-----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, AZdyVoAfB7aTpn26wtyf1TqmqzgQ91W0dJX12ybuIsgswELxhDML12J9tURB5qpl LDHaiM2Z9KWmR9QKHm+Ezg== 0000950137-97-003304.txt : 19971010 0000950137-97-003304.hdr.sgml : 19971010 ACCESSION NUMBER: 0000950137-97-003304 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961015 ITEM INFORMATION: FILED AS OF DATE: 19971009 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACCUMED INTERNATIONAL INC CENTRAL INDEX KEY: 0000888335 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 364054899 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-20652 FILM NUMBER: 97692983 BUSINESS ADDRESS: STREET 1: 920 N FRANKLIN ST STREET 2: STE 402 CITY: CHICAGO STATE: IL ZIP: 60610 BUSINESS PHONE: 3126429200 MAIL ADDRESS: STREET 1: 920 N FRANKLIN STREET STREET 2: SUITE 402 CITY: CHICAGO STATE: IL ZIP: 60610 FORMER COMPANY: FORMER CONFORMED NAME: ALAMAR BIOSCIENCES INC DATE OF NAME CHANGE: 19950504 8-K/A 1 AMENDMENT NO. 3 TO FORM 8-K 1 _________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________ FORM 8-K/A AMENDMENT NO. 3 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): October 15, 1996 ACCUMED INTERNATIONAL, INC. --------------------------- (Exact name of registrant as specified in its charter) Delaware 0-20652 36-4054899 --------------- ----------- ------------------ (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 900 N. Franklin Street, Suite 401, Chicago, Illinois 60610 ---------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (312) 642-9200 _____________________________________________________________ (Former name or former address, if changed since last report) ________________________________________________________________________________ 2 Item 7. Financial Statements and Exhibits (a) Financial Information of Businesses Acquired: The following financial statements are filed herewith: Oncometrics Imaging Corp.: 1. Auditors' Report 2. Balance Sheets as of August 31, 1995, December 31, 1995, May 31, 1996 and September 30, 1996 (unaudited) 3. Statements of Operations and Deficit for the twelve months ended August 1995; four months ended December 31, 1995; five months ended May 31, 1996 and the four months ended September 30, 1996 (unaudited). 4. Statement of Changes in Financial Position for the 12 months ended August 31, 1995, the four months ended December 31, 1995, the five months ended May 31, 1996 and the four months ended September 30, 1996 (unaudited). 5. Notes to financial statements. Radco Ventures, Inc. 1. Independent Auditors' Report. 2. Balance Sheet as of September 30, 1996. 3. Statement of Operations for the period from March 6, 1996 (date of incorporation) through September 30, 1996. 4. Statement of Stockholders' Equity (Deficit) for the period from March 6, 1996 (date of incorporation) through September 30, 1996. 5. Statement of Cash Flows for the period from March 6, 1996 (date of incorporation) through September 30, 1996. 6. Notes to the financial statements. (b) Pro Forma Financial Information: The following pro forma financial information is filed herewith: AccuMed International, Inc. and its subsidiaries. 1. Pro Forma Condensed Combining Balance Sheet as of September 30, 1996. 2. Pro Forma Condensed Combining Statements of Operations for the nine months ended September 30, 1996. 2 3 3. Pro Forma Condensed Combining Statements of Operations for the three months ended December 31, 1995. 4. Notes to Pro Forma Condensed Combining Financial Statements. (c) Exhibits: The following exhibits are filed herewith. 23.1 Consent of KPMG Peat Marwick LLP (incorporated by reference to the Company's Amendment No. 1 on Form 8-K/A to Current Report dated October 15, 1996 and filed October 30, 1996). 23.2 Consent of KPMG. 3 4 AUDITORS' REPORT The Board of Directors Oncometrics Imaging Corp. We have audited the balance sheets of the AIC division of Xillix Technologies Corp. (Division) as at August 31, 1995 and December 31, 1995 and Oncometrics Imaging Corp. (Company) at May 31, 1996 and the statements of operations and deficit and cash flows for the periods then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, these financial statements present fairly, in all material respects, the financial position of the Division as at August 31, 1995, and December 31, 1995, and the Company as at May 31, 1996 and the results of their operations and cash flows for the periods then ended in accordance with accounting principles generally accepted in Canada. As required by the Company Act (British Columbia), we report that, in our opinion, these principles have been applied on a basis consistent with that of the preceding year. Generally accepted accounting principles in Canada vary in certain significant respects from generally accepted accounting principles in the United States. As indicated in note 12 there are no material differences which affect the results of operations in each of the periods and shareholders' deficiency as at August 31, 1995, December 31, 1995 and May 31, 1996. /s/ KPMG Chartered Accountants Vancouver, Canada July 18, 1996 4 5 ONCOMETRICS IMAGING CORP. BALANCE SHEETS (in Can. $)
