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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 (Date of earliest event reported) September 29, 1995
MBf USA, Inc.
(Exact name of registrant as specified in its charter)
Oklahoma 0-17458 73-1326131
(State of or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
500 Park Boulevard Suite 1260, Itasca, Illinois 60143
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 285-9191
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
MBf USA, Inc. (the "Company") as of June 30, 1995 was unable to meet
the minimum capital and surplus requirements required under the Nasdaq by-laws
and was granted an exception from such requirements. Effective October 13, 1995
and for the duration of the exception, the Company's Class B common stock
("Common Stock") will continue to be listed on The Nasdaq SmallCap Market under
the trading symbol of MBFAC.
The Company's inability to meet Nasdaq's minimum capital and surplus
requirements is due primarily to one-time restructuring charges associated with
the discontinuance of its unprofitable nutritional product business, severance
payments related to the Company's recent management restructuring, larger than
anticipated startup costs associated with launching its condom line, and a
reduction in profit margins due to the doubling of latex prices in the past
year.
The temporary exception granted by Nasdaq is conditioned on the Company
taking the steps set forth below to allow the Company to comply with the
minimum capital and surplus requirements in the future.
MBf International Ltd., a Hong Kong corporation and the majority
shareholder of the Company, loaned $1,200,000 to the Company to pay for 7%
Cumulative Preferred Stock of American Health Products Corporation having a
value of $1,200,000 which the Company had previously purchased effective as of
September 29, 1995. MBf International Ltd. has agreed to accept shares of the
Company's Common Stock having a value of $1,200,000 in satisfaction of the
Company's indebtedness to MBf International Ltd., which transaction was
effective as of October 30, 1995.
The Company also has entered into a Stock Acquisition Agreement with
MBf International Ltd. dated as of October 30, 1995 whereby MBf International
Ltd. will exchange its beneficial interest in 1,365 shares of common stock (par
value Indonesian Rupiah 2,167,000 each equivalent to $1,000 US Dollars each)
of P.T. MBf Buana Multicorpora ("MBf Rubber"), an Indonesian company, which
shares are held in trust by MBf Holdings Berhad for the benefit of MBf
International Ltd. and represent seventy percent (70%) of the outstanding
common stock of MBf Rubber and a non-interest bearing demand note with a face
value of $737,769 (the "Note"), which Note is expected to be outstanding for
three years and will be guaranteed by MBf Holdings Berhad, the parent company
of MBf International Ltd., for 2,550,720 shares of Common Stock, par value
$0.01 per share of the Company having an aggregate value of $1,219,563. The
transaction is expected to close on or about October 31, 1995.
2
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Exhibits
99. Additional Exhibits.
1. Press Release dated October 18, 1995
2. Pro Forma Balance Sheet for MBf USA, Inc. and subsidiaries
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EXHIBIT 99.1
[MBf USA, INC. LETTERHEAD]
FOR IMMEDIATE RELEASE
MBf USA, INC. GRANTED TEMPORARY EXCEPTION
TO NASDAQ LISTING REQUIREMENTS
Company's Common Stock to Trade as MBFAC
ITASCA, ILLINOIS - OCTOBER 18, 1995 - MBf USA, Inc. today announced that the
Company has been granted an exception from the minimum capital and surplus
requirements required under the Nasdaq by-laws. For the duration of the
exception, the Company's common stock will continue to be listed on The Nasdaq
SmallCap Market under the trading symbol of MBFAC.
MBf USA said its inability to meet Nasdaq's minimum capital and surplus
requirements as of June, 30, 1995, was due primarily to one-time restructuring
charges associated with the discontinuance of its unprofitable nutritional
product business, severance payments related to the Company's recent management
restructuring, larger than anticipated startup costs associated with launching
its condom line, and a reduction in profit margins due to the doubling of latex
prices in the past year.
MBf USA's temporary exception granted by Nasdaq is conditioned on the Company
taking certain specific steps that will allow the Company to comply with the
minimum capital and surplus requirements in the future. The Company believes
that it can meet these requirements, although there can be no assurance that it
will do so.
Edward Marteka, President of MBf USA stated, "Although we anticipate
significant losses through the third quarter, we expect that the fourth quarter
results will be markedly improved due to our recent restructuring efforts,
decreased overhead primarily related to the closing of our executive offices in
New Jersey, as well as reductions in the costs of goods sold driven by the
recent decline in the price of latex raw materials."
Stephen Tan, Chief Financial Officer added, "We are currently looking at a
number of alternative financing options to raise beween $2.3 million and $3.3
million for the Company. Additionally, we have received assurances that our
majority shareholder, MBf Holdings, will continue to support MBf USA
financially in order to meet the Nasdaq capital and surplus requirements."
MBf USA, Inc. and its subsidiaries market Glovetex(R) brand and OEM medical
examination gloves in the United States and the world famous Playboy(R) brand
condoms internationally.
#### #### ####
CONTACT: -or- MBf USA's INVESTOR RELATIONS COUNSEL:
MBf USA, INC. The Equity Group Inc.
