EUROMED, INC.
8214 WESTCHESTER SUITE 500
DALLAS, TEXAS 75225
214-692-3544
214-987-2091
December 01, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: John L. Krug
Mail Stop 7-6
Re: EuroMed, Inc.
Dear Mr. Krug:
On behalf of EuroMed, Inc. I hereby transmitt the 10k for the period
end 09/30/97.
Best Regards,
Elbert G. Tindell
Chairman of the Board
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______________ TO ____________
EUROMED, INC.
(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER 0-27720
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<S> <C>
NEVADA 88-0317700
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8214 Westchester, Suite 500
Dallas, Texas 75225
(Address of principal executive offices) (Zip Code)
</TABLE>
(214) 220-0693
(Registrant's telephone number, including area code)
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 No X
As of December 01, 1998, there were 1,407,000 shares outstanding of the
registrant's common stock, $0.01 par value.
- ----------------------------------------------------------
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
PAGE NO.
--------------
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED):
Balance Sheets -
December 31, 1996 and September 30, 1997 3
Statements of Operations -
Three months and nine months ended
September 30, 1996 and 1997 5
Statements of Cash Flows -
Nine months ended September 30, 1996 and 1997 6
Notes to Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
<PAGE>
EUROMED, INC. AND SUBSIDIARIES
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30,
1996 1997
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 26,757 $ -
Receivables -
Amount due from sale of discontinued operations - 1,200,000
Due from EuroMed Europe, B.V. - 300,000
Prepaid expenses 5,590 -
------------ ------------------
TOTAL CURRENT ASSETS 32,347 1,500,000
------------ -----------
Net Assets of Discontinued Operations 5,207,529 -
---------- -----------------
TOTAL ASSETS $5,239,876 $1,500,000
========== ==========
</TABLE>
See accompanying notes to
financial statements.
<PAGE>
EUROMED, INC. AND SUBSIDIARIES
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30,
1996 1997
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities
Accounts payable and accrued liabilities $ 13,576 $ 164,652
----------- -----------
TOTAL CURRENT LIABILITIES 13,576 164,652
------------- ---------------------
Stockholders' Equity
Common Stock, par value $.01 per share;
20,000,000 shares authorized; 4,000,000 and 2,300,000
shares issued and outstanding, respectively 40,000 23,000
Additional paid-in capital 12,013,000 10,330,000
Retained (deficit) (6,661,362) (8,885,402)
Cumulative currency translation adjustment (33,088) -
----------- -----------------
5,358,550 1,467,598
Less: 23,000 Treasury Shares, at cost (132,250) (132,250)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 5,226,300 1,335,348
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $5,239,876 $1,500,000
==========
</TABLE>
See accompanying notes to
financial statements.
<PAGE>
EUROMED, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30, September 30, September 30
1996 1997 1996 1997
------------------ ------------------------------- ------
<S> <C> <C> <C> <C>
Sales $ - $ - $ - $ -
Cost of goods sold - - - -
------------- --------------- ------------- ---------------
Gross profit - - - -
Selling, general and administrative expenses 36,578 147,839 491,942 591,359
----------- ------------- ----------- ------------
Operating Profit (loss) (36,578) (147,839) (491,942) (591,359)
Interest income - - 69,602 -
Interest (expense) (9,000) - (9,000) -
----------- ------------------- ----------------------------
Income (loss) before income taxes (45,578) (147,839) (431,340) (591,359)
Income tax (expense) benefit - - - -
--------------- ---------------------------------------------------
(Loss) from continuing operations (45,578) (147,839) (431,340) (591,359)
Discontinued operations
Income (loss) from discontinued operations 165,578 (271,051) 914,340 (713,695)
Estimated loss on disposal of discontinued
operations - (918,986) - (918,986)
------------- ------------- -------------- ------------
Net income (loss) $ 120,000 $(1,337,876) $ 483,000 $(2,224,040)
========== =========== =========== ===========
Weighted average number of
common shares outstanding 3,787,500 2,300,000 3,060,000 3,320,000
========== ============ =========== =============
Income (loss) per share:
Continuing operations $ (.01)$ (.06) $ (.14)$ (.18)
Discontinued operations -
Income (loss) on operations .04 (.12) .30 (.21)
Estimated loss on disposal - (.40) - (.28)
------------- -------------- -------------- --------------
Total $ .03 $ (.58) $ .16$ (.67)
============ ============== ===========================
</TABLE>
See accompanying notes to
financial statements.
