<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the Form
10-KSB of Pure World, Inc. for the year ended December 31, 1995 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000356446
<NAME> PURE WORLD, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 9,357
<SECURITIES> 1,809
<RECEIVABLES> 940
<ALLOWANCES> 100
<INVENTORY> 1,561
<CURRENT-ASSETS> 13,906
<PP&E> 1,579
<DEPRECIATION> 153
<TOTAL-ASSETS> 19,187
<CURRENT-LIABILITIES> 2,221
<BONDS> 0
0
0
<COMMON> 77
<OTHER-SE> 16,889
<TOTAL-LIABILITY-AND-EQUITY> 19,187
<SALES> 6,173
<TOTAL-REVENUES> 7,451
<CGS> 3,891
<TOTAL-COSTS> 7,381
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18
<INCOME-PRETAX> 52
<INCOME-TAX> 11
<INCOME-CONTINUING> 41
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
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 [Fee Required]
For the fiscal year ended December 31, 1995
[ ] Transition Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the transition period from ________________ to _________________.
Commission file number 0-10566
PURE WORLD, INC. (FORMERLY AMERICAN HOLDINGS, INC.)
(Name of small business issuer in its charter)
Delaware 95-3419191
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
376 Main Street, P.O. Box 74, Bedminster, New Jersey 07921
(Address of principal executive offices with Zip Code)
Issuer's telephone number, including area code (908) 234-9220
Securities registered under Section 12(b) of the
Exchange Act:
NONE
Securities registered under Section 12(g) of the
Exchange Act:
Common Stock, par value $.01 per share
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 issuer 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 there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B 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. [ X ]
Issuer's revenues for the fiscal year ended December 31, 1995 were
approximately $7.5 million.
At February 29, 1996, there were 7,704,957 shares of common stock
outstanding. The aggregate market value of the common stock held by
non-affiliates of the registrant, based on the closing price of such stock on
such date as reported by NASDAQ, was approximately $14,900,000.
Transitional Small Business Disclosure Format Yes ____ No X
<PAGE>
PART I
ITEM 1. - DESCRIPTION OF BUSINESS
DISPOSITION OF A SUBSIDIARY
On September 21, 1993, the Board of Directors of Pure World, Inc. (the
"Company" or "Pure World") approved the distribution of the common stock of
NorthCorp Realty Advisors, Inc. ("NorthCorp"), a real estate asset manager and a
wholly-owned subsidiary of the Company, to all holders of the Company's
outstanding common stock (the "Distribution"). Under the plan of distribution,
the Company declared a dividend of one share of NorthCorp common stock
outstanding for every two shares of the Company's common stock outstanding on
the record date of the Distribution, July 8, 1994. At the date of the
Distribution (July 11, 1994), 8,250,000 shares of NorthCorp common stock were
outstanding. Approximately 4,000,000 shares, or 48% of NorthCorp's common stock
were distributed to the stockholders of the Company.
On August 4, 1994, the Company sold substantially all of its remaining
interest in NorthCorp to Mr. R. E. Roark and NorthCorp for approximately $1.5
million. Mr. Roark was the sole shareholder of Crown Revenue Services, Inc.
("Crown"), a real estate asset manager. As part of the transaction, Crown was
reorganized as a subsidiary of NorthCorp. NorthCorp also assumed the lease of
the Company's Washington D.C. office and the employment contract of one of the
Company's executive officers.
ACQUISITION OF MADIS BOTANICALS, INC.
The Company manufactures natural products through its 83% owned
subsidiary, Madis Botanicals, Inc. ("Madis"). On January 3, 1995, a wholly-owned
subsidiary of the Company merged (the "Merger") with Dr. Madis Laboratories,
Inc. (subsequently renamed Madis Botanicals, Inc.), a New Jersey corporation
located in South Hackensack, New Jersey. The surviving corporation is owned 83%
by the Company and 17% by the former shareholders of Madis. The Merger was
effected in connection with a Plan of Reorganization (the "Plan") filed by the
predecessor corporation in Chapter 11 proceedings under the Federal Bankruptcy
Law. Under the terms of the Merger, the Company financed the Plan which provided
for the payment of $3.2 million, of which approximately $2.3 million was
advanced by the Company and approximately $900,000 was paid by Madis from funds
on hand. The balance of the predecessor corporation's indebtedness was assumed
by the surviving corporation and will be paid as due from working capital or by
the Company in the event of any deficiency.
Madis had sales of $6.2 million, $6.0 million and $5.2 million in 1995,
1994, and 1993, respectively. The natural product industry is very competitive,
but is not dominated to any significant degree by any one producer. Madis has
been operating continuously in this industry since 1959 and has developed
expertise in the manufacturing of hundreds of natural products. Madis products,
sold throughout the world, include flavor extracts, aloe, oleoresins and
glycolic extracts. Madis also provides custom manufacturing, spray-drying
and blending services for customers.
Madis obtains raw materials from a variety of sources and is not
dependent on any one supplier.
Madis is regulated by the Food and Drug Administration ("FDA") and the
New Jersey Department of Health in matters of cleanliness, labeling and
manufacturing practices. Madis is also regulated by the Occupational Safety and
Health Administration in matters of general safety in the operation of its
manufacturing facility, and the Bureau of Alcohol, Tobacco and Firearms in its
use of alcohol in its production process. The United States Department of
Agriculture may also inspect the raw materials used in production.
<PAGE>
Madis is a member in good standing of the Institute of Food Technologies,
the Cosmetic Toiletries and Fragrance Association, the Society of Cosmetic
Chemists, the Aloe Council, the Synthetic Organic Chemical Manufacturing
Association and the National Nutritional Foods Association. The Madis production
facilities are certified by the FDA for food and pharmaceutical production and
have kosher-product certification.
EMPLOYEES
At February 29, 1996, the Company had 50 full-time employees, 42 of
whom were employed by Madis.
ITEM 2. - DESCRIPTION OF PROPERTY
On February 1, 1994, the Company entered into a five-year lease
agreement with an affiliate for 1,700 square feet of office space at a monthly
rate of approximately $3,600. Prior to that date, the Company leased the same
space from the affiliate on a month-to-month basis.
Madis leases a 125,000 square-foot facility in South Hackensack, New
Jersey, from an affiliated corporation (the "Madis Affiliate") owned by the
minority shareholders of Madis for $20,000 per month, net, plus one percent of
the gross revenues of Madis up to an additional $200,000 per annum. The lease
has a term of five years and expires in December 1999 with renewal options for
fifteen additional years. The Company believes this rental rate represents the
fair market value of the lease. This facility includes a 20,000 square-foot
office area; a 10,000 square-foot laboratory; manufacturing space of 70,000
square feet; and warehousing space of 25,000 square feet.
In connection with the Merger, the Madis Affiliate borrowed $200,000
from the Company (the "First Loan") in 1995, and the Madis Affiliate and its
shareholders borrowed $205,000 in 1994 from the Company (the "Second Loan").
Both Loans bear interest at the rate of 2% above the Citibank prime rate (but in
no event more than 13%) and are collateralized by the Madis facility. The First
Loan is repayable at $10,000 per month plus interest commencing February 1, 1995
until it is satisfied, and thereafter the Second Loan will be repaid at the rate
of $10,000 per month plus interest until it is satisfied. The First Loan and
Second Loan have principal balances of approximately $90,000 and $205,000,
respectively, as of December 31, 1995.
Madis also leases a warehouse facility in Teterboro, New Jersey for
$120,000 per year from an unrelated party. The lease has a two-year term with a
renewal option for one three-year period at rates up to $130,000 per year.
ITEM 3. - LEGAL PROCEEDINGS
ENVIRONMENTAL MATTERS
In connection with the Plan, Madis was required to undertake up to
$280,000 in costs to perform specified remedial environmental activities at the
South Hackensack facility, including the removal of certain underground storage
tanks, which was accomplished during 1995. The remaining accrued liability at
December 31, 1995 was approximately $179,000. The Company believes this accrued
liability will be sufficient to perform all required remaining remediation
activity.
OTHER
The Company is involved from time to time in various lawsuits that
arise in the course of its business and the outcome of which, if adverse, would
not have a material affect on the financial condition and results of operations
of the Company.
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
<PAGE>
PART II
ITEM 5. - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
At February 29, 1996, the Company had approximately 3,000 stockholders
of record. The Company's common stock currently trades on the NASDAQ/National
Market System under the symbol "PURW."
The following table sets forth the high and low closing prices for the
common stock for the periods indicated, as reported by NASDAQ on the National
Market System.
