<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
/ / Annual report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the calendar year ended December 31, 1993
---------------------------------------------
/ / Transition report under Section 13 or 15(d)of the Securities Exchange
Act of 1934
For the transition period from to
------------------- -------------------
Commission File Number: 33-25647-D
-------------------------------------------------
Advanced Biological Systems, Inc.
- --------------------------------------------------------------------------------
(Name of Small Business Issuer in Its Charter)
Delaware 87-0462198
- ------------------------------- --------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2936 Sierra Point Place, Salt Lake City, Utah 84109
- --------------------------------------------------------------------------------
(Address of Principal Executive Office) (Zip Code)
801-521-8000
- --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
None
- ------------------------------- ---------------------
Securities registered under Section 12(g) of the Exchange Act:
None
- --------------------------------------------------------------------------------
(Title of Class)
Check whether the issuer; (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for past 90 days.
Yes No xx
--- ---
1
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The last report filed by the Company (exclusive of a Form 8-K with date
of report of December 18, 1994, filed December 21, 1994) was a Form 10-Q for its
quarter ended September 30, 1992. Since such date and primarily during the first
six months of 1996, the Company has embarked upon an effort to bring itself
"current" with respect to its reporting requirements and in that regard is in
the process of preparing all Forms 10-QSB and 10-KSB commencing with calendar
year ended December 31, 1992 through and including quarter ended March 31, 1996;
it being expected that each of these reports will be filed on or before July 15,
1996 and (absent an occurrence which would otherwise require the filing of a
Form 8-K) the Company would then be "current" with respect to its reporting
requirements. See also Item 6 - Management's Plan of Operation.
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent calendar year - $-0-
The aggregate market value for the 8,960,374 shares of voting stock
(all of one class of $.001 par value Common Stock) held by non-affiliates * of
Registrant as of July 8, 1996 is $700,029.21 based upon an average of the bid
($.0625) and asked ($.09375) prices for such stock on the date heretofore
indicated. See Item 5 (a) which indicates the limited, if any, trading activity
in the Registrant's securities for the periods indicated. By virtue hereof, it
is difficult if not impossible to accurately arrive at a completely realistic
"aggregate market value" of Registrant shares held by non-affiliates as called
for herein especially in view of the fact that the existence of limited or
sporadic quotations should not of itself be deemed to constitute an "established
public trading market". The above statements regarding "aggregate market value"
and "established public trading market" should be taken into careful
consideration when considering the information contained herein regarding the
indicated "aggregate market value" of shares of voting stock held by
non-affiliates.
* Affiliates for the purpose of this item refers to the Registrant's
officers and directors and/or any persons or firms (excluding those
brokerage firms and/or clearing houses and/or depository companies
holding Registrant's securities as record holders only for their
respective clienteles' beneficial interest) owning 5% or more of the
Registrant's Common Stock, both of record and beneficially - all as of
July 8, 1996.
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes No
--- ---
Not Applicable
2
<PAGE> 3
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. 27,781,234 shares as of
July 8, 1996.
Transitional Small Business Disclosure Format: Yes x No
--- ---
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II,
etc.)into which the document is incorporated: (1) any annual report to
security-holders; (2) any proxy or information statement; and (3) any prospectus
filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities
Act").
None
3
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I
Item 1. Description of Business 5
Item 2. Description of Property 5
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to a Vote of
Security Holders 5
PART II
Item 5. Market For Common Equity and Related
Stockholder Matters 6
Item 6. Management's Plan of Operation 7
Item 7. Financial Statements 9
F1 - F13
Item 8. Changes in and Disagreements With
Accountants on Accounting and
Financial Disclosure 10
PART III
Item 9. Directors, Executive Officers, Promoters
and Control Persons; Compliance With
Section 16(a) of the Exchange Act 10
Item 10. Executive Compensation 11
Item 11. Security Ownership of Certain Beneficial
Owners and Management 11
Item 12. Certain Relationships and Related
Transactions 13
Item 13. Exhibits, List and Reports on Form 8-K 13
</TABLE>
4
<PAGE> 5
ITEM 1. DESCRIPTION OF BUSINESS
Advanced Biological Systems, Inc. (hereinafter "AVBS" or the "Company")
is a development stage company incorporated in the State of Delaware in October,
1988 for the purpose of engaging in certain biotech enterprises (having acquired
marketing rights to certain plant-source products, i.e. "phytopharmaceuticals").
For further specific and/or summarized information with respect to the Company's
business activities through December 31, 1991, reference is herewith made to its
Form 10-K for such calendar year and in particular (but not limited to) Item 1
thereto.
The Company has not had any revenues from operations from inception
through March 31, 1996 and in 1992 discontinued operations due to lack of
working capital. Thereafter, the Company has been basically inactive through
March 31, 1996.
Reference is herewith made to Item 6 hereof regarding Management's Plan
of Operations with respect to proposed future Company activities.
