AGGX 10-Q 06-30-09

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

 

[X]

Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2009.

 

 

[  ]

Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from _______ to _______.


000-26181 

 (Commission file number)

[aggx10q063009apg002.gif]


ANGIOGENEX, INC.

(Exact name of small business issuer as specified in its charter)


Nevada

86-0945116

(State or other jurisdiction

(IRS Employer

of incorporation or organization)

Identification No.)

 

425 Madison Ave. Suite 902, New York, New York 10017

(Address of principal executive offices)


(212) 874-6608

 (Issuer’s telephone number)


________________

 (Former name, former address and former fiscal year, if changed since last report)


  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [X]  No [  ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer [  ]

Accelerated filer [  ] 

Non-accelerated filer [  ] 

Smaller reporting company [X]

(Do not check if a smaller reporting company)

 


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [  ]    No [X]


At August 14, 2009, the issuer had outstanding the indicated number of shares of common stock: 21,302,906 shares.

ANGIOGENEX, INC.

TABLE OF CONTENTS


PART I.

FINANCIAL INFORMATION

  

3

  

  

  

 

Item 1.

Financial Statements

  

3

  

  

  

 

Item 2.

Management’s Discussion and Analysis or Plan of Operations

  

14

  

  

  

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

17

 

 

 

 

Item 4.

Controls and Procedures

  

17

  

  

  

 

PART II.

OTHER INFORMATION

  

18

 

 

 

 

Item 6.

Exhibits

 

18

  

  

  

 

 

SIGNATURES

  

19

 

- 2 -

PART I – FINANCIAL INFORMATION


Item1. Financial Statements

ANGIOGENEX, INC.

(A DEVELOPMENT STAGE ENTERPRISE)

BALANCE SHEETS

 

 

 

 

 

 

June 30, 2009

 

 

 December 31, 2008  

 

ASSETS

 

 

 

 

(unaudited)

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

Cash

 

$

                  476 

 

$ 

               3,493 

 

 

 

Prepaid expenses

 

 

               2,353 

 

 

               8,928 

 

 

 

 

TOTAL CURRENT ASSETS

 

 

               2,829 

 

 

             12,421 

 

 

PROPERTY AND EQUIPMENT

 

 

 

 

 

 

 

 

 

Equipment, net of accumulated depreciation

 

 

                  259 

 

 

                  569 

 

 

 

 

TOTAL PROPERTY AND EQUIPMENT

 

 

                  259 

 

 

                  569 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

               3,088 

 

$ 

             12,990 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

Accrued expenses

 

$

           363,663 

 

$ 

           353,546 

 

 

 

Accrued expenses - related parties

 

 

           249,733 

 

 

           218,837 

 

 

 

Notes payable

 

 

             11,000 

 

 

             11,000 

 

 

 

Notes payable, related parties

 

 

             22,500 

 

 

             22,500 

 

 

 

Accrued interest

 

 

             13,602 

 

 

               9,958 

 

 

 

Other current liabilities

 

 

               5,291 

 

 

               1,576 

 

 

 

 

TOTAL CURRENT LIABILITIES

 

 

           665,789 

 

 

           617,417 

 

 

LONG-TERM LIABILITIES

 

 

 

 

 

 

 

 

 

Notes payable, related parties

 

 

             89,750 

 

 

             28,500 

 

 

 

Settlement payable

 

 

             20,000 

 

 

             25,000 

 

 

 

 

 

 

 

           109,750 

 

 

             53,500 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

Preferred stock, 5,000,000 shares authorized, $0.001 par value;

 

 

 

 

 

 

 

 

 

 

no shares issued or outstanding

 

 

                    - 

 

 

                    - 

 

 

 

Common stock, 70,000,000 shares authorized, $0.001 par value;

 

 

 

 

 

 

 

 

 

 

21,302,906 shares issued and outstanding, respectively

 

 

             21,303 

 

 

             21,303 

 

 

 

Additional paid-in capital

 

 

        2,848,775 

 

 

        2,848,775 

 

 

 

Stock options, warrants, and beneficial conversion rights

 

 

           982,241 

 

 

           982,241 

 

 

 

Accumulated deficit during the development stage

 

 

      (4,624,770)

 

 

      (4,510,246)

 

 

 

 

TOTAL STOCKHOLDERS' DEFICIT

 

 

         (772,451)

 

 

         (657,927)

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$

               3,088 

 

$ 

             12,990 

 

 

 

 

 

 

 

                    - 

 

 

                    - 

 

The accompanying condensed notes are an integral part of these interim financial statements.