<TABLE>
Calendar Quarter Ended:
<CAPTION>
High Low
------ -----
1995
<S> <C> <C>
March 31 ........................ $ 1 3/4 $ 1 3/8
June 30 ......................... 1 15/16 1 7/16
September 30 .................... 3 1/2 1 7/8
December 31 ..................... 3 1/16 1 7/8
1994
March 31 ........................ $ 1 17/32 $ 1 3/8
June 30 ......................... 1 1/2 1 11/32
September 30 .................... 1 5/16 1 5/16
December 31 ..................... 1 5/8 1 9/32
</TABLE>
The Company distributed one share of NorthCorp common stock for every
two shares of the Company's common stock outstanding on the record date of the
distribution, July 8, 1994. At the date of the Distribution (July 11, 1994),
8,250,000 shares of NorthCorp common stock were outstanding. Approximately 4
million shares, or 48%, of NorthCorp's common stock were distributed to the
stockholders of the Company. This distribution was not taxable to the
stockholders of the Company, assuming the individual shareholder's cost basis in
the shares of the Company exceeded the fair market value of the shares of
NorthCorp at the date of distribution.
The Company had not declared or paid any other dividends on its common
stock and does not foresee doing so in the immediate future.
ITEM 6. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
DISPOSITION OF A SUBSIDIARY
On September 21, 1993, the Board of Directors of the Company approved a
plan to distribute the common stock of NorthCorp Realty Advisors, Inc.
("NorthCorp"), a real estate asset manager and a wholly-owned subsidiary of the
Company, to all holders of the Company's outstanding common stock (the
"Distribution"). Under the plan of distribution, the Company declared a dividend
of one share of NorthCorp common stock for every two shares of the Company's
common stock outstanding on the record date of the Distribution, July 8, 1994.
<PAGE>
At the date of distribution (July 11, 1994), 8,250,000 shares of
NorthCorp common stock were outstanding. Approximately 4,000,000 shares, or 48%,
of NorthCorp's common stock were distributed to the stockholders of the Company.
On August 4, 1994, the Company sold substantially all of its remaining
interest in NorthCorp ("the Sale") to Mr. R. E. Roark and NorthCorp for
approximately $1.5 million. Mr. Roark was the sole shareholder of Crown Revenue
Services, Inc. ("Crown"), a real estate asset manager. As part of the
transaction, Crown was reorganized as a subsidiary of NorthCorp. NorthCorp also
assumed the lease of the Company's Washington, D.C. office and the employment
contract of one of the Company's executive officers. The net gain on sale was
$378,000.
NorthCorp's results of operations have been included in the
consolidated financial statements through the date of sale in 1994 as equity in
the earnings of disposed-of subsidiary. Since its acquisition in June 1992 and
until the date of sale, NorthCorp made dividends and payments under a
tax-sharing agreement to the Company aggregating approximately $4.9 million.
ACQUISITION OF MADIS BOTANICALS, INC.
On January 3, 1995, one of the Company's wholly-owned subsidiaries
merged (the "Merger") with Dr. Madis Laboratories, Inc., a New Jersey
corporation located in South Hackensack, New Jersey. The surviving corporation
in the Merger operates under the name of Madis Botanicals, Inc. ("Madis") and is
owned 83% by the Company and 17% by the former shareholders of Madis. In
addition, the Company issued to the former Madis shareholders options to acquire
250,000 shares of the Company's Common Stock at its approximate fair value of
$2.10 per share. Madis, a manufacturer of natural products, had sales of
approximately $6.0 million in 1994 and $6.2 million in 1995.
The Merger was effected in connection with a Plan of Reorganization
(the "Plan") filed by the predecessor corporation in Chapter 11 proceedings
under the Federal Bankruptcy Law. The Plan was confirmed on November 29, 1994 by
the United States Bankruptcy Court in Newark, New Jersey. Under the terms of the
Merger, the Company financed the Plan which provided for the payment to the
creditors of $3.2 million, of which approximately $2.3 million was advanced by
the Company and approximately $900,000 was paid by Madis from funds on hand. The
balance of the predecessor corporation's indebtedness was assumed by the
surviving corporation and will be paid as due from working capital or by the
Company in the event of any deficiency.
Two principal shareholders of Madis, who were also executive officers,
received employment agreements under which one will serve as Chairman Emeritus
of the surviving corporation for a period of three years at an annual salary of
$100,000 and the other will serve as an executive officer for a period of four
years at an annual salary of $150,000. The premises occupied by the surviving
corporation will be leased from a corporation owned by the former Madis
shareholders at an annual rent of $240,000, net, plus 1% of gross revenues up to
an additional $200,000 per annum. The Company believes the rental represents the
fair market value.
PROFORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
Proforma consolidated condensed financial information is included in
Note 4 of Notes to Consolidated Financial Statements. The results of operations
have been adjusted to reflect the disposition of NorthCorp and the Washington,
D.C. office of the Company (the "Disposition") had the Disposition taken place
on January 1, 1994. The results of operations also include the operations of
Madis as if the acquisition of Madis had taken place on the same date.
<PAGE>
The proforma financial information is not intended to reflect results
of operations which would have actually resulted had these transactions been
effected on the dates indicated. Moreover, this proforma financial information
is not intended to be indicative of results of operations which may be attained
in the future. This information should be read in conjunction with the audited
historical consolidated financial statements contained in this Form 10-KSB.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1995, the Company had cash and cash equivalents of $9.4
million. Cash equivalents consisted of treasury bills with maturities of less
than three months and yields of approximately 5.4 percent. Cash and cash
equivalents of $3.2 million were used for the acquisition of Madis. The Company
also had marketable securities with a current market value of approximately $3.7
million at December 31, 1995. The Company has no funded debt. The management of
the Company believes that the Company's financial resources and anticipated cash
flows will be sufficient for future operations and possible acquisitions of
other operating businesses.
In connection with the acquisition of NorthCorp by the Company in 1992,
two officers of NorthCorp were paid an aggregate of $1,125,000 by NorthCorp,
which was used to acquire an aggregate of 750,000 shares of Company stock
("Officer Shares"). In addition, the Company advanced $180,000 to each of the
officers to pay federal income taxes resulting from this cash payment. The
advances bore interest at the minimum rate allowed under the Internal Revenue
Code and were secured by their shares of the Company's common stock.
The advances and accrued interest were repaid by the officers from the
proceeds of a partial sale of the Officer Shares to the Company in February 1994
in connection with their resignation as officers and directors of NorthCorp. The
remaining shares were subsequently repurchased from the Officers in 1994.
In February 1994, the Company announced a plan to purchase up to two
million shares of the Company's common stock, subject to market conditions and
other considerations (the "Repurchase Plan"). As of December 31, 1994, 475,963
shares had been acquired at an aggregate cost of approximately $648,000, and as
of December 31, 1995, 497,167 shares had been acquired under the Repurchase Plan
for an aggregate cost of approximately $679,000.
In total, the Company repurchased 1,225,963 shares in 1994 (475,963 in
connection with the Repurchase Plan) for an aggregate cost of approximately $1.9
million, and 21,204 shares (in connection with the Repurchase Plan) were
acquired in 1995 for an aggregate cost of approximately $31,000. All shares
repurchased in 1994 and 1995 have been canceled and returned to the status of
authorized but unissued shares.
RESULTS OF OPERATIONS
The Company's consolidated operations resulted in net income of
$41,000, or $.01 per share, in 1995, compared to net income of $26,000 in 1994.
The consolidated results of operations for 1994 reflect the net gain on the sale
of the Company's remaining interest in NorthCorp of $378,000 and the equity in
its earnings until the date of disposition of $464,000.
Madis had sales in 1995 of approximately $6.2 million compared to sales
of approximately $6.0 million in 1994 prior to the acquisition. Cost of goods
sold was $3.9 million and gross margin was $2.3 million in 1995, compared to
cost of goods sold of $4.0 million and gross profit of $2.0 million in 1994
prior to the acquisition. Since the acquisition of Madis was accounted for as
a purchase, the results of operations of Madis have been included in the
consolidated financial statements since January 3, 1995, the date of
acquisition. Financial information of Madis from 1994 has been included herein
for comparison purposes only.
<PAGE>
Interest, dividend and other income was $871,000 in 1995, a decrease of
$76,000, or 8% from the $947,000 recorded in 1994. Interest income was $638,000
in 1995, an increase of $6,000, or 1% from the $632,000 recorded in 1994.
Dividend income was $178,000 in 1995 compared to $68,000 in 1994, an increase of
$110,000. The increase in dividends was due to an increased dividend rate from
the securities available-for-sale. All other income decreased from $247,000 in
1994 to $55,000 in 1995. This decrease in all other income was due principally
to the revenue from operation of the Washington DC office of the company, which
was disposed of on August 4, 1994. In 1995, other income mostly consisted of
gains on the disposition of unneeded equipment at Madis.
