<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT
OF 1934
For Quarter Ended JULY 31, 1998
Commission File Number 0-22011
BIONUTRICS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 86-0760991
(State or other jurisdiction of I.R.S. Employer
incorporation of organization) Identification Number
2425 E. CAMELBACK RD., SUITE 650 PHOENIX, ARIZONA 85016
(Address of principal executive offices) (Zip code)
602-508-0112
(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
YES /X/ NO / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, at the latest practical date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AS OF SEPTEMBER 4, 1998
- ----- -----------------------------------
<S> <C>
COMMON 18,329,381
PAR VALUE $.001 PER SHARE
</TABLE>
<PAGE> 2
BIONUTRICS, INC.
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C>
ITEM I. Condensed Consolidated Financial Statements (Unaudited):
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial
Statements 6
ITEM 2. Management's Discussion and Analysis 8
Part II. Other Information
ITEM 1 Legal Proceedings 14
ITEM 2(c) Changes in Securities 14
ITEM 6 Exhibits and Reports on Form 8-K 14
SIGNATURE 15
</TABLE>
2
<PAGE> 3
BIONUTRICS
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
JULY 31, OCTOBER 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 511,927 $ 2,181,121
Trade receivables (net of allowance for bad debts of $42,155 2,609,152 2,334,719
at July 31, 1998)
Inventory 934,294 1,407,760
Prepaid expenses & other current assets 139,944 554,052
------------ ------------
Total Current Assets 4,195,317 6,477,652
------------ ------------
PROPERTY, PLANT and EQUIPMENT (net of accumulated 7,436,332 6,698,811
depreciation of $1,117,050 and $258,357 respectively)
OTHER ASSETS, net of accumulated amortization:
Goodwill 542,727 563,878
Patent applications and other related costs 548,182 441,693
------------ ------------
Total Other Assets 1,090,909 1,005,571
------------ ------------
TOTAL $ 12,722,558 $ 14,182,034
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 4,026,880 $ 2,769,440
Accrued liabilities 2,000,188 2,033,567
Current portion of notes payable & capital leases 3,588,536 329,301
------------ ------------
Total Current Liabilities 9,615,604 5,132,308
------------ ------------
LONG TERM LIABILITIES
Notes payable & capital leases 130,596 13,407
------------ ------------
Total Liabilities 9,746,200 5,145,715
------------ ------------
STOCKHOLDERS' EQUITY
Common stock 18,326 17,812
Additional paid in capital 30,201,950 26,501,567
Accumulated deficit (27,242,715) (17,481,857)
Common stock in treasury (1,203) (1,203)
------------ ------------
Total Stockholders' Equity 2,976,358 9,036,319
------------ ------------
TOTAL $ 12,722,558 $ 14,182,034
============ ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements
-3-
<PAGE> 4
BIONUTRICS
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended July 31 Ended July 31
-------------------------------- --------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
GROSS REVENUES $ 1,767,295 $ 1,668,285 $ 5,146,896 $ 1,834,269
DISCOUNTS AND ALLOWANCES 115,740 315,276 281,071 335,966
------------ ------------ ------------ ------------
NET REVENUES 1,651,555 1,353,009 4,865,825 1,498,303
COST OF SALES 1,921,232 2,102,049 5,667,947 2,763,721
------------ ------------ ------------ ------------
GROSS LOSS (269,677) (749,040) (802,122) (1,265,418)
------------ ------------ ------------ ------------
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES: 2,318,254 2,996,848 8,877,319 6,342,882
------------ ------------ ------------ ------------
OTHER (EXPENSE) INCOME: (63,755) 97,015 (81,417) 223,943
------------ ------------ ------------ ------------
LOSS BEFORE PROVISION FOR
INCOME TAXES (2,651,686) (3,648,873) (9,760,858) (7,384,357)
------------ ------------ ------------ ------------
PROVISION FOR INCOME TAXES 0 0 0 0
------------ ------------ ------------ ------------
NET LOSS ($2,651,686) ($3,648,873) ($9,760,858) ($7,384,357)
============ ============ ============ ============
NET LOSS PER COMMON SHARE-BASIC ($0.14) ($0.22) ($0.54) ($0.47)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 18,329,381 16,227,993 18,175,741 15,792,589
============ ============ ============ ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements
- 4 -
<PAGE> 5
BIONUTRICS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months
Ended July 31
------------------------------
OPERATING ACTIVITIES: 1998 1997
