<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------------------
FORM 8-K/A
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 21, 1996
-------------------------------
U.S. ALCOHOL TESTING OF AMERICA, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
33-90034 22-2806310
- ------------------------------------ --------------------------------------
(Commission File Number) (I.R.S. Employee
Identification No.)
10410 Trademark Street, Rancho Cucamonga, California 91730
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(909) 466-8378
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
<PAGE> 2
INFORMATION TO BE INCLUDED IN REPORT
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired:
(i) The following audited financial statements of
RSA are annexed hereto:
Page
1. Report of Independent Auditors...................... F-1
2. Balance Sheets as of December 31, 1995 and 1994..... F-2
3. Statements of Operations for the years
ended December 31, 1995, 1994 and 1993.............. F-3
4. Statements of Shareholders' Equity for the years
ended December 31, 1995, 1994 and 1993.............. F-4
5. Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993.................... F-5
6. Notes to Financial Statements....................... F-6
(b) Proforma financial information:
The following proforma financial
statements are annexed hereto:
1. Proforma Balance Sheet as of March 31, 1996......... F-10
2. Proforma Statement of Operations for the fiscal year
ended March 31, 1996................................ F-12
2
<PAGE> 3
(c) Exhibits
Number Exhibit
- ------ -------
A Copy of Stock Purchase Agreement dated as of May 21,
1996 by and among U.S. Alcohol Testing of America, Inc.
("USAT"), Robert Stutman, Brian Stutman, Sondra DeBow,
Michael Rochelle and Kimberly Rochelle.(1)
B Form of Secured Promissory Note dated May 21, 1996
is Exhibit A to Exhibit A hereto.
C Form of Security Agreement dated May 21, 1996 by and
among USAT, Robert Stutman and Brian Stutman is
Exhibit C to Exhibit A hereto.
D Form of USAT Warrant expiring May 20, 1999 is Exhibit B
to Exhibit A hereto.
E Form of Registration Rights Agreement dated as of
May 21, 1996 by and between USAT, Robert Stutman,
Brian Stutman, Michael Rochelle, Kimberly Rochelle
and Sondra DeBow is Exhibit D to Exhibit A hereto.
F Copy of Consulting Agreement dated as of December 14,
1996 by and between USAT, ProActive, RSA and
Robert Stutman.(2)
G Copy of Severance Agreement dated May 21, 1996 by and
between USAT and Robert Stutman.(1)
H Copy of Severance Agreement dated May 21, 1996 by and
between USAT and Brian Stutman.(1)
- ---------------
(1) Filed as an Exhibit to USAT's Current Report on Form S-K filed on
June 5, 1996 and incorporated herein by this reference.
(2) Filed as an Exhibit to USAT's Registration Statement on Form S-8
filed on March 11, 1996 and incorporated herein by this reference.
3
<PAGE> 4
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 hereunto duly authorized.
U.S. Alcohol Testing of America, Inc.
-------------------------------------
(Registrant)
Date: August 26, 1996 By: /s/ Linda H. Masterson
---------------------------------
Linda H. Masterson, President
4
<PAGE> 5
[ERNST & YOUNG LLP LETTERHEAD]
Report of Independent Auditors
The Board of Directors
U.S. Alcohol Testing, Inc.
