U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ___________ to ___________
Commission file number: 0-26073
BARRINGTON LABORATORIES, INC.
--------------------------------------------
(Name of small business issuer in its charter)
Nevada 86-0881193
- ------------------------ --------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1801 E. Tropicana, Suite 9, Las Vegas, Nevada 89119
- ------------------------------------------------------ ---------
(Address of principal executive offices) (Zip Code)
(702) 893-2556
----------------------
(Issuer's telephone number)
Securities registered under Section 12(b) of the Exchange Act:
Title of each class registered: None Name of each exchange on which
registered: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.001
-----------------------------
(Title of class)
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 [ ]
Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
The issuer is a developmental stage pharmaceutical research company, and as
such has yet to generating any revenues.
Based on the average if the closing bid and asked prices of the issuer's
common stock on December 31, 1999, the aggregate market value of the voting
stock held by non-affiliates of the registrant on that date was $375,350.
As of December 31, 1999, the issuer had 3,750,700 shares of common stock
outstanding.
Documents incorporated by reference: None
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
1
<PAGE>
CONTENTS
PAGE
PART I
Item 1. Description of Business........................................3
Item 2. Description of Property.......................................13
Item 3. Legal Proceedings.............................................13
Item 4. Submission of Matters to a Vote of Security Holders...........13
PART II
Item 5. Market for Common Equity and Related Stockholder Matters......14
Item 6. Management's Discussion and Analysis or Plan of Operation.....15
Item 7. Financial Statements..........................................17
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure........................20
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the
Exchange Act...............................................20
Item 10. Executive Compensation........................................21
Item 11. Security Ownership of Certain Beneficial Owners and
Management.................................................22
Item 12. Certain Relationships and Related Transactions................22
Item 13. Exhibits and Reports on Form 8-K..............................23
SIGNATURES ..............................................................24
Forward-Looking Statements
This report contains forward-looking statements. The forward-looking statements
include all statements that are not statements of historical fact. The
forward-looking statements are often identifiable by their use of words such as
"may," "expect," "believe," "anticipate," "intend," "could," "estimate," or
"continue," "Plans" or the negative or other variations of those or comparable
terms. Our actual results could differ materially from the anticipated results
described in the forward-looking statements. Factors that could affect our
results include, but are not limited to, those discussed in Item 6,
"Management's Discussion and Analysis or Plan of Operation" and included
elsewhere in this report.
2
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
(a) BUSINESS DEVELOPMENT
(i) Business Development, Organization and Acquisition Activities
Barrington Laboratories, Inc., a developmental stage company, hereinafter
referred to as "the Company", was organized by the filing of Articles of
Incorporation with the Secretary of State of the State of Nevada on August
6, 1998. The original articles of the Company authorized the issuance of
twenty-five million (20,000,000) shares of Common Stock at par value of
$0.001 per share and five million (5,000,000) shares of Preferred Stock at
par value of $0.001.
The Company was issued a permit to sell securities to the public in the State
of Nevada on February 1, 1999 pursuant to Nevada Revised Statues Chapter
90.490. This offering was made in reliance upon an exemption from the
registration provisions of Section 5 of the Securities Act of 1993, as
amended, pursuant to regulation D, Rule 504 of the Act. On December 15,
1998, founding shareholders purchased 3,000,000 shares of the company's
authorized but unissued treasury stock for cash and assets. Additionally, the
Company sold seven hundred fifty thousand seven hundred (750,700) shares of
the Common Stock of the Company during the Offering to approximately sixty-
seven (67) shareholders in the State of Nevada. The offering was closed
March 1, 1999. As of March 1, 1999, the Company has seven three million
seven hundred fifty thousand seven hundred thousand (3,750,700) shares of its
$0.001 par value common voting stock issued and outstanding which are held by
approximately sixty-eight (68) shareholders of record.
Barrington Laboratories, Inc. is developmental stage company, which plans to
produce generic pharmaceutical products, through contract laboratories and
manufacturing facilities, for pharmaceutical products that have lost their
innovator patent, and no other generics for these products are currently
available on the market. The company plans to distribute this product into
the marketplace through drug wholesalers, chain pharmacies and State Medicaid
programs.
It is the company's hope to enter the marketplace with the first versions of
generic drugs, after the innovator patent has expired. There are no
guarantees that other generic pharmaceuticals could not enter the market
first with a similar product beforehand.
(ii) Principal Products and Principal Markets
Barrington Laboratories, Inc. was incorporated to transact any lawful
business. The Company hopes to develop a generic pharmaceutical product,
utilizing contract laboratory and manufacturing facilities. The Company has
limited itself to the development of one product; however, this does not
preclude the company from seeking other product opportunities. At this time,
it does not have the resources to pursue multiple products. The Company
plans to target a low volume pharmaceuticals product, in which its U.S.
patent recently expired. Generally speaking, low volume pharmaceutical
products are not quickly brought to the market as generic products, by the
larger generic pharmaceutical drug facilities, since the cost to produce a
low volume generic product out weights its return on investment. Barrington
Laboratories, Inc., believes it can minimize the cost to produce generic
pharmaceutical products by out-sourcing the steps necessary to obtain Food
and Drug Administration (FDA) approval.
3
<PAGE>
The goal of Barrington Laboratories, Inc. is to obtain an ANDA (Abbreviated
New Drug Application) from the FDA to produce and market a pharmaceutical
product where the patent on the brand name product has expired, and market
its generic version. The FDA requires one holder (a primary contact) of the
ANDA. The Company needs to consider where or not the contract manufacturer
will submit the submission package to the FDA, and be the holder of the ANDA
for this product. If this becomes the case, the Company would need to enter
into a contract with the contract manufacturer to be the exclusive
distributor of this product. At this time, the Company is still in the
process of identifying contract facilities to undertake this work. Since
this is a lengthy process, the Company believes it is too premature to
determine the actual holder of the ANDA for this product.
Generic products generally sell at 1/3 the price of brand name products;
however, profit margins are higher for generic products since the companies
do not carry the overhead of research, administration, marketing, plants and
equipment.
The Company plans to begin with one product, it will take twelve to eighteen
months before the company can expect to generate any revenues. It will take
that amount of time to obtain FDA approval to market said product. The
Company is evaluating a low volume off-patent product. And, the innovator
product's patent expired. Until the evaluation is completed, the Company
considers this evaluation proprietary information.
The target product has no known generic competition at this time. Upon
release of this product, the Company hopes to capture the current market by
achieving an additional one percent of market share for each month the
generic product is on the market. It should be cautioned, that the Company
hopes to generate sales volume upon the release of the product, provided no
other generic equivalents are on the market. If a similar generic product
enters the market beforehand, sales results will suffer.
There are a finite number of end customers of generic pharmaceuticals
products. If there are multiple generic pharmaceutical products on the
market for the same type of product, these products share the total market
sales in the marketplace. Generally speaking, the first generic product
to enter the marketplace, captures a significant share of the market.
Price and distribution also become a major factors in determining which
generic product is utilized over a similar product.
The FDA requires that generic products produce a series of studies and the
results of its testing before companies are authorized to sell these
products. At that time, the FDA will issue an Abbreviated New Drug
Application (ANDA), which allows the company to market a product. If the
product fails these studies, the entire project and all funding can be lost.
