<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDED REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) MARCH 10, 2000
---------------------------
AETHLON MEDICAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 33-44567-NY 13-3632859
--------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No,)
7825 Fay Avenue, Suite 200, La Jolla, California 92037
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including are code (858) 456-5777
--------------
Not applicable
--------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired
Audited financial statements of Syngen Research, Inc. years ended
December 31, 1999 and 1998.
(b) Pro Forma Financial Information
Pro Forma Balance Sheet (unaudited) as of December 31, 1999
Pro Forma Statements of Operations for the nine months ended December
31, 1999 and the year ended March 31, 1999
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.
Aethlon Medical, Inc.
(Formerly Bishop Equities, Inc.)
/s/ Franklyn S. Barry, Jr.
----------------------------
Franklyn S. Barry, Jr., President
Date: July 17, 2000
<PAGE>
The following unaudited pro forma financial statements give effect to
the acquisition by Bishop Equities, Inc. ("Bishop") of all the outstanding
common stock of Syngen Research, Inc. ("Syngen") in a transaction accounted for
as a purchase. The unaudited pro forma balance sheet is based on the individual
balance sheets of Bishop and Syngen as of December 31, 1999 to reflect the
acquisition as of that date. The unaudited pro forma statements of operations
are based on the individual statements of operations of Bishop for the nine
months ended December 31, 1999 and the year ended March 31, 1999 and the
statements of income of Syngen for the same two periods. The unaudited pro forma
statements of operations combine the results of operations of Bishop and Syngen
(acquired on January 6, 2000) as if the acquisition had occurred at the
beginning of the respective periods.
<PAGE>
Audited Financial Statements of
Syngen Research, Inc.
years ended December 13, 1999 and 1998
INDEPENDENT AUDITOR'S REPORT
To the Owner of
Syngen Research
San Diego, California
We have audited the accompanying balance sheet of Syngen Research as of December
31, 1998, and the related statements of income and proprietor's deficit, and
cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit 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 statement presentation.
We believe that our audit provides 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 Syngen Research as of December
31, 1998, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
/s/ Delsen & Company LLP
-----------------------------
Delsen & Company LLP
San Diego, CA
March 20, 2000
<PAGE>
SYNGEN RESEARCH
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
<TABLE>
<S> <C>
Current assets:
Cash $ 11,002
Accounts receivable,
net of allowance for doubtful accounts 4,971
--------
Total current assets 15,973
--------
Property and equipment:
Equipment 9,968
less accumulated depreciation (2,761)
--------
Net property and equipment 7,207
--------
Total assets $ 23,180
========
LIABILITIES & PROPRIETOR'S DEFICIT
Current liabilities:
Accounts payable $ 4,627
Credit cards payable 14,182
Sales tax payable 1,303
--------
Total current liabilities 20,112
Long term debt (Note 3) 25,000
--------
Total liabilities 45,112
Proprietor's deficit (21,932)
--------
Total liabilities and proprietor's deficit $ 23,180
========
</TABLE>
(See accountant's report and accompanying notes)
2
<PAGE>
SYNGEN RESEARCH
STATEMENT OF INCOME & PROPRIETOR'S DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
Income:
Consulting fees $ 61,360
Grants 57,191
Sales 18,449
Interest earned 64
--------
Total income 137,064
--------
Expenses:
Advertising 2,462
Auto 161
Cash discounts 835
Computer 1,463
Consulting 3,259
Depreciation 2,429
Dues and subscriptions 1,274
Equipment rental 258
Interest expense 2,253
Lab testing fees 450
Lab chemicals and supplies 29,708
Licenses and permits 69
Office supplies 4,439
Payroll taxes 1,346
Professional fees 4,395
Rent 750
Repairs and maintenance 4,653
Salaries 13,750
Shipping and postage 970
Telephone 1,108
Travel and entertainment 2,276
--------
Total expenses 78,308
--------
Net income 58,756
Proprietor's deficit at beginning of year (19,358)
Capital contributions 12,608
Capital withdrawals (73,938)
--------
Proprietor's deficit at end of year $(21,932)
========
</TABLE>
(See accountant's report and accompanying notes)
3
<PAGE>
SYNGEN RESEARCH
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
Cash flows from operating activities:
Net income $ 58,756
Non-cash transactions included in net income:
Depreciation 2,429
Change in:
Accounts receivable (4,971)
Accounts payable 4,627
Credit cards payable 13,469
Sales tax payable 1,303
---------
Net cash provided by (used in) operating activities 75,613
Cash flows from investing activities:
Change in fixed assets (4,198)
---------
Net cash provided by (used in) investing activities (4,198)
Cash flows from financing activities:
Proprietor's contribution 12,608
Proprietor's distribution (73,939)
---------
Net cash provided by (used in) financing activities (61,331)
Cash at beginning of year 918
---------
Cash at end of year $ 11,002
=========
</TABLE>
(See accountant's report and accompanying notes)
4
<PAGE>
SYNGEN RESEARCH
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1998
Note 1. NATURE OF OPERATIONS
The Company is a sole-proprietorship, which performs consulting and
research activities in the biomedical field.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Depreciation
Depreciation of equipment is computed using accelerated methods
with estimated useful lives of 5 years.
