-----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, KZC8WlsYOAYfOFxBr8eF8To796iqckpKOt9b5dxTWLsRRfLgxNEJapTzBGYR799m KiKnKpTc5+aeeOhPNoN+9Q== 0000856143-97-000021.txt : 19971029 0000856143-97-000021.hdr.sgml : 19971029 ACCESSION NUMBER: 0000856143-97-000021 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19971028 SROS: BSE SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BCAM INTERNATIONAL INC CENTRAL INDEX KEY: 0000856143 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 133228375 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 001-10420 FILM NUMBER: 97701711 BUSINESS ADDRESS: STREET 1: 1800 WALT WHITMAN RD CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 5167523550 MAIL ADDRESS: STREET 1: 1800 WALT WHITMAN RD CITY: MELVILLE STATE: NY ZIP: 11747 FORMER COMPANY: FORMER CONFORMED NAME: BIOMECHANICS CORP OF AMERICA DATE OF NAME CHANGE: 19920703 10QSB/A 1 10QSB/A FOR THE QUARTER ENDED JUNE 30, 1997 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB/A (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 -------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from _________ to ___________ Commission file number 0-18109 ------- BCAM INTERNATIONAL, INC. - -------------------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) New York 13-3228375 - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1800 Walt Whitman Road, Melville, New York 11747 - ------------------------------------------------ (Address of principal executive offices) (516) 752-3550 --------------------------- (Issuer's telephone number) Not applicable ---------------------------------------------------- (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 Securities Exchange Act during the past 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 ___ Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ___ No ___ State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: 15,954,733 ---------- Transitional Small Business Disclosure Format (check one): Yes ____ No X FORM 10-QSB/A BCAM INTERNATIONAL, INC. PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Balance Sheet--June 30, 1997 (Unaudited)................3 Condensed Consolidated Statements of Operations - Three Months and Six Months ended June 30, 1997 and 1996 (Unaudited).....................4 Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 1997 and 1996 (Unaudited)..........................................5 Notes to Condensed Consolidated Financial Statements - June 30, 1997 (Unaudited).................................................................6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.........................................8 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K.....................................11 SIGNATURES....................................................................12 INDEX OF EXHIBITS.............................................................13 2
BCAM INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) JUNE 30, 1997 Current assets: Cash and cash equivalents $ 240,964 Accounts receivable, less allowance for doubtful accounts of $11,245 73,796 Unbilled receivables 82,592 Inventory 26,158 Prepaid expenses and other current assets 197,365 ------------------ Total current assets 620,875 Property, plant, and equipment, at cost: Furniture and fixtures 220,318 Equipment 586,421 Leasehold improvements 50,519 ------------------ 857,258 Less accumulated depreciation and amortization (695,725) ------------------ 161,533 Deferred finance and acquisition costs 439,768 Other assets, principally patents and capitalized software (net of accumulated amortization of $103,600) 337,190 ------------------ Total assets $ 1,559,366 ================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 203,715 Accrued expenses and other current liabilities 190,343 ------------------ Total current liabilities 394,058 Other liabilities 4,289 Commitments and contingencies - Acquisition preferred stock, par value $.01 per share: Authorized 750,000 shares, no shares issued or outstanding - Common shareholders' equity: Common stock, par value $.01 per share; authorized 40,000,000 shares, 16,717,915 shares issued and 15,954,733 shares outstanding 167,179 Paid-in surplus 16,002,908 Deficit (14,109,968) ------------------ 2,060,119 Less 763,182 treasury shares (899,100) ------------------ 1,161,019 ------------------ Total liabilities and shareholders' equity $ 1,559,366 ================== See accompanying notes
