-----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, IyCOrHE804vmz3scwGqNVoErQXisfCCYJsnheh1EvF3OTX3joI97q2BNKUASZOaD eopVAqp18WLof+nslR/z9Q== 0001005444-96-000095.txt : 19961118 0001005444-96-000095.hdr.sgml : 19961118 ACCESSION NUMBER: 0001005444-96-000095 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: BIORELEASE CORP CENTRAL INDEX KEY: 0000797662 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 880218411 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-15260 FILM NUMBER: 96666684 BUSINESS ADDRESS: STREET 1: 10 CHESTNUT DRIVE STREET 2: UNIT D CITY: BEDFORD STATE: NH ZIP: 03110 BUSINESS PHONE: 6033711255 MAIL ADDRESS: STREET 1: 10 CHESTNUT DRIVE STREET 2: UNIT D CITY: BEDFORD STATE: NH ZIP: 03110 FORMER COMPANY: FORMER CONFORMED NAME: OIA INC DATE OF NAME CHANGE: 19920703 10QSB 1 10-QSB 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, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File No. 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.) 10 Chestnut Drive #D, Bedford, NH 03110 (Address of principal Executive offices) (Zip Code) (603) 471-1255 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, 9,471,659 shares of common stock, par value $.01 per share as of November 08, 1996. Transitional Small Business Disclosure Format (Check One) Yes _____ No __X__ 1 of 11 BIORELEASE CORP. INDEX PART I. FINANCIAL INFORMATION Page Number Item 1. Financial Statements . . . . . . . . . . 3 Balance sheets as of September 30, 1996 (unaudited) and June 30, 1996. . . . . . 3 Statements of Operations for the Three Months Ended September 30, 1996 (unaudited) and 1995 (unaudited), and from October 20, 1989 (inception) to September 30, 1996 (unaudited) . . . . . 4 Statements of Cash Flows for the three Months Ended September 30, 1996 (unaudited) and 1995 (unaudited), and from October 20, 1989 (inception) to September 30, 1996 (unaudited) . . . . . 5 Notes to Unaudited 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 . . . . . . . . 10 Item 2. Changes in Securities . . . . . . 10 Item 3. Defaults Upon Senior Securities . 10 Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . 10 Item 5. Other Information . . . . . . . . 10 Item 6. Exhibits and Reports on Form 8-K. 10 2 of 11 PART I. FINANCIAL INFORMATION Item 1. Financial Statement BIORELEASE CORP. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED BALANCE SHEETS September 30, 1996 and June 30, 1996 September June 30, ASSETS 30,1996 1996 ------- ---- Unaudited --------- Current Assets Cash $ 156 $ 1,200 Accounts receivable 192 563 Inventories 27,679 27,679 Other receivables 1,015 - Prepaid expenses and other current assets 2,311 1,679 --------- --------- Total current assets 31,353 31,121 --------- --------- Equipment and leasehold improvements,net 27,044 30,040 --------- --------- Other assets Intangible assets, net 36,110 14,811 Deferred legal fees for future acquisition 38,947 - Other noncurrent assets 698 699 --------- --------- Total assets $ 110,016 $ 100,807 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCIES) Current liabilities Accounts payable $ 99,446 $ 90,637 Accrued expenses 96,620 70,642 Notes payable stockholders,current 55,600 85,530 Income taxes payable 1,549 1,549 Other current liabilities 5,748 1,500 --------- --------- Total current liabilities 258,963 249,858 Notes payable stockholders, long term 26,930 - Notes payable others, long term 16,000 16,000 Other liabilities 87,734 87,734 Total liabilities 389,627 353,592 --------- --------- Stockholders' equity (Deficiency): Common stock of $.01 par value, 50,000,000 shares authorized, 9,921,659 and 9,880,354 issued and 9.471.659 and 9,430,354 outstanding at September 30, 99,217 98,803 1996 and June 30, 1996 Additional paid-in capital 9,119,297 9,113,927 Development stage accumulated deficit (9,443,625) (9,411,015) Stock subscriptions receivable ( 50,000) ( 50,000) --------- --------- ( 275,111) ( 248,285) Less: Treasury stock, at par ( 4,500) ( 4,500) Total Stockholder's Equity (deficiencies) ( 279,611) (252,785) ----------- ------------ Total liabilities and stockholders'equity (deficiencies) $ 110,016 $ 100,807 =========== ===========
The accompanying notes are an integral part of the consolidated financial statements. 3 of 11 BIORELEASE CORP. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended September 30, 1996 and 1995, and the Cumulative Period from Inception to September 30, 1996 (Unaudited)
