================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
Amendment No. 1 to
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 10, 2000
COMMISSION FILE NUMBER 0-17714
BIOPOOL INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 58-1729436
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6025 NICOLLE STREET
VENTURA, CALIFORNIA 93003
(Address of principal executive offices)
(805) 654-0643
(Registrant's telephone number including area code)
N/A
(Former name or former address, if changed since last report)
================================================================================
<PAGE>
This Current Report on Form 8-K/A amends Item 7 of the Current Report on Form
8-K filed with the Securities and Exchange Commission on August 11, 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) XTRANA, INC. FINANCIAL STATEMENTS
---------------------------------
Report of Farber & Hass LLP, Independent Auditors
Balance Sheets as of December 31, 1999 and 1998
Statements of Operations for the Years Ended December 31, 1999 and
1998
Statements of Stockholders' Deficit for the Years Ended December 31,
1999 and 1998
Statements of Cash Flows for the Years Ended December 31, 1999 and
1998
Notes to Financial Statements
Unaudited Balance Sheets as of June 30, 2000 and 1999
Unaudited Statements of Operations for the 6 Months Ended June 30,
2000 and 1999
Unaudited Statements of Cash Flows for the 6 Months Ended June 30,
2000 and 1999
(b) PRO FORMA FINANCIAL INFORMATION
-------------------------------
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June
30, 2000
Unaudited Pro Forma Condensed Consolidated Statements of Operations
for the Six Months Ended June 30, 2000
Unaudited Pro Forma Condensed Consolidated Statements of Operations
for the Year Ended December 31, 1999
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements
(c) EXHIBITS
--------
23.1 Consent of Farber & Hass LLP, Independent Auditors.
2
<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 thereunto duly authorized.
Date: OCTOBER 20, 2000 BIOPOOL INTERNATIONAL, INC.
---------------------- -----------------------------
(Registrant)
/S/ JOHN H. WHEELER
-------------------------------------
John H. Wheeler
President and Chief Executive Officer
3
<PAGE>
INDEPENDENT AUDITORS' REPORT
May 26, 2000
To the Board of Directors of
Xtrana, Inc.:
We have audited the accompanying balance sheets of Xtrana, Inc. (formerly
Molecular Innovations, Inc.) (the "Company") as of December 31, 1999 and 1998
and the related statements of operations, stockholders' deficit and cash flows
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Xtrana, Inc. as of December 31, 1999 and
1998 and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred losses from operations since
inception, has a working capital deficit of $790,962 and has stockholders'
deficit of $763,852. These conditions raise substantial doubt about its ability
to continue as a going concern. Management's plans regarding those matters also
are described in Note 8. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Farber & Hass LLP
Oxnard, California
4
<PAGE>
<TABLE>
XTRANA, INC.
(FORMERLY MOLECULAR INNOVATIONS, INC.)
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
----------------------------------------------------
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash .............................................. $ 46,333 $ 104,238
Accounts receivable ............................... 115,982 87,680
Prepaid expenses and other current assets ......... 10,135 1,242
--------- ---------
Total current assets .............................. 172,450 193,160
--------- ---------
EQUIPMENT:
Computer equipment ................................ 1,761
Office equipment .................................. 3,189
---------
Total equipment ................................... 4,950
Less accumulated depreciation ..................... (1,225)
---------
Property and equipment, net ....................... 3,725
---------
OTHER ASSETS - Intellectual property,
net of amortization ............................. 23,385 24,592
--------- ---------
TOTAL ASSETS ...................................... $ 199,560 $ 217,752
========= =========
</TABLE>
(Continued)
5
<PAGE>
<TABLE>
XTRANA, INC.
(FORMERLY MOLECULAR INNOVATIONS, INC.)