EUROMED, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended
September 30, September 30,
1996 1997
----------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) from continuing operations $ (431,340) $ (591,359)
Changes in operating assets and liabilities:
Prepaid expenses - 5,590
Accounts payable and accrued liabilities - 151,075
--------------- -----------
Net cash (used in) continuing operations (431,340) (434,694)
---------- ----------
Net cash provided by discontinued operations 331,340 407,937
---------- ----------
Net cash (used in) operating activities (100,000) (26,757)
--------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in unconsolidated subsidiary $(5,992,000) $ -
----------- ---------------
Net cash (used in) investing activities (5,992,000) -
----------- ----------------
CASH FLOW FROM FINANCING ACTIVITIES:
Sale of common stock 6,247,500 -
Purchase of treasury shares (132,250) -
------------ ----------------
Net cash provided by financing activities 6,115,250 -
----------- -----------------
Net increase (decrease) in cash and cash equivalents 23,250 (26,757)
Cash and cash equivalents
at the beginning of the nine month period - 26,757
--------------- ------------
Cash and cash equivalents
at the end of the nine month period $ 23,250 $ -
============ =================
Cash paid during the nine month period:
Interest $ 9,000 $ -
Income taxes $ - $ -
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Common stock $ - $ (17,000)
Additional paid-in-capital - (1,683,000)
Reduction in investment in Mutarestes B.V. - 1,700,000
-------------- -----------
$ - $ -
============== =================
</TABLE>
See accompanying notes to
financial statements.
EUROMED, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
a. Interim Financial Statements
The consolidated financial information for the interim periods presented herein
has not been audited by independent accountants, but in the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the condensed consolidated balance sheets
and the condensed consolidated statements of earnings and cash flows at the
dates and for the periods indicated have been made. Results of operations for
interim periods are not necessarily indicative of results of operations for the
respective full years.
b. Earnings Per Share
Earnings per share are computed on the weighted average number of shares and
dilutive equivalent shares of common stock outstanding during the three-month
and nine month periods ended September 30, 1997, using the treasury stock
method.
c. Discontinued Operations
In the summer of 1997, the Company's management concluded the sale of the
Company's investment in Mutarestes B.V. and determined that the Company should
divest itself of the remaining operating subsidiaries. On November 26, 1997, the
Company executed the "Purchase Agreement by and between EuroMed, Inc. and
Neopharm B.V." Selected provisions of the agreement are as follows:
! 80% of capital stock sold to Neopharm of EuroMed Europe, B.V.
! Sale Proceeds $1,000,000
! Retainment of $300,000 receivable from EuroMed Europe, B.V.
! Assignment to the Company of $500,000 of the claim against the
purchaser of Mutarestes B.V.
Additionally, in connection with the sale of EuroMed Europe, B.V., the Company
entered into a settlement agreement with Dr. A. Francois Hinnen and his
affiliates to return 1,000,000 common shares owned by them to the Company and in
return the Company would transfer ownership of certain assets to Dr. Hinnen.
Management has determined that the remaining 20% interest held in EuroMed Europe
B.V. had no realizable value and the collection of the $500,000 claim against
the purchse of Mutarestes B.V. was not probable; therefore no value was given to
these assets at September 30, 1997.
(Continued)
EUROMED, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
c. Discontinued Operations (Continued)
The financial statement of EuroMed Europe B.V. as of
September 30, 1997 are as follows:
EUROMED EUROPE, B.V.
BALANCE SHEET
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September 30, 1997
ASSETS
Current Assets $6,850,655
Vehicles, Furniture and Equipment, net 399,959
Other Assets 510,281
Total Assets $7,760,895
LIABILITIES AND EQUITY
Liabilities $5,963,189
Equity 1,797,706
$7,760,895
EUROMED EUROPE, B.V.
STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
('000 omitted)
Sale $ 26,395
Cost of Sale 24,760
Gross Profit 1,635
Selling, general and administrative expense 2,349
Net (Loss) $ (714)
==========
</TABLE>
(Continued)
EUROMED, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
c. Discontinued Operations (Continued)
The loss on the disposal of the Subsidiary is as follows:
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Net investment in EuroMed Europe, B.V. $ 2,063,763
Professional fees incurred in connection
with sale of EuroMed Europe 55,223
2,118,986
Proceeds from sale (1,000,000)
Fair value of Francois Hinnen stock returned to company
(1,000,000 shares @ $.20) (200,000)
------------
Net loss $ 918,986
============
</TABLE>
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
GENERAL
Swiss Nassau Corporation was incorporated on May 17, 1994 in the state of
Nevada, United States of America, with authorized and issued share capital of
1,000 shares of common stock with no par value (the "Common Stock). On June 15,
1994, computer equipment with estimated value of $4,998 was contributed in
exchange for all of the shares of Swiss Nassau Corporation. On October 20, 1995,
Swiss Nassau Corporation changed its name into EuroMed, Inc. ("EuroMed" or the
"Company") and increased its authorized shares to 20,000,000 shares of Common
Stock with a new par value of $0.01 per share, and 5,000,000 preferred shares
with a par value of $0.01 per share. On October 20, 1995, EuroMed, Inc. effected
a 150 for 1 stock split of its Common Stock.
On November 17, 1995, all of the shares of Galenica B.V. ("Galenica") and
Confedera B.V. ("Confedera"), both based in Oosterhout, the Netherlands, were
exchanged by the ultimate shareholder of both companies for all of the shares of
a newly-formed company, EuroMed Europe B.V. ("EuroMed Europe"). Prior to this
transaction Galenica and Confedera were owned by B.V. Wisteria ("Wisteria"), a
Netherlands limited liability company, which is owned by Pantapharma B.V., which
is owned by A. Francois Hinnen. All of the shares of EuroMed Europe were then
exchanged for 1,850,000 shares of Common Stock. Neither EuroMed Europe nor the
Company had any operations, and these transactions were completed in
contemplation of an initial public offering ("IPO") of shares of EuroMed. In
March 1996 EuroMed completed its IPO by selling 1,150,000 shares of its common
stock at $6.50 per share. The proceeds of the IPO and 850,000 shares of its
common stock were used to acquire Mutarestes B.V. and Subsidiary ("Mutarestes")
in July 1996 (estimated acquisition price of $11,729,500). Almost immediately,
upon completion of the acquisition of Mutarestes, differences developed between
various officers, directors and shareholders. Mutarestes was subsequently sold
in July 1997 with a significant loss being recognized and the 850,000 shares of
common stock being returned to the Company. In addition, A. Francois Hinnen
returned 850,000 shares of common stock to the Company to mitigate the effect of
the loss on the Mutarestes transactions.
As a result of the failed acquisition of Mutarestes and a significant change in
the Dutch law as it related to the wholesale price of pharmaceuticals, the Board
of Directors concluded that it was in the best interest of EuroMed to divest
itself of its remaining Dutch pharmaceutical operations. In November 1997,
EuroMed Europe and its subsidiaries were sold. EuroMed recognized a substantial
loss on the disposal of EuroMed Europe; therefore, the Board of Directors
negotiated with A. Francois Hinnen the return of 1,000,000 shares of EuroMed's
common stock to lessen the effects of the loss on disposal for the remaining
shareholders.
EuroMed currently has no business operations; however, its President and Board
of Directors are actively seeking appropriate business acquisitions.
<PAGE>
RESULTS OF OPERATIONS
Three Months Ended September 30, 1997 Compared to Three Months Ended
September 30, 1996 and Nine Months Ended September 30, 1997 Compared to Nine
Months Ended September 30, 1996
As of September 30, 1997 the Company had no sales. Selling, general and
administrative expenses for the three and nine months ended September 30, 1997
were $147,839 and $591,359, respectively, and were comprised primarily of legal
and professional fees incurred as part of the legal proceeding described in Part
II Item 1 Legal Proceedings.
Selling, general and administrative expenses for the three and nine months ended
September 30, 1996 were $30,578 and $491,942, respectively, and were comprised
primarily of legal and accounting expenses incurred in connection with the
Company's initial public offering and professional fees for the recurring public
reporting. The $69,600 interest income was earned on the funds raised on the
initial public offering prior to the time the funds were expended for the
investment in Mutarestes B.V.
