-----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, DapoM90rV3TTe9zWircKfK2KJjCHgiHeqYXagSa1eomr6o/b6McTwJzBHH3ghBDY 7qd2xLVp6Pphr7Orb9rMbA== 0000356446-96-000030.txt : 19961118 0000356446-96-000030.hdr.sgml : 19961118 ACCESSION NUMBER: 0000356446-96-000030 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PURE WORLD INC CENTRAL INDEX KEY: 0000356446 STANDARD INDUSTRIAL CLASSIFICATION: INVESTORS, NEC [6799] IRS NUMBER: 953419191 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-10566 FILM NUMBER: 96665690 BUSINESS ADDRESS: STREET 1: P O BOX 74 STREET 2: 376 MAIN STREET CITY: BEDMINSTER STATE: NJ ZIP: 07921 BUSINESS PHONE: 9082349220 MAIL ADDRESS: STREET 1: P O BOX 74 STREET 2: 376 MAIN STREET CITY: BEDMINSTER STATE: NJ ZIP: 07921 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN HOLDINGS INC /DE/ DATE OF NAME CHANGE: 19940411 FORMER COMPANY: FORMER CONFORMED NAME: COMPUTER MEMORIES INC /DE/ DATE OF NAME CHANGE: 19940411 EX-27 1 FDS --
5 This Schedule contains summary financial information extracted from the Form 10-QSB of Pure World, Inc. for the nine months ended September 30, 1996 and is qualified to its entirety by reference to such financial statements. 0000356446 PURE WORLD, INC. 1000 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 8,537 15 887 86 2,177 11,855 1,855 313 18,413 2,158 0 0 0 76 16,179 18,413 4,784 5,493 2,965 6,316 0 0 8 (831) 1 (832) 0 0 0 (832) (.11) (.11)
10QSB 2 FOR THE QUARTER ENDED SEPTEMBER 30, 1996 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No.: 0-10566 Pure World, Inc. (Exact name of small business issuer as specified in its charter) Delaware 95-3419191 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 376 Main Street, Bedminster, New Jersey 07921 (Address of principal executive offices) (908) 234-9220 (Issuer's telephone number) (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 Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _____ State the number of shares outstanding of each of the issuer's classes of common stock: As of October 31, 1996, the issuer had 7,644,387 shares of its common stock, par value $.01 per share, outstanding. Transitional Small Business Disclosure Format (check one): Yes No X PART I - FINANCIAL INFORMATION Item 1. - Financial Statements
PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (UNAUDITED) (000 Omitted) September 30, 1996 ------------- ASSETS Cash and cash equivalents $ 8,537 Trading securities 15 Accounts receivable, net of allowance for uncollectible accounts and returns and allowances of $86 801 Inventories, net 2,177 Other current assets 325 ------- Total current assets 11,855 ------- Securities available-for-sale 2,175 Furniture and equipment, net 1,542 Notes receivable from affiliates 535 Goodwill, net of accumulated amortization of $154 1,261 Other assets 1,045 ------- Total assets $18,413 ======= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable $ 266 Accrued expenses and other liabilities 1,892 ------- Total current liabilities 2,158 ------- Stockholders' equity: Common stock, par value $.01; 30,000,000 shares authorized; 7,644,691 shares issued and outstanding 76 Additional paid-in capital 43,663 Accumulated deficit ( 27,611) Unrealized gains on securities available-for-sale 127 ------- Total stockholders' equity 16,255 ------- Total liabilities and stockholders' equity $18,413 =======
See accompanying notes to consolidated financial statements.
PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (000 Omitted, except per share data) Three Months Ended September 30, 1996 1995 ----------------------- Revenues: Sales $ 1,469 $ 1,360 Net gains on marketable securities 6 108 Interest, dividend and other income 125 186 ------- ------- Total revenues 1,600 1,654 ------- ------- Expenses: Cost of goods sold 904 844 Personnel 475 326 Professional fees 199 234 Other 332 240 ------- ------- Total expenses 1,910 1,644 ------- ------- Income (loss) before income taxes ( 310) 10 Provision for income taxes - 2 ------- ------- Net income (loss) ($ 310) $ 8 ======= ======= Net income (loss) per share ($ .04) $ - ======= ======= Weighted average shares outstanding (in 000's) 7,680 7,957 ======= ======
See accompanying notes to consolidated financial statements.
PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (000 Omitted, except per share data) Nine Months Ended September 30, 1996 1995 ----------------------- Revenues: Sales $ 4,784 $ 4,638 Net gains on marketable securities 315 250 Interest, dividend and other income 394 602 ------- ------- Total revenues 5,493 5,490 ------- ------- Expenses: Cost of goods sold 2,965 2,811 Personnel 1,380 1,090 Professional fees 860 556 Other 1,119 820 ------- ------- Total expenses 6,324 5,277 ------- ------- Income (loss) before income taxes ( 831) 213 Provision for income taxes 1 47 ------- ------- Net income (loss) ($ 832) $ 166 ======= ======= Net income (loss) per share ($ .11) $ .02 ======= ======= Weighted average shares outstanding (in 000's) 7,697 7,752 ======= =======
See accompanying notes to consolidated financial statements.
PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (000 Omitted) Nine Months Ended September 30, 1996 1995 ----------------------- Cash flows from operating activities: Net income (loss) ($ 832) $ 166 Adjustments: Depreciation and amortization 218 200 Net trading securities and U.S. Treasury securities transactions 1,900 ( 389) Change in inventories ( 616) ( 262) Change in receivables 33 ( 52) Change in accounts payable and other accruals ( 187) ( 898) Other, net 33 60 ------- ------- Net cash provided by (used in) operating activities 549 ( 1,175) ------- ------- Cash flows from investing activities: Purchase of a business less cash acquired - ( 2,128) Purchase of furniture and equipment, net ( 277) ( 176) Purchase of securities available-for-sale ( 37) ( 227) Repayment of loans to affiliates 92 50 Investment in Gaia Herbs, Inc. ( 1,010) - Other, net ( 30) ( 86) ------- ------- Net cash used in investing activities ( 1,262) ( 2,567) ------- ------- Cash flows from financing activities: Repurchase of common stock ( 107) ( 31) Other, net - ( 5) ------- ------- Net cash used in financing activities ( 107) ( 36) ------- ------- Net decrease in cash and cash equivalents ( 820) ( 3,778) Cash and cash equivalents at beginning of period 9,357 13,427 ------- ------- Cash and cash equivalents at end of period $ 8,537 $ 9,649 ======= =======
See accompanying notes to consolidated financial statements. PURE WORLD, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 AND 1995 (Unaudited) 1. General ------- The accompanying unaudited consolidated financial statements of Pure World, Inc. and subsidiaries (the "Company") as of September 30, 1996 and for the three and nine month periods ended September 30, 1996 and 1995 reflect all material adjustments consisting of only normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. Certain information and footnote disclosures required under generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the year-end consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1995 as filed with the Securities and Exchange Commission. The results of operations for the three and nine month periods ended September 30, 1996 and 1995 are not necessarily indicative of the results to be expected for the entire year or any other period. 2. Marketable Securities --------------------- At September 30, 1996, marketable securities consisted of the following (in 000's):
Gross Gross Holding Holding Fair Cost Gains Losses Value --------- --------- --------- ------- Trading securities $ 15 $ - $ - $ 15 Securities available- for-sale 2,048 302 175 2,175 ------ ------ ------ ------ Total marketable securities $2,063 $ 302 $ 175 $2,190 ====== ====== ====== ======
All marketable securities were investments in common stock. Substantially all gains recorded in the three and nine month periods ended September 30, 1996 were realized. 3. Inventories, Net ---------------- Inventories are comprised of the following (in 000's): Raw materials $ 524 Work-in-process 103 Finished goods 1,550 ------ Total inventories $2,177 ======
4. Other Assets ------------ In May 1996, the Company made an investment in non-voting common stock representing 25% ownership of Gaia Herbs, Inc. ("Gaia") for approximately $1.0 million. Gaia manufactures and distributes natural products. Gaia is a privately-held company and does not publish financial results. The Company is accounting for this investment by the cost method. The cost method is a method of accounting for an investment under which an investor records an investment in the stock of an investee at cost, and recognizes as income dividends received that are distributed from net accumulated earnings of the investee since the date of acquisition by the investor. The net accumulated earnings of an investee subsequent to the date of investment are recognized by the investor only to the extent distributed by the investee as dividends. Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions of the cost of the investment. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations --------------------------------------------- Liquidity and Capital Resources - ------------------------------- At September 30, 1996, the Company had cash and cash equivalents of $8.5 million. Cash equivalents of $8.4 million consisted of U.S. Treasury bills with an original maturity of less than three months and yields ranging between 5.02% and 5.37%. The Company had net working capital of $9.7 million. The Management of the Company believes that the Company's financial resources and anticipated cash flows will be sufficient for future operations and possible acquisitions of other operating businesses. The Company repurchased 60,266 shares of its common stock during the three-month period ended September 30, 1996 for an aggregate purchase of approximately $107,000. No other shares were repurchased during the nine months ended September 30, 1996. In 1995, the Company repurchased 21,192 shares at an aggregate cost of $31,000 during the nine months ended September 30, 1995 with none repurchased in the third quarter 1995. All shares repurchased have been returned to the status of authorized but unissued. Net cash of approximately $549,000 was provided by operations for the nine months ended September 30, 1996, compared with the use of $1.2 million during the same period in 1995. The principal reasons for the increase in net cash flows from operations were the sale of trading securities and the change in investment in U.S. Treasury securities with original maturities longer than three months to securities with original maturities of less than three months. This increase in net cash flows in the first nine months of 1996 was partially offset by the growth in inventories of $616,000. The growth in inventories is primarily attributable to the introduction of Kava Pure(TM) by the Company. Kava Pure(TM) is available in powder and fluid extracts and "softgel" formula to the