-----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, KJDTO1Qdw+AY7dlq0LD9iak/m896KplGUX0QYQOkScA2ZpY7oLawsD7R4ZshALZZ bpZmmrtHQdJyrNwwh6o+kg== /in/edgar/work/20000814/0000950005-00-000903/0000950005-00-000903.txt : 20000921 0000950005-00-000903.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950005-00-000903 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUMAN PHEROMONE SCIENCES INC CENTRAL INDEX KEY: 0000878616 STANDARD INDUSTRIAL CLASSIFICATION: [2844 ] IRS NUMBER: 943107202 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-23544 FILM NUMBER: 696797 BUSINESS ADDRESS: STREET 1: 4034 CLIPPER CT CITY: FREMONT STATE: CA ZIP: 94538 BUSINESS PHONE: 5102266874 FORMER COMPANY: FORMER CONFORMED NAME: EROX CORP DATE OF NAME CHANGE: 19940307 10QSB 1 0001.txt QUARTERLY REPORT U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (MARK ONE) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 2000 [ ] TRANSITION REPORT UNDER SECTION 13 OR A5(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (no fee required) Commission file number 0-23544 HUMAN PHEROMONE SCIENCES, INC. ----------------------------------------------- (Name of small business issuer in its charter) California 94-3107202 - ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. employee incorporation or organization) Identification No.) 47650 Fremont Blvd. Suite 200, Fremont, California 94538 - --------------------------------------------------- ---------- (Address of principal executive offices) (Zip code) Issuer's telephone number: (510) 226-6874 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] (APPLICABLE ONLY TO CORPORATE REGISTRANTS) State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 3,429,839 shares of Common Stock as of August 7, 2000. HUMAN PHEROMONE SCIENCES, INC. INDEX Page ---- PART I FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets as of June 30, 2000 (Unaudited) and December 31, 1999.......................................... 3 Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for the Three and Six Months Ended June 30, 2000 and 1999......................................... 4 Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2000 and 1999.................... 5 Notes to Consolidated Financial Statements (Unaudited)........... 6 Item 2. Management's Discussion and Analysis 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.................................12 SIGNATURES....................................................................13 2 PART I FINANCIAL INFORMATION Item 1. Financial Statements Human Pheromone Sciences, Inc. Consolidated Balance Sheets
June 30, December 31, (in thousands except share data) 2000 1999 - -------------------------------------------------------------------------------- -------- -------- (unaudited) Assets Current assets: Cash and cash equivalents $ 761 $ 108 Accounts receivable, net of allowances of $38 and $338 in 2000 and 1999, respectively 1,185 2,050 Inventories 600 2,304 Other current assets 47 36 -------- -------- Total current assets 2,593 4,498 Property and equipment, net 9 14 -------- -------- $ 2,602 $ 4,512 ======== ======== Liabilities and Shareholders' Equity Current liabilities: Bank borrowings $ 0 $ 900 Accounts payable 88 573 Deferred revenue 188 0 Accrued advertising 83 313 Accrued commissions 0 286 Other accrued expenses 238 374 -------- -------- Total current liabilities 597 2,446 -------- -------- Commitments and Contingencies Shareholders' equity: Preferred stock, issuable in series, no par value, 10,000,000 shares authorized, 1,433,333 Series AA convertible shares issued and outstanding at June 30, 2000 and December 31, 1999, 17,010 and 14,203 Series BB convertible shares issued and outstanding at June 30, 2000 and December 31, 1999, respectively 3,606 3,296 Common stock, no par value, 13,333,333 shares authorized, 3,429,839 shares issued and outstanding on each date 17,667 17,667 Accumulated deficit (19,208) (18,847) Accumulated other comprehensive loss (60) (50) -------- -------- Total shareholders' equity 2,005 2,066 -------- -------- $ 2,602 $ 4,512 ======== ======== See accompanying notes to consolidated financial statements
3 Human Pheromone Sciences, Inc. Consolidated Statements of Operations and Comprehensive Loss (unaudited)
Three months ended Six months ended June 30, June 30, ----------------------- ----------------------- (in thousands except per share data) 2000 1999 2000 1999 ------- ------- ------- ------- Net product sales $ 474 $ 1,724 $ 1,755 $ 3,886 License and supply revenues 277 387 529 464 ------- ------- ------- ------- Net revenues 751 2,111 2,284 4,350 Cost of goods sold 140 757 686 1,536 ------- ------- ------- ------- Gross profit 611 1,354 1,598 2,814 Operating Expenses: Research and development 81 83 161 167 Selling, general and administrative 590 1,538 1,778 3,201 ------- ------- ------- ------- Total operating expenses 671 1,621 1,939 3,368 ------- ------- ------- ------- Loss from operations (60) (267) (341) (554) Other income and (expense) 0 Interest (expense) 0 (24) (22) (46) Other income (expense) 4 (9) 2 (7) ------- ------- ------- ------- Total other income and (expense) 4 (33) (20) (53) ------- ------- ------- ------- Net loss available to common shareholders (56) (300) (361) (607) Other comprehensive loss - translation adjustment (3) (11) (10) (48) ------- ------- ------- ------- Comprehensive loss $ (59) $ (311) $ (371) $ (655) ======= ======= ======= ======= Net loss per common share-basic and diluted $ (.02) $ (.09) $ (.11) $ (.18) ======= ======= ======= ======= Weighted average common shares outstanding 3,430 3,430 3,430 3,430 ======= ======= ======= ======= See accompanying notes to consolidated financial statements
