SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
January 3, 1996
Date of Report (Date of earliest event reported)
CAMBRIDGE BIOTECH CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-12081 04-2726626
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification Number)
incorporation)
365 Plantation Street, Biotechnology Research Park
Worcester, Massachusetts 01605
(Address of principal executive offices)
(508) 797-5777
(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
Attached hereto as Exhibit A is a copy of the Registrant's
amended monthly operating report dated January 3, 1996 (the "Monthly
Operating Report"), to the United States Bankruptcy Court Trustee
for the District of Massachusetts, Western Division, relating to
the Registrant's petition under Chapter 11 of the United States
Bankruptcy Code, Case No. 94-43054-JFQ.
The Monthly Operating Report has not been audited by the
Registrant's independent, certified public accountants, nor does
the Monthly Operating Report contain complete consolidated
information relating to the Company's subsidiaries and affiliates
or adjustments which may be required as a result of an independent
audit of the Registrant's financial statements, including
adjustments relating to the special investigation described in the
Company's reports on Form 8-K filed with the Securities and
Exchange Commission on April 6, 1994 and May 13, 1994,
respectively.
Item 7. Exhibits.
The Registrant's Monthly Operating Report dated January 3, 1996
filed with the United States Bankruptcy Court Trustee for the
District of Massachusetts, Western Division, Case No. 94-43054-JFQ.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
behalf by the undersigned thereunto duly authorized.
CAMBRIDGE BIOTECH CORPORATION
Dated: January 11, 1996 By: \s\ Alison Taunton-Rigby
Alison Taunton-Rigby, President
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF MASSACHUSETTS
IN RE: CAMBRIDGE BIOTECH CORPORATION CASE NO.: 94-43054-JFQ
365 PLANTATION STREET JUDGE: J.F. QUEENAN
WORCESTER, MA 01605-2376
DEBTOR(S): CAMBRIDGE BIOTECH CORPORATION, CHAPTER: 11
DEBTOR-IN-POSSESSION
MONTHLY OPERATING REPORT FOR MONTH ENDING: OCTOBER 31, 1995
COMES NOW, CAMBRIDGE BIOTECH CORPORATION
Debtor-in-Possession, and hereby submits its Monthly Operating
Report for the period commencing October 1, 1995 and ending October 31,
1995 as shown by the report and exhibits consisting of twenty-two pages
and containing the following, as indicated:
____X____ Monthly Reporting Questionnaire (Attachment 1)
____X____ Comparative Balance Sheets (Forms OPR-1 & OPR-2)
____X____ Summary of Accounts Receivable (Form OPR-3)
____X____ Schedule of Post-petition Liabilities (Form OPR-4)
____X____ Income Statement (Form OPR-5)
____X____ Statement of Sources and Uses of Cash (Form OPR-6)
I declare under penalty of perjury that this report and all attachments
are true and correct to the best of my knowledge and belief.
Date: January 3, 1996 DEBTOR(S)-IN-POSSESSION
By: /s/ Alison Taunton-Rigby
Name & Title: Alison Taunton-Rigby
President & CEO
Address: 365 Plantation Street
Worcester, MA 01605-2376
Telephone No.:508-797-5777
Footnote:
As Debtor-in-Possession commenced filing on July 7, 1994
___________________________________________________________________________
Attachment 1 (Page 1)
Rev. 1/92
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
Case Name: CAMBRIDGE BIOTECH CORPORATION
Case Number: 94-43054
Month of: OCTOBER 1, 1995 THROUGH OCTOBER 31, 1995
1. Payroll: State the amount of all executive wages paid and taxes
withheld and paid.
See Attached
2. Insurance: Is worker's compensation and other insurance in effect? YES.
Are payments current? YES.
If any policy has lapsed, been replaced or renewed, state so
in the schedule below. Attach a copy of the new policy's
binder or cover page.
Date
Coverage
Carrier Coverage Expiration Premium Pd.
TYPE Name Amount Policy # Date Amounts Through
Homeowners
Rental
Property
Liability
Vehicle
Workers Comp(GA) CIGNA $500,000 C41793788 10/31/96 $551.00 10/31/96
Workers Comp
(TX, FL, & CO)
Other
---------------------------------------------------------------------------
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054 SCHEDULE #1
Month of: October, 1995
Monthly Operating Report - Wages - Executives
October 1 through October 31, 1995
Taxes Taxes Taxes
Name Title Gross Net Withheld Paid Due
A.Taunton-Rigby Pres./CEO 17,307.69 10,708.57 6,599.12 6,599.12 0.00
Jeffrey Beaver Chairman 7,692.32 4,888.93 2,803.39 2,803.39 0.00
Gary Long VP.Corp.Operations 9,615.40 6,794.41 2,820.99 2,820.99 0.00
Deborah Grabbe VP. Reg.Affairs 10,000.00 6,983.77 3,016.23 3,016.23 0.00
Gerald Beltz VP.R & D 10,769.23 7,971.52 2,797.71 2,797.71 0.00
Robert Kammer VP.Medical Aff. 11,538.46 8,234.83 3,303.63 3,303.63 0.00
--------- --------- --------- --------- ----
Total Executive Payroll: 66,923.10 45,582.03 21,341.07 21,341.07 0.00
___________________________________________________________________________
SYM POLICY NUMBER
WOC C4 17 93 78 8 ATLANTIC EMPLOYERS INSURANCE COMPANY
NEW RENEWAL x REWRITE OF NCCI CARRIER CODE: 18678
SYM PREVIOUS POLICY NO.
WOC C40557994
- ----------------------------------------------------------------------------
WORKERS COMPENSATION AND EMPLOYERS INFORMATION PAGE
LIABILITY INSURANCE POLICY
Item 1. CAMBRIDGE BIOTECH CORPORATION Inter/Intrastate ID No. 203019
The 365 PLANTATION STREET
Insured WORCESTER, MA 01605
DIRECT BILLED
Mailing Individual Partnership
Address Corporation X
Employer's Identification No.: FEIN # 000000000
Other workplaces not shown above: STATE OF NEW JERSEY
Item 2.Policy period from 10-31-95 to 10-31-96 12:01 A.M. standard time
at insured's mailing address.
- ------------------------------------------------------------------------------
Item 3. A. Worker's Compensation Insurance: Part One of the policy applies to
the Workers Compensation Law of the states listed here: NEW JERSEY
B. Employers Liability Insurance: Part Two of the policy applies
to work in each state listed in Item 3.A.
The limits of our liability under Part Two are:
Bodily Injury by Accident $500,000 each accident
Bodily Injury by Disease $500,000 policy limit
Bodily Injury by Disease $500,000 each employee
C. Other States Insurance: Part Three of the policy applies to the states,
if any, listed here:
- ------------------------------------------------------------------------------
Item 4. The premium for this policy will be determined by our Manual of Rules,
Classifications, Rates and Rating Plans. All information required below is
subject to verification and change by audit.
- -----------------------------------------------------------------------------
Classifications Premium Basis Rate
- -----------------------------------------------------------------------------
Code Estimated Total Per $100 of Estimated
# Annual Remuneration Remuneration Annual Prem.
SALESPERSONS OUTSIDE *8742 47000. .67 315.
INCREASED LIMITS
(PART TWO) 1.90% 50.
ESTIMATED STANDARD
POLICY PREMIUM 365.
(INCLUDED IN POLICY
PREMIUM OF $551)
EXPENSE CONSTANT 0900 150.
TOTAL ESTIMATED
PREMIUM 515.
0935 Second Injury Fund Surcharge (9.57%) 35.
0936 Uninsured Employers Fund Surch (0.23%) 1.
- -----------------------------------------------------------------------------
Minimum Premium $ 197. Total Estimated Annual Premium $ 551.
If Indicated here, interim adjust- (PAGE 1 LAST PAGE)
ments of premium will be made: Semi-Annually Qtrly Mthly Dep. Premium $
This policy includes these endorsements and schedules: WC 290301
AGENCY NO. 984029 04-2787509 NJS Countersigned By____________________
WILLIAM GALLAGHER ASSOC. (Authorized Agent)
200 STATE STREET MARKETING OFFICE: W.Gallagher Agency
BOSTON, MA 02109 NATIONAL WC. RE POOL 95282 DOC 6176A WCY
CKE-4266a Ptd.in U.S.A. Copyright 1987 Nt'l Council on Compensation Insurance
INSURED'S COPY WC 00 00 01A
---------------------------------------------------------------------------
NEW JERSEY PART TWO LIMIT OF LIABILITY ENDORSEMENT
----------------------------------------------------------------------------
Named Insured Endorsement Number
CAMBRIDGE BIOTECH CORPORATION
- -----------------------------------------------------------------------------
Policy Symbol Policy Number Policy Period Effective Date of Endorsement
WOC C4 17 93 78 8 10/31/95-10/31/96
- -----------------------------------------------------------------------------
Issued By (Name of Insurance Company)
ATLANTIC EMPLOYERS INSURANCE COMPANY
- -----------------------------------------------------------------------------
Insert the policy number. The remainder of the information is to be completed
only when this endorsement is issued subsequent to the preparation of the
policy.
