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 JUNE 30, 1998
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, TX 75225
(Address of principal executive offices) (Zip Code)
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(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
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INDEX
PART I. FINANCIAL INFORMATION
PAGE NO.
--------------
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED):
Balance Sheets -
December 31, 1996 and June 30, 19983
Statements of Operations -
Three months and six months ended June 30, 1997 and 1998 4
Statements of Cash Flows -
Six months ended June 30, 1997 and 1998 5
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS7
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
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EUROMED, INC.
BALANCE SHEETS
December 31, March 31,
1997 1998
(Unaudited)
ASSETS
Current Assets
Cash $ 232,170 $ 736,140
Receivables -
Proceeds from sale of subsidiary 670,000 -
Due from EuroMed Europe, B.V. 300,000 300,000
Prepaid assets 6,000
--------- -----------
TOTAL CURRENT ASSETS 1,202,170 1,042,140
-------- -------------
TOTAL ASSETS $1,202,170 $1,042,140
========= =========
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 88,223 $ 57,000
--------- -----------
TOTAL CURRENT LIABILITIES 88,223 57,000
- -----------
Stockholders' Equity
Common Stock, par value $.01 per share;
20,000,000 shares authorized; 1,430,000
shares issued and outstanding 14,300 14,300
Additional paid-in capital 10,167,138 10,167,138
Retained (deficit) (8,935,241) (9,064,048)
---------- ----------
1,246,197 1,117,390
Less: 23,000
Treasury Shares, at cost (132,250) (132,250)
----------- --------
TOTAL STOCKHOLDERS' EQUITY 1,113,947 985,140
------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,202,170 $1,042,140
==========
See accompanying notes to
financial statements.
EUROMED, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
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<CAPTION>
Three months ended Six months ended
June 30, June 30, June 30, June 30
1997 1998 1997 1998
--------- ---------- -------- ------
<S> <C> <C> <C> <C>
Sales $ - $ - $ - $ -
Cost of goods sold - - - -
------------- ------------- -------------- -------------
Gross profit - - - -
Selling, general and administrative expenses 177,408 50,688 443,520 128,807
---------- ---------- ----------- ----------
Operating (Loss) (177,408) (50,688) (443,520) (128,807)
Income tax (expense) benefit - - - -
------------- ------------- -------------- -------------
(Loss) from continuing operations (177,408) (50,688) (443,520) (128,807)
Discontinued operations:
Loss from discontinued operations (377,402) - (442,644) -
Estimated loss on disposal of
discontinued operations - - - -
---------------- ---------------- ------------------ ----------------
Net (loss) $ (554,810) $ (50,688) $ (886,164) $ (128,807)
========== ========== =========== ==========
Weighted Average Number of
Common Shares Outstanding 3,575,000 1,430,000 3,757,143 1,430,000
========== ========== =========== ==========
(Loss) per share:
Continuing operations $ (.05) $ (.04) $ (.12) $ (.09)
Discontinued operations -
Loss on operations (.10) - (.12) -
Estimated loss on disposal of
discontinued operations - - - -
------------- ------------- -------------- -------------
Total $ (.15)$ (.04) $ (.24) $ (.09)
============ ============ ============= ===========
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See accompanying notes to
financial statements.
EUROMED, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
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<CAPTION>
Six months ended
June 30, June 30,
1997 1998
--------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net $ (443,520) $ (128,807)
Changes in operating assets and liabilities:
Prepaid expenses 5,482 (6,000)
Accounts payable 88,483 (31,223)
------------ -----------
Net cash (used in) continuing operations (349,555) (166,030)
----------- ----------
Net cash provided by discontinued operations 326,203 -
----------- ----------------
Net cash (used in) operating activities (23,352) (166,030)
------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of subsidiary - 670,000
------------- --------
Net cash used in investing activities - 670,000
-------------- ------
Net increase (decrease) in cash and cash equivalents (23,352) 503,970
Cash and cash equivalents
at the beginning of the six month period 26,757 232,170
------------ ----------
Cash and cash equivalents
at the end of the six month period $ 3,405 $ 736,140
============ ==========
Cash paid during the six month period:
Interest $ - $ -
Income taxes $ - $ -
</TABLE>
See accompanying notes to
financial statements.
