UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 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) December 4, 1998
BELL NATIONAL CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
California 0-935 94-1451828
- ------------------------------- ------------ -------------------
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
900 North Franklin Street, Suite 210, Chicago, Illinois 60610
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(Address of Principal Executive Offices) (Zip Code)
(312) 640-8810
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(Registrant's Telephone Number, Including Area Code)
360 Rio Vista Avenue, Suite A, Orlando, Florida 32805
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
1. Balance sheet of InPath, LLC as of September 30, 1998
2. Statement of Operations of InPath, LLC for the period
from February 1, 1998 through September 30, 1998
3. Statement of Cash Flows of InPath, LLC for the period
from February 1, 1998 through September 30, 1998
4. Notes to Financial Statements
(b) Pro Forma Financial Information.
1. Pro Forma Consolidated Balance Sheet of Bell National
Corporation at September 30, 1998
2. Pro Forma Consolidated Statement of Operations of
Bell National Corporation for the eight months
ended September 30, 1998
3. Notes to Pro Forma Consolidated Financial Statements
<PAGE>
InPath, LLC
(A Development Stage Company)
Balance Sheet
September 30,
1998
(Unaudited)
-------------
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . $ 631
----------
Total current assets. . . . . . . . . . . . $ 631
Fixed assets, net . . . . . . . . . . . . . . . . . $ 43,126
Other assets, net
License . . . . . . . . . . . . . . . . . . . . . $ 745,000
Patents . . . . . . . . . . . . . . . . . . . . . $ 5,993
----------
Total assets. . . . . . . . . . . . . . . . $ 794,750
==========
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities:
Accounts payable. . . . . . . . . . . . . . . . . $ 424,679
Notes payable, current. . . . . . . . . . . . . . $ 75,000
Other current liabilities . . . . . . . . . . . . $ 21,854
----------
Total current liabilities . . . . . . . . . $ 521,533
Notes payable, long-term. . . . . . . . . . . . . . . $ 175,000
Members' Equity
Capital stock . . . . . . . . . . . . . . . . . . . $ 398,834
Accumulated deficit . . . . . . . . . . . . . . . . $ (300,617)
----------
Total members' equity . . . . . . . . . . . $ 98,217
----------
Total liabilities and members' equity . . . . . . . . $ 794,750
==========
The accompanying notes are an integral part
of these financial statements.
<PAGE>
InPath, LLC
(A Development Stage Company)
Statement of Operations
From February 1, 1998
(Inception) through
September 30, 1998
(Unaudited)
---------------------
Net sales . . . . . . . . . . . . . . . . . . . . . . $ --
Cost and expenses:
Cost of sales . . . . . . . . . . . . . . . . . . . $ --
Selling general and administrative expenses . . . . $ 299,150
----------
Operating loss. . . . . . . . . . . . . . . . . . . . $ (299,150)
Other income (expense):
Interest (expense). . . . . . . . . . . . . . . . . $ (1,917)
Other . . . . . . . . . . . . . . . . . . . . . . . $ 450
----------
Loss. . . . . . . . . . . . . . . . . . . . . . . . . $ (300,617)
==========
The accompanying notes are an integral part
of these financial statements.
<PAGE>
InPath, LLC
(A Development Stage Company)
Statement of Cash Flows
From February 1, 1998
(Inception) through
September 30, 1998
(Unaudited)
---------------------
OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . . . . . . . . $ (300,617)
Depreciation and amortization . . . . . . . . . . . $ 2,665
Changes in operating assets and liabilities:
License . . . . . . . . . . . . . . . . . . . . . $ (500,000)
Patents and trademarks. . . . . . . . . . . . . . $ (5,993)
Accounts payable. . . . . . . . . . . . . . . . . $ 424,679
Other current liabilities . . . . . . . . . . . . $ 21,854
----------
Net cash used in operating activities . . . $ (357,412)
INVESTING ACTIVITIES:
Purchase of fixed assets. . . . . . . . . . . . . . $ (45,791)
FINANCING ACTIVITIES:
Issuance of notes payable . . . . . . . . . . . . . $ 250,000
Sale of equity units. . . . . . . . . . . . . . . . $ 153,834
----------
Net cash provided by financing activities . $ 403,834
----------
NET INCREASE IN CASH AND CASH EQUIVALENTS . . . . . . $ 631
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD. $ --
----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD. . . . . . $ 631
==========
The accompanying notes are an integral part
of these financial statements.