----------- -----------
<S> <C> <C>
Net Loss ($9,760,858) ($7,384,357)
Adjustments to reconcile net loss to cash used in operations:
Depreciation and amortization 898,354 100,808
Expenses incurred in exchange for common stock 63,750 174,996
Loss on disposal of asset 0 237
Consulting fees incurred for capital raising (224,135) 0
Non-employee stock-based compensation 105,228 428,500
Changes in operating assets and liabilities:
Receivables-net (274,433) (1,040,566)
Inventory 473,466 (815,516)
Prepaid expenses and other current assets 414,109 (105,784)
Accounts payable and accrued liabilities 1,224,060 1,424,594
----------- -----------
Net cash used in operating activities (7,080,459) (7,217,088)
----------- -----------
INVESTING ACTIVITIES:
Capital expenditures (1,547,405) (1,413,177)
Disposal of fixed asset 0 5,706
Investment in joint venture 0 (400,000)
----------- -----------
Net cash used in investing activities (1,547,405) (1,807,471)
----------- -----------
FINANCING ACTIVITIES:
Net proceeds from issuance of stock 3,756,055 7,368,511
Note issuance 3,225,000 0
Repayment of notes payable & capital lease obligations (22,385) 0
----------- -----------
Net cash provided by financing activities 6,958,670 7,368,511
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,669,194) (1,656,048)
CASH AND CASH EQUIVALENTS, BEG OF PERIOD 2,181,121 5,676,360
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 511,927 $ 4,020,312
=========== ===========
Supplemental Disclosures of Noncash
Financing activities:
Capital lease obligations $ 173,808
===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
-5-
<PAGE> 6
BIONUTRICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - The accompanying unaudited Condensed Consolidated Financial
Statements of Bionutrics, Inc. ("the Company") have been prepared
in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-Q.
Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles
for completed financial statements. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position,
results of operations and cash flows for all periods presented
have been made. The results of operations for the three-month
and nine-month periods ended July 31, 1998 are not necessarily
indicative of the operating results that may be expected for the
entire year ending October 31, 1998. These financial statements
should be read in conjunction with the Company's financial
statements and accompanying notes thereto as of and for the year
ended October 31, 1997.
NOTE B - Basic net loss per share is computed by dividing the net loss by
the weighted average number of common shares outstanding during the
presented periods. Options and warrants are excluded from the basic
net loss per share calculation, as they are anti-dilutive.
NOTE C - The Company raised $3,756,055 in capital through the issuance of
common stock and sale of warrants during the nine-month period
ended July 31, 1998. The capital stock was issued at $5.00,
$7.25 and $8.00 per share. The shares at $5.00 were issued in
connection with the exercise of stock options and totaled
$41,655. The shares issued at $7.25 represented $3,000,000 of the
funds raised and were sold to Novartis Nutrition, a subsidiary of
Novartis AG. The shares at $8.00 were issued to a director and
totaled $500,000.
NOTE D - The Company borrowed $3,225,000 on a short term basis,
$1,725,000 from two directors and $1,500,000 from a financial
institution.
The loans from directors are demand loans and bear interest at the
rate of 9.50% annually and were granted to the Company as a bridge
loan pending permanent financing.
The $1,500,000 borrowed from a financial institution was granted as
a short term bridge pending permanent financing and was repayable on
June 23, 1998, prior to when such financing was anticipated. After
such and other financing did not close prior to the expiration of
bridge lender
6
<PAGE> 7
extensions, on July 22, 1998 the financial institution initiated
legal action in the United States District Court, Southern District
of New York. Subsequent to quarter end, the Company closed on a
portion of a replacement financing and repaid $500,000 of the bridge
loan in exchange for an extension in the date to answer the legal
action initiated by the lender to September 20, 1998. The Company
anticipates repayment of the entire balance, plus accrued interest
and costs, by this date. The warrants referred to in the second
quarter 10-Q, with regard to the bridge loan extension, were not
issued.