BALANCE SHEETS - CONTINUED
DECEMBER 31, 1999 AND 1998
----------------------------------------------------
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable ................................. $ 208,863 $ 63,929
Accrued payroll and bonuses ...................... 281,710 101,995
Notes payable .................................... 412,000
Accrued expenses and other current liabilities ... 11,322 33,993
Accrued interest ................................. 32,950
Deferred income .................................. 16,567
----------- -----------
Total current liabilities ........................ 963,412 199,917
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value; 1,250,000
shares authorized; 706,880 shares
issued and outstanding ....................... 7,069 7,069
Common stock, $.01 par value; 4,000,000
shares authorized; 1,710,000 shares
issued and outstanding ....................... 17,100 17,100
Paid-in capital .................................. 466,671 384,271
Accumulated deficit .............................. (1,254,692) (390,605)
----------- -----------
Total stockholders' equity (deficit) ............. (763,852) 17,835
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) ................. $ 199,560 $ 217,752
=========== ===========
See accompanying notes to the financial statements.
</TABLE>
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6
<PAGE>
<TABLE>
XTRANA, INC.
(FORMERLY MOLECULAR INNOVATIONS, INC.)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
----------------------------------------------
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
REVENUES ..................................... $ 924,888 $ 317,204
COST OF REVENUES ............................. 437,492 259,432
----------- -----------
GROSS PROFIT ................................. 487,396 57,772
----------- -----------
OPERATING EXPENSES:
General and administrative ................... 520,527 240,229
Sales and marketing .......................... 104,160 18,057
Research and development ..................... 609,378 188,368
----------- -----------
Total operating expenses ..................... 1,234,065 446,654
----------- -----------
LOSS FROM OPERATIONS ......................... (746,669) (388,882)
----------- -----------
OTHER INCOME (EXPENSE):
Other income ................................. 44
Interest expense ............................. (33,502) (163)
Convertible debentures - beneficial
conversion feature ......................... (82,400)
----------- -----------
Other expense, net ........................... (115,858) (163)
----------- -----------
LOSS BEFORE PROVISION FOR INCOME TAXES ....... (862,527) (389,045)
PROVISION FOR INCOME TAXES ................... 1,560 1,560
----------- -----------
NET LOSS ..................................... $ (864,087) $ (390,605)
=========== ===========
See accompanying notes to the financial statements.
</TABLE>
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7
<PAGE>
<TABLE>
XTRANA, INC.
(FORMERLY MOLECULAR INNOVATIONS, INC.)
STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
PREFERRED STOCK COMMON STOCK
-------------------- ------------------- PAID-IN ACCUMULATED
OUTSTANDING AMOUNT OUTSTANDING AMOUNT CAPITAL DEFICIT TOTAL
----------- ------ ----------- ------ -------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1,
COMMON STOCK ISSUED:
Intellectual property 830,000 $8,300 $ (3,300) $ 5,000
Founders' shares 970,000 9,700 (9,215) 485
PREFERRED STOCK
ISSUED:
Class A for I.P. 400,000 $4,000 16,000 20,000
Class B for cash 262,880 2,629 325,371 328,000
Class C for cash 40,000 400 49,600 50,000
Class D for services 4,000 40 4,960 5,000
COMMON SHARES (90,000) (900) 855 (45)
NET LOSS $ (390,605) (390,605)
-----------------------------------------------------------------------------------------
BALANCE, DECEMBER
31, 1998 706,880 7,069 1,710,000 17,100 384,271 (390,605) 17,835
FAIR VALUE OF
BENEFICIAL
CONVERSION 82,400 82,400
NET LOSS (864,087) (864,087)
-----------------------------------------------------------------------------------------
BALANCE, DECEMBER
31, 1999 706,880 $7,069 1,710,000 $17,100 $466,671 $(1,254,692) $(763,852)
=========================================================================================
See accompanying notes to the financial statements.
</TABLE>
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8
<PAGE>
<TABLE>
XTRANA, INC.
