SEC SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the Quarterly Period Ended September 30, 2002
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ____________ to ____________
Commission File No. 1-14778
DOR BIOPHARMA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 41-1505029
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
28101 BALLARD DRIVE, SUITE F, LAKE FOREST, IL 60045
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (847) 573-8990
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15 (d) of the Securities Exchange Act during the past 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 |_|
Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act)
Yes |_| No |X|
At August 12, 2002, 21,520,812 shares of the registrant's common stock (par
value, $.001 per share) were outstanding.
Transitional Small Business Disclosure Format (check one):
Yes |_| No |X|
PART I. - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
DOR BIOPHARMA, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, December 31,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $ 4,019,907 $ 9,942,053
Receivable from related party 68,153 44,447
Prepaid expenses 37,731 49,941
------------- -------------
Total current assets 4,125,791 10,036,441
Leasehold improvements and equipment, net of
accumulated amort. of $1,074,573 and $1,015,136 311,202 365,219
Patent issuance costs, net of accumulated amortization
of $23,974 and $20,512 401,039 284,419
Intangible assets, net of accumulated amortization
of $86,110 and $10,671 278,041 355,540
------------- -------------
TOTAL ASSETS $ 5,116,073 $ 11,041,619
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 524,171 $ 856,187
Accrued compensation 206,813 205,969
Due to joint ventures -- 2,042,833
Current portion of note payable 231,897 --
Current portion of line of credit 134,762 164,748
------------- -------------
Total current liabilities 1,097,643 3,269,737
Long-term liabilities:
Long-term portion of note payable 347,845 --
Long-term portion of line of credit 52,290 52,098
------------- -------------
Total long-term liabilities 400,135 52,098
------------- -------------
Total Liabilities 1,497,778 3,321,835
Series C exchangeable convertible preferred stock,
$.05 par value. Authorized 200,000 shares; 104,435
issued and outstanding at liquidation value -- 10,348,733
Stockholders' equity/(deficit):
Preferred stock, $.001 par value. Authorized
4,600,000 shares; none issued and outstanding -- --
Series B convertible preferred stock,
$.05 par value. Authorized 200,000 shares;
112,745 issued & outstanding at liquidation value 11,493,154 10,844,280
Series C exchangeable convertible preferred stock,
$.05 par value. Authorized 200,000 shares; 108,955
issued and outstanding at liquidation value 10,895,516 --
Common stock, $.001 par value. Authorized
50,000,000 shares; 21,639,454 issued,
and 21,520,822 outstanding 21,639 20,945
Additional paid-in capital 48,655,867 48,983,361
Common stock held in escrow, 654,930 and
1,350,000 shares 818,663 1,687,500
Deficit accumulated during the development stage (67,822,794) (63,721,285)
------------- -------------
4,004,946 (2,185,199)
Less:
Treasury stock, at cost, 118,642 shares (443,750) (443,750)
------------- -------------
Total Stockholders' Equity/(Deficit) 3,618,295 (2,628,949)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT) $ 5,116,073 $ 11,041,619
============= =============
See accompanying condensed notes to financial statements.
DOR BIOPHARMA, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Cumulative from
Nine Months February 15, 1985
Ended September 30, (date of inception)
2002 2001 to September 30, 2002
Revenue:
SBIR contract revenue $ -- $ -- $ 100,000
Expenses:
SBIR contract
research and development -- -- 86,168
Proprietary research
and development 2,570,151 1,766,813 19,931,056
General and
administrative 2,397,849 1,430,979 17,443,348
Write-off of acquired in-process
research and development -- -- 10,181,000
------------ ------------ ------------
Total operating expenses 4,968,000 3,197,792 47,641,572
------------ ------------ ------------
Loss from operations (4,988,132) (3,197,792) (47,541,572)
Equity gains/(losses)in
joint ventures 787,275 (620,053) (22,260,674)
Other income -- (1,577) 262,889
Interest income 87,139 376,752 3,552,759
Interest expense (7,923) (35,883) (357,073)
------------ ------------ ------------
Net loss (4,101,509) (3,478,553) (66,343,671)
Preferred stock dividends (1,195,657) (1,111,822) (6,062,958)
------------ ------------ ------------
Net loss applicable to common
stockholders $ (5,297,166) $ (4,590,375) $(72,406,629)
============ ============ ============
Basic and diluted
net loss per share
available to common
stockholders $ (0.25) $ (0.36)
Basic and diluted
weighted average common
shares outstanding 21,179,037 12,741,858
See accompanying condensed notes to financial statements.