Edward Marteka, President Terry Hosmer (212) 836-9610
(708) 285-9191 Linda Latman (212) 836-9609
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MBfUSA, INC. AND SUBSIDIARIES
PROFORMA BALANCE SHEETS
<TABLE>
<CAPTION>
Debt to equity Indonesia factory Proforma Balances
September 30, 1995 Conversion by Injection by October 31,1995
------------------ October 31, 1995 October 31, 1995 -----------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 20,250 $ $ $ 20,250
Accounts receivable - trade,
net of allowance for doubtful
accounts of $51,001 in 1995 and
$144,009 in 1994 5,445,361 5,445,361
Note receivable from affiliate --
Inventories 9,174,150 9,174,150
Prepaid expenses 423,457 423,457
Other current assets 184,223 184,223
------------- -------------
Total current assets 15,247,441 15,247,441
------------- -------------
PROPERTY, PLANT AND EQUIPMENT:
Building Improvements 21,744 21,744
Equipment, furniture and
fixtures 463,738 463,738
------------- -------------
Total property, plant and
equipment 485,482 485,482
Less - Accumulated depreciation (198,498) (198,498)
------------- -------------
Property, plant and equipment,
net 286,984 286,984
-------------
INVESTMENT IN LABORATORY SPECIALISTS, INC. 1,059,367 1,059,367
------------- -------------
INVESTMENT IN INDONESIAN COMPANY -- 1,087,769 1,087,769
------------- ---------- -------------
OTHER ASSETS:
Goodwill, net of accumulated
amortization of $308,491 in 1995
and $236,222 in 1994 1,441,509 1,441,509
Trademarks and license rights,
net of accumulated amortization
of $41,477 in 1995 and $36,532
in 1994 311,184 311,184
Due from affiliates/shareholders 1,459,538 1,459,538
Other assets 115,728 115,728
------------- -------------
Total other assets 3,327,959 3,327,959
------------- -------------
$ 19,921,751 $ 0 $1,087,769 $ 21,009,520
============= ========== ========== =============
</TABLE>
The accompanying notes to unaudited consolidated financial statements are an
integral part of these proforma balance sheets.
-1-
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MBf USA, INC. AND SUBSIDIARIES
PROFORMA BALANCE SHEETS
<TABLE>
<CAPTION>
Debt to equity Indonesia factory Proforma Balances
September 30, 1995 Conversion by Injection by October 31, 1995
------------------ October 31, 1995 October 31, 1995 ----------------
(Unaudited) (Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C> <C> <C>
CURRENT LIABILITIES:
Trade notes payable to bank $ 1,369,000 $ $ $ 1,369,000
Notes payable and current
portion of long-term
obligations 2,703,542 2,703,542
Accounts payable - trade 5,813,134 5,813,134
Due to afilliates/shareholders 2,490,853 (1,200,000) 1,290,853
Accrued expenses 1,104,326 1,104,326
----------- ---------- ----------
Total current liabilities 13,481,755 (1,200,000) 12,281,755
----------- ---------- ----------
LONG-TERM OBLIGATIONS 6,463,125 6,463,125
----------- ----------
DUE TO AFFILIATES 775,732 775,732
----------- ----------
SHAREHOLDERS' EQUITY:
Series A common stock, $.01 par
value, 12,525,374 shares
authorized, 12,525,374 shares
issued and outstanding 125,253 125,253
Common stock, $.01 par value,
40,000,000 shares authorized,
12,247,427 shares issued at
September 30, 1995 122,475 25,098 25,507 173,080
Additional paid-in capital 4,973,195 1,174,902 1,062,282 7,210,359
Retained Earnings (Deficit) (4,696,748) (4,696,748)
Less - Common stock in treasury
at cost 1,300,000 shares at
September 30, 1995 (1,323,036) (1,323,036)
----------- ----------- -------------- ------------
Total shareholders' equity (798,861) 1,200,000 1,087,769 1,488,908
----------- ----------- -------------- ------------
$19,921,751 $ 0 $ 1,087,769 $ 21,009,520
=========== =========== ============== ============
</TABLE>
The accompanying notes to unaudited consolidated financial statements are an
integral part of these proforma balance sheets.
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[AMERICAN HEALTH PRODUCTS LETTERHEAD]
MBf USA, Inc. and Subsidiaries
Notes to Proforma Balance Sheet
Note 1 - The proforma balance sheet includes the conversion of debt to equity.
At September 30, 1995, MBf International Ltd., the majority
shareholder of MBf USA, Inc. (the "Company"), has advanced the
Company $1.2 million. This debt will be converted to equity equal to
2,509,804 shares of common stock of the Company. The Company
completed this transaction on October 30, 1995. This will increase
the total number of common shares outstanding from to 12,247,427 to
14,757,231 shares.
Note 2 - The proforma balance sheet includes the injection of a 70%
interest in an Indonesian glove manufacturing company, PT Buana
Multiocorpora comprising of 1,365 shares of par value Indonesian
Rupiah 2,167,000 each (equivalent to US$1,000.00 each) of which
US$350,000.00 has been paid up and a note receivable with a face value
of US$737,769.00 for a total aggregate value of US$1,219,563.00.
Since these transactions are between companies under common control,
the carryover basis has been used to record the assets received (ie
US$1,087,769). The Indonesian company is currently owned 70% by MBf
International Ltd. which will exchange its 70% interest equity in the
Indonesian company for 2,550,720 shares of common stock of MBf USA,
Inc. The Company completed this transaction on October 31, 1995. The
total number of common shares outstanding will further increase to
17,307,951 shares.
Note 3 - For the purpose of this proforma balance sheet only, and not to infer
any estimate of future earnings or forecasts, the proforma
balance sheet assumes no profit or loss in the month of October 1995
for MBf USA, Inc. or the Indonesian company, PT Buana Multicorpora.
The Company's net worth is expected to be approximately $1.488
million after the completion of these transactions.
