SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 2
TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 18, 1997
DYNAGEN, INC.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 1-11352 04-3029787
-------- ------- ----------
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation or organization) Identification No.)
99 Erie Street, Cambridge, MA 02139
----------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (617) 491-2527
---------------------------
No change since last report
---------------------------
(Former name or address, if changed since last report)
-2-
The undersigned registrant ("DynaGen") hereby further amends the
following items, financial statements, exhibits and other portions of its
Current Report on Form 8-K dated June 18, 1997 as set forth on the pages
attached hereto:
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
This item is further amended to provide the following interim,
unaudited financial statements relating to the business of
Superior Pharmaceutical Company, which are filed as Exhibit
99.6 to this report and incorporated herein by reference.
Condensed Interim (Unaudited) Balance Sheet at June
30, 1997 and 1996.
Condensed Interim (Unaudited) Statement of Operations
for the six months ended June 30, 1997 and 1996.
Condensed Interim (Unaudited) Statement of Cash Flows
for the six months ended June 30, 1997 and 1996.
(b) Unaudited Pro Forma Combined Financial Information.
This item is amended to provide the following unaudited pro
forma combined financial information of DynaGen, which is
filed as Exhibit 99.7 to this report and incorporated herein
by reference.
Pro Forma Statement of Operations (Unaudited) for the
year ended December 31, 1996 and for the six
months ended June 30, 1997.
(c) Exhibits.
2.1 Agreement and Plan of Merger dated March 7, 1997
among DynaGen, DynaGen Acquisition Corp., Superior
and the Shareholders (filed as Exhibit 2c to
DynaGen's Transition report on Form 10-K for the
transition period from July 1, 1996 to December 31,
1996).
4.1 Registration Rights Agreement dated June 18, 1997
among DynaGen and the Shareholders (filed as Exhibit
4.1 to DynaGen's Current Report on Form 8-K dated
June 18, 1997).
4.2 Secured Promissory Note dated June 18, 1997 issued by
DynaGen to Eric C. Hagerstrand (filed as Exhibit 4.2
to DynaGen's Current Report on Form 8-K dated June
18, 1997).
-3-
4.3 Secured Promissory Note dated June 18, 1997 issued by
DynaGen to Dennis B. Smith (filed as Exhibit 4.3 to
DynaGen's Current Report on Form 8-K dated June 18,
1997).
4.4 Secured Promissory Note dated June 18, 1997 issued by
DynaGen to Thomas L. Canning (filed as Exhibit 4.4 to
DynaGen's Current Report on Form 8-K dated June 18,
1997).
4.5 Pledge Agreement dated June 18, 1997 among DynaGen
and the Shareholders (filed as Exhibit 4.5 to
DynaGen's Current Report on Form 8-K dated June 18,
1997).
4.6 Secured Promissory Note dated June 18, 1997 issued by
DynaGen to Sirrom (filed as Exhibit 4.6 to DynaGen's
Current Report on Form 8-K dated June 18, 1997).
4.7 Secured Promissory Note dated June 18, 1997 issued by
DynaGen to Odyssey (filed as Exhibit 4.7 to DynaGen's
Current Report on Form 8-K dated June 18, 1997).
4.8 Stock Purchase Warrant dated June 18, 1997 issued by
DynaGen to Sirrom (filed as Exhibit 4.8 to DynaGen's
Current Report on Form 8-K dated June 18, 1997).
4.9 Stock Purchase Warrant dated June 18, 1997 issued by
DynaGen to Odyssey (filed as Exhibit 4.9 to DynaGen's
Current Report on Form 8-K dated June 18, 1997).
4.10 Pledge and Security Agreement dated June 18, 1997
between DynaGen and Sirrom (filed as Exhibit 4.10 to
DynaGen's Current Report on Form 8-K dated June 18,
1997).
4.11 Subordinated Note dated June 18, 1997 issued by
DynaGen to Coutts & Co. AG (filed as Exhibit 4.11 to
DynaGen's Current Report on Form 8-K dated June 18,
1997).
4.12 Bridge Financing Purchase Agreement dated June 16,
1997 between DynaGen and Coutts & Co. AG (filed as
Exhibit 4.12 to DynaGen's Current Report on Form 8-K
dated June 18, 1997).
