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
Date of Report (date of earliest event reported):September 15, 1997
BIOPHARMACEUTICS, INC.
(Exact name of Registrant as specified in its Charter)
DELAWARE 1-9370 13-3186327
(State or other (Commission File Number) (I.R.S Employer
jurisdiction of I.D. Number)
incorporation)
990 Station Road
Bellport, New York 11713
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516-286-5800)
N/A
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 15, 1997 the Company completed the acquisition of Caribbean
Medical Testing Center, Inc. with the payment of $4,900,000 in cash and a note
for $1,500,000 bearing interest at 10 1/2% per annum due July 17, 1998. The
funding for the acquisition was obtained by the issuance of 3,100,000 shares of
common stock and $4,900,000 of notes bearing interest at 9% and payable $175,000
a month for 28 months.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
A. Sale of Securities: 3,100,000 Shares of Common Stock of Registrant were
sold pursuant to Regulation S on September 15, 1997
B. Distributor: European Equity Partners, Inc. was the distibutor for the
Regulation S placement to 4 non-U.S. entities.
C. Consideration: The securities were sold at a price of $.43 per share.
The distributor received a fee of 275,000 restricted shares of the registrant in
connection with the Regulation S placement of the registrant's shares and debt
financing.
D. Exemption Claimed: The exemption claimed for the sale of the shares was
Regulation S proulgated under the Securities Act of 1933 as amended.
E. Terms of conversion or exercise: Not applicable
EXHIBIT INDEX
Current Report on Form 8-K
of
Biopharmaceutics, Inc.
Date of Report: November 25, 1997
Exhibit:
28.19 Press Release dated September, 15, 1997
28.20 CMT Audited Financial Statements for the
years ending December 31, 1995 and 1996
28.21 Proforma Financial Statements for the years
ending December 31, 1995 and 1996 showing
the business combination
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BIOPHARMACEUTICS, INC.
(Registrant)
By: /s/ Edward Fine
Edward Fine
President, Chief Executive Officer
(Signature)
Dated: December 2, 1997
<PAGE>
EXHIBIT 28.19
Press Release For Immediate Release
For More Information, Call:
Stuart Fine (516) 286-5800
Biopharmaceutics, Inc. Completes CMT Acquisition
BELLPORT, N.Y. (September 15,1997) - Biopharmaceutics, Inc. (BOPH:OTCBB)
announced today that it has completed the acquisition of CMT with the payment of
$4.9 million in cash and a note for $1.5 million bearing interest at 10 1/2% per
annum due July 17, 1998.
Biopharmaceutics also stated that the consolidated revenues for the month
of August 1997 reached a new record of in excess of $1,200,000, eclipsing the
previous record set in July 1997, of in excess of $1,100,000. The Company's year
ends on September 30th. Total revenues for the first two months of the current
fiscal quarter are in excess of $2,300,000. Consolidated income for the months
of July and August 1997 aggregated in excess of $500,000. or approximately $0.05
per share. For the quarter ended June 30, 1997, the Company had reported
consolidated revenues of $1,884,000. and net income of $255,000.
Biopharmaceutics received $6,250,000 to finance the acquisition and issued
3,100,000 shares of common stock and $4.9 million of notes, bearing interest at
9% and payable $175,000 per month for 28 months.
Angel Vale, son of CMT founder, Rufino Vale, will become President and
Chief Operating Officer of CMT. Mr. Vale, stated "I intend to manage CMT in the
same manner as my father has done previously, providing important medical
services to the Puerto Rico community. We are pleased that Biopharmceutics has
chosen and is committed to maintaining CMT as a Puerto Rican managed business
and is dedicated to the strong traditions of the Vale family."
<PAGE>
EXHIBIT 28.20
CARIBBEAN MEDICAL TESTING CENTER INC.