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BCAM INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30 ------------------------------------- --------------------------------- 1997 1996 1997 1996 --------------- ------------------ --------------- --------------- Net revenue $ 215,861 108,226 $ 287,232 $ 210,721 Costs and expenses: Direct costs of revenue 71,178 4,543 150,349 49,288 Selling, general and administrative 618,091 567,659 1,027,026 1,075,315 Research, development and engineering 22,368 19,333 30,477 46,560 --------------- ------------------ --------------- --------------- Total operating expenses 711,637 591,535 1,207,852 1,171,163 --------------- ------------------ --------------- --------------- Net loss from operations (495,776) (483,309) (920,620) (960,442) Interest income, net 5,339 16,722 11,942 41,534 --------------- ------------------ --------------- --------------- Net loss $ (490,437) $ (466,587) $ (908,678) $ (918,908) =============== ================== =============== =============== Net loss per share $ (0.03) $ (0.03) $ (0.06) $ (0.06) =============== ================== =============== =============== Weighted average number of common shares outstanding 15,954,733 14,859,211 15,682,634 14,858,222 =============== ================== =============== =============== See accompanying notes
4
BCAM INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED JUNE 30 ------------------------------------------ 1997 1996 ------------------ ----------------- OPERATING ACTIVITIES Net loss $ (908,678) $ (918,908) Adjustments to reconcile net loss to net cash used in operating activities Depreciation 33,984 72,840 Amortization 12,837 - Accrued interest on held to maturity securities - 7,172 Changes in operating assets and liabilities: Accounts receivable, billed and unbilled (33,489) 120,281 Inventory (26,158) - Prepaid expenses and other current assets (122,874) (25,921) Accounts payable, accrued expenses and sundry liabilities 63,435 (139,033) (less amount accrued for finance and acquisition costs) Other liabilities - 4,707 ------------------ ----------------- Net cash (used in) operating activities (980,943) (878,862) ------------------ ----------------- INVESTING ACTIVITIES Loss from sale of equipment 3,331 - Proceeds from sale of equipment 3,000 - Purchase of equipment (8,060) - Investment in software technology (121,492) (77,821) Proceeds from sale of held to maturity securities - 1,500,000 Cash paid for deferred acquisition costs (148,573) - ------------------ ----------------- Net cash (used in) provided by investing activities (271,794) 1,422,179 ------------------ ----------------- FINANCING ACTIVITIES Net proceeds from short-term debt - 400,000 Net proceeds from sale of common stock 1,075,000 - Net proceeds from exercise of options - 18,440 Payment of stock registration and issuance costs (20,630) (59,219) Cash paid for deferred finance costs (87,013) - ------------------ ----------------- Net cash provided by financing activities 967,357 359,221 ------------------ ----------------- (Decrease) increase in cash and cash equivalents (285,380) 902,538 Cash and cash equivalents at beginning of period 526,344 701,686 ================== ================= Cash and cash equivalents at end of period $ 240,964 $ 1,604,224 ================== ================= See accompanying notes
5 BCAM International, Inc. BCAM INTERNATIONAL, INC. ("THE COMPANY") NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1997 1. BASIS OF PRESENTATION The accompanying unaudited condensed 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. 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. Operating results for the three-month and six-month period ended June 30, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-KSB and Form 10-KSB/A for the year ended December 31, 1996. 2. PER SHARE DATA Net loss per share has been computed on the basis of the weighted average number of common shares outstanding for each of the periods presented. Common stock equivalents have been excluded since their effect is antidilutive. 3. INCOME TAXES The Company accounts for income taxes in accordance with Financial Accounting Standards Board ("FASB") Statement No. 109, "Accounting for Income Taxes". The Company has not reflected a benefit for income taxes in the accompanying Condensed Consolidated Statements of Operations for the three months and six months ended June 30, 1997 and the three months and six months ended June 30, 1996, since the future availability of net operating loss carryforwards have been offset in full by valuation allowances in accordance with FASB Statement No. 109. 