4.13 Certificate of Designations, Preferences and Rights
of Series A Preferred Stock of DynaGen (filed as
Exhibit 4.13 to DynaGen's Current Report on Form 8-K
dated June 18, 1997).
-4-
4.14 Securities Purchase Agreement dated June 16, 1997
among DynaGen and the purchasers of Series A
Preferred Stock (filed as Exhibit 4.14 to DynaGen's
Current Report on Form 8-K dated June 18, 1997).
4.15 Registration Rights Agreement dated June 16, 1997
among DynaGen and the purchasers of Series A
Preferred Stock (filed as Exhibit 4.15 to DynaGen's
Current Report on Form 8-K dated June 18, 1997).
4.16 Form of Common Stock Purchase Warrant dated June 18,
1997 issued by DynaGen to the purchasers of Series A
Preferred Stock (filed as Exhibit 4.16 to DynaGen's
Current Report on Form 8-K dated June 18, 1997).
4.17 Certificate of Designations, Preferences and Rights
of Series B Preferred Stock of DynaGen (filed as
Exhibit 4.17 to DynaGen's Current Report on Form 8-K
dated June 18, 1997).
4.18 Securities Purchase Agreement dated June 17, 1997
between DynaGen and Julius Baer Securities Inc. as
agent for certain non-U.S. persons (filed as Exhibit
4.18 to DynaGen's Current Report on Form 8-K dated
June 18, 1997).
4.19 Registration Rights Agreement dated June 17, 1997
between DynaGen and Julius Baer Securities Inc. as
agent for certain non-U.S. persons (filed as Exhibit
4.19 to DynaGen's Current Report on Form 8-K dated
June 18, 1997).
4.20 Stock Purchase Warrant dated June 18, 1997 issued by
Superior to Sirrom (filed as Exhibit 4.20 to
DynaGen's Current Report on Form 8-K dated June 18,
1997).
4.21 Stock Purchase Warrant dated June 18, 1997 issued by
Superior to Odyssey (filed as Exhibit 4.21 to
DynaGen's Current Report on Form 8-K dated June 18,
1997).
4.22 Revolving Note dated June 18, 1997 issued by Superior
to Huntington National Bank (filed as Exhibit 4.22 to
DynaGen's Current Report on Form 8-K dated June 18,
1997).
99.1 Loan Agreement dated June 18, 1997 among DynaGen,
Sirrom and Odyssey (filed as Exhibit 99.1 to
DynaGen's Current Report on Form 8-K dated June 18,
1997).
99.2 Security Agreement dated June 18, 1997 among DynaGen,
Sirrom and Odyssey (filed as Exhibit 99.2 to
DynaGen's Current Report on Form 8-K dated June 18,
1997).
-5-
99.3 Amended and Restated Loan and Security Agreement
dated June 18, 1997 among Huntington National Bank,
Superior and DynaGen (filed as Exhibit 99.3 to
DynaGen's Current Report on Form 8-K dated June 18,
1997).
99.4 Continuing Guaranty Unlimited dated June 18, 1997
from DynaGen to Huntington National Bank (filed as
Exhibit 99.4 to DynaGen's Current Report on Form 8-K
dated June 18, 1997).
99.5 Financial Statements of Superior Pharmaceutical
Company (filed as Exhibit 99.5 to DynaGen's Current
Report on Form 8-K dated June 18, 1997, as amended by
Amendment No.
1).
99.6 Interim (Unaudited) Financial Statements of Superior
Pharmaceutical Company (filed herewith).
99.7 Pro Forma Statement of Operations (Unaudited) for the
year ended December 31, 1996 and for the six months
ended June 30, 1997 (filed herewith).
-6-
SIGNATURE
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.
DYNAGEN, INC.
By:/S/ DHANANJAY G. WADEKAR
------------------------
Title:Executive Vice President
-------------------------
Dated: August 28, 1997
-7-
EXHIBIT INDEX
Exhibit
Numbers Exhibits
- ------- --------
2.1 Agreement and Plan of Merger dated March 7, 1997 among
DynaGen, DynaGen Acquisition Corp., Superior and the
Shareholders (filed as Exhibit 2c to DynaGen's Transition
report on Form 10-K for the transition period from July 1,
1996 to December 31, 1996).
4.1 Registration Rights Agreement dated June 18, 1997 among
DynaGen and the Shareholders (filed as Exhibit 4.1 to
DynaGen's Current Report on Form 8-K dated June 18, 1997).