4 Human Pheromone Sciences, Inc. Consolidated Statements of Cash Flows (unaudited)
Six months ended June 30, ----------------------------- (in thousands) 2000 1999 - -------------------------------------------------------------------------------- ------- ------- Cash flows from operating activities Net loss $ (361) $ (607) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 7 24 Provision for sales returns and allowances (300) (610) Changes in operating assets and liabilities: Accounts receivable 1,165 961 Inventories 1,704 234 Other current assets (11) (10) Deferred revenue 188 -- Accounts payable and accrued liabilities (1,137) (367) ------- ------- Net cash provided by (used in) operating activities 1,255 (375) Cash flows from investing activities Purchase of property and equipment (2) -- ------- ------- Net cash used in investing activities (2) -- Cash flows from financing activities Proceeds from bank borrowings 150 900 Repayment of bank borrowings (1,050) (773) Proceeds from issuance of convertible preferred stock 310 300 ------- ------- Net cash (used in) provided by financing activities (590) 427 Effect of exchange rate changes on cash (10) (48) ------- ------- Net increase in cash and cash equivalents 653 4 Cash and cash equivalents at beginning of period 108 77 ------- ------- Cash and cash equivalents at end of period $ 761 $ 81 ======= ======= Cash paid for interest $ 24 $ 46 ======= ======= See accompanying notes to consolidated financial statements
5 Human Pheromone Sciences, Inc. Notes to Consolidated Financial Statements (unaudited) March 31, 2000 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations Human Pheromone Sciences, Inc. (the "Company") was incorporated in the State of California in 1989 under the name of EROX Corporation. The Company changed the name to Human Pheromone Sciences, Inc. in May 1998. The Company is engaged in the research, development, manufacturing, marketing and licensing of consumer products containing synthetic human pheromones as a component. The Company initiated commercial operations in late 1994 with a line of fine fragrances and toiletries. 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 10-01 of Regulation S-X. 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 and six months ended June 30, 2000 are not necessarily indicative of the results that may be expected for the calendar year ending December 31, 2000. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 1999. Inventories Inventories are stated at the lower of cost (first in - first out method) or market. The inventory at June 30, 2000 consists of finished goods inventory valued at $349,000, work in process of $13,000, and raw materials of $238,000. At December 31, 1999, these balances were $662,000, $472,000 and $1,170,000, respectively. Capital Stock and Stock Options On June 30, 2000 the Company sold 526 shares of Series BB convertible preferred stock for $50,000, net of issuance costs, to a current shareholder. The sale enabled the Company's net equity to remain in compliance with the NASDAQ Small Cap listing requirements. No assurances can be given that the Company will remain in compliance with these listing requirements in the future. On March 26, 2000 the Company sold 2,271 shares of Series BB convertible preferred stock for $260,000, net of issuance costs, to a current shareholder. The cash was used to reduce bank borrowings. Outstanding options to purchase shares of common stock and certain common stock equivalents were excluded from the computation of diluted earnings per share since their effect would be antidilutive. During the three months ended June 30, 2000 no common stock options were granted and no issued options were exercised. 6 License and Supply Revenue On April 24, 2000 the Company entered into a multi-year agreement under which it licensed its Realm(R) fragrance and toiletry brands to Niche Marketing, Inc. in exchange for a royalty on Niche Marketing sales. The license includes all territories excluding the Far East, which the company retains. The effective date for this agreement was May 1, 2000. The sale of the Company's patented pheromones to licensees are reported when the license fee revenues are earned. 7 Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Except for the historical information contained in this discussion and analysis of financial condition and results of operations, the matters discussed herein are forward looking statements. These forward looking statements include but are not limited to the Company's plans for sales growth and expansion into new channels of trade, expectations of gross margin, expenses, new product introduction, and the Company's liquidity and capital needs. These matters involve risks and uncertainties that could cause actual results to differ materially from the statements made. In addition to the risks and uncertainties described in "Risk Factors", below, these risks and uncertainties may include consumer trends, business cycles, scientific developments, changes in governmental policy and regulation, currency fluctuations, economic trends in the United States and inflation. These and other factors may cause actual results to differ materially from those anticipated in forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Risk Factors The