ASSETS AUGUST 31, DECEMBER 31, MAY 31, SEPTEMBER 30, 1995 1995 1996 1996 (UNAUDITED) ---------- ------------ ------- ------------- Current assets Cash $ $ - $ 18,006 $ 33,893 Accounts receivable 37,818 222,576 35,960 66,199 Inventories 147,592 80,249 138,050 150,483 Other - - 5,438 45,058 --------- --------- --------- --------- Total current assets 185,410 302,825 197,454 295,633 --------- --------- --------- --------- Capital assets, net 244,916 238,197 236,847 236,104 --------- --------- --------- --------- 430,326 541,022 434,301 531,737 ========= ========= ========= ========= LIABILITIES AND EQUITY (DEFICIENCY) Current liabilities Accounts payable and accrued liabilities 45,600 22,700 105,962 152,018 Current portion of long-term debt - 10,000 10,000 - --------- --------- --------- --------- 45,600 32,700 115,962 152,018 --------- --------- --------- --------- --------- --------- --------- --------- Long term debt 318,338 308,338 308,338 307,726 --------- --------- --------- --------- Equity (Deficiency) Share capital - - 199,984 199,984 Xillix divisional equity, net of operating loss 66,388 199,984 - - Xillix capital contributions - - 302,374 794,349 --------- --------- --------- --------- 66,388 199,984 502,358 994,333 --------- --------- --------- --------- (Deficit) Profit - - (492,357) (922,341) --------- --------- --------- --------- 66,388 199,984 10,001 71,992 --------- --------- --------- --------- $ 430,326 $ 541,022 $ 434,301 $ 531,737 ========= ========= ========= =========
See accompanying notes to financial statements. 5 6 ONCOMETRICS IMAGING CORP. STATEMENTS OF OPERATIONS AND DEFICIT (in Can. $)
TWELVE MONTHS FOUR MONTHS FIVE MONTHS FOUR MONTHS ENDED ENDED ENDED ENDED AUGUST 31, 1995 DECEMBER 31, 1995 MAY 31, 1996 SEPTEMBER 30, 1996 (UNAUDITED) --------------------------------------------------------------------- Revenues Product sales $ 220,862 $ 198,845 $ 7,012 $ 6,431 Interest income - - 1,554 647 Other income - - - 24,759 ----------------------------------------------------------------- 220,862 198,845 8,566 31,837 Cost and expense Cost of sales 183,927 119,325 4,297 5,719 Marketing, sales and support - - 82,062 18,636 Research and development 1,290,188 300,853 283,522 315,124 General and administrative - - 100,435 97,107 General and administrative allocation from parent company 235,826 60,320 - - Depreciation and amortization 71,840 23,680 30,607 25,235 ----------------------------------------------------------------- 1,781,781 504,178 500,923 461,821 ----------------------------------------------------------------- Loss for the period $1,560,919 $ 305,333 $ 492,357 $ 429,984 ============================ Deficit, beginning of period - ---------------------------- Deficit, end of period $ 492,357 $ 922,341 ============================
See accompanying notes to financial statements. 6 7 ONCOMETRICS IMAGING CORP. STATEMENTS OF CASH FLOWS (in Can. $)
TWELVE MONTHS FOUR MONTHS FIVE MONTHS FOUR MONTHS ENDED ENDED ENDED ENDED AUGUST 31, 1995 DECEMBER 31, 1995 MAY 31, 1996 SEPTEMBER 30, 1996 (UNAUDITED) --------------- ----------------- ------------ ------------------ Cash provided by (used in): Operations: Loss for the period $(1,560,919) $ (305,333) $ (492,357) $ (429,984) Depreciation and amortization an item not involving cash 71,840 23,680 30,607 35,100 ----------- ----------- ----------- ----------- (1,489,079) (281,653) (461,750) (394,884) Changes in non-cash operating working capital: Accounts receivable (37,818) (184,758) 186,616 (30,239) Inventories (147,592) 67,343 (57,801) (12,433) Other current assets - - (5,438) (39,620) Accounts payable and accrued liabilities 45,600 22,900 83,262 36,056 ----------- ----------- ----------- ----------- (1,628,889) (421,968) (255,111) (441,120) ----------- ----------- ----------- ----------- Financing Increase in equity 1,627,307 438,929 302,374 491,975 Increase in long-term debt 318,338 - - - ----------- ----------- ----------- ----------- 1,945,645 438,929 302,374 491,975 ----------- ----------- ----------- ----------- Investments Purchase of capital assets, net $ (316,756) $ (16,961) $ (29,257) (34,968) ----------- ----------- ----------- ----------- Increase in cash - - 18,006 15,887 Cash, beginning of period - - - 18,006 =========== =========== =========== =========== Cash, end of period $ - $ - $ 18,006 $ 33,893 =========== =========== =========== ===========
See accompanying notes to financial statements. 7 8 ONCOMETRICS IMAGING CORP. NOTES TO FINANCIAL STATEMENTS 1. FORMATION AND OPERATIONS: A division of Xillix Technologies Inc. ("Xillix") has specialized in the research and development of Automated Image Cytometry equipment ("AIC Division") In contemplation of raising additional capital for the AIC division, Oncometrics Imaging Corp. (the "Company") was formed as a wholly-owned subsidiary of Xillix in October 1995. Effective January 1, 1996 the operations of the AIC Division were transferred to the Company. The net assets of the AIC Division were transferred on January 20, 1996 in consideration of shares of the Company. The value assigned to the shares was equal to the historical value of net assets transferred. The accompanying financial statements include the accounts of the Company for the period January 1, 1996 to May 31, 1996 and the accounts for the AIC Division for the year ended August 31, 1995 and the four months ended December 31, 1995. In December 1995 Xillix changed its fiscal year end from August 31 to December 31. The financial statements for the year ended August 31, 1995 and four months ended December 31, 1995 include an allocation of the overhead of Xillix applicable to the AIC Division, based on proportionate wages, which management believes to be a reasonable allocation. Interim Financial Statements: The financial statements as of September 30, 1996 are unaudited. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position and results of operations for such periods. Results of operations for interim periods are not necessarily indicative of results that will be achieved for the entire year. 2. SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared by management in accordance with generally accepted accounting principles in Canada (Canadian GAAP) and presented in Canadian dollars. These financial statements also conform, in all material respects, with those accounting principles that are generally accepted in the United States (US GAAP), except for these matters referred to in note 12. 8 9 (a) Basis of presentation: These financial statements are prepared for inclusion in a SEC filing statement for purposes of funding the acquisition of a 66.67% equity interest of Oncometrics Imaging Corp. pursuant to a letter of intent dated July 3, 1996. The financial statements have been prepared on the basis which assumes the realization of assets and settlement of liabilities in the normal course of business. The ability of the Company to continue its planned course of action is dependent upon continued financial support from its parent company and upon additional financing and obtaining future profitable operations. (b) Inventories: Inventories are included at the lower of average cost and net realizable value. (c) Capital assets: Capital assets are stated at cost. Depreciation is provided using the following methods and annual rates:
Asset Basic Rate --------------------------------------------------- ----------------- ---- Computer and laboratory equipment declining-balance 30% Furniture and office equipment declining-balance 20% Demonstration equipment straight-line over 3 years Leasehold improvements straight-line over 5 years Intellectual property and patents straight-line over 17 years
(d) Research and development costs: Research and development (R&D) costs are expensed as incurred. Research and related government assistance is accounted for using the cost reduction method and is credited against R&D expenditures. (e) Estimates: Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from these estimates. 9 10 3. INVENTORIES: Inventories comprises finished goods of $ nil (August 31, 1995 - $70,000; December 31, 1995 -$ nil) and materials of $138,050 (August 31, 1995 - $77,592; December 31, 1995 - $80,249). 4. CAPITAL ASSETS:
AUGUST 31, DECEMBER 31, MAY 31, 1995 1995 1996 --------- ----------- ------ Computer and laboratory equipment $194,130 $207,891 $221,811 Furniture and office equipment 1,923 7,923 11,339 Demonstration equipment 107,562 108,623 108,623 Leasehold improvements - - 3,883 Intellectual property and patents 121,901 124,040 132,078 -------- -------- -------- 431,516 448,477 477,734 Less accumulated depreciation and amortization 186,600 210,280 240,887 -------- -------- -------- $244,916 $238,197 $236,847 ======== ======== ========
5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES: Accrued liabilities include a warranty reserve of $9,120 (August 31, 1995 - $20,000: December 31, 1995 - $10,000) and accrued salary and vacation pay of $ nil (August 31, 1995 - $25,600; - December 31, 1995 - $ nil). 6. LONG-TERM DEBT: Long-term debt consists of repayable contribution from the Wester Economic Diversification Program which was assumed from Xillix Technologies Corp. ("Xillix") and is still in the name of Xillix as follows:
AUGUST 31, DECEMBER 31, MAY 31, 1995 1995 1996 --------- ----------- ------ Balance assumed $318,338 $318,338 $318,338 Less current portion - 10,000 1,000 -------- -------- -------- $318,338 $308,338 $308,338 ======== ======== ========
The Western Diversification construction does not bear interest. This is repayable in semi-annual contributions commencing January 31, 1994. Repayments are based on future sales of the ACCESS device. 10 11 The estimated aggregate maximum repayments for each of each of the five years subsequent to December 31, 1995 are as follows: 1996......................................................................................................$ 10,000 1997...................................................................................................... 100,000 1998...................................................................................................... 100,000 1999...................................................................................................... 100,000 2000...................................................................................................... 8,338
7. SHARE CAPITAL: (a) Authorized: The authorized share capital of the Company consists of 50,000,000 common shares without par value. (b) Issued:
AUGUST 31, DECEMBER 31, MAY 31, 1995 1995 1996 ---------- ------------ ------- 1,775,000 (1- December 31, 1995) common shares $ N/A $ - $ 199,984
8. DIVISIONAL EQUITY: The divisional equity at December 31, 1995 and August 31, 1995 represents the sum of cash contributions, plus the net assets of the division less the divisional loss. 9. XILLIX CAPITAL CONTRIBUTION This represents loans by Xillix to the Company which will be converted to shares. 10. INCOME TAXES: As at May 31, 1996 the Company has non-capital losses for income tax purposes of approximately $256,000 available to reduce taxes of future years, which expire in 2000. The Company also has Scientific Research Experimental Development Expenditures of approximately $214,000 at May 31, 1996. No recognition has been given in these financial statements to the potential future tax benefits which may arise from claiming these losses and Scientific Research and Experimental Development Expenditures. 11 12 11. EXPORT SALES: The Company's division had export sales in the following geographic regions:
TWELVE MONTHS FOUR MONTHS FIVE MONTHS ENDED ENDED ENDED AUGUST 31, DECEMBER 31, MAY 31, 1995 1995 1996 -------- -------- -------- United States $148,453 $ 8,190 $ 4,326 Europe 2,428 129,675 2,186 -------- -------- -------- $150,881 $137,865 $ 6,512 ======== ======== ========
12. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES: In February 1992, the Financial Accounting Standards Board issued Statement No. 109, "Accounting for Income Taxes". Statement 109 changed the method companies used to account for income taxes from the deferral method to the asset and liability method. This statement is effective for fiscal years beginning after December 15, 1992. The Company has determined that the adoption of Statement 109 does not result in a material effect on the net deferred income tax position of the Company as any deferred tax assets initially recognized are fully offset by a valuation allowance as at December 31, 1995. 13. SUBSEQUENT EVENT (UNAUDITED): Pursuant to the share Purchase Agreement dated as of August 16, 1996, a related party acquired two-thirds equity interest in the Company for aggregate consideration of $4.0 million in cash on October 15, 1996. Of the consideration $2.0 million was paid to Xillix Technologies Corp. The remaining $2.0 million was paid to the Company in consideration for 1,000,000 newly issued shares of the Company's stock pursuant to the Subscription Agreement between the related party and the Company dated as of August 16, 1996. 12 13 INDEPENDENT AUDITORS' REPORT The Board of Directors Radco Ventures, Inc.: We have audited the accompanying balance sheet of Radco Ventures, Inc. (a development stage enterprise) as of September 30, 1996 and the related statements of operations, stockholders' equity (deficit) and cash flows for the period from March 6, 1996 (date of incorporation) through September 30, 1996. These financial statements are the responsibility of Radco Ventures, Inc. management. Our responsibility is to express and opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as will as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Radco Ventures, Inc. (a development stage enterprise) as of September 30, 1996, and the results of its operations and its cash flows for the period from March 6, 1996 (date of incorporation) through September 30, 1996 in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that Radco Ventures, Inc. will continue as a going concern. As discussed in note 2 to the financial statements, Radco Ventures, Inc. has suffered recurring losses from operations, has a net stockholders' deficit, and negative working capital that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ KPMG Peat Marwick LLP Chicago, Illinois December 6, 1996 13 14 RADCO VENTURES, INC. (A DEVELOPMENT STAGE ENTERPRISE) BALANCE SHEET SEPTEMBER 30, 1996 ASSETS ------ Current Assets Cash and cash equivalents $ 18,094 Note receivable from affiliate 775,000 ----------- Total current assets 793,094 ----------- 793,094 =========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ------------------------------------ Current liabilities Accounts payable 1,583 Accrued interest 67,761 Due to affiliate 191,000 Notes payable 1,187,500 ----------- Total current liabilities 1,447,844 ----------- Stockholders' equity (deficit) Common stock, $0.01 par value, 1,000,000 shares 5,000 authorized, 500,000 shares issued and outstanding at September 30, 1996 Additional paid-in capital 57,500 Deficit accumulated during development stage (717,250) ----------- Total stockholders' equity (deficit) (654,750) ----------- $ 793,094 ===========
See accompanying notes to financial statements. 14 15 RADCO VENTURES, INC. (A DEVELOPMENT STAGE ENTERPRISE) STATEMENTS OF OPERATIONS FOR PERIOD FROM MARCH 6, 1996 (DATE OF INCORPORATION) THROUGH SEPTEMBER 30, 1996 Operating expenses: General and administrative $ 217,075 Research and development 432,650 Sales and marketing 10,000 --------- Total operating expenses 659,725 --------- Operating loss (659,725) --------- Other income (expense): Interest income 10,146 Interest expense (67,671) --------- Total other income (expense) (57,525) --------- Loss before income taxes (717,250) --------- Income tax expense - --------- Net loss $(717,250) =========
See accompanying notes to financial statements. 15 16 RADCO VENTURES, INC. (A DEVELOPMENT STAGE ENTERPRISE) STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) FOR PERIOD FROM MARCH 6, 1996 (DATE OF INCORPORATION) THROUGH SEPTEMBER 30, 1996
Deficit Accumulated Common stock During ---------------------- Paid-in Development Shares Amount Capital Stage Total -------------------------------------------------------------------- Issue of common stock on March 6, 1996 500,000 $ 5,000 $ 57,500 $ 62,500 Net loss - - - (717,250) $(717,250) - ------------------------------------------------------------------------------------------------------------------ Balances at September 30, 1996 500,000 $ 5,000 $ 57,500 $(717,250) $(654,750) ==================================================================================================================
See accompanying notes to financial statements 16 17 RADCO VENTURES, INC. (A DEVELOPMENT STAGE ENTERPRISE) STATEMENT OF CASH FLOWS FOR PERIOD FROM MARCH 6, 1996 (DATE OF INCORPORATION) THROUGH SEPTEMBER 30, 1996
Operating activities Net loss $ (717,250) Adjustments to reconcile net loss to net cash used in operating activities: Changes in operating assets and liabilities: Notes receivable from affiliate (775,000) Accounts payable 1,583 Due to affiliate 191,000 Accrued interest 67,761 ----------- Net cash used in operating activities (1,231,906) ----------- Financing activities: Proceeds from issuance of stock and notes payable 1,250,000 ----------- Net cash provided by financing activities 1,250,000 ----------- Net increase in cash and cash equivalents 18,094 Cash and cash equivalents at beginning of period - ----------- Cash and cash equivalents at end of period $ 18,094 ===========