CONDENSED FINANCIAL STATEMENTS FOR THE
YEARS ENDING DECEMBER 31, 1996 AND 1995
BALANCE SHEET
ASSETS
1996 1995
---- ----
CURRENT ASSETS
CASH $ 93,791 $ 151,990
ACCOUNTS RECEIVABLE (NET) 554,326 546,302
INVENTORIES 13,702 6,814
PREPAID AND OTHER ASSETS 105,434 121,849
------- -------
TOTAL CURRENT ASSETS 767,253 826,955
PLANT PROPERTY AND EQUIPMENT(NET) 693,909 519,608
------- -------
TOTAL ASSETS $ 1,461,162 $ 1,346,563
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 427,589 $ 239,343
ACCRUED EXPENSES 97,906 110,195
CURRENT MATURITIES OF LONG TERM DEBT 143,589 131,049
------- ------
TOTAL CURRENT LIABILITIES 669,084 480,587
LONG TERM DEBT NET OF CURRENT PORTION 398,865 446,499
------- -------
TOTAL LIABILITIES 1,067,949 927,086
SHAREHOLDERS' EQUITY
COMMON STOCK 200 SHARES ISSUED 20,000 20,000
RETAINED EARNINGS 368,647 392,492
UNREALIZED GAIN ON MARKETABLE
SECURITIES 4,566 6,985
----- -----
393,213 419,477
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $ 1,461,162 $ 1,346,563
=========== ============
<PAGE>
CARIBBEAN MEDICAL TESTING CENTER INC.
CONDENSED STATEMENT OF INCOME
FOR THE YEARS ENDING
DECEMBER 31, 1996 AND 1995
1996 1995
---- ----
NET REVENUES $ 2,624,993 $ 2,174,028
COST AND EXPENSES
COST OF GOODS SOLD 1,755,667 1,202,682
SELLING, GENERAL & ADMIN 962,886 882,897
------- -------
2,718,553 2,085,579
--------- ---------
(93,560) 88,449
------- ------
OTHER INCOME AND EXPENSE 38,095 45,229
------ ------
NET INCOME (LOSS) BEFORE TAXES (55,465) 133,678
PROVISION FOR TAXES ( 9,692) (42,546)
------- -------
NET INCOME (LOSS) (65,157) 91,132
======== ======
AVERAGE NUMBER OF SHARES
OUTSTANDING 200 200
GAIN (LOSS) PER SHARE $(325.79) $455.66
<PAGE>
CARIBBEAN MEDICAL TESTING CENTER, INC.
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS (LOSS) (65,157) 91,132
ADJUSTMENTS TO RECONCILE NET INCOME
(LOSS) TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 92,835 85,259
PROVISION FOR BAD DEBTS 218,821 74,793
LOSS ON DISPOSAL OF ASSETS 1,000 ---
CHANGES IN ASSETS AND LIABILITIES:
INCREASE IN ACCOUNTS RECEIVABLE (226,845) (106,817)
INCREASE IN INVENTORY (6,888) ---
INCREASE IN PREPAID EXPENSES (6,951) (9,860)
INCREASE IN DEFERRED TAX ASSET (9,692) ---
DECREASE IN BANK OVERDRAFT --- (12,630)
INCREASE IN ACCOUNTS PAYABLE 202,944 81,040
DECREASE IN ACCRUED EXPENSES (12,289) ---
DECREASE IN ACCRUED LIABILITIES --- (23,713)
DECREASE IN INCOME TAX PAYABLE (20,282) 26,547
DECREASE IN DUE TO STOCKHOLDER --- (17,685)
TOTAL ADJUSTMENTS 232,653 96,934
NET CASH PROVIDED BY OPERATING ACTIVITIES 167,496 188,066
CASH FLOWS FROM INVESTING ACTIVITIES:
DISPOSITION OF MARKETABLE SECURITIES 19,642 ---
PURCHSES OF MARKETABLE SECURITIES --- (45,142)
SALE OF ASSET 11,000 ---
CAPITAL EXPENDITURES (204,766) (62,810)
INCREASE IN OTHER ASSETS --- (14,563)*
NET CASH USED BY INVESTING ACTIVITIES (174,124) (122,515)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM LINE OF CREDIT 41,683 ---
PROCEEDS FROM LOANS --- 59,525
REPAYMENT OF LOANS (39,918) (125,637)
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,765 (66,112)
---------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,863) (561)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 4,863 5,424
---------- ----------
CASH AND CASH EQUIVALENTS, END OF YEAR $ --- $ 4,863
========== ==========
SUPPLEMENTAL DISCLOSURES:
CASH PAID FOR INTEREST AMOUNTED TO: $ 58,620 $ 59,249
========== ==========
CASH PAID FOR INCOME TAX AMOUNTED TO: $ --- $ 15,999
========== ==========
*CAPITAL EXPENDITURES: DURING THE YEAR AN ACQUISITION OF A BUILDING WAS
FINANCED WITH A REAL ESTATE MORTGAGE AMOUNTING TO $188,000.