EMPLOYEES
At the present time the Company has no employees other than its
President.
ITEM 2. DESCRIPTION OF PROPERTY
The Company currently maintains its executive offices, rent free, at
the home of its President (Emanuel A. Floor) at 2936 Sierra Point Place, Salt
Lake City, Utah 84109 and its telephone number is 801-521-8000. The Company
currently intends to continue to maintain such offices until such time as
business activities warrant the expenditure of monies for separate executive
offices.
ITEM 3. LEGAL PROCEEDINGS
The Company is not presently a part to any material litigation nor, to
the knowledge of management, is any material litigation threatened.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company has not held an annual meeting of stockholders throughout
calendar years 1992, 1993 , 1994 and 1995. While the Company does currently
intend to hold an annual meeting of stockholders for its calendar year ended
December 31, 1995 it has not, as yet, formalized any specific plans as to any
proposed date for such meeting.
5
<PAGE> 6
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) Marketing Information. The following table sets forth, for the
periods indicated, the range of high and low bid prices on the dates indicated
for the Company's securities indicated below for each full quarterly period
within the two most recent calendar years (if applicable) and any subsequent
interim period for which financial statements are included and/or required to be
included.
<TABLE>
<CAPTION>
Calendar Year Ended December 30, 1992 Quarterly Common Stock Price
By Quarter Ranges (1)
- ------------------------------------- -----------------------
Quarter Date High Low
- ------- ---- ---- ---
<S> <C> <C> <C>
1st March 31, 1992 $12.00 $4.50
2nd June 30, 1992 $ 5.25 $ .75
3rd September 30, 1992 (2) $ 2.0833 $ .0833
4th December 31, 1992 $ .4687 $ .125
</TABLE>
<TABLE>
<CAPTION>
Calendar Year Ended December 30, 1993 Quarterly Common Stock Price
By Quarter Ranges (1)
- ------------------------------------- -----------------------
Quarter Date High Low
- ------- ---- ---- ---
<S> <C> <C> <C>
1st March 31, 1993 $ .3125 $ .25
2nd June 30, 1993 $ .375 $ .125
3rd September 30, 1993 $ .25 $ .0625
4th December 31, 1993 $ .149 $ .0625
</TABLE>
(1) The existence of limited or sporadic quotations should not of itself be
deemed to constitute an "established public trading market". To the
extent that limited trading in the Company's Common Stock has taken
place, such transactions have been limited to the over-the-counter
market (except as otherwise may be indicated hereinafter). All prices
indicated herein are as reported to the Company by broker-dealer(s)
making a market in its securities in the National Quotation Data
Service ("pink sheets") and/or in the Electronic Over-the-Counter
Bulletin Board (the latter under the symbol AVBS). The aforesaid
securities were not traded or quoted on any automated quotation system
(other than as may be indicated herein). The over-the-counter market
quotes indicated above reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not necessarily represent
actual transactions.
(2) During the calendar quarter ended September 30, 1992, and more
particularly on or about August 25, 1992, the Company effectuated a
reverse stock split of its Common Stock outstanding on a 1 for 3 basis.
(b) Holders. As of July 8, 1996 the approximate number of
stockholders of the Company's Common Stock (as indicated on its transfer agent's
July 8, 1996 certified list of stockholders) amounted to 182 persons and/or
firms (inclusive of those brokerage firms and/or clearing houses and/or
depository companies holding the Company's securities for their respective
clientele - each such brokerage house, clearing house and/or depository firm
being considered as one record holder). The exact number of beneficial owners of
the Company's securities is not known but would necessarily exceed the number of
record owners indicated above in that
6
<PAGE> 7
brokerage firms and/or clearing house and/or depository companies are normally
record owners for presumably any number of unidentified beneficial owners.
(c) Dividends. The payment by the Company of dividends, if any, in
the future rests within the discretion of its Board of Directors and will
depend, among other things, upon the Company's earnings, its capital
requirements and its financial condition, as well as other relevant factors. The
Company has not paid or declared any dividends upon its Common Stock since its
inception and, by reason of its present financial status and its contemplated
financial requirements , does not contemplate or anticipate paying any dividends
upon its Common Stock in the foreseeable future.
ITEM 6. MANAGEMENT'S PLAN OF OPERATION
The Company is subject to the reporting requirements under the
Securities Exchange Act of 1934. Notwithstanding such requirements, the last
report filed by the Company (exclusive of a Form 8-K with date of report of
December 18, 1994, filed December 28, 1994) was a Form 10-Q for its quarter year
ended September 30, 1992. The Company, during the first six months of 1996
embarked upon an effort to bring itself "current" with respect to its reporting
requirements and in that regard has prepared and filed (or is in the process of
filing) the following reports as indicated:
Form 10-KSB for calendar year ended December 31, 1992
Forms 10-QSB for quarters ended March 31, 1993, June 30, 1993 and September 30,
1993
Form 10-KSB for calendar year ended December 31, 1993
Forms 10-QSB for quarters ended March 31, 1994, June 30, 1994 and September 30,
1994
Form 10-KSB for calendar year ended December 31, 1994
Forms 10-QSB for quarters ended March 31, 1995, June 30, 1995 and September 30,
1995
Form 10-KSB for calendar year ended December 31, 1995 and
Form 10-QSB for quarter ended March 31, 1996
Each of the above referenced reports were basically prepared at or
around the same time and forwarded for filing purposes on or about the same
date.