- -----------------------------------------------------------------------------
Worker's Compensation and Employers' Liability Policy
This endorsement applies only to the insurance provided by Part Two
(Employers Liability Insurance) because New Jersey is shown in item 3.A
of the Information Page.
We may not limit our liability to pay damages for which we become legally
liable to pay because of bodily injury to your employees if the bodily
injury arises out of an in the course of employment that is subject to,
and is compensable under, the workers compensation law of New Jersey.
WILLIAM GALLAGHER ASSOCIATES
----------------------------
Authorized Agent
CKE-7615 (4/84) Ptd. in U.S.A. WC 29 03 01
3073
- --__________________________________________________________________________
Attachment 1 (Page 2)
Rev. 1/92
CHAPTER 11
MONTHLY OPERATING REPORT
DETAILED LISTING OF DISBURSEMENTS
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Month of: October 1 Through October 31, 1995
3. Bank Accounts Monthly Operating Report
ACCOUNT TYPE
OPERATING OPERATING OPERATING PAYROLL
Bank Fleet Dependent First N'tl Flagship
Name Care BOM
G/L number 1.1113 1.1116 2.1129 1.1119.1
Account number 9372562275 551-50574 175-8828-5 1023381112
Beginning Book
Balance ($11,509.29) $4,164.28 $201.24 $17,134.27
PLUS: Deposits 1,334,708.89
LESS:Disbursements (1,493,320.72) ($3,551.58) (512.81) (556,109.19)
Other:
Transfers In(Out) (601,635.59) $ 862.32 2,500.00 556,109.19
Investments 807,411.00
------------ -------- ---------- ----------
Ending Book
Balance (1) ($35,654.29) $ 1,475.02 $2,188.43 $17,134.27
========== ========= ========== ==========
___________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
As of: October 31, 1995
--------------------------------
Monthly Operating Report
3. Bank Accounts Petty
------------- Payroll Escrow Cash Total
------- ------ ----- -----
Bank Name Nations Bk CBL Escrow N/A
G/L Number 2.1127 1.1131 xx.1150
Account Number 3933333731 N/A N/A
Beginning Bk Bal. $4,666.74 $100,000.00 $1,228.55 $115,885.79
PLUS: Deposits 1,334,708.89
LESS: Disburs. (40,348.33) (1,445.21) (2,095,287.84)
Other:
Transfers In (Out) 40,892.63 1,271.45 (0.00)
Investments 807,411.00
--------- ---------- -------- ------------
Ending Book Balance (1) $5,211.04 $100,000.00 $1,054.79 $162,717.84
========= =========== ========= ===========
(1) Cash balances exclude short term investments of
excess cash which totals $5,232,590 for the month.
The total cash and short term investments decreased for
the month of October by $756,415 and increased since the
7/7/94 filing date by $2,785,568.
- -------------------------------------------------------------------------------
ATTACHMENT 1(Page 2)
REV. 1/92
CHAPTER 11
MONTHLY OPERATING REPORT
DETAILED LISTING OF DISBURSEMENTS
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Month of: October 1, through October 31, 1995
4. Post Petition Payments: Amount Date Check #
Professionals:
Bowditch & Dewey $ 26,618.50 10/30/95 72885
Bromberg & Sunstein 137.37 10/26/95 72839
Brown, Rudnick, Freed & Gesmer 50,512.77 10/30/95 72886
Brown, Rudnick, Freed & Gesmer 13,944.75 10/30/95 72886
Hale & Dorr 4,071.43 10/26/95 72848
Hale & Dorr 143.85 10/26/95 72848
Musket Research Associates 5,000.00 10/02/95 72339
Poorman-Douglas 18,118.86 10/31/95 72928
Sterne, Kessler, Goldstein 22,177.75 10/06/95 72487
U.S. Trustee 5,000.00 10/20/95 72738
Venable, Baetjer & Howard 325.50 10/31/95 72935
----------
Total (Professionals) $146,050.78
==========
Pre-Petition Debts:
For Priority Debt:
None $0.00
--------
0.00
For Secured Debt:
Norwest Capital Lease Payment (2.3505) 387.27 10/12/95 72579
-------
387.27
For Unsecured Debt:
None 0.00
-------
0.00
For Accrued Restructuring:
Rockville Retention Bonus
Payments (TMS) 18,889.23 10/15/95 wire transfer
Total Management Solutions 49.50 10/13/95 72613
----------
18,938.73
---------
Total (Pre-petition) $19,326.00
========
_____________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-1
Comparative Balance Sheets
As of: October 31, 1995
FILING
DATE 7/31/94 8/31/94 9/30/94
ASSETS
CURRENT ASSETS:
Cash $1,287,187 $771,969 $863,230 $744,627
Other Negotiable
Instruments (i.e.
Commercial Paper,
CD's, Repo's, etc.) 1,322,553 2,925,553 3,235,553 2,001,807
Accounts Receivable
(See OPR-3) 2,813,217 2,798,473 2,426,792 3,072,351
Less: Allowance for
doubtful accounts (159,413) (153,957) (156,702) (156,702)
Inventory, at lower
of cost or market 4,771,316 4,727,916 4,588,153 3,989,809
Prepaid Expenses and
Deposits 540,318 758,112 724,877 917,900
Other Receivables 38,793 68,301 19,737 81,504
---------- ---------- ---------- ----------
TOTAL CURRENT ASSETS 10,613,971 11,896,367 11,701,640 10,651,296
PROPERTY, PLANT AND
EQUIPMENT, AT COST 27,437,762 27,440,087 27,443,284 27,400,776
Less: Accumulated
Depreciation (13,006,471)(13,250,916) (13,518,839)(13,794,569)
NET PROPERTY, PLANT ---------- ---------- ---------- ----------
& EQUIP. 14,431,291 14,189,171 13,924,445 13,606,207
OTHER ASSETS
Investment in Foreign
Subsidiary & Interco.
Receivables 7,303,275 7,226,960 7,334,353 7,321,297
Equity Investments in
Minority Interests 949,801 949,801 949,801 699,801
Long term Notes
Receivable 120,000 120,000 120,000 120,000
Patents & Purchased
Technology, net 2,645,753 2,588,888 2,519,249 2,449,611
Misc. other assets 83,666 83,543 85,921 103,250
----------- ---------- ---------- ----------
NET OTHER ASSETS 11,102,495 10,969,192 11,009,324 10,693,959
---------- ---------- ---------- ----------
TOTAL ASSETS $36,147,757 $37,054,730 $36,635,409 $34,951,462
========== ========== ========== ==========
See Accompanying Notes to Financial Statements
________________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-1
Comparative Balance Sheets
As of: October 31, 1995
10/31/94 11/30/94 12/31/94 1/31/95
ASSETS
CURRENT ASSETS:
Cash $121,108 $1,978,464 $141,017 $170,469
Other Negotiable
Instruments (i.e.
Commercial Paper,
CD's, Repo's, etc.) 2,744,989 6,518,489 8,396,774 8,171,774
Accounts Receivable
(See OPR-3) 2,456,055 2,020,214 3,025,812 2,712,218
Less: Allowance for
doubtful accounts (154,965) (154,988) (150,200) (150,754)
Inventory, at lower
of cost or market 4,144,276 4,313,167 3,965,668 4,066,730
Prepaid Expenses and
Deposits 843,827 1,049,251 836,285 857,048
Other Receivables 112,983 65,389 92,624 81,742
---------- ---------- ---------- ----------
TOTAL CURRENT ASSETS 10,268,273 15,789,986 16,307,980 15,909,227
PROPERTY, PLANT AND
EQUIPMENT, AT COST 27,395,379 27,392,289 24,776,430 24,782,465
Less: Accumulated
Depreciation (14,056,613) (14,318,428)(14,892,611) (15,141,494)
NET PROPERTY, PLANT ---------- ---------- ---------- ----------
& EQUIP. 13,338,766 13,073,861 9,883,819 9,640,971
OTHER ASSETS
Investment in Foreign
Subsidiary & Interco.
Receivables 7,320,594 2,180 510 0
Equity Investments in
Minority Interests 699,801 644,200 110,075 110,075
Long term Notes
Receivable 120,000 120,000 0 0
Patents & Purchased
Technology, net 2,400,000 2,328,114 2,094,494 2,034,338
Misc. other assets 110,888 72,832 105,791 106,768
---------- --------- --------- ---------
NET OTHER ASSETS 10,651,283 3,167,326 2,310,870 2,251,181
---------- ---------- ---------- ----------
TOTAL ASSETS $34,258,322 $32,031,173 $28,502,669 $27,801,379
========== ========== ========== ==========
See Accompanying Notes to Financial Statements
________________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-1
Comparative Balance Sheets
As of: October 31, 1995
2/28/95 3/31/95 4/30/95
ASSETS
CURRENT ASSETS:
Cash ($55,657) $214,214 $173,689
Other Negotiable Instruments
(i.e., Commercial Paper, CD's 8,159,683 6,479,683 6,162,566
Repo's, etc.)
