<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
/xx/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
----------------------
or
/ / TRANSITION REPORT PURSUANT TO 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.
(Exact name of registrant as specified 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 84198
(Address of principal executive offices) (Zip Code)
(801) 521-8000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 the past 90 days.
/ / Yes / x/ No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date.
The number of shares outstanding of each of the registrant's classes of common
stock, as of August 7, 1996 is 27,881,234 shares, all of one class of $.0001 par
value common stock.
1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
PART I
<S> <C> <C>
Item 1. Financial Statements 3-16
Item 2. Management's Discussion and Analysis
or Plan of Operation 17-18
PART II
Item 1. Legal Proceedings 19
Item 2. Changes in Securities 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matters to a
Vote of Security Holders 19
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
Signatures 20
</TABLE>
2
<PAGE> 3
[JONES, JENSEN & COMPANY LETTERHEAD]
INDEPENDENT ACCOUNTANT'S REPORT
The Board of Directors
Advanced Biological Systems, Inc.
Salt Lake City, Utah
The accompanying balance sheet of Advanced Biological Systems, Inc. (a
development stage company) as of June 30, 1996 and the related statements of
operations, stockholders' equity (deficit), and cash flows for the three months
and six months ended June 30, 1996 and 1995 and from inception on October 3,
1988 through June 30, 1996 were not audited by us and, accordingly, we do not
express an opinion on them. The accompanying balance sheet as of December 31,
1995 was audited by us and we expressed an unqualified opinion on it in our
report dated April 4, 1996.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
August 5, 1996
3
<PAGE> 4
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 81 $ 45,598
----------- -----------
TOTAL ASSETS $ 81 $ 45,598
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable - trade $ 43,004 $ 68,429
Notes payable (Note 2) 18,000 --
----------- -----------
Total Current Liabilities 61,004 68,429
----------- -----------
COMMITMENTS AND CONTINGENCIES (Note 6) -- --
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value,
50,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, $0.001 par value,
50,000,000 shares authorized,
27,881,234 and 26,711,234
shares issued and outstanding 27,881 26,711
Capital in excess of par value 8,336,234 8,295,304
Deficit accumulated during
the development stage (8,425,038) (8,344,846)
----------- -----------
Total Stockholders' Equity (Deficit) (60,923) (22,831)
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 81 $ 45,598
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
From Inception
on October 3,
For the Three Months For the Six Months 1988 Through
Ended June 30, Ended June 30, June 30,
1996 1995 1996 1995 1996
----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
REVENUE $ -- $ -- $ -- $ -- $ --
----------- ----------- ----------- ----------- -----------
OPERATING
EXPENSES -- -- -- -- --
----------- ----------- ----------- ----------- -----------
OPERATING
LOSS -- -- -- -- --
----------- ----------- ----------- ----------- -----------
OTHER INCOME
AND (EXPENSES)
Loss on
discontinued
operations (47,720) (901) (80,192) (23,374) (8,425,038)
----------- ----------- ----------- ----------- -----------
NET LOSS $ (47,720) (901) $ (80,192) $ (23,374) $(8,425,038)
=========== =========== =========== =========== ===========
Loss Per Share $ (0.00) $ (0.00) $ (0.00) $ (0.00) $ (1.12)
=========== =========== =========== =========== ===========
Weighted Average
Number of Shares
Outstanding 26,757,901 9,311,234 26,734,567 9,311,234 7,498,973
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
<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.
6
<PAGE> 7
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
(Unaudited)
<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 approximately $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.
7
<PAGE> 8
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
(Unaudited)
<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.
8
<PAGE> 9
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
(Unaudited)
<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.
