-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MhClF2ulWZUlmLW1HvB0spnMLxmNyccAv7GIlF9f06AL5YXML4vEfnArTMAgILLC Q0uF8zgcoogCrEW3NQUDtA== 0000225211-04-000010.txt : 20041006 0000225211-04-000010.hdr.sgml : 20041006 20041005195234 ACCESSION NUMBER: 0000225211-04-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20041006 DATE AS OF CHANGE: 20041005 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BICO INC/PA CENTRAL INDEX KEY: 0000225211 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS CHEMICAL PRODUCTS [2890] IRS NUMBER: 251229323 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10822 FILM NUMBER: 041067138 BUSINESS ADDRESS: STREET 1: 2275 SWALLOW HILL ROAD CITY: PITTSBURGH STATE: PA ZIP: 15220 BUSINESS PHONE: 4122791059 MAIL ADDRESS: STREET 1: 2275 SWALLOW HILL ROAD CITY: PITTSBURGH STATE: PA ZIP: 15220 FORMER COMPANY: FORMER CONFORMED NAME: BIOCONTROL TECHNOLOGY INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CORATOMIC INC DATE OF NAME CHANGE: 19861223 10-Q 1 b10q0304.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 2004 Commission file number 0-10822 BICO, INC. (Exact name of registrant as specified in its charter) Pennsylvania 25-1229323 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification no.) 2275 Swallow Hill Road, Bldg. 2500, Pittsburgh, PA 15220 (Address of principal executive offices) (Zip Code) (412) 279-1059 Registrant's telephone number, including area code Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No X As of March 31, 2004, 7,387,507,775 shares of BICO, Inc. common stock, par value $.10 were outstanding. BICO, Inc. and Subsidiaries (Debtor in Possession) Consolidated Balance Sheets
March 31, 2004 Dec. 31, 2003 ------------- ------------- CURRENT ASSETS Cash and equivalents $ 388,947 $ 448,180 ------------- ------------- TOTAL CURRENT ASSETS 388,947 448,180 OTHER ASSETS Related Party Receivables Notes receivable 317,137 317,137 Interest receivable 16,047 16,047 ------------- ------------- 333,184 333,184 Other notes receivable 546,533 546,533 Other interest receivable 1,384 1,384 ------------- ------------ 881,101 881,101 Allowance for notes receivable (881,101) (881,101) ------------- ------------ - - TOTAL ASSETS $ 388,947 $ 448,180 ============= ============= The accompanying notes are an integral part of these statements.
F-2 BICO, Inc. and Subsidiaries (Debtor in Possession) Consolidated Balance Sheets (Continued)
March 31, 2004 Dec. 31, 2003 ------------ ------------- CURRENT LIABILITIES $ - $ - Liabilities subject to compromise 8,129,450 8,154,100 Liabilities in excess of assets held for sale 184,773 184,773 ------------ ------------- 8,314,223 8,338,873 COMMITMENTS AND CONTIGENCIES STOCKHOLDERS' EQUITY (DEFICIENCY) Common stock, par value $.10 per share, authorized 8,000,000,000 shares at Mar. 31, 2004 and Dec. 31, 2003, outstanding 7,387,507,775 shares at Mar. 31, 2004 and 7,138,933,127 shares at Dec. 31, 2003 738,750,778 738,750,778 Additional paid-in capital (468,788,830) (468,788,830) Accumulated deficit (277,887,197) (277,852,641) ------------- ------------- TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) (7,925,249) (7,890,693) ------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) $ 388,974 $ 448,180 ============= ============= The accompanying notes are an integral part of these statements.
F-3 BICO, INC. AND SUBSIDIARIES (Debtor in Possessions) CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2004 2003 ------------- ------------- Revenues Net sales $ 5,000 $ 154,734 ------------- ------------ 5,000 154,734 Costs and expenses Cost of products sold - 71,109 General and administrative 39,556 265,442 ------------- ------------- 39,556 336,551 ------------- ------------- Loss from operations (34,556) (181,817) Other (income) and expense Forgiveness of debt - (1,292,335) Interest expense - 42,694 ------------- ------------- - (1,249,641) ------------- ------------- Net income (loss) $ (34,556) $ (7,224,247) ============= ============== Income (loss) per common share - Basic: Net Income (Loss) $ 0.000 $ (0.000) Less: Preferred stock dividends (0.000) (0.000) ------------- ------------- Net income (loss) attributable to common stockholders: $ 0.000 $ (0.000) ============= ============= Income (loss) per common share - Diluted: Net Income (loss) $ 0.000 $ (0.000) Less: Preferred stock dividends (0.000) (0.000) ------------- ------------- Net income (loss) attributable to common stockholders: $ 0.000 $ (0.000) ============= ============= The accompanying notes are an integral part of these statements.