Income Taxes
The company is not subject to income taxes since it is a sole
proprietorship and the income is taxable directly to the owner.
Note 3. NOTE PAYABLE
The Company owes $25,000 to a relative of the owner. The note is
payable upon demand. The Company has been making interest payments of
$125 monthly, totaling $1,500 for the current reporting period.
Note 4. RENT
The rent was paid by an affiliated company.
Note 5. SALE OF THE COMPANY
As of October 11, 1999 the Company had signed a letter of intent to
be acquired by Bishop Equities, Inc. dba Aethlon Medical, Inc., a
publicly held company. Under the agreement, Aethlon Medical acquired
all the shares of Syngen Research after incorporation in exchange for
65,000 shares of Aethlon Medical common stock. Aethlon Medical also
employs the former owner pursuant to an employment agreement. As a
condition of acquisition, the rights to a certain technology
developed by the former owner in a contract with another publicly
held company was transferred to Aethlon Medical. On January 9, 2000 a
merger agreement was signed and Syngen Research, Inc. became a wholly
owned subsidiary of Aethlon Medical.
5
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholder of
Syngen Research, Inc.
San Diego, California
We have audited the accompanying balance sheet of Syngen Research, Inc. as of
December 31, 1999, and the related statements of income and retained earnings,
and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit 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 statement presentation.
We believe that our audit provides 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 Syngen Research, Inc. as of
December 31, 1999, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/ Delsen & Company LLP
-----------------------------
Delsen & Company LLP
San Diego, CA
March 20, 2000
2
<PAGE>
SYNGEN RESEARCH, INC.
BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
ASSETS
<S> <C>
Current assets:
Cash $ 8,442
Accounts receivable,
net of allowance for doubtful accounts 62,666
---------
Total current assets 71,108
---------
Property and equipment:
Equipment 12,010
less accumulated depreciation (6,461)
---------
Net property and equipment 5,549
---------
Total assets $ 76,657
=========
LIABILITIES & SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 2,299
Credit cards payable 21,112
Sales tax payable 1,029
Income taxes payable 2,530
---------
Total current liabilities 26,970
Long term debt (Note 3) 25,000
---------
Total liabilities 51,970
Shareholder's equity
Common stock, no par value
1,000 shares authorized, 100 shares
issued and outstanding 100
Retained earnings 24,587
---------
Total shareholder's equity 24,687
---------
Total liabilities and shareholder's equity $ 76,657
=========
</TABLE>
(See accountant's report and accompanying notes)
2
<PAGE>
SYNGEN RESEARCH, INC.
STATEMENT OF INCOME & RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
Income:
Consulting fees $ 142,097
Grants 139,035
Sales 15,007
Reimbursed expenses 2,143
Interest earned 4
---------
Total income 298,286
---------
Expenses:
Auto 78
Computer 789
Consulting 2,100
Depreciation 3,700
Dues and subscriptions 2,103
Insurance 1,237
Interest expense 3,155
Lab chemicals and supplies 23,756
Legal and accounting 6,607
Licenses and permits 22
Office supplies 1,728
Owner's compensation 58,908
Meetings 1,550
Payroll taxes 5,845
Professional fees 59,811
Rent 2,000
Repairs and maintenance 5,419
Salaries 60,855
Shipping and postage 1,739
Telephone 1,790
Travel and entertainment 6,045
---------
Total expenses 249,237
---------
Income before income taxes 49,049
Income taxes:
Current income taxes 2,530
---------
Total income taxes 2,530
</TABLE>
(See accountant's report and accompanying notes)
3
<PAGE>
SYNGEN RESEARCH, INC.