In 1995, the Company recorded net gains on marketable securities of
$407,000, compared to net gains of $13,000 in 1994. The Company adopted
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities", on January 1, 1994. As a result, net
gains on marketable securities in 1995 are composed of net realized gains of
$143,000 and net unrealized gains of $264,000. Gains on marketable securities in
1994 were composed of realized gains of $50,000 and net unrealized losses of
$37,000. Total shareholders' equity was decreased at December 31, 1995 by
$101,000, a valuation allowance recorded to reflect the decrease in current
market value in securities available-for-sale from its cost basis. The current
valuation allowance of $101,000 reflects an increase in the market value of the
securities available-for-sale of $641,000 from December 31, 1994. This allowance
was related primarily to the Company's investment in a real estate investment
trust ("REIT"). The Company has undertaken several proxy contests to protect its
investment in the REIT and to obtain control of the REIT's Board of Directors.
General and administrative expenses were $3.5 million in 1995, compared
to $1.8 million in 1994, an increase of approximately $1.7 million. The increase
was mainly due to additional expenses associated with the acquisition and
operation of Madis in 1995. Personnel expenses increased due principally to the
increased headcount which resulted from the acquisition of Madis. Professional
fees increased due to consulting fees incurred for product development and
increased audit fees due to the acquisition and operations of Madis. Other
expenses represent other operating expenses such as advertising, sales
commissions, and marketing expenses incurred in the operations of Madis.
<PAGE>
ITEM 7. - FINANCIAL STATEMENTS
The financial statements filed with this item are listed below:
Independent Auditors' Report
Consolidated Financial Statements:
Consolidated Balance Sheet as of December 31, 1995
Consolidated Statements of Operations for the Years ended December 31, 1995
and 1994
Consolidated Statements of Stockholders' Equity for the Years ended
December 31, 1995 and 1994
Consolidated Statements of Cash Flows for the Years ended December 31, 1995
and 1994
Notes to Consolidated Financial Statements
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of Pure World, Inc.:
We have audited the accompanying consolidated balance sheet of Pure World, Inc.
and subsidiaries as of December 31, 1995, and the related consolidated
statements of operations, stockholders' equity and cash flows for the two years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Pure World, Inc. and subsidiaries
as of December 31, 1995, and the results of their operations and their cash
flows for the two years then ended in conformity with generally accepted
accounting principles.
As discussed in Note 1 to the consolidated financial statements, the Company
changed its method of accounting for marketable securities effective January 1,
1994 to conform to Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities".
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
March 18, 1996
<PAGE>
<TABLE>
PURE WORLD, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31, 1995
(in $000's)
<CAPTION>
ASSETS
<S> <C>
Cash and cash equivalents .............................. $ 9,357
Trading securities ..................................... 1,809
Accounts receivable, net of allowance for
uncollectible accounts and returns and
allowances of $100 .................................. 840
Inventories, net ....................................... 1,561
Other current assets ................................... 339
-------
Total current assets ............................. 13,906
-------
Securities available-for-sale .......................... 1,909
Furniture and equipment, net ........................... 1,426
Notes receivable from affiliates ....................... 626
Goodwill, net of accumulated amortization of $86........ 1,320
-------
Total assets ..................................... $19,187
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable ....................................... $ 169
Accrued expenses and other liabilities ................. 2,052
-------
Total liabilities ................................ 2,221
-------
Commitments and Contingencies
Stockholders' equity:
Common stock, par value $.01;
30,000,000 shares authorized;
7,704,957 shares issued and outstanding ............. 77
Additional paid-in capital ............................. 43,769
Accumulated deficit .................................... ( 26,779)
Unrealized losses on securities
available-for-sale .................................. ( 101)
-------
Total stockholders' equity ........................ 16,966
-------
Total liabilities and stockholders' equity ....... $19,187
=======
See accompanying notes to consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
PURE WORLD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in $000's, except per share data)
<CAPTION>
Year Ended December 31,
------------------------------
1995 1994
------ ------
<S> <C> <C>
Revenues:
Sales ................................ $ 6,173 $ -
Equity in earnings of
disposed-of subsidiary ............ - 464
Net gain on sale of majority
interest in disposed-of subsidiary - 378
Net gains on marketable securities ... 407 13
Interest, dividend and other income... 871 947
------- -------
7,451 1,802
------- -------
Expenses:
Cost of goods sold ................... 3,891 -
Personnel ............................ 1,437 855
Professional fees .................... 965 634
Other ................................ 1,106 282
------ -------
7,399 1,771
------- -------
Income before income taxes .............. 52 31
Provision for income taxes .............. 11 5
------- -------
Net income .............................. $ 41 $ 26
======= =======
Net income per share .................... $ .01 $ -
======= =======
Weighted average shares
outstanding (in 000's) ................ 7,709 8,095
======= =======
See accompanying notes to consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
PURE WORLD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in 000's)
<CAPTION>
Unrealized
Gains/(Losses) Total
Additional Treasury Stock On Securities Stock-
Total Shares Common Paid-In Accumulated ------------------ Available- holders
Outstanding Stock Capital Deficit Shares Cost for-Sale Equity
----------- ----- --------- -------- -------- ------ --------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993 ......... 10,849 $108 $49,469 ($26,846) 1,897 ($3,330) $ - $19,401
Unrealized gains on securities
available for sale at
January 1, 1994 ................... -- -- -- -- -- -- 68 68
Change in unrealized losses
in securities available-
for-sale .......................... -- -- -- -- -- -- ( 810) ( 810)
Net income ......................... -- -- -- 26 -- -- -- 26
Distribution of NorthCorp
shares ............................ -- -- ( 897) -- -- -- -- ( 897)
Purchase of treasury stock ......... -- -- -- -- 759 ( 1,217) -- ( 1,217)
Common stock subject to
put agreement ..................... -- -- -- -- -- 400 -- 400
Cancellation of treasury
stock .............................( 2,656) ( 26) ( 4,121) -- (2,656) 4,147 -- --
Repurchase and cancella-
tion of common stock ..............( 467) ( 5) ( 651) -- -- -- -- ( 656)
------- ---- ------- ------- ----- ------ ----- -------
Balance, December 31, 1994 ......... 7,726 $ 77 $43,800 ($26,820) -- $ -- ($ 742) $16,315
======= ==== ======= ======= ===== ====== ===== =======
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
PURE WORLD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
(in 000's)
<CAPTION>
Unrealized
Gains/(Losses) Total
Additional On Securities Stock-
Total Shares Common Paid-In Accumulated Available- holders
Outstanding Stock Capital Deficit for-Sale Equity
------------ ---------- ------- ----------- -------------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994 .......... 7,726 $ 77 $43,800 ($26,820) ($742) $16,315
Change in net unrealized gains/
losses on securities available-
for-sale ........................... -- -- -- -- 641 641
Net income .......................... -- -- -- 41 -- 41
Repurchase and cancellation
of common stock .................... ( 21) -- ( 31) -- -- ( 31)
----- ---- ------- ------- ---- -------
Balance, December 31, 1995 .......... 7,705 $ 77 $43,769 ($26,779) ($101) $16,966
===== ==== ======= ======= ==== =======
See accompanying notes to consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
PURE WORLD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in $000's)
<CAPTION>
Year Ended December 31,
-----------------------
1995 1994
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net income ......................................... $ 41 $ 26
Adjustments:
Net gain on sale of disposed-of subsidiary ..... - ( 378)
Depreciation and amortization .................. 211 14
Net trading securities and U.S.
Treasury securities transactions ............. ( 584) ( 731)
Change in inventories .......................... ( 102) -
Change in receivables .......................... ( 147) 76
Change in accounts payable and other
accruals ..................................... ( 1,490) ( 162)
Other, net ..................................... 95 ( 1,238)
------- -------
Net cash used in operating activities .......... ( 1,976) ( 2,393)
------- -------
Cash flows from investing activities:
Purchase of a business less cash acquired .......... ( 1,717) -
Proceeds from sale of subsidiary ................... - 1,500
Purchase of furniture and equipment, net ........... ( 177) ( 6)
Proceeds from sale of securities available-
for-sale ......................................... - 69
Purchase of securities available-for-sale .......... ( 127) ( 1,515)
Loans to affiliates ................................ ( 303) ( 463)
Repayments of loans to affiliates .................. 160 360
Other, net ......................................... - ( 161)
------- -------
Net cash used in investing
activities ................................... ( 2,164) ( 216)
------- -------
Cash flows from financing activities:
Repurchase of common stock ......................... ( 31) ( 1,873)
Other, net ......................................... 101 -
------- -------
Net cash provided by (used in) financing
activities .................................... 70 ( 1,873)
------- -------
Net decrease in cash and cash equivalents ....... ( 4,070) ( 4,482)
Cash and cash equivalents at beginning
of period .......................................... 13,427 17,909
------- -------
Cash and cash equivalents at end of period ........... $ 9,357 $13,427
======= =======
See accompanying notes to consolidated
financial statements.