It should be pointed out, if the company cannot pass the necessary studies
required by the FDA, the Company would be unable to fund additional studies.
This could place the Company's future at great risk, to the point, that the
Company would not have enough funds to continue in business.
4
<PAGE>
(iii) Status of Products and Services
To date, the Company has taken the following initiatives and steps in order
to further its operations and continues to execute its business plan:
a) The Company identified a generic pharmaceutical product, in which its
innovator patent has recently expired. The Company plans to investigate
the steps necessary to obtain an ANDA for this product. In December,
1998, the Company signed a Confidentially Agreement with a large
pharmaceutical contract manufacturer to pursue and investigate this
initiative.
b) The Company has received from the FDA, under the Freedom of Information
Act, the innovator Drug Filings for its first targeted generic drug
product.
c) The Company has identified a major pharmaceutical contract manufacturer,
and signed a Confidentiality agreement with this manufacturer to begin
the ANDA process.
d) The Company has hired an outside consulting firm, to it help it write
and submit the ANDA package to the FDA.
e) The Company has hired other outside consultants to help in the
analytical processes.
f) If the Company can obtain an ANDA from the FDA to market generic drugs,
the Company would need additional funding to cover the cost of
manufacturing, inventories, distribution, warehousing, sales,
administration and marketing. Without FDA approval, the company cannot
justify the cost of these expenses, as it is a developmental company with
no approved product(s).
(iv) Industry Background and Current Status
The Industry and Potential Effect on the Company's Plan of Operation
The pharmaceutical business has consistently grown in gross profit and
revenues. According to the U.S. Department of Commerce, there are currently
1,356 pharmaceutical manufacturers in the U.S. who sell $74.2 billion in
pharmaceutical products, in 1997. Generic products account for 50 percent of
the unit volume and approximately 30 percent of the total dollar volume.
5
<PAGE>
When a generic pharmaceutical product enters the market place, it is generally
priced at a 1/3 discount to the brand name product. As multiple generics enter
the marketplace, additional price reductions take place. Frequently, the brand
name product's price does not drop. The company manufacturing and selling the
brand name product cannot afford to cut the price, since they are burdened,
with research, marketing, administration, and plant and equipment costs.
Additionally, once FDA approval is obtain, the brand name companies cannot make
claims of superiority of their product, since the FDA clearly states they are
the same.
There are very few generic pharmaceutical companies who target the lower
volume brand name products that have lost their patent. The larger generic
pharmaceutical manufacturers, e.g., Zenith, Schein, Major Pharmaceuticals,
generally produce and market generic pharmaceutical products, in which the
total (generic and innovator) product sales exceed $40 million. They need to
target the larger volume product to pay their overhead and expenses. It is
the goal of Barrington Laboratories, Inc. to identify these smaller volume
products, and with little overhead, find a contract manufacturer who can
adhere to FDA guidelines to replicate these products. If this can be
accomplished, the advantage for the Company in the opinion of management, is
that, it has very little overhead. Additionally, there are contract
manufacturers that will help defray the additional funding needs for a
percent of the volume generated by this generic product. If a firm contract
can been established with a contract manufacturer, then the Company might
consider negotiating a risk sharing agreement to determine the amount of
funds available versus the expected return on investment. If any
negotiations do take place, one of the factors to be negotiated would be to
determine, which entity actually holds the ANDA. The holder of the ANDA is
the primary contact with the FDA should they have any concerns with the
product. At this time, the Company has no such agreements in place.
The Pharmaceutical Market
There are a number of pharmaceutical products with expired patents that have no
generic counterpart in the marketplace. This information can be found on
public records. Under the Drug Price Competition and Patent Term Restoration
Act (1984 Amendments) the FDA is required to make publicly available a list
of approved drug products with monthly supplements. The FDA also publishes
through its own Web site a list of prescription pharmaceutical products and
the dates their patents expire. The FDA publishes newly approved generic
product. They state whether or not the generic product is equivalent to the
brand name product.
Once a product is approved by the FDA, the owner of the product, usually begins
the process of distribution for said generic product. Depending on the nature
of the product, the distribution for pharmaceutical products begins with drug
wholesalers. The drug wholesalers distribute to retail pharmacies, chains,
hospitals, Federal Government, and most managed health care organizations.
Many managed health care organizations and State Medicaid programs mandate that
generic products be used when they become available. This gives a marketing
edge to the first generic products on the market. If multiple generics become
available for the same brand name product, price becomes the driving factor in
substituting one generic product over another. In the pharmacy arena, it
becomes a commodity driven market. Some managed health care organizations
require a competing generic product be priced twenty (20) lower than an
equivalent product, in order to justify the administrative costs to switch from
one product to another.
6
<PAGE>
Approval Process
The Federal Drug Administration (FDA), Center for Drug Evaluation and Research
under the Federal Food, Drug, and Cosmetic Act (the Act) approves drug products
on the basis of safety and effectiveness.
The main criterion for in the approval process of a pharmaceutical product is
that the product is the subject of an application with an effective approval
that has not been withdrawn for safety or efficacy reasons. Additionally, the
FDA approves the marketing of approved multi-source prescription generic drug
products.
To contain drug costs, virtually every state in the United States has adopted
laws and/or regulations that encourage the substitution of drug products.
These state laws generally require either that substitution be limited to
drugs on a specific list (the positive formulary approach) or that it be
permitted for all drugs except those prohibited by a particular list (the
negative formulary approach). Because of the number of requests in the late
1970s for FDA assistance in preparing both positive and negative formularies,
the FDA was inundated to meet the needs of each state on an individual basis.
The FDA also recognized that providing a single list based on common criteria
would be preferable to evaluating drug products on the basis of differing
definitions and criteria in various state laws. As a result, on May 31, 1978,
the Commissioner of Food and Drugs sent a letter to officials of each state
stating FDA's intent to provide a list of all prescription drug products that
are approved by FDA for safety and effectiveness, along with therapeutic
equivalence determinations for multi-source prescription products.
The list was distributed as a proposal in January 1979. It included only
currently marketed prescription drug products approved by FDA through new drug
applications (NDAs), abbreviated new drug applications (ANDAs), or abbreviated
antibiotic applications (AADAs) under the provisions of Section 505 or 507 of
the Act. The therapeutic equivalence evaluations in the List reflect FDA's
application of specific criteria to the approved multi-source prescription
drug products on the List.
A complete discussion of the background and basis of the FDA's therapeutic
equivalence evaluation policy was published in the Federal Register on January
12, 1979 (44 FR 2932). The final rule, which includes FDA's responses to the
public comments on the proposal, was published in the Federal Register on
October 31, 1980 (45 FR 72582). The first publication, October 1980, of the
final version of the List incorporated appropriate corrections and additions.
Each subsequent edition has included the new approvals and made appropriate
changes in data.
On September 24, 1984, the President of the United States signed into law the
Drug Price Competition and Patent Term Restoration Act (1984 Amendments). The
1984 Amendments require that FDA, among other things, make publicly available a
list of approved drug products with monthly supplements. The Approved Drug
Products with therapeutic equivalence evaluations publication and its monthly
Cumulative Supplements satisfy this requirement.