- 3 -


ANGIOGENEX, INC

(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

March , 1999

 

 

 

 

Three Months Ended

 

Six Months Ended

 

(Inception) to

 

 

 

 

June 30,

 

June 30,

 

June 30,

 

 

 

 

2009

 

2008

 

2009

 

2008

 

2009

 

 

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

$

                  -   

$

                 -   

$

                  -   

$

                 -   

$

               50,000

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

             5,400

 

          16,050

 

           10,800

 

          21,919

 

          1,759,402

 

Consulting fees

 

                    -

 

                   -

 

                    -

 

                   -

 

             109,666

 

Licenses and fees

 

                    -

 

                   -

 

                    -

 

                   -

 

             155,000

 

Professional fees

 

           45,980

 

          42,207

 

           91,799

 

          88,891

 

          1,689,510

 

General and administrative

 

                755

 

          59,350

 

             6,002

 

          84,892

 

             368,015

 

 

TOTAL OPERATING

EXPENSES

 

           52,135

 

        117,607

 

         108,601

 

        195,702

 

          4,081,593

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

         (52,135)

 

      (117,607)

 

       (108,601)

 

      (195,702)

 

        (4,031,593)

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME  (EXPENSES)

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 

                 -   

 

 

 

                 -   

 

             464,688

 

Interest income

 

                  -   

 

                 21

 

                  -   

 

                 21

 

                 7,257

 

Finance costs

 

           (3,256)

 

          (2,310)

 

           (5,923)

 

          (5,186)

 

        (1,065,122)

 

 

TOTAL OTHER INCOME

(EXPENSES)

 

           (3,256)

 

          (2,289)

 

           (5,923)

 

          (5,165)

 

           (593,177)

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

         (55,391)

 

      (119,896)

 

       (114,524)

 

      (200,867)

 

        (4,624,770)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAXES

 

                  -   

 

                 -   

 

                  -   

 

                 -   

 

                      -   

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

$

         (55,391)

$

      (119,896)

$

       (114,524)

$

      (200,867)

$

        (4,624,770)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER

COMMON SHARE -

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

$

          (0.00)

$

         (0.01)

$

          (0.01)

$

         (0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE

NUMBER OF

 

 

 

 

 

 

 

 

 

 

 

 

COMMON STOCK SHARES

OUTSTANDING -

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

 

    21,302,906

 

   21,119,060

 

    21,302,906

 

   21,089,876

 

 


The accompanying condensed notes are an integral part of these interim financial statements.



- 4 -

ANGIOGENEX, INC.

(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period from

 

 

 

 

 

 

 

 

 

 

 

 

 

March, 1999

 

 

 

 

 

 

 

Six Months Ended

 

(Inception) to

 

 

 

 

 

 

 

June 30,

 

June 30,

 

 

 

 

 

 

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

$

            (114,524)

 

$ 

          (200,867)

 

$ 

          (4,624,770)

 

Adjustments to reconcile net loss

 

 

 

 

 

 

 

 

 

 

 

 

to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

 

                   310 

 

 

                  310 

 

 

                  7,590 

 

 

 

Services paid by issuance of common stock

 

 

                     - 

 

 

                    - 

 

 

              526,450 

 

 

 

Services paid by issuance of common stock options

 

 

                     - 

 

 

                    - 

 

 

              359,419 

 

 

 

Amortization of warrants and beneficial conversion

 

 

                     - 

 

 

                    - 

 

 

              948,929 

 

 

 

Non cash financing & other charges

 

 

 

                     - 

 

 

                    - 

 

 

                  6,285 

 

 

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

 

                 6,575 

 

 

              (9,511)

 

 

                (2,353)

 

 

 

 

Accounts receivables

 

 

 

                     - 

 

 

             50,000 

 

 

                        - 

 

 

 

 

Prepaid offering costs

 

 

 

                     - 

 

 

                    - 

 

 

                        - 

 

 

 

 

Accrued expenses

 

 

 

               10,117 

 

 

             55,973 

 

 

              362,241 

 

 

 

 

Accrued expenses, related party

 

 

               30,896 

 

 

             15,351 

 

 

              251,155 

 

 

 

 

Accrued interest

 

 

 

                 3,644 

 

 

               2,810 

 

 

              103,716 

 

 

 

 

Other current liabilties

 

 

 

                 3,715 

 

 

                    - 

 

 

                  5,291 

 

 

 

 

Settlement payable

 

 

 

               (5,000)

 

 

              (5,000)

 

 

                20,000 

 

Net cash used in operating activities

 

 

 

             (64,267)

 

 

            (90,934)

 

 

          (2,036,047)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Purchase of equipment

 

 

 

                     - 

 

 

                    - 

 

 

                (7,849)

 

Net cash used in investing activities

 

 

 

                     - 

 

 

                    - 

 

 

                (7,849)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Proceeds from bridge loan

 

 

 

                     - 

 

 

                    - 

 

 

              875,000 

 

Payment of notes payable - related party

 

 

 

                     - 

 

 

                    - 

 

 

               (25,000)

 

Payment of notes payable

 

 

 

                     - 

 

 

                    - 

 

 

               (35,000)

 

Proceeds from notes payable

 

 

 

               61,250 

 

 

                    - 

 

 

              280,750 

 

Issuance of stock for cash - net

 

 

 

                     - 

 

 

             55,850 

 

 

              948,622 

 

Net cash provided by financing activities

 

 

 

               61,250 

 

 

             55,850 

 

 

            2,044,372 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease)  in cash

 

 

 

               (3,017)

