<PAGE>
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark one)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1995
--------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ________
Commission file number 0-5776
--------
BIOSPHERICS-R- INCORPORATED
--------------------------------------------------------------------------------
(Exact name of small business issuer in its charter)
Delaware 52-0849320
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
12051 Indian Creek Court, Beltsville, Maryland 20705
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(Address of principal executive offices)
301-419-3900
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(Issuer's telephone number)
Check whether the issuer (1) has 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 report(s), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
The number of outstanding shares of the registrant's Common Stock on
August 1, 1995, was 3,912,510.
Transitional Small Business Disclosure Format (Check One): Yes No X
--- ---
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<PAGE>
BIOSPHERICS INCORPORATED
___________
FORM 10-QSB
INDEX
PAGE NO.
Face Sheet 1
Index 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Operations for the
three and six months ended June 30, 1995 and 1994 (unaudited) 3
Consolidated Balance Sheets at June 30, 1995 (unaudited)
and December 31, 1994 4
Consolidated Statements of Cash Flows for the three and
six months ended June 30, 1995 and 1994 (unaudited) 5
Notes to the Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis or Plan of Operation 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURE 13
- 2 -
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIOSPHERICS INCORPORATED
Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
-------------------------------- ------------------------------
1995 1994 1995 1994
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
REVENUES
Contract revenues $ 4,656,068 $ 4,058,483 $ 8,676,764 $ 7,757,166
OPERATING EXPENSES
Direct contract costs and operating expenses 3,427,345 3,592,228 6,489,113 6,601,519
General and administrative 638,548 533,741 1,223,306 1,063,099
Research and development 179,508 192,831 297,070 416,258
Depreciation and amortization 111,967 89,446 216,699 178,545
-------------- -------------- ------------- --------------
Total operating expenses 4,357,368 4,408,246 8,226,188 8,259,421
-------------- -------------- ------------- --------------
Income (loss) from operations 298,700 (349,763) 450,576 (502,255)
Other income (expense)
Other income (expense) (16,369) (14,671) (13,926) 4,887
Interest expense (33,798) (29,944) (56,647) (56,652)
-------------- -------------- ------------- --------------
Income (loss) before taxes 248,533 (394,378) 380,003 (554,020)
Income tax benefit (expense) (95,942) 152,465 (146,491) 214,087
-------------- -------------- ------------- --------------
NET INCOME (LOSS) $ 152,591 $ (241,913) $ 233,512 $ (339,933)
-------------- -------------- ------------- --------------
-------------- -------------- ------------- --------------
NET INCOME (LOSS) PER SHARE $ 0.03 $ (0.06) $ 0.05 $ (0.09)
-------------- -------------- ------------- --------------
-------------- -------------- ------------- --------------
</TABLE>
See notes to consolidated financial statements.
- 3 -
<PAGE>
BIOSPHERICS INCORPORATED
Consolidated Balance Sheets
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
ASSETS 1995 1994
---------------- ------------------
<S> <C> <C>
CURRENT ASSETS (unaudited)
Cash and cash equivalents $ 229,250 $ 7,979
Trade accounts receivable, net 2,867,252 3,277,923
Costs and estimated earnings in excess of billings on contracts 224,038 338,810
Other receivables 106,199 202,392
Prepaid expenses and other assets 495,377 472,288
Current deferred income taxes 53,545 53,545
---------------- ------------------
Total current assets 3,975,661 4,352,937
Restricted cash-security deposit 27,408 27,408
Property and equipment, net 1,704,541 1,703,268
Patents, net 98,870 88,400
---------------- ------------------
TOTAL ASSETS $ 5,806,480 $ 6,172,013
---------------- ------------------
---------------- ------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank line of credit $ 790,000 $ 1,535,000
Accounts payable and accrued expenses 1,183,731 1,331,106
Accrued salaries and benefits 725,379 469,966
Accrued vacation 196,681 173,663
Income taxes payable 64,900 31,772
---------------- ------------------
Total current liabilities 2,960,691 3,541,507
Deferred compensation 148,626 148,626
Deferred income taxes 190,425 190,425
Deferred rent 136,910 159,129
---------------- ------------------
Total liabilities 3,436,652 4,039,687
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 18,000,000 shares
authorized, 3,921,770 shares issued, 3,912,510 outstanding
at June 30, 1995, and 3,904,770 issued and outstanding
at December 31, 1994 39,218 39,048
Paid-in capital in excess of par 830,519 765,544
Treasury stock, 9,260 shares at cost (61,155) -
Retained earnings 1,561,246 1,327,734
---------------- ------------------
Stockholders' equity 2,369,828 2,132,326
---------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,806,480 $ 6,172,013
---------------- ------------------
---------------- ------------------
</TABLE>
See notes to consolidated financial statements.