7
<PAGE>
According to the FDA, pharmaceutical equivalents are drug products considered
pharmaceutical equivalents if they contain the same active ingredient(s), are
of the same dosage form and are identical in strength or concentration, and
route of administration. Pharmaceutically equivalent drug products are
formulated to contain the same amount of active ingredient in the same dosage
form and to meet the same or compendia or other applicable standards (i.e.,
strength, quality, purity, and identity), but they may differ in
characteristics such as shape, scoring configuration, packaging, excipients
(including colors, flavors, preservatives), expiration time, and, within
certain limits, labeling.
Drug products are considered pharmaceutical alternatives if they contain the
same therapeutic moiety, but are different salts, esters, or complexes of that
moiety, or are different dosage forms or strengths. Data are generally not
available for FDA to make the determination of tablet to capsule
bioequivalence. Different dosage forms and strengths within a product line
by a single manufacturer are thus pharmaceutical alternatives, as are
extended-release products when compared with immediate-release or
standard-release formulations of the same active ingredient.
Drug products are considered to be therapeutic equivalents only if they are
pharmaceutical equivalents and if they can be expected to have the same
clinical effect when administered to patients under the conditions specified
in the labeling.
The FDA classifies as therapeutically equivalent those products that meet the
following general criteria: (1) they are approved as safe and effective; (2)
they are pharmaceutical equivalents in that they (a) contain identical amounts
of the same active drug ingredient in the same dosage form and route of
administration, and (b) meet compendia or other applicable standards of
strength, quality, purity, and identity; (3) they are bioequivalent in that (a)
they do not present a known or potential bio-equivalence problem, and they meet
an acceptable in vitro standard, or (b) if they do present such known or
potential problem, they are shown to meet an appropriate bioequivalence
standard; (4) they are adequately labeled; (5) they are manufactured in
compliance with Current Good Manufacturing Practice regulations.
The concept of therapeutic equivalence, applies only to drug products
containing the same active ingredients, and does not encompass a comparison
of different therapeutic agents used for the same condition.
The FDA considers drug products to be therapeutically equivalent if they meet
the criteria outlined above, even though they may differ in certain other
characteristics such as shape, scoring configuration, packaging, excipients
(including colors, flavors, preservatives), expiration time and minor aspects
of labeling (e.g., the presence of specific pharmacokinetic information).
The FDA believes that products classified as therapeutically equivalent can be
substituted with the full expectation that the substituted product will produce
the same clinical effect and safety profile as the prescribed product.
The term bioavailability describes the rate and extent to which the active drug
ingredient or therapeutic ingredient is absorbed from a drug product and
becomes available at the site of drug action.
8
<PAGE>
This term bioequivalent drug products describes pharmaceutically equivalent
products that display comparable bioavailability when studied under similar
experimental conditions. Section 505 (j)(7)(B) of the Act describes conditions
under which a test and reference listed drug shall be considered bioequivalent:
a) the rate and extent of absorption of the test drug do not show a significant
difference from the rate and extent of absorption of the reference drug when
administered at the same molar dose of the therapeutic ingredient under
similar experimental conditions in either a single dose or multiple doses;
b) the extent of absorption of the test drug does not show a significant
difference from the extent of absorption of the reference drug when
administered at the same molar dose of the therapeutic ingredient under
similar experimental conditions in either a single dose or multiple doses and
the difference from the reference drug in the rate of absorption of the drug
is intentional, is reflected in its proposed labeling, is not essential to
the attainment of effective body drug concentrations on chronic use, and is
considered medically insignificant for the drug. Where these above methods
are not applicable (e.g., for topically applied products intended for local
rather than systemic effect), other in vivo tests of bioequivalence may be
appropriate.
Bioequivalence may sometimes be demonstrated using an in vitro bioequivalence
standard, especially when such an in vitro test has been correlated with human
in vivo bioavailability data or in other situations through comparative
clinical trials or pharmacodynamic studies.
Statistical Criteria for Bioequivalence
The FDA requires under the Drug Price Competition and Patent Term Restoration
Act of 1984, that companies seeking approval to market a generic drug must
submit data demonstrating that the drug product is bioequivalent to the pioneer
(innovator) drug product. A major premise underlying the 1984 law is that
bioequivalent products are therapeutically equivalent and, therefore,
interchangeable.
The standard bioequivalence study is conducted in a crossover fashion in a
small number of volunteers, usually with 12 to 24 healthy normal male adults.
Single doses of the test and reference drugs are administered and blood or
plasma levels of the drug are measured over time. Characteristics of these
concentration-time curves, such as the area under the curve (AUC) and the
peak blood or plasma concentration (C max), are examined by statistical
procedures.
Bioequivalence of different formulations of the same drug substance involves
equivalence with respect to the rate and extent of drug absorption. Two
formulations whose rate and extent of absorption differ by 20% or less are
generally considered bioequivalent. The use of the 20% rule is based on a
medical decision that, for most drugs, a 20% difference in the concentration
of the active ingredient in blood will not be clinically significant.
9
<PAGE>
In order to verify, for a particular pharmacokinetic parameter, that the
- -/+ 20% rule is satisfied, two one-sided statistical tests are carried out
using the data from the bioequivalence study. One test is used to verify
that the average response for the generic product is no more than 20% below
that for the innovator product; the other test is used to verify that the
average response for the generic product is no more than 20% above that for
the innovator product. The current practice is to carry out the two
one-sided tests at the 0.05 level of significance.
Computationally, the two one-sided tests are carried out by computing a 90%
confidence interval. For approval of abbreviated new drug applications
(ANDA's), in most cases, the generic manufacturer must show that a 90 percent
confidence interval of the difference between the mean response (usually AUC
and max) of its product and that of the innovator is within the limits -/+ 20
percent of the innovator mean. If the true difference between the products is
near 20 percent of the innovator mean, the confidence limit will likely be
outside the acceptable range and the product will fail the bioequivalence test.
Thus, an approved generic product is likely to differ from that of the
innovator by far less than this quantity.
The current practice of carrying out two one-sided tests at the 0.05 level of
significance ensures that if the two products truly differ by as much or more
than is allowed by the equivalence criteria (usually +/- 20 percent of the
innovator product average for the bioequivalence parameter, such as AUC or
Cmax) there is no more than a 5 percent chance that they will be approved as
equivalent. This reflects the fact that the primary concern from the
regulatory point of view is the protection of the patient against the
acceptance of bioequivalence if it does not hold true. The results of a
bioequivalence study must usually be acceptable for more than one
pharmacokinetic parameter. As such, a generic product that truly differs by
20 percent or more from the innovator product with respect to one or more
pharmacokinetic parameters, would actually have less than a 5 percent chance
of being approved. Therefore, the Company must be duplicate and demonstrate
to the FDA that their product can meet these criteria.
(v) Raw Materials and Suppliers
The raw material to produce a generic is a major concern. Although many
innovator companies have their patents expire, they are the sole manufacturers
of the raw materials needed to make the generic counterparts. In a sense,
they can prevent a generic product from entering the market place by
controlling the raw materials needed to produce it. Therefore, the first
criteria, Barrington Laboratories, Inc., utilizes in selecting a generic
product, is to determine the availability of the raw materials to produce it.
