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Previous: ARVIDA JMB PARTNERS L P, 10-Q, 1998-05-15 |
Next: YOU BET INTERNATIONAL INC, 10QSB, 1998-05-15 |
<PAGE> 1
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 MAY 15, 1998
ECOGEN INC.
(Exact Name of Registrant as specified in its charter.)
DELAWARE 1-9579 22-247948
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
2005 CABOT BOULEVARD WEST, LANGHORNE, PENNSYLVANIA 19047
(Address of Principal Executive Offices)
(215) 757-1590
Registrant's telephone number, including area code
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Ecogen Inc. (the "Company") has recently announced that on April 30,
1998 the Company completed the sale of substantially all of the assets (other
than receivables from product sales) associated with its pheromone product line
to Scentry Biologicals, Inc. for total consideration of approximately $2.4
million. The consideration included cash of $1.7 million and the assumption of
$0.7 million of liabilities. The Company expects to record a gain on the sale
of the pheromone product line of approximately $0.5 million in the second
quarter of fiscal 1998. As part of the transaction, the Company was named by
Scentry Biologicals as an exclusive distributor in the United States for three
pheromone products, BeeScent(R) Attractant, NoMate(R) LRX MEC and NoMate(R) BHF
MEC, through December 31, 2000. Scentry Biologicals is a newly formed company,
two of the principals of which are the former manager of the Company's
pheromone product line and a former principal of a company that distributed the
Company's pheromone products in Central and South America.
ITEM 7(b). FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
ECOGEN INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Financial Information
The following unaudited pro forma condensed consolidated balance sheet
as of January 31, 1998 and the unaudited pro forma condensed consolidated
statements of operations for the year ended October 31, 1997 and the
three-month period ended January 31, 1998 give effect to the sale of
substantially all of the assets (other than receivables from product sales)
associated with the pheromone product line (the "Pheromone Product Line"), as
if the disposition had occurred as of the beginning of the periods presented.
The pro forma information is presented for illustrative purposes only and may
not be indicative of the results that would have been obtained had the
disposition actually occurred on the dates presented, nor is it indicative of
the Company's future consolidated financial condition or results of operations.
The pro forma condensed consolidated financial statements should be read in
conjunction with the historical consolidated financial statements and notes
thereto of the Company contained in its 1997 Annual Report on Form 10K and its
Quarterly Report on Form 10Q for the quarter ended January 31, 1998.
<PAGE> 3
Ecogen Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Condensed Balance Sheet
January 31, 1998
($ in thousands)
<TABLE>
<CAPTION>
Sale of
Pheromone
Product Line
Pro forma
Ecogen Inc. Adjustments Ecogen Inc.
ASSETS Actual Dr. (Cr.) Pro forma
------ ------ --------- ---------
<S> <C> <C> <C>
Current Assets:
Cash, cash equivalents and
temporary investments $4,832 $1,707 (1) $6,539
Trade receivables, net 1,368 - 1,368
Inventory, net 8,672 (1,908) (2) 6,764
Prepaid expenses and other
current assets 663 - 663
--- ---
Total current assets 15,535 (201) 15,334
------ ---- ------
Plant and equipment, net 3,452 (102)(2) 3,350
Other assets, net 835 (4)(2) 831
--- -- ---
$19,822 ($307) $19,515
======= ====== =======
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
Current Liabilities:
Accounts payable and
accrued expenses $5,578 $750 (1) $4,828
Deferred contract revenue 2,044 - 2,044
------ -------- -----
Total current liabilities 7,622 750 6,872
------ ----- -----
Long-term debt 3,866 28 (1) 3,838
----- ------ -----
Other long-term obligations 2,706 - 2,706
----- -------- -----
Stockholders' equity:
Common stock 81 - 81
Additional paid-in capital 117,823 - 117,823
Accumulated deficit (110,798) (471) (3) (110,327)
Other (1,478) - (1,478)
------- ------- -------
Total stockholders' equity 5,628 (471) 6,099
------- ----- -------
$19,822 $307 $19,515
======= ==== =======
</TABLE>
See accompanying notes to unaudited pro forma consolidated condensed financial
information.