<PAGE>
CARIBBEAN MEDICAL TESTING CENTER, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of certain significant accounting policies
followed in the preparation of these financial statements:
ORGANIZATION:
The Company was organized under the Commonwealth of Puerto Rico to provide
medical, laboratory and x-ray services.
PROPERTY, PLANT, EQUIPMENT AND DEPREICATION:
Property, plant and equipment are recorded at cost. Depreciation is
provided on the straight line method over the estimated useful lives of the
respective assets. Maintenance and repairs are charged to expense as incurred.
Major renewals and improvements are capitalized. When items of property or
equipment are sold or retired, the related costs and accumulated depreciation
are removed from the accounts and any gain or loss is included in income.
INVESTMENTS:
Unrealized gains and losses for trading securities shall be included in
earnings, whereas unrealized gains and losses for available for sale securities
shall be excluded from earnings and reported as a net amount in a separate
component of stockholder's equity until realized.
INVENTORIES:
The Company inventory consits of laboratories supplies and is stated at
cost following the firt-in first-out method.
CASH EQUIVALENTS:
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid investments with a maturity of three months or less to be cash
equivalents.
Use of estimates in preparing financial statements:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Disclosures about fair value of financial instruments:
The Company financial instruments consist principally of cash and cash
equivalents, investments, accounts receivable and accounts and notes payable.
There are no significant differences between the carrying value and fair value
of any of these financial instruments.
2. INVESTMENTS
Following is a summary of investment securities classified as available for
sale, as of December 31, 1996:
AMORTIZED UNREALIZED
DESCRIPTION FAIR VALUE COST (LOSS) GAIN
EQUITY SECURITIES $ 74,550 $ 70,000 $ 4,500
PR COMMONWEALTH OBLIFATIONS
(MATURE AFTER 10 YEARS) 25,688 25,000 688
US GOVERNMENT SECURITIES 21,532 22,125 (593)
PR INVESTOR FUND 3,296 3,375 (79)
-------- -------- --------
$125,066 $120,500 $ 4,566
======== ======== ========
<PAGE>
3. BANK LINE OF CREDIT
The Company has available a line of credit agreement with a bank in which
it may borrow up to $50,000. Borrowings under the credit line bear interest at
1.5% over prime.
Amounts due under this line of credit is secured by a building.
4. LONG-TERM DEBTS
Long-term debts at December 31, 1996, consist of the following:
10% loan collateralized with marketable securities,
payable at demand $ 17,455
1.5% over prime rate mortgage on building, payable
in monthly installments of $1,944, plus interest.
Due on June, 2008. 260,898
10% rate mortgage on building payable in monthly
installments of $1,124 plus interest.
Due on June, 2009. 166,800
Three, from 15% to 20% rate, auto loans, payable in
monthly installemtns amounting to $1,701,
including interest 13,802
Two 17.11% interest rate insurance loans payable in
monthly installments amounting to $4,864,
including interest 41,816
----------
500,771
Less current portion 101,906
----------
$ 398,865
==========
Following are the maturates of long-term debts for each of the next five
years.
December 31 Amount
1997 $101,906
1998 42,878
1999 35,856
2000 35,856
2001 35,856
Thereafter 248,419
--------
$500,771
========
5. CONTINGENCIES
The Company is defendant in two lawsuits filed by two of its customers for
negligence. Management and legal counsel believe the suits are completely
without merit and coverd by insurance and intend to vigorously defend their
position.
6. INCOME TAXES
In 1996, the Company adopted the provisions of SFAS No. 109, "Accounting
for Income Taxes." This statement establishes standards of financial accounting
and reporting for income taxes that are currently payable and for the tax
consequences of temporary differences and loss carry forwards. A temporary
difference is a difference between the basis of an asset or liability and its
reported amount in the financial statements that will result in taxable or
deductible amounts in future years when the reported amount of the asset or
liability is recovered or settled, respectively.