STATEMENT OF INCOME & RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
Net income 46,519
---------
Beginning deficit (21,932)
---------
Ending retained earnings $ 24,587
=========
</TABLE>
(See accountant's report and accompanying notes)
4
<PAGE>
SYNGEN RESEARCH, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
Cash flows from operating activities:
Net income $ 46,519
Non-cash transactions included in net income:
Depreciation 3,700
Change in:
Accounts receivable (57,695)
Accounts payable (2,328)
Credit cards payable 6,930
Sales tax payable (274)
Income taxes payable 2,530
---------
Net cash provided by (used in) operating activities (618)
Cash flows from investing activities:
Change in fixed assets (2,042)
---------
Net cash provided by (used in) investing activities (2,042)
Cash flows from financing activities:
Issuance of common stock 100
---------
Net cash provided by (used in) financing activities 100
Cash at beginning of year 11,002
Cash at end of year $ 8,442
=========
</TABLE>
(See accountant's report and accompanying notes)
5
<PAGE>
SYNGEN RESEARCH, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1999
Note 1. NATURE OF OPERATIONS
The Company performs consulting and research activities in the
biomedical field.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Entity
The Company operated as a sole proprietorship until October 14,
1999. On that date the sole proprietor transferred the company's
assets and liabilities to Syngen Research, Inc., a corporation,
in exchange for all of the corporation's stock.
Depreciation
Depreciation of equipment is computed using accelerated methods
with estimated useful lives of 5 years.
Income Taxes
Income for the period through October 13, 1999 is taxable
directly to the sole proprietor.
Income taxes for the period October 14, 1999 through December 31,
1999 have been accrued and are based on the year's income taxable
for federal and state income tax reporting purposes.
Note 3. NOTE PAYABLE
The Company owes $25,000 to a relative of the owner. The note is
payable upon demand. The Company has been making interest payments of
$125 monthly, totaling $1,500 for the current reporting period.
Note 4. RENT
The rent was paid by an affiliated company. The company also paid
rent for lab space at another location.
Note 5. SALE OF THE COMPANY
As of October 11, 1999 the Company had signed a letter of intent to
be acquired by Bishop Equities, Inc. dba Aethlon Medical, Inc., a
publicly held company. Under the agreement, Aethlon Medical acquired
all the shares of Syngen Research after incorporation in exchange for
65,000 shares of Aethlon Medical common stock. Aethlon Medical also
employs the former owner pursuant to an employment agreement. As a
condition of acquisition, the rights to a certain technology
developed by the former owner in a contract with another publicly
held company was transferred to Aethlon Medical. On January 9, 2000 a
merger agreement was signed and Syngen Research, Inc. became a wholly
owned subsidiary of Aethlon Medical.
6
<PAGE>
BISHOP EQUITIES, INC. (DBA AETHLON MEDICAL, INC.)
Proforma Balance Sheet (Unaudited)
December 31, 1999
<TABLE>
<CAPTION>
Aethlon Syngen Proforma
Medical Research Adjustments Combined
ASSETS
<S> <C> <C> <C> <C>
Current Assets:
Cash $ 25,461 $ 8,442 $ -- $ 33,903
Accounts receivable -- 62,666 -- 62,666
Prepaid insurance 32,349 -- -- 32,349
Employee advances 15,800 -- -- 15,800
-------------------------- --------------------------
Total current assets 73,610 71,108 -- 144,718
Property and Equipment, Net 34,211 5,549 -- 39,760
Other Assets:
Goodwill -- -- (a) 507,783 507,783
Patents, net 39,284 -- -- 39,284
Deferred debt expense 46,874 -- -- 46,874
Other 1,330 -- -- 1,330
-------------------------- --------------------------
Total other assets 87,488 -- 507,783 595,271
-------------------------- --------------------------
Total assets $ 195,309 $ 76,657 $ 507,783 $ 779,749
========================== ==========================
LIABILITIES
Current Liabilities:
Accounts payable:
Trade $ 418,061 $ 24,440(a)$ 15,000 $ 457,501
Related parties 230,742 25,000 -- 255,742
Notes payable 574,500 -- -- 574,500
Accrued liabilities 181,423 2,530(a) (2,530) 181,423
Deferred compensation 325,835 -- -- 325,835
-------------------------- --------------------------
Total current liabilities 1,730,561 51,970 12,470 1,782,531
STOCKHOLDERS' DEFICIT
Common stock 2,595 100(a) 65 2,660
Additional paid in capital 2,670,943 -- (a) 519,935 3,190,878
Deficit accumulated during
development stage (4,208,790) 24,587(a) (24,587) (4,208,790)
-------------------------- --------------------------
Total stockholders' deficit (1,535,252) 24,687 495,313 (1,015,252)
-------------------------- --------------------------
Total liabilities and
stockholders' deficit $ 195,309 $ 76,657 $ 507,783 $ 779,749
========================== ==========================
</TABLE>
(a) To reflect the acquisition of the common stock of Syngen Research, Inc. in
exchange for 65,000 shares of common stock of Aethlon Medical, Inc. valued
at $4.80 per share.