4.2 Secured Promissory Note dated June 18, 1997 issued by DynaGen
to Eric C. Hagerstrand (filed as Exhibit 4.2 to DynaGen's
Current Report on Form 8-K dated June 18, 1997).
4.3 Secured Promissory Note dated June 18, 1997 issued by DynaGen
to Dennis B. Smith (filed as Exhibit 4.3 to DynaGen's Current
Report on Form 8-K dated June 18, 1997).
4.4 Secured Promissory Note dated June 18, 1997 issued by DynaGen
to Thomas L. Canning (filed as Exhibit 4.4 to DynaGen's
Current Report on Form 8-K dated June 18, 1997).
4.5 Pledge Agreement dated June 18, 1997 among DynaGen and the
Shareholders (filed as Exhibit 4.5 to DynaGen's Current Report
on Form 8-K dated June 18, 1997).
4.6 Secured Promissory Note dated June 18, 1997 issued by DynaGen
to Sirrom (filed as Exhibit 4.6 to DynaGen's Current Report on
Form 8-K dated June 18, 1997).
4.7 Secured Promissory Note dated June 18, 1997 issued by DynaGen
to Odyssey (filed as Exhibit 4.7 to DynaGen's Current Report
on Form 8-K dated June 18, 1997).
4.8 Stock Purchase Warrant dated June 18, 1997 issued by DynaGen
to Sirrom (filed as Exhibit 4.8 to DynaGen's Current Report on
Form 8-K dated June 18, 1997).
4.9 Stock Purchase Warrant dated June 18, 1997 issued by DynaGen
to Odyssey (filed as Exhibit 4.9 to DynaGen's Current Report
on Form 8-K dated June 18, 1997).
-8-
4.10 Pledge and Security Agreement dated June 18, 1997 between
DynaGen and Sirrom (filed as Exhibit 4.10 to DynaGen's Current
Report on Form 8-K dated June 18, 1997).
4.11 Subordinated Note dated June 18, 1997 issued by DynaGen to
Coutts & Co. AG (filed as Exhibit 4.11 to DynaGen's Current
Report on Form 8-K dated June 18, 1997).
4.12 Bridge Financing Purchase Agreement dated June 16, 1997
between DynaGen and Coutts & Co. AG (filed as Exhibit 4.12 to
DynaGen's Current Report on Form 8-K dated June 18, 1997).
4.13 Certificate of Designations, Preferences and Rights of Series
A Preferred Stock of DynaGen (filed as Exhibit 4.13 to
DynaGen's Current Report on Form 8-K dated June 18, 1997).
4.14 Securities Purchase Agreement dated June 16, 1997 among
DynaGen and the purchasers of Series A Preferred Stock (filed
as Exhibit 4.14 to DynaGen's Current Report on Form 8-K dated
June 18, 1997).
4.15 Registration Rights Agreement dated June 16, 1997 among
DynaGen and the purchasers of Series A Preferred Stock (filed
as Exhibit 4.15 to DynaGen's Current Report on Form 8-K dated
June 18, 1997).
4.16 Form of Common Stock Purchase Warrant dated June 18, 1997
issued by DynaGen to the purchasers of Series A Preferred
Stock (filed as Exhibit 4.16 to DynaGen's Current Report on
Form 8-K dated June 18, 1997).
4.17 Certificate of Designations, Preferences and Rights of Series
B Preferred Stock of DynaGen (filed as Exhibit 4.17 to
DynaGen's Current Report on Form 8-K dated June 18, 1997).
4.18 Securities Purchase Agreement dated June 17, 1997 between
DynaGen and Julius Baer Securities Inc. as agent for certain
non-U.S. persons (filed as Exhibit 4.18 to DynaGen's Current
Report on Form 8-K dated June 18, 1997).
4.19 Registration Rights Agreement dated June 17, 1997 between
DynaGen and Julius Baer Securities Inc. as agent for certain
non-U.S. persons (filed as Exhibit 4.19 to DynaGen's Current
Report on Form 8-K dated June 18, 1997).
4.20 Stock Purchase Warrant dated June 18, 1997 issued by Superior
to Sirrom (filed as Exhibit 4.20 to DynaGen's Current Report
on Form 8-K dated June 18, 1997).