Accounts Receivable (See OPR-3) 2,721,157 3,221,150 3,111,506
Less: Allowance for doubtful accounts (151,583) (148,773) (155,829)
Inventory, at lower of cost or market 3,909,665 3,966,171 4,053,493
Prepaid Expenses and Deposits 931,831 1,198,892 1,229,568
Other Receivables 64,335 77,139 80,229
---------- ---------- ----------
TOTAL CURRENT ASSETS 15,579,431 15,008,476 14,655,222
PROPERTY, PLANT AND EQUIPMENT, AT COST 24,794,255 24,895,135 24,894,506
Less: Accumulated Depreciation (15,376,953) (15,809,227)(16,039,124)
---------- ---------- ----------
NET PROPERTY, PLANT & EQUIP. 9,417,302 9,085,908 8,855,382
OTHER ASSETS
Investment in Foreign
Subsidiary & Interco. Receivables 0 0 1,100
Equity Investments in
Minority Interests 110,075 110,075 110,075
Long term Notes Receivable 0 0 0
Patents & Purchased Technology, net 1,980,640 1,812,398 1,766,695
Miscellaneous other assets 106,646 106,524 106,401
--------- --------- ---------
NET OTHER ASSETS 2,197,361 2,028,997 1,983,171
---------- ---------- ----------
TOTAL ASSETS $27,194,094 $26,123,381 $25,493,775
========== ========== ==========
See Accompanying Notes to Financial Statements
- -------------------------------------------------------------------
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-1
Comparative Balance Sheets
As of: OCTOBER 31, 1995
ASSETS 5/31/95 6/30/95 7/31/95
CURRENT ASSETS:
Cash $157,900 $138,077 $344,437
Other Negotiable Instruments
(i.e. Commercial Paper, CD's
Repo's, etc.) 6,051,807 5,976,957 5,973,454
Accounts Receivable (See OPR-3) 3,123,410 3,557,453 3,407,884
Less: Allowance for doubtful accounts (159,019) (166,019) (173,017)
Inventory, at lower of cost or market 3,920,770 3,903,542 3,744,522
Prepaid Expenses and Deposits 1,261,826 1,234,929 1,163,646
Other Receivables 78,432 75,165 76,573
---------- ---------- ----------
TOTAL CURRENT ASSETS 14,435,126 14,720,104 14,537,499
PROPERTY, PLANT AND EQUIPMENT, AT COST 24,913,243 24,903,260 24,926,375
Less: Accumulated Depreciation (16,267,078) (16,669,411) (16,887,830)
---------- ---------- ----------
NET PROPERTY, PLANT & EQUIP. 8,646,165 8,233,849 8,038,545
OTHER ASSETS
Investment in Foreign
Subsidiary & Interco. Receivables 0 0 0
Equity Investments in
Minority Interests 110,075 110,075 110,075
Long term Notes Receivable 0 0 0
Patents & Purchased Technology, net 1,724,305 1,634,189 1,571,552
Miscellaneous other assets 106,279 106,156 106,034
--------- --------- ---------
NET OTHER ASSETS 1,940,659 1,850,420 1,787,661
---------- --------- ---------
TOTAL ASSETS $25,021,950 $24,804,373 $24,363,705
========== ========== ==========
See Accompanying Notes to Financial Statements
- ---------------------------------------------------------------------------
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-1
Comparative Balance Sheet
As of: OCTOBER 31, 1995
ASSETS 8/31/95 9/30/95 10/31/95
CURRENT ASSETS:
Cash $431,722 $111,722 $162,718
Other Negotiable Instruments
(i.e. Commercial Paper, 6,215,932 6,040,001 5,232,590
CD's, Repo's etc.)
Accounts Receivable (See OPR-3) 3,179,522 3,246,157 4,344,761
Less:Allowance for doubtful
accounts (180,037) (187,342) (194,793)
Inventory, at lower of cost or
market 3,682,465 4,103,462 3,923,724
Prepaid Expenses and Deposits 1,360,141 1,388,231 779,179
Other Receivables 79,128 85,007 87,124
--------- --------- ---------
TOTAL CURRENT ASSETS 14,768,873 14,787,238 14,335,303
PROPERTY, PLANT AND EQUIPMENT, AT COST 24,844,783 24,967,102 25,034,893
Less: Accumulated Depreciation (17,105,893) (17,525,164)(17,809,440)
----------- ----------- -----------
NET PROPERTY, PLANT & EQUIP. 7,838,890 7,441,938 7,225,453
OTHER ASSETS:
Investment in Foreign Subsidiary
& Interco. Receivables 0 0 0
Equity Investments in Minority
Interests 110,075 110,075 110,075
Long Term Notes Receivable 0 0 0
Patents & Purchased Technology, net 1,527,563 1,339,284 1,246,871
Miscellaneous other assets 105,912 105,790 105,667
--------- --------- ---------
NET OTHER ASSETS 1,743,550 1,555,149 1,462,613
--------- --------- ---------
TOTAL ASSETS $24,351,313 $23,784,325 $23,023,369
========== ========== ==========
See Accompanying Notes to Financial Statements.
- ---------------------------------------------------------------------------
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-2
Comparative Balance Sheets
As of: OCTOBER 31, 1995
FILING
DATE 7/31/94 8/31/94 9/30/94
LIABILITIES
POSTPETITION LIABILITIES (OPR-4) $0 $650,373 $1,141,051 $1,497,470
PRE PETITION LIABILITIES:
Priority Debt 223,302 182,012 182,012 68,035
Secured Debt 5,034,218 5,033,952 5,033,605 4,026,027
Unsecured Debt 5,523,250 5,524,993 5,524,993 5,555,313
TOTAL PRE PETITION ---------- ---------- ---------- ---------
LIABILITIES 10,780,770 10,740,957 10,740,610 9,649,375
Accrued Restructuring 1,844,180 1,842,293 1,838,952 1,838,649
Deferred Revenue & Taxes 5,254,300 5,247,862 5,224,541 4,432,191
---------- ---------- ---------- ----------
TOTAL LIABILITIES 17,879,250 18,481,485 18,945,154 17,417,685
SHAREHOLDERS' EQUITY (DEFICIT):
PREFERRED STOCK 0 0 0 0
COMMON STOCK 260,570 260,570 260,570 260,570
PAID - IN CAPITAL 119,978,714 119,985,005 119,993,131 120,001,257
ACCUMULATED DEFICIT:
Through Filing Date (101,970,777)(101,970,777)(101,970,777)(101,970,777)
Post Filing Date - 1994 298,447 (592,669) (757,273)
Post Filing Date - 1995
---------- ---------- ---------- ----------
TOTAL ACCUMULATED DEFICIT(101,970,777)(101,672,330)(102,563,446)(102,728,050)
---------- ---------- ---------- ----------
TOTAL SHAREHOLDERS' EQUITY 18,268,507 18,573,245 17,690,255 17,533,777
TOTAL LIABILITIES AND ---------- ---------- ---------- ----------
SHAREHOLDERS' EQUITY $36,147,757 $37,054,730 $36,635,409 $34,951,462
========== ========== ========== ==========
See Accompanying Notes to Financial Statements.
______________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-2
Comparative Balance Sheets
As of: OCTOBER 31, 1995
10/31/94 11/30/94 12/31/94
LIABILITIES
POSTPETITION LIABILITIES (OPR-4) $2,082,362 $2,755,184 $2,953,193
PRE PETITION LIABILITIES:
Priority Debt 68,035 67,035 41,405
Secured Debt 4,025,674 4,025,320 4,024,962
Unsecured Debt 5,557,217 5,554,724 5,648,205
TOTAL PRE PETITION --------- --------- ---------
LIABILITIES 9,650,926 9,647,079 9,714,572
Accrued Restructuring 1,818,204 1,818,204 378,170
Deferred Revenue & Taxes 4,478,161 7,969,504 6,788,574
Income Taxes Payable 479
---------- ---------- ----------
TOTAL LIABILITIES 18,029,653 22,189,971 19,834,988
SHAREHOLDERS' EQUITY (DEFICIT):
PREFERRED STOCK 0 0 0
COMMON STOCK 260,570 260,570 260,570
PAID - IN CAPITAL 120,009,383 120,017,509 120,024,635
ACCUMULATED DEFICIT:
Through Filing Date (101,970,777)(101,539,684)(101,539,684)
Post Filing Date - 1994 (2,070,507) (8,897,193) (10,077,840)
Post Filing Date - 1995
---------- ----------- -----------
TOTAL ACCUMULATED DEFICIT (104,041,284) (110,436,877)(111,617,524)
---------- ---------- ----------
TOTAL SHAREHOLDERS' EQUITY 16,228,669 9,841,202 8,667,681
TOTAL LIABILITIES AND ---------- ---------- ----------
SHAREHOLDERS' EQUITY $34,258,322 $32,031,173 $28,502,669
========== ========== ==========
See Accompanying Notes to Financial Statements.