- 4 -
<PAGE>
BIOSPHERICS INCORPORATED
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------------
1995 1994
------------ ----------
<S> <C> <C>
Net income (loss) $ 233,512 $ (339,933)
Adjustments to reconcile net income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization 216,699 178,545
Loss on disposal of property and equipment 32,415 -
Provision for uncollectible accounts 22,301 18,000
Decrease in short-term investment - 56,865
Decrease in trade accounts receivable 388,371 267,903
Decrease (increase) in costs and estimated earnings
in excess of billings on contracts 114,772 (163,512)
Decrease in other receivables 96,193 217,643
Decrease in income taxes receivable - 126,090
Decrease (increase) in prepaid expenses and other assets (23,090) 110,575
Increase in restricted cash-security deposit - (27,408)
Increase (decrease) in accounts payable, accrued expenses, and other liabilities (147,375) 25,160
Increase in accrued salaries and benefits 255,413 109,920
Increase in accrued vacation 23,018 13,531
Increase (decrease) in income taxes payable 33,128 (23,573)
Decrease in deferred rent (22,219) (29,060)
Other 3,990 3,609
------------ ----------
Total adjustments 993,616 884,288
Net cash provided by operating activities 1,227,128 544,355
Cash flows from investing activities:
Purchases of property and equipment (249,883) (266,940)
Additions to patent costs (10,974) (8,176)
------------ ----------
Net cash used by investing activities (260,857) (275,116)
Cash flows from financing activities:
Net repayments under line of credit (745,000) (200,101)
------------ ----------
Net cash used by financing activities (745,000) (200,101)
Net increase in cash and cash equivalents 221,271 69,138
Cash and cash equivalents, beginning of period 7,979 9,045
------------ ----------
Cash and cash equivalents, end of period $ 229,250 $ 78,183
------------ ----------
------------ ----------
</TABLE>
See notes to consolidated financial statements.
- 5 -
<PAGE>
BIOSPHERICS INCORPORATED
Notes to Consolidated Financial Statements
(Unaudited)
___________
1. BASIS OF PRESENTATION
The accompanying interim consolidated financial statements of Biospherics
Incorporated (the "Company") do not include all of the information and
disclosures generally required for annual financial statements and are
unaudited. In the opinion of management, all material adjustments considered
necessary for a fair presentation of the results of interim periods have been
included. This report should be read in conjunction with the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1994.
The Consolidated Statement of Cash Flows for the six months ended June 30,
1995 has been prepared using the "indirect method" in accordance with Statement
of Financial Accounting Standards No. 95 ("SFAS 95"). The Consolidated
Statement of Cash Flows for the six months ended June 30, 1994 was previously
reported using the "direct method" under SFAS 95, but has been restated to
conform to the 1995 presentation. Management believes the indirect method
provides a more concise presentation of the significant factors that impact cash
flows.
2. NET INCOME (LOSS) PER SHARE
Net income (loss) per share is computed using the weighted average number
of common shares and, when appropriate, common stock equivalents outstanding
during the period. Common stock equivalents consist of shares under option.
Fully-diluted earnings per share is not materially different than primary
earnings per share. The weighted average number of common shares and common
stock equivalents outstanding during the three and six month periods ended June
30, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
------------------------------- -------------------------------
1995 1994 1995 1994
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Weighted average shares outstanding 3,912,510 3,904,770 3,912,510 3,904,770
Common stock equivalents 537,528 - 479,570 -
---------- ---------- ---------- -----------
Weighted average shares and common
stock equivalents outstanding 4,450,038 3,904,770 4,392,080 3,904,770
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
</TABLE>
3. BANK LINE OF CREDIT
On September 28, 1994, the Company entered into an Amended and Restated
Loan Agreement (the "Previous Credit Agreement"). The Previous Credit
Agreement, which expired on May 31, 1995, provided for borrowings of up to $2
million, subject to an advance rate as defined in the agreement. Amounts
outstanding under the Previous Credit Agreement accrued interest at the bank's
prime rate plus 1% per annum. The Previous Credit Agreement contained covenants
which required the Company to meet certain tangible net worth and cash flow
coverage ratios and limits direct research and development expenditures. On
March 2, 1995, the agreement was amended to increase research and development
expenditures to certain levels, subject to the Company obtaining certain before
tax profit margin targets.
