1,000,416 785,031 506,070 Change in reporting currency (iii) -- (45,558) 33,417 Intellectual property rights (iv) (757,392) -- -- Amortization of intellectual property rights (iv) 36,790 -- -- ------------------------------------------------------------------------------------------------------------------------- (883,627) (203,153) (125,919) ------------------------------------------------------------------------------------------------------------------------- Shareholders' equity, U.S. GAAP $2,687,766 $2,417,812 $5,191,099 -------------------------------------------------------------------------------------------------------------------------

13 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued (Unaudited) Periods ended June 30, 2000, 1999 and 1998 (in US dollars) -------------------------------------------------------------------------------- 3. CANADIAN/US REPORTING DIFFERENCES (CONTINUED): (i) In accordance with APB Opinion 17, INTANGIBLE ASSETS, the patents are amortized using the straight-line method over the legal life of the patents from the date the patent was secured. For Canadian GAAP purposes, the patents are amortized commencing in the year of commercial production of the developed products. (ii) In accordance with FAS 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, compensation related to the stock options granted to non-employees has been recorded in the accounts based on the fair value of the stock options at the grant date. There are no comparable Canadian standards. (iii) As explained in note 1 (a), the Company adopted the US dollar as its reporting currency effective January 1, 2000. For Canadian GAAP purposes, the financial information for 1999 and 1998 has been translated into US dollars at the December 31, 1999 exchange rate. For United States GAAP reporting purposes, assets and liabilities for all periods presented have been translated into US dollars at the ending exchange rate for the respective period and the statement of earnings at the average exchange rate for the respective period. (iv) Under U.S. GAAP, purchased research and development with no alternative future uses is expensed in the year of acquisition. In Canada, the acquisition of intellectual property rights and know-how is capitalized and amortized using the straight-line basis over the period of intended benefit, which was determined to be ten years. 4. SEGMENT DISCLOSURES: Geographic segment information was as follows:

-------------------------------------------------------------------------------------- United Canada States -------------------------------------------------------------------------------------- Revenues: 2000 $ 34,232 $ 73,488 1999 17,939 104,962 1998 68,334 23,123 Net loss: 2000 (1,247,918) (842,678) 1999 (917,661) (637,657) 1998 (1,015,757) (1,319,783) Identifiable assets: June 30, 2000 3,681,646 402,825 June 30, 1999 2,166,527 515,758 December 31, 1999 1,714,416 426,075 --------------------------------------------------------------------------------------