We have audited the accompanying balance sheets of Robert Stutman & Associates,
Inc. as of Decenber 31, 1995 and 1994, and the related statements of
operations, shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion of the 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
statemant 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 Robert Stutman & Associates,
Inc. at December 31, 1995 and 1994 and the result of its operations and its
cash flow for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
July 23, 1996
F-1
<PAGE> 6
ROBERT STUTMAN & ASSOCIATES, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1994 1995
--------- ---------
<S> <C> <C>
A S S E T S
Current Assets:
Cash and Cash Equivalents $ 94,100 $ 4,836
Accounts Receivable 9,900 3,761
Receivable from Shareholder -- 200
Prepaid Expenses 2,750 2,888
--------- ---------
Total Current Assets 106,750 11,685
Property and Equipment, net 3,929 6,027
--------- ---------
Total Assets $ 110,679 $ 17,712
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY)
Current Liabilities:
Accrued Expenses $ 15,877 $ 39,326
Unearned Revenue 224,909 285,416
Due to Shareholder 15,000 5,250
--------- ---------
Total Current Liabilities 255,786 329,992
Commitments and Contingencies
Shareholders' Equity (Capital Deficiency):
Common Stock, $50 par value
Authorized - 80 shares
Issued and outstanding-77 shares on December 31, 1993
and 80 shares on December 31, 1994 and 1995 4,000 4,000
Accumulated Deficit (149,107) (316,280)
--------- ---------
Total Shareholders' Equity (Capital Deficiency) (145,107) (312,280)
--------- ---------
Total Liabilities and Shareholders' Equity (Capital Deficiency) $ 110,679 $ 17,712
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE> 7
ROBERT STUTMAN & ASSOCIATES, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------
1993 1994 1995
----------- ----------- -----------
<S> <C> <C> <C>
Revenues $ 536,292 $ 646,428 $ 1,101,599
Cost of Revenues 458,874 467,822 845,663
----------- ----------- -----------
Gross Margin 77,418 178,606 255,936
Operating Expenses 175,866 161,912 275,485
----------- ----------- -----------
Net Income (Loss) $ (98,448) $ 16,694 $ (19,549)
=========== =========== ===========
Pro forma data (unaudited)
Historical income (loss) before income taxes $ (98,448) $ 16,694 $ (19,549)
Pro forma income taxes (39,379) 6,680 (7,820)
----------- ----------- -----------
Pro forma net income (loss) $ (59,069) $ 10,014 $ (11,729)
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE> 8
ROBERT STUTMAN & ASSOCIATES, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON TREASURY ACCUMULATED
STOCK STOCK DEFICIT TOTAL
------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Balance - January 1, 1993 $ 3,400 $ (41,978) $ (38,578)
Issued 9 shares, net 450 450
Net Income (Loss) -- (98,448) (98,448)
------- ----------- ---------
Balance - December 31, 1993 3,850 (140,426) (136,576)
Repurchase of 17 shares $ (850) (850)
Issued 20 shares, net 150 850 1,000
Net Income (Loss) 16,694 16,694
Distributions to Shareholders (25,375) (25,375)
------- ------- ----------- ---------
Balance - December 31, 1994 4,000 (149,107) (145,107)
Net Income (Loss) (19,549) (19,549)
Distributions to Shareholders (147,624) (147,624)
------- ------- ----------- ---------
Balance - December 31, 1995 $ 4,000 $ -- $ (316,280) $(312,280)
======= ======= =========== =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 9
ROBERT STUTMAN & ASSOCIATES, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------
1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
Cash Flow From Operating Activities:
Net Income (Loss) $ (98,448) $ 16,694 $ (19,549)
Adjustments to Reconcile Net Loss To Net Cash Used
By Operating Activities:
Depreciation 5,782 7,030 3,938
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Accounts Receivable (30,400) 20,500 6,139
(Increase) Decrease in Due from Shareholder (450) 450 (200)
(Increase) Decrease in Prepaid Expenses (331) (1,592) (138)
Increase (Decrease) in Accrued Expenses 9,184 (14,151) 23,449
Increase (Decrease) in Unearned Income 117,125 84,660 60,507
(Decrease) in Due to Shareholder -- -- (9,750)
(Decrease) in Profit Sharing Accrual (24,000) -- --
--------- --------- ---------
Net Cash Provided (Used) By Operating Activities (21,538) 113,591 64,396
Cash Flow From Investing Activities:
Purchase of Property and Equipment (7,415) (4,564) (6,036)
--------- --------- ---------
Net Cash Flow (Used) by Investing Activities (7,415) (4,564) (6,036)
Cash Flow From Financing Activities:
Distributions to Shareholders -- (25,375) (147,624)
Issuance of Stock 450 150 --
--------- --------- ---------
Net Cash Provided (Used) by Financing Activities 450 (25,225) (147,624)
Increase (Decrease) in Cash and Cash Equivalents (28,503) 83,802 (89,264)
Cash and Cash Equivalents - Beginning 38,801 10,298 94,100
--------- --------- ---------
Cash and Cash Equivalents - Ending $ 10,298 $ 94,100 $ 4,836
========= ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 10
ROBERT STUTMAN & ASSOCIATES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--THE COMPANY
Robert Stutman & Associates, Inc. ( "RSA" or "the Company") was
incorporated in Massachusetts in June 1990. The Company, which operates in a
single industry segment, provides consulting, education, and drug-testing
services to organizations planning to implement drug- and alcohol-free workplace
programs.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of Credit Risk
The Company sells its services to a diverse group of customers in
several industries. No single customer accounted for more than 10% of 1995
sales. In 1994, one customer accounted for 11% of sales. The financial strength
of customers are routinely reviewed and evaluated. The Company typically obtains
a contract with a significant down payment and firm payment schedule before
beginning work on contracts. The Company has experienced no bad debt losses
since incorporation.
