<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
------------------
OR
/__/ TRANSITION REPORT PURSUANT OT SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________to________________________
Commission File No. 0-11772
-------
NU-TECH BIO-MED, INC.
---------------------
(Exact name of registrant as specified in its charter)
Delaware 25-1411971
-------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation of organization)
55 Access Road, Warwick, Rhode Island 02886
- ------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (401) 732-6520
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes X No
--- --
As of November 13, 1995, there were issued and outstanding 1,742,155
shares of common stock of the registrant.
<PAGE> 2
Nu-Tech Bio-Med, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1995 1994
-----------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,985,505 $ 3,803,189
Accounts receivable - (net of allowance for uncollectible claims
of approximately $15,698 and $23,600 at September 30,
1995 and at December 31, 1994, respectively) 52,245 29,850
Prepaid expenses and other current assets 115,685 25,610
-----------------------------------------------
Total current assets 3,153,435 3,858,649
Equipment and leasehold improvements (net of accumulated 372,278 38,236
depreciation of approximately $226,900 and $197,000 at
September 30, 1995 and December 31, 1994 respectively)
Patents (net of accumulated amortization of approximately
$70,724 and $62,700 at September 30, 1995 and
December 31, 1994 respectively) 122,491 107,180
Goodwill (net of accumulated amortization of approximately
$422,434 and $366,200 at September 30, 1995 and
December 31, 1994 respectively) 327,566 383,816
------------------------------------------------
Total Assets $ 3,975,770 $ 4,387,881
================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 174,268 $ 483,888
Contract payable 105,571 105,571
Accrued compensation 28,128 130,990
Current portion of long term debt 194,608 192,149
------------------------------------------------
Total current liabilities 502,575 912,598
Debt 369,832 516,767
Deferred income 5,540 7,640
Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000 shares
authorized, none outstanding
Common stock, $.01 par value; 12,000,000 shares
authorized, 1,742,155 and 1,429,128 shares issued and
outstanding at September 30, 1995 and
December 31, 1994 17,421 14,291
Capital in excess of par value 16,842,266 14,724,150
Unvested stock grants (929,070) -
Deficit accumulated during the development stage (12,832,794) (11,787,565)
------------------------------------------------
Total stockholders' equity 3,097,823 2,950,876
------------------------------------------------
Total liabilities and stockholders' equity $ 3,975,770 $ 4,387,881
================================================
</TABLE>
See accompanying notes
<PAGE> 3
Nu-Tech Bio-Med, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
CUMULATIVE
AMOUNT FROM
FEBRUARY 1
1982
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED (INCEPTION TO
SEPTEMBER 30 September 30 SEPTEMBER 30 September 30 SEPTEMBER 30,
1995 1994 1995 1994 1995
-------------------------------------------------------------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Assay sales $ 26,490 $ 35,693 $ 117,824 $ 119,183 $ 1,128,230
Contract revenues - 32,140 2,100 47,880 732,611
Investment and interest income 44,948 76 120,019 2,807 2,375,228
Fee income - - - - 100,000
Other - - - 4,310 471,417
-------------------------------------------------------------- ------------
Total revenues 71,438 67,909 239,943 174,180 4,807,486
Expenses:
General and administrative 321,785 265,810 940,029 930,762 9,764,972
Lab expense 42,092 47,494 150,743 134,800 1,087,595
Research and development 21,625 - 55,532 - 4,627,705
Loss on sale of investments - - - - 577,423
Interest 8,094 10,404 26,094 30,637 194,915
Rent 6,396 6,103 18,576 18,358 439,809
Depreciation and amortization 35,364 34,922 94,198 104,338 775,565
Loss (gain) on disposal of equipment,
furniture and fixtures - - - - 34,100
-------------------------------------------------------------- ------------
Total expenses 435,356 364,733 1,285,172 1,218,895 17,502,083
-------------------------------------------------------------- ------------
Loss from continuing operations (363,918) (296,824) (1,045,229) (1,044,715) (12,694,597)
Discontinued operations:
Loss on disposition - - - - (112,010)
Loss from discontinued operations - - - - (172,530)
-------------------------------------------------------------- ------------
Loss from discontinued operations - - - - (284,540)
-------------------------------------------------------------- ------------
Loss before extraordinary item (363,918) (296,824) (1,045,229) (1,044,715) (12,979,137)
Extraordinary item:
Gain on forgiveness of debt - - - - 146,344
-------------------------------------------------------------- ------------
Net loss $ (363,918) $ (296,824) $ (1,045,229) $ (1,044,715) $(12,832,794)
============================================================== =============
Net loss per common share $ (0.21) $ (0.44) $ (0.66) $ (1.69)
==============================================================
Weighted average common
shares outstanding 1,748,043 672,809 1,578,234 619,407
==============================================================
</TABLE>
See accompanying notes
<PAGE> 4
Nu-Tech Bio-Med, Inc.