(FORMERLY MOLECULAR INNOVATIONS, INC.)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
----------------------------------------------
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ............................................. $(864,087) $(390,605)
Adjustments to reconcile net loss to net cash used by
operating activities:
Depreciation ....................................... 1,225
Amortization ....................................... 1,207 848
Stock issued for services ........................ 5,000
Interest expense:
Convertible debentures and notes ............... 82,400
Changes in operating assets and liabilities:
Accounts receivable ............................ (28,302) (87,680)
Prepaid expenses and other assets ................ (8,893) (1,242)
Accounts payable and accrued expenses ............ 122,263 97,967
Interest payable ................................. 32,950
Accrued payroll and related party .............. 179,715 101,995
Deferred income ................................ 16,567
--------- ---------
Net cash used by operating activities ................ (464,955) (273,717)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES -
Capital expenditures ............................... (4,950)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible notes .......... 412,000
Payments for treasury shares ......................... (45)
Proceeds from issuance of preferred stock ............ 378,000
--------- ---------
Net cash provided by financing activities ............ 412,000 377,955
--------- ---------
NET INCREASE (DECREASE) IN CASH ...................... (57,905) 104,238
CASH, BEGINNING OF YEAR .............................. 104,238
--------- ---------
CASH, END OF YEAR .................................... $ 46,333 $ 104,238
========= =========
</TABLE>
(Continued)
9
<PAGE>
<TABLE>
XTRANA, INC.
(FORMERLY MOLECULAR INNOVATIONS, INC.)
STATEMENTS OF CASH FLOWS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
----------------------------------------------
<CAPTION>
1999 1998
------ ------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Interest ......................................... $ 551 $ 163
Income taxes ..................................... $3,120 $ -0-
In July 1998, the Company exchanged 400,000 shares of preferred stock and
830,000 shares of common stock for intellectual property valued at $25,000.
</TABLE>
------------------------------------------------------------------------
10
<PAGE>
XTRANA, INC.
(FORMERLY MOLECULAR INNOVATIONS, INC.)
NOTES TO FINANCIAL STATEMENTS
---------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS - Xtrana, Inc. (formerly Molecular Innovations,
Inc.) (the "Company") is engaged in the research and development of DNA
analysis. The Company's approach enables DNA testing methods to be applied
in industries and for applications where demand for a more sensitive
approach previously was impractical. Inventing solutions to address the
roadblocks of the practical use of Nucleic Acid Detection, proving
feasibility and commercializing applications is the mission of the Company.
For 1998 and 1999, the majority of the Company's revenue was derived from
Government grants.
The Company has incurred net operating losses since inception and expects
to continue to incur such losses until the Company's business plan of
transforming the Company from a research company to a commercial company is
achieved. These and other factors have caused a liquidity problem at the
Company. As discussed in Note 8, management of the Company plans to effect
a merger with a California company engaged in the research, development,
manufacture and marketing of diagnostic products sold on a worldwide basis.
The accompanying financial statements were prepared assuming the Company
will continue to operate on a going-concern basis and do not include any
adjustments to the recorded amounts of assets or to the recorded amounts or
classification of liabilities which would be required if the Company were
unable to realize its assets and satisfy its liabilities and obligations in
the normal course of business.
CONCENTRATION OF CREDIT RISK - Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally of
accounts receivable. Amounts due from Government agencies account for 100%
of accounts receivable. The Company receives periodic progress payments on
most contracts.
PERVASIVENESS OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS - Based on borrowing rates currently
available to the Company, the carrying value of all financial instruments
potentially subject to valuation risk approximates fair value.
OPERATING SEGMENT INFORMATION - The Company predominantly operates in one
industry segment, bio-medical research. Substantially all of the Company's
assets and employees are located at the Company's headquarters in Denver,
Colorado.
11
<PAGE>
ACCOUNTING FOR CONVERTIBLE DEBT SECURITIES - The Company has issued
convertible debt securities with a non-detachable conversion feature. The
Company accounts for such securities in accordance with Emerging Issues
Task Force Topic D-60. The Company has recorded the fair value of the
beneficial conversion feature as interest expense and an increase to
capital.