Financial instruments that potentially subject the Company to
concentration of credit risk consist principally of cash equivalents and trade
receivables.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid cash investments with a
maturity of three months or less when purchased to be cash equivalents.
Property and Equipment
Property and equipment is stated at cost, less accumulated
depreciation. Depreciation is computed using the straight-line method over the
estimated useful lives of the related assets, generally five years. Expenditures
for maintenance and repairs are charged to expense as incurred whereas major
betterments and renewals are capitalized.
Revenue Recognition
Revenues are recorded as earned. Contracts for the development of
custom alcohol and drug testing programs typically extend over several months
with revenue recognized on a percentage of completion basis as determined by
major contract milestones. Revenue for standard alcohol and drug testing
policies, programs, employee assistance program fees and supervisor "hot line"
fees is recognized over the life of the contract. Buying group set up fees are
recognized when the programs are set up.
F-6
<PAGE> 11
ROBERT STUTMAN & ASSOCIATES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE--2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
The Company has elected to be taxed as a Subchapter S corporation.
Accordingly, the Company's stockholders, rather than the Company, are required
to pay federal and certain state income taxes on the Company's earnings, whether
or not the earnings are distributed to the stockholders. An estimated tax
provision using the statutory tax rates has been provided as proforma
disclosure.
The Company accounts for income taxes under Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes". The
objective of the asset and liability method is to establish deferred tax assets
and liabilities for the temporary differences between the financial reporting
basis and the tax basis of the Company's assets and liabilities at enacted tax
rates expected to be in effect when such amounts are realized or settled. No
material differences between tax and book income exist in the periods presented.
Earnings per Common Share
Earnings per common share is based upon the weighted average number of
common shares outstanding during the periods reported. There are no common stock
equivalents.
NOTE 3--CASH AND CASH EQUIVALENTS
Cash and cash equivalents are summarized as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1994 1995
------- -------
<S> <C> <C>
Cash in Banks $91,270 $ 1,933
Money Market Funds 2,830 2,903
------- -------
$94,100 $ 4,836
======= =======
</TABLE>
NOTE 4--PROPERTY AND EQUIPMENT
Property and equipment consisted of:
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1994 1995
-------- --------
<S> <C> <C>
Computers $ 16,483 $ 19,481
Furniture and Fixtures 17,645 20,683
-------- --------
Property and Equipment, at cost 34,128 40,164
Less: Accumulated depreciation (30,199) (34,137)
-------- --------
Property and Equipment, net $ 3,929 $ 6,027
======== ========
</TABLE>
Depreciation expense amounted to $5,782, $7,030 and $3,938 in the years ended
December 31, 1993, 1994 and 1995, respectively.
F-7
<PAGE> 12
ROBERT STUTMAN & ASSOCIATES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 5--LINE OF CREDIT
The Company had a line of credit with a bank allowing for borrowings up
to $50,000 at the bank's prime rate plus 2%. Robert Stutman and Brian Stutman,
both of whom are officers and shareholders of the Company, are guarantors of the
loan. Collateral for the loan consisted of a first security interest in all
business assets. The line of credit was canceled by the Company on May 14, 1996.