<PAGE>
InPath, LLC
(A Development Stage Company)
Notes to Financial Statements
NOTE 1: THE COMPANY AND BASIS OF PRESENTATION
InPath, LLC, a development stage company incorporated in the
State of Delaware, was formed on February 1, 1998. The Company is
undertaking research to develop a proprietary sample collection device and
a series of instruments to be used in a point of care cervical cancer
screening process.
In accordance with the terms of the Exchange Agreement dated
December 4, 1998 InPath, LLC agreed to merge with Bell National Corporation
(Bell), a company incorporated in the State of California. At the time of
the merger Bell had no active operations.
Under the terms of the Exchange Agreement, InPath unit holders
received newly issued Bell common stock and warrants to purchase additional
shares of Bell common stock. Upon exercise of the warrants, the former
InPath holders will hold a 50% interest in Bell. The management of InPath
has assumed management control of Bell and will continue and expand the
current product development process.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR. The Company operates on a calendar fiscal year.
CASH AND CASH EQUIVALENTS. The Company considers all highly
liquid investments with a maturity of three months or less at the time of
purchase to be cash equivalents.
PROPERTY AND EQUIPMENT. Property and equipment are stated at
cost and are depreciated using the straight-line method over the assets
estimated useful lives. Principal useful lives are as follows:
Furniture and fixtures 5 years
Laboratory equipment 5 years
Computer and telecommunications
equipment 3 years
Test instruments 3 years
Leasehold Improvements Useful life or
life of lease
Accumulated depreciation at September 30, 1998 was $2,665.
LICENSES, PATENTS, AND TECHNOLOGY: Licenses, patents, and
purchased technology are recorded at their acquisition cost. During 1998,
a portion of a license, valued at $245,000, was contributed to the Company
in exchange for an equity stake of equal value. All costs are amortized
over 10 years. Amortization is begun as of the date of acquisition or upon
filing of final patent applications. There was no accumulated amortization
at September 30, 1998.
<PAGE>
InPath, LLC
(A Development Stage Company)
Notes to Financial Statements - Continued
REVENUE RECOGNITION. The Company will recognize revenue upon
shipment of product to customers.
INCOME (LOSS) PER COMMON SHARE. The Company reports income or
loss per common share in accordance with Financial Accounting Standards
Board Statement No. 128, Earnings Per Share, which replaced the calculation
of primary and fully diluted earnings per share with basic and diluted
earnings per share. Basic earnings per share excludes any dilutive effects
of options or warrants. Diluted earnings per share is similar to the
previously reported fully diluted earnings per share.
USE OF ESTIMATES: The preparation of the financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
may differ from those estimates.
NOTE 3: NOTES PAYABLE
On August 28, 1998, the Company issued a $75,000 note payable
to its outside legal counsel, Holleb & Coff. The note is due on demand and
interest is payable monthly at 12% per annum. Interest expense for the
period ended September 30, 1998 was $750.
On September 1, 1998, the Company issued a $175,000 note
payable to Mr. Peter P. Gombrich, its Chairman and principal unit holder.
The note is due September 1, 2003 and interest is payable at each
anniversary date at 8% per annum. The note may be prepaid at any time
without penalty. Interest expense for the period ended September 30, 1998
was $1,167.
NOTE 4: LEASES
Future minimum lease payments for operating leases with initial
terms in excess of one year as of September 30, 1998 are as follows:
1999 $ 30,000
2000 $ 30,000
2001 $ 30,000
2002 $ 30,000
2003 $ 7,500
Rent expense for the eight months ended September 30, 1998 was
$15,000.
<PAGE>
BELL NATIONAL CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements of Bell
National Corporation (the"Company") as of and for the eight months ended
September 30, 1998 give effect to the merger of the Company and InPath as
if it occurred on February 1, 1998.
Based upon the terms of the merger, for financial reporting and accounting
purposes the merger has been accounted for as a reverse acquisition whereby
InPath is deemed to have acquired the Company. However, the Company is the
continuing legal entity and registrant for both Securities and Exchange
Commission filing purposes and income tax reporting purposes. Since the
Company is a non-operating public shell company, the merger will be
recorded as the issuance of stock for the net monetary assets of the
Company, accompanied by a recapitalization and no goodwill or other
intangible assets will be recorded.