See accompanying notes to financial statements. 17 18 RADCO VENTURES, INC. (a development stage enterprise) Notes to Financial Statements (1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Radco Ventures, Inc. (the "Company") was formed for the purpose of developing a diagnostic microbiology test panel and automated reading instrument. The Company was formed and incorporated in Delaware on March 6, 1996. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with maturities less than three months. Research and Development Costs The Company expensed all research and development costs in the period incurred. Accrual based accounting The Company's financial statements have been prepared on the accrual basis. Use of Estimates Management of Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting policies. Actual results could differ from those estimates. (2) BASIS OF PRESENTATION The financial statements have been prepared in accordance with the provisions of Statement of Financial Accounting Standards No. 7, "Accounting and Reporting by Development Stage Enterprises," which requires development stage enterprises to employ the same accounting principles as operating companies. The accompanying financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements, the Company has suffered recurring losses totaling $717,250 since inception, has a working capital deficit of $654,750, and net 18 19 stockholders' deficit of $654,750 as of September 30, 1996. These factors, among others, may indicate that the Company will be unable to continue as a going concern. The Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, continued financial support from its stockholders, and ultimately to attain successful operations. Management is currently involved in selling the Company (see note 5). (3) RELATED PARTY TRANSACTIONS The Company entered into an agreement to loan AccuMed International, Inc. $775,000 in July, 1996 and received as consideration a non-negotiable interest-free promissory note with maturity date of July 21, 1997. The note is recorded as note receivable from affiliate in the September 30, 1996 balance sheet. The Company also recorded a payable due to affiliate in the balance sheet at September 30, 1996 for $191,000 related to operating expenses paid on behalf of the Company by the same related party. Radco and AccuMed International, Inc. entered into a Research and Development Services Agreement dated March 15, 1996 to provide services in connection with the development of a diagnosetic microbiology test panel and automated reading instrument. In March 1996, AccuMed International, Inc. and Radco aslo entered into an Administration and Facilities Service Agreement pursuant to which AccuMed International, Inc. provided laboratory facilities and administrative services to Radco in consideration of specified cash payments. (4) PRIVATE PLACEMENT In March 1996, the Company was capitalized through a private placement of units consisting of an aggregate of 400,000 shares of the Company's common stock, notes payable in the aggregate principal amount of approximately $1.2 million (bearing interest at a rate of 10% per annum), and warrants to purchase an aggregate of 687,500 shares of the related party's common stock with a weighted average exercise price of $3.73 per share. In consideration for the issuance of such warrants, the related party received 10% of the Company's outstanding stock. (5) SUBSEQUENT EVENT Pursuant to the Stock Purchase Agreement dated as of August 15, 1996 among the related party, the Company, and the selling stockholders, the related party acquired all of the outstanding shares (not then owned) of the Company and retired all non-negotiable promissory notes recorded by the Company on October 15, 1996. The notes were settled for $1,327,410 plus accrued interest payable. 19 20 PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS The accompanying pro forma condensed combining financial statements reflects the acquisition of a 66% interest in Oncometrics Imaging Corp. (Oncometrics) by AccuMed International, Inc. (AccuMed International) (formerly Alamar Biosciences, Inc.) the acquisition of the remaining 90% interest in Radco Ventures, Inc. (Radco), the merger of AccuMed International and AccuMed Inc. (AccuMed), and the purchase of certain assets and assumption of certain liabilities from Sensititre US and Sensititre Ltd. by AccuMed. The pro forma condensed combining balance sheet as of September 30, 1996 assumes that the acquisition of the 66% interest in Oncometrics and the acquisition of the remaining 90% interest in Radco occurred on September 30, 1996. The pro forma condensed combining statements of operations for the nine months ended September 30, 1996 and for the three months ended December 31, 1995 assume that the acquisition of the 66% interest in Oncometrics occurred on October 1, 1995. In addition, the pro forma condensed combining statements of operations for the three months ended December 31, 1995 assume that the merger of AccuMed International with AccuMed and the purchase of Sensititre US and Sensititre Ltd. occurred on October 1, 1995. The condensed combining statement of operations for the three months ended December 31, 1995, does not reflect results of operations for Radco since it was