<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 June 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO 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 August 11, 1995, there were issued and outstanding 1,742,206
shares of common stock of the registrant.
Page 1 of 14 Pages
<PAGE> 2
Nu-Tech Bio-Med, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,068,877 $ 3,803,189
Accounts receivable - (net of allowance for uncollectible
claims of approximately $19,615 and $23,600 at June 30,
1995 and at December 31, 1994, respectively) 47,785 29,850
Prepaid expenses and other current assets 67,443 25,610
-------------------------------------
Total current assets 3,184,105
3,858,649
Equipment and leasehold improvements, net 238,121 38,236
Patents (net of accumulated amortization of approximately
$67,944 and $62,700 at June 30, 1995 and
December 31, 1994 respectively 116,672 107,180
Goodwill (net of accumulated amortization of approximately
$403,684 and $366,200 at June 30, 1995 and
December 31, 1994 respectively 346,316 383,816
-------------------------------------
Total Assets $ 3,885,214 $ 4,387,881
=====================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 196,394 $ 483,888
Contract payable 105,571 105,571
Accrued compensation 23,999 130,990
Current portion of long term debt 192,004 192,149
-------------------------------------
Total current liabilities 517,968 912,598
Debt 419,471 516,767
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, 1,648,832 and 1,429,128 shares issued and
outstanding at June 30, 1995 and December 31, 1994 16,488 14,291
Capital in excess of par value 16,335,488 14,724,150
Unvested stock grants (940,866) -
Deficit accumulated during the development stage (12,468,875) (11,787,565)
-------------------------------------
Total stockholders' equity 2,942,235 2,950,876
-------------------------------------
Total liabilities and stockholders' equity $ 3,885,214 $ 4,387,881
=====================================
</TABLE>
See accompanying notes.
Page 2 of 14 Pages
<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 SIX MONTHS ENDED (INCEPTION TO
JUNE 30 June 30 JUNE 30 JUNE 30 JUNE 30
1995 1994 1995 1994 1995
--------------------------------------------------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues:
Assay sales $ 37,563 $ 46,362 $ 91,334 $ 83,490 $ 1,101,740
Contract revenues - 100 2,100 15,740 732,611
Investment and interest income 47,039 1,462 75,072 2,731 2,330,281
Fee income - - - - 100,000
Other - 40 - 4,310 471,417
--------------------------------------------------------- ------------
Total revenues 84,602 47,964 168,506 106,271 4,736,049
Expenses:
General and administrative 320,084 473,395 618,244 644,603 9,443,187
Lab expense 49,715 30,195 108,651 77,138 1,045,503
Research and development 18,446 15,654 33,906 30,517 4,606,079
Loss on sale of investments - - - - 577,423
Interest 8,723 10,680 18,000 20,233 186,821
Rent 6,090 6,127 12,180 12,255 433,413
Depreciation and amortization 33,272 34,832 58,834 69,416 740,201
Loss (gain) on disposal of equipment,
furniture and fixtures - - - - 34,100
--------------------------------------------------------- ------------
Total expenses 436,330 570,883 849,815 854,162 17,066,728
--------------------------------------------------------- ------------
Loss from continuing operations (351,728) (522,919) (681,309) (747,891) (12,330,679)
Discontinued operations:
Loss on disposition - - - - (112,010)
Loss from discontinued operations - - - - (172,530)
--------------------------------------------------------- ------------
Loss from discontinued operations - - - - (284,540)
--------------------------------------------------------- ------------
Loss before extraordinary item (351,728) (522,919) (681,309) (747,891) (12,615,219)
Extraordinary item:
Gain on forgiveness of debt - - - - 146,344
--------------------------------------------------------- ------------
Net loss $ (351,728) $(522,919) $ (681,309) $(747,891) $(12,468,874)
========================================================= ============
Net loss per common share $ (0.23) $ (0.88) $ (0.46) $ (1.26)
=========================================================
Weighted average common
shares outstanding 1,538,906 599,289 1,484,017 592,263
=========================================================
</TABLE>
See accompanying notes.
Page 3 of 14 Pages
<PAGE> 4
Nu-Tech Bio-Med, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
CUMULATIVE
AMOUNT FROM
FOR THE SIX MONTHS ENDED FEBRUARY 1, 1982
JUNE 30 JUNE 30 (INCEPTION) TO
1995 1994 MARCH 31, 1995
---------------------------- ----------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss ($681,309) $(747,891) $(12,468,874)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation, amortization and accretion $ 58,834 69,416 1,206,356
Common stock issued as compensation 2,884 150,000 2,884
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 (59,768) 115,118 (142,291)
Investment in and advances to affiliate - - (431,802)
Accounts payable and accrued expenses (287,494) 44,041 (76,001)
Accrued compensation ($106,991) 109,515 23,999
Other liabilities - - (76,840)
Deferred income (2,100) 38,800 5,540
--------------------------- ------------
Net cash used in operating activities (1,075,944) (221,001) (11,096,081)
INVESTING ACTIVITIES
Proceeds from sale of equipment - - 10,407
Capital expenditures ($230,712) (12,161) (489,499)
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 (230,712) (12,161) (1,022,234)
FINANCING ACTIVITIES
Proceeds from issuance of notes payable - 125,000 1,116,000
Repayment of notes payable (97,441) (28,214) (288,181)
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 669,785 - 14,607,826
Repayment of note payable to stockholder - - (266,601)
Capitalization of interest on note
payable to stockholder --------------------------- ------------
Net cash provided by financing activities 572,344 96,786 15,187,192
--------------------------- ------------
</TABLE>
See accompanying notes.