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
CUMULATIVE
AMOUNT FROM
FOR THE NINE MONTHS ENDED FEBRUARY 1, 1982
SEPTEMBER 30 SEPTEMBER 30 (INCEPTION) TO
1995 1994 SEPTEMBER 30, 1995
-------------------------------- --------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss (1,045,229) $ (747,891) $ (12,832,794)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation, amortization and accretion $94,198 69,416 1,241,720
Common stock issued as compensation $14,680 150,000 14,680
Loss (gain) on disposal of equipment - - 34,100
Loss on investments - - 349,224
Loss on sale of subsidiary - - 112,010
Losses of affiliated company - - 365,614
Changes in assets and liabilities:
Accounts receivable, prepaids and
other current assets ($112,470) 115,118 (194,993)
Investment in and advances to affiliate - - (431,802)
Accounts payable and accrued expenses ($309,620) 44,041 (98,127)
Accrued compensation ($102,862) 109,515 28,128
Other liabilities - - (76,840)
Deferred income (2,100) 38,800 5,540
-------------------------------- --------------------
Net cash used in operating activities (1,463,403) (221,001) (11,483,540)
INVESTING ACTIVITIES
Proceeds from sale of equipment - - 10,407
Capital expenditures ($387,301) (12,161) (646,088)
Organization Costs - - (19,778)
Purchase of long-term investments and
other assets - - (95,974)
Proceeds from loan receivable from officer - - (20,000)
Cash acquired in purchase of company, net - - (820,390)
Sale of company, net of cash sold - - 413,000
-------------------------------- --------------------
Net cash used in investing activities (387,301) (12,161) (1,178,823)
FINANCING ACTIVITIES
Proceeds from issuance of notes payable - 125,000 1,116,000
Repayment of notes payable (144,476) (28,214) (335,216)
Proceeds from 7% promissory notes - - 400,000
Repayment of 7% promissory notes - - (400,000)
Advances from officer - - 100,000
Repayment of advances from officer - - (100,000)
Proceeds from sale of common stock 1,177,496 - 15,115,537
Repayment of note payable to stockholder - - (266,601)
Capitalization of interest on note
payable to stockholder 18,148
-------------------------------- --------------------
Net cash provided by financing activities 1,033,020 96,786 15,647,868
-------------------------------- --------------------
</TABLE>
See accompanying notes
<PAGE> 5
Nu-Tech Bio-Med, Inc.
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
CUMULATIVE
AMOUNT FROM
FOR THE NINE MONTHS ENDED FEBRUARY 1, 1982
SEPTEMBER 30 SEPTEMBER 30 (INCEPTION) TO
1995 1994 SEPTEMBER 30, 1995
--------------------------------- --------------------
<S> <C> <C> <C>
Net increase in cash and cash equivalents (817,684) (136,376) 2,985,505
Cash and cash equivalents at beginning of period 3,803,189 261,015 -
--------------------------------- --------------------
Cash and cash equivalents at end of period $ 2,985,505 $ 124,639 $ 2,985,505
================================= ====================
Noncash transactions:
During 1989, the Company extinguished a
liability via the issuance of common
stock at a value of $20,000 $ - $ - $ 20,000
During 1990, the Company acquired the
remaining 50% interest in Analytical
Biosystems Corporation with the
issuance of 34,286 shares of common
stock - - 750,000
During 1991, the Company capitalized
$49,869 of accrued interest from 1990
into the note payable to stockholder - - 49,869
During 1991, the Company extinguished
liabilities via the issuance of common - - 30,400
stock at a value of $30,400
</TABLE>
See accompanying notes
<PAGE> 6
Nu-Tech Bio-Med, Inc. and Subsidiary
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Nine Months Ended September 30, 1995
(Unaudited)
A. Basis of Presentation
In the opinion of management of Nu-Tech Bio-Med, Inc. (the "Company"
or "Nu-Tech") the accompanying unaudited financial statements contain
all adjustments necessary to present fairly the financial position of
the Company at September 30, 1995 and the results of operations and
cash flows for the three and nine months ended September 30, 1995 and
1994.