____________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-2
Comparative Balance Sheets
As of: OCTOBER 31, 1995
1/31/95 2/28/95 3/31/95
LIABILITIES
POST PETITION LIABILITIES (OPR-4) $3,406,350 $3,711,705 $3,844,426
PRE PETITION LIABILITIES:
Priority Debt 41,405 41,405 37,685
Secured Debt 4,024,601 4,024,238 4,023,872
Unsecured Debt 5,607,221 5,609,144 5,609,724
--------- --------- ---------
TOTAL PRE PETITION LIABILITIES 9,623,227 9,674,787 9,671,281
Accrued Restructuring 378,170 374,564 371,904
Deferred Revenue & Taxes 6,481,588 6,092,576 5,720,237
Income Taxes Payable 479 479 1,299
---------- ---------- ----------
TOTAL LIABILITIES 19,939,814 19,854,111 19,609,147
MINORITY INTEREST 1,193 1,193 2,800
SHAREHOLDERS' EQUITY (DEFICIT):
PREFERRED STOCK 0 0 0
COMMON STOCK 260,570 260,570 260,570
PAID - IN CAPITAL 120,032,761 120,040,887 120,049,013
ACCUMULATED DEFICIT:
Through Filing Date (101,539,684)(101,539,684)(101,539,684)
Post Filing Date - 1994 (10,077,840) (10,077,840) (10,077,840)
Post Filing Date - 1995 (815,435) (1,345,143) (2,180,625)
----------- ----------- -----------
TOTAL ACCUMULATED DEFICIT (112,432,959)(112,962,667)(113,798,149)
---------- ---------- ----------
TOTAL SHAREHOLDERS' EQUITY 7,860,372 7,338,790 6,511,434
TOTAL LIABILITIES AND ---------- ---------- ----------
SHAREHOLDERS' EQUITY $27,801,379 $27,194,094 $26,123,381
========== ========== ==========
See Accompanying Notes to Financial Statements.
____________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-2
Comparative Balance Sheets
As of: OCTOBER 31, 1995
4/30/95 5/31/95 6/30/95
LIABILITIES
POST PETITION LIABILITIES (OPR-4) $4,049,265 $4,344,761 $4,873,571
PRE PETITION LIABILITIES:
Priority Debt 36,319 36,319 34,954
Secured Debt 4,023,502 4,023,130 4,022,755
Unsecured Debt 5,594,925 5,594,925 5,600,781
--------- --------- ---------
TOTAL PRE PETITION LIABILITIES 9,654,746 9,654,374 9,658,490
Accrued Restructuring 370,929 370,929 366,089
Deferred Revenue 5,401,416 5,083,970 4,753,389
Income Taxes Payable 1,299 1,299 2,335
---------- ---------- ----------
TOTAL LIABILITIES 19,477,655 19,455,333 19,653,874
MINORITY INTEREST 2,800 2,800 4,832
SHAREHOLDERS' EQUITY (DEFICIT):
PREFERRED STOCK 0 0 0
COMMON STOCK 260,570 260,570 260,570
PAID - IN CAPITAL 120,057,139 120,065,265 120,073,391
ACCUMULATED DEFICIT:
Through Filing Date (101,539,684)(101,539,684)(101,539,684)
Post Filing Date - 1994 (10,077,840) (10,077,840) (10,077,840)
Post Filing Date - 1995 (2,686,865) (3,144,494) (3,570,770)
----------- ----------- -----------
TOTAL ACCUMULATED DEFICIT (114,304,389)(114,762,018)(115,188,294)
---------- ---------- ----------
TOTAL SHAREHOLDERS' EQUITY 6,013,320 5,563,817 5,145,667
TOTAL LIABILITIES AND ---------- ---------- ----------
SHAREHOLDERS' EQUITY $25,493,775 $25,021,950 $24,804,373
========== ========== ==========
See Accompanying Notes to Financial Statements.
- -----------------------------------------------------------------------------
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-2
Comparative Balance Sheets
As of: OCTOBER 31, 1995
7/31/95 8/31/95 9/30/95
LIABILITIES
POST PETITION LIABILITIES (OPR-4) $5,422,110 $5,594,484 $5,774,517
PRE PETITION LIABILITIES:
Priority Debt 36,319 36,319 36,319
Secured Debt 4,022,376 4,021,995 4,021,611
Unsecured Debt 5,603,755 5,603,755 5,603,755
--------- --------- ---------
TOTAL PRE PETITION LIABILITES 9,662,450 9,662,069 9,661,685
Accrued Restructuring 364,055 321,395 274,694
Deferred Revenue 4,444,846 4,132,160 3,798,366
Income Taxes Payable 2,335 2,335 3,128
---------- --------- ---------
TOTAL LIABILITES 19,895,796 19,712,443 19,512,390
MINORITY INTEREST 4,832 4,832 6,386
SHAREHOLDERS' EQUITY (DEFICIT):
PREFERRED STOCK 0 0 0
COMMON STOCK 260,570 260,570 260,570
PAID - IN CAPITAL 120,073,391 120,073,391 120,073,391
ACCUMULATED DEFICIT:
Through Filing Date (101,539,684)(101,539,684) (101,539,684)
Post Filing Date - 1994 (10,077,840) (10,077,840) (10,077,840)
Post Filing Date - 1995 (4,253,360) (4,082,399) (4,450,888)
----------- ------------ ------------
TOTAL ACCUMULATED DEFICIT (115,870,884)(115,699,923) (116,068,412)
---------- ------------ ------------
TOTAL SHAREHOLDERS' EQUITY 4,463,077 4,634,038 4,265,549
TOTAL LIABILITIES AND ---------- ----------- -----------
SHAREHOLDERS' EQUITY $24,363,705 $24,351,313 $23,784,325
========== =========== ==========
See Accompanying Notes to Financial Statements.
____________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-2
Comparative Balance Sheets
As Of: OCTOBER 31, 1995
10/31/95
LIABILITIES
POST PETITION LIABILITIES (OPR-4) $4,950,424
PRE-PETITION LIIABILITIES:
Priority Debt 36,319
Secured Debt 4,021,223
Unsecured Debt 5,604,060
---------
TOTAL PRE-PETITION LIABILITIES 9,661,602
Accrued Restructuring 255,755
Deferred Revenue 3,513,689
Income Taxes Payable 3,128
---------
TOTAL LIABILITIES 18,384,598
MINORITY INTEREST 6,386
SHAREHOLDERS' EQUITY (DEFICIT):
PREFERRED STOCK 0
COMMON STOCK 260,570
PAID-IN CAPITAL 120,073,391
ACCUMULATED DEFICIT:
Through Filing Date (101,539,684)
Post Filing Date-1994 (10,077,840)
Post Filing Date-1995 (4,084,052)
---------
TOTAL ACCUMULATED DEFICIT (115,701,576)
-------------
TOTAL SHAREHOLDERS' EQUITY 4,632,385
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $23,023,369
==========
- ----------------------------------------------------------------------------
Case Name: Cambridge Biotech Corporation Form: OPR-3
Case Number: 94-43054
Summary of Accounts Receivable
As of: OCTOBER 31, 1995
0 - 30 31 - 60
TOTAL DAYS DAYS
----------- ---------- ------------
Date of Filing:July 7, 1994 2,813,216.84 2,110,219.71 452,069.57
Allowance for doubtful accts (159,413.23)
Net 2,653,803.61 2,110,219.71 452,069.57
Month: July 31, 1994 2,798,472.98 1,289,104.11 1,238,841.68
Allowance for doubtful accts (153,956.56)
Net 2,644,516.42 1,289,104.11 1,238,841.68
Month: August 31, 1994 2,426,792.24 1,669,036.84 267,054.03
Allowance for doubtful accts (156,701.89)
Net 2,270,090.35 1,669,036.84 267,054.03
Month: Sept. 30, 1994 3,072,351.16 2,402,728.52 365,353.30
Allowance for doubtful accts (156,701.89)
Net 2,915,649.27 2,402,728.52 365,353.30
Month: October 31, 1994 2,456,054.54 1,406,348.28 750,784.77
Allowance for doubtful accts (154,964.89)
Net 2,301,089.65 1,406,348.28 750,784.77
Month: Nov. 30, 1994 2,020,214.59 1,322,881.77 350,696.71
Allowance for doubtful accts (154,988.00)
Net 1,865,226.59 1,322,881.77 350,696.71
Month: Dec. 31, 1994 3,025,812.46 2,407,489.50 389,515.89
Allowance for doubtful accts (150,200.00)
Net 2,875,612.46 2,407,489.50 389,515.89
Month: January 31, 1995 2,712,217.41 1,602,468.56 854,807.89
Allowance for doubtful accts (150,753.71)
Net 2,561,463.70 1,602,468.56 854,807.89
Month: Feb. 28, 1995 2,721,156.82 1,972,020.47 187,953.54
Allowance for doubtful accts (151,582.78)
Net 2,569,574.04 1,972,020.47 187,953.54
Month: March 31, 1995 3,221,150.56 2,380,366.33 671,660.83
Allowance for doubtful accts (148,773.14)
Net 3,072,377.42 2,380,366.33 671,660.83
Month: April 30, 1995 3,111,505.76 1,660,592.76 1,250,431.86
Allowance for doubtful accts (155,829.15)
Net 2,955,676.61 1,660,592.76 1,250,431.86
Month: May 31, 1995 3,123,410.36 2,153,951.07 257,035.14
Allowance for doubtful accts (159,019.25)