 

 

            (35,084)

 

 

                    476 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



- 5 -

 

Cash, beginning of period

 

 

 

                 3,493 

 

 

             45,406 

 

 

                        - 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash, end of period

 

 

$

                   476 

 

$ 

             10,322 

 

$ 

                    476 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW DISCLOSURES:

 

 

 

 

 

 

 

 

 

 

Cash paid for interest and income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

$

                     - 

 

$ 

                    - 

 

$ 

                        - 

 

 

Income taxes

 

 

$

                     - 

 

$ 

                    - 

 

$ 

                        - 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Services paid by issuance of stock

 

 

$

                     - 

 

$ 

                    - 

 

$ 

              526,450 

 

Services paid by issuance of stock options

 

 

$

                     - 

 

$ 

                    - 

 

$ 

              274,735 

 

Offering costs paid by issuance of stock options

 

$

                     - 

 

$ 

                    - 

 

$ 

                14,822 

 

Conversion of debt to equity

 

 

$

                     - 

 

$ 

                    - 

 

$ 

              960,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying condensed notes are an integral part of these interim financial statements.



- 6 -

ANGIOGENEX, INC.

(A DEVELOPMENT STAGE COMPANY)

JUNE 30, 2009 AND 2008

CONDENSED NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)


NOTE 1 – ORGANIZATION AND OPERATIONS


AngioGenex, Inc. (“AngioGenex” or the “Company”) incorporated in the State of Nevada on March 1, 1999. The Company is a biopharmaceutical company founded to create products that are uniquely useful for the treatment, diagnosis and prognosis of cancer. The Company programs focus on (1) the discovery and development of orally active anti-cancer drugs that act by modulating the action of the Id proteins, (2) the measurement of Id proteins in tumors and blood to create products for the diagnosis and prognosis of cancer, (3) generating proof-of-concept data in relevant preclinical models to establish that modulation of Id proteins is useful to treat non-oncologic diseases in which an overgrowth of blood vessels is an important part of the underling pathology and (4) collaborating in respect to treatments of diseases in which blood vessel proliferation is desirable.


The Company has been in the development stage since inception and as of June 30, 2009 has had minimal revenues from its planned operations.


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of presentation


The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q  and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”).  Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. Interim results are not necessarily indicative of the results that may be expected for the full year. These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2008 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on April 14, 2009.


Use of estimates


The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period.  Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of the Company’s financial position and results of operations.


Development Stage Activities


The Company is a development stage company as defined by Statement of Financial Accounting Standards No. 7 “Accounting and Reporting by Development Stage Enterprises” (“SFAS No. 7”).  Although the Company has recognized some nominal amount of revenue since inception, the Company is still devoting substantially all of its efforts on establishing the business and, therefore, still qualifies as a development stage company. All losses accumulated since inception have been considered as part of the Company’ development stage activities.


Going Concern


As reflected in the accompanying financial statements, the Company had a deficit accumulated during the development stage at June 30, 2009 and a net loss and cash used in operations for the interim period ended June 30, 2009, with no revenues during the period.

- 7 -

While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations.  Management intends to raise additional funds by way of a public or private offering.  Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern.  While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect.  The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


Cash equivalents


The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.


Property and equipment


Property and equipment are recorded at cost.  Expenditures for major additions and betterments are capitalized.  Maintenance and repairs are charged to operations as incurred.  Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives ranging from five (5) years to seven (7) years.  Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.


Impairment of long-lived assets


The Company follows Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”) for its long-lived assets.  The Company’s long-lived assets, which include property and equipment and software, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.


The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts.  Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.  Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.  The Company determined that there were no impairments of long-lived assets as of June 30, 2009 or 2008.


Fair Value Measurement


The Company's financial instruments as defined by SFAS No. 107, "Disclosures about Fair Value of Financial Instruments," include cash, prepaid expenses, accounts payable, accrued expenses, accrued interest and other current liabilities.  All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at June 30, 2009 and December 31, 2008. The Company’s notes payable and notes payable – related parties approximates the fair value of such instrument based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at June 30, 2009 and 2008.


In September 2006, the FASB issued FASB Statement No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of SFAS 157 were adopted January 1, 2008.

 

SFAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under SFAS 157 are described below: 


Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities.

- 8 -

Level 2 - Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 - Prices or valuation techniques that require inputs that are both significant to fair value measurement and unobservable (supported by little or no market activity).

The Company's cash instruments are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.


Revenue recognition


The Company follows the guidance of the United States Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) No. 101 “Revenue Recognition” (“SAB No. 101”), as amended by SAB No. 104 (“SAB No. 104”) for revenue recognition.  The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.  The Company will derive royalties from the planned license of the biopharmaceutical products current under the development. Royalties will be recognized as revenue when the amounts are contractually earned, fixed and determinable, and there is substantial probability of collection.


Recent Accounting Pronouncements

FAS 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162 will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative.   This Statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009, except for nonpublic nongovernmental entities that have not followed the guidance included in the AICPA Technical Inquiry Service Section 5100, “Revenue Recognition,” paragraphs 38–76.