incorporated on March 6, 1996. The transactions have been accounted for using purchase accounting. The pro forma adjustments are based on preliminary assumptions of the fair value of the assets and liabilities are completed. Actual purchase accounting adjustments may differ form the pro forma adjustments presented herein. The respective Oncometrics financial results have been translated from Canadian dollars to U.S. dollars using an exchange rate of .7391 for the three months ended December 31, 1995 and .73495 for the nine months ended September 30, 1996 and .7342 as of September 30, 1996. The pro forma condensed combining financial information is not necessarily indicative of the results that actually would have occurred if the acquisitions had been completed on the assumed dates nor are the statements indicative of future combined financial position or earnings. 20 21 ACCUMED INTERNATIONAL, INC. PROFORMA CONDENSED COMBINING BALANCE SHEETS AS OF SEPTEMBER 30, 1996 (UNAUDITED)
ASSETS ACCUMED ONCOMETRICS RADCO ADJUSTMENTS PRO FORMA - ------ ------- ----------- ----- ----------- --------- Current Assets Cash and cash equivalents $ 445,811 $ 24,884 $ 18,094 $ $ 488,789 Accounts receivable 1,427,781 48,603 - - 1,476,384 Prepaid expenses and deposits 238,381 - - - 238,381 Production inventory 1,566,539 110,485 - - 1,677,024 ------------ -------- --------- ------------- ----------- Total current assets 3,678,512 183,972 18,094 3,880,578 ------------ -------- --------- ------------- ----------- Fixed assets, net 1,308,310 173,348 - - 1,481,658 Intangible assets 4,288,673 - - 794,570 (2) 7,728,243 2,645,000 (1) Other assets 731,491 33,081 775,000 (191,000) (8) 573,572 (775,000) (8) ------------ -------- --------- ------------- ----------- 10,006,986 390,401 793,094 2,473,570 13,664,051 ============ ======== ========= ============= =========== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current liabilities Accounts payable 2,896,440 111,612 1,583 - 3,009,635 Other current liabilities 896,369 - 258,761 (191,000) (8) 896,369 (67,761) (8) Due to Oncometrics Imaging Crop. Due to Xillix Technologies Corp. - - - 2,000,000 (1) 2,000,000 Due to Radco Ventures, Inc - - - 1,395,081 (2) 1,395,081 Deferred revenue 45,644 - - - 45,644 Notes payable 1,312,497 - 1,187,500 (1,187,500) (2) 537,497 (775,000) (8) Capital lease obligation due within one year 106,456 - - - 106,456 ------------ -------- --------- ------------- ----------- Total current liabilities 5,257,406 111,612 1,447,844 1,173,820 7,990,682 ------------ -------- --------- ------------- ----------- Long term portion of capital lease obligation 4,350 - - - 4,350 Deferred rent 14,025 - - 14,025 Long term debt - 225,933 - - 225,933 - Minority interest - - - 697,856 (5) 697,856 Stockholders' equity - Common stock 178,084 5,000 (5,000) (2) 178,084 Additional paid-in capital 33,351,069 57,500 (57,500) (2) 33,351,069 Share capital - 146,828 - (146,828) - Xillix capital contribution - 583,211 - (583,211) - Cumulative transaction adjustment (2,236) (2,236) Accumulated deficit (28,635,755) (677,183) (717,250) 1,394,433 (1)(2) (28,635,755) ------------ -------- --------- ------------- ----------- 4,891,162 52,856 (654,750) 601,894 4,891,162 Less treasury stock (159,957) (159,957) ------------ -------- --------- ------------- ----------- Total stockholders' equity 4,731,205 52,856 (654,750) 601,894 4,731,205 ------------ -------- --------- ------------- ----------- Total Liabilities and stockholder's equity $ 10,006,986 $390,401 $ 793,094 $ 2,473,570 $13,664,051 ============ ======== ========= ============= ===========
See accompanying notes to the pro forma condensed combining financial statements. 21 22 ACCUMED INTERNATIONAL, INC. PRO FORMA CONDENSED COMBINING STATEMENTS OF OPERATIONS FOR NINE MONTHS ENDING SEPTEMBER 30, 1996 (UNAUDITED)
ACCUMED ONCOMETRICS RADCO ADJUSTMENT PRO FORMA ------------ ------------ ------------ ------------ ------------ Sales $ 3,668,150 $ 9,880 $ - $ - $ 3,678,030 Less cost of sales 2,054,122 7,361 - - 2,061,483 ------------ ------------ ------------ ------------ ------------ Gross profit (loss) 1,614,028 2,519 - - 1,616,547 ------------ ------------ ------------ ------------ ------------ Operating expenses: General and administrative 2,874,079 74,008 217,075 81,000 (4) 3,246,162 Research and development 5,298,016 439,975 432,650 - 6,170,641 Sales, marketing and customer service 1,465,047 186,225 10,000 - 1,661,272 ------------ ------------ ------------ ------------ ------------ Total operating expenses 9,637,142 700,208 659,725 81,000 11,078,075 ------------ ------------ ------------ ------------ ------------ Operating loss (8,023,114) (697,689) (659,725) (81,000) (9,461,528) ------------ ------------ ------------ ------------ ------------ Other income (expense): Interest income 15,796 - 10,146 - 25,942 Interest expense (450,628) - (67,671) - (518,299) Other income 2,584,541 19,814 - - 2,604,355 Other expense - - - - - ------------ ------------ ------------ ------------ ------------ Total other income (expense) 2,149,709 19,814 (57,525) - 2,111,998 ------------ ------------ ------------ ------------ ------------ Loss before income taxes (5,873,405) (677,875) (717,250) (81,000) (7,349,530) Income tax expense 850 - - - 850 ------------ ------------ ------------ ------------ ------------ Net loss before Minority interest (5,874,255) (677,875) (717,250) (81,000) (7,350,380) ------------ ------------ ------------ ------------ ------------ Minority interest - - - 250,429 (5) 250,429 ------------ ------------ ------------ ------------ ------------ Net loss $ (5,874,255) $ (677,875) $ (717,250) $ 169,429 $ (7,099,951) ============ ============ ============ ============ ============