4.21 Stock Purchase Warrant dated June 18, 1997 issued by Superior
to Odyssey (filed as Exhibit 4.21 to DynaGen's Current Report
on Form 8-K dated June 18, 1997).
-9-
4.22 Revolving Note dated June 18, 1997 issued by Superior to
Huntington National Bank (filed as Exhibit 4.22 to DynaGen's
Current Report on Form 8-K dated June 18, 1997).
99.1 Loan Agreement dated June 18, 1997 among DynaGen, Sirrom and
Odyssey (filed as Exhibit 99.1 to DynaGen's Current Report on
Form 8-K dated June 18, 1997).
99.2 Security Agreement dated June 18, 1997 among DynaGen, Sirrom
and Odyssey (filed as Exhibit 99.2 to DynaGen's Current Report
on Form 8-K dated June 18, 1997).
99.3 Amended and Restated Loan and Security Agreement dated June
18, 1997 among Huntington National Bank, Superior and DynaGen
(filed as Exhibit 99.3 to DynaGen's Current Report on Form 8-K
dated June 18, 1997).
99.4 Continuing Guaranty Unlimited dated June 18, 1997 from DynaGen
to Huntington National Bank (filed as Exhibit 99.4 to
DynaGen's Current Report on Form 8-K dated June 18, 1997).
99.5 Financial Statements of Superior Pharmaceutical Company (filed
as Exhibit 99.5 to DynaGen's Current Report on Form 8-K dated
June 18, 1997, as amended by Amendment No. 1).
99.6 Interim (Unaudited) Financial Statements of Superior
Pharmaceutical Company (filed herewith).
99.7 Pro Forma Statement of Operations (Unaudited) for the year
ended December 31, 1996 and for the six months ended June 30,
1997 (filed herewith).
SUPERIOR PHARMACEUTICAL COMPANY
CONDENSED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, June 30,
1997 1996
---- ----
Current assets:
Cash $ 202,910 $ --
Accounts receivable, net 2,766,366 4,218,409
Finished goods inventory 7,883,739 7,703,209
Other current assets 571,511 83,551
----------- -----------
Total current assets 11,424,525 12,005,170
Property and equipment, net of
accumulated depreciation and
amortization of $359,310 and $254,471 366,728 399,480
Deposits 7,906 4,704
----------- -----------
$11,799,159 $12,409,354
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft $ -- $ 1,078,530
Line of credit 5,514,615 4,000,000
Notes payable -- 146,667
Accounts payable 1,534,907 4,387,802
Accrued payroll and
payroll taxes 268,870 136,735
----------- -----------
Total current liabilities 7,318,392 9,749,734
----------- -----------
Stockholders' equity:
Common stock 1,000 1,000
Additional paid-in capital 1,750,000 --
Retained earnings 2,729,767 2,658,621
----------- -----------
Total stockholders' equity 4,480,767 2,659,621
----------- -----------
$11,799,159 $12,409,354
=========== ===========
See accompanying notes to unaudited condensed financial statements.
SUPERIOR PHARMACEUTICAL COMPANY
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended
----------------
June 30, June 30,
1997 1996
------------- --------
Product sales, net $ 12,960,819 $ 15,187,923
------------ ------------
Costs and expenses:
Cost of sales 10,230,865 11,874,606
Selling, general and
administrative 1,959,150 1,718,049
------------ ------------
Total costs and expenses 12,190,015 13,592,655
------------ ------------
Operating income 770,804 1,595,268
Interest expense (231,574) (167,271)
------------ ------------
Net income $ 539,230 $ 1,427,997
============ ============
See accompanying notes to unaudited condensed financial statements.