NOTE E - Subsequent to the period ended July 31, 1998, the Company
announced an $8 million transaction with AC Humko. The transaction
consists of three components: (1) sale of Bionutrics stock, $4
million (2,000,000 shares at $2/share), (2) sale of rice bran oil
processing technology, $2 million, and (3) sale of certain rice
bran oil processing assets, $ 2 million.
With regard to the rice bran technology sale, AC Humko's rights are
restricted to the use and practice of such technology in its
assigned field of use in North America.
The first two components closed on August 14, 1998 and a $6 million
payment was made to Bionutrics. The proposed sale of hard assets
will be made upon completion of due diligence by AC Humko, and final
documentation of the asset purchase agreement.
As part of the transaction, AC Humko received 2 million warrants to
purchase Bionutrics' common stock exercisable at $2 per share for 2
years.
The Company, as part of the proposed hard asset sale transaction,
will acquire a perpetual profit-sharing interest in AC Humko's rice
bran oil and rice derived products business and AC Humko will supply
the patented rice bran-derived Clearesterol(TM) ingredient used in
the evolvE(R) product. For 24 months, the Company has agreed to
purchase, at a fixed price, all of AC Humko's output of rice bran
oil distillate.
NOTE F - The Company had a memorandum of understanding to acquire
Lipoprotein Technologies, which has elapsed due to passage of time.
The Company may evaluate opportunities with Lipoprotein Technologies
at a future date.
NOTE G - The Company is presently assessing its exposure to year 2000
issues. Internally it has been determined that systems are
capable of handling the new millennium. With regard to key
suppliers and strategic partners a letter requesting the status
of year 2000 readiness has been distributed. Although not all
recipients have responded as yet, those that have stated they are
prepared or have taken steps to be prepared. As a complete
7
<PAGE> 8
assessment has not yet been achieved, the Company's state of
readiness, cost if any to address the company's year 2000 issues,
risks and contingency plans are not yet known.
BIONUTRICS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
THE FOLLOWING DISCUSSION OF THE COMPANY'S FINANCIAL CONDITION AND RESULTS
OF OPERATIONS INCLUDES CERTAIN FORWARD LOOKING STATEMENTS. WHEN USED IN THIS
REPORT, THE WORDS "EXPECTS," "INTENDS," "PLANS" AND "ANTICIPATE" AND SIMILAR
TERMS ARE INTENDED TO IDENTIFY FORWARD LOOKING STATEMENTS THAT RELATE TO THE
COMPANY'S FUTURE PERFORMANCE. SUCH STATEMENTS INVOLVE RISKS AND UNCERTAINTIES.
THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED
HERE. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED
TO, THOSE DISCUSSED UNDER "BUSINESS-SPECIAL CONSIDERATIONS" IN THE COMPANY'S
FORM 10-K/A.
Three months ended July 31, 1998 compared with three months ended July 31, 1997.
RESULT OF OPERATIONS
The results of operations for the third quarter of fiscal 1998 as compared
to 1997 reflect Bionutrics, Inc. maturing into a company with national
distribution of several products and services through three subsidiaries.
Consolidated gross revenues for the quarter ended July 31, 1998 were
$1,767,000 versus $1,668,000 for the same quarter in 1997, summarized by
subsidiary as follows (intercompany sales excluded):
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED
JULY 31,
---------------------
SUBSIDIARY 1998 1997
---------- ---- ----
<S> <C> <C>
InCon Technologies $1,115,000 *
Bionutrics Health Products 600,000 $1,536,000
Nutrition Technology 52,000 132,000
---------- ----------
Total Consolidated Gross Revenues $1,767,000 $1,668,000
========== ==========
</TABLE>
* Acquired October 31, 1997
8
<PAGE> 9
InCon Technologies gross revenues are primarily attributed to molecular
distillation of materials from a variety of customers. InCon was acquired by
Bionutrics on October 31, 1997 and accordingly no revenues are shown for the
same quarter of the prior year.