FAS 167, Amendments to FASB Interpretation No. 46(R) Consolidation of Variable Interest Entities is effective at the start of a company’s first fiscal year beginning after November 15, 2009, or January 1, 2010 for companies reporting earnings on a calendar-year basis. FAS 167 retains the scope of Interpretation 46(R) with the addition of entities previously considered qualifying special-purpose entities, as the concept of these entities was eliminated in Statement 166. FAS 167 amends Interpretation 46(R) to require an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. Additionally, an enterprise is required to assess whether it has an implicit financial responsibility to ensure that a variable interest entity operates as designed when determining whether it has the power to direct the activities of the variable interest entity that most significantly impact the entity’s economic performance.

FAS 166, Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140 is effective at the start of a company’s first fiscal year beginning after November 15, 2009, or January 1, 2010 for companies reporting earnings on a calendar-year basis. Earlier application is prohibited. FAS 166 has the same scope as Statement 140, accordingly, it applies to all entities. FAS 166 clarifies that the objective of paragraph 9 of Statement 140 is to determine whether a transferor and all of the entities included in the transferor’s financial statements being presented have surrendered control over transferred financial assets. FAS 166 modifies the financial-components approach used in Statement 140 and limits the circumstances in which a financial asset, or portion of a financial asset, should be derecognized when the transferor has not transferred the entire original financial asset to an entity that is not consolidated with the transferor in the financial statements being presented and/or when the transferor has continuing involvement with the transferred financial asset. FAS166 defines the term participating interest to establish specific conditions for reporting a transfer of a portion of a financial asset as a sale. It requires that a transferor recognize and initially measure at fair value all assets obtained (including a transferor’s beneficial interest) and liabilities incurred as a result of a transfer of financial assets accounted for as a sale.

- 9 -

FAS 165 “Subsequent Events” is effective for interim and annual periods ending after June 15, 2009. FAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, FAS 165 sets forth: (i) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This Statement does not apply to subsequent events or transactions that are within the scope of other applicable generally accepted accounting principles (GAAP) that provide different guidance on the accounting treatment for subsequent events or transactions. FAS 165 requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, that is, whether that date represents the date the financial statements were issued or were available to be issued.

FAS 163 “Accounting for Financial Guarantee Insurance Contracts” is effective January 1, 2009 except for disclosures about the risk-management activities of the insurance enterprise be effective for the first period (including interim periods) beginning after issuance of this Statement. Except for those disclosures, earlier application is not permitted. FAS 163 requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. FAS 163 also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities. The effect of adoption of FAS 163 on the Company’s financial position and results of operations is not expected to be material.

 FAS 161 “Disclosures about Derivative Instruments and Hedging Activities”, which is effective January 1, 2009 requires enhanced disclosures about derivative instruments and hedging activities to allow for a better understanding of their effects on an entity’s financial position, financial performance, and cash flows. Among other things, FAS 161 requires disclosure of the fair values of derivative instruments and associated gains and losses in a tabular format. The adoption of FAS 161 will not affect the Company’s financial position or results of operations.

In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in developing an estimate of expected term of "plain vanilla" share options in accordance with SFAS No. 123 (R), Share-Based Payment.  In particular, the staff indicated in SAB 107 that it will accept a company's election to use the simplified method, regardless of whether the company has sufficient information to make more refined estimates of expected term. At the time SAB 107 was issued, the staff believed that more detailed external information about employee exercise behavior (e.g., employee exercise patterns by industry and/or other categories of companies) would, over time, become readily available to companies. Therefore, the staff stated in SAB 107 that it would not expect a company to use the simplified method for share option grants after December 31, 2007. The staff understands that such detailed information about employee exercise behavior may not be widely available by December 31, 2007. Accordingly, the staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The Company currently uses the simplified method for “plain vanilla” share options and warrants, and will assess the impact of SAB 110 for fiscal year 2009. It is not believed that this will have an impact on the Company’s financial position, results of operations or cash flows.

NOTE 3 – AGREEMENT WITH BIOCHECK, INC.


On December 15, 2003, the Company entered into a development and marketing agreement with BioCheck Inc. for the development and marketing of diagnostic, prognostic, or bio-analytical products.  The agreement was modified as of July 21, 2008. Under the agreement, the Company will receive license fees equal to 9% of the gross revenue of the direct sale by BioCheck, Inc. of any products and 25% of any sublicensing revenue received by BioCheck, Inc. As of June 30, 2009 no revenues were generated. Prior to its modification the agreement provided certain minimum annual royalty to be paid to the Company. The provision for minimum royalty payments has been eliminated. Therefore the receivable of $50,000 that was recognized was charged to bad debt in 2008.


NOTE 4 – RELATED PARTY TRANSACTIONS


An officer of the Company allows the Company to use space in his offices for records keeping and other business purposes.  The Company pays no rent for this space.  The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.  This same officer also provides services to the Company in the form of bookkeeping and tax preparation, for which the Company is billed. At June 30, 2009 and December 31, 2008 the Company owed the officer’s business $131,738 and $100,842, respectively, which is included in accrued expenses – related parties in the financial statements.