<PAGE> 4
Ecogen Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Condensed Statement of Operations
Year Ended October 31, 1997
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Sale of
Pheromone
Product Line
Pro forma
Ecogen Inc. Adjustments Ecogen Inc.
Actual (Dr.) Cr. Pro forma
<S> <C> <C> <C>
Revenues:
Product sales, net $8,783 ($2,860)(4) $5,923
Contract research 2,939 - 2,939
Other income, net 89 - 89
------ ------- -----
Total revenues 11,811 (2,860) 8,951
------ ------- -----
Costs and expenses:
Cost of products sold 6,292 1,814 (5) 4,478
Research and development 5,042 150 (6) 4,892
Selling, general and
administrative 8,661 780 (7) 7,881
Special charges 1,626 - 1,626
------ ----- ------
Total costs and expenses 21,621 2,744 18,877
------ ----- ------
Net loss ($9,810) ($116) ($9,926)
======= ===== =======
Basic and diluted net loss
per share ($1.23) ($1.25)
======= ======
Weighted average shares
outstanding 7,958 7,958
===== =====
</TABLE>
See accompanying notes to unaudited pro forma consolidated condensed financial
information.
<PAGE> 5
Ecogen Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Condensed Statement of Operations
Three Months Ended January 31, 1998
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Sale of
Pheromone
Product Line
Pro forma
Ecogen Inc. Adjustments Ecogen Inc.
Actual (Dr.) Cr. Pro forma
------ --------- ---------
<S> <C> <C> <C>
Revenues:
Product sales, net $1,716 ($978) (4) $738
Contract research 720 - 720
Other income, net 2,500 - 2,500
----- ------- -----
Total revenues 4,936 (978) 3,958
----- ------- -----
Costs and expenses:
Cost of products sold 1,407 700 (5) 707
Research and development 962 38 (6) 924
Selling, general and
administrative 1,681 143 (7) 1,538
Other, net 132 - 132
------- ------ ------
Total costs and expenses 4,182 881 3,301
------ --- -----
Net income (loss) $754 ($97) $657
==== ==== ====
Basic and diluted net income
(loss) per share $0.09 $0.08
===== =====
Weighted average shares
outstanding 8,032 8,032
===== =====
</TABLE>
See accompanying notes to unaudited pro forma consolidated condensed financial
information.
<PAGE> 6
ECOGEN INC. AND SUBSIDIARIES
Notes to Unaudited Pro Forma Condensed Consolidated Financial Information
Year Ended October 31, 1997 and Three Month Period Ended January 31, 1998
(1) Under the terms of the Asset Purchase Agreement dated April 27, 1998
between the Company and Scentry Biologicals, Inc. ("Scentry"), the
purchase price for the Pheromone Product Line consisted of $1,707,000
in cash and the assumption of $778,000 of liabilities. Adjustments
represent an increase to cash of $1,707,000 representing the cash
proceeds, net of expenses associated with the transaction, a $750,000
decrease to accounts payable and accrued expenses and a $28,000
decrease to long-term debt for the liabilities assumed by Scentry.
(2) Adjustments represent the elimination of the assets associated with the
Pheromone Product Line that were acquired by Scentry as follows:
<TABLE>
<CAPTION>
<S> <C>
Inventory, net $1,908,000
Plant and equipment, net 102,000
Intangibles and other assets 4,000
============
</TABLE>
(3) Adjustment represents the estimated gain on the sale of the Pheromone
Product Line, net of expenses associated with the transaction.
(4) Adjustment represents the elimination of sales of pheromone products
except for product sales that will continue under an exclusive
distribution agreement between the Company and Scentry.
(5) Adjustment represents the elimination of cost of goods sold associated
with pheromone product sales that were eliminated in 4 above and an
adjustment to gross profit margins for products covered by the
distribution agreement.
(6) Adjustment represents the elimination of research and development
expenses associated with pheromone technology.
(7) Adjustment represents the elimination of selling and marketing expenses
associated with the Pheromone Product Line, except for expenses that
are expected to continue as a result of the distribution agreement
between the Company and Scentry.
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 15, 1998 ECOGEN INC.
By: /s/ James P. Reilly, Jr.
Name: James P. Reilly, Jr.
Title: Chairman and
Chief Executive Officer
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