See accompanying notes to the pro forma condensed combining financial statements. 22 23 ACCUMED INTERNATIONAL, INC. AND SUBSIDIARIES PRO FORMA CONDENSED COMBININB STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 1995 (UNAUDITED)
ACCUMED ONCOMETRICS INTERNATIONAL, IMAGING INC. ACCUMED INC. CORP. (A) ADJUSTMENTS PRO FORMA ------------ ------------ ------------ ------------ ------------ Sales $ 100,130 $ 1,009,376 $ 146,959 $ (73,005)(6) $ 1,183,460 Cost of sales (338,730) (830,497) (88,189) 71,892 (7) $ (1,185,524) ------------ ------------ ------------ ------------ ------------ Gross profit (loss) (238,600) 178,879 58,770 (1,113) $ (2,064) ------------ ------------ ------------ ------------ ------------ Operating expenses: General and administrative 1,418,797 758,066 49,759 27,000 (4) 2,253,622 Research and development 3,997,600 338,178 172,259 - 4,508,037 Sales and marketing 7,197 289,360 - - 296,557 ------------ ------------ ------------ ------------ ------------ Total Operating expenses 5,423,594 1,385,604 222,018 27,000 7,058,216 ------------ ------------ ------------ ------------ ------------ Operating loss (5,662,194) (1,206,725) (163,248) (28,113) (7,060,280) Other income (expenses) Interest income 4,748 - - - 4,748 Interest (expense) (10,862) (1,948) - - (12,810) Other (72,929) - - - (72,929) ------------ ------------ ------------ ------------ ------------ Loss before income taxes and minority interest (5,741,237) (1,208,673) (163,248) (28,113) (7,141,271) Provision for income taxes 800 - - - 800 ------------ ------------ ------------ ------------ ------------ Net loss before minority interest (5,742,037) (1,208,673) (163,248) (18,113) (7,132,071) Minority interest - - - 65,000 (5) 65,000 ------------ ------------ ------------ ------------ ------------ Net earnings (loss) $ (5,742,037) $ (1,208,673) $ (163,248) $ 36,887 $ (7,077,071) ============ ============ ============ ============ ============ Net loss per share $ (0.60) ============ Weighted average common shares outstanding 11,742,980 ============
(A) Includes the three months ended December 31, 1995 for Oncometrics See accompanying notes to the pro forma condensed combining financial statements 23 24 ACCUMED INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS NOTE A - DESCRIPTION OF ACQUISITIONS On December 29, 1995, AccuMed International (the "Company") (formerly Alamar Biosciences, Inc.) acquired all of the common stock of AccuMed, which included the recent acquisition of certain assets and assumption of certain liabilities of Sensititre Ltd. by AccuMed. Pursuant to the terms of the merger agreement, the Company issued 3,931,401 unconditional shares of common stock valued at $4,422,826 and 237,840 warrants valued at $68,252. An additional 1,881,910 shares and 126,945 warrants were issued to AccuMed shareholders on December 29, 1995, however, such shares and warrants are contingent and subject to forfeitures if specified performance goals are not achieved by the merged entity during the 24 months beginning January 1, 1996. In March 1996 the contingency associated with 940,955 shares and 63,472 warrants was resolved (performance goal achieved) resulting in contingent consideration of $5,430,326. The remaining contingent consideration will be recorded when the goals are achieved and will be computed based upon the stock price on such date. The acquisition has been accounted for using the purchase method of accounting. On October 15, 1996, the Company acquired a 66% interest in Oncometrics Imaging Corp. (Oncometrics), for approximately $4.0 million in cash. Of the $4.0 million consideration paid, $2.0 million was paid to Xillix Technologies Corp. (the Seller) with the remaining $2.0 million paid to Oncometrics in consideration for 1,000,000 newly issued shares of Oncometrics stock pursuant to the subscription agreement between the Seller and Oncometrics. This amount is included in cash in the adjustment column in the accompanying Pro Forma condensed combining balance sheet. The acquisition will be accounted for using the purchase method of accounting and a portion of the purchase price will be charged to acquired in-process research and development in the period in which the transaction is consummated. The respective Oncometrics financial results have been translated from Canadian dollars to U.S. dollars using an exchange rate of .7350 for the nine months ended September 30, 1996 and .7342 as of September 30, 1996. On October 15, 1996, the Company acquired the remaining 90% interest in Radco Ventures, Inc. (Radco), for approximately $1.4 million in cash. The acquisition will be accounted for using the purchase method of accounting and a portion of the purchase price will be charged to acquired in-process research and development in the period in which the transaction is consummated. 