PROPERTY AND EQUIPMENT - Property and equipment are stated at cost with
depreciation provided over the estimated useful life of 3 to 5 years using
the straight-line method.
OTHER ASSETS - Other assets consist of intellectual property for which the
Company is amortizing, using the straight-line method over 15 years.
REVENUE RECOGNITION - The Company, for the years ended 1999 and 1998,
records income based on a percentage of cost or milestone method for all
Government contracts and grants. Costs are accumulated by contract or
grant. Each contract is billed bi-weekly or monthly, based on incurred
costs and estimated annual indirect rates. Actual indirect rate adjustments
are then made at year-end, by contract or grant. Where costs exceed
accumulated billings, the Company records an unbilled receivable, in excess
of any billed receivables. Where billings exceed costs, the Company records
a deferred revenue.
RESEARCH AND DEVELOPMENT - The Company incurs research and development
costs relating to DNA analysis. Research and development costs are expensed
as incurred.
INCOME TAXES - The Company accounts for its income taxes under the
provisions of Statement of Financial Accounting Standards 109 ("SFAS 109").
The method of accounting for income taxes under SFAS 109 is an asset and
liability method. The asset and liability method requires the recognition
of deferred tax liabilities and assets for the expected future tax
consequences of temporary differences between tax bases and financial
reporting bases of other assets and liabilities. The provision for income
taxes represents the Delaware corporate minimum franchise tax.
NEW ACCOUNTING PRONOUNCEMENTS - SFAS No. 130, "Reporting Comprehensive
Income", establishes standards for reporting and displaying comprehensive
income and its components in financial statements. The Company adopted the
provisions of SFAS No. 130 in 1998, but has had no elements of
comprehensive income since inception.
SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information", establishes a new model for segment reporting, called the
"management approach" and requires certain disclosures for each segment.
The management approach is based on the way the chief operating
decision-maker organizes segments within a company for making operating
decisions and assessing performance. The Company adopted the provisions of
SFAS No. 131 in 1998, but currently operates in only one industry segment.
2. AGREEMENTS
INTELLECTUAL PROPERTY
In July 1998, the Company entered into Intellectual Property Agreements
with six employees of the Company. In exchange for assigning the Company
all of the rights, title and interest in certain intellectual property and
other rights relating to the development and commercialization of patent
rights, the Company issued 830,000 shares of common stock.
12
<PAGE>
MEMORANDUM OF UNDERSTANDING
In November 1997, the Company entered into an agreement with Bonfils Blood
Center ("BBC") of Colorado and Immunilogical Associates of Denver ("IAD").
BBC and IAD received 400,000 shares of Series A Preferred stock of the
Company in 1998, in consideration for the assignment to the Company of all
rights of Intellectual Property relating to Nucleic Acid Detection
technology, National Institute of Science and Technology ("NIST") grants
and certain other property rights.
As part of certain other property rights, BBC would make available to the
Company, laboratory space on a temporary basis and certain equipment
associated with the NIST grants.
EMPLOYMENT AGREEMENTS
In January 1998, the Company entered into several employment and memorandum
agreements. Three employment agreements provide for a subjective and
objective bonus of up to 30% of base salary. For the period ending December
31, 1999, the Company accrued $131,000 in bonuses which included amounts
negotiated in the employment agreements.
LICENSE
The Company has license agreements with three companies. The agreements
relate to certain proprietary rights relating to technology and marketing.
For the period ending December 31, 1999, no royalty payments were due based
on the terms of the agreements.
3. CONVERTIBLE NOTES PAYABLE
In January 1999, the Board approved the sale of up to $788,640 of 9%
convertible notes due July 31, 2000. The notes are convertible into the
common stock of the Company. The conversion to capital will be equal to
120% of the face amount of the notes. The notes range in face value from
$10,000 to $300,000. Seven notes were issued for a total of $412,000.