Three Months Ended Inception (October 20,1989) September 30, to September ------------- ------------ 30, 1996 -------- 1996 1995 ---- ---- Revenues $ 12,691 $ 14,109 $ 399,803 Cost of goods sold ( 0) ( 6) ( 15,297) ----------- ----------- ----------- Gross profit 12,691 14,103 384,506 Costs and expenses: Biotech selling expenses - - ( 601,116) Research and development - (12,500) (2,558,041) Purchased technology - - ( 690,000) General and administra- tive ( 44,317) ( 60,783) (4,079,949) ----------- ---------- ----------- Loss from operations ( 31,626) ( 59,180) (7,544,600) ----------- ---------- ----------- Interest, net ( 981) (1,193) 86,370 Lease commitment costs - - ( 315,000) Litigation costs - (4,825) ( 99,242) Offering costs - - ( 291,434) Option compensation - - ( 219,375) Other income (cost) - - ( 23,024) Realized loss for decline in value of investment - - (1,500,000) Gain on equipment sale - 1,100 62,616 Income recognized on settlements - - 280,500 ----------- --------- ---------- Total other income (cost) ( 981) ( 4,918) (2,018,589) Loss before provision for (benefit from) income taxes and cumulative effect of change in accounting principle ( 32,607) ( 64,098) (9,563,189) Provision for income taxes - - 343,873 ---------- --------- ---------- Loss before cumulative effect of change in accounting principle ( 32,607) ( 64,098) (9,907,062) Cumulative effect of change in accounting principle - - 463,440 --------- ---------- ---------- Net loss ($32,607) ($ 64,098) (9,443,622) ========= ========= =========== Weighted average shares 9,471,659 8,892,263 5,168,977 Total loss per share ($0.00) ($0.01) ($1.77)
The accompanying notes are an integral part of the consolidated financial statements. 4 of 11 BIORELEASE CORP. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENT OF CASH FLOWS For the three Months Ended September, 1996 and 1995 and the Cumulative Period from Inception to September 30, 1996 (Unaudited)
Inception Three Months Ended (October 20, 1989) September 30, to September 30, 1996 1995 1996 ---- ---- ---- Cash flows from operating activities: Net loss ($ 32,610) ( $ 64,098) ($ 9,443,625) Adjustments to reconcile net loss to net cash used in development activities: Depreciation and amortization 5,833 6,498 215,263 Cumulative effect of change in accounting principle - - ( 463,440) (Gain) Loss on sale of assets - - ( 38,704) Recognized loss on investment - - 1,500,000 Loss on extinguishment of debt - - 42,000 Common Stock issued in exchange for pur- chased technologies - - 605,000 Common Stock issued in exchange for services rendered - - 89,228 Common stock options issued in exchange of services rendered - - 52,300 Amortization of unearned compensation - - 140,625 Repricing of A Warrants - - 78,750 Changes in current assets: Cash held as collateral - - - Accounts Receivable 371 35,239 ( 192) Inventories - 5 (27,679) Other receivables ( 1,015) - ( 1,015) Prepaid expenses and other current assets ( 632) 254 ( 2,311) Deferred tax asset - - 463,440 Other non-current assets ( 14,810) 403 ( 15,509) Changes in current liabilities: Accounts payable 8,809 2,030 170,397 Accrued expenses 25,978 13,297 104,448 Other liabilities 4,248 - 95,031 ------- ------------ ----------- Net cash used in operating activities ( 3,828) ( 6,372) ( 6,435,993) --------- ------------ ---------------
The accompanying notes are an integral part of the consolidated financial statements. 5 of 11 BIORELEASE CORP. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENT OF CASH FLOWS For the Three Months Ended September 30, 1996 and 1995 and the Cumulative Period from Inception to September 30, 1996 (Unaudited)
Three Months Ended Inception September 30, (October 20, 1989) to September 30, 1996 1995 1996 ---- ---- ---- Cash flows from investing activities: Purchase of collateralized mort- gage obligations - - ( 1,000,000) Proceeds from collateralized mortgage obligations - - 1,000,000 Purchase of fixed assets - ( 1,220) ( 333,187) Purchase of intangible assets - ( 2,726) ( 96,272) Proceeds from sale of assets ( -) ( -) 189,742 ----------- -------- ------------- Net cash used in investing activities ( -) ( 3,946) ( 239,717) ----------- -------- ------------- 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 ( 3,000) ( 3,000) 98,530 Issuance of common stock, net 5,784 - 3,611,750 Purchase of investments in issuance of common stock - - ( 1,500,000) Recapitalization - - 4,031,176 ----------- ------- ------------- Net cash provided by investing activities 2,784 ( 3,000) 6,675,866 ------------- -------- ------------ Net increase (decrease) in cash ( 1,044) ( 13,318) 156 Cash at beginning of period 1,200 13,521 0 ------------ ---------- ------------ Cash at end of period $ 156 $ 203 $ 156 ============= ========== =============