Bionutrics Health Products continued to rollout nationally its first product,
evolvE(R), during the quarter. The revenues for the prior year reflect the
initial launch of evolvE(R). As of the end of the third quarter, evolvE(R),
offered in three packages, was distributed by over 40,000 stores including many
leading drug and food chains and mass merchandisers throughout the United
States. Nonetheless, sales of evolvE(R) have been less than anticipated and
substantially less than the same quarter last year because the Company was
forced to cut back on budgeted advertising and promotion for the product due to
delays in raising capital during this and prior periods. The Company recognizes
that a sustained advertising program is necessary to achieve growth in the
evolvE(R) product line, and that failure to show positive sales results will
have a negative impact on obtaining and maintaining distribution store accounts.
The Company is seeking a partner to provide the resources needed to properly
market and promote the evolvE(R) brand. The Company is engaged in early
discussions with several potential partners involving the present and future
brand products.
Nutrition Technology's processing in West Monroe, LA was idle during the quarter
ended July 31, 1998 in preparation for full scale production of edible rice bran
oil, originally planned to commence this quarter. This delay in production is
chiefly attributable to the delay in raising capital. Gross revenues reflected
in this period represent byproducts sold out of inventory. Revenues reflected
for the same prior year quarter represent sale of byproducts from manufacturing
operations which had commenced during this period last year for the production
of evolvE(R). Subsequent to the quarter end, the Company entered into an
alliance with AC Humko. The alliance had many elements, as outlined in Note E.
Portions that impact production and Nutrition Technology are that AC Humko will
supply future requirements of clearesterol and intends to acquire certain rice
bran oil processing assets.
Cost of sales for the quarter ended July 31, 1998 was $1,921,000 versus
$2,102,000 for the same quarter in 1997. Cost of sales for the quarter ended
July 31, 1998 and 1997 resulted in negative margins as the company had not
achieved operating level efficiency primarily due to low volume activity at the
West Monroe production location and start-up costs associated with product
rollout of evolvE(R). As noted above, the Company's manufacturing operations in
West Monroe, Louisiana were idle during the third quarter of this year to allow
for installation of new, more efficient processing equipment and prepare for
commodity production of edible rice bran oil, originally planned to commence in
the third quarter of 1998. Curtailment of operations has resulted in cost
savings recognized in the third quarter of 1998. As a result of the alliance
with AC Humko, the company anticipates margins to improve due to the lower cost
of evolvE(R) product ingredients.
9
<PAGE> 10
Selling, general and administrative expenses for the quarter ended July 31, 1998
of $2,318,000 were $679,000 lower than that recognized for the same quarter in
1997 of $2,997,000. Although activities associated with InCon Technologies'
molecular distillation processing business increased costs, they were more than
offset by reduction in promotion and advertising expenditures for the evolvE(R)
product due to financial constraints.
Other expense for the quarter ended July 31, 1998 was $64,000 versus other
income of $97,000 for the same quarter for the prior year. The decreased income
is attributable to decreased interest earnings from lower balances of cash, and
interest incurred on borrowings.
Net loss decreased to $2,652,000, or $0.14 per share for the quarter ended July
31, 1998 from $3,649,000, or $0.22 per share for the quarter ended July 31, 1997
due primarily to lower expenses as outlined above.
Nine months ended July 31, 1998 compared with nine months ended July 31, 1997.
RESULTS OF OPERATIONS
Trends and comments as noted for the third quarter apply also to the nine month
year-to-date comparisons. Results of operations for the first nine months of
fiscal 1998 as compared to 1997 reflect the activities of Bionutrics, Inc. in
transition from a research and development mode to production and sales.
