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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: November 7, 1995
ECOGEN INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-9579 22-2487948
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) file number) Identification No.)
2005 Cabot Boulevard West, Langhorne, Pennsylvania 19047
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(Address of Principal Executive Offices)
(215) 757-1590
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(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 23, 1995 the Registrant ("Ecogen") terminated its European
research and development agreements with 3A S.r.l. ("3A"), an Italian
corporation with whom Ecogen operated Ecogen Europe S.r.l., a research and
development company that was owned 75% by Ecogen and 25% by 3A. As part of the
transaction, Ecogen transferred its ownership interest in Ecogen Europe to a
party selected by 3A and Ecogen Europe changed its name to Bio Integrated
Technology S.r.l. ("BIT"). As a result of the deal, Ecogen is released
from the obligation to provide $5.6 million of funding to Ecogen Europe. Also
in connection with the transaction, Ecogen closed its research and development
operation in Kiel, Germany.
At closing, Ecogen received cash of approximately $1.2 million and
683,202 of its common shares that had been held by BIT. Ecogen licensed to BIT
Ecogen's existing, nematode technology for use solely in Europe, Africa and the
Middle East ("BIT's Territory") and agreed to provide BIT with improvements
to certain of its nematode formulation technology. BIT licensed to Ecogen
BIT's nematode technology for use outside of BIT's Territory. Ecogen also
licensed to BIT certain of its existing Bt technology principally 12
non-commercialized strains and process and formulation technology
solely for use in BIT's Territory. BIT also received the right to manufacture
certain of Ecogen's current products for one of Ecogen's existing product
distributors that has co-exclusive rights to sell those products in Italy,
Spain and Portugal. Ecogen will also pay BIT until the year 2002 a royalty of
1.5% on Ecogen's net sales in BIT's Territory of its Aspire and AQ10
biofungicide products. Ecogen expects to record a gain on the transaction.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The financial statements required by Item 7 are attached.
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.
Ecogen Inc.
By: /s/ JAMES P. REILLY, JR.
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James P. Reilly, Jr.
President and Chief
Executive Officer
Date: November 7, 1995
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Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
<TABLE>
<CAPTION>
The following pro forma financial information is included in Form 8-K: Page in
Form 8-K
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<S> <C>
Introduction F-2
Unaudited Pro Forma Balance Sheet at July 31, 1995 F-3
Unaudited Pro Forma Statement of Operations for the
nine-month period ended July 31, 1995 F-4
Unaudited Pro Forma Statement of Operations for the
ten-month period ended October 31, 1994 F-5
Notes to Unaudited Pro Forma Financial Information F-6
</TABLE>
F-1
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ECOGEN INC. AND SUBSIDIARIES
PRO FORMA CONDENSED FINANCIAL INFORMATION
Introduction
The following unaudited pro forma condensed financial information sets forth
historical consolidated information of Ecogen adjusted to give pro forma effect
to the disposition of Ecogen Europe S.r.l., previously a 75% owned subsidiary
of Ecogen Inc., pursuant to the terms of the agreement with 3A S.r.l. dated
October 23, 1995 as if such transaction occurred on July 31, 1995 for the pro
forma balance sheet and at the beginning of the period for the pro forma
statements of operations. The pro forma information does not purport to be
indicative of the results that may be obtained in the future or that would
actually have been obtained had the disposition occurred during the periods
indicated. The pro forma information should be read in conjunction with the
historical consolidated financial statements and notes thereto contained in
Ecogen's Quarterly Report on Form 10-Q for the nine months ended July 31, 1995
and the Annual Report on Form 10-K for the ten-month period ended October 31,
1994. Further, interim results are not necessarily indicative of results
expected for the year.
F-2
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PRO FORMA FINANCIAL STATEMENTS OF ECOGEN INC.
UNAUDITED PRO FORMA BALANCE SHEET
AS OF JULY 31, 1995
<TABLE>
<CAPTION>
HISTORICAL
------------------------------------
ECOGEN ECOGEN PRO FORMA
INC. EUROPE S.r.l. (d) ADJUSTMENTS PRO FORMA
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 5,557,496 $4,151,298 $1,204,082 (b) $ 2,610,220
Inventory 6,762,135 - - 6,762,135
Trade receivables, net 2,512,360 - - 2,512,360
Prepaid expenses and other current assets 966,694 693,382 - 273,312
------------ ---------- ---------- -----------
Total current assets 15,798,625 4,844,680 1,204,082 12,158,027
Net plant and equipment 2,398,830 99,260 - 2,299,570
Intangible and other assets, net 654,221 127,788 - 526,433
------------ ---------- ---------- -----------
$18,851,676 $5,071,728 $1,204,082 $14,984,030
============ ========== ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 3,420,612 $ 691,170 $ - $ 2,729,442
Deferred contract revenue 3,663,718 3,642,944 - 20,774
------------ ---------- ---------- -----------
Total current liabilities 7,084,330 4,334,114 - 2,750,216
Other long-term obligations 1,743,738 - - 1,743,738
Stockholders' equity:
Preferred stock, issued and outstanding
260,000 shares 2,600 - - 2,600
Common stock, issued and outstanding
29,686,278 shares 296,863 - - 296,863
Additional paid-in capital 104,429,951 - - 104,429,951
(Accumulated deficit) retained earnings (93,641,274) 610,442 610,442 (c)
593,640 (g) (93,047,634)
Foreign currency translation adjustment 224,248 127,172 - 97,076
Treasury stock, 180,778 shares at cost (1,288,780) - - (1,288,780)
------------ ---------- ---------- -----------
Total stockholders' equity 10,023,608 737,614 1,204,082 10,490,076
------------ ---------- ---------- -----------
$18,851,676 $5,071,728 $1,204,082 $14,984,030
============ ========== ========== ===========
</TABLE>
See accompaning notes to unaudited pro forma financial information.