As long as the raw materials are widely available, the Company will proceed
to evaluate whether or not it can be produced as a generic product. This
company research to identify pharmaceutical raw materials should be
considered proprietary information.
The Company does not intend to manufacture any products. The Company intends
to license to, or enter into strategic alliances with, larger pharmaceutical
and veterinary companies that are equipped to manufacture pharmaceutical
products that the Company plans to seek to develop and market.
10
<PAGE>
(vi) Customers
The Company plans to distribute its product - if and when it gets to this stage
of its business plan - into the marketplace through drug wholesalers, chain
pharmacies and State Medicaid programs. As of February 28, 1999, no sales
revenues have been generated by the Company. In addition, the Company does not
expect to generate any sales revenues in the foreseeable future.
The customer profile, however, for generic products in the U.S. currently
includes:
<TABLE>
<CAPTION>
Business Number
- -------------- -----------
<S> <C>
Drug wholesalers 278
Pharmacies 50,000
Drug Chain Headquarters 100
Contracting Managed Health Care 70
Federal Government (DOD) 1
State Medicaid Programs 50
</TABLE>
It should be noted that the ten (10) largest drug wholesalers, service and
distribute to approximately eighty (80) percent of the entire pharmaceutical
business in the U.S. Therefore, once a drug receives FDA approval,
distribution then becomes the next concern of a pharmaceutical company. With
limited resources, the Company believes that it will take a deal of time and
effort to obtain product distribution of a generic pharmaceutical product.
This could adversely affect the Company's sales results.
(vii) Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements, or Labor Contracts
The Company plans to produce generic pharmaceutical products, in which the
innovator's product patent has expired. Patents are generally not issued to
generic pharmaceutical products. If the company receives FDA approval to
sell a generic product, it plans to give the product a generic tradename
which would be registered with the US Trademark office. It is too premature
to submit any entries, as the US Trademark Office requires that submissions
should not be made until at least six (6) months until the product is
marketed. The Company expects the generic approval process will take
eighteen (18) to twenty-four (24) months.
(viii) Regulation
The pharmaceutical industry is tightly regulated by the FDA, DEA, and State
Governments, and State Boards of Pharmacy. Under Section 510(h) of the Federal
Food, Drug, and Cosmetic Act, every drug establishment registered with the FDA
must be inspected at least once every two (2) years to determine if the drugs
they market are produced in conformance with current Good Manufacturing
Practices (GMP). Copies of the inspection reports generated by the FDA
District conducting the inspection or any other inspections conducted are
available from the local Districts offices pursuant to the Freedom of
Information regulations. These reports are also available from: National
Technical Information Service, 5285 Port Royal Road, Springfield, VA 22161.
11
<PAGE>
For this reason, the Company plans to use sub-contractors who are in good
standing with the FDA. If the Company hopes to achieve FDA approval of a
generic drug, the Company needs to utilize FDA approved facilities. When the
FDA reviews the submission package from the Company, they will quickly
ascertain which facilities did the testing and manufacturing and whether or
not they facilities are approved FDA facilities. The Company believes the
usage of non-approved FDA sub-contractors would only delay the approval
process.
(ix) Effect of Existing or Probable Government Regulations
Although the Company plans on obtaining all required federal and state permits,
licenses, FDA registrations and bonds to operate its facilities, there can be no
assurance that the Company's operations and profitability will not be subject
to more restrictive regulation or increased taxation by federal, state, or
local agencies.
(x) Research and Development Activities
Barrington Laboratories, Inc., believes it can minimize the cost to produce
generic pharmaceutical products by out-sourcing the steps necessary to obtain
Food and Drug Administration (FDA) approval.
The goal of Barrington Laboratories, Inc. is to obtain an ANDA (Abbreviated New
Drug Application) from the FDA to produce and market a pharmaceutical product
where the patent on the brand name product has expired, and then subsequently
market its generic version. The FDA requires one holder (a primary contact) of
the ANDA. The Company needs to consider whether or not the contract
manufacturer will submit the submission package to the FDA, and be the holder
of the ANDA for this product. If this becomes the case, the Company
would need to enter into a contract with the contract manufacturer to be the
exclusive distributor of this product. At this time, the Company is still in
the process of identifying contract facilities to undertake this work. Since
this is a lengthy process, the Company believes it is too premature to
determine who the actual holder of the ANDA for this product will be.
Thus far, the Company has identified a generic pharmaceutical product, in which
the innovator patent has recently expired. The Company plans to investigate
the steps necessary to obtain an ANDA for this product. In December, 1998, the
Company signed a Confidentially Agreement with a large pharmaceutical contract
manufacturer to pursue this initiative. In addition, the Company has received
from the FDA, under the Freedom of Information Act, the innovator Drug Filings
for its first targeted generic drug product. If the Company can obtain an ANDA
from the FDA to market generic drugs, the Company would need additional funding
to cover the cost of manufacturing, inventories, distribution, warehousing,
sales, administration and marketing. Without FDA approval, the Company cannot
justify the cost of these expenses, however, as it is a developmental company
with no approved product(s).
(xi) Impact of Environmental Laws
The pharmaceutical industry is tightly regulated. The Company plans to
subcontract almost all of its work to outside laboratories and to an outside
pharmaceutical manufacturer. It is the Company's intent to only utilize FDA
approved facilities, as it needs to have its generic product FDA approved
before it can be marketed.
12
<PAGE>
(xii) Employees
The Company currently has two (2) employees: one President, and one
Secretary. All of the research and development with be subcontracted to
outside laboratories and a manufacturing facility. This subcontracting will
be coordinated by the President of the Company. If the company can obtain an
ANDA from the FDA for a generic pharmaceutical product, at that time the
Company will either consider adding more employees, or selling its rights to
market the product to another Company.
ITEM 2. DESCRIPTION OF PROPERTY.
The Company's corporate headquarters are located at 1801 E. Tropicana, Suite 9,
Las Vegas, NV 89119, Telephone: (702) 893-2556. The office space is provided
by one of the officers of the Company at no cost to the Company. The Company
pays for its own telephone service.
ITEM 3. LEGAL PROCEEDINGS.
As of the date hereof, Barrington Laboratories is not a party to any material
Legal proceedings, and none are known to be contemplated against Barrington
Laboratories.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 1999.
13
<PAGE>
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Market Information
- ------------------
Until September 14, 1999, there was no public trading market for the Company's
stock. On that day the Company's common stock was cleared for trading on the
OTC Bulletin Board system under the symbol BRRT. A very limited market exists
for the trading of the Company's common stock.
The table below sets forth the high and low bid prices of our common stock for
each quarter shown, as provided by the Nasdaq Trading and Market Services
Research Unit. Quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual transactions.
<TABLE>
<CAPTION>
FISCAL 1999 HIGH LOW
- -------------------------------- ---- ----
<S> <C> <C>
Quarter Ended March 31, 1999 N/A N/A
Quarter Ended June 30, 1999 N/A N/A
Quarter Ended September 30, 1999 N/A N/A
Quarter ended December 31, 1999 $0.50 $0.25
</TABLE>
Holders
- -------
The approximate number of holders of record of common stock as of December 31,
1999 was 68.
