U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
For the transition period from TO
Commission file number 0-13281
DIAGNON CORPORATION
(Exact name of small business issuer as specified in its charter)
State of Delaware 13-3078199
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9600 Medical Center Drive, Rockville, Maryland 20850
(Address of principal executive office) (Zip Code)
Issuer's telephone number, including area code (301) 251-2801
Not Applicable
(Former name, former address and former fiscal year, 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 during the past 12 months, and (2)
has been subject to such filing requirement for the past 90 days.
Yes X No
Common Stock, $.01 par value per share; authorized 25,000,000 shares; 5,398,244
shares outstanding as of October 4, 1996.
Convertible Preferred Stock, $1.00 par value per share; authorized 325,000
shares; no shares outstanding as of October 4, 1996.
Transitional Small Business Disclosure Format (Check one): Yes No X
<PAGE>
DIAGNON CORPORATION
INDEX
Part I. Financial Information Page
Item 1. Financial Statements.
Consolidated Balance Sheets, May 31, 1996 and
August 31, 1996 (Unaudited) . . . . . . . . . . . . 2
Unaudited Statements of Consolidated Operations for
the Three Months Ended August 31, 1996 and
August 31, 1995 . . . . . . . . . . . . . . . . . . 3
Unaudited Statements of Consolidated Cash Flows
for the Three Months Ended August 31, 1996 and
August 31, 1995 . . . . . . . . . . . . . . . . . . 4
Notes to Financial Statements . . . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis . . . . . . . . . . . 5
Part II. Other Information
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 6
Item 6. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . 6
<PAGE>
DIAGNON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, MAY 31, 1996 AND AUGUST 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
AUGUST 31, MAY 31,
ASSETS 1996 1996
- ------ --------------------- ---------------------
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 81,579 $ 218,543
Accounts receivable:
Trade 1,327,875 930,598
Unbilled 417,834 622,245
Other 19,479 27,425
Prepaid expenses 96,101 71,432
Inventories 52,135 52,755
Deferred income taxes-current 49,000 49,000
--------------------- ---------------------
Total current assets 2,044,003 1,971,998
--------------------- ---------------------
LOANS TO OFFICERS 90,000 90,000
--------------------- ---------------------
FIXED ASSETS:
Leasehold improvements 545,319 543,735
Furniture, fixtures and equipment 2,764,855 2,647,531
--------------------- ---------------------
Total 3,310,174 3,191,266
Less accumulated depreciation
and amortization 1,983,379 1,920,873
--------------------- ---------------------
Fixed assets, net 1,326,795 1,270,393
--------------------- ---------------------
DEFERRED INCOME TAXES-NONCURRENT 793,500 796,500
--------------------- ---------------------
OTHER NONCURRENT ASSETS 102,093 102,093
--------------------- ---------------------
TOTAL $ 4,356,391 $ 4,230,984
===================== =====================
LIABILITIES
CURRENT LIABILITIES:
Borrowings under line of credit $ 327,931
Current maturities of long-term debt 113,918 $ 113,918
Accounts payable 143,973 234,270
Accrued compensation and related costs 165,011 275,794
Accrued income taxes 11,360 3,560
Other accrued liabilities 11,464 11,503
--------------------- ---------------------
Total current liabilities 773,657 639,045
LONG-TERM DEBT 261,245 288,345
--------------------- ---------------------
Total liabilities 1,034,902 927,390
--------------------- ---------------------
STOCKHOLDERS' EQUITY
Convertible preferred stock - par value of
$1.00 per share, 325,000 shares authorized;
no shares issued and outstanding
Common stock - par value of $.01 per share;
25,000,000 shares authorized; 9,602,452
shares issued; 5,398,244 shares outstanding 96,024 96,024
Additional paid-in capital 7,395,015 7,395,015
Accumulated deficit (3,542,193) (3,560,088)
--------------------- ---------------------
Total 3,948,846 3,930,951
Less - treasury stock 4,204,208 shares, at cost (627,357) (627,357)
--------------------- ---------------------
Total stockholders' equity 3,321,489 3,303,594
--------------------- ---------------------
TOTAL $ 4,356,391 $ 4,230,984
===================== =====================
</TABLE>
See notes to financial statements.