There were no balances outstanding at December 31, 1994 or 1995.
NOTE 6--PRO FORMA INFORMATION
Pro Forma Statement of Operations
The Company has been taxed as a Subchapter S corporation until its
stock was acquired on May 21, 1996 by U.S. Alcohol Testing of America, Inc. As
of that date the Subchapter S status terminated and the Company became subject
to federal and state corporate income taxes. Accordingly, for informational
purposes, the accompanying statements of income for the years ended December 31,
1993, 1994 and 1995 include an unaudited pro forma adjustment for income taxes,
based on the tax laws in effect at the time, which would have been recorded if
the Company had not been an S corporation.
NOTE 7--LEASE COMMITMENTS
The Company leases its office facilities and certain equipment under
lease arrangements expiring between 1998 and 1999. Total rent expense for all
operating leases amounted to approximately $11,700, $14,700 and $35,000 for the
years ended December 31, 1993. 1994 and 1995, respectively. In addition to rent,
the facility lease provides for payment of real estate taxes and other occupancy
costs.
Future minimum payments under operating leases are summarized as
follows:
<TABLE>
<CAPTION>
Years Ending December 31
- ------------------------
<S> <C>
1996 $ 39,288
1997 39,288
1998 35,925
1999 25,534
--------
Total $140,035
========
</TABLE>
NOTE 8 - PENSION PLAN
During the years ended December 31, 1993 and 1994, the Company
maintained a defined contribution pension benefit plan. The annual contribution
to the plan was determined at the discretion of the Board of Directors. This
plan was discontinued in January 1995. Pension expense was $35,183 in 1993. No
pension expense was incurred in 1994 or 1995.
NOTE 9 - CONTINGENCY
A former client has made a claim against the Company in the amount of
approximately $109,000 for alleged deficiencies in the work performed by the
Company. The Company has rejected this claim as management believes it is
without merit. Accordingly, no provision for possible loss has been provided.
F-8
<PAGE> 13
ROBERT STUTMAN & ASSOCIATES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 10 SUBSEQUENT EVENTS
On May 21, 1996, the Company's common stock was acquired by U. S.
Alcohol Testing of America, Inc. ("USAT"). Robert Stutman, the largest holder of
the Company's common stock, was elected to the board of directors of USAT,
elected Chairman of the Board and designated Chief Executive Officer of USAT on
April 18, 1996.
The Company expects to move its principal offices to Florida in August
1996. In connection with this move, the Company negotiated an early termination
of its office lease at no cost to the Company.
F-9
<PAGE> 14
U.S. ALCOHOL TESTING OF AMERICA, INC.
PROFORMA BALANCE SHEET
<TABLE>
<CAPTION>
MERGER &
PROPOSED MERGER WITH
SALE OR ACQUISITION OPERATIONS
SALE OF LIQUIDATION OF CORP. OF RSA
HISTORICAL USRR GOOD IDEAS USD YE 12/31/95 PROFORMA
ASSETS 3/31/96 DR(CR) DR(CR) DR(CR) DR(CR) 3/31/96
Current Assets: ----------- -------- -------------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Cash and Cash Equivalents 1,286,520 150,000 (1) 4,836(7) 1,441,356
Accounts Receivable (net of
Allowance for Bad Debts of
$187,703 and $112,490) 488,776 (141,038)(2) (61,612)(3) 3,761(7) 289,887
Other Receivables 1,850 200(7) 2,050
Inventories 1,041,261 (174,981)(2) (196,209)(3) 670,071
Prepaid Expenses 265,660 (3,721)(2) (7,358)(3) 2,888(7) 257,469
----------- -------- --------- ---------- ---------- -----------
Total Current Assets 3,084,067 (169,740) (265,179) 11,685 2,660,833
----------- -------- --------- ---------- ---------- -----------
Property and Equipment (Net of
Accumulated Depreciation of
$2,060,568 and $1,890,439) 2,997,066 (281,120)(2) (15,801)(3) 6,027(7) 2,706,172