- 10 -

At June 30, 2009 the Company owed an officer $95,000 for unpaid salary pursuant to an agreement to pay $5,000 per month through September 30, 2006.  


For additional related party transactions, see Note 5.


NOTE 5 – NOTES PAYABLE


On September 1, 2005, the Company obtained an unsecured loan in the amount of $25,000 from a corporate officer, $12,500 of which was repaid during 2008. The agreement provides for repayment of principal and interest accrued at 6% per annum at September 1, 2008. At June 30, 2009 the principal balance and accrued interest of $4,909 were unpaid.


On November 25, 2005, the Company obtained an unsecured loan in the amount of $1,000 from an unrelated third party. The agreement provides for repayment of principal and interest accrued at 6% per annum at December 1, 2008.  At June 30, 2009 the principal balance and accrued interest of $216 were unpaid.


On November 29, 2005, the Company obtained an unsecured loan in the amount of $10,000 from a corporate officer. The agreement provides for repayment of principal and interest accrued at 6% per annum at December 1, 2008.  At June 30, 2009, the principal balance and accrued interest of $2,152 were unpaid.


On November 19, 2007, the Company obtained an unsecured loan in the amount of $10,000 from an unrelated third party. The agreement provides for repayment of principal and interest accrued at 6% per annum at November 19, 2009.  At June 30, 2009 the Company had accrued interest of $968.


On October 16, 2008, the Company obtained an unsecured loan in the amount of $16,000 from a corporate officer. The agreement provides for repayment of principal and interest accrued at 6% per annum at October 16, 2011. At June 30, 2009, the Company had accrued interest of $678.


On October 28, 2008, the Company obtained an unsecured loan in the amount of $5,000 from a related party. The agreement provides for repayment of principal and interest accrued at 6% per annum at October 28, 2011.  At June 30, 2009, the Company had accrued interest of $201.


On November 3, 2008, the Company obtained an unsecured loan in the amount of $4,000 from a related party. The agreement provides for repayment of principal and interest accrued at 6% per annum at November 3, 2011.  At June 30, 2009, the Company had accrued interest of $151.


On December 1, 2008, the Company obtained an unsecured loan in the amount of $3,500 from a corporate officer. The agreement provides for repayment of principal and interest accrued at 6% per annum at December 1, 2011.  At June 30, the Company had accrued interest of $121.


On February 12, 2009, the Company obtained an unsecured loan in the amount of $15,000 from a corporate officer. The agreement provides for repayment of principal and interest accrued at 6% per annum at February 12, 2012.  At June 30, 2009, the Company had accrued interest of $340.


On February 12, 2009, the Company obtained an unsecured loan in the amount of $5,000 from a related party. The agreement provides for repayment of principal and interest accrued at 6% per annum at February 12, 2012.  At June 30, 2009, the Company had accrued interest of $113.


On April 6, 2009, the Company obtained an unsecured loan in the amount of $15,000 from a related party. The agreement provides for repayment of principal and interest accrued at 6% per annum at April 6, 2012.  At June 30, 2009, the Company had accrued interest of $210.


On May 13, 2009, the Company obtained an unsecured loan in the amount of $12,500 from a related party. The agreement provides for repayment of principal and interest accrued at 6% per annum at May 13, 2012.  At June 30, 2009, the Company had accrued interest of $99.


On May 15, 2009, the Company obtained an unsecured loan in the amount of $13,000 from a corporate officer. The agreement provides for repayment of principal and interest accrued at 6% per annum at May 15, 2012.  At June 30, 2009, the Company had accrued interest of $98.

- 11 -

On June 15, 2009, the Company obtained an unsecured loan in the amount of $750 from a related party. The agreement provides for repayment of principal and interest accrued at 6% per annum at June 15, 2012.  At June 30, 2009, the Company had accrued interest of $2.


NOTE 6 – CAPITAL STOCK


Common Stock


During the six months ended June 30, 2009 the Company did not sell any shares of common stock.


NOTE 7 – STOCK OPTIONS


During 2001, the board of directors and the stockholders of the Company approved a stock option plan which provides for the granting of options to purchase up to 2,000,000 shares of common stock, pursuant to which officers, directors, advisers and consultants are eligible to receive incentive and/or non-statutory stock options. The options are exercisable for a period of up to 10 years from date of grant at an exercise price which is not less than the fair value on date of grant, except that the exercise period of options granted to a stockholder owning more then 10% of the outstanding capital stock may not exceed 5 years with the exercise option price not less then 110% of the fair value of the common stock at date of grant. The options granted vest upon grant through 5 years.  At June 30, 2009, the Company has granted all 2,000,000 options permitted under this plan of which 300,000 expired in 2008.