The consolidated financial statements have been prepared in accordance
with the provisions of Statement of Financial Accounting Standards No.
7, "Accounting and Reporting by Development Stage Enterprises" since
the Company's planned principal operations have commenced, but there
has been no significant revenue therefrom. Successful completion of
the Company's development program and its transition to ultimately
attaining profitable operations is dependent upon achieving a level of
sales adequate to support the Company's cost structure.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form
10-QSB and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine month period
ended September 30, 1995 are not necessarily indicative of the results
that may be expected for the year ended December 31, 1995. For
further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form
10-KSB for the year ended December 31, 1994.
B. Unvested Stock Grants
In June 1995, the Company granted 100,000 restricted shares to the
President of the Company that will vest periodically at a rate of
5,000 shares per year subject to certain conditions. The grant has
been accounted for as an increase in common stock and capital in
excess of par value at the fair value of the shares at the date of the
grant offset by an equal charge to equity recorded as an Unvested
Stock Grant.
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three months ended September 30, 1995, compared with three months ended
September 30, 1994
The Company is classified as a development stage company for financial
accounting purposes by reason of the fact that it has not generated significant
revenues from operations to date. Total revenues for the three months ended
September 30, 1995, were $71,438 compared to $67,909 for the three months ended
September 30, 1994. This increase in total revenues is due to the receipt by
the Company of approximately $45,000 of interest income during the quarter,
which interest income was derived from the deposit of the proceeds of the
Company's December 1994 public offering as well as the April and July 1995
private sales of securities; the prior period included the receipt of
approximately $32,000 in contract revenues derived from contracts with
pharmaceutical companies to test drug compounds.
Assay sales, net of billing adjustments, for the processing of the
Fluorescent Cytoprint Assay (FCA) by Analytical Biosystems Corporation ("ABC),
a wholly owned subsidiary of the Company, were $26,490 for the three months
ended September 30, 1995 as compared to $35,693 for the three months ended
September 30, 1994. This decrease of $9,203 was due to a reduced number of
assays received for processing.
General and administrative expenses for the three months ended
September 30, 1995, were $321,785 compared to $265,810 for the three months
ended September 30, 1994. This increase of $55,975 was primarily due to an
increase in consultants expense associated with the Company's efforts to
improve reimbursement for the FCA.
Laboratory expenses for the three months ended September 30, 1995,
decreased to $42,092 from $47,494 for the three months ended September 30,
1994. This decrease of $5,402 is primarily due to a reduced number of assays
received for processing.
Research and development expenses for the three months ended September
30, 1995 were $21,625. These expenses were primarily associated with work in
connection with the reconfiguration of ABC's image system. The Company
incurred no research and development expenses for the three months ended
September 30, 1994.
For the three months ended September 30, 1995, the Company incurred a
net loss of $363,918 ($0.21 per share) compared to a net loss of $296,824
($0.44 per share) for the three months ended September 30, 1994. The increase
of $67,094 is primarily due to increases in general and administrative expenses
as well as research and development expenses. The decrease in the net loss per
common share was primarily due to an increase in the number of weighted average
shares. Weighted average shares were 1,748,043 and 672,809 for the three
months ended September 30, 1995 and September 30, 1994, respectively. This
increase is primarily due to the issuance of shares associated with the
Company's December 1994 public offering as well as the April and July 1995
private sales of securities.
Nine months ended September 30, 1995, compared with nine months ended
September 30, 1994
Total revenues for the nine months ended September 30, 1995, were
$239,943 compared to $174,180 for the nine months ended September 30, 1994.