Each of the above referenced reports clearly indicate that the Company
has not had any revenues from operations since its inception in 1988. Such
reports further indicate that in 1992 the Company discontinued all operations
due to lack of working capital and that the Company has been inactive and
remained inactive through March 31, 1996.
Such reports further indicate that from time to time, and as management
felt the need arose, the Company utilized sale of its securities for purposes of
obtaining operating capital and/or in order to settle certain outstanding
indebtedness. For a complete summarization of all shares of Company common stock
issued from inception through December 31, 1995, reference is herewith made to
the audited statement of stockholders' equity as same appears in the Company's
Form 10-KSB for calendar year ended December 31, 1995.
7
<PAGE> 8
Such statement of stockholders' equity (taken in conjunction with those
prior audited statements of stockholders' equity for calendar years ended
December 31, 1992, 1993 and 1994) indicates, in part, as follows:
Calendar year ended December 31,
A) 1992 - the Company issued 1,437,095 shares of its common stock in
settlement of debt in the amount of $1,192,445. During such time period
the Company also issued 347,693 shares of its common stock in private
placements for net proceeds of $513,735.
B) 1993 - the Company issued 220,875 shares of its common stock in
settlement of debt in the amount of $220,875. During such time period
the Company also issued 666,666 shares of its common stock in private
placements for net proceeds of $103,250.
C) 1994 - no new shares of common stock were issued.
D) 1995 - the Company issued 14,000,000 shares of its common stock in
settlement of debt in the amount of $140,398. During such time period
the Company also issued 3,400,000 shares of its common stock in private
placements for net proceeds of $100,000.
No shares of common stock were issued during the first quarter of 1996.
As can be seen from the above, from January 1, 1992 through March 31,
1996 an aggregate of 15,657,970 shares of Company common stock were issued for
purposes of retiring debt in the amount of $1,553,718. Accordingly, as a direct
result of the above (and taking into consideration debt retirement in exchange
for securities) Company liabilities (which consists of accounts payable - trade)
were reduced to $55,327 as of March 31, 1996.
Subsequent to March 31, 1996 and during the first two weeks of April,
1996, the Company issued an additional 1,000,000 shares of its common stock for
cash consideration in the amount of $35,000. The Company further authorized
issuance of an additional 70,000 shares of its common stock in settlement, on
May 8, 1996, of a claim by a former officer for use of his name on stock
certificates subsequent to his resignation. Accordingly, as of July 8, 1996 the
total number of shares of common stock issued and outstanding amounted to
27,781,234.
Once each of the above referenced Forms 10-QSB and 10-KSB have been
filed the Company will be current with respect to its reporting requirements and
will be in a position so as to pursue its current business objectives, i.e., to
seek potential business opportunities which in the opinion of management may
provide a profit to the Company. Such involvement may be either in the form of
an acquisition of existing business(s) and/or the acquisition of assets in order
to establish subsidiary business(es) for the Company. These plans remain in
their formative stages and are, accordingly, subject to change if and when
alternative business opportunities arise. At the present time management
considers the Company's principal asset to be the fact that the Company is a
"public" company trading on the electronic over-the-counter bulletin board,
thereby
8
<PAGE> 9
creating a "value" for the Company which might not otherwise exist if it were
not a public company. An example of such "value" relates directly to the
Company's ability to, as aforesaid, retire a substantial amount of outstanding
indebtedness in exchange for issuance of its securities, thereby creating a
relatively broad base of interested stockholders, many of whom were former
creditors of the Company.
ITEM 7. FINANCIAL STATEMENTS
The following financial statements have been prepared in accordance
with the requirements of Regulation S-X and supplementary financial information
included herein, if any, has been prepared in accordance with Item 302 of
Regulation S-K, such information appears on pages F-1 through F-13 inclusive of
this Form 10-KSB, which pages follow this page.
ADVANCED BIOLOGICAL SYSTEMS, INC.
DECEMBER 31, 1993 AND 1992
CONTENTS
<TABLE>
<CAPTION>
Page
------
<S> <C>
Independent Auditor's Report F-1
Balance Sheets F-2
Statements of Operations F-3
Statements of Stockholders' Equity (Deficit) F-4
Statements of Cash Flows F-8
Notes to Financial Statements F-11 - F-13
</TABLE>
9
<PAGE> 10
[JONES, JENSEN & COMPANY LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Advanced Biological Systems, Inc.