<PAGE>
EUROMED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
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. Description of business
EuroMed had no business operations from November 1997 to June 30, 1998. The
expenses incurred are directors' fees and other general expenses required to
maintain the corporate shell. The Board of Directors is currently searching for
appropriate business acquisitions.
c. Earnings Per Share
Net (loss) per share is computed on the weighted average number of shares
outstanding during the period; however the net (loss) per share computations do
not include the excercise of the outstanding stock warrants due to the
antidilutive effect.
<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 June 30, 1998 compared to the three months ended June 30,
1997 and six months ended June 30, 1998 compared to the six months ended June
30, 1998.
As of June 30, 1998 the Company had no sales. Selling, general and
administrative expenses for the three and six months ended June 30, 1998 were
$50,688 and $128,807, respectively, and were comprised primarily of directors'
fees, legal fees and professional fees incurred as part of the legal proceedings
described in Part II Item 1. Legal Proceedings. Selling, general and
administrative fees for the three and six months ended June 30, 1997 were
$177,408 and $443,520, respectively, and were comprised primarily of legal and
accounting expenses incurred in connection with the Company's divestiture of its
Pluripharm Division; professional fees for the recurring public reporting and
continuing legal and accounting fees related to ongoing litigation; and ongoing
auditing costs.
LIQUIDITY AND CAPITAL RESOURCES
Cash (used in) operations was ($166,030) for the six months ended June
30, 1998 compared with ($23,352) provided by operations for the six months ended
June 30, 1997. This increase in usage of cash is a result of the directors' fees
and expenses in the amount of $140,562 for the six months ended June 30, 1998.
Cash and cash equivalents at the end of the six months ended June 30,
1998 was $736,140 compared with $3,405 at the end of six months ended June 30,
1997.
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 six months.
<PAGE>
PART II
Item I. 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 in which
Final Judgment was awarded in favor of the Company against Gaylor. Gaylor and
Jan Bouwman (another former Company Director) were also held in contempt of
court for intentionally violating the Final Judgment and federal securities
laws. There has been no substantive activity in this lawsuit in the past three
months.
The third legal proceeding is a Nevada lawsuit filed by Gaylor and Bouwman,
on behalf of themselves and the Company's minority shareholders, against the
Company in which a special master was appointed, with the Company's agreement,
to investigate Gaylor and Bouwman's allegations against the Company. The special
master has not issued his report as of yet.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Number and Description of Exhibit
Number Exhibit Description
3.1 Restated Articles of Incorporation of the Registrant.(1)
3.2 Bylaws of the Registrant.(1)
4.1 Specimen Common Stock Certificate.(1)
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.
(b) Reports of Form 8-K
None
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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
Chief Executive Officer,
Robert A. Shuey, III Chief Financial Officer,
Treasurer and Director
<PAGE>
Exhibit Index
Exhibit No. Description
27.1 Financial Data Schedule.(*)
(*) Filed herewith
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<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-31-1998
<PERIOD-START> APR-1-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 736,140
<SECURITIES> 0
<RECEIVABLES> 300,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,042,140
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,042,140
<CURRENT-LIABILITIES> 57,000
<BONDS> 0
0
0
<COMMON> 14,300
<OTHER-SE> 970,840
<TOTAL-LIABILITY-AND-EQUITY> 1,042,140
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 128,807
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (128,807)
<INCOME-TAX> 0
<INCOME-CONTINUING> (128,807)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (128,807)
<EPS-PRIMARY> (0.09)
<EPS-DILUTED> (0.09)
</TABLE>