Net 2,964,391.11 2,153,951.07 257,035.14
Month: June 30, 1995 3,557,453.25 2,902,109.40 332,562.82
Allowance for doubtful accts (166,019.26)
Net 3,391,433.99 2,902,109.40 332,562.82
Month: July 31, 1995 3,407,884.36 2,212,905.66 982,984.93
Allowance for doubtful accts (173,017.12)
Net 3,234,867.24 2,212,905.66 982,984.93
Month: August 31, 1995 3,179,522.37 2,183,815.66 281,811.74
Allowance for doubtful accts. (180,037.08)
Net 2,999,485.29 2,183,815.66 281,811.74
Month: September 30, ,1995 3,246,157.13 2,482,719.49 515,865.14
Allowance for doubtful accts. (187,341.75)
Net 3,058,815.38 2,482,719.49 515,865.14
Month: October 31, 1995 4,344,760.98 2,458,054.64 1,491,457.97
Allowance for doubtful accts. (194,793.10)
Net 4,149,967.88 2,458,054.64 1,491,457.97
_________________________________________________________________________
Case Name: Cambridge Biotech Corporation Form: OPR-3
Case Number: 94-43054
Summary of Accounts Receivable
As of: OCTOBER 31, 1995
61 - 90 OVER
TOTAL DAYS 90 DAYS
----------- --------- ----------
Date of Filing:July 7, 1994 2,813,216.84 56,398.93 194,528.63
Allowance for doubtful accts (159,413.23) (159,413.23)
Net 2,653,803.61 56,398.93 35,115.40
Month: July 31, 1994 2,798,472.98 128,524.10 142,003.09
Allowance for doubtful accts (153,956.56) (11,953.47) (142,003.09)
Net 2,644,516.42 116,570.63 0.00
Month: August 31, 1994 2,426,792.24 297,637.99 193,063.38
Allowance for doubtful accts (156,701.89) (156,701.89)
Net 2,270,090.35 297,637.99 36,361.49
Month: Sept. 30, 1994 3,072,351.16 77,168.82 227,100.52
Allowance for doubtful accts (156,701.89) (156,701.89)
Net 2,915,649.27 77,168.82 70,398.63
Month: October 31, 1994 2,456,054.54 87,405.93 211,515.56
Allowance for doubtful accts (154,964.89) (154,964.89)
Net 2,301,089.65 87,405.93 56,550.67
Month: Nov. 30, 1994 2,020,214.59 188,381.49 158,254.62
Allowance for doubtful accts (154,988.00) (154,988.00)
Net 1,865,226.59 188,381.49 3,266.62
Month: Dec. 31, 1994 3,025,812.46 65,733.45 163,073.62
Allowance for doubtful accts (150,200.00) (150,200.00)
Net 2,875,612.46 65,733.45 12,873.62
Month: January 31, 1995 2,712,217.41 92,582.75 162,358.21
Allowance for doubtful accts (150,753.71) (150,753.71)
Net 2,561,463.70 92,582.75 11,604.50
Month: Feb. 28, 1995 2,721,156.82 407,769.97 153,412.84
Allowance for doubtful accts (151,582.78) (151,582.78)
Net 2,569,574.04 407,769.97 1,830.06
Month: March 31, 1995 3,221,150.56 45,696.46 123,426.94
Allowance for doubtful accts (148,773.14) (25,346.20) (123,426.94)
Net 3,072,377.42 20,350.26 0.00
Month: April 30, 1995 3,111,505.76 103,220.04 97,261.10
Allowance for doubtful accts (155,829.15) (58,568.05) (97,261.10)
Net 2,955,676.61 44,651.99 0.00
Month: May 31, 1995 3,123,410.36 631,903.39 80,520.76
Allowance for doubtful accts (159,019.25) (78,498.49) (80,520.76)
Net 2,964,391.11 553,404.90 0.00
Month: June 30, 1995 3,557,453.25 52,189.56 270,591.47
Allowance for doubtful accts (166,019.26) (166,019.26)
Net 3,391,433.99 52,189.56 104,572.21
Month: July 31, 1995 3,407,884.36 125,622.71 86,371.06
Allowance for doubtful accts (173,017.12) (86,646.06) (86,371.06)
Net 3,234,867.24 38,976.65 0.00
Month: August 31, 1995 3,179,522.37 559,210.76 154,684.21
Allowance for doubtful accts. (180,037.08) (25,352.87) (154,684.21)
Net 2,999,485.29 533,857.89 0.00
Month: September 30, 1995 3,246,157.13 84,128.64 163,443.86
Allowance for doubtful accts (187,341.75) (23,897.89) (163,443.86)
Net 3,058,815.38 60,230.75 0.00
Month: October 31, 1995 4,344,760.98 230,772.04 164,476.33
Allowance for doubtful accts (194,793.10) (30,316.77) (164,476.33)
Net 4,149,967.88 200,455.27 0.00
________________________________________________________________________
Case Name: Cambridge Biotech Corporation Form OPR-4
Case Number: 94-43054
Schedule of Post Petition Liabilities
As of: OCTOBER 31, 1995
DATE DATE TOTAL 0-30 31-60
INCURRED DUE DUE DAYS DAYS
TAXES PAYABLE:
Federal Income Taxes W/H 0
FICA-Employer's Share 0
FICA-Employee's Share W/H 0
Unemployment Tax 0
State Income Tax Withheld 0
State Sales & Use Tax Various Various 5,155 1,155 2,000
State Franchise Tax Various Various 3,998 1,573 1,000
Real Estate and
Personal Property Tax Various Various 53,344 9,344 9,000
------ ------ -----
TOTAL TAXES PAYABLE 62,497 12,072 12,000
POST PETITION
SECURED DEBT 0 0
POST PETITION
UNSECURED DEBT 0 0
ACCRUED INTEREST
PAYABLE Various Various 24,286 3,286 3,000
TRADE ACCOUNTS
PAYABLE & OTHER:
Accounts Payable Various Various 514,400 341,777 20,977
Accrued Expenses Various Various 2,920,416 875,416 430,000
Accrued Stock
Incentive Plan 7/8/94 Emerge 1,428,825
from
Ch. 11
TOTAL ACCOUNTS --------- --------- -------
PAYABLE & OTHER 4,863,641 2,646,018 450,977
--------- --------- -------
TOTAL POST PETITION LIABILITIES $4,950,424 $2,661,376 $465,977
========= ========= =======
_______________________________________________________________________________
Case Name: Cambridge Biotech Corporation Form OPR-4
Case Number: 94-43054
Schedule of Post Petition Liabilities
As of: OCTOBER 31, 1995
DATE DATE TOTAL 61-90 OVER 90
INCURRED DUE DUE DAYS DAYS
TAXES PAYABLE:
Federal Income Taxes W/H 0
FICA-Employer's Share 0
FICA-Employee's Share W/H 0
Unemployment Tax 0
State Income Tax Withheld 0
State Sales & Use Tax Various Various 5,155 2,000
State Franchise Tax Various Various 3,998 1,000 425
Real Estate and
Personal Property Tax Various Various 53,344 9,000 26,000
------ ----- -----
TOTAL TAXES PAYABLE 62,497 12,000 26,425
POST PETITION
SECURED DEBT 0 0
POST PETITION
UNSECURED DEBT 0 0
ACCRUED INTEREST
PAYABLE Various Various 24,286 3,000 15,000
TRADE ACCOUNTS
PAYABLE & OTHER:
Accounts Payable Various Various 514,400 111,712 39,934
Accrued Expenses Various Various 2,920,416 390,000 1,225,000
Accrued Stock
Incentive Plan 7/8/94 Emerge 1,428,825 1,428,425
from
Ch. 11
TOTAL ACCOUNTS --------- ------- ---------
PAYABLE & OTHER 4,863,641 501,712 1,264,934
--------- ------- ---------
TOTAL POST PETITION LIABILITIES $4,950,424 $516,712 $1,306,359
========= ======= =========
_____________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-5
Income Statement
Period: July 8, 1994 - October 31, 1995
7/8-31/94 August September
NET REVENUE (INCOME) $1,990,463 $1,297,330 $2,870,689
COST OF GOODS SOLD:
Materials
Labor - Direct
Manufacturing Overhead
TOTAL COST OF GOODS SOLD 677,628 872,451 1,424,705
--------- ------- -------
GROSS PROFIT 1,312,835 424,879 1,445,984
OPERATING EXPENSES:
Selling and Marketing 86,253 117,890 129,345
General and Administrative 330,964 404,626 548,839
Research and Development 223,590 359,735 288,595
Other: Regulatory 18,336 22,767 18,815
Other: Misc. (Income)/Expense (13,655) (8,693) (45,076)
------- ------- -------
TOTAL OPERATING EXPENSES 645,488 896,325 940,518
INCOME BEFORE INTEREST,
DEPRECIATION, TAXES OR ------- ------- -------
EXTRAORDINARY EXPENSES 667,347 (471,446) 505,466
CHAPTER 11 EXPENSES (97,310) (113,110) (112,501)
INTEREST EXPENSE (27,145) (38,638) (31,839)
DEPRECIATION (244,445) (267,922) (275,730)
INCOME TAX EXPENSE 0 0 0
EXTRAORDINARY
INCOME(EXPENSE) 0 0 (250,000)
------- ------- -------
NET INCOME (LOSS) $298,447 ($891,116) ($164,604)
======= ======= =======
See Accompanying Notes to Financial Statements.