Salt Lake City, Utah
We have audited the accompanying balance sheets of Advanced Biological Systems,
Inc. (A Development Stage Company) as of December 31, 1993 and 1992 and the
related statements of operations, stockholders' equity (deficit) and cash flows
for the years ended December 31, 1993, 1992 and 1991 and from the date of
inception on October 3, 1988 through December 31, 1993. 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 audit 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 referred to above present fairly, in
all material respects, the financial position of Advanced Biological Systems,
Inc. (A Development Stage Company) as of December 31, 1993 and 1992 and the
results of its operations and its cash flows for the years ended December 31,
1993, 1992 and 1991, and from the date of inception on October 3, 1988 through
December 31, 1993 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 5 to the
financial statements, the Company is a development stage company with no
significant operating revenues to date. These conditions raise substantial doubt
about its ability to continue as a going concern. Management's plans concerning
these matters are also described in Note 5. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Jones, Jensen & Company
- ---------------------------
Jones, Jensen & Company
April 4, 1996
F1
<PAGE> 11
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31, December 31,
1993 1992
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 30 $ --
----------- -----------
Total Current Assets 30 --
----------- -----------
FIXED ASSETS - Net (Note 1) -- 9,411
----------- -----------
TOTAL ASSETS $ 30 $ 9,411
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Cash overdraft $ -- $ 64
Accounts payable - trade 78,112 196,216
Loans payable - related parties (Note 6) 32,798 --
----------- -----------
Total Current Liabilities 110,910 196,280
----------- -----------
COMMITTMENTS AND CONTINGENCIES (Note 7) -- --
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, 5,000,000 shares
authorized at $0.001 par value; no shares
issued and outstanding -- --
Common stock, 50,000,000 shares
authorized at $0.001 par value;
9,311,234 and 8,423,693 shares
issued and outstanding, respectively 9,311 8,423
Capital in excess of par value 8,072,306 7,749,069
Deficit accumulated during
the development stage (8,192,497) (7,944,361)
----------- -----------
Total Stockholders' Equity (Deficit) (110,880) (186,869)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 30 $ 9,411
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F2
<PAGE> 12
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
From Inception
on October 3,
For the Years Ended December 31, 1988 Through
------------------------------------------------- December 31,
1993 1992 1991 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE $ -- $ -- $ -- $ --
----------- ----------- ----------- -----------
EXPENSES -- -- -- --
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) -- -- -- --
----------- ----------- ----------- -----------
LOSS ON DISCONTINUED
OPERATIONS (248,136) (5,540,971) (2,245,287) (8,192,497)
----------- ----------- ----------- -----------
NET LOSS $ (248,136) $(5,540,971) $(2,245,287) $(8,192,497)
=========== =========== =========== ===========
Loss Per Share $ (0.03) $ (1.03) $ (0.43) $ (1.35)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 8,935,019 5,382,265 5,238,409 6,089,166
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F3
<PAGE> 13
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Capital in During the
----------------------------- Excess of Development
Shares Amount Par Value Stage
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, October 3, 1988 -- $ -- $ -- $ --
Shares issued to incorporators
for $0.0012 per share 3,306,668 3,307 693 --
Net loss for the year ended
December 31, 1988 -- -- -- (164)
----------- ----------- ----------- -----------
Balance, December 31, 1988 3,306,668 3,307 693 (164)
Shares issued to the public for
$0.0375 per share on
August 22, 1989 1,733,332 1,733 63,267 --
Costs of public offering -- -- (29,265) --
Net loss for the year ended
December 31, 1989 -- -- -- (28,341)
----------- ----------- ----------- -----------
Balance, December 31, 1989 5,040,000 5,040 34,695 (28,505)
Shares of restricted common
stock issued for $6.00 per share 416,667 417 2,499,583 --
Net loss for the year ended
December 31, 1990 -- -- -- (129,598)
----------- ----------- ----------- -----------
Balance, December 31, 1990 5,456,667 $ 5,457 $ 2,534,278 $ (158,103)
----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F4
<PAGE> 14
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Capital in During the
----------------------------- Excess of Development
Shares Amount Par Value Stage
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1990 5,456,667 $ 5,457 $ 2,534,278 $ (158,103)
Shares issued in private
transactions at an average
price of $4.59 per share 113,917 114 523,636 --
Shares issued in private
placement at $3.00 per share 668,333 668 2,004,332 --
Shares issued in exchange for
product and marketing rights
at $3.00 per share 400,000 400 1,199,600 --
Costs of private placement -- -- (218,523) --
Contribution of assets by an
officer and director -- -- 1,350 --
Net loss for the year ended
December 31, 1991 -- -- -- (2,245,287)
----------- ----------- ----------- -----------
Balance, December 31, 1991 6,638,917 6,639 6,044,673 (2,403,390)
Shares issued on March 31, 1992
in private placement at
$3.75 per share 66,667 67 249,933 --
Shares issued on March 31, 1992
in settlement of debt at
approximately $1.00 per share 150,000 150 150,200 --
Shares issued on April 15, 1992
in private placement at an average
price of approximately $4.49