Consolidated gross revenues for the nine months ended July 31, 1998 were
$5,147,000 versus $1,834,000 for the same period in 1997 and are summarized by
subsidiary as follows (intercompany sales excluded):
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
JULY 31,
---------------------
SUBSIDIARIES 1998 1997
------------ ---- ----
<S> <C> <C>
InCon Technologies $2,913,000 *
Bionutrics Health Products 1,937,000 $1,702,000
Nutrition Technology 297,000 132,000
---------- ----------
Total Consolidated Gross Revenues $5,147,000 $1,834,000
========== ==========
</TABLE>
*- Acquired October 31, 1997
InCon Technologies gross revenues are primarily attributed to molecular
distillation toll processing as well as the sale of processing equipment. One
company, with multiple
10
<PAGE> 11
groups using InCon's services, is expected to account for approximately 75% of
InCon's business for 1998. InCon was acquired by Bionutrics on October 31, 1997
and accordingly no revenues are shown for the same period of the prior year.
Bionutrics Health Products continued to rollout nationally its first product,
evolvE(R), during the nine months ended July 31, 1998. The revenues for the
prior year reflect the initial launch of evolvE(R).
Nutrition Technology's processing revenues were higher during the first nine
months of 1998 as compared to the same period of the prior year. Gross revenues
reflected in this period represent byproducts sold out of inventory. Higher
sales during the first nine months of 1998 reflect greater availability of
inventory and customer base versus the same period in 1997. The plant has been
idle for the majority of the fiscal year-to-date in preparation for full scale
production of edible rice bran oil, which has not commenced.
Cost of sales for the nine months ended July 31, 1998 was $5,668,000 versus
$2,764,000 for the same nine-month period in 1997. The increase in cost of sales
is primarily due to increased sales volume. It should also be noted that cost of
sales for the nine months ended July 31, 1998 and 1997 resulted in negative
margins as the company had not achieved operating level efficiency primarily due
to low volume activity at the West Monroe production location, low evolvE(R)
sales volume and start-up costs associated with product rollout of evolvE(R).
Selling, general and administrative expenses for the nine months ended July 31,
1998 of $8,877,000 were $2,534,000 higher than that recognized for the same
period in 1997 of $6,343,000. In addition to costs associated with the molecular
distillation processing business acquired effective the first quarter of 1998,
this increase in expenses directly reflects costs associated with product
rollout and infrastructure development. Significant increases were incurred for
salaries, advertising and marketing.
Other expense for the nine months ended July 31, 1998 was $81,000 versus other
income of $224,000 for the same nine months in the prior year. The decreased
income is attributable to decreased interest earnings from lower balances of
cash, and interest incurred on borrowings.
Net loss increased to $9,761,000 or $0.54 per share for the nine months ended
July 31, 1998 from $7,384,000 or $0.47 per share for the nine months ended July
31, 1997, due primarily to increased levels of expenses as outlined above
offset, in part, by the sales of evolvE(R) and revenues from molecular
distillation processing and production byproducts sales.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities during the nine-month period ended July
31, 1998 was $7,080,000 as compared to $7,217,000 during the same period in
1997. Although net losses for the nine month period ended July 31, 1998 were
substantially higher than
11
<PAGE> 12
the same period for the prior year, changes in operating assets and liabilities
essentially offset this variation. This offset is due primarily to lower
inventory and higher accounts payable levels.
Net cash used in investing activities during the nine months ended July 31, 1998
was $1,547,000 as compared to $1,807,000 during the same period in 1997. These
investment activities were largely related to capital expenditures in
manufacturing operations. The Company anticipates that additional investment in
manufacturing operations will be required at InCon. In 1997, investing
activities also reflected $400,000 invested in a former joint venture with InCon
Technologies.
Net cash provided by financing activities totaled $6,959,000 for the nine-month
period ended July 31, 1998 versus $7,369,000 from the same period in 1997. This
cash was provided primarily by the sale of common stock for both years as well
as the issuance of short-term debt in the amount of $3,225,000 in 1998.
As previously reported, in October 1997, the Company issued 500,000 shares of
restricted common stock at $8 per share pursuant to stock purchase agreements
with two overseas investors, both of whom are related to an existing
shareholder. Payment of the $4 million purchase price was evidenced by
promissory notes requiring payment no later than August 1, 1998, having been
extended by agreement from May 1, 1998. The share issuance is void under Nevada
law if payment is not received, and for accounting purposes the notes were not
booked as assets, and the shares issued against promissory notes are not
considered issued and outstanding until the notes are paid. Subsequent to the
nine months ended July 31, 1998, the Company has been advised by the investors
that due to economic conditions in Southeast Asia where they are based, they
will not honor the terms of the promissory notes. The Company is considering
what course of action it can pursue.