Dividends
- ---------
Holders of common stock are entitled to receive such dividends as the board of
directors may from time to time declare out of funds legally available for the
payment of dividends. No dividends have been paid on our common stock, and we do
not anticipate paying any dividends on our common stock in the foreseeable
future.
Recent Sales of Unregistered Securities
- ---------------------------------------
The Company was issued a permit to sell securities to the public in the State
of Nevada on February 9, 1999 pursuant to Nevada Revised Statues Chapter
90.490. This offering (hereinafter referred to as the "Offering") was made
in reliance upon an exemption from the registration provisions of Section 5
of the Securities Act of 1933 (the "Act"), as amended, pursuant to regulation
D, Rule 504, of the Act. The Company sold seven hundred fifty thousand seven
hundred (750,700) shares of the Common Stock of the Company during the
Offering to approximately sixty-seven (67) shareholders in the State of
Nevada. The Offering was closed February 28, 1999. The Company filed an
original Form D with the Securities and Exchange Commission on or about March
12, 1999. As of March 1, 1999, the Company has three million seven hundred
fifty thousand seven hundred (3,750,700) shares of its $0.001 par value
common voting stock issued and outstanding which are held by approximately
sixty-eight (68) shareholders of record.
14
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
General
- -------
The current core business of Barrington Laboratories, Inc. is to develop
and contract manufacture generic prescription pharmaceutical products.
The Company hopes to develop a generic pharmaceutical product, utilizing a
FDA approved contract laboratory and contract manufacturing facilities. The
Company hopes to obtain an Abbreviated New Drug Application (ANDA) for their
generic pharmaceutical product. The Company has limited itself to the
development of one product; however, this does not preclude the company from
seeking other product opportunities. At this time, it does not have the
resources to pursue multiple products. The Company plans to target a low
volume pharmaceuticals product, in which its U.S. patent recently expired.
Generally speaking, low volume pharmaceutical products are not quickly
brought to the market as generic products, by the larger generic
pharmaceutical drug facilities, since the cost to produce a low volume
generic product out weights its return on investment. Barrington
Laboratories, Inc., believes it can minimize the cost to produce generic
pharmaceutical products by out-sourcing the steps necessary to obtain Food
and Drug Administration (FDA) approval.
The goal of Barrington Laboratories, Inc. is to obtain an ANDA (Abbreviated
New Drug Application) from the FDA to produce and market a pharmaceutical
product where the patent on the brand name product has expired, and market
its generic version. The FDA requires one holder (a primary contact) of the
ANDA. The Company needs to consider where or not the contract manufacturer
will submit the submission package to the FDA, and be the holder of the ANDA
for this product. If this becomes the case, the Company would need to enter
into a contract with the contract manufacturer to be the exclusive
distributor of this product.
In December, 1999, the Company signed a Confidentially Agreement with
a large pharmaceutical contract manufacturer to pursue and investigate this
initiative. Upon investigation by this contract manufacturer, they were
unable to perform the services required, as they did not have the required
special equipment to manufacture the proposed pharmaceuticals for Barrington
Laboratories, Inc. In September, 1999, the Company identified another
contract pharmaceutical manufacturer, and signed a Confidentially Agreement
with them. It appears this pharmaceutical contract manufacturer, has access
to both the FDA-required research facilities and equipment to undertake a
project for Barrington Labs. It is still too early to determine, whether
or not the Company has identified a contract manufacturer to undertake its
work. Further evaluations are required to determine whether the work will
be subcontracted to this particular pharmaceutical manufacturer. This will
be conducted by management of the Company during the Fourth Quarter. Since
this is a lengthy process, the Company believes it is too premature to
determine the actual holder of the ANDA for this product.
Results of Operations
- ---------------------
As a research and development Company, the Company has yet to generate any
Revenues. In addition, the Company does not expect to generate any revenues
over the next approximately to eighteen (18) months. During calendar year,
1999, the Company experienced net losses $7,415. The bulk of these expenses
were for legal and accounting purposes, filing fees, office supplies, and
transfer fees. This loss compares to a loss of $7,536 for 1998 (August 6,
1998, inception through December 31, 1998). The Company does not have any
material commitments for capital expenditures.
15
<PAGE>
Liquidity and Capital Resources
- -------------------------------
The Company's primary sources of liquidity since its inception have been the
sale of shares of common stock from shareholders, which were used during the
period from inception through September 30, 1999. An original stock offering
was made pursuant to Nevada Revised Statues Chapter 90.490 (hereinafter
referred to as the "Offering"). This Offering was made in reliance upon an
exemption from the registration provisions of Section 5 of the Securities Act
of 1993 (the "Act"), as amended, pursuant to Regulation D, Rule 504 of the
Act. On August 7, 1998, founding shareholders purchased three million
(3,000,000) shares of the Company's authorized but unissued treasury stock for
cash. Additionally, the Company sold seven hundred fifty thousand seven
hundred (750,700) shares of Common Stock of the Company during the Offering to
approximately sixty-seven (67) shareholders in the State of Nevada. The
offering was closed February 28, 1999. As of the date of this Registration
Statement, the Company has three million seven hundred fifty thousand seven
hundred (3,750,700) shares of its $0.001 par value common voting stock issued
and outstanding which are held by approximately sixty-eight (68) shareholders
of record, including the Company's founder. Management fully anticipates that
the proceeds from the sale of all of the Common Shares sold in the offering
delineated above will be sufficient to provide the Company's capital needs for
the next approximately twelve (12) months. At that time, the Company will
need additional working capital to finance its planned activity.
This is a developmental stage company. The Company hopes to produce generic
pharmaceutical products, through contract laboratories and manufacturing
facilities, for pharmaceutical products that have lost their innovator patent,
and where no other generics for these products are currently available on the
market. If successful, the Company plans to distribute this product into the
marketplace through drug wholesalers, chain pharmacies and State Medicaid
programs.
It is the Company's intention to enter the marketplace with the first versions
of generic drugs, after their innovator patents have expired. There are no
guarantees that other generic pharmaceuticals could not enter the market first
with a similar product beforehand. Other companies could be developing a
similar product; if they enter the market first, this would dramatically
curtail any earnings potential for the Company. Additionally, a superior
competitive product could force the Company out of business.
The Company currently has 2 employees who are both officers and directors of
the Company. These employees received no compensation through September 30,
1999. The Company does not plan to hire any additional employees until it
receives FDA approval for one of its pharmaceutical products. (See employment
agreement in 10-SB12G).
Year 2000 Issue
- ---------------
The Company is not currently utilizing any electronic processing systems and
Therefore, the company is not directly at risk for having systems that will not
recognize the Year 2000 ("Y2K") or treat any date after December 31, 1999 as
a date during the twentieth century. However, no assurances can be given
that we will be able to avoid all Y2K problems, especially those that might
originate with third parties with whom we transact business, such as financial
institutions, and we have not undertaken any investigation to determine the
Y2K readiness of such parties. If the Company or any third party with whom the
Company does business were to have a Y2K problem, the business could be
disrupted
and the Company's financial condition and results of operations could be
materially adversely affected.
