SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-1
Current Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 1996
BIOPHARMACEUTICS, INC.
(Exact name of Registrant as specified in its Charter)
DELAWARE 1-9370 13-3186327
(State or other jurisdiction (Commission File Number) (I.R.S. Employer I.D.
of incorporation) Number)
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.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 24, 1997, the Company's Certified Public Accountants, Farber,
Blicht & Eyerman, LLP completed their audit of the Gross Revenue and Related
Costs of the Feminine Hygiene Product Line of London International U.S.
Holdings, Inc. for the year ended March 31, 1995 and the eleven months ended
February 29, 1996. The product line was acquired by Biopharmaceutics, Inc. on
March 15, 1996.
EXHIBITS
Current Report on Form 8-K/A-1
of
Biopharmaceutics, Inc.
Date of Report: April 30, 1997
Exhibits
- - --------
28.13 Financial statements provided:
Statements of Gross Revenue and Related Costs of
the Feminine Hygiene Proudct Line
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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: April 30, 1997
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EXHIBIT 28.13
------------
BIOPHARMACEUTICS, INC.
STATEMENTS OF
GROSS REVENUE AND RELATED COSTS
OF THE
FEMININE HYGIENE PRODUCT LINE
FOR THE YEAR ENDED
MARCH 31, 1995 AND THE
ELEVEN MONTH PERIOD ENDED
FEBRUARY 29, 1996
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BIOPHARMACEUTICS, INC.
INDEX TO STATEMENTS
Page
Number
-------
Auditor's Report 1
Statements of Gross Revenue and Related Costs 2
Notes to Financial Statements 3 - 6
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FARBER, BLICHT & EYERMAN, LLP
Certified Public Accountants 255 Executive Drive, Suite 215
Plainview, NY 11803-1715
Telephone: (516) 576-7040
Facsimile: (516) 576-1232
Board of Directors and Shareholders
Biopharmaceutics, Inc.
Bellport, New York
Gentlemen:
We have audited the accompanying statements of gross revenue and related
costs of the Feminine Hygiene Product Line of London International U.S.
Holdings, Inc. for the year ended March 31, 1995 and the eleven months ended
February 29, 1996. As explained in Note 1 to the notes of the statements, these
statements are the responsibility of the Management of London International U.S.
Holdings, Inc. Our responsibility is to express an opinion on these statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
The accompanying statements were prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion with the filing of Form 8-K of Biopharmaceutics, Inc.) as described in
Note 1 to the notes of the statements and are not intended to be a complete
representation of the revenues and costs of London International U.S. Holdings,
Inc.. Quality Health Products, Inc., a subsidiary of Biopharmaceutics, Inc.,
purchased the aforementioned product line from London International U.S.
Holdings, Inc. in March, 1996.
In our opinion, the statements referred to above present fairly, in all
material respects, the gross revenue and related costs of the Feminine Hygiene
Product Line as described in Note 1 for the year ended March 31, 1995 and the
eleven months ended February 29, 1996, in conformity with generally accepted
accounting principles.
FARBER, BLICHT & EYERMAN, LLP
(SIGNATURE)
Plainview, New York
March 18, 1997 (except for Note 1,
which is dated March 24, 1997)
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BIOPHARMACEUTICS, INC.
FEMININE HYGIENE PRODUCT LINE
STATEMENTS OF GROSS REVENUE AND RELATED COSTS
For the year For the eleven
ended months ended
March 31, February 29,
1995 1996
----------- -----------
Net Sales $ 5,038,040 $ 4,016,462
Cost of sales 2,224,390 1,676,543
----------- -----------
Gross profit $ 2,813,650 $ 2,339,919
=========== ===========
The accompanying notes are an integral
part of the statements.
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BIOPHARMACEUTICS, INC.
NOTES TO STATEMENTS
Note 1. Summary of Significant Accounting Policies
------------------------------------------
a) The Company and basis of presentation
-------------------------------------
Biopharmaceutics, Inc. (the "Company") is a manufacturer of
generic pharmaceutical products. These products are sold nationwide to major
chain stores, distributors, wholesalers and clinics. In March, 1996, the
Company, through one of its subsidiaries, Quality Health Products, Inc.
("Quality"), acquired three branded consumer product lines (namely Koromex,
Vaginex and Feminique) from London International U.S. Holdings, Inc. ("London
Int'l") for a purchase price of $3,600,000. Pursuant to the acquisition
agreement, as amended, $100,000 was paid upon the signing of the agreement and
$1,500,000 paid at the closing. The balance of the purchase price of $2,000,000
is payable as follows: I) $500,000 on or before May 15, 1997, ii) $660,000 on
or before April 1, 1998 and iii) $840,000 on April 1, 1999, with interest at
8.5%, payable semi-annually through October, 1997, then quarterly to maturity.
The obligation is guaranteed by the Company and is collateralized by a security
interest in the assets purchased from London Int'l which consisted of
trademarks, trade names and its customer base.
As the aforementioned acquired product lines constitute a major
portion of the continuing business of the Company, audited historical statements
of gross revenue and related costs are presented in accordance with Rule 3-05
of Regulation S-X, along with the unaudited proforma financial statements
reflecting the effects of the acquisition on actual operations of the Company
(Note 2).