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<PAGE>
DIAGNON CORPORATION AND SUBSIDIARIES
UNAUDITED STATEMENTS OF CONSOLIDATED OPERATIONS FOR THE
THREE MONTHS ENDED AUGUST 31, 1996 AND AUGUST 31, 1995
<TABLE>
<CAPTION>
AUGUST 31, AUGUST 31,
1996 1995
--------------- ---------------
<S> <C>
CONTRACT REVENUES $ 2,290,387 $ 2,229,348
--------------- ---------------
OPERATING EXPENSES:
Contract 1,809,915 1,720,861
General and administrative 440,563 440,238
--------------- ---------------
Total 2,250,478 2,161,099
--------------- ---------------
OPERATING INCOME 39,909 68,249
INTEREST INCOME 1,801 4,800
INTEREST EXPENSE (11,815) (7,645)
--------------- ---------------
INCOME BEFORE INCOME TAX 29,895 65,404
PROVISION FOR INCOME TAX 12,000 26,400
--------------- ---------------
NET INCOME $ 17,895 $ 39,004
=============== ===============
INCOME PER SHARE $ 0.00 $ 0.01
=============== ===============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 5,398,244 5,398,244
=============== ===============
</TABLE>
See notes to financial statements.
-3-
<PAGE>
DIAGNON CORPORATION AND SUBSIDIARIES
UNAUDITED STATEMENTS OF CONSOLIDATED CASH FLOWS FOR THE
THREE MONTHS ENDED AUGUST 31, 1996 AND AUGUST 31, 1995
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
August 31, 1996 August 31, 1995
--------------- --------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 17,895 $ 39,004
--------------- --------------
Adjustments to reconcile net income to net cash used for operating activities:
Depreciation and amortization 62,506 71,882
Deferred income taxes 3,000 18,600
Increase in accounts receivable (184,920) (481,157)
Increase in prepaid expenses (24,669) (74,064)
Decrease (increase) in inventories 620 (9,524)
Decrease in other assets 27,553
(Decrease) increase in accounts payable and accrued expenses (201,119) 7,601
Increase in income taxes payable 7,800 1,400
--------------- --------------
Total Adjustments (336,782) (437,709)
--------------- --------------
NET CASH USED FOR OPERATING ACTIVITIES (318,887) (398,705)
--------------- --------------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Capital expenditures (118,908) (154,393)
--------------- --------------
NET CASH USED FOR INVESTING ACTIVITIES (118,908) (154,393)
--------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds under line-of-credit agreement 327,931 424,165
Principal payments under capital lease obligations (27,100) (24,984)
--------------- --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 300,831 399,181
--------------- --------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (136,964) (153,917)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 218,543 210,887
--------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 81,579 $ 56,970
=============== ==============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 10,385 $ 6,836
=============== ==============
Income taxes $ 1,200 $ 6,400
=============== ==============
</TABLE>
See notes to financial statements.
-4-
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Interim Financial Statements
In the opinion of management, all adjustments consisting only of normal
recurring accruals necessary for a fair presentation of such amounts have been
included. The results of operations for the quarter are not necessarily
indicative of results for the year.
Inventories
Inventories are stated at the lower of cost or market.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Summary Analysis
In this first quarter of fiscal year 1997, Diagnon realized net income of
$17,895.
On July 1, 1996, the Company's subsidiary, BIOQUAL, Inc., won a renewal
competition and began work on the National Institute of Child Health and Human
Development contract "Biological Testing Facility". This five year contract
totals $15,015,891.