4. PRIVATE PLACEMENT On January 15, 1997, the Company offered a minimum of 400,000 units, each consisting of one share of the Company's common stock and a non-redeemable Class AA warrant which entitled the holder to purchase one share of the Company's Common Stock at a price of $1.10 per share, until March 31, 1999. The proceeds were to be used for the advancement of various technologies as well as for working capital. The offering was completed on March 28, 1997, and the Company sold 1,075,000 units for $1,075,000. On May 14, 1997 the Company changed the conversion price of the Class AA warrants from $1.10 per share to $ .65 per share and extended the expiration date from March 31, 1999 to March 31, 2002. 6 5. STOCK PURCHASE AGREEMENT On March 19, 1997 the Company entered into an agreement with Drew Shoe Corporation ("Drew") to purchase all of the common stock of Drew for approximately $5,000,000. This commitment is contingent upon the Company obtaining the necessary financing to fund the purchase. The Company does not have any obligations under this agreement should management be unable to obtain this financing. 6. SUBSEQUENT EVENTS On July 24, 1997, the Company commenced an offering of 150 shares of BCA Services Inc. Series A Convertible Preferred Stock (the "Preferred Stock"), the proceeds of which were used for working capital purposes. BCA Services, Inc is a subsidiary of BCAM International, Inc. The first tranche was in the amount of $500,000 and 50 shares of Preferred Stock were issued. Two additional tranches of $500,000 each are available to the Company to draw down on, one up to sixty(60) days after the Company's registration statement is declared effective, and another one up to sixty(60) days after the second tranche is drawn down. The Preferred Stock contains a penalty provision permitting redemption, together with penalties, at the option of the holder, if the Company failed to cause a registration statement of the underlying common stock into which the Preferred Stock is convertible to be effective prior to approximately January 4, 1998. The Company believes that such a registration will be effective prior to the filing of the September 30, 1997 Form 10-QSB, due on November 14, 1997. Therefore the Preferred Stock, net of related fees and expenses, will be recorded on the Consolidated Balance Sheet of the Company as minority interest, until converted into common shares. The Preferred Stock is convertible into shares of the Company's Common Stock ("Common Stock") at a price equal to 70% of the average closing bid price of the Common Stock over a three day trading period ending on the day preceding the conversion date (the "Variable Conversion Price"). The Conversion Price may not be greater than 100% of the Variable Conversion Price on the first closing date (the "Fixed Conversion Price"). The Fixed Conversion price is $0.6563. On the first anniversary of the closing date, all outstanding shares of Preferred Stock must be converted into shares of Common Stock of the Company. The "in the money" value of the conversion feature, which is immediately exercisable, is being recorded as a charge to minority interest as of the date of issuance. On July 23, 1997, the Company reached an agreement with Drew to extend the deadline for the closing of the Drew Shoe Acquisition, as outlined in the Purchase Agreement, from March 28, 1997 to September 15, 1997, for $25,000 for each of the two partners, with the total of $50,000 to be credited to the purchase price at the closing. The Company is in process of arranging the funding for the acquisition of Drew and, in conjunction with this effort, the following has occurred: On July 8, 1997 (modified on August 11, 1997), the Company received a commitment from Coleman and Company to work to consummate a private placement offer for a minimum of $3.5 Million and a maximum of $5.0 Million in Convertible and Redeemable Acquisition Preferred Stock, the shares of which will be convertible into shares of the Company's Common Stock. In conjunction with this equity funding, the Company expects that a group, including its largest shareholder, will purchase $1.0M of additional Preferred Stock, under substantially the same terms and conditions as the Coleman offer, bringing the total of the expected funding to between $4.5M to $6.0M. The proceeds are expected to be used for the acquisition of Drew and other working capital needs. On June 18, 1997, the Company received a commitment letter from Coast Business Credit to provide up to $6.5M in asset-based financing under a revolving line of credit to be secured by substantially all of the assets of Drew and to be guaranteed by BCAM International. The proceeds are expected to be used for the acquisition of Drew and for operating capital for Drew. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF --------------------------------------- FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- The June 30, 1997 Form 10-QSB/A represents the second quarterly report after the Form 10-KSB and Form 10-KSB/A for the year ended December 31, 1996. The 10-QSB/A should be read in conjunction with the aforementioned document, and represents a comparison between the quarter ended June 30, 1997 and the quarter ended June 30, 1996. RESULTS OF OPERATIONS Net revenue increased by $107,635, to $215,861, during the three months ended June 30, 1997, as compared to the same period in 1996. The increase was due to $47,828 of revenue from sales of the HumanCAD(R) division's MQPro(TM) software, which was launched in April 1997, an increase in Product Assessment and Redesign revenue of $39,535, and an increase of $22,500 in Intelligent Surface Technology ("IST") revenue. Net revenue increased by $76,511, to $287,232, during the six months ended June 30, 1997, as compared to the same period in 1996. The increase was primarily due to $54,876 of revenue from sales of MQPro(TM) software. Direct costs include salaries, product costs, equipment purchases for contracts, consulting fees and certain other costs. Gross profit may fluctuate from period to period. Factors influencing fluctuations include the nature and volume of services provided to individual customers which affect contract pricing, the Company's success in estimating contract costs (principally professional time), the timing of hiring new professionals, who may require training before gaining experience, efficiencies and meeting customer demands. Direct costs in total increased by $66,635, to $71,178, in the quarter ended June 30, 1997, and by $101,061, to $150,349, in the six months ended June 30, 1997, as compared to the same periods in 1996. The first six months of 1996 reflect lower direct costs because of a credit of $148,960, due to the elimination of a reserve no longer deemed necessary. Excluding this non-recurring item, direct costs were $18,575 lower in the three months ended June 30 and $47,899 lower in the six months ended June 30 than the comparable periods in 1996. 8 As a result of the above, gross profit, as set forth in the table below, increased by $41,000 for the quarter ended June 30, 1997, and decreased by $24,550 for the six months ended June 30, 1997, as compared to the comparable periods in 1996.
Three Months Ended June 30 Six Months Ended June 30 1997 1996 1997 1996 Net revenue $215,861 $108,226 $287,232 $210,721 Direct costs 71,178 4,543 150,349 49,288 ---------- ---------- --------- --------- Gross profit $144,683 $103,683 $136,883 $161,433 Gross profit % 67% 96% 48% 77%
Selling, general and administrative expenses increased by $50,432, to $618,091, for the three months ended June 30, 1997, and decreased by $48,289, to $1,027,026, for the six months ended June 30, 1997, as compared to the same periods in 1996. Included in these figures were $252,675 of costs in the six months ended June 30, 1997, of which $212,512 was incurred in the second quarter, in connection with the launch of the HumanCAD(R) division's MQPro(TM) software. Offsetting this was a reduction in expenses relating to the Company's Ergonomic Consulting Services business of $162,080 in the three months ended June 30 and $300,964 in the six months ended June 30, primarily in the areas of legal costs, salaries and benefits, consulting costs, reporting and exchange fees and insurance premiums. Research, development and engineering costs increased by $3,035 for the quarter ended June 30, 1997 and decreased by $16,083 for the six months ended June 30, 1997 from the same periods in 1996. Net interest income decreased by $11,383 for the three months ended June 30, 1997, and by $29,592 for the six months ended June 30, 1997, compared to the periods ended June 30, 1996. This was due to a decrease in assets available for investment. Net loss, as a result of the above, for the three months and six months ended June 30, 1997, was $490,437 and $908,678, respectively, as compared to a net loss of $466,587 and $918,908 for the comparable period in 1996. There was no tax benefit for the three months or six months ended June 30, 1997 and the three months or six months ended June 30, 1996. Losses which have increased the future availability of the net operating loss carryforward have been offset by valuation allowances. 