</TABLE>
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF CONSOLIDATION
The consolidated financial statements include the accounts of Pure
World, Inc. (the "Company" or "Pure World") and its wholly-owned
subsidiaries after elimination of all material intercompany accounts
and transactions.
The results of operations of NorthCorp Realty Advisors, Inc.
("NorthCorp") are included in the Consolidated Statements of Operations
as equity in the earnings of disposed-of subsidiary through the date of
disposition in 1994.
The acquisition of Madis Botanicals, Inc. ("Madis") described in Note 3
of Notes to Consolidated Financial Statements occurred on January 3,
1995 and was accounted for using the purchase method. Therefore, Madis'
financial condition, results of operations, and cash flows are included
in the consolidated financial statements from that date forward.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist primarily of cash on hand, cash in
banks and treasury bills purchased with an original maturity of three
months or less.
MARKETABLE SECURITIES
The Company adopted Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities"
("SFAS 115") as of January 1, 1994. SFAS 115 provides that all
investments are to be classified into three categories: debt securities
that the Company has the positive intent and ability to hold to
maturity are classified as held-to-maturity securities and reported at
amortized cost; debt and equity securities that are bought and held
principally for the purpose of selling them in the near term are
classified as trading securities and reported at fair value, with
unrealized gains and losses
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
included in the results of operations; and debt and equity
securities not classified as either held-to-maturity securities or
trading securities are classified as available-for-sale securities
reported at fair value with unrealized gains and losses excluded from
the results of operations and reported as a separate component of
stockholders' equity.
The Company accounts for securities transactions on a trade-date basis.
For computing realized gains or losses on sale of marketable
securities, cost is determined on a first-in, first-out basis. The
effect of all unsettled transactions is accrued in the consolidated
financial statements.
INVENTORIES
Merchandise inventories are valued at the lower of cost or market. Cost
is determined by the first-in, first-out (FIFO) method of accounting.
FURNITURE AND EQUIPMENT
The Company records all furniture and equipment at cost. Depreciation
is computed using the straight-line method over the related estimated
useful life of the asset. Gains or losses on dispositions of furniture
and equipment are included in operating results. Furniture and
equipment as of January 3, 1995 was adjusted to their fair values in
connection with the acquisition of Madis.
GOODWILL
Goodwill has been established in connection with the acquisition of
Madis. Goodwill is being amortized using the straight-line method over
a fifteen-year period.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts reported in the balance sheet for cash and cash
equivalents, investments, accounts receivable and payables approximate
their fair value.
INCOME TAXES
The Company follows the requirements of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
109"). SFAS No. 109 requires an asset and liability approach for the
accounting for income taxes.
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
NorthCorp's results of operations are included in the consolidated
federal income tax return for the period from January 1, 1994 through
the date of Distribution (see Note 2 of Notes to Consolidated Financial
Statements). At December 31, 1995, the Company had net operating loss
carryforwards for tax purposes that expire in various years through
2010 and are available to offset consolidated taxable income.
NET INCOME PER SHARE
Net income per share is calculated by dividing net income by the
weighted average number of outstanding common stock and common
equivalent stock, which consists of the dilutive effect of the assumed
exercise of certain outstanding stock options when applicable.
RECLASSIFICATIONS
Certain reclassifications have been made to the 1994 consolidated
financial statements to conform to the current year's presentation.
2. DISPOSITION OF A SUBSIDIARY
On September 21, 1993, the Board of Directors of the Company
approved the distribution of the common stock of NorthCorp, a real
estate asset manager and a wholly-owned subsidiary of the Company, to
all holders of the Company's outstanding common stock (the
"Distribution"). Under the plan of distribution, the Company declared
a dividend of one share of NorthCorp common stock for every two shares
of the Company's common stock outstanding on the record date of the
Distribution, July 8, 1994.
At the date of Distribution (July 11, 1994), 8,250,000 shares of
NorthCorp common stock were outstanding. Approximately 4,000,000
shares, or 48%, of NorthCorp's common stock were distributed to the
stockholders of the Company.
On August 4, 1994, the Company sold substantially all of its remaining
interest in NorthCorp to Mr. R. E. Roark and NorthCorp for approxi-
mately $1.5 million. Mr. Roark was the sole shareholder of Crown
Revenue Services, Inc. ("Crown"), a real estate asset manager. As
part of the transaction, Crown was reorganized as a subsidiary of
NorthCorp. NorthCorp also assumed the lease of the Company's
Washington, D.C. office and the employment contract of one of the
Company's executive officers.
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
3. ACQUISITION OF MADIS
On January 3, 1995, one of the Company's wholly-owned subsidiaries
merged (the "Merger") with Dr. Madis Laboratories, Inc., a New Jersey
corporation located in South Hackensack, New Jersey. The surviving
corporation in the Merger operates under the Madis Botanicals, Inc.
("Madis") name and is owned 83% by the Company and 17% by the former
shareholders of Madis. In addition, the Company issued to the former
Madis shareholders options to acquire 250,000 shares of the Company's
Common Stock at its approximate fair value at the date of acquisition.
The Merger was effected in connection with a Plan of
Reorganization (the "Plan") filed by the predecessor corporation in
Chapter 11 proceedings under the Federal Bankruptcy law. The Plan was
confirmed on November 29, 1994 by the United States Bankruptcy Court
in Newark, New Jersey. Under the terms of the Merger, the Company
financed the Plan which provided for Madis creditors to be paid
approximately $3.2 million, of which approximately $2.3 million was
advanced by the Company and approximately $900,000 was paid by Madis
from funds on hand. The balance of the predecessor corporation's
indebtedness was assumed by the surviving corporation and will be paid
as due from working capital or by the Company in the event of any
deficiency.
Two principal shareholders of Madis, who were also executive
officers, received employment agreements under which one will serve as
Chairman Emeritus of the surviving corporation for a period of three
years at an annual salary of $100,000 and the other will serve as an
executive officer for a period of four years at an annual salary of
$150,000. The premises occupied by the surviving corporation will be
leased from an affiliated corporation owned by the minority
shareholders of Madis at an annual rent of $240,000, net, plus 1% of
gross revenues up to an additional $200,000 per annum. The Company
believes the rental represents the fair value of this lease.
The acquisition of Madis has been accounted for as a purchase.
The excess of the purchase price over the fair value of the net
identifiable assets acquired has been recorded as goodwill and is
being amortized using the straight-line method over fifteen years.
Minority interest is immaterial.
The following is a summary of the allocation of the purchase
price of approximately $3.2 million (in 000's):
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
<TABLE>
<S> <C>
Current assets ...................... $2,200
Property and equipment .............. 1,300
Other assets ........................ 100
Current liabilities ................. ( 1,200)
Other liabilities ................... ( 600)
Goodwill ............................ 1,400
------
$3,200
======
</TABLE>
4. PROFORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION (UNAUDITED)
The proforma results of operations for 1994 have been adjusted to
reflect the disposition of NorthCorp and the Washington, D.C. office of
the Company (the "Disposition") had the Disposition taken place on
January 1, 1994. The results of operations also include the operations
of Madis as if the acquisition had taken place on the same date.
The proforma financial information is not intended to reflect results
of operations which would have actually resulted had these transactions
been effected on the dates indicated. Moreover, this proforma financial
data is not intended to be indicative of results of operations which
may be attained in the future.
<TABLE>
Pure World, Inc.
and Subsidiaries
Proforma Consolidated Condensed
Statement of Operations
For the Year Ended
December 31, 1994
(in $000's, except per share data)
<S> <C>
Revenues .......................... $ 6,436
Expenses:
Cost of goods sold .............. 4,008
Other ........................... 3,081
-------
7,089
-------
Loss before income taxes .......... ( 653)
Provision for income taxes ........ -
-------
Net loss .......................... ($ 653)
=======
Loss per common share ............. ($ .08)
=======
Weighted average shares
outstanding (in 000's) .......... 8,095
=======
</TABLE>
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
5. MARKETABLE SECURITIES
At December 31, 1995, marketable securities consisted of the
following (in $000's):
<TABLE>
<CAPTION>
Gross Gross
Cost Holding Holding Fair
Basis Gains Losses Value
--------- ------- ------- -----
<S> <C> <C> <C> <C>
Trading securities:
Corporate debt
securities .............. $ 115 $ 21 $ - $ 136
Equity securities ........ 1,467 206 - 1,673
------- ------ ------ -------
Total ............. 1,582 227 - 1,809
------- ------ ------ -------
Available-for-sale:
Equity securities ........ 2,010 4 105 1,909
------- ------ ------ -------
Total marketable
securities ...... $ 3,592 $ 231 $ 105 $ 3,718
======= ====== ====== =======
</TABLE>
The corporate debt securities mature in the year 2009.