On May 31, 1995, the Company entered into a Loan Agreement (the "New Loan
Agreement") which replaced the Company's previous bank line of credit. The New
Loan Agreement, which expires on May 31, 1996, provides for borrowings of up to
$2 million, subject to an advance rate as defined in the agreement. Amounts
outstanding under the New Loan Agreement accrue interest at the bank's prime
rate plus .75% per annum and are collateralized by the Company's accounts
receivable. The New Loan Agreement contains covenants which require
- 6 -
<PAGE>
BIOSPHERICS INCORPORATED
Notes to Consolidated Financial Statements
(Unaudited)
______________
the Company to meet certain tangible net worth and cash flow coverage ratios,
and excludes a specific limitation on research and development expenditures.
The Company was in compliance with all covenants as of June 30, 1995.
4. COMMITMENTS AND CONTINGENCIES
As a result of routine audits of the Company's Federal income tax returns
by the Internal Revenue Service ("IRS"), the IRS has disputed the timing of
certain rent expense deductions taken during the 1986 through 1992 tax years.
The aggregate amount of the IRS' claims and penalties were $348,666 and $79,808,
respectively. The deficiencies in question constitute temporary differences
regarding the period in which certain rent expenses should be deducted, and
therefore, if the IRS is successful, the outcome will not have an impact on the
Company's Consolidated Statements of Operations. However, if any interest and
penalties are assessed, such amounts would result in a charge to the Company's
Consolidated Statements of Operations. The Company has filed a petition in the
United States Tax Court disputing all of the claims and penalties. The Company
has identified certain errors in the IRS audit findings which will substantially
reduce any amounts paid as a result of the audit. The IRS has also agreed to
waive all penalties under a proposed settlement. If the proposed settlement is
consummated, there will be no impact on the Company's results of operations and
no material impact on cash flows.
- 7 -
<PAGE>
BIOSPHERICS INCORPORATED
______________
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
The Company earned net income of $152,591 for the second quarter of 1995,
compared with a net loss of $241,913 during the second quarter of 1994.
Revenues increased 14.7% to $4,656,068 in the second quarter of 1995 compared to
$4,058,483 for the second quarter of 1994. As reflected in the chart below, the
improvement in the results of operations is primarily a result of significant
improvement in operations of the information services business. These
fluctuations are discussed further below.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
INFORMATION SERVICES 1995 1994
------------------------------------------------ ---------- ----------
<S> <C> <C>
Revenues 4,136,000 3,392,000
Operating expenses 3,516,000 3,592,000
---------- ----------
Operating profit (loss) 620,000 (200,000)
---------- ----------
---------- ----------
ENVIRONMENTAL AND LABORATORY SERVICES
------------------------------------------------
Revenues 520,000 666,000
Operating expenses 640,000 656,000
---------- ----------
Operating profit (loss) (120,000) 10,000
---------- ----------
---------- ----------
RESEARCH AND DEVELOPMENT
------------------------------------------------
Revenues - -
Operating expenses 201,000 160,000
---------- ----------
Operating loss (201,000) (160,000)
---------- ----------
---------- ----------
</TABLE>
Information services revenues were $4,136,000, which reflects an increase
of 21.9% or $744,000, compared with revenues of $3,392,000 during the second
quarter of 1994. Operating profit improved $820,000 from the loss of $200,000
during the second quarter of 1994. The increases in revenues and profitability
were primarily the result of a new customized disease management support program
in the commercial sector, somewhat offset by a decline in Federal government
contract revenue. The percentage of commercial and Federal government
information services business changed from 34% and 66%, respectively, during the
1994 period, to 58% and 42%, respectively, during the three months ended June
30, 1995. The change in the mix of business contributed to the improved
operating profit along with cost control measures implemented on the Company's
Department of Agriculture Forest Service campsite reservation contract.