16
<PAGE>
ITEM 7. FINANCIAL STATEMENTS.
BARRINGTON LABORATORIES, INC.
(A DEVELOPMENT STATE COMPANY)
FINANCIAL STATEMENTS
--------------------
December 31, 1998
December 31, 1998
17
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
INDEPENDENT AUDITORS REPORT F-1
ASSETS F-2
LIABILITIES AND STOCKHOLDERS' EQUITY F-3
STATEMENT OF OPERATIONS F-4
STATEMENT OF STOCKHOLDERS' EQUITY F-5
STATEMENT OF CASH FLOWS F-6
NOTES TO FINANCIAL STATEMENTS F-7-11
18
<PAGE>
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 Tulita Drive OFFICE (702) 361-8414
Las Vegas, NV 89123 FAX NO (702) 896-0278
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors February 28, 2000
Barrington Laboratories, Inc.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of Barrington Laboratories,
Inc. (A Development Stage Company), as of December 31, 1999, and December
31, 1998, and the related Statements of Operations, Stockholders' Equity and
Cash Flows for the year ended December 31, 1999, and the period August 6,
1998, (inception) to December 31, 1998. These financial statements
are the responsibility of the Company's management. My responsibility
is to express an opinion of these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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 account principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Barrington Laboratories,
Inc. (A Development Stage Company), as of December 31, 1999, and December 31,
1998, and the results of its operations and cash flows for the year ended
December 31, 1999, and the period August 6, 1998, (inception) to December
31, 1998, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note #5 to the financial
statements, the Company has ad no operations and has no established source
of revenue. This raises substantial doubt about its ability to continue as
a going concern. Management's plan in regard these matters are also described
in Note #5. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Barry L. Friedman
- ------------------------------
Barry L. Friedman
Certified Public Accountant
F-1
<PAGE>
BARRINGTON LABORATORIES, INC.
(A Development Stage Company)
<TABLE>
<CAPTION>
ASSETS
BALANCE SHEET
-------------
ASSETS
------
December December
31, 1999 31, 1998
<S> <C> <C>
CURRENT ASSETS:
CASH $ 26,744 $ 294
-------- ---------
TOTAL CURRENT ASSETS: $ 26,744 $ 294
-------- ---------
OTHER ASSETS:
Organization Costs (Net) $ 0 $ 330
Research & Development (Note #8) 6,200 2,200
-------- ---------
TOTAL OTHER ASSETS: $ 6,200 $ 2,530
-------- ---------
TOTAL ASSETS $ 32,944 $ 2,824
======== =========
</TABLE>
See accompanying notes to financial statements & audit report
<PAGE>
F-2
BARRINGTON LABORATORIES, INC.
(A Development Stage Company)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
BALANCE SHEET
-------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
CURRENT LIABILITIES
Officers' Advances (Note #6) $ 360 $ 360
-------- ----------
TOTAL CURRENT LIABILITIES: $ 360 $ 360
STOCKHOLDERS' EQUITY: (Note #4)
Preferred stock, $0.001 par value,
Authorized 5,000,000 shares;
Issued and outstanding at
December 31, 1999 - None $ 0 $ 0
Common stock, $0.001 par value,
Authorized 20,000,000 shares;
Issued and outstanding at
December 31, 1998-
3,000,000 shares $ 3,000
December 31, 1999-
3,750,700 shares $ 3,767
Additional Paid-In Capital 43,784 7,000
Deficit accumulated during
The development stage -14,951 -7,536
-------- ----------
TOTAL STOCKHOLDERS' EQUITY $ 32,584 $ 2,464
-------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY: $ 32,944 $ 2,824
======== ==========
</TABLE>
See accompanying notes to financial statements & audit report
F-3
<PAGE>
BARRINGTON LABORATORIES, INC.
(A Development Stage Company)
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
STATEMENT OF OPERATIONS
------------------------
Jan. 1 Aug. 6, Aug. 6, 1998
1999, to 1998, to (Inception)
Dec. 31, Dec. 31, to Feb. 29,
1999 1998 1999
<S> <C> <C> <C>
INCOME
Revenue $ 0 $ 0 $ 0
EXPENSES
Amortization $ 330 $ 30 $ 360
Bank Charges 16 1 17
Consulting Fee 0 6,000 6,000
Filing Fees 1,215 705 1,920
Legal and Accounting 2,200 800 3,000
Office Supplies 2,100 0 2,100
Telephone 471 0 471
Transfer Fees 1,083 0 1,083
-------- --------- ---------
Total Expenses $ 7,415 $ 7,536 $ 14,951
-------- --------- ---------
NET PROFIT/LOSS (-) $ -7,415 $ -7,536 $ -14,951
======== ========= =========
Net Profit/Loss(-)
Per weighted share
(Note #1) $ -.0020 $ -.0025 $ -.0043
======== ========= =========
Weighted average
Number of common
shares outstanding 3,631,915 3,000,000 3,449,688
========= ========= =========
</TABLE>
See accompanying notes to financial statements & audit report
F-4
<PAGE>
BARRINGTON LABORATORIES, INC.
(A Development Stage Company)
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
--------------------------------------------
Deficit
accumulated
Common Stock Additional during
------------ paid-in development
Shares Amount capital stage
------ ------ ---------- ------------
<S> <C> <C> <C> <C>
August 6, 1998
issued for cash 3,000,000 $ 3,000 $ 7,000 $ 0
Net loss,
August 6, 1998
(inception) to
December 31, 1998 -7,536
--------------------------------------------------
Balance,
Dec. 31, 1998 3,000,000 $ 3,000 $ 7,000 -7,536
Feb 28, 1999
issued from
sale of
public offering 750,700 751 36,784
Net loss,
January 1, to
December 31, 1999 -7,415
-------------------------------------------------
Balance,
December 31, 1999 3,750,700 $ 3,751 $ 43,784 $ -14,951
==================================================
</TABLE>
See accompanying notes to financial statements & audit report
F-5
<PAGE>
BARRINGTON LABORATORIES, INC.
(A Development Stage Company)
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS
-----------------------
Jan. 1, Aug. 6, Aug 6,, 1998
1999, to 1998, to (Inception)
Dec. 31, Dec. 31, to Feb. 28,
1999 1998 1999
<S> <C> <C> <C>
Cash Flows from
Operating Activities
Net Loss $ -7,415 $ -7,536 $ -14,951
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Amortization +330 +30 +360
Changes in assets and
Liabilities:
Research & Development -4,000 -2,200 -6,200
Organization Costs 0 -360 -360
Officers' Advances 0 +360 +360
-------- -------- --------
Net cash used in
Operating activities: $-11,085 $ -9,706 $ -20,791
Cash Flows from
Investing Activities 0 0 0
Cash Flows from
Financing Activities:
Issuance of Common
Stock for cash +37,535 +10,000 +47,535
------------------------------------
Net Increase (decrease) $+26,450 $ +294 $ +26,744
Cash,
Beginning of period: 294 0 0
------------------------------------
Cash, End of Period: $ 26,744 $ 294 $ 26,744
</TABLE>
See accompanying notes to financial statements & audit report
F-6
<PAGE>
Barrington Laboratories, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999, and December 31, 1998
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized August 6, 1998, under the laws of the
State of Nevada as Barrington Laboratories, Inc. The Company
currently has yet to generate any revenues and in accordance
with SFAS #7, is considered a developmental stage company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect 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 reporting period. Actual results could
differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-
bearing bank that currently does not exceed federally
insured limits. For the purpose of the statements of
cash flows, all highly liquid investments with the maturity
of three months or less are considered to be cash equivalents.