On July 29, 1996, the Company entered into an Agreement of Sale with ZooQuest
Technologies, LTD. to purchase substantially all of ZooQuest's assets, including
the transfer of the United States Department of Agriculture Licenses (Product
License No. 411 and Facility License No. 411), and the Patent No. 4,911,910
entitled "Purified Equine Immunoglobulins and Method of Use Thereof". The
purchase price of the assets was $5,000 in cash, the forgiveness of
approximately $100,000 in debt (written off as uncollectible in previous fiscal
years) and a royalty of three percent on future sales of Equine Oral and Equine
Intravenous (IV) IgG, and Albumin products (the IV and Albumin products have not
received the necessary regulatory approvals).
This Agreement provides Diagnon with sole control and ownership of the Equine
IgG Lyphomune(TM) and the ability to further develop the technology,
however, there can be no assurance of the development and regulatory approval
of future products.
Results of Operations
For the three months of operations ended August 31, 1996 (the Company's first
quarter), Contract Revenues increased by 2.7%. Contract Operating Expenses
increased 5.2% compared to the prior year primarily due to costs associated with
the production of Equine IgG which the Company began to market and sell during
the last fiscal year and research and development (R&D) expenses related to
certain cancer treatment and drug delivery approaches. General and
Administrative Expenses increased .1%. Total Operating Expenses increased 4.1%
due to the above.
Operating Income decreased 41.5% compared to the prior year as Total Operating
Expenses increased at a greater rate than Contract Revenues. The operating
expense increase was primarily due to increases in costs incurred associated
with the production of Equine IgG and R&D expenses related to certain cancer
treatment and drug delivery approaches as stated above.
-5-
<PAGE>
For this quarter, Diagnon had interest expense of $11,815 compared to interest
expense of $7,645 in the prior year. The increase is primarily attributable to
increased capitalized leases at a higher interest rate.
Liquidity and Capital Resources
Assets
The changes in Cash and Cash Equivalents are detailed in the Statements of
Consolidated Cash Flows on page 4. Accounts Receivable has increased by $184,920
consisting mainly of 1) an increase of $397,277 to Trade Receivables reflecting
a slower than normal collections rate and the August invoicing of $59,157 of
previously unbilled indirect rate variances from prior fiscal years, 2) a
$204,411 decrease in Unbilled Accounts Receivable representing decreases in
reimbursable indirect rate variances of $110,784 and prior year unbilled direct
costs of $93,626 that were billed in June 1996, and 3) a $7,946 decrease to a
receivable from ZooQuest Technologies LTD. Prepaid Expenses increased by $24,669
primarily due to the prepayment of $15,000 in life insurance premiums and
$10,000 in business insurance premiums. An increase in Fixed Assets, net of
Accumulated Depreciation and Amortization, of $56,402 reflects an increase in
fixed asset purchases of $118,908 (mainly nonhuman primate housing units) offset
by depreciation and amortization of $62,506 during this quarter.
Liabilities
In the first three months of operations, Total Liabilities increased $107,512.
This increase is primarily attributable to an increase to Borrowings Under
Line-of-Credit of $327,931 reflecting the increases in Trade Receivables and
Fixed Asset purchases stated above.
The increase above is partially offset by 1) a decrease in Accounts Payable of
$90,297 primarily due to the payment of a one-time rent adjustment from Fiscal
Year 1992 ($51,500) that was outstanding at the end of the last fiscal year, 2)
a decrease in Accrued Compensation and Related Costs of $110,783 reflecting a
shorter payroll accrual period this quarter when compared to the prior year end,
and 3) payments totalling $27,100 on capital leases reducing Long-Term Debt.
The Company believes it has sufficient cash and financing sources to provide for
its ongoing operations and the Company continues to believe that the impact of
inflation, or the absence of it, will have no significant effect on its
operations.
PART II. Other Information
Item 1. LEGAL PROCEEDINGS
None.
Item 6. EXHIBITS
(10) Agreement of Sale by and between ZooQuest Technologies,
LTD. and Diagnon Corporation.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.
DIAGNON CORPORATION
DATE October 9, 1996 /s/ John C. Landon, Ph.D.