per share 38,333 38 172,012 --
----------- ----------- ----------- -----------
Balance forward 6,893,917 $ 6,894 $ 6,616,818 $(2,403,390)
----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F5
<PAGE> 15
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Capital in During the
----------------------------- Excess of Development
Shares Amount Par Value Stage
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance forward 6,893,917 $ 6,894 $ 6,616,818 $(2,403,390)
Shares issued on July 23, 1992
upon exercise of options at
$0.003 per share 83,333 83 167 --
Adjustment for fractional shares
due to stock split
on August 25, 1992 (12) -- -- --
Shares issued on
October 23, 1992 in settlement
of debt at $1.00 per share 100,000 100 99,900 --
Shares issued on
October 23, 1992 in settlement
of debt at $0.30 per share 350,000 350 104,650 --
Shares issued on
November 24, 1992 in private
placement at $2.00 per share 25,000 25 49,975 --
Shares issued on
November 25, 1992 in private
placement at approximately $0.38
per share 134,360 134 50,551 --
Shares issued during
December 1992 in settlement
of debt at $1.00 per share 837,095 837 836,258 --
Costs of private placements -- -- (9,250) --
Net loss for the year ended
December 31, 1992 -- -- -- (5,540,971)
----------- ----------- ----------- -----------
Balance, December 31, 1992 8,423,693 $ 8,423 $ 7,749,069 $(7,944,361)
----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F6
<PAGE> 16
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Capital in During the
----------------------------- Excess of Development
Shares Amount Par Value Stage
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1992 8,423,693 $ 8,423 $7,749,069 $(7,944,361)
Shares issued on
January 6, 1993 in private
placement at $0.375 per share 53,333 53 19,947 --
Shares issued on
January 6, 1993 upon exercise
of options at $0.003 per share 83,333 84 166 --
Shares issued on
May 26, 1993 in private
placement at $0.20 per share 50,000 50 9,950 --
Shares issued on
May 26, 1993 in private
placement at $0.20 per share 200,000 200 39,800 --
Shares issued on
July 9, 1993 in private
placement at $0.15 per share 100,000 100 14,900 --
Shares issued on
August 18, 1993 in private
placement at $0.10 per share 180,000 180 17,820 --
Shares issued during
December 1993 in settlement of
debt at $1.00 per share 220,875 221 220,654 --
Net loss for the year ended
December 31, 1993 -- -- -- (248,136)
---------- ---------- ---------- -----------
Balance, December 31, 1993 9,311,234 $ 9,311 $8,072,306 $(8,192,497)
========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F7
<PAGE> 17
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
From Inception
on October 3,
For the Years Ended December 31, 1988 Through
------------------------------------------------- December 31,
1993 1992 1991 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss from discontinued
operations $ (248,136) $(5,540,971) $(2,245,287) $(8,192,497)
Adjustments to reconcile net
income to net cash provided
by operating activities
Depreciation and amortization -- 1,733 1,150 3,043
Stock issued in settlement
of debt 220,875 1,192,445 -- 1,413,320
Loss on disposition of assets 9,411 3,197,380 -- 3,206,791
(Increase) decrease in
accrued interest receivable -- -- 29,470 --
(Increase) decrease in deposits -- 1,000 (1,000) --
Increase (decrease) in
cash overdraft (64) 64 -- --
Increase (decrease) in
accounts payable (118,104) (1,227,447) 1,650,265 78,112
Increase (decrease)in accrued
interest -- (3,994) 8,994 --
Increase (decrease) in taxes
payable -- -- (50) --
----------- ----------- ----------- -----------
Net Cash Provided (Used)
by Operating Activities $ (136,018) $(2,379,790) $ (556,458) $(3,491,231)
----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F8
<PAGE> 18
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
From Inception
on October 3,
For the Years Ended December 31, 1988 Through
------------------------------------------------- December 31,
1993 1992 1991 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of product marketing
rights $ -- $ -- $ (1,250) $ (1,250)
Purchase of fixed assets -- -- (10,784) (10,784)
Purchase of promotional video -- -- (50,000) (50,000)
----------- ----------- ----------- -----------
Net Cash Provided (Used)
by Investing Activities -- -- (62,034) (62,034)
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from loans 32,798 252,742 -- 285,540
Proceeds from sale of common
stock 103,250 513,735 2,231,805 3,267,755
----------- ----------- ----------- -----------
Net Cash Provided (Used)
by Financing Activities 136,048 766,477 2,231,805 3,553,295
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 30 (1,613,313) 1,613,313 30
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD -- 1,613,313 -- --
----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 30 $ -- $ 1,613,313 $ 30
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F9
<PAGE> 19
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
From Inception
on October 3,
For the Years Ended December 31, 1988 Through
------------------------------------------------- December 31,
1993 1992 1991 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
SUPPLEMENTAL DISCLOSURES
OF CASH FLOW INFORMATION
Interest paid $ -- $ -- $ -- $ --
Income taxes paid $ -- $ -- $ -- $ --
NON-CASH FINANCING
ACTIVITIES
Stock issued for note $ -- $ -- $ -- $2,498,750
Purchase of Bioreactors
through assignment of note $ -- $ -- $ -- $2,150,000
Acquisition of product
marketing rights through
issuance of notes and stock $ -- $ -- $2,200,000 $2,200,000
Stock issued in settlement
of debt $ 220,875 $1,192,445 $ -- $1,413,320
</TABLE>
The accompanying notes are an integral part of these financial statements.