4. EQUITY
SERIES A PREFERRED STOCK
In July 1998, the Company created a new class of preferred stock entitled
"Series A Preferred Stock". The Company issued 400,000 shares in exchange
for the assignment of intellectual property. This class has a $1 per share
liquidation price, receives dividends based on an equivalent common
dividend, may vote with the holders of common stock as a single class and
has a mandatory conversion to common stock on a date of a qualified IPO or
a conversion to common at the option of the holder, based on certain
criteria.
SERIES B PREFERRED STOCK
In July 1998, the Company created a new class of preferred stock entitled
"Series B Preferred Stock". The Company may issue up to 460,000 shares at a
purchase price of $25.00 per share. The issue was opened and closed on July
10, 1998, of which 262,880 shares were sold. This class receives dividends
based on an equivalent common dividend, may vote with holders of common as
a single class, and may be converted to common at the option of the holder,
based on certain criteria.
13
<PAGE>
SERIES C PREFERRED STOCK
In July 1998, the Company created a new class of preferred stock entitled
"Series C Preferred Stock". The Company may issue up to 60,000 shares at a
purchase price of $25.00 per share. The issue was opened and closed on July
10, 1998, of which 40,000 shares were sold and 4,000 shares exchanged for
services. This class receives dividends based on an equivalent common
dividend, may vote with holders of common as a single class and has a
mandatory conversion to common on a date of a qualified IPO or a conversion
to common at the option of the holder, based on certain criteria.
STOCK SPLIT
In May 2000, the Board of Directors designated a 20-to-1 stock split to
holders of record for Common stock, Preferred Series A, Preferred Series B
and Preferred Series C. In conjunction with the split, the Board authorized
an increase in capital to 5,250,000 shares at $.01 per share; 4,000,000
shares were designated as Common and 1,250,000 were designated as
Preferred. The stock split has been retroactively reflected in the
financial statements.
5. INCOME TAXES
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets at December 31, 1999 are substantially
composed of the Company's net operating loss carryforward, for which the
Company has made a full valuation allowance.
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the scheduled reversal of deferred tax assets, projected future
taxable income and tax planning strategies in making this assessment.
At December 31, 1999, the Company had a net operating loss carryforward for
Federal income tax purposes of approximately $1.2 million, which is
available to offset future taxable income, if any, through 2019.
6. COMMITMENTS AND CONTINGENCIES
The Company rents its facility on a month-to-month basis. Total rent
expense in 1999 and 1998 was $34,180 and $17,095, respectively.
The Company entered into a lease agreement for equipment starting July 31,
1998. The agreement expires in July 2001. Minimum lease payments due under
the non-cancelable operating lease are as follows:
2000 $ 4,880
2001 2,847
---------
Total $ 7,727
=========
14
<PAGE>
7. YEAR 2000 COMPLIANCE (UNAUDITED)
The Company utilizes computer hardware and software in its operations. Any
of the Company's programs that recognize a date using "00" as the year 1900
rather than the year 2000 could result in errors or system failures.
The Company has completed an evaluation of its computer hardware and
software and believes that its mission critical systems are Year 2000
compliant.
8. MANAGEMENT PLANS (UNAUDITED)
In April 2000, the shareholders of the Company initiated an agreement and
plan of reorganization to merge with a publicly held company in a related
industry. The effect of the merger would be that all of the proprietary
rights, privileges, powers and franchises of the Company would vest in the
publicly held company. All of the assets, debts, liabilities and duties of
the Company would become those of the publicly held company. Immediately
following the merger, the shareholders of the Company will hold
approximately 50% of the outstanding shares of the publicly held company.
In connection with the agreement, each company received a warrant to
purchase approximately 20 percent of the other company should the merger
not be effected.
9. SUBSEQUENT EVENTS (UNAUDITED)
SERIES D PREFERRED STOCK
In April 2000, the Company created a new class of preferred stock entitled
"Series D Preferred Stock". The Company may issue up to 200,000 shares at a
purchase price of $4.00 per share. The issue was opened and closed in April
2000 of which, 168,500 shares were sold. This class receives dividends
based on an equivalent common dividend, may vote with holders of common as
a single class and has a mandatory conversion to common on a date of a
qualified IPO or a conversion to common at the option of the holder, based
on certain criteria.