-------------------- -------------------------
Chairman of the Board,
President and Chief Executive
Officer
DATE October 9, 1996 /s/ Michael P. O'Flaherty
-------------------- -------------------------
Chief Operating Officer and
Secretary
DATE October 9, 1996 /s/ David A. Newcomer
-------------------- ---------------------
Chief Financial Officer
-7-
<PAGE>
EXHIBITS
<PAGE>
(10) Agreement of Sale by and between ZooQuest
Technologies, LTD. and Diagnon Corporation.
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT, entered into this the 29th day of July, 1996, by and
between ZOOQUEST TECHNOLOGIES LTD., a Maryland corporation, (hereinafter
"Seller") and DIAGNON CORPORATION, a Delaware corporation (hereinafter "Buyer").
WHEREAS, the parties hereto have reached an understanding with
respect to the sale by the Seller and the purchase by the Buyer of substantial
assets of the Seller located at 9600 Medical Center Drive, Rockville, Maryland.
NOW, THEREFORE, the parties agree as follows:
1. Sale. The Seller hereby agrees to sell, and the Buyer
hereby agrees to purchase, the following assets (the "Purchased
Assets") of the Seller:
A. All right, title and interest of the Seller in and
to the United States Department of Agriculture Licenses, the
Product License (No. 411) and the Facility license; the Patent
entitled "Purified Equine Immunoglobulins and Method of Use
Thereof", enumerated in Exhibit "A".
B. The equipment, machinery, furniture, furnishings and
fixtures enumerated in Exhibit "B" attached hereto.
C. All right, title and interest of the Seller in the
development and production of Equine Albumin product.
D. All books, records, and reports in connection with
the foregoing assets.
2. Purchase Price. The purchase price for all the assets enumerated in
Paragraph 1 hereof shall be the forgiveness of the debt owed to Buyer by Seller
(approximately One Hundred Thousand Dollars), Five Thousand Dollars
($5,000.00)in cash, and a royalty of Three percent (3%) of Net Sales of the
Equine oral and Equine intravenous (IV) IgG, and Albumin products for the first
Five Hundred Thousand Dollars ($500,000.00)of Net Sales. Diagnon also agrees to
pay ZooQuest a royalty of six percent (6%) of all Net Sales, after the Net Sales
have exceeded Five Hundred Thousand Dollars ($500,000.00) for the life of the
products. In addition, Seller shall, upon request of Buyer, assist in any way
necessary to further the transfer of the U.S.D.A. licenses.
3. Payment of Purchase Price. The purchase price shall be
payable as follows:
A. Five Thousand Dollars ($5,000.00) in cash or
certified check at closing.
<PAGE>
B. A royalty of Three percent (3%) of Net Sales of the Equine
IgG (oral and IV) and Albumin products for the first Five Hundred Thousand
Dollars ($500,000.00). Diagnon agrees to pay ZooQuest a royalty of six percent
(6%) of all Net Sales, after the Net Sales have exceeded Five Hundred Thousand
Dollars ($500,000.00). Diagnon shall pay the royalty on a quarterly basis ninety
(90) days after the end of Diagnon's fiscal quarter. Seller will have access, at
reasonable times with reasonable notice, to Buyer's books and records to verify
sales and revenues with respect to the Equine products. In addition, Buyer shall
submit a yearly report to Seller detailing the sales and revenues of the
products as well as general business information.
4. Representations of Seller. The Seller represents as
follows:
A: That, except with respect to the U.S.D.A. licenses, the
Seller has complete and unrestricted power and the unqualified right to sell,
assign, and transfer to the Buyer, or has obtained all consents necessary to
such sale, assignment or transfer, and the Buyer is acquiring good marketable
title to the assets being sold, assigned, and transferred hereinunder, free and
clear of all liens, mortgages, security interests, and encumbrances.
B. That the instruments of sale, assignment, and transfer
being executed and delivered to the Buyer hereunder are valid and binding
obligations of the Seller, enforceable in accordance with their terms, and will
effectively vest in the Buyer good and marketable title to the assets
transferred by this Agreement.