F10
<PAGE> 20
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1993 and 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Advanced Biological
Systems, Inc. (A Development Stage Company) (the Company). The Company
was incorporated in the State of Delaware on October 3, 1988. The
Company was organized to develop and operate centers for the treatment
of diseases of the immune system through the use of plant-sourced
products. The Company discontinued operations in 1992 and is now
seeking new business opportunities.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a calendar year end.
c. Loss Per Share
The computation of loss per share of common stock is based on the
weighted average number of shares outstanding during the period.
d. Deferred Offering Costs
In connection with the public offering of the Company's common stock,
all costs were accumulated as deferred charges. The deferred charges
were offset against capital in excess of par value upon successful
completion of the offering.
e. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
f. Reclassification
Certain prior years' balances have been reclassified to conform to the
1993 financial statement presentation.
g. Income Taxes
No provision for income taxes has been accrued because the Company has
net operating losses from inception. The net operating loss
carryforwards totaling approximately $8,200,000 at December 31, 1993,
expire in 2008. No tax benefit has been reported in the financial
statements because the Company is uncertain if the carryforwards will
expire unused. Accordingly, the potential tax benefits are offset by a
valuation account of the same amount.
F11
<PAGE> 21
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS (Continued)
December 31, 1993 and 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
h. Fixed assets
Fixed assets are being depreciated utilizing a straight-line method
over sixty months assuming no residual value. Depreciation expense for
the years ended December 31, 1993, 1992 and 1991 was $0, $1,733 and
$990 respectively. During 1993, all fixed assets were disposed of.
i. Stock Split
On November 15, 1989, the Company effected a forward split of its
common shares outstanding on a 4-for-1 basis in the form of a stock
dividend. On June 29,1992, the Company effected a reverse stock split
of its common shares outstanding on a 1-for-3 basis. The financial
statements have been restated retroactively to reflect the effects to
these stock splits.
NOTE 2 - STOCK ISSUANCES
During 1993, the Company issued 666,666 shares of common stock in
several private placements at an average price of $0.15 per share.
Total proceeds were $103,250.
The Company also issued 220,875 shares of common stock in settlement of
debt at an average price of $1.00 per share. Debt was settled in the
amount of $220,875.
NOTE 3 - LEASE AGREEMENT
Effective August 1, 1991, the Company entered into a three year lease
agreement with an unrelated third party for approximately 2,300 square
feet of office space in Salt Lake City, Utah for a rental of $1,905 per
month. The lease payments include all common area maintenance fees and
utilities except telephone service.
NOTE 4 - DISCONTINUED OPERATIONS
In 1992, the Company discontinued all operations due to a lack of
working capital. The Company is currently inactive and is seeking other
business opportunities.
F12
<PAGE> 22
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS (Continued)
December 31, 1993 and 1992
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern. However,
the Company has experienced operating losses and no longer has a source
of revenues. The Company is seeking new business opportunities through
merger or purchase of existing, operating companies. Until that time,
the Company's operating expenses may be financed by advances from a
major shareholder. Due to the limited assets of the Company, no
assurance can be given that the Company will continue as a going
concern.
NOTE 6 - RELATED PARTY TRANSACTIONS
During 1993, the Company received cash advances from a related party in
the amount of $32,798. The amounts advanced are non-interest bearing
and are due on demand.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
For the year ended, December 31, 1992, the Company wrote off certain
accounts payable which were either disputed or never paid. The statute
of limitations has run for most of the undisputed payables, but has not
run for the disputed payables. As of the date of issuance of these
financial statements, no attempt has been made to collect these amounts
from the Company. The disputed amounts totalled $179,000 at December
31, 1992. The Company's management believes that the Company will not
be required to pay any of the disputed amounts.