LIQUIDITY AND CAPITAL RESOURCES
Cash (used in) operations was $(26,757) for the nine months ended
September 30, 1997 compared with $(100,000) provided by operations for the nine
months ended September 30, 1996. The cash used in operations was offset
partially by advances from the discontinued operations.
Net cash provided by financing activities was $0 for the nine months
ended September 30, 1997 compared with $6,115,000 for the nine months ended
September 30, 1996. The Company's initial public offering of shares on March 19,
1996, was the significant source of cash for the nine months ended September 30,
1996.
Cash and cash equivalents at the end of the nine months ended September
30, 1997 was $-0- compared with $23,250 at the end of nine months ended
September 30, 1996.
Management is of the opinion that the proceeds from the sale of the
discontinued operations, should be sufficient to finance and sustain operations
at the present level for at least twelve months or until such time as an
appropriate merger is completed.
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company is still involved in three legal proceedings, two in Nevada
State Court and one in the United States District Court for the Northern
District of Texas. There has been no substantive activity in the past three
months in the first Nevada suit filed by the Company against former directors
Gregory Alan Gaylor and Robert Jansonius.
The second legal proceeding is a lawsuit filed by the Company in the
United States District Court for the Northern District of Texas against Gaylor
for his malicious interference with Company management, business disparagement,
and violation of federal securities laws. On July 29, 1997, U.S. Senior District
Judge Barefoot Sanders granted a Final Judgment awarding the Company actual
damages against Gaylor in the amount of $5,350,000, and punitive damages in the
amount of $10,700,000 for Gaylor's malicious and intentional interference and
disparagement of the Company's management. Gaylor was also permanently enjoined
from violating federal securities laws, including Section 13(d) of the
Securities Exchange Act of 1934.
The third legal proceeding is a Nevada lawsuit filed by Gaylor and Jan
Bouwman (another former director), on behalf of themselves and the Company's
minority shareholders, against the Company. Among other allegations, Gaylor and
Bouwman requested that a receiver be appointed to run the Company and that an
injunction be entered to block the Company's divestiture of Pluripharm
International, B.V. On July 3, 1997, the Nevada State Court denied Gaylor and
Bouwman's requested relief but, with the agreement of the Company, appointed a
special master to conduct an investigation of specific transactions. The
master's report has not been received and discovery in the case has not been
completed. The Company denies Gaylor and Bouwman's allegations and will continue
to vigorously defend the case.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Number and Description of Exhibit
Number Exhibit Description
2.1 Assets and Liabilities Transfer Agreement by and between
Pluripharm
International B.V. and Houdstermaatscheppy B.V. dated July
4, 1997.(2)
3.1 Restated Articles of Incorporation of the Registrant.(1)
3.2 Bylaws of the Registrant.(1)
4.1 Specimen Common Stock Certificate.(1)
10.1 Summary of Management Contract dated February 15, 1997, by and
between EuroMed, Inc. and the Anderson Group.(2)
27.1 Financial Data Schedule.(*)
* Filed herewith.
(1) Previously filed as an Exhibit to the company's Registration
Statement No. 33-80805 on Form S-1 and incorporated by herein
reference.
(2) Previously filed as an Exhibit to Report in Form 8-K dated
July 4, 1997, and incorporated herein by referenced
(b) Reports of Form 8-K
The Company filed a report on Form 8-K dated July 4, 1997 to report
on Item 2 event.
<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.
EuroMed, Inc.
Dated: December 1, 1998
Signature Title
/s/ Elbert G. Tindell President and
Elbert G. Tindell Chairman of the Board
/s/ Robert A. Shuey, III Chief Executive Officer,
Robert A. Shuey, III Chief Financial Officer,
Treasurer and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000852447
<NAME> EUROMED INC
<MULTIPLIER> 1
<CURRENCY> $US
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-1-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 1,500,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,500,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,500,000
<CURRENT-LIABILITIES> 164,652
<BONDS> 0
0
0
<COMMON> 23,000
<OTHER-SE> 1,312,000
<TOTAL-LIABILITY-AND-EQUITY> 1,500,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 591,359
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (591,359)
<INCOME-TAX> 0
<INCOME-CONTINUING> (591,359)
<DISCONTINUED> (1,632,681)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,224,040)
<EPS-PRIMARY> (0.67)
<EPS-DILUTED> (0.67)
</TABLE>