Information services revenues continue to represent a substantial part of the
Company's revenues with 88% during the second quarter of 1995 and 84% for the
same 1994 period.
Environmental services revenues were $520,000, which reflects a decline of
21.9% or $146,000, compared with revenues of $666,000 during the second quarter
of 1994. The operating loss was $120,000 as compared to an operating profit of
$10,000 in 1994. The decline in results of operations was primarily caused by a
decrease in public housing work in the Company's Cleveland office, competitive
market pressure on pricing, and continuing high levels of overhead. The high
overhead is partly the result of an increased emphasis on marketing and sales
efforts to increase revenues and improve profitability.
Research and development (formerly, "BioTech") operating expenses increased
by $41,000 or 25.6% primarily because of higher expenses during the second
quarter of 1995 to produce samples of Sugaree-TM- for use in human trials
underway at the University of Maryland School of Medicine. The Company
continues its negotiations with potential producers to scale-up the
manufacturing process for Sugaree-TM-. Successful conclusion of these
negotiations will allow the scale-up process to begin. If the manufacturing
process can be implemented, the commercialization of Sugaree-TM- could have a
substantial impact on future results of operations.
- 8 -
<PAGE>
BIOSPHERICS INCORPORATED
__________
The April 5, 1995 issue of the FEDERAL REGISTER carried an announcement of
the Company's application for EPA approval of a product label for its
safe-for-humans pesticide, "Wingdinger-TM-". If the product label is approved,
the Company will seek to commercialize Wingdinger.
No assurance can be given that the Company will be successful in its
efforts to commercialize its products.
General and administrative expenses ("G&A") have been fully allocated to
each segment's operating results discussed above. As reflected in the
accompanying Consolidated Statements of Operations, G&A increased $105,000 from
$534,000 in the second quarter of 1994 to $639,000 in the second quarter of
1995. This increased cost is primarily a result of the formation of a corporate
communications group along with related fringe benefits, in addition to higher
rent and other facility expenses allocated to G&A.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
The Company earned net income of $233,512 for the first half of 1995,
compared with a net loss of $339,933 during the first half of 1994. Revenues
increased 11.9% to $8,676,764 in the first half of 1995 compared to $7,757,166
for the first half of 1994. As reflected in the chart below, the improvement in
the results of operations is primarily a result of significant improvement in
operations of the information services business. These fluctuations are
discussed further below.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------------------
INFORMATION SERVICES 1995 1994
-------------------------------------------------- --------- ---------
<S> <C> <C>
Revenues 7,641,000 6,542,000
Operating expenses 6,597,000 6,591,000
---------- ----------
Operating profit (loss) 1,044,000 (49,000)
---------- ----------
---------- ----------
ENVIRONMENTAL AND LABORATORY SERVICES
--------------------------------------------------
Revenues 1,033,000 1,191,000
Operating expenses 1,304,000 1,221,000
---------- ----------
Operating loss (271,000) (30,000)
---------- ----------
---------- ----------
RESEARCH AND DEVELOPMENT
--------------------------------------------------
Revenues 3,000 24,000
Operating expenses 325,000 447,000
---------- ----------
Operating loss (322,000) (423,000)
---------- ----------
---------- ----------
</TABLE>
Information services revenues were $7,641,000, which reflects an increase
of 16.8% or $1,099,000, compared with revenues of $6,542,000 during the first
half of 1994. Operating profit improved $1,093,000 from the loss of $49,000
during the first half of 1994. The increases in revenues and profitability were
primarily the result of a new customized disease management support program in
the commercial sector, somewhat offset by a decline in Federal government
contract revenue. The percentage of commercial and government information
services business changed from 34% and 66%, respectively, during the 1994
period, to 58% and 42%, respectively, during the six months ended June 30, 1995.
The change in the mix of business contributed to the improved operating profit
along with cost control measures implemented on the Company's Department of
Agriculture forest service campsite reservation contract. Information services
revenues continue to represent a substantial part of the Company's revenues with
88% during the first half of 1995 and 84% for the same 1994 period.