These financial statements, and notes thereto, should be read
in conjunction with, and reference is made to the financial statements of
Biopharmaceutics, Inc. and the related notes thereto, as filed in their most
recent 10-K filing for the year ended September 30, 1996.
b) Revenue recognition
-------------------
Sales are recognized as products are shipped.
c) Depreciation and amortization
-----------------------------
The Company amortizes its intangible assets on the straight-
line method over their estimated useful life. The Company depreciates its
property and equipment on the straight-line method for financial reporting
purposes. For tax reporting purposes, the Company uses the straight-line
or accelerated methods of depreciation. Leasehold improvements are amortized
over four to ten years. Equipment, furniture and fixtures generally have been
assigned ten and seven year lives and tools and dies, four year lives.
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BIOPHARMACEUTICS, INC.
NOTES TO STATEMENTS
Note 1. Summary of Significant Accounting Policies (continued)
------------------------------------------
c) Depreciation and amortization (continued)
-----------------------------
Expenditures for maintenance, repairs, renewals and betterments
are reviewed by management and only those expenditures representing improvements
to plant and equipment are capitalized. At the time plant and equipment are
retired or otherwise disposed of, the cost and accumulated depreciation accounts
and the gain or loss on such disposition is reflected in operations.
d) Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenue and expenses
during the reporting period. The most significant estimates made are for
recoverability of property and equipment, intangibles and accounts receivable.
Actual results could differ from those estimates.
Note 2. Pro Forma Statement of Operations (Unaudited)
---------------------------------------------
The unaudited proforma Statements of Operations for the year ended
September 30, 1996 includes the consolidated financial statements of the
accounts of the Company and its subsidiaries combined with the statements of
gross revenue and related costs of the acquired feminine hygiene product line.
The proforma amounts also include interest expense associated with the
acquisition funding of the product line as if the acquisition had occurred at
the beginning of the period. Additionally, estimated selling, marketing and
general and administrative expenses of the feminine hygiene product line were
included in the proforma Statements of Operations. These expenses were computed
based on the percentage of sales of the product line to the total sales of
London Int'l. Selling, marketing and general and administrative expenses for the
five months ended February 29, 1996 based on such aforementioned percentage
aggregated approximately $246,000. Management believes that the amounts
allocated to the feminine hygiene product for selling, marketing and general and
administrative expenses are compiled on a reasonable basis. All significant
intercompany accounts and transactions have been eliminated in consolidation.
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BIOPHARMACEUTICS, INC.
NOTES TO STATEMENTS
Note 2. Pro Forma Statement of Operations (Unaudited) (continued)
---------------------------------------------
The pro forma operating results do not necessarily indicate future
results or the results that would have occurred if the acquisition of the
feminine hygiene product line had occurred at the beginning of the period.
<TABLE>
<CAPTION>
Note 1 Combined
Combined- Historical Pro Forma
For the year end Pro Forma For the year ended
September 30, 1996(1) Adjustments September 30, 1996
--------------------- ----------- -------------------
<S> <C> <C> <C>
Sales $5,660,883 $5,660,883
---------- ----------
Cost and Expenses:
Cost of Sales 3,946,582 3,946,582
Selling, general and
administrative expenses 1,434,036 $ 245,829(2) 1,679,865
Research & development 14,426 14,426
Amortization of intangibles 99,600 99,600
---------- ---------- ----------
5,494,644 245,829 5,740,473
---------- ---------- ----------
166,239 (245,829) (79,590)
---------- ---------- ----------
Other income (deductions):
Income related to contribution
of licenses and rights to
Joint Venture 400,750 400,750
Gain on disposition of equipment 62,500 62,500
Interest expense (298,821) (70,833)(3) (369,654)
---------- --------- ----------
164,429 (70,833) 93,596
---------- --------- ----------
Gain from continuing operations 330,668 (316,662) 14,006
Discontinued Operations:
Gain on disposal 773,659 --- 773,659
---------- --------- ----------
Net Gain $1,104,327 $ (316,662) $ 787,665
========== ========== ==========
Primary gain per share:
Continuing operations $ .01 $ ---
Discontinued operations .02 .02
---------- ----------
Net gain $ .03 $ .02
========== ==========
</TABLE>
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BIOPHARMACEUTICS, INC.
NOTES TO STATEMENTS
Note 2. Pro Forma Statement of Operations (Unaudited) (continued)
---------------------------------------------
(1) Includes the accounts of Biopharmaceutics, Inc. and its subsidiaries for
the year ended September 30, 1996 and the gross revenue and related costs
and expenses of the Feminine Hygiene Product Line for the five months ended
February 29,1996. The financial statements of Biopharmaceutics, Inc.
includes all sales and costs and expenses of the feminine hygiene product
line from March, 1996 (date of acquisition) to September 30, 1996.
(2) Estimated selling, marketing and general and administrative expenses of the
feminine hygiene product line are included as a pro forma adjustment.
(3) Interest expense associated with the acquisition funding of the feminine
hygiene product line has been adjusted as if the acquisition had occurred
at the beginning of the period.
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