On April 25, 2000, the Board of Directors repriced the Series D issue to
$3.00 per share. Each holder was given a proportionate increase in shares
to a total of 224,667 shares.
SETTLEMENT AGREEMENT
In February 1999, the Company entered into a financing, advisory and
consulting agreement for the acquisition of working capital. As a result of
such agreement, the Company subsequently initiated a merger agreement (see
Note 8). In May 2000, the Board approved a settlement agreement with two
companies in connection with the merger.
One agreement allows for a 10-year warrant for 540,000 shares of the merged
company, at a specified formula price, plus $300,000 which is payable by
the Company.
The second agreement allows for a 5-year warrant for 180,000 shares of the
merged company, at a specified formula price, plus $175,000, which was paid
by the Company.
15
<PAGE>
<TABLE>
XTRANA, INC.
BALANCE SHEET
FOR THE PERIODS ENDED JUNE 30, 2000 AND JUNE 30, 1999
UNAUDITED
(in thousands)
<CAPTION>
2000 1999
------- -------
<S> <C> <C>
ASSETS
Current Assets
Cash and Equivalents ........................... $ 836 $ 230
Prepaid Expense and Other .................... 1 2
Accounts Receivable, net ....................... 244 57
------- -------
Total Current Assets ....................... 1,081 289
Property and Equipment, net .................... 8 1
Other Assets ................................... 21 25
------- -------
TOTAL ASSETS ....................................... $ 1,110 $ 315
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Total Current Liabilities .......................... $ 1,353 $ 668
Stockholder's Equity
Common Stock ................................... 34 24
Additional Paid-in-Capital ..................... 1,344 384
Retained Earnings .............................. (1,621) (761)
------- -------
Total Stockholder's Equity ................. (243) (353)
------- -------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ......... $ 1,110 $ 315
======= =======
</TABLE>
16
<PAGE>
<TABLE>
XTRANA, INC.
STATEMENT OF OPERATIONS
FOR THE 6 MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999
UNAUDITED
(in thousands)
<CAPTION>
2000 1999
----- -----
<S> <C> <C>
Contract revenues .................................... $ 658 $ 288
Cost of sales ........................................ 306 154
----- -----
Gross profit ........................... 352 134
Operating expenses:
Selling, general and administrative ........... 606 293
Research and development ...................... 120 212
----- -----
Total operating expenses ............... 726 505
Other income, net .................................... 8
----- -----
Income (loss) from operations before taxes ........... (366) (371)
----- -----
Income tax expense
----- -----
Net income (loss) .................................... $(366) $(371)
===== =====
</TABLE>
17
<PAGE>
<TABLE>
XTRANA, INC.
STATEMENT OF CASH FLOWs
FOR THE 6 MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999
UNAUDITED
(in thousands)
<CAPTION>
2000 1999
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ................................................. $ (366) $ (370)
Adjustments to reconcile net loss to net cash used by
operating activities:
Depreciation & Amortization ............................ 2
Changes in operating assets and liabilities:
Accounts receivable .................................. (127) 30
Prepaid expenses and other assets .................... 9
Accounts payable and accrued expenses ................ (198) 56
------- -------
Net cash used by operating activities .................... (680) (284)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ................................... (5) (2)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable .................. 1,000
Proceeds from issuance of convertible notes .............. 412
Payments for treasury shares .............................