Page 4 of 14 Pages
<PAGE> 5
Nu-Tech Bio-Med, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
CUMULATIVE
AMOUNT FROM
FOR THE SIX MONTHS ENDED FEBRUARY 1, 1982
JUNE 30 JUNE 30 (INCEPTION) TO
1995 1994 MARCH 31, 1995
---------------------------- ----------------
<S> <C> <C> <C>
Net increase in cash and cash equivalents (734,312) (136,376) 3,068,877
Cash and cash equivalents at beginning of period 3,803,189 261,015 -
--------------------------- ----------
Cash and cash equivalents at end of period $3,068,877 $ 124,639 $3,068,877
=================================================
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
stock at a value of $30,400 - - 30,400
</TABLE>
See accompanying notes.
Page 5 of 14 Pages
<PAGE> 6
Nu-Tech Bio-Med, Inc. and Subsidiary
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Six Months Ended June 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 June 30, 1995 and the results of operations and cash flows
for the three and six months ended June 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 six month period
ended June 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.
C. Subsequent Event
The Company, during July 1995, completed a private sale of 93,335
shares of its common stock at $6 per share and 35,408 common stock
purchase warrants were issued at $.05 per warrant for aggregate gross
proceeds of approximately $561,800, with expenses of approximately
$43,000, for net proceeds of approximately $518,800.
Page 6 of 14 Pages
<PAGE> 7
Nu-Tech Bio-Med, Inc. and Subsidiary
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Six Months Ended June 30, 1995
(Unaudited)
The following table sets forth information of the Company as of June 30, 1995 on
an actual and pro forma basis taking into consideration the July 1995 private
placement offering.
<TABLE>
<CAPTION>
June 30, 1995
-------------
Actual Pro Forma
------ ---------
<S> <C> <C>
Cash and Cash Equivalents $3,068,877 $3,587,677
Working Capital $2,666,136 $3,184,936
Total Assets $3,885,214 $4,404,014
Total Stockholders' Equity $2,942,235 $3,461,035
</TABLE>
(This space intentionally left blank)
Page 7 of 14 Pages
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three months ended June 30, 1995, compared with three months ended June
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 June
30, 1995, were $84,602 compared to $47,964 for the three months ended June 30,
1994. This increase in total revenues is due to the receipt by the Company of
approximately $47,000 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 and April 1995 private sale of securities.
Assay sales, net of billing adjustments, for the processing of the
Fluorescent Cytoprint Assay by Analytical Biosystems Corporation ("ABC"), a
wholly owned subsidiary of the Company, were $37,563 for the three months ended
June 30, 1995 as compared to $46,362 for the three months ended June 30, 1994.
This decrease of $8,799 was due to a reduced number of assays received for
processing.
General and administrative expenses for the three months ended June 30,
1995, were $320,084 compared to $473,395 for the three months ended June 30,
1994. This decrease of $153,311 was due to a one time bonus paid in relation to
the hiring of the Company's new Chief Executive Officer during the quarter of
June 1994.
Laboratory expenses for the three months ended June 30, 1995, increased
to $49,715 from $30,195 for the three months ended June 30, 1994. This increase
of $19,520 is primarily due to general salary increases as well as the addition
of personnel to prepare for assay work associated with upcoming clinical trials.
Research and development expenses of $18,446 for the three months ended
June 30, 1995 as compared to $15,654 for the three months ended June 30, 1994
were substantially unchanged. These expenses were primarily associated with work
in connection with the reconfiguration of ABC's image system.
For the three months ended June 30, 1995, the Company incurred a net
loss of $351,728 ($0.23 per share) compared to a net loss of $522,919 ($0.88 per
share) for the three months ended June 30, 1994. The decrease of $171,191 is due
to a combination of a decrease in general and administrative expenses as well as
an increase in interest income. 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 1,538,906 and 599,289 for the three months ended
June 30, 1995 and June 30, 1994, respectively. This increase is primarily due to
the issuance of shares associated with the Company's December 1994 public
offering and April 1995 private sale of securities.
Six months ended June 30, 1995, compared with six months ended June 30,
1994
Total revenues for the six months ended June 30, 1995, were $168,506
compared to $106,271 for the six months ended June 30, 1994. This increase in
total revenues is due to the receipt by the Company of approximately $75,000 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 and April
1995 private sale of securities.