On July 13, 2004, the board of directors and the stockholders of the Company approved a stock option plan which provides for the granting of options to purchase up to 5,000,000 shares of common stock, pursuant to which officers, directors, advisers and consultants are eligible to receive incentive and/or non-statutory stock options. The options are exercisable for a period of up to 10 years from date of grant at an exercise price which is not less than the fair value on date of grant, except that the exercise period of options granted to a stockholder owning more then 10% of the outstanding capital stock may not exceed 5 years with the exercise option price not less then 110% of the fair value of the common stock at date of grant. The options granted vest upon grant through 5 years. At June 30, 2009, the Company has granted 590,000 options under this plan.


In the six months ended June 30, 2009, the Company did not grant any options.


Stock options activity under the plans is summarized as follows:


 

Number of Stock Options

 

Weighted Average Exercise Price

 

 

 

 

Options at December 31, 2008

   2,290,000

 

$0.55

 

 

 

 

Options at June 30, 2009

   2,290,000

 

$0.55

 

 

 

 


As of June 30, 2009 4,410,000 options are available for future grant under 2004 Plan and 300,000 options are available under 2001 Plan. A summary of the options outstanding and exercisable as of June 30, 2009 is as follows:


 

Number of

Stock

Options

Weighted

Average

Exercise

Price

Weighted Average

Remaining Contractual

Life in Years

 

 

 

 

Options outstanding

2,290,000

$

0.55

4.7

Options exercisable

2,290,000

$

0.55

4.7


 

- 12 -

NOTE 8 — COMMITMENTS AND CONTINGENCIES



On August 1, 2001, the Company entered into an agreement with William Garland, PhD. In exchange for his services as the Company’s vice president and chief operating officer, he will receive a salary of $5,000 per month.  Additionally, he was to receive options to purchase 5,000 shares of the Company’s common stock exercisable at $3.00 each per month.  The Company granted to Mr. Garland 30,000 options on August 1, 2001 under this agreement.  Subsequently, the Company and Mr. Garland amended this agreement eliminating the monthly options but the Company has continued to pay $5,000 plus expense reimbursements and has also granted to Mr. Garland 440,000 options under the 2001 stock option plan. The agreement was terminated September 30, 2006.


In July 2006, Comparative Biosciences Inc. (“CompBio”) , a company that AngioGenex hired to breed and house a colony of its proprietary “ID-Knockout” mice, sued the Company claiming approximately $200,000 in unpaid invoices. AngioGenex’s response included counter-claims for CompBio’s breaches of contract, as well as a number of business torts. On November 6, 2007 the parties agreed to a disposition of the suit under a stipulated judgment and settlement agreement pursuant to which: CompBio must return the laboratory mice and all scientific data from the research, CompBio agrees to forego all intellectual property rights in the mice and in the research, that it acknowledges belong to AngioGenex, and AngioGenex agreed to pay the CompBio $55,000 in installments over a 5-year period, plus accumulated interest at 5% per annum. The stipulated judgment and settlement agreement was filed with the court by November 15. At June 30, 2009 the Company has made $17,500 of payments to CompBio pursuant to the settlement agreement, and has accrued interest of $3,344. The Company has not made the required payment for the fourth quarter of 2008 and the two quarters of 2009, and is in default of this settlement agreement. Under the terms of the agreement upon receipt of written notification of default from CompBio the Company has five days to cure. Failure by the Company to cure the default results in an increase in the settlement amount to $75,000 plus retroactive interest of 5% on the balance. The Company has not received any notification of default from CompBio.



- 13 -

Item 2.  Management’s Discussion and Analysis or Plan of Operations


THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INVOLVE A HIGH DEGREE OF RISK AND UNCERTAINTY. ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACTS, INCLUDED IN OR INCORPORATED BY REFERENCE INTO THIS FORM 10-Q ARE FORWARD-LOOKING STATEMENTS. IN ADDITION, WHEN USED IN THIS DOCUMENT, THE WORDS “ANTICIPATE,” “ESTIMATE,” “PROJECT,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS DUE TO RISKS AND UNCERTAINTIES THAT EXIST IN OUR OPERATIONS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS INCLUDING AMONG OTHERS, THE RISK THAT OUR PRODUCT DEVELOPMENT PROGRAMS WILL NOT PROVE SUCCESSFUL, THAT WE WILL NOT BE ABLE TO OBTAIN FINANCING TO COMPLETE ANY FUTURE PRODUCT DEVELOPMENT, THAT OUR PRODUCTS WILL NOT PROVE COMPETITVE IN THEIR MARKETS. THESE RISKS AND OTHERS ARE MORE FULLY DESCRIBED IN OUR ANNUAL REPORT ON FORM 10-K. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE ANTICIPATED, ESTIMATED OR PROJECTED.


ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS INCLUDED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT GIVE ANY ASSURANCES THAT THESE EXPECTATIONS WILL PROVE TO BE CORRECT. WE UNDERTAKE NO OBLIGATION TO PUBLICLY RELEASE THE RESULT OF ANY REVISIONS TO SUCH FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.


The following discussion and analysis should be read in conjunction with our financial statements and the notes thereto appearing in Part I, Item 1.