_______________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-5
Income Statement
Period: July 8, 1994 - October 31, 1995
October November December
NET REVENUE (INCOME) $1,089,394 $1,073,137 $3,369,904
COST OF GOODS SOLD:
Materials
Labor - Direct
Manufacturing Overhead
TOTAL COST OF GOODS SOLD 781,526 637,644 1,201,755
------- ------- -------
GROSS PROFIT 307,868 435,493 2,168,149
OPERATING EXPENSES:
Selling and Marketing 130,164 137,154 157,174
General and Administrative 503,279 497,797 931,930
Research and Development 526,086 376,756 871,580
Other: Regulatory 41,259 26,668 32,231
Other: Misc. (Income)/Expense 1,583 (28,619) 929,547
--------- --------- ---------
TOTAL OPERATING EXPENSES 1,202,371 1,009,756 2,922,462
INCOME BEFORE INTEREST,
DEPRECIATION, TAXES OR ------- ------- -------
EXTRAORDINARY EXPENSES (894,503) (574,263) (754,313)
CHAPTER 11 EXPENSES (130,808) (105,473) (42,975)
INTEREST EXPENSE (25,880) (34,149) 131,775
DEPRECIATION (262,043) (261,816) (611,521)
INCOME TAX EXPENSE 0 0 8,493
EXTRAORDINARY
INCOME(EXPENSE) 0 (5,850,985) 87,894
--------- --------- ---------
NET INCOME (LOSS) $(1,313,234) $(6,826,686) $(1,180,647)
========= ========= =========
See Accompanying Notes to Financial Statements.
______________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-5
Income Statement
Period: July 8, 1994 - October 31, 1995
January 1995 February March
NET REVENUE (INCOME) $1,396,377 $1,766,809 $2,778,865
COST OF GOODS SOLD:
Materials
Labor - Direct
Manufacturing Overhead
TOTAL COST OF GOODS SOLD 757,549 920,742 1,509,887
------- ------- ---------
GROSS PROFIT 638,828 846,067 1,268,978
OPERATING EXPENSES:
Selling and Marketing 120,148 116,908 179,619
General and Administrative 502,352 451,508 942,244
Research and Development 404,257 395,094 664,295
Other: Regulatory 33,717 31,186 35,613
Other: Misc.
(Income)/Expense (52,914) (44,031) (43,545)
------- ------- ---------
TOTAL OPERATING EXPENSES 1,007,560 950,665 1,778,226
INCOME BEFORE INTEREST,
DEPRECIATION, TAXES OR ------- ------- -------
EXTRAORDINARY EXPENSES (368,732) (104,598) (509,248)
CHAPTER 11 EXPENSES (98,405) (96,420) (78,629)
INTEREST EXPENSE (32,384) (31,021) 58,559
DEPRECIATION (315,211) (301,785) (299,621)
INCOME TAX EXPENSE 0 4,116 (4,936)
EXTRAORDINARY
INCOME(EXPENSE) 0 0 0
MINORITY INTEREST (703) 0 (1,607)
------- ------- -------
NET INCOME (LOSS) ($815,435) ($529,708) ($835,482)
======= ======= =======
See Accompanying Notes to Financial Statements.
_____________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-5
Income Statement
Period: July 8, 1994 - October 31, 1995
April May June
NET REVENUE (INCOME) $1,642,292 $2,188,446 $2,959,667
COST OF GOODS SOLD:
Materials
Labor - Direct
Manufacturing Overhead
TOTAL COST OF GOODS SOLD 726,804 1,086,787 1,642,248
------- --------- ---------
GROSS PROFIT 915,488 1,101,659 1,317,419
OPERATING EXPENSES:
Selling and Marketing 139,342 152,110 172,675
General and Administrative 490,893 572,129 824,781
Research and Development 392,539 408,496 430,260
Other: Regulatory 17,577 29,652 41,658
Other: Misc.
(Income)/Expense (48,350) (46,132) (83,349)
------- --------- -------
TOTAL OPERATING EXPENSES 992,001 1,116,255 1,386,025
INCOME BEFORE INTEREST,
DEPRECIATION, TAXES OR ------ ------ -------
EXTRAORDINARY EXPENSES (76,513) (14,596) (68,606)
CHAPTER 11 EXPENSES (99,270) (113,541) (123,086)
INTEREST EXPENSE (32,995) (33,974) 63,298
DEPRECIATION (297,462) (295,518) (294,814)
INCOME TAX EXPENSE 0 0 (1,036)
EXTRAORDINARY
INCOME(EXPENSE) 0 0 0
MINORITY INTEREST (2,032)
------- ------- -------
NET INCOME (LOSS) ($506,240) ($457,629) ($426,276)
======= ======= =======
See Accompanying Notes to Financial Statements.
- ----------------------------------------------------------------------------
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR - 5
Income Statement
Period: July 8, 1994 - October 31, 1995
July August September
NET REVENUE (INCOME) $1,938,622 $2,373,327 $2,730,414
COST OF GOODS SOLD:
Materials
Labor - Direct
Manufacturing Overhead
TOTAL COST OF GOODS SOLD 1,101,074 946,529 1,357,642
--------- --------- ----------
GROSS PROFIT 837,548 1,426,798 1,372,772
OPERATING EXPENSES:
Selling and Marketing 134,861 135,741 103,055
General and Administrative 446,284 330,294 918,735
Research and Development 498,460 397,805 414,180
Other:Regulatory 29,266 22,144 29,693
Other:Misc.(Inc)/Exp. (15,202) (7,476) (118,333)
------- ------- ---------
TOTAL OPERATING EXPENSES 1,093,669 878,508 1,347,330
INCOME BEFORE INTEREST,
DEPRECIATION, TAXES OR ------- ------- ---------
EXTRAORDINARY EXPENSES (256,121) 548,290 25,442
CHAPTER 11 EXPENSES (138,916) (97,785) (105,820)
INTEREST EXPENSE (1,589) 6,064 (1,583)
DEPRECIATION (285,964) (285,608) (284,181)
INCOME TAX EXPENSE 0 0 (793)
MINORITY INTEREST 0 0 (1,554)
EXTRAORDINARY
INCOME (EXPENSE) 0 0 0
------- -------- -------
NET INCOME (LOSS) $(682,590) $170,961 ($368,489)
======= ======== =========
See Accompanying Notes to Financial Statements.
