<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________________ to ______________________
Commission file number 0-19693
BIO FLUORESCENT TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
Nevada 87-0485320
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
7373 North Scottsdale Road, Suite D222, Scottsdale, Arizona 85253
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(Address of principal executive offices)
602-596-0269
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(Issuer's telephone number)
None
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Former name, former address and former fiscal year,
if changed since last report.
Applicable only to issuers involved in bankruptcy proceedings during
the preceding five years.
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the last 12 months (or for such
shorter period that the registrant was required to file such report(s), and (2)
has been subject to such filing requirements for the past 90 days.
Yes No X
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: August 15, 1996, 13,574,306
common shares of par value $.001 outstanding.
Transitional Small Business Disclosure Format (Check One):
Yes No X
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BIO FLUORESCENT TECHNOLOGIES, INC.
Table of Contents
<TABLE>
<CAPTION>
<S> <C> <C>
PART 1 Financial Information Page No.
Item I Financial Statements
Condensed Balance Sheet 3
Condensed Statements of Operations 4
Condensed Statements of Cash Flow 5
Notes to Condensed Financial Statements 6
Item 2 Plan of Operations 8
PART II Other Information
Item 1 Legal Proceedings N/A
Item 2 Changes in Securities N/A
Item 3 Defaults Upon Senior Securities N/A
Item 4 Submission and Matters to a Vote of Security Holders N/A
Item 5 Other Information N/A
Item 6 Exhibits and Reports on Form 8-K 10
SIGNATURES 10
</TABLE>
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Bio Florescent Technologies, Inc.
(A Company in the Development Stage)
Condensed Balance Sheet
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C>
Current Assets:
Cash $ 98
Trade exchange receivable - barter 49,887
Media products and services receivable - current portion 250,000
--------------
Total current assets 299,985
Media Products and Services Receivable - non current portion 250,000
License, net of accumulated amortization 884,000
--------------
$ 1,433,985
==============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable-
Trade accounts $ 118,025
Related party accounts 182,076
Accrued expenses 65,070
--------------
Total current liabilities 365,171
--------------
Stockholders' Equity:
Common stock, $0.001 par value, Authorized 25,000,000 shares, 12,217
issued and outstanding 12,216,749 shares
Common stock, subscription paid - to be issued 888,000 shares 888
Common stock, subscription unpaid - 1,112,000 shares 1,112
Additional paid-in capital 3,347,307
Subscription of common stock sales receivable (278,000)
Deficit accumulated during development stage (2,014,710)
--------------
Total stockholders' equity 1,068,814
$ 1,433,985
=============
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
3
<PAGE> 4
Bio Florescent Technologies, Inc.
(A Company in the Development Stage)
Condensed Statements of Operations
for the six month period ended June 30, 1996
and for the period from inception of development stage
(February 15, 1990 to June 30, 1996)
(Unaudited)
<TABLE>
<CAPTION>
Three month period Six month period Cumulative from
ended June 30 ended June 30, the inception of
--------------- ---------------- Development stage
1996 1995 1996 1995 (February15,1990)
------ ------ ------ ------ ------------------
<S> <C> <C> <C> <C> <C>
Net Sales $ -0- $ -0- $ -0- $ -0- $ -0-
Selling, general &
administrative expenses 290,967 128,130 629,253 202,512 2,014,816
------------ ------------ ------------ ------------ ------------
Loss from operations (290,967) (128,130) (629,253) (202,512) (2,014,816)
Interest Expense -0- -0- -0- -0- -0-
Interest Income 106 -0- 106 -0- 106
------------ ------------ ------------ ------------ ------------
Loss before provision for
income taxes (290,967) (128,130) (629,253) (202,512) (2,014,816)
Provision for income taxes -0- -0- -0- -0- -0-
------------ ------------ ------------ ------------ ------------
Net Loss $ (290,861) $ (128,130) $ (629,147) $ (202,512) $(2,014,710)
=========== =========== =========== =========== ============
Loss per common share $ (0.03) $ (0.01) $ (0.06) $ (0.01)
=========== =========== =========== ===========
Weighted average number of
common shares outstanding 12,204,244 11,000,000 12,013,759 11,000,000
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
4
<PAGE> 5
Bio Florescent Technologies, Inc.