C. That the Seller is not in material default under any
of the agreements being sold, assigned, or transferred hereunder to
the Buyer.
D. That the Seller has no notice of, and knows of no basis
for, any claim, lien, judgment, action, government investigation, or proceeding,
pending or contemplated against or relating to the Purchased Assets.
E. Seller shall permit Buyer to use Sellers name on labels,
boxes, and other sales material until December 31, 1996, or such later time as
new labeling is approved by the U.S.D.A.. Those products already produced and
labeled may carry the Sellers name to the end of the shelf life where labeling
is impossible.
5. Representation of Buyer. The Buyer represents as follows:
A. That after closing, Buyer will pay a royalty of three
percent (3%) on Net Sales of the Equine oral and IV IgG, and Albumin products
for the first Five Hundred Thousand Dollars ($500,000.00). Diagnon also agrees
to pay ZooQuest a royalty of six percent (6%) of all Net Sales, after the Net
Sales have
<PAGE>
exceeded Five Hundred Thousand Dollars ($500,000.00) on a quarterly basis ninety
(90) days after the end of the Buyer's fiscal quarter, so long as the products
is being manufactured.
B. Buyer agrees to keep accurate and correct records of Equine
IgG Products made, used or sold appropriate to determine the amount of royalties
due Seller. Buyer shall provide Seller with quarterly and yearly reports. Such
records shall be retained for at least five (5) years following a given
reporting period. They shall be available during normal business hours for
inspection at the expense of Seller by an accountant or other designated auditor
selected by Seller for the sole purpose of verifying reports and payments
hereinunder. The accountant or auditor shall only disclose to Seller information
relating to the accuracy of reports and payments made under this Agreement. If
an inspection shows an under-reporting or underpayment in excess of ten (10)
percent for any twelve (12) month period, the Buyer shall reimburse to Seller
for the cost of the inspection at the time Buyer pays the unreported royalties.
C. Net Sales means the total gross receipts for sales of the
Equine IgG products available to others, whether invoiced or not, less returns
and allowances actually granted, freight out, taxes or excise duties imposed on
the transaction, and wholesaler and cash discounts in amounts customary in the
trade. No deductions shall be made for commissions paid to individuals whether
they be with independent sales agencies or regularly employed by Buyer, and on
their payroll, or for the cost of collections.
6. Indemnification.
A. The Seller and its successors and assigns, hereby agree
forever to indemnify, defend, and hold harmless the Buyer from and against all
demands, claims, actions, or causes of action, assessments, losses, damages,
liabilities, costs, and expenses (including, without limitation, interest,
penalties, and reasonable attorney's fees and expenses) asserted against,
resulting to, imposed upon, or incurred by the Buyer, directly or indirectly, by
reason or resulting from:
(i) liabilities and obligations of Seller existing as of the
date of closing, and claims against the Seller existing as of the date of
closing or resulting solely from facts or circumstances existing on or prior
thereto;
(ii) a breach of any representation, warranty, covenant,
or agreement of the Seller contained herein or made pursuant
thereto; or
(iii) any tax or related claim (including, without limitation,
claims for interest and penalties) asserted against Seller with respect to any
tax or related claim relating to the
<PAGE>
operation of the Business by the Seller through the date of
closing.
B. The Buyer hereby agrees to indemnify, defend, and hold harmless the
Seller from and against all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs and expenses (including without
limitation, interest, penalties, and reasonable attorney's fees and expenses)
asserted against, resulting to, imposed upon, or incurred by the Seller,
directly or indirectly, by reason of or resulting from (i) Buyer's
non-performance of those obligations of Seller assumed by Buyer hereunder; and
(ii) any breach of any covenant or agreement of Buyer made pursuant hereto or
contained herein; and (iii) any sales, use or other taxes resulting from the
transaction contemplated hereby.
7. Closing. Closing shall take place as of the close of
business on May 31, 1996, at 9600 Medical Center Drive, Rockville,
Maryland, or on such other date and at such other place as Buyer
and Seller mutually agree.
