Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 11, 1997
WHITEWING LABS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-27420 95-4437350
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
15455 San Fernando Mission Boulevard, Suite 105, Mission Hills, California 91345
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 898-2167
Not Applicable
(Former name or former address, if changed since last report)
Item 4. Changes in Registrant's Certifying Accountant.
a) Arthur Andersen LLP was dismissed as the Company's independent
accountants by the Company's Board of Directors on November 11, 1997. Arthur
Andersen LLP had acted as the Company's independent accountants since 1995. The
independent auditors' reports issued by Arthur Andersen LLP on the Company's
consolidated financial statements for the years ended December 1995, and 1996,
did not contain an adverse opinion or disclaimer of opinion, and such reports
were not modified for any departure from generally accepted accounting
principles or for any limitation of audit scope. There were no disagreements
with Arthur Andersen LLP, resolved or unresolved, on any matter of accounting
principles or practices, financial disclosure, or auditing scope or procedure,
which, if not resolved to Arthur Andersen LLP's satisfaction, would have caused
it to make reference to the subject matter of the disagreement in connection
with its reports. Arthur Andersen LLP was not retained to report on the
Company's 1997 consolidated financial statements.
(b) Effective as of November 11, 1997, the Company has engaged Moss Adams
LLP to audit the Company's consolidated financial statements for the year ending
December 31, 1997. At no time during the Company's two fiscal years ending
December 31, 1996 nor during the subsequent interim period prior to engaging
Moss Adam LLP did the Company, or anyone on its behalf, consult Moss Adams
LLP regarding (i) either: the application of accounting principles to a
specified transaction, either completed or proposed; or the type of audit
opinion that might be rendered on the Company's consolidated financial
statements, and either a written report was provided to the Company or oral
advice was provided that Moss Adams LLP concluded was an important factor
considered by the Company in reaching a decision as to the accounting, auditing
or reporting issue; or (ii) any matter that was either the subject of a
disagreement (as defined in paragraph 304(a)(1)(iv) and the related instruction
of Regulation S-K) or was a reportable event (as described in paragraph
304(a)(1)(iv) of Regulation S-K).
Item 5. Other Events.
On November 4, 1996, the Company reduced the exercise price of the
Outstanding Common Stock Purchase Warrants (the "Warrants") issued in connection
with the Company's 1996 initial public offering, such that the holder of two
Warrants will be entitled to purchase one share of the Company's Common Stock at
a price of $3.00 per share at any time after November 4, 1997 and prior to
January 9, 1999, at which time any then outstanding Warrants that have not been
exercised will expire automatically. The outstanding Warrants currently are
subject to call by the Company for redemption on 45 days' prior written notice
at a redemption price of $.05 per Warrant if, among other conditions, the
closing bid price of the Company's Common Stock exceeds the exercise
price of the Warrants by at least 50% during a period of at least 20 trading
days of the 30 trading days immediately preceding the date on which notice of
the proposed redemption is given. As a consequence of the reduction in the
exercise prices of the Warrants, the Company may call the Warrants for
redemption if the closing bid price of the Common Stock is at least $4.50 over
the specified period.
On November 7, 1997, the Company issued a press release announcing the
Operating results of its third quarter which ended September 30, 1997, and the
reduction in the exercise price of the Warrants. A copy of the Company's press
release dated November 7, 1997 is filed as Exhibit to A to this Current Report
on Form 8-K and by this reference incorporated herein.
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following exhibits are filed herewith as part of this
Current Report on Form 8-K:
Exhibit A Press release dated November 7, 1997.
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 hereunto duly authorized.
WHITEWING LABS, INC.
____/S/__Cynthia_Kolke_______
By: Cynthia Kolke, President
Date: November 11, 1997
PRESS RELEASE
________________________________________________________________________________
FOR IMMEDIATE RELEASE
FRIDAY, NOVEMBER 7, 1997
WHITEWING LABS ANNOUNCES THIRD QUARTER RESULTS AND REPRICING OF WARRANTS
MISSION HILLS, CA - Whitewing Labs, Inc. (Nasdaq: WWLI) today announced results
of operations for the three months ended September 30, 1997. Sales increased to
$987,518 for the third quarter of 1997 versus $812,843 for the third quarter of
1996. Operating expenses for the third quarter of 1997 decreased to $1,011,782
from $1,142,466 in the third quarter of 1996. The net loss for the third
quarter decreased to $136,271 ($0.05 per share) from $423,178 ($0.16 per share)
in the third quarter of 1996. On a sequential basis sales for the third quarter
of 1997 increased 62% over sales of the second quarter of 1997. This increase
is attributed to higher response rates generated by the Company's current
marketing program.
During the third quarter of 1997, the customer base grew from 98,000 to 122,000.
The Company continued to focus on selecting a mix of direct response media with
overall favorable response rates, with the result that advertising and selling
costs decreased from $925,251 for the three months ended September 30, 1996 to
$839,251 for the three months ended September 30, 1997, a decrease of
approximately 10% over the prior period. While the company reduced certain of
its advertising and direct mail programs, it continued to aggressively market to
its existing customers via various catalogue offerings.
Whitewing's President, Cynthia Kolke said, "Despite a maturing catalogue market
for nutrition companies, the Company has been able to tap into a new source of
customers as a result of its investment in electronic in-home delivery of
product advertising. Management is continuing to work on various strategies to
ensure maximum utilization of new customer interest as well as the existing
customer base". Ms. Kolke also announced that the exercise price of the
Company's Warrants have been reduced from $7.00 to $3.00 effective with the date
of this press release. The holder of two Warrants is entitled to purchase one
share of the Company's Common stock at $3.00 per share prior to February 9,
1999.
Whitewing Labs, Inc. - Results of Operations
3 months 3 months 9 months 9 months
ended 9/30/96 ended 9/30/97 ended 9/30/96 ended 9/30/97
Net Sales 812,843 987,518 2,736,285 2,256,927
Cost of Goods Sold 134,693 130,978 375,945 317,936
Operating Expenses 1,142,466 1,011,782 3,999,973 2,896,151
Other Income, Net 41,138 18,971 110,981 63,785
Net Loss (423,178) (136,271) (1,536,516) (893,375)
Loss per Share (0.16) (0.05) (0.58) (0.31)
Wt Av Shrs Outstanding 2,649,287 2,864,938 2,647,288 2,864,603
Whitewing Labs, Inc. is a publicly held company that develops and markets
nutritional supplements.
Contact: Cynthia Kolke - President
Whitewing Labs, Inc.
Phone: (818) 898-2167
Fax: (818) 898-2136