Company's future results may be affected to a greater or lesser degree by the following factors among others: The Company's marketing strategy may not be successful. The Company may not be able to successfully complete negotiations for licensing its pheromone technology. The Company may not be able to establish and maintain the necessary sales and distribution channels. The Company may not have sufficient funds to successfully market its products if the current marketing strategy is not successful. The Company and/or its licensees may not be able to effectively compete with larger companies or with new products. The prestige fragrance market is extremely competitive. Many fragrance products are better known than the Company's products and compete for advertising and retail shelf space. Many competitors have significantly greater resources that will allow them to develop and introduce new competing products or increase the promotion of current products. The product life cycle of a fragrance can be very short. Changing fashions and fads can dramatically shift consumer preferences and demands. Traditional fragrance companies introduce a new fragrance every year or so. Changing fashions and new products may reduce the chance of creating long-term brand loyalty to the Company's products. The current retail environment may cause pricing and promotional pressures. Five companies control the majority of the sales in the U. S. department store arena. Because of their market share, each company will have significant power to determine the price and promotional terms which the Company and/or its licensees must meet in order to sell its products in the department stores. Seasonality in sales may cause significant variation in quarterly results. Sales in the fragrance industry are generally seasonal with sales higher in the second half of the year because of Christmas. This seasonality could cause a significant variation in the Company's quarterly operating results. The Company has reported operating losses in past years. No assurance can be given that the Company will produce operating income in the future. The Company not be able to protect its technology or trade secrets. The Company's patents and patent applications may not protect the Company's technology or ensure that the Company's technology does not infringe another's valid patent. Others may independently develop substantially equivalent proprietary information. The Company may not be able to protect its technology, proprietary information or trade secrets. The Company may not be able to recruit and retain key personnel. The Company's success substantially depends upon recruiting and retaining key employees and consultants with research, product development and marketing experience. The Company may not be successful in recruiting and retaining these key people. 8 The Company relies upon other companies to manufacture its products. The Company relies upon Pherin and other companies to manufacture its pheromones, supply components, and to blend, fill and package its fragrance products. The Company may not be able to obtain or retain pheromones manufacturers, fragrance suppliers, or component manufacturers on acceptable terms. If not, the Company may not be able to obtain commercial quantities of its products. This would adversely affect operating results. Results of Operations Three Months ended June 30, 2000 compared to the Three Months ended June 30, 1999 On April 24, 2000 the Company entered into a multi-year agreement under which it licensed its Realm(R) fragrance and toiletry brands to Niche Marketing, Inc. in exchange for a royalty on Niche Marketing sales, with guaranteed annual minimum payments due to the Company. The license includes all territories excluding the Far East, which the company retains. The effective date for this agreement was May 1, 2000. Net revenues for the second quarter of 2000 were $751,000 representing a decrease of 64% from revenues of $2,111,000 for the prior year's quarter. Approximately 86% of the decrease is due to the absence of Realm(R) product sales for May and June, which was licensed to Niche Marketing. The license and supply of pheromones under license agreements decreased by 28% to $277,000 for the current year period. The decreased license and supply revenue is due to the reduced requirements by Avon this year as reorder quantities were not expected to match last years initial manufacturing requirements for the product launch of Perceive(R) by Avon. The addition of the Realm(R) license to other royalty income help offset the reduced Avon demand. Net revenues for the quarters ended June 30, 2000 and 1999 were as follows (in thousands). - -------------------------------------------------------------------------------- Markets 2000 1999 - -------------------------------------------------------------------------------- U.S. Retail & Distributor Markets $ 379 $1,598 License and Supply Revenues 277 387 International Markets 95 126 ------ ------ Net Revenues $ 751 $2,111 Gross profit for the quarter ended June 30, 2000 declined 55% to $611,000 from $1,354,000 in the prior year due to the reduced sales volume. As a percentage of sales gross profit of 81% was better than last year of 64% reflecting the impact of the more profitable license and supply business. Research and Development expenses for the second quarters of 2000 and 1999 were $81,000 and $83,000, respectively. These costs principally reflect payments and costs under the Company's consulting