The Company has available at December 31, 1996, unused operating loss carry
forwards amounting to $34,084, which may be applied againt future taxable income
and expires in year 2003. SFAS No. 109 requires the recognition of a deferred
tax asset for the estimated future tax effects attributed to these loss carry
forwards.
<PAGE>
7. CONCENTRATIONS OF CREDIT RISK
The hospital grants credit without collateral to the majority of its
patients, most of whom are local residents. Some of the patients serviced work
to companies who are directly billed and the others are insured under third
party payor agreements.
8. PRIOR PERIOD ADJUSTMENT
Retained earnings at the beginning of 1996 has been adjusted to correct the
cumulative effect for depreciation expense that have been recognized in excess
on prior years.
This difference arose from the fact that the Company does not maintain a
detailed property ledger. The effect of this restatement was to decrease
accumulated depreciation by $41,132 and does not have an effect on net income
for 1996.
<PAGE>
CARIBBEAN MEDICAL TESTING CENTER, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of certain significant accounting policies
followed in the preparation of these financial statements:
Organization:
The Company was organized under the Commonwealth of Puerto Rico to provide
medical, laboratory and x-ray services.
Property, Plant, Equipment and Depreciation:
Property, plant and equipment are recorded at cost. Depreciation is
provided on the straight line method over the estimated useful lives of the
respective assets. Maintenance and repairs are charged to expense as incurred.
Major renewals and improvements are capitalized. When items of property or
equipment are sold or retired, the related costs and accumulated depreciation
are removed from the accounts and any gain or loss is included in income.
Investments:
Effective January 1, 1994, the Company adopted the provision of SFAS 115 to
account for certain investments in debt and equity securities. The SFAS 115
requires that at acquisition, an enterprise shall classify debt and equity
securities into one of three categories; held to maturity, available for sale or
trading. At each reported date, the appropriateness of the classification shall
be reassessed. Unrealized gains and losses for trading securities shall be
included in earnings, where-as unrealized gains and losses for available for
sale securities shall be excluded from earnings and reported as a net amount in
a separate component of stockholder's equity until realized.
Following is a summary of investment securities classified as available for
sales, as of December 31, 1995:
Amortized Unrealized
Description Fair value Cost (loss) gain
Equity securities $ 75,950 $ 70,000 $ 5,950
PR Commonwealth obligation
(mature after 10 years) 26,375 25,000 1,375
U.S. Government securities 37,222 37,602 (380)
P.R. Investor Fund 7,580 7.540 40
--------- --------- ---------
$147,127 $140,142 $6,985
========= ========= =========
Inventories:
The Company inventory consists of laboratories supplies and is stated at
cost.
Cash Flows:
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid investments with a maturity of three months or less to be cash
equivalents.
Use of Estimates in Preparing Financial Statements:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Disclosures about Fair Value of Financial Instruments:
The Compamy financial instruments consist principally of cash and cash
equivalents, investments, accounts receivable and accounts and notes payable.
There are no significant differences between the carrying value and fair value
of any of these financial instruments.
<PAGE>
2. LONG-TERM DEBTS
Long-term debts at December 31, 1995, consist of the following:
10% loan collateralized with marketable securities,
payable at demand $ 16,425
1.5% over prime rate mortgage on building, payable
in monthly installments of $1,944, plus interest.
Due on June, 2008. 289,226
10% rate mortgage on building payable in monthly
installments of $1,124 plus interest.
Due on June, 2009 179,328
Three, from 15% to 20% rate, auto loans, payable
in monthly installments amounting to $1,701,
including interest 26,042
Two 17.11% interest rate insurance loans payable
in monthly installments amounting to $4,864,
including interest 29,668
--------
549,689
Less current portion 94,190
--------
$446,499
========
Following are the maturities of long-term debts for each of the next five
years
December 31 Amount
1996 $ 94,190
1997 41,356
1998 41,356
1999 41,356
2000 41,356
Thereafter 28l,075
--------
$540,689
========
3. ACCOUNTS RECEIVABLE
During the year ended December 31, 1995, the Company rendered consulting
services amounting to $187,794 to the Puerto Rico Department of Health and to a
Health Care Corporation, in regards to the Puerto Rico Health Reform Act.
