-----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, S0JFrrKcGb3v5Jsh4yq8ysuKBROFTh0HTgA/q+C9+VPG+xdWAYbjuqXk34fP5o/0 RyBcob1I2OfUSLtMGArlrA== 0001005444-97-000202.txt : 19971117 0001005444-97-000202.hdr.sgml : 19971117 ACCESSION NUMBER: 0001005444-97-000202 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE 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: 10-Q SEC ACT: SEC FILE NUMBER: 000-15260 FILM NUMBER: 97722084 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 10-Q 1 QUARTERLY REPORT 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, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from July 1, 1997 to September 30, 1997 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. 10 Chestnut Street, Unit D, Bedford, NH 03110 603-471-1255 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, 9,446,659 shares of common stock, par value $.01 per share as of November 08, 1997. - ----------------------------------------------------------------- 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 Balance sheets as of September 30, 1997 (unaudited) and June 30, 1997..............................................3 Statements of Operations for the Three Months Ended September 30, 1997 (unaudited) and 1996 (unaudited), and from October 20, 1989 (inception) to September 30, 1997 (unaudited).................................4 Statements of Cash Flows for the three Months Ended September 30, 1997 (unaudited) and 1996 (unaudited), and from October 20, 1989 (inception) to September 30, 1997 (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..............................................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, 1997 and June 30, 1997
September 30, 1997 June 30, Unaudited 1997 --------- -------- ASSETS ------ Current Assets: Cash $ 32,186 $ 15,277 Accounts receivable 0 8,099 Inventories 19,681 19,681 Other receivables 195 195 Prepaid expenses and other current assets 180 180 ------------ ------------ Total current assets 52,242 43,432 ------------ ------------ Equipment and leasehold improvements, net 16,587 18,987 ------------ ------------ Other assets: Intangible assets, net 27,246 32,347 Other noncurrent assets 699 699 ------------ ------------ Total assets $ 96,774 $ 95,465 ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCIES) --------------------------------------------------- Current liabilities: Accounts payable $ 118,503 $ 116,397 Accrued expenses 137,727 141,243 Notes payable stockholders,current 55,575 58,575 Deferred Income 20,000 20,000 Other current liabilities 2,378 2,367 ------------ ------------ Total current liabilities 334,183 338,582 Notes payable stockholders, long term 14,955 14,955 Notes payable others, long term 16,000 16,000 Other liabilities 87,734 87,734 Total liabilities 452,872 457,271 ------------ ------------ 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, 1997 and June 30, 1997 99,216 99,216 Additional paid-in capital 9,110,298 9,110,298 Development stage accumulated deficit (9,510,111) (9,515,820) Stock subscriptions receivable (50,000) (50,000) ------------ ------------ (350,597) (356,306) Less: Treasury stock, at par (5,500) (5,500) Total Stockholder's Equity (Deficiencies) (356,097) (361,806) ------------ ------------ Total liabilities and stockholders' equity (deficiencies) $ 96,774 $ 95,465 ============ ============
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, 1997 and 1996, and the Cumulative Period from Inception to September 30, 1997 (Unaudited) -----------
Three Months Ended Inception September 30, (October 20,1989) 1997 1996 to September 30, 1996 ---- ---- --------------------- Revenues $ 20,000 $ 12,691 $ 516,396 Cost of goods sold ( 0) ( 0) (23,296) ----------- ----------- ---------- Gross profit 20,000 12,691 493,100 Costs and expenses: Biotech selling expenses - - (601,116) Research and development - - (2,558,041) Purchased technology - - (690,000) General and administrative (12,673) (44,317) (4,217,070) (Loss)/Gain from operations 7,327 (31,626) (7,573,127) Interest, net (1,617) (981) 82,059 Lease commitment costs - - (315,000) Litigation costs - (99,242) Offering costs - - (334,946) Option compensation - - (219,375) Other income (cost) - - (23,034) Realized loss for decline in value of investment - - (1,500,000) Gain on equipment sale - 62,616 Income recognized on - - 293,606 settlements Total other income (cost) (1,617) (981) (2,056,550) Loss)/Gain before provision for (benefit from) income taxes and cumulative effect of change in accounting principle 5,710 (32,607) (9,629,677) Provision for income taxes - - 343,873 (Loss)/Gain before cumulative effect of change in accounting principle 5,710 (32,607) (9,973,550) Cumulative effect of change in accounting principle - - 463,440 Net (loss)/gain 5,710 ($ 32,607) (9,510,110) =========== =========== ========== Weighted average shares 9,388,325 9,471,659 5,575,916 Total loss per share ($0.00) ($0.00) ($1.71) 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, 1997 and 1996 and the Cumulative Period from Inception to September 30, 1997 (Unaudited) ----------