Proceeds from issuance of preferred stock ................ 475
------- -------
Net cash provided by financing activities ................ 1,475 412
------- -------
NET INCREASE (DECREASE) IN CASH .......................... 790 126
CASH, BEGINNING OF PERIOD ................................ 46 104
------- -------
CASH, END OF PERIOD ...................................... $ 836 $ 230
======= =======
</TABLE>
18
<PAGE>
<TABLE>
BIOPOOL INTERNATIONAL, INC. AND XTRANA, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2000
UNAUDITED
(IN THOUSANDS)
<CAPTION>
BIPL XTRANA ADJUSTMENTS CONSOLIDATED
--------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and Equivalents ............... $ 4,140 $ 836 $ 4,976
Accounts Receivable, net ........... 1,954 244 2,198
Inventories ........................ 2,209 2,209
Prepaid Expense and Other .......... 267 1 268
Deferred Tax Benefits .............. 109 109
Note Receivable from Xtrana ........ 1,000 (1,000) a
--------------------------------------------------
Total Current Assets ........... 9,679 1,081 9,760
Property and Equipment, net ........ 1,009 8 1,017
Deferred Tax Benefits .............. 254 648 e 902
Other Assets ....................... 928 21 8,457 b 9,406
--------------------------------------------------
TOTAL ASSETS ........................... $ 11,870 $ 1,110 $ 8,105 $ 21,085
==================================================
LIABILITIES AND STOCKHOLDER'S
EQUITY
Total Current Liabilities .............. $ 1,184 $ 1,353 (694) a,f $ 1,843
Deferred Tax Liability ................. 126 126
Stockholder's Equity
Common Stock ....................... 83 34 45 c 162
Additional Paid-in-Capital ......... 10,793 1,344 7,133 c 19,270
Retained Earnings .................. 42 (1,621) 1,621 d,f 42
Accumulated Other Comprehensive Loss (358) (358)
--------------------------------------------------
Total Stockholder's Equity ..... 10,560 (243) 19,116
--------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY ................... $ 11,870 $ 1,110 $ 8,105 $ 21,085
==================================================
</TABLE>
19
<PAGE>
<TABLE>
BIOPOOL INTERNATIONAL, INC. AND XTRANA, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
UNAUDITED
(IN THOUSANDS EXCEPT PER SHARE DATA)
<CAPTION>
INCOME STATEMENTS PRO FORMA
------------------- --------------------------
BIPL XTRANA ADJUST REF CONSOL'D
------------------- --------------------------
<S> <C> <C> <C> <C> <C>
Sales .................................... $ 5,243 $ 5,243
Contract revenues ........................ $ 658 658
------------------- --------
Total sales and revenues ... 5,243 658 5,901
Cost of sales ............................ 2,438 306 2,744
------------------- --------
Gross profit ............... 2,805 352 3,157
Operating expenses:
Selling, general and administrative 1,783 606 $ 553 a 2,942
Research and development .......... 208 120 328
------------------- --------
Total operating expenses ... 1,991 726 3,270
Other income, net ........................ 73 8 81
------------------- --------
Income (loss) from operations before taxes 887 (366) (32)
Income tax expense ....................... 298 (172) b 126
------------------- ------ --------
Net income (loss) ........................ $ 589 $ (366) $ (381) $ (158)
=================== ====== ========
Weighted average shares outstanding
Basic ............................. 8,307 7,893 16,200
Effect of dilutive shares ......... 34 N/A
-------- --------
Diluted ........................... 8,341 N/A
======== ========
Diluted and basic earnings per share ..... $ 0.07 $ (0.01)
======== ========
</TABLE>
20
<PAGE>
<TABLE>
BIOPOOL INTERNATIONAL, INC. AND XTRANA, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
UNAUDITED
(IN THOUSANDS EXCEPT PER SHARE DATA)
<CAPTION>
INCOME STATEMENTS PRO FORMA
------------------- --------------------------
BIPL XTRANA ADJUST REF CONSOL'D
------------------- --------------------------
<S> <C> <C> <C> <C> <C>
Sales ................................... $ 8,842 $ 8,842
Contract revenues ....................... $ 925 925
------------------- --------
Total sales and revenues ... 8,842 925 9,767
Cost of sales ........................... 4,681 437 5,118
------------------- --------
Gross profit ............... 4,161 488 4,649
Operating expenses:
Selling, general and administrative 3,113 625 $ 815 a 4,553
Research and development .......... 322 609 931
------------------- --------