NOTE 8 - SUBSEQUENT EVENT
On May 8, 1996, the Company entered into a settlement agreement with a
former officer. The former officer threatened litigation because the
Company used stock certificates which represented that he is still an
officer of the Company. The Company agreed to discontinue issuing stock
certificates which bear the signature of the former officer. The
Company also delivered a note in the amount of $5,000 to the former
officer, and will issue 70,000 shares of its common stock to the former
officer. The former officer agreed not to commence any litigation
against the Company regarding the unauthorized use of his name.
F13
<PAGE> 23
ITEM 8. CHANGES IN THE AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
No disagreements with accountants on accounting and financial
disclosure matters existed during the Company's calendar year ended December 31,
1993.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Directors and Executive Officers of the Company, as of June 15,
1996 unless otherwise indicated, were as follows:
<TABLE>
<CAPTION>
Name and Address Position(s) Held Age *
- ---------------- ---------------- ---
<S> <C> <C>
Emanuel A. Floor President, Treasurer and 58
2936 Sierra Point Place Chairman of the Board
Salt Lake City, Utah 84109 of Directors
Paul W. Mortensen Vice President-Administrative 41 **
1051 North Hughes Street Services, Secretary and a
Centerville, Utah 84014 Director
</TABLE>
* Chronological age indicated is for the calendar year ended for which
the 10-KSB is being filed.
** Resigned effective March 1993.
Directors are elected to serve until the next annual meeting of
stockholders and until their successors have been elected and have qualified.
Officers are appointed to serve until the meeting of the Board of Directors
following the next annual meeting of stockholders and until their successors
have been elected and have qualified.
EMANUEL A. FLOOR has served as President and Chairman of the Board of Directors
of the Company since July 10, 1990, has served as Treasurer since October, 1992
and Secretary since March, 1993. Since 1970, Mr. Floor has also served as the
President of Emanuel A. Floor and Associates, Inc., and since 1989 he has served
as President of the Park Group, Inc. Both of these private corporations provide
consulting services to business companies in the areas of public relations,
marketing, management, development and finance. From 1975 to 1986, Mr. Floor was
president, chief executive officer and director of Triad Properties, Inc., a
real estate development and marketing company which, through various
subsidiaries, owned, managed and developed the Salt Lake International Center, a
900-acre business park adjacent to the Salt Lake City International Airport in
Utah; Triad Center Houston, a 21-acre parcel of undeveloped property at the
Galleria in Houston, Texas; and the Cone Ranch, a 12,000 acre parcel of
undeveloped property near Tampa, Florida. In February 1987, several months
following Mr. Floor's resignation, Triad Properties, Inc. and several related
entities filed for protection in consolidation proceedings under the Bankruptcy
Code. Between 1986 and 1987, as a result of a down-turn in the real estate
market, Kimball Associates, Inc., Bertagnole Investments Co., Bertagnole
Properties and East Canyon Resort Trust, all of which were recreational real
estate development
10
<PAGE> 24
firms for which Mr. Floor was an officer and director and less than a 5%
shareholder, filed for relief under the Bankruptcy Code. As a result of his
personal guarantee of substantial amounts of indebtedness of these entities, Mr.
Floor filed for personal bankruptcy in 1988 and was discharged from bankruptcy
on December 11, 1989. Additionally, Mr. Floor filed for Chapter 13 proceedings
in April 1993 and received a discharge in June 1995.
PAUL W. MORTENSEN, served as the Company's Vice President for Administrative
Services from mid-1991 until his resignation as hereinafter indicated. During
the five year period prior to joining the Company, Mr. Mortensen, who is a
member of the bars of Utah and Arizona, was engaged in the private practice of
law in Moab, Utah, completed a masters degree in international business
management, and passed the CPA examination. Mr. Mortensen resigned as an officer
and director of the Company effective March, 1993. Such resignation was not a
result of any disagreements with the Company on any matter relating to its
operations, policies or practices.
See Item 11 hereof with respect to security ownership, if any, of
management.
ITEM 10. EXECUTIVE COMPENSATION
Remuneration paid (and/or accrued, if applicable and so specifically
indicated) to officers and/or directors of the Company during calendar year
ended December 31, 1993 is indicated in the chart appearing directly
hereinafter.
<TABLE>
<CAPTION>
Securities
Salaries, Fees, or Property, Aggregate of
Capacities Directors' Fees, Insurance Benefits Contingent
Name of In Which Commissions or Reimbursement, Forms of
Individual Served and Bonuses Personal Benefits Remuneration
- ---------- ----------- ---------------- ------------------ ------------
<S> <C> <C> <C> <C>
Emanuel A. Floor President, Secretary, $35,900.00 $12,164.81 $48.064.81
Treasurer & a Director
Paul W. Mortensen VP - Administrative $-0- $-0- $-0-
Services, Secretary & Director
</TABLE>
There are no current written employment agreements between the Company
and any of its officers and directors.