This net increase of $65,763 in total revenues is due to the receipt of
approximately $120,000 of interest income during the nine month period ending
September 30, 1995, which interest was generated from the deposit of the
proceeds of the Company's December 1994 public offering and April and July 1995
private sales
<PAGE> 8
of securities; the prior period included the receipt of approximately $48,000
in contract revenues derived from contracts with pharmaceutical companies to
test drug compounds.
Assay sales, net of billing adjustments, for the processing of the
Fluorescent Cytoprint Assay (FCA) by Analytical Biosystems Corporation ("ABC),
a wholly owned subsidiary of the Company, of $117,824 for the nine months ended
September 30, 1995 as compared to $119,183 for the nine months ended September
30, 1994 were substantially unchanged.
General and administrative expenses for the nine months ended
September 30, 1995, of $940,029 compared to $930,762 for the nine months ended
September 30, 1994, were substantially unchanged.
Laboratory expenses for the nine months ended September 30, 1995, were
$150,743 as compared to $134,800 for the nine months ended September 30, 1994.
The increase of $15,943 is primarily due to general salary increases.
Research and development expenses for the nine months ended September
30, 1995 were $55,532. The Company incurred no research and development
expenses for the nine months ended September 30, 1994. These expenses were
primarily associated with work in connection with the reconfiguration of ABC's
image system
For the nine months ended September 30, 1995, the Company incurred a
net loss of $1,045,229 ($0.66 per share) compared to a net loss of $1,044,715
($1.69 per share) for the nine months ending September 30, 1994. The decrease
in the net loss per common share was primarily due to an increase in the number
of weighted average shares. Weighted average shares were 1,578,234 and 619,407
for the nine months ended September 30, 1995 and September 30, 1994,
respectively. This increase was primarily due to the issuance of shares
associated with the Company's December 1994 public offering as well as the
April and July 1995 private sales of securities.
Balance Sheet
Total assets amounted to $3,975,770 at September 30, 1995 versus
$4,387,881 at December 31, 1994. The period to period decrease of $412,111 was
principally due to a reduction in cash of $817,684 to fund operations, but was
partially offset by the acquisition of equipment net of depreciation of
approximately $334,000.
Total current liabilities, inclusive of the current portion of long
term debt, amounted to $502,575 at September 30, 1995 versus $912,598 at
December 31, 1994. The period to period decrease of $410,023 was the result of
payments during the period of current obligations.
Liquidity and Capital Resources
At September 30, 1995, the Company's working capital was $2,650,860
compared to $2,946,051 at December 31, 1994. The decrease in working capital
was primarily due to the utilization of net cash of $295,191 during the period
to support operating activities and the payment and reduction of current
liabilities.
Weighted average shares were 1,578,234 and 619,407 for the nine months
ended September 30, 1995 and September 30, 1994, respectively. This increase
is primarily due to the issuance of shares associated with the Company's
December 1994 public offering as well as the April and July 1995 private sales
of securities.
<PAGE> 9
The Company has contracted with a firm to redesign, modify and
implement an improved image system to be used in conjunction with the Company's
FCA technology. The Company anticipates that the costs associated with this
project will be approximately $300,000.
On July 14, 1995, the Company completed the sale of 93,335 shares of
its Common Stock and 35,408 Common Stock Purchase Warrants for aggregate gross
proceeds of $561,800.
The primary sources of the Company's liquidity is its cash on hand
from its December 1994 public offering and proceeds received by it from the
April 1995 and July 1995 private sales of its securities.
Plan of Operations
The Company is classified as a development stage company for financial
reporting purposes and its financial statements are prepared in accordance with
the provision of Statement of Financial Accounting Standards No. 7, "Accounting
and Reporting by Development Stage Enterprises", since the Company's planned
principal operations have commenced, but there has been no significant revenues
therefrom.
The Company believes that its current cash position is adequate and
sufficient for the Company's anticipated needs through the second quarter of
1997. The Company may thereafter, if it has not achieved a positive cash flow,
require additional funds to sustain operations. No assurance may be given that
such additional capital, if required, will be available to the Company in the
future and, if not available, may have adverse effect on the continued
operations of the Company.