Environmental services revenues were $1,033,000, which reflects a decline
of 13.3% or $158,000, compared with revenues of $1,191,000 during the first half
of 1994. The operating loss was $271,000 as compared to an operating loss of
$30,000 in 1994. The decline in results of operations was primarily caused by a
decrease in public housing work in the Company's Cleveland office, competitive
market pressure on pricing, and continuing high levels
- 9 -
<PAGE>
BIOSPHERICS INCORPORATED
__________
of overhead. The high overhead is partly the result of an increased emphasis on
marketing and sales efforts to increase revenues and improve profitability.
Research and development operating expenses decreased by $122,000 or 27.3%
primarily because of higher expenses during the first half of 1994. The 1994
expenses were higher primarily as a result of toxicology testing and initial
overseas marketing costs for Sugaree-TM-, which is the Company's patented
non-fattening, bulk sugar substitute, scientifically known as D-tagatose.
Expenses incurred during 1995 primarily relate to ongoing efforts to begin
commercial production of Sugaree-TM- through a toll producer, overseas travel
to continue negotiating distribution agreements covering the Asian and Oceania
markets, and expenses associated with the production of Sugaree-TM- samples for
use in human trials underway at the University of Maryland School of Medicine.
No assurance can be given that the Company will be successful in its
efforts to commercialize its products.
G&A has been fully allocated to each segment's operating results discussed
above. As reflected in the accompanying Consolidated Statements of Operations,
G&A increased $160,000 from $1,063,000 in the first half of 1994 to $1,223,000
in the first half of 1995. This increased cost is primarily a result of the
formation of a corporate communications group along with related fringe
benefits, in addition to higher rent and other facility expenses allocated to
G&A.
LIQUIDITY AND CAPITAL RESOURCES
On September 28, 1994, the Company entered into an Amended and Restated
Loan Agreement (the "Previous Credit Agreement"). The Previous Credit
Agreement, which expired on May 31, 1995, provided for borrowings of up to $2
million, subject to an advance rate as defined in the agreement. Amounts
outstanding under the Previous Credit Agreement accrued interest at the bank's
prime rate plus 1% per annum. The Previous Credit Agreement contained covenants
which required the Company to meet certain tangible net worth and cash flow
coverage ratios and limits direct research and development expenditures. On
March 2, 1995, the agreement was amended to increase research and development
expenditures to certain levels, subject to the Company obtaining certain before
tax profit margin targets.
On May 31, 1995, the Company entered into a Loan Agreement (the "New Loan
Agreement") which replaced the Company's previous bank line of credit. The New
Loan Agreement, which expires on May 31, 1996, provides for borrowings of up to
$2 million, subject to an advance rate as defined in the agreement. Amounts
outstanding under the New Loan Agreement accrue interest at the bank's prime
rate plus .75% per annum and are collateralized by the Company's accounts
receivable. The New Loan Agreement contains covenants which require the Company
to meet certain tangible net worth and cash flow coverage ratios, and excludes a
specific limitation on research and development expenditures. The Company was
in compliance with all covenants as of June 30, 1995.
As reflected in the Consolidated Statements of Cash Flows, cash flows
provided by operating activities improved by $682,773 primarily as a result of
the improvement in earnings. Net cash used in investing activities decreased
slightly despite the increase in the Company's volume of business. With the
improvement in cash flow, the Company was able to decrease borrowings under its
credit facility by $745,000 since December 31, 1994, as reflected by the net
cash used in financing activities.
OTHER
The Company has 2 major commercial information services contracts which
provided revenues of $1,399,005 for the three month period ended June 30, 1995
and $2,765,955 for the six month period then ended. The Company also has
contracts with the Federal government which aggregated $1,720,643 and $3,201,496
for the three and six month periods ended June 30, 1995, respectively. One of
the major commercial contracts, which represented $593,332 and $1,326,414 of
revenues for the three and six month periods of 1995, will be completed by early
August of 1995.
- 10 -
<PAGE>
BIOSPHERICS INCORPORATED
__________
As a result of routine audits of the Company's Federal income tax returns
by the Internal Revenue Service ("IRS"), the IRS has disputed the timing of
certain rent expense deductions taken during the 1986 through 1992 tax years.