DOR BIOPHARMA, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months
Ended September 30,
2002 2001
Revenue:
SBIR contract revenue $ -- $ --
Expenses:
SBIR contract
Research and development -- --
Proprietary research
and development 326,162 595,319
General and
Administrative 339,203 522,710
Write-off of acquired in-process
research and development -- --
------------ ------------
Total operating expenses 665,365 1,118,029
------------ ------------
Loss from operations (665,365) (1,118,029)
Equity gains/(losses)in
joint ventures 20,041 (42,392)
Other income -- --
Interest income 20,795 82,066
Interest expense (100) (8,563)
------------ ------------
Net loss (624,629) (1,086,918)
Preferred stock dividends (402,932) (374,680)
------------ ------------
Net loss applicable to common
Stockholders $ (1,027,561) $ (1,461,598)
============ ============
Basic and diluted
net loss per share
available to common
stockholders $ (0.05) $ (0.12)
Basic and diluted
weighted average common
shares outstanding 21,520,812 12,741,858
See accompanying condensed notes to financial statements.
DOR BIOPHARMA, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Cumulative Period
Nine Months February 15, 1985
Ended September 30, (Inception) to
2002 2001 September 30, 2002
------------ ------------ ------------------
OPERATING ACTIVITIES:
Net Loss: ...................................... $ (4,101,509) $ (2,531,401) $(66,286,572)
Adjustments to reconcile net loss in
cash used in operating activities:
Depreciation and amortization ................ 229,420 89,310 1,792,526
Gain on the sale of mkt securities ........... -- (5) (110,244)
Non-cash stock compensation .................. -- 3,691 786,178
Equity (gains)/losses in joint ventures ...... (787,276) 577,661 22,260,674
Amortization of fair value of warrants ....... -- -- 3,307,546
Gain on sale of assets ....................... -- 1,575 (4,530)
Write off patent issuance costs .............. -- -- 439,725
Write off of acquired research
and development ............................ -- -- 10,181,000
Changes in operating assets and liabilities:
Receivable from third party ................. (23,706) 99,793 (68,153)
Prepaid expenses ............................ 12,210 5,873 (33,709)
Accounts payable and accrued expenses ....... (856,496) 31,879 (55,265)
Accrued compensation ........................ 844 27,411 206,813
Due to joint ventures ................. (151,315) 275,118 (1,192,549)
------------ ------------ ------------
Net cash used in operating activities .......... (5,677,828) (1,279,329) (28,776,560)
INVESTING ACTIVITIES:
Cash received in acquisition of CTD, net ....... -- -- 1,392,108
Patent issuance cost ........................... (130,552) (6,534) (924,612)
Investment in joint ventures ................... -- (620,053) (19,963,883)
Organizational costs incurred .................. -- (135)
Purchases of leasehold improvements and
equipment .................................... (83,972) (111,291) (1,871,081)
Proceeds from assets sold ...................... -- -- 4,790
Purchases of marketable securities ............. -- (3,973,724) (11,004,080)
Proceeds from sale of marketable
securities ................................... -- 5,988,708 11,114,324
Prepaid acquisition costs ...................... -- (1,404,847) --
------------ ------------ ------------
Net cash provided by (used in)
investing activities ........................... (214,524) (127,741) (21,252,569)
FINANCING ACTIVITIES:
Net proceeds from issuance (costs incurred
related to issuance)common stock ............ -- -- 37,777,399
Net proceeds from issuance of
preferred stock ............................. -- -- 16,325,712
Proceeds from exercise of options ............. -- -- 417,092
Proceeds from borrowings under
line of credit .............................. -- -- 1,150,913
Repayment of amounts under line of credit ..... (29,794) (81,276) (1,026,677)
Proceeds from refinancing of due to
joint venture payable ....................... -- -- --
Repayment of long-term note receivable ........ -- -- 50,315
Repayment of note payable issued in
exchange for legal service .................. -- (71,968)
Purchase and retirement of common stock ....... -- -- (130,000)
Purchase of common stock for
treasury stock .............................. -- -- (443,750)
------------ ------------ ------------
Net cash provided by (used in)
financing activities ......................... (29,794) (81,276) 54,049,036
------------ ------------ ------------
Net increase (decrease) in cash and
Cash equivalents ............................. (5,922,146) (2,740,418) 4,019,907
Cash and cash equivalents at beginning
of period .................................... 9,942,053 10,831,266 --
------------ ------------ ------------
Cash and cash equivalents at end
of period .................................... $ 4,019,906 $ 8,090,848 $ 4,019,907
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW:
Cash paid for interest ....................... $ 7,924 $ 35,883
NON-CASH TRANSACTIONS
Issuance of preferred stock
Dividends in kind .......................... $ 1,195,657 $ 1,111,822
Issuance of note payable to settle
joint venture liabilities .................. $ 579,742 --
The accompanying notes are an integral part of the consolidated financial
statements
DOR BIOPHARMA, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED NOTES TO FINANCIAL STATEMENTS
These unaudited interim consolidated financial statements were prepared
under the rules and regulations for reporting on Form 10-QSB. Accordingly, we
omitted some information and footnote disclosures normally accompanying the
annual financial statements. You should read these interim financial statements
and notes in conjunction with our audited consolidated financial statements and
their notes included in our latest annual report on Form 10-KSB, for the year
ending December 31, 2001, as amended. It is our opinion that the consolidated
financial statements include all adjustments necessary for a fair statement of
the results of operations, financial position and cash flows for the interim
periods. All adjustments were of a normal recurring nature. The results of
operations for interim periods are not necessarily indicative of the results for
the full fiscal year.