9 LIQUIDITY AND CAPITAL RESOURCES Cash, cash equivalents and held-to-maturity securities were $240,964 as of June 30, 1997, compared to $526,344 as of December 31, 1996. Net cash used in operating activities, mainly to cover the net loss, was $980,943 for the six month period ended June 30, 1997. Financing activities, primarily the proceeds from a private placement completed on March 28, 1997 provided $967,357 in cash for the six month period ended June 30, 1997. Working capital was $226,817 as of June 30, 1997, compared to $438,669 as of December 31, 1996. The decrease of $211,852 or 48.2% in working capital was primarily attributable to the proceeds from the private placement, reduced by the net loss incurred in the six months ended June 30, 1997, as well as cash paid for deferred acquisition and financing costs, which have been capitalized as non-current assets.. The Company expects that its working capital, together with revenue from operations, and the proceeds from future private placements, will be more than sufficient to meet any liquidity and capital requirements for the remainder of 1997. On March 19, 1997, the Company entered into an agreement with the owners of Drew Shoe Corporation ("Drew") whereby, the Company will purchase all of the Common Stock of Drew for approximately $5,000,000 subject to financing. Drew, of Lancaster Ohio, is a 125 year-old leading designer, manufacturer and distributor of medical footwear and orthotic products. Drew represents an opportunistic and synergistic vehicle for the Company to incorporate IST into medical footwear and orthotic products, for diabetics, arthritics, and the aging population. The Company has committed to spend $230,000 during the remainder of 1997 for the development of the Microvalve, which is a necessary component relating to certain applications of the IST. PREPAID EXPENSES AND OTHER CURRENT ASSETs Prepaid Expenses and Other Current Assets were $197,365 compared with $74,491 on December 31, 1996. During the six month period the Company accelerated its marketing activities related to the launching of MQPro on March 10, 1997. The impact of the launch related activities, including marketing and product packaging, occurred primarily in the second quarter of the Company's fiscal year.. Approximately $105,000 of expenses associated with the launching of MQPro (consisting principally of inventory of brochures, sales sheets, folders, an exhibit booth, etc.) are being charged to operations as used. DEFERRED ACQUISITION AND FINANCING COSTS Deferred acquisition and financing costs consist of professional fees, due diligence costs, investment banking fees and consultant fees associated with the Company's planned purchase of Drew Shoe Corporation and related necessary financing. Such amount increased by approximately $281,144 during the six months ended June 30, 1997. 10 PART II. OTHER INFORMATION ----------------- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (A) EXHIBITS. --------- 10.53 Employment Agreement dated January 1, 1997, between Michael Strauss and the Company (1) 10.54 Employment Agreement dated January 1, 1997, between Robert Wong and the Company (1) 10.55 Consulting Agreement dated April 7, 1997, between Masthead Management and the Company (1) 27 Financial Data Schedule (1) Filed as an Exhibit to Registrant's Form 10-QSB for the quarter ended June 30, 1995 (file no. 0-18109) and incorporated by reference thereto (B) REPORTS ON FORM 8-K ------------------- No reports were filed on Form 8-K during the six month period ended June 30, 1997. 11 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. BCAM INTERNATIONAL, INC. Dated: October 28, 1997 By: /s/ Michael Strauss --------------- -------------------- Michael Strauss Chairman of the Board of Directors Chief Executive Officer Dated: October 28, 1997 By: /s/ Robert P. Wong --------------- ------------------ Robert P. Wong Vice Chairman of the Board of Directors Chief Technology Officer Acting Chief Financial Officer 12 INDEX OF EXHIBITS ----------------- Exhibit No. Exhibit - ----------- ------- 27 Financial Data Schedule 13 EX-27 2 FDS FOR THE QUARTER ENDED JUNE 30, 1997
5 This schedule contains summary financial information extracted from the Condensed Consolidated Balance Sheet, Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows, and is qualified in its entirety by reference to such financial statements. 0000856143 BCAM International, Inc. 1 U.S. Dollars 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 1.000 240,964 0 73,796 11,245 26,158 620,875 857,258 695,725 1,559,366 394,058 0 0 0 167,179 993,840 1,559,366 0 287,232 0 150,349 1,057,503 0 0 (908,678) 0 (908,678) 0 0 0 (908,678) (0.06) (0.06)
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