F-3
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UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE NINE-MONTH PERIOD ENDED JULY 31, 1995
<TABLE>
<CAPTION>
HISTORICAL
------------------------------------
ECOGEN ECOGEN PRO FORMA
INC. EUROPE S.r.l. (d) ADJUSTMENTS PRO FORMA
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
Product sales, net $7,986,688 $ - $ - $7,986,688
Cost of products sold 4,800,026 - - 4,800,026
------------ ------------- ------------ -----------
Gross profit 3,186,662 - - 3,186,662
------------ ------------- ------------ -----------
Operating expenses:
Research and development 6,674,635 1,411,658 - 5,262,977
Selling, general and administrative 7,802,855 75,000 - 7,727,855
Special charges 9,543,194 - 8,878,806 (g) 664,388
------------ ------------- ------------ -----------
Total operating expenses 24,020,684 1,486,658 8,878,806 13,655,220
------------ ------------- ------------ -----------
Other income 2,747,431 957,957 - 1,789,474
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Net loss ($18,086,591) ($528,701) ($8,878,806) ($8,679,084)
============ ============= ============ ===========
Net loss per common share: ($0.70) ($0.32)
============ ===========
Weighted average
common shares 25,907,000 859,000 (f) 26,766,000
============ ============ ===========
</TABLE>
See accompaning notes to unaudited pro forma financial information.
F-4
<PAGE> 7
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE TEN-MONTH PERIOD ENDED OCTOBER 31, 1994
<TABLE>
<CAPTION>
HISTORICAL
------------------------ ECOGEN INC. HISTORICAL
ECOGEN ETECH PRO FORMA COMBINED ECOGEN
INC. INC. ADJUSTMENTS PRO FORMA EUROPE S.r.l. (d)
----------- ---------- ----------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Product sales, net $8,549,523 $ - $ - $8,549,523 $ -
Cost of products sold 5,890,670 - - 5,890,670 -
----------- ---------- ----------- ------------ -----------
Gross profit 2,658,853 - - 2,658,853 -
----------- ---------- ----------- ------------ -----------
Operating expenses:
Research and development 9,278,005 6,843,663 (6,843,663) (e) 9,278,005 2,117,331
Selling,general and administrative 9,249,277 737,000 - 9,986,277 139,163
----------- ---------- ----------- ------------ -----------
Total operating expenses 18,527,282 7,580,663 (6,843,663) 19,264,282 2,256,494
----------- ---------- ----------- ------------ -----------
Other income 11,275,825 31,764 (6,843,663) (e) 4,463,926 2,292,018
----------- ---------- ----------- ------------ -----------
Net loss ($4,592,604) ($7,548,899) $ - ($12,141,503) $35,524
=========== ========== =========== ============ ===========
Net loss per common share: ($0.25) ($0.54)
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Weighted average
common shares 18,575,000 4,111,000 (f) 22,686,000
=========== ========== ============
<CAPTION>
PRO FORMA
ADJUSTMENTS PRO FORMA
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<S> <C> <C>
Product sales, net $ $8,549,523
Cost of products sold - 5,890,670
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Gross profit - 2,658,853
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Operating expenses:
Research and development - 7,160,674
Selling,general and administrative - 9,847,114
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Total operating expenses - 17,007,788
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Other income - 2,171,908
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Net loss $ ($12,177,027)
=========== ============
Net loss per common share: ($0.54)
============
Weighted average
common shares 22,686,000
============
</TABLE>
See accompaning notes to unaudited pro forma financial information.
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<PAGE> 8
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(a) The pro forma financial statements give effect to the disposition of
Ecogen Europe S.r.l. in October 1995 and the acquisition of 71.2% of
Ecogen Technologies Inc. (ETech) in December 1994 accounted for under
purchase accounting as if such transactions occurred on July 31, 1995
for purposes of the pro forma balance sheet and as of the beginning of
the period presented for purposes of the pro forma statements of
operations.
(b) Represents the cash received by Ecogen Inc. in connection with
disposition of Ecogen Europe S.r.l.
(c) To eliminate Ecogen Europe S.r.l. stockholders' equity.
(d) To reflect the disposition of Ecogen Europe S.r.l. pursuant to the
agreement with 3A S.r.l.
(e) To eliminate related party contract revenue recorded by Ecogen and
research and development expenses recorded by ETech.
(f) The pro forma weighted average shares of common stock include the common
shares issued for the acquisition of 71.2% of ETech as if such shares
where issued as of the beginning of the periods presented.
(g) The pro forma statement of operations do not reflect the non-recurring
charge recorded by Ecogen Inc. in the first quarter of 1995 in
connection with the acquisition of ETech representing in process research
and development acquired from ETech of approximately $9 million.
Further, the pro forma statements of operations exclude a gain of
approximately $.6 million associated with the disposition of Ecogen
Europe S.r.l.
F-6