However, the Company can't provide us the written agreement with both
organizations as acceptance of the fees for the consulting services rendered. In
addition, at the date of this report, the fees have not been collected in spite
of the Company's collection efforts. Therefore, we have not been able to satisfy
ourselves at to the collectibility of the above described receivables.
4. CONTINGENCIES
The Company is defendant in two lawsuits filed by two of its customers for
negligence. Management and legal counsel believe the suits are completely
without merit and covered by insurance and intend to vigorously defend their
position.
<PAGE>
EXHIBIT 28.21
BIOPHARMACEUTICS INC.
PROFORMA COMBINED CONDENSED BALANCE SHEET
FOR THE YEARS ENDING
DECEMBER 31, 1996 AND 1995
BALANCE SHEET
ASSETS
1996 1995
---- ----
CURRENT ASSETS
CASH $ 133,365 $ 131,415
ACCOUNTS RECEIVABLE (NET) 1,048,938 747,518
INVENTORIES 604,747 396,713
PREPAID AND OTHER ASSETS 181,985 71,348
------- -------
TOTAL CURRENT ASSETS 1,969,035 1,346,994
PLANT PROPERTY AND EQUIPMENT(NET) 999,166 906,536
INVESTMENT IN RESTRICTED SECURITIES 250,750
INTANGIBLE ASSETS NET AT COST 3,610,125 0
LICENSING COSTS NET 64,001 70,301
SUNDRY 81,944 112,118
------- -------
TOTAL ASSETS $ 6,975,021 $ 2,435,949
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 1,334,201 $ 1,644,262
ACCRUED EXPENSES 640,321 1,007,620
CURRENT MATURITIES OF LONG TERM DEBT 830,689 269,190
------- ------
TOTAL CURRENT LIABILITIES 2,805,211 2,921,072
LONG TERM DEBT NET OF CURRENT PORTION 1,985,657 577,481
CONVERTABLE DEBENTURES 1,102,941 1,000,000
------- -------
TOTAL LIABILITIES 5,893,809 4,498,553
SHAREHOLDERS' EQUITY
COMMON STOCK 200 SHARES ISSUED 42,071 47,868
ADDITIONAL PAID IN CAPITAL 30,438,908 27,741,437
DEFICIT (27,900,447) (28,355,008)
----------- -----------
2,538,461 (613,571)
UNREALIZED GAIN ON MARKETABLE
SECURITIES 4,566 6,985
LESS TREASURY STOCK AT COST (944,612) (944,612)
NOTES RECEIVABLE FROM OFFICERS
AND EMPLOYEES (559,274) (559,274
-------- --------
1,081,212 (2,062,604)
--------- ---------
SHAREHOLDERS EQUITY $6,975,021 $2,435,949
========== ==========
<PAGE>
BIOPHARACEUTICS, INC.
PROFORMA COMBINED CONDESNSED STATEMENT OF INCOME
FOR THE YEARS ENDING
DECEMBER 31, 1996 AND 1995
1996 1995
---- ----
NET REVENUES $ 7,151,648 $ 3,444,677
COST AND EXPENSES
COST OF GOODS SOLD 5,102,298 3,466,233
SELLING, GENERAL & ADMIN 2,455,176 1,715,451
AMORTIZATION OF INTANGABLES 147,600 433,218
------- -------
7,705,034 5,614,902
--------- ---------
(553,386) (2,170,225)
------- ------
OTHER INCOME AND EXPENSE 178,823 (5,503,272)
DISCONTINUED OPERATIONS 773,659 (1,621,543)
------ ------
NET INCOME (LOSS) BEFORE TAXES 399,096 (9,295,040)
PROVISION FOR TAXES ( 9,692) (42,546)
------- -------
NET INCOME (LOSS) 389,404 (9,337,586)
======= ===========
AVERAGE NUMBER OF SHARES
OUTSTANDING 40,457,550 21,941,390
GAIN (LOSS) PER SHARE $ 0.01 $ (0.43)