Company Overview


AngioGenex is a development stage biotechnology company focused on the discovery and development of compounds useful for the diagnosis and treatment of cancer. Our proprietary technology is based on the research work of Dr. Robert Benezra and his colleagues at Memorial Sloan Kettering Cancer Center, who established the role of the Id (inhibition of differentiation) genes and corresponding Id proteins in the formation of new blood vessels (angiogenesis) required for tumor growth and metastasis. This intellectual property includes the exclusive worldwide rights to certain patents pending for Id based anti-angiogenesis anti-cancer biotechnology that we acquired in 2000 from the Sloan Kettering Institute for Cancer Research and subsequently from sponsored research. In addition, our intellectual property includes proprietary molecules that we generated as a result of in-house screening and out-sourced contract research.  These organic molecules, particularly AGx8 and AGx51 appear to inhibit the Id related process responsible for the formation of new blood vessels and consequent tumor growth, as well as inhibiting metastases, or the spread of the disease.  We also own substantial intellectual property in the form of “know-how” and trade secrets related in the Id field that resulted from our own efforts and other out-sourced research.  We have filed for patent protection covering these molecules out of which we identified AGx8 and AGx51 as pre-clinical lead drug candidates.  Subsequent tests have shown them to inhibit the establishment of tumors and their spread.  These results have been published in peer reviewed scientific journals and presented at major conferences.

 

Our therapeutic focus is on the identification and development of orally active molecules capable of inhibiting Id activity and preventing the formation of blood vessels that support the growth of cancerous tumors. In addition, we have sponsored other research on the modulation of Id genes and proteins that may be useful in the treatment of non-oncological diseases, such as age related macular degeneration and diabetic retinopathy, in which a surplus in the growth of blood vessels is an important part of the underlying pathology of such diseases.



- 14 -

We have sub-licensed our rights to develop Id-based prognostics and diagnostics to BioCheck, Inc. (“sub-license”), a leading producer of clinical diagnostic assays .. In June 2004 we signed a Development and Marketing Agreement with BioCheck under which we assigned BioCheck the exclusive rights to develop and market cancer prognostic and diagnostics in return for royalties and milestone payments. Pursuant to this sub-license BioCheck has been developing monoclonal antibodies for all four Id proteins (Id1, Id2, Id3, and Id4) for use in standard enzyme linked immunoassay or ELISA type assay tests and for kits for the detection of the proteins in tumors and other tissues.  We have filed patent applications covering these antibodies. Under the terms of the BioCheck agreement, we own the rights to any therapeutic applications, while BioCheck retains the diagnostic rights, subject to our right to royalties and milestones.


Since the formation in 1999, our efforts have been principally devoted to in-licensing our intellectual property, research and development activities, entering into collaborative agreements, recruiting management personnel and advisors, and raising capital.


Our current business strategy is to concentrate our financial resources primarily on the further development of our proprietary potential anti-cancer lead drug compounds.


Product Research and Development Plans


Our current plan of operation for the next 12 months primarily involves out-sourced contract research and development activities on the design of more potent and efficient Id protein inhibitors based on the two organic molecules which have exhibited anti-Id protein properties. Given sufficient capital resources, we plan to continue to test these organic molecules in established animal tumor models for their ability to block blood vessel formation and inhibit tumor growth. This testing as well as further refinement of the structure of active molecules is expected to result in the identification of a lead clinical therapeutic drug compound. The lead compound would then be subjected to further testing in animals to obtain preliminary knowledge of its properties including safety. After the receiving promising preliminary data on the lead compound, it would be subjected to the more stringent tests required to complete the FDA requirements for an IND (Investigational New Drug Application). Such additional research and testing necessary for an IND application will require significant capital expenditures of approximately $1.5 million and will only be possible if we raise additional capital through equity financings.


We intend to contract out substantially all of the research and development work on our potential anti-cancer lead drug compounds. No employees were hired in the first two quarters of 2009. We do not expect to hire employees during the next twelve months unless we raise substantial additional capital in the range of $5 million.


Our research and development and related activities may vary significantly from current plans depending on numerous factors, including changes in the costs of such activities from current estimates, the results of our research and development programs, technological advances, determinations as to commercial viability and the status of competitive products. The focus and direction of our operations will also be dependent on the establishment of our collaborative arrangements with other companies, the availability of financing and other factors. We expect our development costs to increase as our lead anti-cancer drug compound or compounds enter the later stages of development.


Liquidity and Capital Resources

  

Since inception, we have financed our operations through the private placement of equity and debt securities, as well as loans from certain of our officers and directors.


In February 2008 we sold 19,500 shares in a private placement for gross proceeds of $6,500. In June 2008 we sold 150,000 shares of common stock at $0.333 per share with net proceeds of $50,000. In September 2008 we sold 30,000 shares of common stock at $0.333 per share with net proceeds of $10,000. These private placements were exempt from registration pursuant to Section 4(2) of the Securities Act. In October 2008, 50,000 shares were issued in exchange for reduction of note payable from related party of $12,500.


As of June 30, 2009, we had $476 in cash as compared to $3,493 in cash at December 31, 2008. We do not have any available lines of credit.