_____________________________________________________________________________
CASE NAME: Cambridge Biotech Corporation
CASE NUMBER: 94-43054
Form OPR-5
Consolidated Income Statement
Period: July 8, 1994 - October 31, 1995
FILING
October TO DATE
NET REVENUE (INCOME) $2,795,039 $34,260,775
COST OF GOODS SOLD:
Materials
Labor - Direct
Manufacturing Overhead
TOTAL COST OF GOODS SOLD 1,242,412 16,887,383
--------- ----------
GROSS PROFIT 1,552,627 17,373,392
OPERATING EXPENSES:
Selling and Marketing 81,641 2,094,080
General & Administrative 442,043 9,138,698
Research & Development 364,558 7,016,286
Other:Regulatory 34,632 465,214
Other: Misc. (Income)/Expense (48,377) 327,378
-------- ---------
TOTAL OPERATING EXPENSES 874,497 19,041,656
INCOME BEFORE INTEREST, DEPRECIATION,-------- ---------
TAXES/EXTRAORDINARY EXPENSES 678,130 (1,668,264)
CHAPTER 11 EXPENSES (25,411) (1,579,460)
INTEREST EXPENSE (1,607) (33,108)
DEPRECIATION (284,276) (4,867,917)
INCOME TAX EXPENSE 0 5,844
MINORITY INTEREST 0 (5,896)
EXTRAORDINARY INCOME (EXPENSE) 0 (6,013,091)
-------- ---------
NET INCOME (LOSS) 366,836 (14,161,892)
======== ============
- ---------------------------------------------------------------------------
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-6
Statement of Sources and Uses of Cash
Period of: July 8, 1994 - October 31, 1995
July 8-
July 31 August September
SOURCES OF CASH:
Income (Loss) From Operations $298,447 ($891,116) ($164,604)
Add: Depreciation, Amortization
& Other Non-Cash Items 301,164 322,366 542,532
------- ------- -------
CASH GENERATED FROM OPERATIONS 599,611 (568,750) 377,928
Add: Decrease in Assets:
Accounts Receivable 9,288 374,426
Other Receivables 48,564
Inventory 43,400 139,763 598,344
Prepaid Expenses & Deposits 33,235
Property, Plant & Equipment
Patents & Purchased Technology 18,612
Intercompany Receivables 76,315 13,056
Short Term Investments 1,233,746
Proceeds on sale of foreign
subsidiary
Proceeds on sale of minority interest
Proceeds on note receivable
Other non-current assets 123
Increase in Liabilities:
Pre-Petition Liabilities 1,742 52,055
Post-Petition Liabilities 650,372 490,679 356,419
Deferred Revenue
--------- ------- ---------
TOTAL SOURCES OF CASH (A) 1,380,851 517,917 2,650,160
USES OF CASH:
Increase in Assets:
Accounts Receivable 565,559
Other Receivables 29,508 61,767
Intercompany Receivables 107,393
Inventory
Prepaid Expenses & Deposits 217,794 193,023
Patents & Purchased Technology
Property, Plant & Equipment 2,325 3,197 37,492
Other non-current assets 2,378 17,329
Short Term Investments 1,603,000 310,000
Decrease in Liabilities:
Pre-Petition Liabilities 41,290 135,711
Post-Petition Liabilities
Accrued Restructuring 1,886 3,341 304
Deferred Revenue 750,000
Secured Debt and Capital Leases 266 347 1,007,578
--------- ------- ---------
TOTAL USES OF CASH (B) 1,896,069 426,656 2,768,763
------- ------- -------
NET SOURCE (USE) OF CASH (A-B=NET) (515,218) 91,261 (118,603)
CASH - BEGINNING BALANCE (See OPR-1) 1,287,187 771,969 863,230
------- ------- -------
CASH - ENDING BALANCE (See OPR-1) $771,969 $863,230 $744,627
======= ======= =======
See Accompanying Notes to Financial Statements
_____________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-6
Statement of Sources and Uses of Cash
Period of: July 8, 1994 - October 31, 1995
October November December
SOURCES OF CASH:
Income (Loss) From Operations ($1,313,234)($6,826,686) ($1,180,647)
Add: Depreciation, Amortization
& Other Non-Cash Items 695,379 5,591,211 813,729
------- ------- -------
CASH GENERATED FROM OPERATIONS (617,855) (1,235,475) (366,918)
Add: Decrease in Assets:
Accounts Receivable 539,309 435,863
Other Receivables 47,594
Inventory 347,499
Prepaid Expenses & Deposits 74,073 212,966
Property, Plant & Equipment 80,647 3,090 2,585,034
Patents & Purchased Technology 449,705
Intercompany Receivables 703 1,670
Short Term Investments
Proceeds on sale of foreign
subsidiary 1,982,685 100,000
Proceeds on sale of minority interest 534,125
Proceeds on note receivable 120,000
Other non-current assets 38,056
Increase in Liabilities:
Pre-Petition Liabilities 1,904 230,000 120,000
Post-Petition Liabilities 168,807 557,512 101,997
Deferred Revenue 88,212 3,528,549 152,057
------- --------- --------
TOTAL SOURCES OF CASH (A) 335,800 6,037,579 3,908,430
USES OF CASH:
Increase in Assets:
Accounts Receivable 1,006,666
Other Receivables 31,479 30,955
Intercompany Receivables 28,561
Inventory 154,467 168,891
Prepaid Expenses & Deposits 205,424
Patents & Purchased Technology 1,756 93,988
Property, Plant & Equipment 6,513
Other non-current assets 7,638 34,059
Short Term Investments 743,182 3,773,500 1,878,285
Decrease in Liabilities:
Pre-Petition Liabilities 3,492 52,419
Post-Petition Liabilities
Accrued Restructuring 20,445 0 1,440,034
Deferred Revenue 1,202,600
Secured Debt and Capital Leases 352 355 358
------- --------- ---------
TOTAL USES OF CASH (B) 959,319 4,180,223 5,745,877
------- --------- ---------
NET SOURCE (USE) OF CASH (A-B=NET) (623,519) 1,857,356 (1,837,447)
CASH - BEGINNING BALANCE (See OPR-1) 744,627 121,108 1,978,464
------- --------- -------
CASH - ENDING BALANCE (See OPR-1) $121,108 $1,978,464 $141,017
======= ========= =======
See Accompanying Notes to Financial Statements
____________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-6
Statement of Sources and Uses of Cash
Period of: July 8, 1994 - October 30, 1995
January February March
SOURCES OF CASH:
Income (Loss) From
Operations ($815,435) ($529,708) ($835,482)
Add: Depreciation,
Amortization & Other
Non-Cash Items 110,375 140,458 424,199
CASH GENERATED FROM ------- ------- -------
OPERATIONS (705,060) (389,250) (411,283)
Add: Decrease in Assets:
Accounts Receivable 310,429
Other Receivables 14,602 17,407
Inventory 157,065
Prepaid Expenses &
Deposits
Property, Plant &
Equipment
Patents & Purchased
Technology
Intercompany Receivables 510
Short Term Investments 225,000 12,091 1,680,000
Proceeds on sale of
foreign subsidiary
Proceeds on sale of
minority interest
Proceeds on note receivable
Other non-current assets
Increase in Liabilities:
Pre-Petition Liabilities 1,923 4,116
Post-Petition
Liabilities 351,983 194,519 67,852
Minority Interests 1,193 1,607
Deferred Revenue
------- ------ ---------
TOTAL SOURCES OF CASH (A) 198,657 (6,245) 1,342,292
USES OF CASH:
Increase in Assets:
Accounts Receivable 122,838 502,803
Other Receivables 12,804
Intercompany Receivables
Inventory 101,062 56,506
Prepaid Expenses &
Deposits 20,763 74,783 267,061
Patents & Purchased
Technology
Property, Plant &
Equipment 6,035 11,790 100,880
Other non-current assets
Short Term Investments
Decrease in Liabilities:
Pre-Petition Liabilities 40,984 7,256
Post-Petition Liabilities 104,642
Accrued Restructuring 0 3,607 2,660
Secured Debt and
Capital Leases 361 363 367
------- ------- -------
TOTAL USES OF CASH (B) 169,205 219,881 1,072,421
NET SOURCE (USE) OF CASH
(A-B=NET) 29,452 (226,126) 269,871
CASH-BEGINNING BALANCE
(See OPR-1) 141,017 170,469 (55,657)
CASH-ENDING BALANCE ------ ------- -------
(See OPR-1) $170,469 ($55,657) $214,214
====== ======= =======
See Accompanying Notes to Financial Statements.
_____________________________________________________________________________
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR-6
Statement of Sources and Uses of Cash
Period of: July 8, 1994 - October 31, 1995
April May June
SOURCES OF CASH:
Income (Loss) From
Operations ($506,240) ($457,629) ($426,276)
Add: Depreciation,
Amortization & Other
Non-Cash Items 171,744 166,848 407,066
CASH GENERATED FROM ------- ------- -------
OPERATIONS (334,496) (290,781) (19,210)
Add: Decrease in Assets:
Accounts Receivable 116,700
Other Receivables 1,797 3,267
Inventory 132,723 17,228
Prepaid Expenses &
Deposits 26,897
Property, Plant &
Equipment 630
Patents & Purchased
Technology
Intercompany Receivables
Short Term Investments 317,117 110,759 74,850
Proceeds on sale of
foreign subsidiary
Proceeds on sale of
minority interest
Proceeds on note receivable
Other non-current assets
Increase in Liabilities:
Pre-Petition Liabilities 4,491
Post-Petition Liabilities 95,350 112,840 418,355
Minority Interests 2,032
Deferred Revenue
------- ------ -------
TOTAL SOURCES OF CASH (A) 195,301 67,338 527,910
USES OF CASH:
Increase in Assets:
Accounts Receivable 8,714 427,043
Other Receivables 3,090
Intercompany Receivables
Inventory 87,322
Prepaid Expenses &
Deposits 30,676 32,257
Patents & Purchased
Technology 14,994 18,615 97,846
Property, Plant &
Equipment 18,737 17,629
Other non-current assets
Short Term Investments
Decrease in Liabilities:
Pre-Petition Liabilities 16,165
Post-Petition Liabilities 82,235 4,431
Accrued Restructuring 975 4,840
Secured Debt and
Capital Leases 369 373 375
------- ------ -------
TOTAL USES OF CASH (B) 235,826 83,127 547,733
NET SOURCE (USE) OF CASH ------ ------ ------
(A-B=NET) (40,525) (15,789) (19,823)
CASH-BEGINNING BALANCE
(See OPR-1) 214,214 173,689 157,900
CASH-ENDING BALANCE ------ ------ ------
(See OPR-1) $173,689 $157,900 $138,077
====== ====== ======
See Accompanying Notes to Financial Statements.