There are no cash equivalents as of December 31, 1999.
F-7
<PAGE>
Barrington Laboratories, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, and December 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method
of accounting in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS #109) "Accounting for
Income Taxes". A deferred tax asset or liability is recorded
for all temporary difference between financial and tax reporting.
Deferred tax expense (benefit) results from the net change
during the year of deferred tax assets and liabilities.
Reporting on Costs of Start-Up Activities
Statement of Position 98-5 ("SOP 98-5"), "Reporting on the
Costs of Start-Up Activities" which provides guidance
on the financial reporting of start-up costs and
organization costs. It requires most costs of start-up
activities and organization costs to be expensed as incurred.
SOP 98-5 is effective for fiscal years beginning after December
15, 1998. With the adoption of SOP 98-5, there has been little
or no effect on the company's financial statements.
Loss Per Share
Net loss per share is provided in accordance with
Statement of Financial Accounting Standards No. 128
(SFAS #128) "Earnings Per Share". Basic loss per share
is computed by dividing losses available to common
stockholders by the weighted average number of common
shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have
resulted if dilative common stock equivalents had
been converted to common stock. As of December 31,
1999, the Company had no dilative common stock
equivalents such as stock options.
F-8
<PAGE>
Barrington Laboratories, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, and December 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year End
The Company has selected December 31st as its year-end.
Year 2000 Disclosure
The year 2000 issue is the result of computer programs
being written using two digits rather than four to define
the applicable year. Computer programs that have time
sensitive software may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruption
of normal business activities. Since the Company currently
has no operating business and does not use any computers,
and since it has no customers, suppliers or other
constituents, there are no material Year 2000 concerns.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended
December 31, 1999, due to the net loss and no state income
tax in Nevada, the state of the Company's domicile. The
Company's total deferred tax asset as of December 31, 1999
is as follows:
Net operation loss carry forward $ 14,951
Valuation allowance $ 14,951
Net deferred tax asset $ 0
The federal net operating loss carry forward will expire in
2018 & 2019.
This carry forward may be limited upon the consummation
of a business combination under IRC Section 381.
F-9
<PAGE>
Barrington Laboratories, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, and December 31, 1998
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 20,000,000
shares with a par value of $0.001 per share.
Preferred Stock
The authorized preferred stock of the corporation consists of 5,000,000
shares with a par value of $0.001 per share.
On August 7, 1998 the company issued 3,000,000 shares of its $0.001
par value common stock for cash of $10,000.00 to a director.
On December 31, 1999, the Company completed a public offering that
was registered with the State of Nevada pursuant to N.R.S. 90.490
and was exempt from federal registration pursuant to Regulation D,
Rule 504 of the Securities Act of Stock, the company sold 750,700
shares of common stock at a price of $0.05 per share for a total
amount raised of $37,535.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation
of liabilities in the normal course of business. However, the
Company does not have significant cash or other material assets,
nor does it have an established source of revenues sufficient to
cover its operating costs and to allow it to continue as a going
concern. It is the intent of the Company to seek to raise additional
capital via a private placement offering pursuant to Regulation "D",
Rule 505/506, once the company is trading on the OTC-BB.
Until that time, the stockholders/officers and or directors
have committed to advancing the operating costs of the Company
interest free.
F-10
<PAGE>
Barrington Laboratories, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1999, and December 31, 1998
NOTE 6 - RELATED PARTY TRANSACTIONS
The company neither owns nor leases any real or personal property.
An officer of the corporation provides office services without charge.
Such costs are immaterial to the financial statements and accordingly,
have not been reflected therein. The officers and directors of
the Company are involved in other business activities and may, in
the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may
face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for
the resolution of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any
additional shares of common or preferred stock.
NOTE 8 - RESEARCH AND DEVELOPMENT
In December 1998, the company signed a contract with a pharmaceutical
contract manufacturer, to produce a generic pharmaceutical product.
The manufacturer requested chemical and analytical data concerning
the raw materials and the manufacturer process of this project before
they could begin the project. In order to provide this data, outside
services were paid to research the information requested. If the
manufacturer is unable to proceed with this project, the research
obtained could be utilized with other contract pharmaceutical
manufacturers. The President of the company paid his former associates
to research and obtain this data. This is company proprietary data,
which is needed to produce this generic product and hopefully produce
revenues for the company.
F-11
<PAGE>
- ----------------------------------------------------------------------------
19
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The following table sets forth the current officers and directors of Barrington
Laboratories, Inc.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
T. J. Jesky 53 President, Chief Executive
Officer, Chief Financial
Officer and Director
Skyelan Rose 42 Secretary and Director
</TABLE>
The Company is managed and led by T. J. Jesky, who has 20 years experience in
the pharmaceutical industry. He is a former Division Manager for Procter &
Gamble Pharmaceuticals. He began his pharmaceutical career in 1973 with Eaton
Laboratories, whose headquarters were based in Norwich, New York. This company
subsequently changed its name to Norwich Eaton, and in 1981 it was purchased by
Procter & Gamble. The Division subsequently changed its name to Procter &
Gamble Pharmaceuticals. Mr. Jesky held various positions in the company,
including but not limited to: District Manager, Key Account Manager, Hospital
Manager, Region Manager, Division Manager for U.S., Canada and Puerto Rico.
He resigned from Procter & Gamble in 1995. He became President, CEO and sole
stockholder of Studebaker's, Inc. a restaurant/nightclub and real estate
holding company in Arizona. He sold this business in 1997, and opened a
restaurant consulting business. In 1998, this company was sold. He is
currently President and Chairman of the Board of Boppers Holdings, Inc., a
Nevada Corporation. In August, 1998, Mr. Jesky founded Barrington
Laboratories, Inc.
20
<PAGE>
Skyelan Rose, Corporate Secretary for Barrington Laboratories, Inc. Her
background includes marketing hotel services and banquet facilities. For the
past two years, she has executed marketing programs for restaurants and
nightclubs. She is the Event Planner for the Arizona Room of America OnLine,
and has successfully executed a number of programs with this organization.
Prior, she has eight years experience in marketing and sales with the hotel
industry. She spent two of those eight years as Director of Marketing/Sales
for Holiday Inn, Arizona Region. She is also a Corporate Secretary for an
e-Commerce company, called eClic, Inc., and Corporate Secretary for
Boppers Holdings, Inc., both Nevada Corporations. She worked with Mr.
Jesky, as his Corporate Secretary for his restaurant consulting business
in 1997, this business was sold in 1998.
Directors are elected in accordance with our bylaws to serve until the next
annual stockholders meeting. Barrington Laboratories does not currently pay
compensation to directors for services in that capacity.