In connection with the aforementioned stock sale to Novartis in Note C, in
February 1998, the Company entered into a strategic alliance with Novartis to
enable it to evaluate the Company's technology and rice bran - derived products
for potential application as functional food ingredients. The initial evaluation
by Novartis is expected to take until December 1998, following which Novartis is
expected to determine whether to increase its $3 million equity investment in
the Company and pay fees to the Company in connection with entering into
long-term research and license agreements. No assurance can be given that
results of the initial evaluation will satisfy Novartis regarding use of the
Company's evolvE(R) product as a functional food ingredient, or that Novartis
will determine to proceed and extend or expand its relationship with the
Company.
Subsequent to the period ended July 31, 1998, the Company announced an $8
million transaction with AC Humko. The transaction consists of three components:
(1) sale of Bionutrics stock, $4 million (2,000,000 shares at $2/share), (2)
sale of rice bran oil processing technology, $2 million, and (3) sale of certain
rice bran oil processing assets, $ 2 million.
12
<PAGE> 13
The first two components closed on August 14, 1998 and a $6 million payment was
made to Bionutrics. The proposed sale of hard assets will be made upon
completion of due diligence by AC Humko, and final documentation of the asset
purchase agreement.
The Company's current cash resources, expected cash flow from operations and the
proposed sale of rice bran oil processing assets to AC Humko may not be
sufficient to fund its operational needs for the next 12 months, without an
increase in projected revenues. Therefore, the Company continues to seek
additional capital through private equity, bank lines of credit and asset based
financing. There can be no assurance that such additional financing will be
attainable, or attainable on terms acceptable to the Company. Access by the
company to additional capital will depend substantially upon prevailing market
conditions, and the financial condition of and prospects for the Company at the
time.
13
<PAGE> 14
BIONUTRICS, INC.
PART II - OTHER INFORMATION
ITEM 1 Legal proceedings:
The response contained in Note D is incorporated by reference
herein.
ITEM 2(c) Changes in Securities:
2,000,000 shares of common stock issued at $2.00 per share
pursuant to the stock purchase agreement with AC Humko in
reliance on the exemption provided by section 4(2) of the
Securities Act of 1933.
2,000,000, 2 year warrants to purchase common stock at $2.00
per share issued to AC Humko in reliance on the exemption
provided by section 4(2) of the Securities Act of 1933.
ITEM 6 Exhibits and Report on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - August 31, 1998
14
<PAGE> 15
BIONUTRICS, INC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Bionutrics, Inc.
(Registrant)
Dated: September 4, 1998 By:/s/George E. Duck, Jr.
----------------------
Its: Vice President, Finance
Secretary and Treasurer
(Principal Financial
Officer)
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> JUL-31-1998
<CASH> 511,927
<SECURITIES> 0
<RECEIVABLES> 2,651,307
<ALLOWANCES> 42,155
<INVENTORY> 934,294
<CURRENT-ASSETS> 4,195,317
<PP&E> 8,553,382
<DEPRECIATION> 1,117,050
<TOTAL-ASSETS> 12,722,558
<CURRENT-LIABILITIES> 9,615,604
<BONDS> 0
0
0
<COMMON> 18,326
<OTHER-SE> 2,958,032
<TOTAL-LIABILITY-AND-EQUITY> 12,722,558
<SALES> 2,028,308
<TOTAL-REVENUES> 4,865,825
<CGS> 3,690,124
<TOTAL-COSTS> 5,667,947
<OTHER-EXPENSES> 8,877,319
<LOSS-PROVISION> 42,155
<INTEREST-EXPENSE> 81,417
<INCOME-PRETAX> (9,760,858)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,760,858)
<EPS-PRIMARY> (.54)
<EPS-DILUTED> 0
</TABLE>