(A Company in the Development Stage)
Condensed Statements of Cash Flows for the Six month
period ended June 30, 1996 and for the period from inception of
development stage (February 15, 1990 to June 30, 1996)
(Unaudited)
<TABLE>
<CAPTION>
Three month period Six month period Cumulative from
ended June 30 ended June 30, the inception of
--------------- ---------------- Development stage
1996 1995 1996 1995 (February15,1990)
------ ------ ------ ------ ------------------
<S> <C> <C> <C> <C> <C>
Cash flows from operations:
Net loss(including development costs) $(290,861) $128,130) $(629,147) $(202,512) $(2,014,710)
Adjustments to reconcile net loss to
net cash used in operating activities:
Amortization 25,500 51,000 136,000
Writedown of artwork 400,000
Common stock issued for services 126,748
Change in assets and liabilities:
Decrease/(increase) in prepaid
expenses 2,500 3,000 1,875 (5,000) -0-
Decrease/(increase) in trade
exchange receivable 113 113 113
Increase/(decrease) in accounts
payable and accrued expenses 89,091 73,915 181,629 77,085 365,171
--------- -------- --------- --------- -----------
Net cash used by operations (173,657) (51,215) (394,530) (130,427) (986,678)
--------- -------- --------- --------- -----------
Cash flows from financing activities:
Sale and issue of common stock, net 22,590 45,000 153,796 131,000 764,776
Sale of stock subscriptions(net of
subscriptions receivable) 150,000 -0- 222,000 -0- 222,000
--------- -------- --------- --------- -----------
Cash provided by financing 172,590 45,000 375,796 131,000 986,776
--------- -------- --------- --------- -----------
Net increase/(decrease) in cash funds (1,067) (6,215) (18,734) 573 98
Cash funds, beginning of period 1,165 6,788 18,832 -0- -0-
--------- -------- --------- --------- -----------
Cash funds, end of period $ 98 $ 573 $ 98 $ 573 $ 98
========= ======== ========= ========= ===========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
5
<PAGE> 6
BIO FLUORESCENT TECHNOLOGIES, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1996
1. THE COMPANY AND ITS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
HISTORY AND REPORTING ENTITY
Bio Fluorescent Technologies, Inc. (the Company) is a development stage company
that was incorporated under the laws of the state of Nevada in February 1990 as
Partisan Corporation. On March 10, 1995, the Company's name was changed from
Partisan Corporation to Bio Fluorescent Technologies, Inc. The Company was
inactive through February 1995 and prior to such time the Company's only
activities consisted of the sale or transfer of shares of its common stock in
private placements.
BASIS OF PRESENTATION
The unaudited condensed financial statements and related notes have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and regulations.
The accompanying financial statements and related notes should be read in
conjunction with the audited financial statements of the company and notes
thereto, for the fiscal year ended December 31, 1995.
The information furnished reflects, in the opinion of management, all
adjustments, consisting of normal recurring accruals, necessary for a fair
presentation of the results of the interim period presented.
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 reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
SUBSEQUENT EVENT
During July 1996 the company received $500,000 net proceeds from the private
placement offering of $550,000 8% convertible debentures with due dates in
August and September 1996. Subsequent to date of issuance, holders of the
debentures have excerised their conversion rights. The company is redeeming
such debentures including accrued interest by the issuance of approximately
2,865,000 common shares.
6
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LOSS PER COMMON SHARE
Loss per common share is computed by dividing the net loss by the weighted
average number of common shares outstanding during the period. Fully diluted
loss per common share is considered equal to primary loss per common share for
all periods presented.
RECENTLY ISSUED ACCOUNTING STANDARDS
SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of, which is required to be adopted by the company
in 1996, is not expected to have a material effect on the Company's financial
position or its results of operations upon adoption. SFAS No. 123, Accounting
for Stock-Based Compensation, is required to be adopted by the Company in 1996.
Pursuant to the provisions of SFAS No. 123, the Company will continue to account
for transactions with its employees pursuant to Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees. Therefore, this
statement is not expected to have a material effect on the Company's financial
position or its results of operations when adopted.
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PLAN OF OPERATIONS
ITEM 2
The Company is presently concentrating its efforts on opportunities
created by critical global healthcare concerns to more rapidly and reliably
detect viruses such as HIV 1/2 and Hepatitis B.
The Company secured worldwide rights to manufacture, market and sell
the Mehica GP120 System in February 1995. Consideration for such rights included
a commitment by the Company to finance the production and finalization of other
development requirements as well as royalty payments.
The Mehica GP120 System, which is in the early stages of development,
is designed to be an automated HIV testing system that will process large
quantities of HIV samples at a low unit cost, produce results in just minutes
and that may be operated by low-skilled technicians. The Mehica GP120 System is
a single use application of the Automated Micro-Cellular Analysis System, a
multi-function cell testing unit which has received a 510(k) Classification by
the FDA.
Prior to selling the Mehica GP120 System in the United States, the
Company must obtain certain FDA approvals. Under the original terms of the
license agreement for the Mehica GP120 System, the licensor had agreed to
produce a prototype of the system and perform testing protocol prescribed by
applicable FDA and the company had agreed to pay the licensor $1.4 million in
four installments at the beginning of each development stage.