SUPERIOR PHARMACEUTICAL COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
----------------
June 30, June 30,
1997 1996
------------- --------
Cash flows provided by operating activities:
Net earnings $ 539,230 $ 1,427,997
Adjustments to reconcile
net earnings to net cash
used in operating activities:
Depreciation and amortization 50,520 46,436
Changes in assets and liabilities:
Accounts receivable 791,861 (1,206,283)
Inventory (319,894) (2,780,240)
Other assets 117,727 410,809
Accounts payable (398,378) 2,991,317
Bank overdraft (790,823) 151,228
---------- -----------
Net cash provided by (used by)
operating activities (9,757) 1,041,264
----------- -----------
Cash flows used by investing activities:
Purchase of property and equipment (15,939) (74,677)
----------- -----------
Net cash used by
investing activities (15,939) (74,677)
----------- -----------
Cash flows provided by (used by) financing
activities:
Parent company contributed capital 1,750,000 --
Line of credit proceeds (payments)
- net (174,459) 387,692
Note payable - (payments) -- (20,000)
Distributions to shareholders (1,346,935) (1,334,279)
----------- -----------
Net cash provided by (used by)
financing activities 228,606 (966,587)
----------- -----------
Net change in cash 202,910 --
Cash balance, beginning of period -- --
----------- -----------
Cash balance, end of period $ 202,910 $ --
=========== ===========
Cash paid during the period for:
Interest $ 263,928 $ 164,050
=========== ===========
See accompanying notes to unaudited condensed financial statements.
SUPERIOR PHARMACEUTICAL COMPANY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30,1997
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of Superior
Pharmaceutical Company have been prepared in accordance with generally accepted
accounting principles for interim financial information and in accordance with
the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly,
they do not include all information and footnotes required by generally accepted
accounting principles for complete financial statement presentation.
The results of operations for the periods reported are not necessarily
indicative of expected results for any future interim period or for a full
fiscal year. In the opinion of management, all adjustments have been made
(consisting only of normal recurring adjustments) which are necessary for a fair
statement of operating results for the interim periods presented.
2. STOCKHOLDERS' EQUITY
On June 18, 1997, DynaGen, Inc. acquired all of the outstanding shares
of Superior Pharmaceutical Company. Immediately following the closing of the
acquisition, DynaGen, Inc., the parent company, contributed $1,750,000 in
additional paid-in capital towards working capital for Superior Pharmaceutical
Company.
EXHIBIT 99.7
The following pro forma statements of operations for the year ended
December 31, 1996 and the six months ended June 30, 1997 of DynaGen, Inc., Able
Laboratories Inc. and Superior Pharmaceutical Company are based upon historical
financial data of the aforementioned companies as if the acquisitions of Able
and Superior occurred at the beginning of each period presented. These pro forma
statements of operations are not necessarily indicative of expected results for
any future interim period or for a full fiscal year.
<TABLE>
<CAPTION>
DYNAGEN, INC.
PRO FORMA STATEMENT OF OPERATIONS
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1996
DynaGen Able Superior
------------------------------------------
<S> <C> <C> <C>
REVENUES:
Product sales, net $249,671 $2,268,111 $32,221,784
Fees and royalties 61,441
------------------------------------------
TOTAL REVENUES 311,112 2,268,111 32,221,784
------------------------------------------
COSTS AND EXPENSES:
Cost of sales 102,099 2,578,062 24,849,369
Research and development 3,173,776
Selling, general and administrative 3,942,765 1,606,486 3,960,296
------------------------------------------
TOTAL COSTS AND EXPENSES 7,218,640 4,184,548 28,809,665
------------------------------------------
Operating income (loss) (6,907,528) (1,916,437) 3,412,119
OTHER INCOME(EXPENSE):
Other income 413,844 138 40,586
Interest expense (257,320) (458) (382,658)
State income taxes
------------------------------------------
156,524 (320) (342,072)
------------------------------------------
Net income (loss) ($6,751,004) ($1,916,757) $3,070,047
==========================================
</TABLE>
<TABLE>
<CAPTION>
Proforma
Adjustments Combined
-----------------------------------------------
<S> <C> <C> <C>
REVENUES:
Product sales, net $34,739,566
Fees and royalties 61,441
-----------------------------------------------
TOTAL REVENUES 0 0 34,801,007
-----------------------------------------------
COSTS AND EXPENSES:
Cost of sales 27,529,530
Research and development 3,173,776
Selling, general and administrative (A) 952,970 10,462,517
------------------------------------------------
TOTAL COSTS AND EXPENSES 952,970 0 41,165,823
------------------------------------------------
Operating income (loss) (952,970) 0 (6,364,816)
OTHER INCOME(EXPENSE):
Other income (B) (35,000) 419,568
Interest expense (C&D) (1,206,036) 144,000 (1,702,472)
State income taxes (E) (300,000) (300,000)
------------------------------------------------
(1,541,036) 144,000 (1,582,904)
------------------------------------------------
Net income (loss) ($2,494,006) $144,000 ($7,947,720)
================================================
Proforma
As reported Combined
-----------------------------
Net loss per share ($0.27) ($0.26)
=============================
Weighted average shares outstanding 27,740,155 30,616,155
=============================
</TABLE>
(1) The Superior and Able acquisitions are accounted for under the purchase
method of accounting.