NET LOSS PER SHARE
Net loss per share is presented on the Consolidated Statements of
Operations in accordance with SFAS No. 128 for the current and prior periods.
DOR BioPharma had a net loss for all periods being presented, which resulted in
diluted and basic earnings per share being the same for all periods presented.
The potential impact of warrants and stock options outstanding was not included
in the calculation because their inclusion would have been anti-dilutive.
SEVERANCE COSTS
In June 2002, the Board of Directors authorized management to restructure
the Company and implement a cost reduction program in order to reduce future
operating costs and preserve the Company's existing working capital. The company
has reduced its headcount from 22 to 5 employees. The Company communicated all
severance benefits to employees before June 30, 2002.
Severance charges recorded in the statement of operations during the quarter
ended June 30, 2002 totaled approximately $630,000, which was based on
management's best estimate of probable costs to be incurred under severance
agreements with the terminated employees. During the quarter ended September 30,
2002 that best estimate was increased to $748,598 with the increase being
recorded as an expense for the third quarter. As of September 30, 2002,
severance payments of $541,785 had been made and $206,813 is currently recorded
on the Company's balance sheet as accrued compensation.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis provides information to explain the
results of operations and financial condition of DOR BioPharma, Inc. ("DOR
BioPharma," "DOR," or the "Company"). You should also read the Company's
unaudited consolidated interim financial statements and their notes, included in
this Form 10-QSB, and the Company's audited consolidated financial statements
and their notes and other information included in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 2001. This report contains
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended which are subject to the safe-harbor created by
that section. The forward-looking statements within this Form 10-QSB are
identified by words such as "believes," "anticipates," "expects," "intends,"
"may," "will" "plans" and other similar expressions. However, these words are
not the exclusive means of identifying such statements. In addition, any
statements that refer to expectations, projections, or other characterizations
of future events or circumstances are forward-looking statements. These
forward-looking statements are subject to significant risks, uncertainties and
other factors, including those identified in Exhibit 99 "Risk Factors" of this
Form 10-QSB, which may cause actual results to differ materially from those
expressed in, or implied by, these forward-looking statements. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements to reflect events or circumstances occurring subsequent to the filing
of this Form 10-QSB with the SEC. You should carefully review and consider the
various disclosures the Company makes in this report and the Company's other
reports filed with the SEC that attempt to advise interested parties of the
risks, uncertainties and other factors that may affect the Company's business.
The Company is a development stage enterprise involved in the development
of proprietary orally delivered human therapeutic products and vaccines and has
not generated any material revenues from operating activities. The Company's
lead product, orBec(R) (oral beclomethasone diproprionate), is currently in
multi-center phase III clinical trials that, if successful, should allow the
Company to file a New Drug Application with the FDA for marketing approval in
the U.S. orBec(R) has been granted Fast Track status by the FDA for the
treatment of Intestinal Graft-vs-Host Disease, a life threatening form of severe
gastrointestinal inflammation that occurs in a small population of patients. The
Company is simultaneously testing and developing orBec(R) for much larger
patient populations such as inflammatory bowel disease (IBD) and irritable bowel
syndrome (IBS) that may allow it to file a Supplemental New Drug Application for
one or more of these indications in an efficient and cost effective manner.
In addition to orBec(R), the Company also has technologies and products at
earlier stages of development relating to the oral delivery of other drug
candidates and synthetic (non-live) vaccines that it is seeking to out-license
or partner with larger pharmaceutical companies.