- -----------------------------------------------------------------------------
Case Name: Cambridge Biotech Corporation
Case Number: 94-43054
Form OPR - 6
Statement of Sources and Uses of Cash
Period of: July 8, 1994 - October 31, 1995
July August September
SOURCES OF CASH: ------ ------- ---------
Operations $(682,590) $170,961 ($368,489)
Amortization & Other
Non-Cash Items 1,241 (31,548) 273,879
CASH GENERATED FROM ------- -------- ---------
OPERATIONS (681,349) 139,413 (94,610)
Add: Decrease in Assets:
Accounts Receivables 156,567 235,382 44,430
Other Receivables 3,364
Inventory 159,020 62,057
Prepaid Expenses &
Deposits 71,283
Property, Plant &
Equipment
Patents & Purchased
Technology
Intercompany Receivables
Short Term Investments 3,503 175,931
Proceeds on sale of
foreign subsidiary
Proceeds on sale of
minority interest
Proceeds on note receivable
Other non-current assets
Increase in Liabilities:
Pre-Petition Liabilities 4,339
Post-Petition Liabilities 519,932 172,374 180,826
Minority Interests 1,554
Deferred Revenue
------- ------- -------
TOTAL SOURCES OF CASH (A) 233,295 609,226 311,495
USES OF CASH:
Increase in Assets:
Accounts Receivable 103,760
Other Receivables 1,408 2,555 9,243
Intercompany Receivables
Inventory 420,997
Prepaid Expenses &
Deposits 196,495 28,090
Patents & Purchased
Technology 18,964
Property, Plant &
Equipment 23,114 18,408 22,319
Other non-current assets
Short Term Investments 242,478
Decrease in Liabilities:
Pre-Petition Liabilities
Post-Petition Liabilities
Accrued Restructuring 2,035 42,660 46,702
Secured Debt and
Capital Leases 378 381 384
------ ------- -------
TOTAL USES OF CASH (B) 26,935 521,941 631,495
NET SOURCE (USE) OF CASH ------- ------- -------
(A-B=NET) 206,360 87,285 (320,000)
CASH - BEGINNING BALANCE
(See OPR-1) 138,077 344,437 431,722
CASH - ENDING BALANCE ------- ------- -------
(See OPR-1) $344,437 $431,722 $111,722
======= ======== =======
See Accompanying Notes to Financial Statements.
_____________________________________________________________________________
CASE NAME: Cambridge Biotech Corporation
CASE NUMBER: 94-43054
Form OPR-6
Statement of Sources and Uses of Cash
Period of: July 8, 1994 - October 31, 1995
7/8/94-
October 10/31/95
SOURCES OF CASH:
Income (Loss) From Operations $366,836 ($14,161,892)
Add: Depreciation, Amortization
& Other Non-Cash Items 101,327 10,031,970
------- ----------
CASH GENERATED FROM OPER. 468,163 (4,129,922)
Add: Decrease in Assets:
Accounts Receivable 2,222,394
Other Receivables 136,595
Inventory 179,738 1,836,837
Prepaid Expenses & Deposits 609,052 1,027,506
Property, Plant & Equipment 2,669,401
Patents & Purchased Tech. 468,317
Intercompany Receivables 92,254
Short-Term Investments 807,411 4,640,408
Proceeds on sale of
foreign subsidiary 2,082,685
Proceeds on sale of
minority interest 534,125
Proceeds on note receivable 120,000
Other non-current assets 38,179
Increase in Liabilities:
Pre-Petition Liabilities 305 420,875
Post-Petition Liabilities 4,439,817
Minority Interest 6,386
Deferred Revenue 3,768,818
------- ---------
TOTAL SOURCES OF CASH (A) 2,064,669 20,374,675
USES OF CASH:
Increase in Assets:
Accounts Receivable 1,091,153 3,828,536
Other Receivables 2,117 184,926
Intercompany Receivables 135,954
Inventory 989,245
Prepaid Expenses & Deposits 1,266,366
Patents & Purchased Technology 12,524 282,629
Property, Plant & Equipment 67,791 336,230
Other non-current assets 61,404
Short Term Investments 8,550,445
Decrease in Liabilities:
Pre-Petition Liabilities 297,317
Post-Petition Liabilities 820,761 1,012,069
Accrued Restructuring 18,939 1,588,428
Deferred Revenue 1,952,600
Secured Debt & Capital
Leases 388 1,012,995
------- ---------
TOTAL USES OF CASH (B) 2,013,673 21,499,144
------- ---------
NET SOURCE (USE) OF CASH (A-B=NET) 50,996 (1,124,469)
CASH-BEGINNING BALANCE (See OPR-1) 111,722 1,287,187
------- ---------
CASH-ENDING BALANCE (See OPR-1) 162,718 $162,718
======= =======
- ----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. The Company's auditors have completed the December 31, 1994 year end
audit. The Company has restated its Monthly Operating Reports to
reflect the 1994 audit adjustments. Changes have been made to prior
periods to reflect these adjustments in 1994 and the effect of those
adjustments on the 1995 monthly financial statements.
2. The Company's monthly inventory valuations for 1995 and the amount of
reserves reflect management's best judgement. However the Company is
currently reviewing its inventory valuations. The Company has plans to
conduct physical inventories at its Rockville, MD; Shrewsbury, MA; and
Worcester, MA facilities. The physical counts and management's review
may result in adjustments to the monthly inventory valuations. Manage-
ment believes that these adjustments will not have a material effect on
the results of operations, cash flow, or financial position of the
Company.
3. As part of the 1994 year end audit, the Company has written down its
investment in GRF Corporation to a carrying value of $110,075, which was
GRF's cash on hand at December 31, 1994.
4. On November 30, 1994, the Company sold its Irish subsidiary, Cambridge
Biotech, Ltd., to SelfCare, Inc. The loss of the discontinued opera-
tions and the disposition of the subsidiary were included in the 1994
audited financial statements.
5. The Company entered into an agreement with BASF Bioresearch Corporation
for them to manufacture three batches of QS-21 product including Good
Manufacturing Practice (GMP) documentation. The agreement calls for
an initial payment of $175,000 plus milestone payments totaling an
additional $525,000. Included in the March 1995 results is the initial
payment of $175,000. The balance of $525,000 was being held in escrow
and is included in Prepaid expenses and Deposits in the accompanying
balance sheet (Form OPR-1). The July 1995 results include an accrual
for $175,000 for the first mildestone payment. In September 1995, the
Company accounted for the second and third milestone payments totaling
$350,000 by recording inventory of $276,750 and research expense of
$73,250. Upon receiving the QS-21 product in October 1995, the Company
authorized the release of the $525,000 held in the escrow account for
payment to BASF.
6. In September 1992, the Company purchased a 15% interest in ImmuCell
Corporation for $600,000, and had advanced $120,000 to ImmuCell
between June 1993 and April 1994. As a result of negotiations with
ImmuCell in September 1994, the carrying value of the Company's
investment was reduced by $250,000 to reflect an estimate of the net
realizable value. In November 1994, the carrying value of the
investment was further reduced to $308,571, which the Company received
in December 1994 from ImmuCell to purchase all of the shares owned
by the Company. The $120,000 advance was paid in full in December
1994.
7. On October 27, 1994, the Company's plan to institute a retention
bonus plan for some of its employees was approved by the United
States Bankruptcy Court for the District of Massachusetts. The
plan called for bonuses to be paid in stock of the reorganized
Company upon emergence from Chapter 11 reorganization. As of
October 31, 1995, the Company has recorded compensation expense
of $1,428,825, which is a non-cash expense.
8. On July 7, 1994, the date of the Company's Chapter 11 filing,
it had a $1,007,228 note payable to Fleet Credit Corporation (Fleet)
secured by $1,025,553 of certificates of deposit pledged to Fleet.
The certificates of deposit matured and were used to liquidate the
debt in accordance with relief from stay granted by the Court.
Included in the Company's short-term investment balances for July 7,
July 31, and August 31, 1994 were $1,025,553 of CD's pledged to
Fleet Credit Corporation.
9. On March 8, 1995, an Adversary Proceeding No. 95-4074 was commenced
in the United States Bankruptcy Court, District of Massachusetts,
Western Division, by Institut Pasteur and Genetic Systems Corporation
alleging patent infringement and asking for damages and injunctive
relief. The Company filed an answer and counterclaim denying the
plaintiffs' allegations and seeking a declaration of the Company's
license rights to two of the three patents at issue. On September 1,
1995, the United States Bankruptcy Court issued summary judgment
upholding the Company's license to two patents issued to Institut
Pasteur to commercialize diagnostic tests for the HIV-2 strain of
the AIDS virus. The Court also ruled that the Company's HIV-1
Western blot confirmatory test for HIV-1 infringes a third patent
issued to Institut Pasteur, and enjoined the Company from the
manufacture and sale of the HIV-1 Western blot test. The Company
has appealed the portion of the opinion relating to the patent
covering the HIV-1 Western blot test and the injunction has been
stayed pending further proceedings. Institut Pasteur and Genetic
Systems Corporation have appealed the Bankruptcy Court's decision
on Institut Pasteur's patents concerning HIV-2. On November 22 and
30, 1995, the Bankruptcy Court held a hearing to assess damages with
respect to the third patent. The Company is also seeking to obtain
a license to the third patent from Institut Pasteur. The HIV-1
Western blot test accounted for less than 15% of the Company's
diagnostic revenues in 1994.
10. In September 1995, the Company received correspondence from one of
its customers claiming that the Company owes it payments totaling
$837,220 representing claimed adjustments to the invoiced prices
of product sold to the customer during the first seven and one-half
months of 1995. As the Company sold product at prices which the
Company believes were agreed to among the parties and which were
reflected on purchase orders prepared by the customer, the Company
vigorously disputes this claim and has communicated this position
to the customer. Although the Company is unable to predict with
certainty the outcome of this claim, the Company believes that it
is probable that it will arrive at a resolution to this matter
which will not materially adversely affect the Company's financial
position.