agreements in this area. Selling, general and administrative expenses decreased $948,000 to $590,000 in the first quarter of 2000 from $1,538,000 in the first quarter of 1999. Advertising, selling, and marketing expenses were $749,000 less than the prior year as the licensee of the Realm(R) brand began incurring these expenses May 1,2000. Distribution expenses were reduced by $42,000, and general and administrative costs were $157,000 lower in the current year's quarter. The Company restructured the organization to reduce the overhead required to support its efforts to focus on new product development, and license opportunities for the patented pheromone technology. The loss from operations of $60,000 was $207,000 less, a 78% improvement over the 1999 second quarter operating loss of $267,000. The Company's licensing of the Realm(R) Realm(R) brand, which was effective May 1, 2000, resulted in reduced net revenues but the significant savings in operating expenses resulted in the reduced operating losses. 9 The Company incurred no net interest expense during the second quarter of 2000, and $24,000 in the second quarter of 1999. As a result of the licensee agreement, and subsequent sale of inventory, the Company paid off the existing bank line in April 2000. Six Months ended June 30, 2000 as compared to the Six Months ended June 30, 1999 Net revenues for the six months ended June 30, 2000 were $2,284,000. This was a 47% decrease from net revenues of $4,350,000 for the first half of 1999. The lack of Realm(R) brand products sales in May and June caused by the May 1 effective date of the license agreement, accounted for 25% of the decreased revenues for the first six months. For the first four months of the year the Realm(R) revenues were down 22%for the comparable four months of 1999. The license and supply revenues increased by $65,000 for the first six months of 2000 to $529,000. The Company realized six months of revenue in 2000 as compared with 1999 which reflected the commencement of licensing revenue in March. Net sales for the six months ended June 30, 2000 and 1999 are as follows: - -------------------------------------------------------------------------------- Class of Trade 1999 1999 - -------------------------------------------------------------------------------- U.S. Markets $1,532 $3,635 License and Supply Revenues 529 464 International Markets 223 251 ------ ------ Net Sales $2,284 $4,350 Gross profit for the first half of 2000 declined 43% to $1,598,000 from $2,814,000 in 1999. The decrease is the result of reduced sales volume. Gross profit as a percentage of revenues improved to 70% compared to 65% in 1999, also reflecting the impact of the more profitable license and supply business. Research and Development expenses for the first half of 2000 and 1999 were $161,000 and $167,000, respectively and are principally comprised of payments under the Company's contract with Pherin Corporation. Selling, general and administrative expenses decreased to $1,778,000 in the six months ended June 30, 2000 from $3,201,000 in the period ended June 30, 1999. Selling marketing and advertising accounted for $1,157,000 of the decrease with all other operational areas spending less in 2000 than in 1999. The reduction in operating expenses of $1,423,000 is directly related to the Company's decision to license the Realm(R) brand and eliminate the expenses associated with directly to distributing with the department store accounts. The loss from operations decreased by $213,000 to $341,000 for the six months ended June 30, 2000, from $554,000 in 1999. The Company's licensing of the Realm(R) brand has resulted in reduced net revenues offset by savings in operating expenses that have significantly reduced the operating losses. The unprofitable department store sales channel has been eliminated and replaced with a minimum royalty revenue source. The Company incurred $22,000 in net interest expense during the first half of 2000 compared to $46,000 net interest expense in 1999 due to the repayment of the credit line borrowings in April 2000. LIQUIDITY At June 30, 2000, the Company had no outstanding borrowings, and working capital was $1,996,000. At December 31, 1999 the Company had net borrowings of $900,000 and working capital of $2,052,000. For the six months of 2000, net cash generated from operating activities was $1,255,000 compared to $375,000 used in operating activities for the prior year's six months. Accordingly, the Company had a net repayment of its line of credit of $900,000 in the first six months of 2000, while it had net additional borrowings of $127,000 in the first half year of 1999. 10 On July 1, 2000, the Company's Business Loan Agreement with Mid-Peninsula Bank of Palo Alto, California (the "Bank") providing for a continued line of credit expired. The Company may apply for a new credit line in the future. Assuming the Company's activities proceed substantially as planned, the Company's cash proceeds from the license to Niche Marketing, license revenues and anticipated revenues from product sales should be adequate to meet its working capital needs over the next twelve months. Working capital requirements will primarily be for research, product development and administrative costs. Additional working capital may be required should the Company fail to generate new products or new license revenues. Furthermore, additional working capital may be required should the Company experience a greater than planned success with its