Plan of Operation
In late June 2002, the Company implemented a substantial cost reduction program
to allow it to focus its resources on the clinical development of its lead
product, orBec(R) (oral beclomethasone diproprionate), which is currently in
multi-center phase III clinical trials. As a result of this cost reduction
initiative, the Company's loss from operations for the third quarter 2002 was
reduced to approximately $665,000, a reduction of (72%) as compared to the
Company's loss from operations of $2.4 million for the prior quarter. During the
fourth quarter, the Company implemented additional cost reduction initiatives to
further reduce the Company's quarterly loss from operations.
The Company ended the third quarter with cash on hand in excess of $4 million.
During the third quarter of 2002, the Company:
o Reduced its quarterly loss from operations to $655,000, a reduction
of $1.7 million or 72% from the prior quarter's loss from operations
of $2.4 million;
o Successfully resolved the delisting procedure with the American
Stock Exchange ("AMEX") maintaining the Company's listing on AMEX;
o Increased the rate of enrollment in the pivotal phase III clinical
trial of orBec(R);
o Substantially enhanced the proprietary position of orBec(R) for a
large patient population by executing an exclusive option to license
patent applications held by the University of Texas Medical Branch
at Galveston covering the use of oral topical anti-inflammatory
compounds, such as orBec(R), to treat irritable bowel syndrome
(IBS), a disease affecting millions of persons in the U.S.
o Initiated a program for the development of oral synthetic (non-live)
biodefense vaccines through the Company's InnoVaccines joint venture
beginning with an oral vaccine against Ricin;
o Initiated a stock repurchase program of the Company's shares in the
open market;
o Recruited William Milling, CPA as Controller, Treasurer and
Secretary; and
o Recruited Robin Simuncak, RN as Director of Clinical Affairs
Material Changes in Results of Operations
In comparing the Company's third quarter and first nine months of results
of operations and financial condition for 2002 with results for the same period
in 2001, the reader should note that the 2001 results do not include the impact
of the merger between the Company and Corporate Technology Development, Inc.
("CTD"), which was completed on November 29, 2001. As a result, expenditures
connected with the clinical trials for orBec(R) and other product candidates
acquired through this merger, are not included in the 2001 consolidated results
for DOR BioPharma. In addition, for purposes of per share information, the
Company had 21,520,812 shares outstanding as of September 30, 2002, as opposed
to 12,741,858 as of September 30, 2001.
For the three-month period ended September 30, 2002, the Company had a net
loss, which decreased $462,289 or 43%, to $624,629 as compared to a net loss of
$1,086,918 for the three months ended September 30, 2001. After giving effect to
dividends on preferred stock, which are paid-in-kind in the form of additional
shares of preferred stock, net loss available to common stockholders decreased
$434,037 or 30%, to $1,027,561, or $0.05 per share, compared with $1,461,598, or
$0.12 per share, for the prior year period.
Research and development expenditures for the three months ended September
30, 2002, decreased $269,157, or 45%, to $326,162, compared with $595,319 for
the corresponding period ended September 30, 2001. This decrease reflects the
Company's decision to reduce expenditures associated with its earlier stage
programs, which were the exclusive subject of research and development
expenditures during the third quarter 2001, offset by the cost of phase III
clinical trials of orBec(R) during the third quarter 2002.
General and administrative expenses for the third quarter 2002 decreased
$183,507, or 35%, to $339,203 as compared to $522,710 for the three months ended
September 30, 2001. This decrease reflects the reduction of general and
administrative staff and associated expenses, offset by higher insurance costs.
During the third quarter 2002, equity gains/(losses) from joint venture
activities was a gain of $20,041 an increase of $62,433 compared to a loss of
$42,392 for the same period in 2001.
Interest income for the three months ending September 30, 2002 was
$20,795, a decrease of $61,271, or 75%, compared to $82,066 for the same period
in 2001, due to the decrease in interest rates on investment instruments versus
the prior year as well as lower cash balances in 2002.
For the nine months ended September 30, 2002, the Company had a net loss
applicable to common stockholders, which increased $622,956 or 18%, to
$4,101,509 as compared to a net loss applicable to common stockholders of
$3,478,553 for the nine months ended September 30, 2001. After giving effect to
dividends on preferred stock, which are paid-in-kind in the form of additional
shares of preferred stock, net loss available to common stockholders increased
$706,791, or 15%, to $5,297,166, or $0.25 per share, compared with $4,590,375,
or $0.36 per share, for the first nine months of 2001.
Year to date 2002 research and development expenditures increased
$803,338, or 45%, to $2,570,151, compared with $1,766,813 for the corresponding
period ended September 30, 2001. This increase reflects the cost of the phase
III clinical trials for orBec(R) during 2002 offset by the reduction of research
and development expenses associated with the Company's earlier stage programs
during the third quarter 2002.