Assay sales, net of billing adjustments, for the processing of the
Fluorescent Cytoprint Assay by Analytical Biosystems Corporation ("ABC"), a
wholly owned subsidiary of the
Page 8 of 14 Pages
<PAGE> 9
Company, were $91,334 for the six months ended June 30, 1995 as compared to
$83,490 for the six months ended June 30, 1994. This increase of $7,844 was due
to an increased number of reimbursable assays received for processing during the
first quarter of 1995.
General and administrative expenses for the six months ended June 30,
1995, were $618,244 compared to $644,603 for the six months ended June 30, 1994.
This decrease of $26,359 was due to a one time bonus paid in relation to the
hiring of the Company's new Chief Executive Officer on June 1, 1994, but was
partially offset by an increase in other general and administrative expenses for
the six months ended June 30, 1995.
Laboratory expenses for the six months ended June 30, 1995, were
$108,651 as compared to $77,138 for the six months ended June 30, 1994. The
increase of $31,513 is primarily due to general salary increases as well as the
addition of personnel to prepare for assay work associated with upcoming
clinical trials.
Research and development expenses of $33,906 for the six months ended
June 30, 1995 as compared to $30,517 for the six months ended June 30, 1994 were
substantially unchanged. These expenses were primarily associated with work in
connection with the reconfiguration of ABC's image system.
For the six months ended June 30, 1995, the Company incurred a net loss
of $681,309 ($0.46 per share) compared to a net loss of $747,891 ($1.26 per
share) for the six months ending June 30, 1994. The decrease of $66,582 is due
to a combination of a decrease in general and administrative expenses as well as
an increase interest income. 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 1,484,107 and 592,263 for the six months ended June 30, 1995
and June 30, 1994, respectively. This increase is primarily due to the issuance
of shares associated with the Company's December 1994 public offering and April
1995 private sale of securities.
Balance Sheet
Total assets amounted to $3,885,214 at June 30, 1995 versus $4,387,881
at December 31, 1994. The period to period decrease of $502,667 was principally
due to a reduction in cash of approximately $734,000 to fund operations, but was
partially offset by the acquisition of equipment net of depreciation of
approximately $200,000.
Total current liabilities, inclusive of the current position of long
term debt, amounted to $517,968 at June 30, 1995 versus $912,598 at December 31,
1994. The period to period decrease of approximately $394,630 was the result of
payments during the period of current obligations.
Liquidity and Capital Resources
At June 30, 1995, the Company's working capital was $2,666,137 compared
to $2,946,051 at December 31, 1994. The decrease in working capital was
primarily due to the utilization of net cash of $279,914 during the period to
support operating activities and the payment and reduction of current
liabilities.
Weighted average shares were 1,484,107 and 592,263 for the six months
ended June 30, 1995 and June 30, 1994, respectively. This increase is primarily
due to the issuance of shares associated with the Company's December 1994 public
offering and April 1995 private sale of securities.
Page 9 of 14 Pages
<PAGE> 10
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 and will be substantially incurred over
the second and third quarters of 1995.
Subsequent to the quarter ended June 30, 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 proceeds realized by the
Company from this transaction have been added to the Company's working capital.
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 for a period of 15 to 18 months.
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 of 14 Pages
<PAGE> 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
27 Financial Date Schedule
</TABLE>
(b) Reports on Form 8-K
During the quarter ended June 30, 1995, the following reports
on Form 8-K were filed by the Registrant:
<TABLE>
<CAPTION>
Date of the Report Item Reported Description of Item
------------------ ------------- -------------------
<S> <C> <C>
May 1, 1995 Item 5. Other Events Agreement relating to Analytical
Biosystems Corporation Imaging
System
Private Sale of Common Stock and
Common Stock Purchase Warrants
June 8, 1995 Item 5. Other Events Grant of Restricted Shares of
Common Stock to Registrant's
President
</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: August 11, 1995 by: /s/ J. Marvin Feigenbaum
--------------------------
J. Marvin Feigenbaum
President, Chief Executive
and Chief Financial Officer
Page 11 of 14 Pages
<PAGE> 12
EXHIBIT INDEX
Exhibit No. Description Page No.
--------- --------------------- -------
EX-27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000716778
<NAME> NU-TECH BIO-MED, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<CASH> 3,068,877
<SECURITIES> 0
<RECEIVABLES> 67,400
<ALLOWANCES> 19,615
<INVENTORY> 11,428
<CURRENT-ASSETS> 3,184,105
<PP&E> 444,758
<DEPRECIATION> 206,637
<TOTAL-ASSETS> 3,885,214
<CURRENT-LIABILITIES> 517,968
<BONDS> 419,471
<COMMON> 16,488
0
0
<OTHER-SE> 16,335,488
<TOTAL-LIABILITY-AND-EQUITY> 3,885,214
<SALES> 96,740
<TOTAL-REVENUES> 168,506
<CGS> 0
<TOTAL-COSTS> 831,815
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5,406
<INTEREST-EXPENSE> 18,000
<INCOME-PRETAX> (681,309)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (681,309)
<EPS-PRIMARY> (0.46)
<EPS-DILUTED> 0
</TABLE>