Realized gains and losses of $169,000 and $26,000, respectively, as
well as net unrealized gains of $264,000 were included in the results
of operations for the year ended December 31, 1995. The unrealized loss
on securities available-for-sale included as a separate component of
consolidated stockholders' equity was approximately $101,000 at
December 31, 1995. The unrealized losses and gains on trading
securities included in the results of operations for the year ended
December 31, 1994 were $48,000 and $11,000, respectively.
6. INCOME TAXES
At December 31, 1995, the Company had net operating loss carryforwards
of approximately $21.6 million for Federal income tax reporting
purposes, which expire in the years 2001 to 2010. Additionally, the
Company has investment and research and development tax credit
carryforwards aggregating approximately $200,000 and $870,000,
respectively, which expire from 1996 through 2000. The ultimate
realization of the tax benefits from the net operating loss and tax
credit carryforwards is dependent upon future taxable earnings of the
Company.
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
The Company's federal income tax returns for the years ended March 31,
1987 and 1988 and for the nine months ended December 31, 1988 were
examined by the Internal Revenue Service ("IRS"). The IRS challenged
the deductibility of certain payments aggregating approximately $8.1
million made during those periods in connection with certain litigation
settlements and legal fees primarily related to the settlement of a
class action lawsuit. The Company disagrees with the IRS.
The Company is precluded from challenging the IRS findings until such
time as the Company utilizes the disputed loss carryforwards. Even
though the Company intends to vigorously defend its position, there can
be no assurance that the Company's position will be sustained.
The components of income tax expense were as follows (in $000'S):
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Federal:
Current ........................... $ - $ -
Deferred .......................... - -
------ ------
Total federal ................... $ - $ -
====== ======
State:
Current ........................... $ 11 $ 5
Deferred .......................... - -
------ ------
Total state ..................... $ 11 $ 5
====== ======
Total provision for
income taxes ...................... $ 11 $ 5
====== ======
</TABLE>
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
Deferred income taxes reflect the tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes, and (b) operating loss and tax credit carryforwards. The tax
effects of significant items comprising the Company's net deferred tax
asset as of December 31, 1995 are as follows (in $000's):
<TABLE>
<CAPTION>
<S> <C>
Deferred tax assets:
Net operating loss carryforwards ................. $7,431
Alternative minimum tax ("AMT")
and other credit carryforwards ................. 1,170
Other, net ....................................... 118
------
$8,719
======
Valuation allowance ................................ ($8,719)
======
Net deferred tax asset ............................. $ -
======
</TABLE>
A reconciliation of the provision for income tax expense to the
expected income tax expense (income before income taxes times the
statutory tax rate of 34%) is as follows (in $000's):
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Income before income taxes ........... $ 52 $ 31
Statutory federal income
tax rate ........................... 34% 34%
------ ------
Expected income tax .................. 18 11
Dividends received deduction .........( 34) ( 16)
State tax ............................ 7 3
Net gain on sale of majority
interest in disposed-of subsidiary .. - ( 129)
Change in valuation allowance ........ 54 114
Other, net ...........................( 34) 22
------ ------
Provision for income taxes .......... $ 11 $ 5
====== ======
</TABLE>
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
The Tax Reform Act of 1986, as amended, provides for a parallel tax
system which requires the calculation of AMT and the payment of the
higher of the regular income tax or AMT. The Company also has an AMT
credit carryforward of approximately $107,000 which will be allowed
as a credit carryover against regular tax in the future in the event
the regular tax exceeds the AMT tax.
7. COMMON STOCK
STOCK REPURCHASES
As part of the acquisition and merger of NorthCorp by the Company, two
officers of NorthCorp were paid an aggregate of $1,125,000, which was
used to acquire 750,000 shares of the Company's stock ("Officer
Shares"). The two officers of NorthCorp could each require the Company
to repurchase 100,000 of the Officer Shares at $2 per share. The
Company repurchased these shares in February 1994 in connection with
the officers' resignations as officers and directors of NorthCorp. The
Company repurchased an additional 175,000 of the Officer Shares from
each of the two officers at $1.50 per share in the first quarter of
1994. The Company repurchased the remaining 200,000 Officer Shares at
$1.50 per share during the second quarter of 1994.
In February 1994, the Company announced a plan to purchase up to two
million shares of the Company's common stock, subject to market condi-
tions and other considerations (the "Repurchase Plan"). As of December
31, 1994, 475,963 shares had been acquired under the Repurchase Plan
for an aggregate cost of approximately $648,000. As of December 31,
1995, 497,167 shares had been acquired under the Repurchase Plan for an
aggregate cost of approximately $679,000.
In total, the Company repurchased 1,225,963 shares in 1994 (475,963 in
connection with the Repurchase Plan) for an aggregate cost of approxi-
mately $1.9 million, and 21,204 shares (in connection with the
Repurchase Plan) were acquired in 1995 for an aggregate cost of
approximately $31,000. All shares repurchased in 1994 and 1995 have
been canceled and returned to the status of authorized but unissued
shares.
STOCK OPTIONS
In August 1991, the Board of Directors of the Company adopted a
Non-Qualified Stock Option Plan (the "Option Plan"). Under the Option
Plan, non-qualified options to purchase up to an aggregate of 500,000
shares of common stock of the Company may be granted by the Board of
Directors to officers, directors and employees of the Company at their
fair market value at the date of grant. Options will expire five years
from date of grant and will be exercisable as to one-half of the shares
on the date of grant of the option and as to the other half, on the
first anniversary of the date of grant of the option.
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
The following table summarizes option transactions under the
Option Plan for the year ended December 31, 1994 and 1995:
<TABLE>
<CAPTION>
Price
Shares Range
------ -------
<S> <C> <C>
Options outstanding at
December 31, 1993 ................ 245,000 $1.3125 - $1.75
Options granted .................... 10,000 $1.3125
Options canceled ................... -
Options exercised .................. -
-------
Options outstanding at
December 31, 1994 ................ 255,000 $1.3125 - $1.75
Options granted in 1995 ............ 235,000 $1.71875
Options canceled ................... -
Options exercised .................. -
-------
Options outstanding at
December 31, 1995 ................ 490,000 $1.3125 - $1.75
=======
</TABLE>
In addition, in connection with the Madis acquisition, the Company
issued to the former Madis shareholders options outside of the Option
Plan to acquire 250,000 shares of the Company's common stock at its
approximate fair value of $2.10 per share. Four employees of Madis
were also given a total of 65,000 options outside of the Option Plan
with prices ranging from $2.00 - $2.10, the approximate fair market
value at the time of grant, in connection with their employment. At
December 31, 1995, 492,500 options were exercisable.
8. COMPENSATION ARRANGEMENTS
In April 1990, the Company entered into an employment and deferred
compensation agreement (the "Agreement") with the Company's Chairman
for an initial three-year term commencing on April 1, 1990 (the
"Effective Date") at an annual salary of $185,000, which may be
increased but not decreased at the discretion of the Board of
Directors. In December 1992, the Board of Directors voted unanimously
to increase the Chairman's salary to $215,000 per annum effective
December 1, 1992.
The term is to be automatically extended one day for each day
elapsed after the Effective Date. The Chairman may terminate his
employment under the Agreement under certain conditions specified in
the Agreement, and the Company may terminate the Chairman's employment
under the Agreement for cause. In the event of the Chairman's death
during the term of the Agreement, his beneficiary shall be paid a
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
monthly death benefit equal to $215,000 per year for three years
payable in equal monthly installments. Should the Chairman become
"disabled" (as such term is defined in the Agreement) during the term
of the Agreement, he shall be paid an annual disability payment equal
to 80 percent of his base salary plus cash bonuses in effect at the
time of the disability. Such disability payments shall continue until
the Chairman attains the age of 70. The Company accrued approximately
$35,000 in each of 1994 and 1995 for the contingent payments provided
under the terms of the Agreement.
In connection with the Madis acquisition, two employees were
given employment agreements commencing January 3, 1995. The Chairman
Emeritus of Madis entered into an employment contract with Madis for a
three-year period at an annual salary of $100,000. An executive
officer of Madis entered into an employment agreement with Madis for a
term of four years at an annual salary of $150,000. Both of the
employment arrangements may be terminated for cause, as defined in the
contract.
9. COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS
The Chairman of the Company is the Chairman of a brokerage firm which
provided investment services to the Company during the years ended
December 31, 1995 and 1994. Brokerage commissions paid by the Company
totaled approximately $42,000 in 1995 and $51,000 in 1994.
The Chairman of the Company is also the President of Sun Equities
Corporation ("Sun"), the Company's principal stockholder. The Company
reimburses Sun for the Company's proportionate share of the cost of
certain group medical insurance and office supplies. Such
reimbursements for the years ended December 31, 1995 and 1994 amounted
to approximately $64,000 and $72,000, respectively.
Rosenman & Colin ("R&C") performed substantial legal work for the
Company and its subsidiaries in 1995. Natalie I. Koether, President of
Madis and the wife of the Chairman of the Company, is of counsel to
R&C. Aggregate fees and expenses billed to the Company and its
subsidiaries were approximately $630,000 in 1995 and $615,000 in 1994.
The 1995 professional fees represented work performed primarily in
association with proxy contests undertaken in connection with one of
the Company's investments and the acquisition and operation of Madis.
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
Madis leases a 125,000 square-foot facility in South Hackensack, New
Jersey, from an affiliated corporation ("Madis Affiliate") owned by the
minority shareholders of Madis for $20,000, net, per month plus one per
cent of the gross revenues of Madis up to an additional $200,000 per
year over a term of five years expiring in December 1999 with renewal
options for fifteen additional years. The Company believes this rental
rate represents the fair market value. This facility includes a 20,000
square-foot office area; a 10,000 square-foot laboratory, manufacturing
space of 70,000 square feet; and warehousing space of 25,000 square
feet.
The Company rents office space on a month-to-month basis from an
affiliate. Such rent expense was approximately $43,000 in 1995 and
$46,000 in 1994.
In connection with the Merger, the Madis Affiliate borrowed
$200,000 from the Company (the "First Loan") in 1995, and the Madis
Affiliate and its shareholders borrowed $205,000 in 1994 from the
Company (the "Second Loan"). Both Loans bear interest at the rate of
2% above the Citibank prime rate (but in no event more than 13%) and
are collateralized by the Madis facility. The First Loan is repayable
at $10,000 per month plus interest commencing February 1, 1995 until
it is satisfied and thereafter the Second Loan will be repaid at the
rate of $10,000 per month plus interest until it is satisfied. The
current balances of the First Loan and the Second Loan were
approximately $90,000 and $205,000, respectively, at December 31,
1995.
In connection with the Plan, Madis was required to undertake up to
$280,000 in costs to perform specified remedial environmental activi-
ties at the South Hackensack facility, including the removal of certain
underground storage tanks, which was accomplished during 1995. The
remaining accrued liability at December 31, 1995 is approximately
$179,000. The Company believes this accrued liability will be suf-
ficient to perform all required remaining remediation activity.
During 1995, the Company loaned money to an officer of the
Company and to an officer of Madis to acquire common stock ("Stock")
of the Company in the open market. These loans, amounting to $86,000,
are non-recourse loans collateralized by the Stock, bearing interest
at the minimum rate required under the Internal Revenue Code to avoid
imputation of interest. Also in 1995 in connection with the
acquisition of Madis, the Company loaned $210,000 to Voldemar Madis,
who serves as Vice-Chairman of the Company and of Madis. In the past,
Mr. Madis had made loans for the same amount to Dr. Madis Laboratories,
Inc. while it operated under protection of Federal Bankruptcy Law.
These loans were not repaid when Dr. Madis Laboratories, Inc. was
removed from bankruptcy. The loan made to Mr. Madis by the Company
bears interest at a rate of 8.125%, has a five-year term, and is
collateralized by Mr. Madis' personal residence.
Madis also leases a warehouse facility in Teterboro, New Jersey for
$120,000 per year from an unrelated party. The two-year lease has a
renewal option for one three-year period at rates up to $130,000 per
year.
<PAGE>
Item 8. - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
<PAGE>
PART III
Item 9. - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The five members of the Board of Directors were elected at the
1995 Annual Meeting of Stockholders and will serve until the next Annual Meeting
of Stockholders or until their successors are duly elected and qualified. The
Company's officers are elected by and serve at the leave of the Board.
None of the executive officers of the Company is related to any other.
There is no arrangement or understanding between any executive officer and any
other person pursuant to which such officer was elected.
The directors and executive officers of the Company at February 29,
1996 were as follows:
<TABLE>
<CAPTION>
Position and Office
Presently Held with Director
Name of Person Age the Company Since
- -------------- ----- ------------------- --------
<S> <C> <C> <C>
Paul O. Koether .......... 59 Chairman, President 1988
and Director of the
Company; Chairman
of Madis
Richard M. Bossert ....... <F1> Director 1990
Mark W. Jaindl ........... 36 Director 1994
Alfredo Mena ............. 43 Director 1992
William Mahomes, Jr. ..... 49 Director 1993
<FN>
<F1> Deceased
</FN>
</TABLE>
Paul O. Koether is principally engaged in the following businesses: (i)
the Company, as Chairman since April 1988, President since April 1989, a
director since March 1988, and for more than five years as the Chairman and
President of Sun Equities Corporation ("Sun"), a private, closely-held
corporation which is the Company's principal stockholder; (ii) as Chairman of
Madis Botanicals, Inc., ("Madis") since January 1995 and as a director since
December 1994; (iii) as Chairman and director since July 1987 and President
since October 1990 of Kent Financial Services, Inc. ("Kent") which engages in
various financial services, including the operation of a retail brokerage
business through its wholly-owned subsidiary, T. R. Winston & Company, Inc.
("Winston") and the general partner since 1990 of Shamrock Associates, an
investment partnership which is the principal stockholder of Kent; (iv) various
positions with affiliates of Kent, including Chairman since 1990 and a
registered representative since 1989 of Winston; and (v) since July 1992, as
Chairman of American Metals Service, Inc., which is currently seeking to acquire
an operating business. Prior to August 1994, Mr. Koether also served as a
Chairman and director of NorthCorp Realty Advisors, Inc., formerly a subsidiary
of the Company.
<PAGE>
Mark W. Jaindl has served as Senior Vice President of the Company since
June 1992 until May 1995 and as a director since October 1994. He was Senior
Vice President of Madis from December 1994 until May 1995 and a director of
Madis since December 1994. He has served as a director of American Metals
Service, Inc. since July 1992. From October 1991 to June 1992, he was
self-employed as an investment consultant. From May 1982 to October 1991 and
again since May 1995, he has served as Chief Financial Officer of Jaindl Farms
which is engaged in diversified businesses, including the operation of a
10,000-acre turkey farm, a mobile home park, a John Deere dealership, and a
grain operation. Mr. Jaindl also served as the Chief Financial Officer of Jaindl
Land Company, a developer of residential, commercial and industrial properties
in eastern Pennsylvania. Mr. Jaindl was a director of NorthCorp from June 1992
until September 1994 and was Interim President of NorthCorp from February 1994
until August 1994.
Alfredo Mena has served as a director of the Company since July 1992.
He has been the President of CIA. Salvadorena de Inversiones, S.A. de C.V.
since 1986 and had served as its Director and General Manager from 1974 to 1986.
CIA. Salvadorena de Inversiones, S.A. de C.V. is engaged in coffee growing, pro-
cessing and exporting. Mr. Mena is a citizen of El Salvador. Since October 4,
1995, Mr. Mena has served as the Presidential Commissioner for Privatization and
Modernization of El Salvador.
William Mahomes, Jr. is an attorney. Since 1994 he has been a Senior
Shareholder of Locke Purnell Rain Harrell. From 1990 to 1994 he was a partner in
the Dallas office of Baker & McKenzie. Prior to that, from 1987 to 1990, he
served as Vice President and General Counsel of Pro-Line Corporation, which is
engaged in the manufacture and distribution of hair care products. Mr. Mahomes
currently serves on the Board of Directors of a variety of organizations,
including the Bethlehem Foundation, The Salvation Army, MESBIC Financial
Corporation, St. Philip's Academy, Dallas Black Chamber of Commerce, Dallas/
Fort Worth International Airport and the Dallas Opera.
Item 10. - EXECUTIVE COMPENSATION
The table below sets forth for the years ended December 31, 1995, 1994
and 1993, the compensation of any person who, as of December 31, 1995, was the
Chief Executive Officer of the Company or who was among the four most highly
compensated executive officers of the Company other than the Chief Executive
Officer with annual compensation in excess of $100,000 ("Executive Officers").