Officers are elected by the board of directors and hold office until their
successors are chosen and qualified, until their death or until they resign or
have been removed from office. All corporate officers serve at the discretion
of the board of directors. There are no family relationships between any
director or executive officer and any other director or executive officer of
Barrington Laboratories, Inc.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and persons who beneficially own more than ten percent of a
registered class of our equity securities (referred to as "reporting persons"),
to file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of common stock and other equity
securities. Reporting persons are required by Commission regulations to
furnish us with copies of all Section 16(a) forms they file.
To the Company's knowledge, all Section 16(a) filing requirements applicable
to our directors, executive officers and greater than ten percent beneficial
owners during such period were satisfied.
ITEM 10. EXECUTIVE COMPENSATION.
As a result of our the Company's current limited available cash, no officer or
director received compensation during the fiscal year ended December 31, 1999.
Barrington Laboratories intends to pay salaries when cash flow permits. No
officer or director received stock options or other non-cash compensation
during the fiscal year ended December 31, 1999. The Company does have
employment agreements in place with each of its officer.
21
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the beneficial
ownership of our outstanding common stock as of December 31, 1999, by each
person known by Barrington Laboratories to own beneficially more than 5% of
the outstanding common stock, by each of our directors and officer and by
all of our directors and officers as a group. Unless otherwise indicated
below, all persons listed below have sole voting and investment power with
respect to their shares of common stock. Unless otherwise indicated, the
address of each person listed in the table is: c/o Barrington Laboratories,
Inc., 1801 E. Tropicana, Suite 9, Las Vegas, NV 89119.
<TABLE>
<CAPTION>
Amount
Title Name and Address of shares Percent
of of Beneficial held by of
Class Owner of Shares Position Owner Class
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common T. J. Jesky (1) CEO/CFO 3,000,000 79.98%
Common Skyelan Rose Secretary 0 0.00%
- ----------------------------------------------------------------------------
Common All Executive Officers and
Directors as a Group (2 persons) 3,000,000 79.98%
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Because of the Company's development stage nature and its relatively recent
inception, August 6, 1998, the Company has no relationships or transactions to
disclose.
22
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
The following documents are included or incorporated by reference as exhibits to
this report:
EXHIBIT
NO. DOCUMENT DESCRIPTION
- ------- -----------------------------------------------------------------------
(3) ARTICLES OF INCORPORATION AND BY-LAWS
3.1 Articles of Incorporation of the Company Filed August 6, 1998(1)
3.2 By-Laws of the Company adopted September 23, 1998(1)
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS
4.1 Facsimile of specimen common stock certificate
(10) MATERIAL CONTRACTS
10.1 Employment Agreement with T. J. Jesky(1)
10.2 Employment Agreement with Skyelan Rose(1)
(23) CONSENT OF EXPERTS AND COUNSEL
23.1 Letter of Consent from Barry L. Friedman, CPA
(27) FINANCIAL DATA SCHEDULE
27.1 Financial Data Schedule
(29) ADDITIONAL EXHIBITS -- State Registration Statements
29.1 Agent of the Issuer Registration(1)
29.2 Notice of Effectiveness(1)
- ------------------------------------------------
(1) Previously filed as an exhibit to our registration statement on Form 10-SB
(the "Registration Statement"), which was filed on May 14, 1999, and
incorporated herein by reference.
(b) REPORTS ON FORM 8-K
Barrington Laboratories did not file any reports on Form 8-K during the fiscal
year ended December 31, 1999.
23
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: March 8, 2000 BARRINGTON LABORATORIES, INC.
By: /s/ T. J. Jesky
-----------------------
T. J. Jesky
President, Chief Executive Officer and
Chief Financial Officer
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: March 8, 2000 BARRINGTON LABORATORIES, INC.
By: /s/ Skyelan Rose
-----------------------
Skyelan Rose
Secretary, Director
24
<PAGE>
COMMON STOCK CERTIFICATE
EXHIBIT 4.1
[Front of Certificate]
NUMBER SHARES
- --------- ----------
CUSIP 068593 10 2
SEE REVERSE SIDE FOR CERTAIN DEFINITIONS
This Certifies that
is the record holder of
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK OF
BARRINGTON LABORATORIES, INC.
transferable on the books of the corporation in person or by duly authorized
Attorney upon the surrender of this Certificate properly endorsed. This
Certificate are the shares represented hereby are subject to the laws of the
State of Nevada, and to the Certificate of Incorporation and Bylaws of the
Corporation, as now or hereafter amended. This Certificate is not valid unless
countersigned by the Transfer Agent. WITNESS the facsimile seal of the
Corporation and the signature of it duly authorized officers.
Dated:
T. J. Jesky Skyelan Rose
President Secretary
BARRINGTON LABORATORIES, INC.
CORPORATE
SEAL
NEVADA
<PAGE>
[Reverse of Certificate]
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT - _________Custodian__________
(Cust.) (Minor)
under Uniform Gifts to Minors Act_______________
(State)
Additional abbreviations may also be used though not in the above list.
For Value received, ___________________________________ hereby sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------/--------------------------------------------
- --------------------------------------------------------------------------------
(NAME AND ADDRESS OF ASSIGNEE SHOULD BE PRINTED OR TYPEWRITTEN)
- --------------------------------------------------------------------------------
__________________________________________________________________________Shares
of the capital stock represented by the within Certificate and do hereby
irrevocably constitute and appoint
________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named Corporation, with
full power of substitution in the premises.
Dated___________________
------------------------------------------------------------
------------------------------------------------------------
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY
CHANGE WHATEVER.
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (Bank, Stockbrokers, Savings and Loan
Association and Credit Unions.)
SIGNATURE GUARANTEED:
TRANSFER FEE WILL APPLY
<PAGE>
TYPE: EX-23
BARRINGTON LABORATORIES, INC.
EXHIBIT #23 Consent of Experts and Counsel
Barry L. Friedman, P.C., CPA
Certified Public Accountant
1582 Tulita Drive OFFICE (702) 361-8414
Las Vegas, NV 89123 FAX NO. (702) 896-0278
To Whom It May Concern: February 28, 2000
The firm of Barry L. Friedman, P.C., Certified Public Accountant consents
to the inclusion of their report of February 28, 2000 on the Financial
Statements of Barrington Laboratories, Inc., as of December 31, 1999, in
any filings that are necessary now or in the near future with the U.S.
Securities and Exchange Commission.
Very Truly yours,
/s/ Barry L. Friedman
- ------------------------------------
Barry L. Friedman
Certified Public Accountant
<PAGE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET, THE STATEMENT OF OPERATIONS, AND THE STATEMENT OF CASH FLOWS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 26,744
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 26,744
<PP&E> 6,200
<DEPRECIATION> 0
<TOTAL-ASSETS> 32,944
<CURRENT-LIABILITIES> 360
<BONDS> 0
0
0
<COMMON> 3,751
<OTHER-SE> 29,193
<TOTAL-LIABILITY-AND-EQUITY> 32,944
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 7,415
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,415)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,415)
<EPS-BASIC> (0.002)
<EPS-DILUTED> (0.002)
</TABLE>