The adjustments included in the unaudited pro forma consolidated financial
statements represent the Company's preliminary determination of those
adjustments based on available information. There can be no assurances that
the actual adjustments will not differ significantly from the pro forma
adjustments reflected in the pro forma consolidated financial information.
The unaudited pro forma consolidated financial statements are not
necessarily indicative of either future results of operations or results
that might have been achieved if the merger had been consummated as of
February 1, 1998.
<PAGE>
BELL NATIONAL CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1998 - UNAUDITED
(Dollars in thousands)
Bell Pro
National forma Pro
Corpor- InPath, Adjust- forma
ation LLC ments Balance
-------- ------- ------- -------
ASSETS
Current assets:
Cash and cash
equivalents . . . . $ 1,148 $ 1 $1,149
Prepaid expenses. . . 13 -- 13
------- ------ ------
Total current
assets. . . . . . 1,161 1 1,162
Fixed assets, net . . -- 43 43
Other assets, net:
License . . . . . . -- 745 745
Patents . . . . . . -- 6 6
------- ------ ------
Total assets. . . . $ 1,161 $ 795 $1,956
======= ====== ======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable. . . $ 425 $ 425
Notes payable,
current. . . . . . . 75 75
Accrued compensa-
tion and
benefits . . . . . . $ 348 $ (202) (2) 146
Other current
liabilities. . . . . 392 22 (332) (2) 82
Reserve for asset
sale . . . . . . . . 106 106
------- ------ ------- ------
Total current
liabilities . . . $ 846 $ 522 $ 834
Notes payable,
long-term. . . . . . . 175 175
Stockholders' equity
Capital stock . . . . $15,849 $ 399 $(15,461)(1) $1,321
534 (2)
Additional paid in
capital. . . . . . . 10 (10)(1) --
Accumulated
deficit. . . . . . . (15,544) (301) 15,471 (1) (374)
-------- ------ ------
315 98 947
-------- ------ ------
Total Liabilities
and Stockholders'
Equity. . . . . . $ 1,161 $ 795 $1,956
======== ====== ======
The accompanying notes are an integral part of these
pro forma consolidated financial statements.
<PAGE>
BELL NATIONAL CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
EIGHT MONTHS ENDED SEPTEMBER 30, 1998 - UNAUDITED
(Dollars in thousands)
Bell Pro
National forma
Corpor- InPath, Adjust- As
ation LLC ments Adjusted
-------- ------- ------- ---------
Net Sales . . . . . . . $ -- -- --
Cost and expenses:
Cost of sales . . . . -- -- --
Selling, general
and administra-
tive expenses. . . . 116 $ 299 $ 415
------- ------- -------
Operating loss. . . . . (116) (299) (415)
Other income (expense):
Interest income
(expense). . . . . . 48 (2) 46
Other . . . . . . . . -- -- --
------- ------- -------
Loss before
income taxes . . . . . (68) (301) (369)
Provision for
income taxes . . . . . (5) -- (5)
------- ------- -------
Net loss. . . . . . . . $ (73) $ (301) $ (374)
======= ======= =======
Basic and diluted
net loss per
common share . . . . . $ (0.01) $ (0.02)
======= =======
Weighted average
number of common . . .
shares outstanding . . 5,916,686 9,241,306(3) 15,157,992
========= ========= ==========
The accompanying notes are an integral part of these
pro forma consolidated financial statements
<PAGE>
BELL NATIONAL CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Note 1: To reflect the exchange of common stock of the Company for
Units of InPath, LLC, and the recapitalization of the Company.
Note 2: To reflect the issuance of 1,776,666 shares of common stock of
the Company insettlement of certain liabilities due to officers, directors,
and shareholders in the amount of $534,000.
Note 3: To reflect 4,288,790 new shares of common stock issued by the
Company in exchange for Units of InPath, LLC. Also includes the InPath
warrants to purchase 3,175,850 shares of common stock of the Company and
the 1,776,666 shares of common stock issued in settlement of certain
liabilities, see Note 2 above.
<PAGE>
SIGNATURE
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 thereunto duly authorized.
BELL NATIONAL CORPORATION
(Registrant)
/s/ Leonard R. Prange
---------------------------------------
(President and Chief Financial Officer)
Date: February 16, 1999