- 15 -

Net cash used in operating activities during the six months ended June 30, 2009 was $64,267 resulting in a net loss of $114,524 after taking into account significant non-cash charges for operating expenses during the quarter and other adjustments. We pay no rent to Martin Murray, a director and our Chief Financial Officer, Secretary and Treasurer, for the use of office space for file keeping and other business purposes.

  

As of June 30, 2009, our current liabilities exceeded our current assets by $662,960.  We anticipate that our minimum cash requirements to continue as a going concern for the next twelve months will be at least $70,000.


We plan to finance our needs principally from the following:


•

our existing capital resources and interest earned on that capital;


•

through bridge financing from third parties, existing shareholders, and insiders;


•

through future private placement financing.


The current rate of our cash usage raises substantial doubt about our ability to continue as a going concern, absent any new sources of significant cash flows. We believe that we have sufficient capital resources to finance our plan of operation for at least the next six months. However, this is a forward-looking statement, and there may be changes that could consume available resources before such time. Our long term capital requirements and the adequacy of our available funds will depend on many factors, including the eventual reporting company costs, public relations fees, patent costs for filing, prosecuting, maintaining and defending our patent rights, among others.


We do not currently have sufficient capital resources to finance our plan of operation through the fourth quarter of 2009. We will need to raise additional capital during the fourth quarter of 2009 in order to fund our plan of operation through 2009. Our long term capital requirements and the adequacy of our available funds will depend on many factors, including our reporting company costs, patent costs for filing, prosecuting, maintaining and defending our patent rights, among others.


We will need to raise substantial additional capital through equity or debt financings or generate additional revenue to complete our development of lead anti-cancer drug compounds. We cannot assure you that we will generate sufficient additional capital or revenues, if any, to fund our operations through the fourth quarter of 2009, that any future equity financings will be successful, or that other potential financings through equity offerings, or otherwise, will be available on acceptable terms or at all. Having insufficient funds may require us to delay, scale back, or eliminate some or all of our development programs, relinquish some or even all rights to product candidates at an earlier stage of development, or renegotiate less favorable terms that we would otherwise. If we are unable to raise additional capital through the fourth quarter of 2009 we may have to further curtail or cease operations.

  

Critical Accounting Policies and Estimates.


This discussion and analysis of our financial condition and results of operations are based on our financial statements that have been prepared under accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from those estimates. We have disclosed all significant accounting policies in note 2 to the financial statements included in our Form 10-K. Our critical accounting policies are:

 

Revenue recognition : The Company follows the guidance of the United States Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) No. 101 “Revenue Recognition” (“SAB No. 101”), as amended by SAB No. 104 (“SAB No. 104”) for revenue recognition.  The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.  The Company will derive royalties from the planned license of the biopharmaceutical products current under the development. Royalties will be recognized as revenue when the amounts are contractually earned, fixed and determinable, and there is substantial probability of collection.

- 16 -


Research, development costs: Research and development costs are expensed as incurred.


Use of estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Off Balance Sheet Arrangements


We do not have any off-balance sheet arrangements.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk


Not required


Item 4.   Controls and Procedures.

  

Evaluation of disclosure controls and procedures.


In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by our management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of June 30, 2009. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, and in light of the previously identified material weakness in internal control over financial reporting, as of December 31, 2008, relating to fundamental elements of an effective control environment described in the 2008 Annual Report on Form 10-K, our principal executive officer and our principal financial officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2009. There has been no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There were no such change in our internal control over financial reporting because of the timing of the filing of Form 10-K in relation to the filing of the Form 10-Q, there was insufficient time for us to implement any material changes in internal control over financial reporting.   



- 17 -

PART II – OTHER INFORMATION

  

Item 1. Legal Proceedings.


None.


Item 1A.  Risk Factors


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


Item 2. Unregistered Sales of Securities and Use of Proceeds.


None.


Item 3. Defaults Upon Senior Securities.


None.


Item 4. Submission of Matters to a Vote of Security Holders.


None.


Item 5. Other Information.

  

None.

  

Item 6. Exhibits


 

(a)

Exhibits

  

 

3.1

Amended Articles of Incorporation dated December 30, 2005 (Incorporated by reference to exhibit 3.4 to the Form 8-K previously filed by AngioGenex on December 30, 2005 (File No. 000-26181))


 

3.2

Bylaws of Registrant (Incorporated by reference to Exhibit 3b to the Form 10SB12G previously filed by ECLIC on May 24, 1999 (File No. 000-26181))


 

31.1

Certification of Principal Executive Officer pursuant to rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

  

 

31.2

Certification of Principal Financial Officer pursuant to rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

  

 

32.1

Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

  

 

32.2

Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

- 18 -

SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, AngioGenex has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 



 

ANGIOGENEX, INC.

 

 

August 14, 2009

By:  

/s/ William Garland

 

William Garland

Chief Executive Officer

 

 

August 14, 2009

By:  

/s/ Martin Murray

 

Martin Murray

Chief Financial Officer, Secretary, and

Treasurer (Principal Financial and

Accounting Officer)




- 19 -