F-4 BICO, Inc. and Subsidiaries (Debtor in Possession) Consolidated Statements of Cash Flows
For the three months ended March 31, 2003 2002 ------------- ------------- Cash flows used by operating activities: Net income (loss) $ (34,556) $ 1,067,824 Adjustments to reconcile net loss to net cash used by operating activities: Unrelated investors' interest in susidiaries - (1,440) (Increase)decrease in accounts receivable - 50,096 Increase in other liabilities - 42,694 Increase in liabilities in excess of assets held for sale - 10,650 Forgiveness of debt - (1,292,335) ------------- ------------- Net cash flow (used) by operating activities - (122,511) ------------- ------------- Cash flows from investing activities: Payments received on notes receivable - 46,336 ------------- ------------- Net cash provided (used) by investing activites - 46,336 ------------- ------------- Cash flows from financing activities: Settlement of liabilities subject to compromise (24,650) - ------------- ------------- Net cash provided by financing activities (24,650) - _____________ _____________ Net increase (decrease) in cash (59,206) (76,173) Cash and cash equivalents, beginning of year 448,180 81,682 ------------- ------------- Cash and cash equivalents, end of year $ 388,974 $ 5,509 ============= ============= The accompanying notes are an integral part of these statements.
BICO, INC. (Debtor in Possession) NOTES TO FINANCIAL STATEMENTS NOTE A - Proceedings under Chapter 11 of the Bankruptcy Code On March 18, 2003 ("Petition Date"), BICO, Inc., filed a voluntary petition for reorganization under Chapter 11 of the Federal bankruptcy laws ("Bankruptcy Code") in the United States Bankruptcy Court for the Western District of Pennsylvania ("Bankruptcy Court"). The Company and its subsidiaries incurred substantial losses in 2002 and in prior years and funded their operations and product development through the sale of common and preferred stock and issuance of debt instruments. In late 2001 and continuing throughout 2002, BICO experienced difficulty raising monies to support its own operations and controlling costs. During 2002, BICO began selling its assets to provide capital to meet its obligations. BICO's financial situation continued to deteriorate throughout 2002. Without necessary funding, BICO was unable to continue operations and to retain sufficient counsel to defend itself from litigation matters. In 2002, BICO was sued by several alleged creditors who obtained default judgments against BICO and a subsidiary. The judgment holders thereafter levied on property of BICO, scheduling an execution sale of assets. The threat of losing substantial assets to a single creditor precipitated the need to seek protection under Chapter 11 and to reorganize the Company. As a Debtor-in-Possession, BICO is authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the approval of the Court, after notice and an opportunity for a hearing. Under the Bankruptcy Code, actions to collect pre- petition indebtedness, as well as most other pending litigation, are stayed and other contractual obligations against the Company may not be enforced. In addition, under the Bankruptcy Code, the Company may assume or reject executor contracts, including lease obligations. Parties affected by these rejections may file claims with the Court, in accordance with the reorganization process. Absent an order of the Court, substantially all pre-petition liabilities are subject to settlement under a plan of reorganization which has been approved by creditors and equity holders and confirmed by the Court. Upon emergence from bankruptcy, the amounts reported in subsequent financial statements may materially change due to the restructuring of the Company's assets and liabilities as a result of the Plan of Reorganization and the application of the provisions of Statement of Position 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code," (SOP 90-7), with respect to reporting upon emergence from Chapter 11 ("Fresh-Start" accounting). Changes in accounting principles required under generally accepted accounting principles within 12 months of emerging from bankruptcy are required to be adopted at the date of emergence. Additionally, the Company may choose to make changes in accounting practices and policies at that time. For all of these reasons, financial statements for periods subsequent to emergence from Chapter 11 may not be comparable with those of prior periods. The accompanying Consolidated Financial Statements have been prepared on a going concern basis, which assumes continuity of operations and realization of assets and satisfaction of liabilities in the ordinary course of business, and in accordance with SOP-7. Accordingly, all pre-petition liabilities subject to compromise have been segregated in the Consolidated Balance Sheets and classified as Liabilities Subject to Compromise, at the estimated amount of allowable claims. Liabilities not subject to compromise are separately classified as current and non-current. NOTE B - Basis of Presentation The accompanying consolidated financial statements of BICO, Inc. (the "Company") and its 52% owned subsidiary, Diasense, Inc., and its 75% owned subsidiary, Petrol Rem, Inc., and its 99% owned subsidiary, ViaCirQ, Inc. (through October 13, 2003), and its 99% owned subsidiary, ViaTherm, Inc. (through October 13, 2003), and its 75% owned subsidiary, Rapid HIV Detection