No compensation of any nature was paid to any director for services
rendered to the Company in such capacity excepting for repayment made, if any,
for accountable expenses incurred on the Company's behalf.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners - The following
persons and/or firms are known to the Company to be the beneficial owners of
more than 5% of the 27,781,234 shares of the Company's outstanding $.001 par
value Common Stock as of July 8, 1996. To the best of the Company's knowledge
each individual and/or firm has beneficial ownership of the
11
<PAGE> 25
shares and each individual and/or firm has sole voting power and sole investment
power with respect to the number of shares beneficially owned.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- --------
<S> <C> <C>
Brookfield Associates, Ltd. 10,000,000 36.00%
c/o Akar Verwaltung AG
Seestrasse 17
P.O. Box 53
CH-8702 Zollikon 2
Switzerland
Targas Foundation 5,238,917 18.86%
c/o Akar Verwaltungs AG
Seestrasse 17
P.O. Box 53
CH-8702 Zollikon 2
Switzerland
Arista Capital Growth Fund, Ltd. 3,400,000 12.24%
c/o Akar Verwaltungs AG
Seestrasse 17
P.O. Box 53
CH-8702 Zollikon 2
Switzerland
</TABLE>
(b) Security Ownership of Management - The number and percentage of
shares of $.001 par value Common Stock of the Company owned of record and
beneficially, by each current officer and director of the Company (or former
officers and/or directors of the Company if so specifically indicated) and by
all current officers and directors of the Company as a group, is as follows - as
of July 8, 1996. To the best of the Company's knowledge each individual has
beneficial ownership of the shares and each individual has sole voting power and
sole investment power with respect to the number of shares beneficially owned.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- --------
<S> <C> <C>
Emanuel A. Floor 181,943 (1) .6549%
2936 Sierra Point Place
Salt Lake City, Utah 84109
Bradley D. Berrett 30,000 (2) .1080%
2705 North 2600 East
Layton, Utah 84040
</TABLE>
12
<PAGE> 26
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- --------
<S> <C> <C>
Paul W. Mortensen 174,915 (3) .6296%
1051 North Hughes Street
Centerville, Utah 84014
All offices and directors
as a group (1 person) 181,943 .6549%
</TABLE>
(1) Mr. Floor does not own any shares of record and beneficially. However,
Mr. Floor may be deemed to be the beneficial owner of 181,943 shares
held of record by The Five Floors, Inc., a Utah corporation, as a
result of his status as an officer and principal shareholder of such
corporation and the fact that such corporation's shares are owned, in
their entirety, by Mr. Floor and his family.
(2) Resigned effective October, 1992. Security ownership indicated, if
any, is as of most practicable date - July 8, 1996.
(3) Resigned effective March, 1993. Security ownership indicated, if any,
is as of most practicable date - July 8, 1996.
The Company does not know of any arrangement or pledge of its
securities by persons now considered in control of the Company that might result
in a change of control.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For the calendar year ended December 31, 1993 there have not been any
material transactions between the Company and any director, executive officer,
security holder or any member of the immediate family of any of the
aforementioned which exceeded $60,000 other than as may be indicated in this
Form 10-KSB and the financial statements and footnotes thereto which are a part
hereof.
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
Reference is herewith made to page F-1 through F-13 inclusive of this
10-KSB with respect to the financial statements and notes thereto included
therein.
No exhibits are being filed with this Form 10-KSB.
During the last quarter of the Company's calendar year ended December,
1993 no Form 8-K was filed.
13
<PAGE> 27
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ADVANCED BIOLOGICAL SYSTEMS, INC.
By /Emanuel A. Floor/
-----------------------------
Emanuel A. Floor, President
Date: June 30, 1996
In accordance with the Exchange act, This report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
/s/ Emanuel A.Floor President, Secretary, Dated: June 30, 1996
- ------------------- Treasurer and Chairman
Emanuel A. Floor of the Board of Directors
14
<PAGE> 28
SUPPLEMENTAL INFORMATION
Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered Securities
Pursuant to Section 12 of the Act.
The Company has not held an annual meeting of stockholders throughout
calendar years 1992, 1993, 1994 and 1995. While the Company does currently
intend to hold an annual meeting of stockholders for its calendar year ended
December 31, 1995 it has not, as yet, formalized any specific plans as to any
proposed date for such meeting.
Four copies of all material to be mailed to stockholders with respect
to such Annual Meeting of Stockholders (when scheduled to be held) will be
furnished to the Securities and Exchange Commission but such documents, when
furnished, will not be deemed to be "filed" with the Securities and Exchange
Commission or otherwise subject to liabilities of Section 18 of the Act (except
to the extent that the Registrant specifically incorporates such material by
reference in any subsequent Form 10-KSB); it is expected that such documents
will consist of a Form of Proxy, Notice of Annual Meeting with Information
Statement as well as such schedules and/or exhibits as may be annexed thereto.
15