products, potential products, and research funding requirements. Funds would be needed for inventory build, accounts receivable financing and staffing purposes. If the Company fails to achieve revenues from its 2000 marketing efforts, or if product development proves to be more capital intensive than planned, the Company may require additional funding. On June 30, 2000, the Company obtained $50,000 additional equity capital from a current shareholder by issuing shares of convertible preferred stock. RECENT ACCOUNTING PRONOUNCEMENTS In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133 requires companies to recognize all derivatives contracts as either assets or liabilities in the balance sheet and to measure them at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. SFAS No. 133, as amended by SFAS No. 137, is effective for all fiscal quarters of fiscal quarters of fiscal years beginning after June 15, 2000. The Company has not entered into derivatives contracts either to hedge existing risks or for speculative purposes. Accordingly, the Company does not expect adoption of the new standard on January 1, 2001 to affect its financial statements. In December 1999, the SEC issued Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements. SAB No. 101 summarizes certain of the staff's views in applying generally accepted accounting principles to revenue recognition in financial statements. SAB No. 101 is effective for all transactions beginning with the second quarter of 2000. The Company has applied SAB No. 101 where applicable. 11 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 10.21 Amendment to License Agreement with Niche Marketing, Inc. (b) Exhibit 27.01-Financial Data Schedule 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant had duly caused this Report to be signed on behalf by the undersigned thereunto duly authorized. HUMAN PHEROMONE SCIENCES, INC. Registrant Date: August 14, 2000 /s/ William P. Horgan ------------------------------------ William P. Horgan Chairman and Chief Executive Officer Date: August 14, 2000 /s/ Gregory S. Fredrick ------------------------------------ Gregory S. Fredrick Vice President Finance 13 EX-10.21 2 0002.txt AMENDMENT TO LICENSE AGREEMENT AMENDMENT TO LICENSE AND PURCHASE AGREEMENT This Amendment is made on June 23, 2000 to the License and Purchase Agreement (the "Agreement") dated April 24, 2000 between Human Pheromone Sciences, Inc. (the "Licensee") and Niche Marketing, Inc. ("Licensee"). Section 6 ("Additional Payment) of the Agreement is deleted in its entirety. Section 9 ("Sales Returns") of the Agreement is amended to read as follows. 9. Sales Return. Licensor shall be responsible for the initial $355,000 of Product plus 10% of net sales of Mothers Day gift sets (at wholesale prices) physically returned by U.S. Department Store Customers or destroyed in the field with the authorization of current sales management. Licensor shall be responsible for all product returned from all other customers or destroyed in the in the field. Licensor has provided Licensee a list of return authorizations to be issued through the date of close. Any additional return authorizations shall be received by May 31, 2000 or such other date as may be agreed by the Licensor and Licensee. Inventory returned up to the $355,000 and the greater 10% of net sales of Mothers Day gift sets which can be refurbished for future sale will be so refurbished by Licensor and sold to Licensee at Licensor's cost. Licensee will pay Licensor the wholesale value of returns by U.S. Department Store Customers physically accepted by Licensor or authorized as destroyed in the field by Licensee above the initial $355,000 plus 10% of net sales of Mothers Day sets, and such goods will be for the account of the Licensee, without further costs. Licensee shall have the right to authorize return authorizations on Licensor's behalf and to cancel Licensor's previously made return authorizations subject to the provisions of the immediately preceding paragraph. However, such right is conditioned upon Licensee's obligation to report any such actions pertaining to old allowances and all new allowances authorized by Licensee on Licensor's behalf. Allowance reports will be updated and reported to Licensor within ten days of close, and on a thirty-day basis thereafter subject to a Licensor's right of audit pursuant to paragraph 40. Payment due under this section will be made to Licensor by Licensee within 30 (thirty) days of receipt of such inventory by Licensee. In all other respects, the terms of the Agreement are reaffirmed and ratified. The Rest of This Page Left Intentionally Blank "Licensor" "Licensee" HUMAN PHEROMONE SCIENCES, INC. NICHE MARKETING, INC. By /s/ William P. Horgan By /s/ Mark D. Crames --------------------------- --------------------------- William P. Horgan, CEO Mark D. Crames, CEO "Guarantor" NORTHERN GROUP, INC. By /s/ Mark D. Crames --------------------------- Mark D. Crames, CEO EX-27.01 3 0003.txt FINANCIAL DATA SCHEDULE
5 The Schedule Contains Summary Financial Information Extracted From Balance Sheets and Statements of Income 0000878616 Human Pheromone Sciences, Inc. 1 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 761,000 0 1,223,000 (38,000) 600,000 2,593,000 802,000 (793,000) 2,602,000 597,000 0 0 3,606,000 17,667,000 (19,268,000) 2,602,000 1,755,000 2,284,000 686,000 686,000 1,939,000 0 22,000 (361,000) 0 (361,000) 0 0 0 (361,000) (0.11) (0.11)
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