The accompanying notes are an integral part of the consolidated financial statements. 6 of 11 BIORELEASE CORP. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 AND CUMULATIVE FROM INCEPTION (OCTOBER 20, 1989) TO SEPTEMBER 30, 1996 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, 1996. 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, 1996 are not necessarily indicative of the results that may be expected for the year ended June 30, 1997. 2. $14,811 in deferred legal fees relate to the pending acquisition of Theramed Partners, Inc. which is subject to approval of stockholders. 7 of 11 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. During this quarter $14,811 was incurred relating to the proposed acquisition of Theramed Partners, Inc, such amount being deferred pending completion of the acquisition which is subject to the approval of the stockholders of the Company. Three Months Ended September 30, 19965 and 1995 For the three months ended September 30, 1996, the Company had revenues of $12,691, costs of goods sold of $0, no cell culture operation costs, no research and development expenses, general and administrative expenses of $44,317, interest expense of $981, no litigation costs, no gain on sale of equipment of and no income taxes resulting in a net loss of $32,607 compared to the three months ended September 30, 1995, in which the Company had revenues of $14,109, cost of goods sold of $6, no cell culture operations costs, research and development expenses of $12,500, general and administrative expenses of $60,783, interest expense of $1,193, litigation costs of $4,825, a gain on sale of assets of $1,100, no income recognized on settlements, no other non-operating costs, no realized loss for decline in value of investment and no income taxes resulting in a net loss of $64,098. From October 20, 1989, the initial date of the Subsidiary's activity, through September 30, 1996, the Subsidiary had revenues $399,803, cost of goods sold of $15,297, Cell culture operation expenses of $601,116, research and developmental expenses of $2,558,041, purchased technology costs of $690,000, general and administrative expenses of $4,079,949, other costs in the aggregate of $2,018,589, income taxes of $343,873 and a cumulative effect of change in accounting principle of $463,440 thereby yielding an accumulated net loss of $9,443,622. 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 8 of 11 current capital is the Company's funds and revenues. Contained in the most recent Annual Report on Form 10KSB is discussion relating to the acquisition of Theramed Partners, Inc. (Theramed) following which the Company expects to spin out the Subsidiary operations to the Company's stockholders in proportion to their interest in the Company and begin focussing on merger and acquisition activities through Theramed. Theramed has agreed to advance funds to the Company pending stockholder approval of the acquisition. At September 30, 1996 such advances were $5,000 plus the assumption of the Company's obligations to R T Robertson Consultants. In the event the Company is unable to complete the Theramed transaction and raise the funds anticipated to cover the planned operating expenses, the Company would be unable to implement its revised strategy and would be forced to further curtail operations until capital or financing can be obtained. Any such additional financing could result in significant dilution to existing stockholders. At September 30, 1996, the Company had negative working capital of $227,610, as compared with the Company's negative working capital of $218,737 at June 30, 1996. The decrease in the Company's working capital between June 30 and September 30, 1996 is attributable to continuing operations without significant revenues or new capital formation. Dividend Policy The Company has not declared or paid any 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. 9 of 11 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. None. Item 6. Exhibits and Reports of Form 8-K. None. 10 of 11 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 08, 1996 By:/s/ Richard F. Schubert ----------------------- Richard F. Schubert, Chairman and Principal Financial Officer 11 of 11 EX-27 2
5 3-MOS JUN-30-1996 JUL-01-1996 SEP-30-1996 156 0 192 0 27,679 31,353 27,044 2996 110,016 258,963 0 0 0 99,217 (378,828) 110,016 12,691 12,691 0 44,317 0 (32,626) 981 (32,607) 0 0 0 0 0 (32,607) .00 .00
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