9
<PAGE> 10
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
(Unaudited)
<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, 1993 9,311,234 $ 9,311 $8,072,306 $(8,192,497)
Net loss for the year ended
December 31, 1994 -- -- -- (107,291)
---------- ------- ---------- -----------
Balance, December 31, 1994 9,311,234 9,311 8,072,306 (8,299,788)
Shares issued during December
1995 settlement of debt at
approximately $0.01 per share 14,000,000 14,000 126,398 --
Shares issued during December
1995 in private placement at
approximately $0.029 per share 3,400,000 3,400 96,600 --
Net loss for the year
ended December 31, 1995 -- -- -- (45,058)
---------- ------- ---------- -----------
Balance, December 31, 1995 26,711,234 26,711 8,295,304 (8,344,846)
Shares issued in private
placement at $0.035 per share 1,000,000 1,000 34,000 --
Shares issued in private
placement at $0.05 per share 100,000 100 4,900 --
Shares issued an settlement of
dispute valued at $0.03 per share 70,000 70 2,030 --
Net loss for the six months
ended June 30, 1996 -- -- -- (80,192)
---------- ------- ---------- -----------
Balance, June 30, 1996 27,881,234 $27,881 $8,336,234 $(8,425,038)
========== ======= ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE> 11
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
From Inception
on October 3,
For the Three Months For the Six Months 1988 Through
Ended June 30, Ended June 30, June 30,
-------------- --------------
1996 1995 1996 1995 1996
---------- -------- --------------- --------------- ---------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss from discontinued
operations $(47,720) $(901) $(80,192) $(23,374 ) $(8,425,038)
Adjustments to reconcile net
loss to net cash used by
operating activities
Depreciation and amortization -- -- -- -- 3,043
Stock issued in settlement of
debt 20,100 -- 20,100 -- 1,433,420
Loss on disposition of assets -- -- -- -- 3,206,791
Increase (decrease) in cash
overdraft -- 837 -- 837 --
Increase (decrease) in
accounts payable (12,323) -- (25,425) -- 43,004
-------- ----- -------- -------- -----------
Net Cash (Used) by
Operating Activities $(39,943) $ (64) $(85,517) $(22,537) $(3,738,780)
-------- ----- -------- -------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE> 12
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
From Inception
For the Three Months For the Six Months on October 3,
Ended June 30, Ended June 30, 1988 Through
--------------------- --------------------------------- June 30,
1996 1995 1996 1995 1996
---------- -------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of fixed assets $ -- $-- $ -- $ -- $ (10,784)
Purchase of product
marketing rights -- -- -- -- (1,250)
Purchase of promotional video -- -- -- -- (50,000)
------- ---- -------- -------- -----------
Net Cash Provided (Used)
by Investing Activities -- -- -- -- (62,034)
------- ---- -------- -------- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from loans -- -- -- 22,500 393,140
Proceeds from sale of
common stock 40,000 -- 40,000 -- 3,407,755
------- ---- -------- -------- -----------
Net Cash Provided (Used)
by Financing Activities 40,000 -- 40,000 22,500 3,800,895
------- ---- -------- -------- -----------
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS 57 (64) (45,517) (37) 81
CASH AND CASH
EQUIVALENTS, BEGINNING OF
PERIOD 24 64 45,598 37 --
------- ---- -------- -------- -----------
CASH AND CASH
EQUIVALENTS, END OF
PERIOD $ 81 $-- $ 81 $ -- $ 81
======= ==== ======== ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE> 13
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
From Inception
For the Three Months For the Six Months on October 3,
Ended June 30, Ended June 30, 1988 Through
--------------------------- ---------------------------- June 30,
1996 1995 1996 1995 1996
---------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
SUPPLEMENTAL CASH FLOW
DISCLOSURES
Interest paid $ -- $ -- $ -- $ -- $ --
Income taxes paid $ -- $ -- $ -- $ -- $ --
NON-CASH FINANCING ACTIVITIES
Stock issued for note $ -- $ -- $ -- $ -- $2,498,750
Stock issued in settlement of
debt $ -- $ -- $ -- $ -- $1,433,420
Purchase of Bioreactor through
assignment of note $ -- $ -- $ -- $ -- $2,150,000
Acquisition of product marketing
rights through issuance of notes
and stock $ -- $ -- $ -- $ -- $2,200,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE> 14
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1996 and December 31, 1995
(Unaudited)
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. Income Taxes
No provision for income taxes has been accrued because the Company
has net operating losses from inception. The net operating loss
carryforwards of approximately $8,400,000 at June 30, 1996, expire
in 2011. 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.
14
<PAGE> 15
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS (Continued)
June 30, 1996 and December 31, 1995
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
g. 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 - NOTES PAYABLE
Notes payable as of June 30, 1996 and December 31, 1995 consisted
of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- ----------
<S> <C> <C>
Note payable to an individual, accruing interest
at 9%, due June 15, 1996, unsecured $ 5,000 $ --
Note payable to an individual, accruing interest
at 9%, due June 15, 1996, unsecured 3,000 --
Note payable to an individual, accruing interest
at 9% due June 15, 1996, unsecured 5,000 --
Note payable to an individual, accruing interest
at 9% due June 15, 1996, unsecured 5,000 --
-------- ---------
Total $ 18,000 $ --
Less Current Portion (18,000) --
-------- ---------
$ -- $ --
======== =========
</TABLE>
15
<PAGE> 16
ADVANCED BIOLOGICAL SYSTEMS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS (Continued)
June 30, 1996 and December 31, 1995
(Unaudited)
NOTE 3 - STOCK ISSUANCES
During the six months ended June 30, 1996, the Company issued
1,100,000 shares of its common stock for cash proceeds of $40,000.
On May 8, 1996, the Company entered into a settlement agreement
with a former officer who alleged that the Company used stock
certificates improperly bearing his name and indicating that he
was a corporate officer. In order to settle such claim and avoid
such costs as might otherwise have been incurred due to threatened
litigation, the Company agreed to discontinue issuing stock
certificates which bore the signature of such former officer and
also delivered a note in the amount of $5,000 due and payable June
15, 1996 and issued 70,000 shares of its common stock to such
individual. The former officer agreed not to commence any
litigation against the Company regarding the alleged unauthorized
use of his name.