Inception Three Months Ended (October September 30, 20, 1989) to September 30, 1997 1996 1995 ---- ---- ---- Cash flows from operating activities: Net (loss)/Gain $ 5,710 ($ 32,610) ($ 9,510,110) Adjustments to reconcile net loss to net cash used in development activities: Depreciation and amortization 7,500 5,833 243,516 Cumulative effect of change in - - ( 463,440) accounting principle (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 purchased technologies - - 605,000 Common Stock issued in exchange for services rendered - - 95,012 Common stock options issued in exchange of services rendered - - 52,300 Amortization of unearned - - 140,625 compensation Repricing of A Warrants - - 78,750 Changes in current assets: Cash held as collateral - - - Accounts Receivable (8,099) 371 - Inventories - - (19,681) Other receivables - (1,015) (195) Prepaid expenses and other current - (632) (180) assets Deferred tax asset - - 463,440 Other non-current assets - (14,810) (699) Changes in current liabilities: Accounts payable (828) 8,809 186,520 Accrued expenses 2,500 25,978 151,211 Other liabilities - 4,248 (692) -------- --------- ------------ Net cash used in operating activities $ 6,783 ($ 3,828) ($ 6,389,828) -------- --------- -----------
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, 1997 and 1996 and the Cumulative Period from Inception to September 30, 1997 (Unaudited) --------
Inception Three Months Ended (October 20, 1989) September 30, to September 30, 1997 1996 1995 ---- ---- ---- Cash flows from investing activities: Purchase of collateralized mortgage obligations - - (1,000,000) Proceeds from collateralized - - 1,000,000 mortgage obligations Purchase of fixed assets - - (333,187) Purchase of intangible assets - - (105,205) Proceeds from sale of assets ( -) ( -) ( -) ----------- -------- ----------- 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 (3,000) (3,000) 86,530 Issuance of common stock, net - 5,784 2,095,966 Purchase of investments in issuance of common stock - - (1,500,000) Recapitalization - - 4,031,176 ----------- -------- ----------- Net cash provided by investing activities (3,000) 2,784 6,651,082 ----------- -------- ----------- Net increase (decrease) in cash 16,909 (1,044) 32,186 Cash at beginning of period 15,277 1,200 - ----------- -------- ----------- Cash at end of period $ 32,186 $ 156 $ 32,186 ========= ======== ============
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, 1997 AND 1996 AND CUMULATIVE FROM INCEPTION (OCTOBER 20, 1989) TO SEPTEMBER 30, 1997 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, 1997. 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, 1997 are not necessarily indicative of the results that may be expected for the year ended June 30, 1998. 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, 1997 and 1996 For the three months ended September 30, 1997, the Company had revenues of $20,000, costs of goods sold of $0, no cell culture operation costs, no research and development expenses, general and administrative expenses of $12,673, interest expense of $1,617, no litigation costs, no gain on sale of equipment of and no income taxes resulting in a net gain of $5,710 compared to the three months ended September 30, 1996, in which the Company had revenues of $12,691, cost of goods sold of $0, no cell culture operations 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 assets, 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 $32,607. From October 20, 1989, the initial date of the Subsidiary's activity, through September 30, 1997, the Subsidiary had revenues of $516,396, cost of goods sold of $23,296, 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 $4,217,070, other costs in the aggregate of $2,056,550, income taxes of $343,873 and a cumulative effect of change in accounting principle of $463,440 thereby yielding an accumulated net loss of $9,510,110. 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 is the Company's funds and revenues. 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. 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. None. Item 6. Exhibits and Reports of 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 12, 1997 By: /s/ Richard F. Schubert ------------------------------------------ Richard F. Schubert, Chairman and Principal Financial Officer 10 EX-27 2 BIORELEASE FINANCIAL DATA SCHEDULE
5 0000797662 Biorelease, Corp. 1 U.S. Dollars 3-MOS JUN-30-1997 JUL-01-1997 SEP-30-1997 1.000 32,186 0 185 0 19,681 52,242 41,270 22,283 96,774 334,183 0 0 0 99,216 0 96,774 20,000 20,000 0 14,290 0 0 1,617 5,710 0 0 0 0 0 5,710 0 0
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