Effects of Inflation
Management does not believe that inflationary effects will have a
material impact on the Company. Management does believe, however, that current
governmental proposals for comprehensive health care reform, including mandated
basic health care benefits, controls on health care spending, price controls,
and proposed fundamental changes in the health care delivery system may have an
impact upon the Company. Although the Company believes its FCA to be cost
effective in overall chemotherapy treatment, changes in the level of support by
federal and state governments of health care services, the methods by which
such services may be delivered and the prices for such services may all have a
materially adverse impact on the Company's ability to achieve and sustain a
profit. Health care reform could also reduce the profitability of certain
medical institutions and, in turn, adversely impact the fees the Company is
able to charge for its FCA. The Company cannot predict which, if any, health
care reform plan may be adopted or, if adopted, the effect on its business.
(This space intentionally left blank)
<PAGE> 10
PART II. OTHER INFORMATION
Item 4. Submission of Matters To a Vote of Security Holders
On August 25, 1995, Nu-Tech Bio-Med, Inc. (the "Company") held its
Annual Meeting of Stockholders in Warwick, Rhode Island. Of the 1,648,832
shares of Common Stock entitled to vote as of the Record Date of July 14, 1995,
1,247,643 shares were represented either in person or by proxy (75.6% of the
total shares entitled to vote).
The purpose of the Annual Meeting was to elect one Class 1 Director,
one Class 2 Director and two Class 3 Directors to the Company's Board of
Directors.
The nominees for Director were:
<TABLE>
<CAPTION>
Class 1 Class 2 Class 3
- ------- ------- -------
<S> <C> <C>
Robert Fagenson David A. Sterling Edmund E. Charrette
Chriss W. Street
</TABLE>
The term for Class 1 directors expires at the 1997 Annual Meeting, the term for
Class 2 directors expires at the 1996 Annual Meeting and the term for Class 3
directors expires at the 1998 Annual Meeting.
RESULTS OF VOTING
The Stockholders voted as follows with respect to the election of directors:
<TABLE>
<CAPTION>
Votes For Votes Withheld
--------- --------------
<S> <C> <C>
David A. Sterling 1,244,486 3,157
Robert Fagenson 1,244,486 3,157
Edmund E. Charrette 1,244,486 3,157
Chriss W. Street 1,244,486 3,157
</TABLE>
Of the shares present at the Annual Meeting and entitled to vote, .3% voted
against the Directors nominated for election.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
----------- -----------
27 Financial Data Schedule
(b) Reports on Form 8-K
During the quarter ended September 30, 1995, the following
reports on Form 8-K were filed by the Registrant:
<PAGE> 11
<TABLE>
<CAPTION>
Date of the Report Item Reported Description of Item
- ------------------ ------------- -------------------
<S> <C> <C>
July 14, 1995 Item 5. Other Events Private Sale of Common Stock and
Common Stock Purchase Warrants
August 17, 1995 Item 5. Other Events Listing of Common Stock on the
Boston Stock Exchange
Clinical Trials Agreement
</TABLE>
SIGNATURES
In accordance with requirements of the Securities Exchange Act, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NU-TECH BIO-MED, INC.
(Registrant)
Dated: November, 13, 1995 by: /s/ J. Marvin Feigenbaum
------------------------------
J. Marvin Feigenbaum
President, Chief Executive
and Chief Financial Officer
<PAGE> 12
EXHIBIT INDEX
Exhibit No. Description Page No.
- ---------- ----------- -------
EX-27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Balance
Sheet and Statement of Operations
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,985,505
<SECURITIES> 0
<RECEIVABLES> 67,943
<ALLOWANCES> 15,698
<INVENTORY> 9,085
<CURRENT-ASSETS> 3,153,435
<PP&E> 599,178
<DEPRECIATION> 226,900
<TOTAL-ASSETS> 3,975,770
<CURRENT-LIABILITIES> 502,575
<BONDS> 369,832
<COMMON> 17,421
0
0
<OTHER-SE> (13,761,864)
<TOTAL-LIABILITY-AND-EQUITY> 3,975,770
<SALES> 117,824
<TOTAL-REVENUES> 239,943
<CGS> 0
<TOTAL-COSTS> 1,259,078
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 14,731
<INTEREST-EXPENSE> 26,094
<INCOME-PRETAX> (1,045,229)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,045,229)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,045,229)
<EPS-PRIMARY> (.66)
<EPS-DILUTED> (.66)
</TABLE>