General and administrative expenses for the nine months ended September
30, 2002, increased $966,870, or 68%, to $2,397,849 as compared to $1,430,979
for the nine months ended September 30, 2001. This increase is attributable to
increased general and administrative staff and associated expenses during the
first two quarters of 2002 as compared to 2001, severance costs relating to
general and accounting personnel in the second quarter of 2002, increased legal
and accounting expenses, increased insurance costs and depreciation and
amortization, offset by a reduction in these expenses during the third quarter
2002.
Year to date 2002 equity gains/(losses) from joint venture activities
reflected a gain of $787,275, an increase of $1,364,936 compared to the loss of
$577,661 for the same period in 2001. This change resulted from gains realized
by the Company in settling the Elan joint ventures on June 29, 2002 and the
subsequent reduction of expenditures associated with such joint ventures during
2002.
Interest income for the first nine months of 2002 decreased to $87,139, a
decrease of $292,613, or 78%, compared to $376,752 for the first nine months of
2001, the decrease was due to the decline in interest rates on investment
instruments versus the prior year as well as a lower cash balance in 2002.
FINANCIAL CONDITION
On September 30, 2002 and December 31, 2001, DOR BioPharma had cash, cash
equivalents, and marketable securities of $4,019,907 and $9,942,053,
respectively. The level of working capital was $3,028,148 for September 30, 2002
compared with $6,766,704, for December 31, 2001.
For the third quarter 2002, the Company reduced its quarterly loss from
operations to $665,000, a reduction of $1.7 million or 72% from the prior
quarter's loss from operations of $2.4 million. This reduction was largely
attributable to a reduction in general and administrative expenses and research
and development expenses associated with the Company's earlier stage programs.
During the fourth, the Company implemented additional cost reduction initiatives
to further reduce the Company's quarterly loss from operations.
The Company is focused on completing the ongoing multi-center phase III
clinical trial for its lead product, orBec(R) (oral beclomethasone
diproprionate), which, if successful, the Company believes will allow it to file
a New Drug Application with the FDA for the Fast Track designated indication of
Intestinal Graft-vs-Host Disease. If approved, the Company intends to expand the
market potential for orBec(R) by filing one or more Supplemental New Drug
Applications for orBec(R) in substantially larger disease markets, such as
irritable bowel syndrome (IBS) or inflammatory bowel disease (IBD).
The Company will continue to seek pharmaceutical partners interested in
developing its earlier stage programs and is seeking government support for its
oral biodefense vaccine program.
The Company believes that based upon the current level of spending, if
maintained at the current level, the existing working capital resources will be
sufficient to support operations for at least the next 18 months. See Exhibit
99--"Risk Factors."
ITEM 4. CONTROLS AND PROCEDURES
(a) The Interim President and Controller of the Company (its principal
executive officer and principal financial officer, respectively) have concluded,
based on their evaluation as of a date within 90 days prior to the date of the
filing of this report, that the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company in
the reports filed or submitted by it under the Securities Exchange Act of 1934,
as amended, is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and include controls and
procedures designed to ensure that information required to be disclosed by the
Company in such reports is accumulated and communicated to the Company's
management, including the Interim President and Controller of the Company, as
appropriate to allow timely decisions regarding required disclosure.
(b) There were no significant changes in the Company's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of such evaluation."
PART II. - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) 99.1 Risk Factors
99.2 Certification of Interim President, pursuant to the
Sarbanes-Oxley Act of 2002.
99.3 Certification of Principal Financial Officer, pursuant to the
Sarbanes-Oxley Act of 2002.
--------------
(b) Reports on Form 8-K:
There were no reports filed on Form 8K for this period
SIGNATURES
In accordance with 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.
DOR BIOPHARMA, INC.
November 14, 2002 /s/ Steve Kanzer
------------------------------
Steve H. Kanzer
Interim President
November 14, 2002 /s/ William Milling
------------------------------
William Milling
Controller
(principal financial and accounting officer)
SECTION 302 CERTIFICATION
I, Steve H. Kanzer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of DOR BioPharma;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report for the period ending September 30, 2002; and
c) Presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
evaluation date;
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors:
a) All significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: 11/14/2002
/s/ Steve H Kanzer
------------------------------
Steve H Kanzer
Interim President
I, William D Milling, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of DOR BioPharma;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report for the period ending September 30, 2002; and
c) Presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
evaluation date;
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors:
a) All significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: 11/14/2002
/s/ William D Milling
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William D Milling
Controller
(Principal financial and accounting officer)