Other Assets: 871,151 (6,000)(2) (6,808)(3) 858,343
Excess of Cost over Fair Value on Net
Assets Acquired 4,143,804(8) 4,143,804
Estimated Net Realizable Value of Assets
Held for Sale 39,580 (4) 39,580
Notes Receivable - Non Current 300,000 (1) 300,000
----------- -------- --------- ---------- ---------- -----------
6,952,284 (156,860) (248,208) 4,161,516 10,708,732
=========== ======== ========= ========== ========== ===========
Current Liabilities: CR(DR) CR(DR) CR(DR) CR(DR)
Accounts Payable 649,835 (78,613)(2) (86,831)(3) 484,391
Accrued Liabilities 708,620 (65,215) (138,858) 104,326(7) 608,873
Unearned Revenue 285,416(7) 285,416
Current Portion Long Term Debt 32,827 (3,431)(2) (8,337)(3) 21,059
Due to Shareholder 5,250(7) 5,250
Pref. Stock Dividend Payable 7,202 7,202
----------- -------- --------- ---------- ---------- -----------
Total Current Liabilities 1,398,484 (147,259) (234,026) 394,992 1,412,191
----------- -------- --------- ---------- ---------- -----------
Long Term Debt - Net of Current Portion 42,962 (9,601) (14,182)(3) 400,000 419,179
Minority Interest 1,478,508 (911,039)(5) (567,469)(6)
Stockholders' Equity
Preferred Stock Class "A" 412 412
Common Stock $.01 324,800 6,883 (5) 40,178 (6) 14,459(3) 386,320
Additional Paid In Capital 45,176,619 1,541,797 (5) 8,999,797 (6) 3,648,041(3) 59,366,254
Accumulated Deficit (41,469,501) (637,641)(12) (8,472,506)(11) 295,985(8) (50,579,648)
------------ -------- --------- ---------- ---------- -----------
Total Stockholders' Equity 4,032,330 911,039 567,469 3,366,515 8,877,353
----------- -------- --------- ---------- ---------- -----------
TOTAL LIABILITIES AND EQUITY 6,952,284 (156,860) (248,208) 4,161,507 10,708,732
=========== ======== ========== ========== ========== ===========
</TABLE>
F-10
<PAGE> 15
Notes to Proforma Balance Sheet
(1) Proceeds of sale of USRR
(2) Assets of USRR sold and liabilities assumed by purchaser
(3) Assets of Good Ideas to be sold or liquidated and liabilities assumed
or settled, excluding cash and receivable from parent
(4) Estimated value of assets to be sold or liquidated less liabilities
(5) Purchase of minority interest in Good Ideas
(6) Purchase of minority interest in U.S. Drug
(7) Assets Acquired and Liabilities Assumed in Purchase of Robert Stutman
& Associates, Inc. (RSA)
(8) RSA-Excess of Cost over Fair Value of Assets Acquired
Consideration Paid:
<TABLE>
<S> <C>
Cash $2,100,000
Note Payable 400,000
Stock 500,000 shares of Common @ 3.125 1,562,500
Estimated Expenses 65,000
----------
Total Price Paid 4,127,500
Accumulated Deficit 316,280
Common Stock (4,000)
----------
Purchase Price in excess of net asset value $4,439,780
==========
</TABLE>
Amortization of purchase price in excess of net asset value is based
on a 15 year life and amounts to $295,985 per year.
(9) The cash portion of the Robert Stutman acquisition was provided by the
exercise of Common Stock Purchase Warrants subsequent to 3/31/96. The
Proforma was calculated using the exercise of 945,946 warrants at an
average price of $2.22
(10) Operations of RSA for the year ended 12/31/95
Calculation of number of shares assumed in Merger Transactions with USD and Good
Ideas
<TABLE>
<CAPTION>
USD GI
--------- ---------
<S> <C> <C>
Agreed price 5.25 1.00
Estimated Average USAT price 2.25 2.25
Agreed Price/Est. Ave. USAT price 2.33 0.44
OS USD Minority Shares 1,721,900 1,548,680
--------- ---------
Estimated Number of USAT Share to be issued 4,017,767 688,302
========= =========
</TABLE>
(11) Charge to operations of incomplete research and development due to
the value of USAT stock issued in the merger to purchase the minority
interest of U.S. Drug in excess of its historical amount.