24 25 NOTE B - PRO FORMA ADJUSTMENTS The following adjustments are reflected in the Pro Forma Condensed Combining Financial Statements under the columns headed "Adjustments". (1) Purchase Price Allocation - Oncometrics To reflect the estimated allocation of the $2 million purchase price paid directly to Xillix associated with the acquisition of the 66% interest in Oncometrics. The purchase price was paid from the net proceeds of the Offering and has been reflected in the Pro Forma Condensed Combining Balance Sheet as Due to Xillix Technologies Corp. and Oncometrics Imaging Corp. The allocation of the purchase price represents an estimate of the fair value of the assets acquired and liabilities assumed, which consist of: Current assets $ 183,972 Fixed assets, net 173,348 Intangible assets: Purchased technology 1,045,000 Acquired in-process research and development 1,600,000 Other assets 33,081 Current liabilities (111,612) Long-term debt (255,933) Minority interest (697,856) ---------- Total purchase price $2,000,000 The Pro Forma Condensed Combining Balance Sheet reflects the estimated $1.6 million of acquired in-process research and development as Intangible Assets. Such amount will be written off as a charge to earnings in the period subsequent to the acquisition. The allocation is subject to change and is not necessarily indicative of the ultimate purchase price allocation. In addition, the Company contributed $2 million cash to Oncometrics as partial consideration for the 66% interest stated above. The cash was intended to be used by Oncometrics for working capital purposes. (2) Purchase Price Allocation - Radco To reflect the estimated allocation of the $1.4 million purchase price associated with the acquisition of remaining 90% interest in Radco. The purchase price was paid from the net proceeds of The Offering and has been reflected in The Pro Forma Condensed Combining Balance Sheet as Due to Radco Ventures, Inc. The allocation of the purchase price represents an estimate of the fair value of the assets acquired and liabilities assumed, which consist of: Cash $ 18,094 Other assets 775,000 Acquired in-process research and development 795,000 Current liabilities (192,583) --------- Total purchase price $1,395,511 The Pro Forma Condensed Combining Balance Sheet reflects the estimated $795,000 of acquired in-process research and development as Intangible Assets. Such amount will be written off as a charge to earnings in the period subsequent to the acquisition. The allocation is subject to change and is not necessarily indicative of the ultimate purchase price allocation. (3) Acquired In-Process Research and Development. The estimated charges of approximately $1.6 million and $795,000 for acquired in-process research and development relating to the Oncometrics and Radco acquisitions, respectively, are not reflected in the accompanying Pro Form Condensed Combining Statements of Operations. Such amounts will result in a charge to earnings in the period subsequent to the acquisitions. A charge for acquired in-process research and development relating to the AccuMed acquisition in the amount of approximately $4.0 million has been reflected in the historical financial results of AccuMed International in the accompanying Pro Form Condensed Combining Statements of Operations for the 25 26 three months ended December 31,1995. In addition, a charge of $3.5 million relating to the allocation of purchase price to acquire in-process research and development following the resolution of a portion of the contingency has been reflected in the historical financial result of AccuMed International in the accompanying Pro Form Condensed Combining Statements of Operations for the nine months ended September 30, 1996. (4) Amortization of Intangibles To reflect the amortization of the excess of cost over net assets acquired and purchased technology of Oncometrics using the straight-line method over 10 years. (5) To reflect the minority interest share (33.3%) of net loss and the respective share of stockholders' equity. The stockholders' equity of Oncometrics is comprised of $2.0 million in cash and $52,856 of net assets acquired. (6) To eliminate intercompany sales from AccuMed International Limited (formerly Sensititre UK Ltd.) to AccuMed (formerly Sensititre U.S.) (7) To eliminate intercompany profit from the cost of product sold from AccuMed International Limited (formerly Sensititre UK Ltd.) to AccuMed (formerly Sensititre U.S.) (8) To eliminate intercompany receivables and payables between Radco Ventures, Inc. and AccuMed International, Inc. 26 27 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to the report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: August 14, 1997 ACCUMED INTERNATIONAL, INC. By: /s/ LEONARD R. PRANGE ----------------------------- Leonard R. Prange Chief Financial Officer and Chief Operating Officer 27 28 EXHIBIT INDEX No. Exhibit 23.1 Consent of KPMG Peat Marwick LLP (incorporated by reference to the Company's Amendment No. 1 on Form 8-K/A to Current Report dated October 15, 1996 and filed October 30, 1996). 23.2 Consent of KPMG. 28 EX-23.1 2 CONSENT OF KPMG PEAT MARWICK LLP 1 Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT The Board of Directors Radco Ventures, Inc. We consent to the use of our report dated December 6, 1996 with respect to the balance sheet of Radco Ventures, Inc. as of Secptember 30, 1996, and the related statements of operations, stockholders' equity (deficit), and cash flows for the period from March 6, 1996 (date of incorporation) through September 30, 1996, included herein. /s/ KPMG Peat Marwick LLP Chicago, Illinois December 23, 1996 EX-23.2 3 CONSENT OF KPMG 1 Exhibit 23.2 INDEPENDENT AUDITORS' CONSENT The Board of Directors Oncometrics Imaging Corp. We consent to the use of our report dated July 18, 1996 with respect to the balance sheets of AIC Division of Xillix Technologies Corp., as of August 31, 1995, and December 31, 1995, and Oncometrics Imaging Corp. as of May 31, 1996, and the related statements of operations and deficit and changes in financial position for the period then ended, included herein. /s/ KPMG Chartered Accountants Vancouver, British Columbia July 17, 1997 -----END PRIVACY-ENHANCED MESSAGE-----