(2) There are no provisions for federal income taxes due to DynaGen net
operating loss carryforwards available to offset Superior net income. A
state income tax provision is provided for at statutory rates.
(3) Adjustments to the pro forma statement of operations for the year ended
December 31, 1996 have been made to reflect:
(A) Recognition of goodwill amortization resulting from the purchase
of Superior.
(B) Loss of interest income at 5% on $700,000 used to purchase Able
Laboratories.
(C) Interest expense associated with certain debt and other
obligations issued in connection with the Superior acquisition.
(D) Reduction in interest expense of Superior resulting from DynaGen
capital contribution of $1,750,000.
(E) State income taxes for Superior at statutory rates.
(4) Net loss per share is calculated based upon the weighted average number of
shares outstanding during the period presented. The effect of all common
stock equivalents has been excluded from the calculation since its
inclusion would be anti-dilutive.
<TABLE>
<CAPTION>
DYNAGEN, INC.
PRO FORMA STATEMENT OF OPERATIONS
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1997
DynaGen Able Superior
-----------------------------------------
<S> <C> <C> <C>
REVENUES:
Product sales, net $42,514 $893,436 $12,960,819
Fees and royalties 50,658
-----------------------------------------
TOTAL REVENUES 93,172 893,436 12,960,819
-----------------------------------------
COSTS AND EXPENSES:
Cost of sales 19,529 2,024,333 10,230,865
Research and development 1,468,887 177,792
Selling, general and administrative 1,730,630 432,947 1,959,150
-----------------------------------------
TOTAL COSTS AND EXPENSES 3,219,046 2,635,072 12,190,015
-----------------------------------------
Operating income (loss) (3,125,874) (1,741,636) 770,804
OTHER INCOME(EXPENSE):
Other income 109,035
Interest expense (116,238) (231,574)
State income taxes
-----------------------------------------
(7,203) (231,574)
-----------------------------------------
Net income (loss) ($3,133,077) ($1,741,636) $539,230
=========================================
</TABLE>
<TABLE>
<CAPTION>
Proforma
Adjustments Combined
---------------------------------------------
<S> <C> <C> <C>
REVENUES:
Product sales, net $13,896,769
Fees and royalties 50,658
---------------------------------------------
TOTAL REVENUES 0 0 13,947,427
---------------------------------------------
COSTS AND EXPENSES:
Cost of sales 12,274,727
Research and development 1,646,679
Selling, general and administrative (A) 436,778 4,559,505
---------------------------------------------
TOTAL COSTS AND EXPENSES 436,778 0 18,480,911
---------------------------------------------
Operating income (loss) (436,778) 0 (4,533,484)
OTHER INCOME(EXPENSE):
Other income 109,035
Interest expense (B&C) (674,654) 72,000 (950,466)
State income taxes (D) (72,000) (72,000)
---------------------------------------------
(746,654) 72,000 (913,431)
---------------------------------------------
Net income (loss) ($1,183,432) $72,000 ($5,446,915)
=============================================
Proforma
As reported Combined
---------------------------
Net loss per share ($0.16) ($0.16)
===========================
Weighted average shares outstanding 30,195,712 33,757,407
===========================
</TABLE>
(1) The Superior and Able acquisitions are accounted for under the purchase
method of accounting.
(2) There are no provisions for federal income taxes due to DynaGen net
operating loss carryforwards available to offset Superior net income. A
state income tax provision is provided for at statutory rates.
(3) Adjustments to the pro forma statement of operations for the six months
ended June 30, 1997 have been made to reflect:
(A) Recognition of goodwill amortization resulting from the purchase
of Superior.
(B) Interest expense associated with certain debt and other
obligations issued in connection with the Superior acquisition.
(C) Reduction in interest expense of Superior resulting from DynaGen
capital contribution of $1,750,000.
(D) State income taxes for Superior at statutory rates.
(4) Net loss per share is calculated based upon the weighted average number of
shares outstanding during the period presented. The effect of all common
stock equivalents has been excluded from the calculation since its
inclusion would be anti-dilutive.