(12) Charge to loss on disposal of discontinued operations due to the
value of the USAT stock issued to purchase the minority interest of
Good Ideas in excess of its historical cost.
(13) Elimination of minority interest.
F-11
<PAGE> 16
U.S. Alcohol Testing of America, Inc.
Proforma Statement of Operations
For the Fiscal Year ended 3/31/96
<TABLE>
<CAPTION>
MERGER AND
PROPOSED
SALE OR MERGER WITH
SALE LIQUIDATION ACQUISITION ACQUISITION
OF OF CORP. OF RSA
HISTORICAL USRR GOOD IDEAS USD 12/31/95 PROFORMA
---------- ---- ---------- --- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Continuing Operations:
Net Sales $ 1,165,661 1,101,599(10) 2,267,260
Costs and Expenses
Cost of Sales (Exclusive of
Depreciation Shown Below) 1,208,726 845,663(10) 2,054,389
Selling, General and Administrative
Expenses (Exclusive of Depreciation
Shown Below) 5,720,592 275,485(10) 5,996,077
Research and Development 1,005,832 1,005,832
Incomplete Research and Development 8,472,506(11) 8,472,506
Interest 81,450 81,450
Depreciation and Amortization 1,017,534 295,985 1,313,519
Loss on Settlement of Litigation 1,137,914 1,137,914
------------ -------- ----------- ---------- ---------- ------------
Total Costs and Expenses 10,172,048 8,472,506 1,417,133 20,061,687
------------ -------- ----------- ----------- ---------- ------------
Loss From Operations (9,006,387) (8,472,506) (315,534) (17,794,427)
------------ -------- ----------- ----------- ---------- ------------
Other Income (Expense)
Interest Income 116,075 116,075
Loss on Sale of Marketable Securities (1,889,216) (1,889,216)
Unrealized Gain on Marketable Securities 2,190,721 2,190,721
Other Losses (8,704) (8,704)
------------ -------- ----------- ----------- ---------- ------------
Total Other Income (Expense) 408,876 408,876
------------ -------- ----------- ----------- ---------- ------------
Loss Before Minority Interest in Net
Loss of Subsidiaries (8,597,511) (8,472,506) (315,534) (17,385,551)
Minority Interest in Net Loss of
Subsidiaries 541,466 (541,466)
------------ -------- ----------- ----------- ---------- ------------
Loss from Continuing Operations (8,056,045) (9,013,972) (315,534) (17,385,551)
Discontinued Operations:
Loss from Operations before Minority
Interest (1,545,457) (1,545,457)
Minority Interest in Net Loss 467,183 (467,183)
Loss on Disposal, Net of Minority
Interest $143,671 (1,326,267) (781,312) (2,107,579)
------------ -------- ----------- ----------- ---------- ------------
Loss from Discontinued Operations (2,404,541) (1,248,495) (3,653,036)
------------ -------- ----------- ----------- ---------- ------------
Net Loss $(10,460,586) $ $ 2,035,973 $(9,013,972) $ (315,534) (21,038,587)
============ ======== =========== =========== ========== ============
Weighted Average Common Shares Outstanding 29,834,502 688,302 4,017,767 1,445,946 35,986,517
============ ======== =========== =========== ========== ============
Loss Applicable to Common Stock:
Net Loss (10,460,586) $(1,248,495) $(9,013,972) (315,534) (21,038,587)
Preferred Stock Dividend - Class "A" (28,810) (28,810)
------------ -------- ----------- ----------- ---------- ------------
Loss Applicable to Common Stock $(10,489,396) $ $(1,248,495) $(9,013,972) $ (315,534) $(21,067,397)
============ ======== =========== =========== ========== ============
Loss Per Common Share:
Loss from Continuing Operations $ (0.27) $ (0.48)
Loss from Discontinued Operations $ (0.08) $ (0.10)
------------ ------------
Net Loss $ (0.35) $ (0.58)
============ ============
</TABLE>
F-12
