-----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, TFGbx7o9BwbeRui4IZZ2pNP+raSS/BputV/aQCur+rpPwbsiPTjDWJ3c3iVmWJbO aPs/1+jPWgc6Gh5e8Tp3RA== /in/edgar/work/0001005444-00-000269/0001005444-00-000269.txt : 20001121 0001005444-00-000269.hdr.sgml : 20001121 ACCESSION NUMBER: 0001005444-00-000269 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIORELEASE CORP CENTRAL INDEX KEY: 0000797662 STANDARD INDUSTRIAL CLASSIFICATION: [2836 ] IRS NUMBER: 880218411 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-15260 FILM NUMBER: 773184 BUSINESS ADDRESS: STREET 1: 340 GRANITE STREET STREET 2: SUITE 200 CITY: MANCHESTER STATE: NH ZIP: 03102-4004 BUSINESS PHONE: 6036418443 MAIL ADDRESS: STREET 1: 340 GRANITE STREET STREET 2: SUITE 200 CITY: MANCHESTER STATE: NH ZIP: 13102-4004 FORMER COMPANY: FORMER CONFORMED NAME: OIA INC DATE OF NAME CHANGE: 19920703 10QSB 1 0001.txt 10QSB FOR BIORELEASE CORP. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from July 1, 2000 to September 30, 2000 Commission File No. 0-15260 Biorelease Corp. (Exact name of small business issuer as specified in its charter) Delaware 88-0218411 (State or other jurisdiction of (Internal Revenue Service incorporation or organization) Employer Identification No.) 340 Granite St. Suite 200, Manchester, NH 03102 (Address of principal Executive offices Zip Code) (603) 641-8443 Issuer's telephone number, including area code Former name, former address and formal 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date, 12,124,238 shares of common stock, par value $.01 per share as of November 15, 2000. ----------------------------------------------------------------- Transitional Small Business Disclosure Format (Check One) Yes No X ---- ----- 1
BIORELEASE CORP. INDEX PART I. FINANCIAL INFORMATION Page Number Item 1. Financial Statements .........................................................................3 Consolidated balance sheets as of September 30, 2000 (unaudited) and June 30, 2000.................................................................................3 Consolidated Statements of Operations for the Three Months Ended September 30, 2000 (unaudited) and 1999 (unaudited), and from October 20, 1989 (inception) to September 30, 2000 (unaudited)........................................4 Consolidated Statements of Cash Flows for the three Months Ended September 30, 2000 (unaudited) and 1999 (unaudited), and from October 20, 1989 (inception) to September 30, 2000 (unaudited) ...................................... 5 Notes to Unaudited Consolidated Financial Statements .........................................7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation..........8 PART II. OTHER INFORMATION Item 1. Legal Proceedings.............................................................................9 Item 2. Changes in Securities ........................................................................9 Item 3. Defaults Upon Senior Securities ..............................................................9 Item 4. Submission of Matters to a Vote of Security Holders...........................................9 Item 5. Other Information.............................................................................9 Item 6. Exhibits and Reports on Form 8-K. ............................................................9 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statement BIORELEASE CORP. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED BALANCE SHEETS September 30, 2000 and June 30, 2000 September June 30, 30, 2000 2000 (Unaudited) ASSETS ------------ ------------ Current Assets: Cash ........................................................................ $ 428 $ 502 Accounts receivable ......................................................... 6,125 -- Due from merger candidate ................................................... 28,549 29,447 Inventories ................................................................. 15,218 16,012 Other receivables ........................................................... -- -- Prepaid expenses and other current assets ................................... -- -- ------------ ------------ Total current assets ........................................................... 50,320 45,961 ------------ ------------ Equipment and leasehold improvements, net ...................................... 1,577 1,734 ------------ ------------ Other assets: Intangible assets, net ...................................................... -- -- Other non current assets .................................................... -- -- ------------ ------------ Total assets ................................................................... $ 51,897 $ 47,695 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCIES) Current liabilities: Notes payable ............................................................... $ -- $ -- Accounts payable ............................................................ 17,215 14,792 Accrued expenses ............................................................ 18,350 17,000 Notes payable stockholders,current .......................................... -- -- Deferred Income ............................................................. -- -- Other current liabilities ................................................... 5,000 5,000 ------------ ------------ Total current liabilities ................................................... 40,565 36,792 Notes payable stockholders, long term ....................................... -- -- Notes payable others, long term ............................................. -- -- Other liabilities ........................................................... 2,513 1,000 ------------ ------------ Total liabilities .............................................................. 43,078 37,792 ------------ ------------ Stockholders' equity (Deficiency): Common stock of $.01 par value, 50,000,000 shares authorized, 12,124,238 and 12,124,238 issued and 12,124,238 and 12,124,238 Outstanding at September 30, 2000 and June 30, 2000 ....................... 121,242 121,242 Additional paid-in capital ..................................................... 9,114,114 9,114,115 Development stage accumulated deficit .......................................... (9,221,007) (9,212,078) ------------ ------------ 14,349 23,279 Less: Deferred offering costs ............................................... (5,530) (13,376) ------------ ------------ Total Stockholder's Equity (Deficiencies) ...................................... 8,819 9,903 ------------ ------------ Total liabilities and stockholders' equity (deficiencies) ...................... $ 51,897 $ 47,695 ============ ============ The accompanying notes are an integral part of the consolidated financial statements. 3 BIORELEASE CORP. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended September 30, 2000 and 1999, and the Cumulative Period from Inception to September 30, 2000 (Unaudited) Three Months Ended September 30, Inception ---------------------------- (October 20,1989) 2000 1999 To September 30, 1999 ------------ ------------ ------------ Revenues ............................. $ 8,255 $ -- $ 582,756 Cost of goods sold ................... 2,345 -- (30,898) ------------ ------------ ------------ Gross profit ......................... 5,910 -- 551,858 Costs and expenses: Research and development .......... -- -- (2,558,041) Purchased technology .............. -- -- (690,000) General and administrative ........ (6.095) (5,637) (4,339,930) Biotech selling expenses .......... -- -- (601,116) ------------ ------------ ------------ Total costs and expenses ..... (6,095) (5,637) (8,189,087) ------------ ------------ ------------ (Loss)/Gain from operations ....... (185) (5,637) (7,637,229) ------------ ------------ ------------ Other Income (Costs): Interest, net .................. -- -- 66,824 Litigation costs ............... -- -- (99,242) Offering costs ................. (7,846) -- (344,292) Option compensation ............ -- -- (219,375) Other income (cost) ............ (898) -- 30,934 Lease commitment costs ......... -- -- (315,000) Realized loss for decline in value of investment ........... -- -- (1,500,000) Gain on equipment sale .......... -- -- 62,615 Income recognized on indemnified -- -- liabilities ................... 241,636 Income recognized on settlements -- -- 372,555 ------------ ------------ ------------ Total other income (cost) ............ (8,744) -- (1,703,345) ------------ ------------ ------------ (Loss)/Gain before provision for (benefit from) income taxes and Cumulative effect of change in Accounting principle .............. (8,929) (5,637) (9,340,574) Provision for income taxes ........... -- -- 343,873 ------------ ------------ ------------ (Loss)/Gain before cumulative effect Of change in accounting principle . (8,929) (5,637) (9,684,447) Cumulative effect of change in Accounting principle .............. -- -- 463,440 ------------ ------------ ------------ Net (loss)/gain ...................... $ (8,929) $ (5,637) ($ 9,221,007) ============ ============ ============ Weighted average shares .............. 12,124,238 12,082,071 8,330,976 Basic and fully diluted loss per share ($0.00) ($0.00) ($1.11) The accompanying notes are an integral part of the consolidated financial statements. 4 BIORELEASE CORP. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENT OF CASH FLOWS For the three Months Ended September, 2000 and 1999 and the Cumulative Period from Inception to September 30, 2000 (Unaudited) Inception Three Months Ended (October 20, September 30, 1989) -------------------------- to September 30, 2000 1999 2000 ----------- ----------- ----------- Cash flows from operating activities: Net (loss)/Gain ........................................ $ (8,929) $ (5,637) $(9,221,007) Adjustments to reconcile net loss to net cash used in development activities: Depreciation and amortization ..................... 157 363 285,772 Cumulative effect of change in accounting principle -- -- (463,440) Recognized loss on investment ..................... -- -- 1,500,000 (Gain) Loss on sale of assets ..................... -- -- (38,703) Loss on extinguishment of debt .................... -- -- 42,000 Common Stock issued in exchange for Purchased technologies ........................ -- -- 605,000 Common Stock issued in exchange for services rendered ............................. -- -- 128,453 Common stock options issued in exchange of services rendered ............................. -- -- 52,300 Amortization of unearned compensation ............. -- -- 140,625 Re-pricing of A Warrants .......................... -- -- 78,750 (Increase) Decrease in current assets: Accounts Receivable ............................... (6,125) -- (6,125) Inventories ....................................... 794 -- (15,218) Other receivables ................................. 898 -- (28,549) Prepaid expenses and other current assets ......... -- -- 360 Deferred tax asset ................................ -- -- 463,440 Other non-current assets .......................... -- -- -- Increase (Decrease) in current liabilities: Accounts payable .................................. 2,423 3,329 88,166 Accrued expenses .................................. 1,350 (8,581) 25,818 Other current liabilities ......................... -- -- 5,000 Other liabilities ................................. 1,513 -- 2,513 ----------- ----------- ----------- Net cash used in operating activities .................. $ (7,919) $ (10,526) $(6,354,845) ----------- ----------- ----------- The accompanying notes are an integral part of the consolidated financial statements. 5 BIORELEASE CORP. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENT OF CASH FLOWS For the Three Months Ended September 30, 2000 and 1999 and the Cumulative Period from Inception to September 30, 2000 (Unaudited) Inception Three Months Ended (October 20, September 30, 1989) ------------------------- to September 30, 2000 1999 2000 ----------- ----------- ----------- Cash flows from investing activities: Purchase of collateralized mortgage obligations . -- -- (1,000,000) Proceeds from collateralized mortgage obligations -- -- 1,000,000 Purchase of fixed assets ........................ -- -- (333,187) Purchase of intangible assets ................... -- -- (105,205) Proceeds from sale of assets .................... ( --) ( --) 189,742 ----------- ----------- ----------- Net cash used in investing activities .............. ( --) ( --) (248,650) ----------- ----------- ----------- Cash flows from financing activities: Advances from and amounts due to Stockholders ................................ -- -- 594,385 Payments of advances from stockholders .......... -- -- (159,975) Notes receivable ................................ -- -- -- Notes payable ................................... -- -- -- Issuance of common stock, net ................... (1) 3,925 2,153,867 Payment of deferred offering costs .............. 7,846 (2,958) (5,530) Purchase of treasury stock ...................... -- -- (10,000) Re-capitalization ............................... -- -- 4,031,176 ----------- ----------- ----------- Net cash provided by investing activities .......... 7,845 967 6,599,036 ----------- ----------- ----------- Net increase (decrease) in cash .................... (74) (9,559) 428 Cash at beginning of period ........................ 502 12,232 -- ----------- ----------- ----------- Cash at end of period .............................. $ 428 $ 2,673 $ 428 =========== =========== =========== The accompanying notes are an integral part of the consolidated financial statements.