Total operating expenses ... 3,435 1,234 5,484
Other income (expense), net ............. 14 (116) (102)
------------------- --------
Income (loss) from continuing operations
before taxes ...................... 740 (862) (937)
Income tax expense ...................... 340 2 (264) b 78
------------------- --------
Income (loss) from continuing operations $ 400 $ (864) $ (551) $ (1,015)
=================== ====== ========
Weighted average shares outstanding
Basic ............................. 8,375 7,893 16,268
Effect of dilutive shares ......... 24 N/A
-------- --------
Diluted ........................... 8,399 N/A
======== ========
Diluted and basic earnings per share
From Continuing operations ........ $ 0.05 $ (0.06)
======== ========
</TABLE>
21
<PAGE>
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
The unaudited pro forma condensed consolidated statement of income for the
twelve months ended December 31, 1999 gives effect to the consolidated results
of operations as if the merger occurred at January 1, 1999. The unaudited pro
forma condensed consolidated statement of income for the six months ended June
30, 2000 gives effect to the consolidated results of operations as if the merger
occurred at January 1, 2000. These results are not necessarily indicative of the
consolidated results of operations of Biopool International, Inc. ("Biopool") as
they may be in the future, or as they might have been had these events been
effective at January 1, 1999 and 2000, respectively. The unaudited pro forma
condensed statements are based on the individual historical results of
operations of Biopool and Xtrana, Inc. ("Xtrana"), and have been prepared to
reflect the acquisition of Xtrana by Biopool. The unaudited pro forma condensed
consolidated balance sheet gives effect to the financial position at June 30,
2000 as if the merger occurred at June 30, 2000. Such consolidated financial
position of Biopool as it may be in the future, or as it might have been had
these events been effective at June 30, 2000. The unaudited pro forma condensed
consolidated financial information should be read in conjunction with the
historical financial statements of Biopool and Xtrana and the related notes
thereto.
PRO FORMA ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF INCOME FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999 AND THE SIX
MONTHS ENDED JUNE 30, 2000:
a) Gives effect to: (i) the amortization of goodwill of approximately
$8,876 over 20 years as if the merger had occurred at January 1 for
each of the periods presented, (ii) additional compensation expense
pursuant to Employment Agreements executed concurrently with the
Merger Agreement, and (iii) $306 of merger costs incurred by Xtrana.
b) Gives effect to the current losses of Xtrana for US tax purposes,
adjusted for the tax provision for Biopool, AB, Biopool's wholly owned
subsidiary in Sweden.
PRO FORMA ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE
SHEET AT JUNE 30, 2000:
a) To record the elimination of a loan made from Biopool to Xtrana in the
amount of $1,000 prior to the merger.
b) Reflects the excess purchase price as if the merger had occurred at
June 30, 2000.
c) Gives effect to: (i) the issuance of 7,893 shares as merger
consideration to Xtrana shareholders, (ii) the issuance of 540
warrants to a third party for financial advisory services, and (iii)
eliminates the historical equity of Xtrana.
d) To reflect the elimination of the historical retained loss of Xtrana.
e) To reflect the reduction of the valuation allowance related to
Xtrana's net operating loss carry forward.
f) To reflect $306 in merger costs incurred by Xtrana.
NOTE: The Company is still in the process of evaluating the fair value of the
assets acquired and the liabilities assumed in order to make a final
determination of the excess purchase price, including allocation to the
intangibles other than goodwill. Accordingly, the purchase accounting
information is preliminary and has been made solely for the purpose of
developing such pro forma condensed consolidated financial information. Based on
current information, the preliminary determination of the cost in excess of the
net assets acquired and the allocation to goodwill should not materially differ
from the final determination.
22
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- --------------------------------------------------
23.1 Consent of Farber & Hass LLP, Independent Auditors
23