Corp., and its 98% owned subsidiary Ceramic Coatings Technologies, Inc., and its 100% owned subsidiary, B-A-Champ, Inc., have been prepared in accordance with generally accepted accounting principles for interim financial information, and with the instructions to Form 10-Q and Rule 10-01 Regulation S- X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes included in the Company's annual report on Form 10-K for the year ended December 31, 2003. The Company and its subsidiary Petrol Rem, Inc. filed voluntary petitions for Chapter 11 bankruptcy with the United States Bankruptcy Court for the Western District of Pennsylvania. As discussed in Note A, for financial reporting purposes, the consolidated financial statements have been prepared on a going concern basis. In addition, the debtor has applied the provisions of the American Institute of Certified Public Accountants Statement of Position 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code" ("SOP 90-7). Accordingly, all pre-petition liabilities subject to compromise have been segregated in the Balance Sheet and classified as Liabilities Subject to Compromise, at the estimate amount of allowable claims. Liabilities not subject to settlement are classified current and non-current. NOTE C - Liabilities Subject to Compromise Pursuant to Section 362 of the Bankruptcy Code, the commencement of the Chapter 11 Case imposed an automatic stay, applicable generally to creditors and other parties of interest, of: (1) the commencement or continuation of a judicial, administrative or other action or proceeding against the Debtor that was or could have been commenced prior to commencement of the Chapter 11 Case or to recover for a claim that arose prior to commencement of the Chapter 11 Case; (2) the enforcement against the Debtor or its property of any judgments obtained prior to commencement of the Chapter 11 Case; (3) the taking of any action to obtain possession of property of the Debtor or to exercise control over property of the Debtor; (4) the creation, perfection or enforcement of any lien against the property of the Debtor's bankruptcy estate; (5) any act to create, perfect or enforce against property of the Debtor any lien that secures a claim that arose prior to the commencement of the Chapter 11 Case; (6) the taking of any action to collection, assess or recover claims against the Debtor that arose before commencement of the Chapter 11 Case; (7) the setoff of any debt owing the Debtor that arose prior to commencement of the Chapter 11 Case against any claim against the Debtor; (8) the commencement or continuation of a proceeding before the United States Tax Court concerning the Debtor. Any entity may apply to the Bankruptcy Court, upon an appropriate showing of cause, for relief from the automatic stay to exercise the foregoing remedies, however, enforcement of judgments entered on these claims, if any, is expressly prohibited without further Bankruptcy Court approval. Petition Date liabilities that are expected to be settled as part of a plan of reorganization are separately classified in the consolidated balance sheet as Liabilities Subject to Compromise. Reductions in liabilities as a result of the bankruptcy proceedings are recognized as "Forgiveness of Debt" in the Consolidated Statements of Operations. NOTE D - Liabilities in Excess of Assets Held for Sale In March 2003, the Company and its subsidiary Petrol Rem, Inc. filed a voluntary petition for bankruptcy under Chapter 11 of the Bankruptcy Code. Following the filing, the Company's equity interests in Diasense, ViaCirq, and Viatherm were sold; Petrol Rem was liquidated in connection with its own bankruptcy plan; and the former operating assets at the Company's manufacturing facility were sold. Although these transactions all took place after the Chapter 11 filing, these efforts were underway at that time to dispose of these assets. The balance, $184,773, recognized as Liabilities in Excess of Assets Held for Sale represents the excess of the liabilities related to the carrying value of the assets held for sale in Diasense, Inc. In July 2004, the Company sold its equity and debt interest in Diasense, Inc. to an unrelated party for $80,000. NOTE E - Commitments and Contingencies Management of the Company believes that any liability arising from litigation through the effective date of the Company's reorganization will be either dismissed or settled through the plan of reorganization. NOTE F - Shareholders' Equity Under our Plan of Reoganization, confirmed by the Bankruptcy Court, all of our outstanding preferred stock as of the bankruptcy date, March 18, 2003 were cancelled. Prior to the bankruptcy date $248,574,648 shares of our common stock were issued in connection with preferred stock conversions. NOTE G - Subsequent Events On August 3, 2004 the Company, along with a joint plan proponent, PHD Capital, submitted a Plan of Reorganization. PHD Capital is an investment banking company and was used by the Company prior to the filing of the Chapter 11 as an investment banker to raise funds. None of the principals or insiders of the Company are principals or insiders of PHD Capital, nor have any members of PHD Capital ever held any positions with the Company. As of September 15, 2004, sufficient votes had been received from creditors to approve the Plan of Reorganization and at a hearing on September 23, 2004 the Court confirmed the plan subject to the