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.
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 - 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 June 30, 1996. The Company's
management believes that the risk that the Company will be
required to pay any of the disputed amounts is remote.
NOTE 7 - SUBSEQUENT EVENTS
In August 1996, the Company amended its Certificate of
Incorporation so as to reduce the number of shares it is
authorized to issue to 10,000,000 shares of common stock and
simultaneously changed the par value of its stock from $0.001 to
$0.0001. The Company also resolved to effect a 1-for-30 reverse
split of its issued and outstanding common shares.
16
<PAGE> 17
MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
As heretofore indicated in the Company's Form 10-QSB for quarter ended
March 31, 1996 - notwithstanding the fact that the company is subject to the
reporting requirements under the Securities Exchange Act of 1934, it had been
delinquent with respect to filing necessary reports and during the first six
months of 1996 embarked upon an effort to bring itself "current" with respect to
its reporting requirements.
In that regard the Company prepared and filed, on July 12, 1996, the
following reports with the Securities and Exchange Commission ("SEC"):
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
The above referenced reports clearly indicated that the Company had not
had any revenues from operations since its inception in 1988 and has been
inactive for a considerable period of time and remained inactive through March
31, 1996. Since such date the Company has remained substantially inactive with
primary activities involving "cleaning up" of numerous outstanding corporate
issues with its creditors and others.
While no shares of common stock were issued during the first quarter of
1996, during the second quarter of 1996 the Company issued 1,000,000 shares of
its common stock for cash consideration in the amount of $35,000 and further
issued an additional 100,000 shares of its common stock for cash consideration
of $5,000. 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 together with certain other consideration as indicated in Note 3 to the
financial statements which are a part hereof.
The above referenced Forms 10-QSB and 10-KSB having been filed the
Company became current with respect to its reporting requirements and placed
itself 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
17
<PAGE> 18
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 creating a "value" for the Company which might not otherwise exist if it
were not a public company.
In further contemplation of its above referenced proposed corporate
activities, the Company, in July 1996, obtained written consent of its majority
stockholders authorizing certain amendments to its Certificate of Incorporation
and further authorizing a contemplated recapitalization by way of a reverse
stock split. Thereafter, the Company amended its Certificate of Incorporation
reducing its authorized shares to 10,000,000 shares and changed its par value to
$.0001. As of August 7, 1996 the Company had not as yet chosen an effective date
for its contemplated reverse stock split but anticipates that same will occur
prior to the end of August 1996. If and when such reverse stock split is
effectuated, the Company will notify its stockholders of same and forward such
transmittal forms as may be necessary as part of such stockholder notification.
Based upon all of the above and in view of the fact that the Company
has not as yet located any potential acquisition which might be classified as a
"target" company, management is unable to determine whether or not the Company
can satisfy such future cash requirements as may occur over the next 12 months
or whether it will be necessary to attempt to raise additional funds therefore
through either equity and/or debt financing. Currently, the Company is not
engaged in any product research and development nor does it expect (a) to
purchase or sell any plant and significant equipment or (b) any significant
change in the number of its employees unless and until additional members join
its Board of Directors and/or an acquisition is consummated.
18
<PAGE> 19
PART II
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None *
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a
Vote of Security Holders - None **
Item 5. Other Information - None
Item 6. (a) Exhibits - None
(b) Reports on Form 8-K None
* Except that on August 5, 1996 the Company amended its Certificate of
Incorporation so as to reduce its authorized shares from 30,000,000 to
10,000,000 and changed its par value from $.001 to $.0001. At the same
time the Company eliminated its prior authorization to issue a class of
Preferred Stock.
** Except that in July of 1996 the Company obtained the written consent of
its majority stockholders in lieu of a meeting of stockholders whereby
such stockholders authorized, amongst other matters, the aforementioned
amendment to the Company's Certificate of Incorporation and proposed
the reverse stock split hereinbefore referred to in Part I, Item 2
hereof.
19
<PAGE> 20
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.
ADVANCED BIOLOGICAL SYSTEMS, INC.
By /Emanuel A. Floor/
---------------------------------
Emanuel A. Floor, President
Dated: August 7, 1996
20
<PAGE> 21
EXHIBIT INDEX
-------------
EXHIBIT 27 FINANCIAL DATA SCHEDULE
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 81
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 81
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 81
<CURRENT-LIABILITIES> 61,004
<BONDS> 0
0
0
<COMMON> 27,881
<OTHER-SE> (88,804)
<TOTAL-LIABILITY-AND-EQUITY> 81
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (80,192)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (80,192)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