The aggregate amount of the IRS' claims and penalties were $348,666 and $79,808,
respectively. The deficiencies in question constitute temporary differences
regarding the period in which certain rent expenses should be deducted, and
therefore, if the IRS is successful, the outcome will not have an impact on the
Company's Consolidated Statements of Operations. However, if any interest and
penalties are assessed, such amounts would result in a charge to the Company's
Consolidated Statements of Operations. The Company has filed a petition in the
United States Tax Court disputing all of the claims and penalties. The Company
has identified certain errors in the IRS audit findings which will substantially
reduce any amounts paid as a result of the audit. The IRS has also agreed to
waive all penalties under a proposed settlement. If the proposed settlement is
consummated, there will be no impact on the Company's results of operations and
no material impact on cash flows.
Consistent with the Company's policy, excess profits will be retained by
the Company to help bring Sugaree-TM-, Wingdinger-TM- and its other products to
market, and for investment in the expansion of the information services
business. Thus, no dividends are anticipated in 1995. While management
believes that continuing operations of the business will generate positive cash
flow, management is pursuing additional financing alternatives to accelerate
bringing its products to market and to support growth of its core businesses.
However, there can be no assurance that such alternatives will be available on
terms satisfactory to the Company.
- 11 -
<PAGE>
BIOSPHERICS INCORPORATED
__________
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 4 Commitments and Contingencies in the accompanying Notes to the
Consolidated Financial Statements contained in Part I, Item I.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 15,1995, the Company held its Annual Meeting of Shareholders. A
total of 3,701,910 shares of stock were voted representing 94.4% of shares
outstanding. All directors proposed by the Company were elected with more than
99% of the outstanding shares. The ratification of the appointment of Coopers &
Lybrand LLP was also approved by more than 99% of the outstanding shares. The
following information reflects the results of each matter voted upon.
<TABLE>
<CAPTION>
Election of Directors For Against Withheld
-------------------------------------------------- ---------- ----------- ------------
<S> <C> <C> <C>
Gilbert V. Levin 3,671,434 1,525 28,951
Lionel V. Baldwin 3,672,859 100 28,951
David A. Blake 3,672,609 350 28,951
A. Bruce Cleveland 3,672,959 0 28,951
George S. Jenkins 3,671,809 1,150 28,951
M. Karen Levin 3,669,134 3,825 28,951
Anne S. MacLeod 3,672,859 100 28,951
Richard L. Snowden 3,672,659 300 28,951
Ratify the Appointment of Independent Accountants For Against Abstain
-------------------------------------------------- ---------- ----------- ------------
Coopers & Lybrand LLP 3,675,994 14,630 11,286
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBIT 27
Financial Data Schedule for the quarterly period ended June 30, 1995 (filed
electronically only).
REPORTS ON FORM 8-K
On April 5, 1995, the Company filed a report on Form 8-K which disclosed
certain information under Item 4 Changes in Registrant's Certifying Accountant.
As more fully described in that Form 8-K, the decision to change accountants was
based upon a comparison of qualifications and fee for services, and was not
related in any way to disagreements on accounting, financial reporting or any
other matter.
- 12 -
<PAGE>
BIOSPHERICS INCORPORATED
__________
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
BIOSPHERICS INCORPORATED
Date: August 8, 1995 By: /s/ Arthur S. Locke, III
-------------- ----------------------------------------
Arthur S. Locke, III
Vice President, Chief Financial Officer
- 13 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statements of Operations and Consolidated Balance Sheets included
in Part I of the accompanying Form 10-QSR for the quarterly period ended June
30, 1995 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 229,250
<SECURITIES> 0
<RECEIVABLES> 2,977,162
<ALLOWANCES> 109,910
<INVENTORY> 0
<CURRENT-ASSETS> 3,975,661
<PP&E> 4,639,898
<DEPRECIATION> 2,935,357
<TOTAL-ASSETS> 5,806,480
<CURRENT-LIABILITIES> 2,960,691
<BONDS> 0
<COMMON> 39,218
0
0
<OTHER-SE> 2,330,610
<TOTAL-LIABILITY-AND-EQUITY> 5,806,480
<SALES> 8,676,764
<TOTAL-REVENUES> 8,676,764
<CGS> 0
<TOTAL-COSTS> 6,489,113
<OTHER-EXPENSES> 513,769
<LOSS-PROVISION> 22,301
<INTEREST-EXPENSE> 56,647
<INCOME-PRETAX> 380,003
<INCOME-TAX> 146,491
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 233,512
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