<PAGE>
<TABLE>
<CAPTION>
Annual Compensation<F1><F2> Long-Term
Name and ------------------------- Compensation Other
Principal Position Year Salary Bonus Options(#) -------
- ------------------ ---- -------- ------- ------------
<S> <C> <C> <C> <C> <C>
Paul O. Koether .......... 1995 $215,000 $ - 50,000 $ -
Chairman, President ...... 1994 215,000 35,000 - -
and Chief Executive ...... 1993 215,000 50,000 - 2,473<F3>
Officer of the Company
and Chairman of Madis
Voldemar Madis ........... 1995 $150,000 $ - 36,115<F4> $ -
Vice Chairman of
the Company and
Madis<F5>
- ----------------------------------------------------------
<FN>
<F1> The Company currently has no bonus plan.
<F2> Certain Executive Officers received incidental personal benefits during the
fiscal years covered by the table. The value of these incidental benefits did
not exceed the lesser of either $50,000 or 10% of the total annual salary and
bonus reported for any of the Executive Officers. Such amounts are excluded from
the table.
<F3> Represents the amount of matching contributions made by the Company pursuant
to a 401(k) plan.
<F4> Options granted in conjunction with the acquisition of Madis Botanicals,
Inc. on January 3, 1995.
<F5> Mr. Madis was President of Dr. Madis Laboratories, Inc., the predecessor
corporation of Madis, and IVM Corporation ("IVM"). Both IVM and Madis operated
under the protection of Federal Bankruptcy Law for the five-year period prior to
January 3, 1995, when Madis was acquired by the Company. Mr. Madis is currently
President of IVM, the owner of the premises occupied by Madis. The terms of the
lease and loans payable to the Company by IVM are described in "Item 2 -
Description of Property".
</FN>
</TABLE>
OPTIONS GRANTED
Under the Company's 1991 Non-Qualified Stock Option Plan (the "Plan"),
non-qualified options to purchase up to an aggregate of 500,000 shares of the
Company's Common Stock may be granted by the Board of Directors to officers,
directors and employees of the Company, its subsidiaries or parent. The exercise
price for the shares may not be
<PAGE>
less than the fair market value of the Common Stock on the date of grant.
Options will expire five years from the date of grant and will be exercisable as
to one-half of the shares on the date of grant and as to the other half, after
the first anniversary of the date of grant, or at such other time, or in such
other installments as may be determined by the Board of Directors or a committee
thereof at the time of grant. The options are non-transferable (other than by
will or by operation of the laws of descent) and are exercisable generally only
while the holder is employed by the Company or by a subsidiary or parent of the
Company or, in the event of the holder's death or permanent disability while
employed by the Company, within one year after such death or disability.
The table below contains information concerning the fiscal year-end
value of unexercised options held by the Executive Officers.
<TABLE>
FISCAL YEAR-END OPTIONS VALUES
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options at 12/31/95 Options at 12/31/95
Name Exercisable/Unexercisable Exercisable/Unexercisable
- --------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Paul O. Koether 125,000 25,000 $63,281 $13,281
Voldemar Madis 14,446 21,669 $ 2,167 $ 3,250
</TABLE>
401(k) PLAN
The Company has established a Retirement Savings Plan pursuant to Section 401(k)
of the Internal Revenue Code (the "401(k) Plan"). The 401(k) Plan permits
employees of the sponsor to defer a portion of their compensation on a pre-tax
basis. Employees who meet the 401(k) Plan's eligibility requirements may defer
up to 15% of their compensation (base pay plus any bonuses and overtime) for the
year. No participant, however, may have deferred more than $9,500 in 1995, which
amount is indexed each year for inflation. The Company in previous years had
elected to match an employee's contribution to the 401(k) Plan on the basis of
50% of the compensation an employee defers, however, as of June 1, 1993, the
Company's matching election was discontinued. Federally mandated discrimination
testing limits the amounts which highly paid employees may defer based on the
amounts contributed by all other employees. Participant elective deferral
accounts are fully vested and participant matching contribution accounts in the
401(k) Plan are vested in accordance with a graduated vesting schedule over a
period of six years of service. All participant accounts in the 401(k) Plan are
invested at the direction of the participants among several different types of
funds offered by a large mutual fund management company selected by the Company.
Distributions of account balances are normally made upon death, disability or
termination of employment after normal retirement date (age 60) or early
retirement date (age 55). However, distribution may be made at any time after an
employee terminates employment. Participants may make withdrawals from their
deferred accounts in the event of financial hardship but may not borrow from
their accounts. Amounts payable to an employee are dependent on the employee's
account balance, which is credited and debited with appropriate earnings, gains,
expenses and losses of the underlying investment. Benefits are determined by
<PAGE>
contributions and investment performance over the entire period an employee
participates in the 401(k) Plan. Payment is made in a single cash sum no later
than sixty days following the close of the year in which the event giving rise
to the distribution occurs.
The Company does not have any other bonus, profit sharing, or
compensation plans in effect.
EMPLOYMENT AGREEMENTS
In April 1990 the Company entered into an employment agreement (the
"Agreement") with Mr. Koether, the Company's Chairman, for an initial three-year
term commencing on April 1, 1990 (the "Effective Date") at an annual salary of
$185,000 ("Base Salary"), which may be increased but not decreased at the
discretion of the Board of Directors. The term is to be automatically extended
one day for each day elapsed after the Effective Date. In December 1992, the
Board of Directors voted to increase the Chairman's Base Salary to $215,000
effective December 1, 1992.
The Chairman may terminate his employment under the Agreement at any
time for "good reason" (defined below) within 36 months after the date of a
Change in Control (defined below) of the Company. Upon his termination, he shall
be paid the greater of (i) the Base Salary and any bonuses payable under the
Agreement through the expiration date of the Agreement or (ii) an amount equal
to three times the average annual Base Salary and bonuses paid to him during the
preceding five years.
Change in Control is deemed to have occurred if (i) any individual or
entity, other than individuals beneficially owning, directly or indirectly,
common stock of the Company representing 30% or more of the Company's stock
outstanding as of April 1, 1990, is or becomes the beneficial owner, directly or
indirectly, of 30% or more of the Company's outstanding stock or (ii)
individuals constituting the Board of Directors on April 1, 1990 ("Incumbent
Board"), including any person subsequently elected to the Board whose election
or nomination for election was approved by a vote of at least a majority of the
Directors comprising the Incumbent Board, cease to constitute at least a
majority of the Board. "Good reason" means a determination made solely by Mr.
Koether, in good faith, that as a result of a Change in Control he may be
adversely affected (i) in carrying out his duties and powers in the fashion he
previously enjoyed or (ii) in his future prospects with the Company.
Mr. Koether may also terminate his employment if the Company fails to
perform its obligations under the Agreement (including any material change in
Mr. Koether's duties, responsibilities and powers or the removal of his office
to a location more than five miles from its current location) which failure is
not cured within specified time periods.
In conjunction with the acquisition of Madis in January 3, 1995 by the
Company, Madis entered into an employment agreement with Voldemar Madis to serve
as an executive officer of Madis. Under the terms of the agreement, Mr. Madis
will be employed for four years from the date of the agreement at an annual
salary of $150,000. The agreement may be terminated for cause, as defined.
<PAGE>
Item 11. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock
of the Company as of February 29, 1996, by each person who was known by the
Company to beneficially own more than 5% of the Common Stock, by each director
and officers as a group:
<TABLE>
<CAPTION>
Number of Shares Approximate
Name and Address of Common Stock Percent
of Beneficial Owner Beneficially Owned<F1> of Class
- ------------------- --------------------- -----------
<S> <C> <C>
Paul O. Koether
211 Pennbrook Road
Far Hills, N.J. 07931 .................... 3,011,496<F2><F3> 36.74%
Sun Equities Corporation
376 Main Street
Bedminster, N.J. 07921 ................... 2,234,296 27.26%
Richard M. Bossert<F8>
P.O. Box 209
Bedminster, N.J. 07921 ................... 33,500 <F7>
Mark W. Jaindl
3150 Coffeetown Road
Orefield, PA 18069 ........................ 145,720<F4> 1.78%
William Mahomes, Jr.