8. Transfer of Licenses. Upon execution of this Agreement,
the Seller will file written request with the United States
Department of Agriculture for Transfer of the Product License No.
411 and the Facility License hereto to Buyer. Seller agrees to
cooperate with Buyer in obtaining the transfer of the Licenses.
9. Closing Costs. Each party shall bear its own expenses in
connection with the sale and purchase of the assets.
10. Deliveries at Closing. At closing, the Seller and Buyer are
required and agree to make full settlement in accordance with the terms of this
Agreement, and to deliver to each other such bills of sale, instruments of
assignment, and assumption, and other documents as may be reasonable necessary
to effectuate this transaction.
11. Termination of Production. In the event, Buyer ceases to operate,
manufacture, sell, and produce the Equine IgG, without sale to a secondary
party, then Seller shall have a sixty (60) day option to purchase, back the
U.S.D.A. licenses and the Patent described above, for Eighty Three Thousand
($83,000.00) Dollars. This option is not activated if Buyer sells the business
to a secondary party. In the event, Diagnon sold the business to a secondary
party then Diagnon must make the continuation of the royalty to ZooQuest for the
life of the product a condition of any such sale.
12. Brokerage. Each of the parties represents that there
has been no involvement of any business broker in any aspect of
this transaction, and that it will pay or discharge, and will
indemnify and hold harmless that other party from and against any
and all claims or liabilities from brokerage commissions or
<PAGE>
finder's fees incurred by reason of any action of the indemnifying
party.
13. Confidentiality. The Buyer and Seller acknowledge that pursuant to
this Agreement either party may become privy to certain confidential information
of the other and that the communication of such confidential information to
third parties could injure either parties business. Seller and Buyer, therefore,
agree to take reasonable steps to insure that such information about either
party obtained by the other or by any of its employees, agents, or
representative shall remain confidential, and shall not be disclosed or revealed
to outside sources.
14. Possession. Possession of the assets and property as
enumerated in Exhibits A, B, and C shall be given over at the time
of closing.
15. Conduct of Business Pending Closing. Both parties shall
conduct business as they currently do until the Closing of this
Agreement.
16. Covenant Not to Compete. For a period of five years after the date
of the closing, Seller shall not directly or indirectly engage in any business
or activities involving an Equine IgG product in competition with Business as
currently conducted or utilizing or related to, the Business conveyed hereunder,
and the Seller shall not make available to any other person any data or research
relating to the Business.
17. Governing Law. This Agreement shall be interpreted and
enforced in accordance with the law of the State of Maryland.
18. Notices. All notices and correspondence shall be deemed given when
personally deliver; or within five (5) days after it has been sent by the United
States Mail, postage prepaid, properly addressed to the party to receive the
notice at the following address given to the other party in the manner above
provided:
To ZooQuest: ZooQuest Technologies Ltd.
To Diagnon: Diagnon Corporation
9600 Medical Center Drive
Rockville, Maryland 20850
19. Validity. If any provision of this Agreement is
determined to be invalid or unenforceable, the provision shall be
deemed to be severable from the remainder of this Agreement and
shall not cause the invalidity or unenforceability of the remainder
of this Agreement.
<PAGE>
20. Right to Counsel. Each party to this Agreement
acknowledges that it was represented by counsel or had the
opportunity to be represented by counsel.
21. Release and Waiver of Claims. Seller and Buyer, for both parties,
its grantees, successors, and assigns, if any, does hereby release, acquit, and
forever discharge each party, its shareholders, members, officers, directors,
employees, and their agents, acting in their capacities as such, from any and
all claims, demands, actions, causes of action, judgements, losses, damages,
liabilities, costs and expenses (including but not limited to attorneys' fees
whether suit is instituted or not), whether known or unknown, liquidated or
contingent, matured or not matured, arising from or related to any matter, cause
or thing whatsoever (collectively, "Claims"), from the beginning of the world to
and including the date as of this Agreement is executed. This release includes
but is not limited to all claims which have accrued or may in the future accrue
to both parties or its grantees, successors and assigns. It is acknowledged and
agreed that both parties had the right to counsel, and that both parties are
relying wholly upon its own and counsel's judgment and knowledge with respect to
the question of liabilities of either party and the nature, extent and duration
of any injuries and damages suffered or to be suffered by either party, and that
no representations or statements regarding said injuries and damages or any
other matters made by either party or any person representing both parties has
influenced both parties to any extent whatsoever in making this release.