wholesale market and in softgel capsules and fluid extract to the retail market. Net cash of approximately $1.2 million was used in operations in the first nine months of 1995. The payment of $.9 million to creditors of Madis Botanicals, Inc. ("Madis")in connection with the Company's acquisition of an 83% ownership interest in Madis and the increase in inventories of $.3 million were the principal uses of cash in operating activities during this period. Results of Operations - --------------------- The Company's operations resulted in a net loss of $310,000, or $.04 per share, for the three months ended September 30, 1996 compared to net income of $8,000 for the comparable period in 1995. The net loss was $832,000 or $.11 per share for the nine month period ended September 30, 1996 compared to net income of $166,000 or $.02 per share for the comparable period in the prior year. Madis had sales of $1.5 million and $4.8 million for the three and nine months ended September 30, 1996, respectively, compared to $1.4 million and $4.6 million for the same periods in 1995. For the three and nine months ended September 30, 1996, the cost of goods sold was $.9 million and $3.0 million, respectively, compared to $.8 million and $2.8 million for the comparable periods in 1995. Gross margin was $.6 million and $1.8 million for the three and nine months ended September 30, 1996 which was comparable to the same periods in 1995. For the three and nine months ended September 30, 1996, the Company recorded net gains on marketable securities of $6,000 and $315,000, respectively, compared to net gains of $108,000 and $250,000 for the same periods in 1995. Substantially all of the gains recorded in 1996 were realized. The changes in net gains on marketable securities from 1996 to 1995 were due to changes in portfolio composition and general market conditions. Interest, dividend and other income was $125,000 and $394,000 for the three and nine months ended September 30, 1996, respectively, compared to $186,000 and $602,000 for the three and nine months ended September 30, 1995. Interest income was $388,000 during the nine month periods ended September 30, 1996, a decrease of $100,000 from the $488,000 recorded in the comparable period of 1995. This decrease was due to lower average interest rates on the Company's cash equivalents and U.S. Treasury securities and lower invested balances. Dividend income for the nine month periods ended September 30, 1996 and 1995 was $3,000 and $108,000, respectively. The decrease in dividends was due to a change in portfolio composition. All other income decreased from $6,000 in the nine months ended September 30, 1995 to $3,000 for the same period in 1996. Personnel expenses were $475,000 and $1,380,000 during the three and nine months ended September 30, 1996, respectively, compared to $326,000 and $1,090,000 in the comparable periods in 1995. This increase was predominantly due to an increase in sales and laboratory personnel at Madis. Professional fees were $199,000 and $860,000 during the three and nine month periods in 1996, compared to $234,000 and $556,000 in the three and nine month periods in 1995. The professional fees in 1996 were incurred primarily to conduct litigation to protect the Company's investment in a real estate investment trust and consulting fees associated with new product introduction ("KavaPure(TM")). Other expenses were $332,000 and $1,119,000 for the three and nine month periods ended September 30, 1996 compared to $240,000 and $820,000 for the same periods in 1995. General office expenses increased by $116,000, travel related expenses increased by $114,000 and advertising expenses increased by $92,000 in the nine month period ended September 30, 1996 compared to the same period in 1995. These increases were primarily due to the introduction of a new product, KavaPure(TM), and other sales efforts including advertising and the above mentioned litigation. All other expenses had a net decrease of $23,000 in the first nine months of 1996 compared to the first nine months of 1995. New Accounting Standards - ------------------------ Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123") was issued in October 1995 and was effective January 1, 1996. SFAS No. 123 requires entities that have employee stock option plans to estimate the value of grants awarded to employees and disclose in a pro forma footnote the impact on the entities' earnings per shares as if the estimated option value were expensed over the vesting period of the same. The Company has granted to key employees and directors options to buy shares of the Company's common stock at the current market value of the stock at the date of grant. Since SFAS No. 123 only requires additional disclosure of the cost of stock options, implementation will not have a material impact on the Company's results of operations. PART II - OTHER INFORMATION - --------------------------- Item 4. - Submission of Matters to a Vote of Security Holders - ------- --------------------------------------------------- The Company held its Annual Meeting of Stockholders on October 28, 1996. All nominees to the Company's Board of Directors were elected. The following is a vote tabulation for all nominees: For Withheld --------- -------- Paul O. Koether 6,376,019 45,858 Mark W. Jaindl 6,376,178 45,699 William Mahomes, Jr. 6,376,163 45,714 Alfredo Mena 6,376,163 45,714
Item 6. - Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits -------- 27. Financial Data Schedule for the nine months ended September 30, 1996. (b) Reports on Form 8-K ------------------- No reports on Form 8-K were filed during the quarter for which this report is being filed. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PURE WORLD, INC. Dated: November 14, 1996 By: /s/ Mark Koscinski ---------------------------------- Mark Koscinski Senior Vice President and Principal Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----