On July 19, 1996, the Company filed a complaint in the United States
District Court for the District of Maryland (Civil Action No. CCB 96-2266)
against the licensor, The Avriel Group and others, seeking declaratory relief,
damages and other relief in respect of certain agreements relating to the rights
to a proprietary automated system for detection of the HIV virus and for use in
mass screening of individuals, the Packaged Antigen Kit or "PAK" and the Mehica
GP120). On July 30, 1996, the defendants filed an answer, counter-claim and
third party complaint, seeking declaratory relief in respect of the agreements
and damages. The proceeding is pending and the Company expects discovery to
commence in the near future. Although the Company is ready, willing and able to
litigate the dispute, the Company is cautiously optimistic that the dispute can
be resolved by and through a negotiated settlement without further litigation.
Upon the advise of legal counsel, pending the outcome of the
aforementioned litigation, the Company is withholding any payments to the
licensor including payment scheduled for July 31, 1996.
The Company plans to aggressively pursue the acquisition of other
products through licensing and/or acquiring businesses with proven sales and
operating history which are compatible with corporate strategies to market and
produce the Mehica GP120 System.
8
<PAGE> 9
The Company re-organized its management team in May 1996 to focus on
the implementation of its business plan which calls for completion of
development of the Mehica GP120 System and the acquisition of compatible
products to establish the Company as an operating Company as soon as possible.
One of the growth strategies of the business plan is to expand the
company's core market to include a broader range of viral and infectious
disease. As of August 29, 1996, the Company has signed a contract with SANNES &
Associates to work on expanding the viral and infectious disease technology.
SANNES & ASSOCIATES has extensive research, product development and product
introduction skills. Their professional careers have given them firsthand
knowledge of these functions with major pharmaceutical and medical equipment
manufacturing companies.
The Company anticipates concluding, in the near future, an additional
contract agreement with a nationally known West Coast based scientific
instrument and optical development company that specializes in imaging and
robotics. The Company's management has expanded the company's core market to
include a broader range of viral and infectious diseases and has sought out the
best possible technology development companies to assure a higher degree of
success.
To date, the Company's operations have consisted primarily of obtaining
the license to the Mehica GP120 System, assembling a management team and raising
capital. From the Company's inception to June 30, 1996, the Company's business
development costs have totaled approximately $2,014,000. These expenditures have
been funded primarily with the proceeds from the private sales of its equity
securities as well as with the issuance of its common stock in exchange for
services.
From inception to June 30, 1996, the Company's development activities
resulted in a deficit in cash flow of approximately $987,000. This deficit was
primarily the result of the cumulative net operating loss of approximately
$2,014,000 offset by noncash charges totaling approximately $663,000 related to
the write off of artwork purchased with common stock, common stock issued for
services and amortization associated with the Company's license to the Mehica
GP120 System. Additionally, the deficit in cash flow from operating activities
was offset by an increase in accounts payable and accrued liabilities of
approximately $365,000.
The Company's financing activities since inception provided cash flow
of approximately $987,000 through June 30, 1996. This was the result of the
private placement of 5,362,700 shares of the Company's common stock. Subsequent
to June 30, 1996, the Company is issuing approximately 2,865,000 shares for
$550,000 cash through private placement of convertible debentures (see
"Subsequent Event" note to Unaudited Financial Statements).
During 1995, the Company also issued an aggregate of 5,333,333 shares
of its common stock for media products and services to be provided in the future
valued at $500,000, barter credits totaling $50,000 and the license to the
Mehica GP120 System recorded at a value of $1,000,000.
The Company will need to raise additional operating capital to satisfy
its obligations under the product development agreements and to fund other
operating expenses of the business. As of the date of this filing, the Company
has not obtained such financing. Failure by the Company to obtain such
additional financing would have a material adverse effect on the Company and may
result in the termination of the license agreement relating to the Mehica GP120
System by the licensor.
9
<PAGE> 10
PART II
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits:
Exhibit 27 - Financial Data Schedule
(B) Reports on Form 8-K:
No reports on Form 8-K were filed during the Quarter ended
June 30, 1996.
SIGNATURES
Pursuant to the regulation requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: Sept, 1996 Bio Fluorescent Technologies, Inc.
(Registrant)
By: /s/ Jan J. Olivier
-------------------------------
Jan J. Olivier
President, Director
By: /s/ A. Richard Bullock
-------------------------------
A. Richard Bullock
Secretary, Treasurer
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 98
<SECURITIES> 0
<RECEIVABLES> 549,887
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 299,985
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,433,985
<CURRENT-LIABILITIES> 365,171
<BONDS> 0
0
0
<COMMON> 14,217
<OTHER-SE> 1,054,597
<TOTAL-LIABILITY-AND-EQUITY> 1,068,814
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 629,147
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (629,147)
<INCOME-TAX> 0
<INCOME-CONTINUING> (629,147)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (629,147)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