2200 Ross Avenue, Suite 2700
Dallas, TX 75201 .......................... 7,500 <F7>
Alfredo Mena
P. O. Box 520656
Miami, Florida 33152 ...................... 9,500 <F7>
Voldemar Madis
376 Huyler Street
So. Hackensack, NJ 07606 .................. 14,446<F5> <F7>
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 .................... 433,400<F6> 5.29%
All directors and
officers as a group
(6 persons) ............................... 3,222,162<F2> 39.31%
- ------------------------------
<PAGE>
<FN>
<F1> The beneficial owner has both sole voting and sole investment powers with
respect to these shares except as set forth in this footnote or in other
footnotes below. Included in such number of shares beneficially owned are shares
subject to options currently exercisable or becoming exercisable within sixty
days: Paul O. Koether (125,000 shares); Richard M. Bossert (22,500 shares); Mark
W. Jaindl (62,500 shares); William Mahomes, Jr. (7,500 shares); Alfredo Mena
(7,500 shares); Voldemar Madis (14,446 shares) and all directors and officers as
a group (239,446 shares).
<F2> Includes (a) 32,400 shares held by a trust for the benefit of Mr. Koether's
daughter for which he serves as the sole trustee, 33,900 shares in his
discretionary accounts, and (b) 297,500 shares beneficially owned by his wife,
including 100,000 shares owned by Emerald Partners of which she is the sole
general partner, 2,000 shares owned by Sussex Group, Inc. of which she is the
President, a director and controlling stockholder, 75,000 shares which she has
the right to acquire upon exercise of stock options and 120,500 shares held in
custodial accounts. Mr. Koether may also be deemed to be the beneficial owner of
the 2,234,296 shares owned by Sun, of which Mr. Koether is a principal
stockholder and Chairman, 35,500 shares held in discretionary accounts of
certain of his brokerage customers and 12,900 shares held in Mr. Koether's IRA
account. Mr. Koether disclaims beneficial ownership of all of the foregoing
shares.
<F3> Includes 40,000 shares owned by Winston. Mr. Koether is an officer and
director of Winston and of Kent, Winston's parent company, and may be deemed the
beneficial owners of such shares. Mr. Koether disclaims such beneficial
ownership.
<F4> Includes 11,720 shares held in Mr. Jaindl's IRA account and 4,000 shares
held by a trust for the benefit of his son, for which Mr. Jaindl serves as a
trustee.
<F5> Consists of shares that Mr. Madis has the right to acquire upon exercise of
stock options.
<F6> Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 433,400 shares of Pure World,
Inc. stock as of December 31, 1995, all of which shares are held in portfolios
of DFA Investment Dimensions Group, Inc., a registered open-end investment
company, or in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, all of which Dimensional Fund
Advisors Inc. serves as investment manager. Dimensional disclaims beneficial
ownership of all such shares.
<F7> Represents less than one percent.
<F8> Deceased.
</FN>
</TABLE>
<PAGE>
Item 12. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company reimbursed Sun approximately $64,000 and $72,000 in 1995 and 1994,
respectively, for the Company's proportionate share of certain general and
administrative expenses.
Rosenman & Colin ("R&C") performed substantial legal work for the Company for
which they billed the Company an aggregate of approximately $630,000 in 1995 and
$615,000 in 1994. The 1995 professional fees represented work performed
primarily in association with the proxy contests undertaken in connection with
one of the Company's investments, the acquisition and operation of Madis, and
litigation. Natalie I. Koether, Esq., President of Madis and wife of the
Chairman of the Company, is of Counsel to R&C. See "Security Ownership of
Officers, Directors and Certain Stockholders."
In connection with the acquisition of NorthCorp in June 1992, the Company issued
80,000 shares of its common stock to Winston as a finder's fee. The transaction
was introduced to the Company by an officer of Winston who was otherwise
unaffiliated with the Company. Winston's parent company, Kent, may be deemed to
be an affiliate of the Company. The Company paid brokerage commissions of
approximately $42,000 in 1995 and $51,000 in 1994 to Winston in connection with
the Company's purchases and sales of marketable securities.
<PAGE>
PART IV
Item 13. - EXHIBITS AND REPORTS ON FORM 8-K
The following exhibits are filed as part of this report:
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Method of Filing
------- ------- ----------------
<S> <C> <C>
3.1 Restated Certificate of Incorporated by reference to
Incorporation of the Company Computer Memories Incorporated
Form 10-K for the year ended
March 31, 1987.
(b) Certificate of Amendment Incorporated by reference to
of Restated Certificate of Exhibit A to Computer Memories
Incorporation of the Company Incorporated Proxy Statement
dated February 16, 1990.
(c) Certificate of Amendment of Incorporated by reference to
Restated Certificate of Incor- American Holdings, Inc.
poration of the Company Form 10-KSB for the year ended
December 31, 1992.
(d) Certificate of Amendment of Filed herewith.
Restated Certificate of Incor-
poration of the Company
3.2 By-laws, as amended Incorporated by reference to
American Holdings, Inc.
Form 10-K for the year ended
December 31, 1992.
10.1 Employment Agreement, dated as Incorporated by reference to
of April 6, 1990, by and between Computer Memories Incorporated
Computer Memories Incorporated Form 10-Q for the quarter
and Paul O. Koether ended June 30, 1990.
10.2 Agreement and Plan of Merger dated Incorporated by reference to
June 1, 1992 between CMIN Merger Computer Memories Incorporated
Co. and NorthCorp Realty Form 8-K dated June 17, 1992
Advisors, Inc.
10.3 1991 Computer Memories Incorporated Incorporated by reference to
Non-Qualified Stock Option Plan Exhibit A to Computer Memories
Incorporated Proxy Statement dated July 7, 1992.
<PAGE>
10.4 Agreement and Plan of Merger Incorporated by reference to
dated as of December, 1994 American Holdings, Inc. Form
8-K dated January 18, 1995.
10.5 Employment Agreement with Incorporated by reference to
Dr. V. Madis, Chairman Emeritus American Holdings, Inc. Form
of Dr. Madis Laboratories, Inc. 8-K dated January 18, 1995.
10.6 Stock Purchase Agreement, dated Incorporated by reference to
as of September 22, 1993, by and American Holdings, Inc. Form
between the Company and Nancy 10-KSB for the year ended
Nasher December 31, 1993.
10.7 Severance Agreements among the Incorporated by reference to
Company, NorthCorp and Messrs. American Holdings, Inc. Form
Dorsey and Young, dated February 10-KSB for the year ended
17, 1994 December 31, 1993.
10.8 Employment Agreement with Incorporated by reference to
V. Madis American Holdings, Inc. Form
8-K dated January 18, 1995.
10.9 Lease Agreement for premises of Incorporated by reference to
Dr. Madis Laboratories, Inc., American Holdings, Inc. Form
375 Huyler Street, South 8-K dated January 18, 1995.
Hackensack, New Jersey
10.10 Plan of Reorganization of Incorporated by reference to
Dr. Madis Laboratories, Inc. American Holdings, Inc. Form
8-K/A (Amendment No. 1) dated
March 17, 1995.
10.11 Disclosure Statement Related Incorporated by reference to
to Plan of Reorganization of American Holdings, Inc. Form
Dr. Madis Laboratories, Inc. 8-K/A (Amendment No. 1) dated
March 17, 1995.
21 Subsidiaries of the Registrant Filed herewith.
27 Financial Data Schedule Filed herewith.
<PAGE>
(b) Reports on Form 8-K
On January 24, 1996, the Company filed a Current Report on Form
8-K disclosing the litigation commenced by American Industrial
Properties REIT ("AIP") against the Company.
On February 16, 1996, the Company filed an Amendment to the
Current Report on Form 8-K disclosing that the Company had filed
its response to the litigation as well as commencing suit against
the AIP and its executive officer and trust managers as well as
instituting a derivative action on behalf of the shareholders of
AIP against the officers and trust managers of AIP.
</TABLE>
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
PURE WORLD, INC.
March 28, 1996 By: /s/ Paul O. Koether
--------------------
Paul O. Koether
Chairman of the Board
and President
By: /s/ Mark Koscinski
Mark Koscinski
-------------------
Senior Vice President
(Principal Financial and
Accounting Officer)
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
Signature Capacity Date
/s/ Paul O. Koether Chairman of the Board March 28, 1996
- ------------------------- President, and Director
Paul O. Koether (Principal Executive
Officer)
/s/ William Mahomes, Jr. Director March 28, 1996
- -------------------------
William Mahomes, Jr.
/s/ Alfredo Mena Director March 28, 1996
- -------------------------
Alfredo Mena
/s/ Mark W. Jaindl Director March 28, 1996
- -------------------------
Mark W. Jaindl
PURE WORLD, INC.
LIST OF SUBSIDIARIES
NAME OF SUBSIDIARY STATE OF INCORPORATION
American Holdings, Inc. Delaware
Eco-Pure, Inc. Delaware
Madis Botanicals, Inc. Delaware
Pure World Botanicals, Inc. Delaware
Strategic Information Systems, Inc. Delaware