Company becoming current with its SEC reporting. Management's Discussion and Analysis of Financial Condition and Cash Flows Liquidity and Capital Resources Our cash decreased to $388,974 as of March 31, 2004 from $448,180 as of December 31, 2003 primarily due to $34,556 net cash flow used by operating activities and settlement of $24,650 of liabilities subject to compromise. Results of Operations Prior to the Chapter 11 filing in the first quarter of 2003, we decided to voluntarily vacate our manufacturing facility in Indiana, PA. All manufacturing operations were ceased and no additional work was performed on any remaining contracts at the Indiana, PA facility. With the exception of ViaCirq substantially all operations of the Company were discontinued throughout 2003. We sold our equity interest in ViaCirq, Inc. on October 13, 2003 so these operations were also eliminated from our consolidations from that date forward. We have proposed a Joint Plan of Reorganization (the Plan) and have received the required acceptance by our creditors. Under the Plan we will not continue business operations as an independent entity. Instead, the Joint Plan Proponent, PHD Capital, anticipates combining a new entity, cXc Services, Inc. ("cXc"), into BICO. BICO will obtain 100% of the assets of cXc, including the exclusive licensing rights to a product known as a "web phone" and management expertise. In return, the shareholders of cXc will receive full voting, convertible, and preferred stock in BICO. The preferred stock shall be convertible at any time into an amount of common stock equal to 49.6% of the total stock issuable by BICO, but will not provide cXc with any priority over the common shareholders upon liquidation, nor any dividend or disbursement priority. The former shareholders of cXc will hold two of the three positions on the Board of Directors of BICO. BICO shall continue business operations as a publicly traded company with continuing infusions of capital and resources from selling additional shares or any other available source. Neither cXc nor its principals shall receive any funds currently held by BICO. Our sales and corresponding costs of products sold during the three months were $5,000 and zero respectively in 2004 compared to $154,734 and $71,109 in 2003. The decrease in sales resulted primarily from the cessation of all operations. The $5,000 of sales recognized in the first quarter of 2004 were from the assignment of the U.S. Army contract formerly held by our manufacturing division in Indiana. The operations for the first quarter of 2003 were all from ViaCirq, Inc.which continued in operations until we sold our equity interest in October 2003. General and Administrative expenses during the first three months decreased from $265,442 in 2003 to $39,556 in 2004. The decrease is primarily due to the fact that we further curtailed our operations. We recognized income of $1,292,335 due to forgiveness of debt due to our bankruptcy filing in the first quarter of 2003. There was no comparable item in the first quarter of 2004. Interest expense decreased from $42,694 for the first three months of 2003 to zero for the same period in 2004 because of our bankruptcy filing on March 18, 2003. PART II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities 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 and Reports on Form 8-K None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 6th day of October 2004. .. BICO, INC. By /s/ Anthony Paterra Anthony Paterra CEO and Director EX-1 2 exh1.txt CERTIFICATION OF CEO PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Anthony Paterra, CEO of BICO, Inc., certify that: (1) I have reviewed the quarterly report on Form 10-Q of BICO, Inc.; (2) Based upon my knowledge, this quarterly report does not contain any untrue statements of a material fact or omit to state a material fact necessary in order 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 upon my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition and results of operations of the registrant, as of, and for, the periods presented in this quarterly report; (4) I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and; a. have designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared; b. have evaluated the effectiveness of the registrant's disclosure controls and procedures within 90 days of the date of this quarterly report (the "Evaluation Date"); and c. have presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation Date; (5) I have disclosed, based on my most recent evaluation, to the registrant's auditors and to the audit committee of the registrant's board of directors (or persons performing the equivalent function): 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) 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 my most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. /s/ Anthony Paterra Anthony Paterra, CEO October 5, 2004 EX-2 3 exh2.txt CERTIFICATION OF CEO PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Anthony Paterra as CEO of BICO, Inc., (the "Company"), certify, pursuant to section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that: (1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2004 (the "Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d); and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Anthony Paterra Anthony Paterra, CEO October 5, 2004 -----END PRIVACY-ENHANCED MESSAGE-----