21. Full Effect. The parties hereto each agree to execute
and deliver any instrument, or perform any acts, that may be
necessary or reasonably requested in order to give full effect to
this Agreement.
22. Counterparts. This Agreement may be executed in more
than one counterpart, each of which shall be deemed to be an
original but all of which together shall be deemed single
document.
23. Entire Agreement. The parties to this contract mutually agree that
it shall be binding upon them, their respective heirs, personal representatives,
successors and assigns. This contract contains the entire agreement between the
parties and they shall no be bound by any terms, conditions, warranties or
representations not herein contained.
<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first hereinabove written.
ATTEST: ZOOQUEST TECHNOLOGIES LTD.
/s/Raymond Shumate
Raymond Shumate, Individually
and on behalf of Frederick J.
Mueller, Marillac L. Mueller,
Philip Shumate, Lu-Anne Shumate,
Randolph Cole, Sherrie Cole and
Sandie Evans Smith, Jeffrey
Beck and Donna Beck
ATTEST: DIAGNON CORPORATION
John C. Landon, Ph.D, President
<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first hereinabove written.
ATTEST: ZOOQUEST TECHNOLOGIES LTD.
/s/James S. Vreeland
James S. Vreeland
/s/Lawrence Allan Arch
Lawrence Allan Arch
ATTEST: DIAGNON CORPORATION
John C. Landon, Ph.D, President
<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first hereinabove written.
ATTEST: ZOOQUEST TECHNOLOGIES LTD.
/s/Laura L. Leidhecker
/s/Michael E. Leidhecker
ATTEST: DIAGNON CORPORATION
John C. Landon, Ph.D, President
<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first hereinabove written.
ATTEST: ZOOQUEST TECHNOLOGIES LTD.
/s/Raymond Mifflin
/s/Linda C. Mifflin
ATTEST: DIAGNON CORPORATION
John C. Landon, Ph.D, President
<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first hereinabove written.
ATTEST: ZOOQUEST TECHNOLOGIES LTD.
ATTEST: DIAGNON CORPORATION
/s/John C. Landon
John C. Landon, Ph.D, President
<PAGE>
PURCHASED ASSETS
EXHIBITS
EXHIBIT A
List of United States Department of Agriculture Licenses,
Patent and products.
EXHIBIT B
List of equipment, etc., that are being purchased.
EXHIBIT C
List of equipment not owned by ZooQuest.
<PAGE>
EXHIBIT A
1. United States Department of Agriculture - United States
Veterinary Biological Product License. License No. 411 Code
3607.00 November 14, 1994
2. United States Department of Agriculture - United States
Veterinary Biologics Establishment License No. 411. Issued to
ZooQuest Technologies Ltd. on November 14, 1994.
3. Patent No. 4,911,910 - "Purified Equine Immunologlublins
and Method of Use Thereof". Issued on March 27, 1990.
4. All rights title and interest of the Seller in the
development and production of the Equine Albumin product.
<PAGE>
EXHIBIT B
Large Column for Blood Purification- Amicon Modiline Aerglie
Model P440x600 Serial No. 4400398, and contents.
Various glassware, trays, plastic, and laboratory disposables.
All books, records, and reports in connection with the foregoing
assets.
<PAGE>
EXHIBIT C
Lyophilizer- Virtus Millitron Model 10-324 51 SRC
Amicon 7 liter Column
Cole-Palmer High Capacity Occlusion Peristaltic Pump
Model 7586-20
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