6 BIORELEASE CORP. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 AND CUMULATIVE FROM INCEPTION (OCTOBER 20, 1989) TO SEPTEMBER 30, 2000 ITEM 1. Basis of presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Rule 310 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements and should be read in conjunction with the Company's audited consolidated financial statements at and for the fiscal year ended June 30, 2000. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2000 are not necessarily indicative of the results that may be expected for the year ended June 30, 2001. 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The following discussion includes the business of Biorelease Technologies, Inc. (the "Subsidiary"), since the Company, prior to its acquisition of the Subsidiary, had no operations other than raising capital and searching for an acquisition candidate (i.e., the Subsidiary). Where relevant, all numbers retroactively take into account the acquisition of the Subsidiary by the Company. Three Months Ended September 30, 2000 and 1999 For the three months ended September 30, 2000 the Company had revenues of $8,255, costs of goods sold of $2,345, general and administrative costs of $6,095, offering costs of $7,846 related to the terminated merger agreement with Polar Molecular Corporation, other costs adjustment of $898 resulting in a net loss of $8,929 as compared with the three months ended September 30, 1999 in which the Company had revenues of $0, costs of goods sold of $0, general and administrative expenses of $5,637, no other costs or income and no income taxes, resulting in a loss of $5,637. Inception to September 30, 2000 From October 20, 1989, the initial date of the Subsidiary's activity, through September 30, 2000, the Company, including the Subsidiary, had revenues of $582,756, cost of goods sold of $30,898, research and developmental expenses of $2,558,041, purchased technology costs of $690,000, general and administrative expenses of $4,339,930, selling expenses of $601,116, other costs in the aggregate of $1,703,345, income taxes of $343,873 and a cumulative effect of change in accounting principle of $463,440 thereby yielding an accumulated net loss of $9,221,007. Liquidity and Capital Resources From inception until the closing of the Reorganization, the Subsidiary's primary source of funds has been the proceeds from private offerings of its Common and Preferred Stock. Since the Reorganization, the primary source of current capital has been the Company's funds and revenues. Dividend Policy The Company has not declared or paid any cash dividends on its common stock since its inception and does not anticipate the declaration or payment of cash dividends in the foreseeable future. The Company intends to retain earnings, if any, to finance the development and expansion of its business. Future dividend policy will be subject to the discretion of the Board of Directors and will be contingent upon future earnings, if any, the Company's financial condition, capital requirements, general business conditions and other factors. Therefore, there can be no assurance that dividends of any kind will ever be paid. Effect of Inflation Management believes that inflation has not had a material effect on its operations for the periods presented. 8 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 Securities Holders None Item 5. Other Information On October 12, 2000 the Company terminated its agreement to merge with Polar Molecular Corporation (Polar). As of this date no further discussions have occurred between the Company and Polar. The Company is exploring other merger opportunities. The plan for the Company to spin off its subsidiary is still in effect. The timing for the spin off is delayed due to the termination of the Polar transaction. Item 6. Exhibits and Reports on form 8-K. None 9 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BIORELEASE CORP. November 16, 2000 By: /s/ R. Bruce Reeves -------------------------------------- R. Bruce Reeves, President and Principal Financial Officer 10 EX-27 2 0002.txt FDS --
5 0000797662 Biorelease Corp. U.S. Dollars 3-MOS JUN-30-2001 JUL-01-2000 SEP-30-2000 1.000 428 0 34,674 0 15,218 50,320 1,577 157 51,897 40,565 0 0 0 121,242 0 51,897 8,255 8,255 2,345 2,345 14,839 0 0 0 (8,929) (185) (8,744) 0 0 (8,929) 0 0
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