<PAGE>
BISHOP EQUITIES, INC. (DBA AETHLON MEDICAL, INC.)
Pro Forma Statement of Operations (Unaudited)
Nine Months Ended December 31, 1999
<TABLE>
<CAPTION>
Pro Forma
Aethlon Syngen
Medical Research Adjustments Combined
<S> <C> <C> <C> <C>
REVENUE
Consulting fees $ -- $ 112,094 $ -- $ 112,094
Grant income -- 72,281 -- 72,281
Subcontract income -- -- -- --
Sale of research and development -- 12,547 -- 12,547
Other income -- 2,143 -- 2,143
Interest income -- 3 -- 3
---------------------------- ----------------------------
Total revenue -- 199,068 -- 199,068
EXPENSES
Personnel costs 314,940 92,660 (a) 18,842 426,442
Repairs and maintenance -- 3,186 -- 3,186
Rent and office expense 53,733 6,049 -- 59,782
Professional fees 153,179 33,838 -- 187,017
Miscellaneous 3,815 -- -- 3,815
Depreciation 7,319 3,700 -- 11,019
Travel and meetings 19,009 7,189 -- 26,198
Insurance 19,409 1,237 -- 20,646
Laboratory supplies -- 16,099 -- 16,099
Interest 16,862 2,530 -- 19,392
Amortization-patents 6,129 -- -- 6,129
Amortization of goodwill -- -- (b) 38,084 38,084
Consulting 55,257 2,100 -- 57,357
Debt expense 111,876 -- -- 111,876
Dues and subscriptions -- 1,748 -- 1,748
---------------------------- ----------------------------
Total expenses 761,528 170,336 56,926 988,790
---------------------------- ----------------------------
LOSS BEFORE INCOME TAXES (761,528) 28,732 (56,926) (789,722)
PROVISION FOR INCOME TAXES 228 2,530 (c) (2,530) 228
---------------------------- ----------------------------
NET LOSS $ (761,756) $ 26,202 $ (54,396) $ (789,950)
============================ ============================
PER SHARE:
Net loss $ (0.29) $ (0.30)
Weighted average number of
common shares outstanding 2,595,000 2,660,000
</TABLE>
(a) Adjust officer's compensation to reflect terms of post-acquisition
employment.
(b) Amortization of goodwill over a period of 10 years.
(c) Eliminate income taxes of Syngen due to offset by Aethlon loss.
<PAGE>
BISHOP EQUITIES, INC. (DBA AETHLON MEDICAL, INC.)
Pro Forma Statement of Operations (Unaudited)
Fiscal Year Ended March 31, 1999
<TABLE>
<CAPTION>
Aethlon Syngen Pro Forma
Medical Research Adjustments Combined
<S> <C> <C> <C> <C>
REVENUE
Consulting fees $ -- $ 68,013 $ -- $ 68,013
Grant income -- 123,945 -- 123,945
Sale of research and development -- 20,909 -- 20,909
Interest income -- 65 -- 65
---------------------------- ----------------------------
Total revenue -- 212,932 -- 212,932
EXPENSES
Personnel costs 221,779 48,044 (a) 62,250 332,073
Repairs and maintenance 1,674 6,807 -- 8,481
Rent and office expense 38,144 11,122 -- 49,266
Professional fees 45,887 36,906 -- 82,793
Miscellaneous 3,131 2,174 -- 5,305
Depreciation 16,287 2,429 -- 18,716
Travel and meetings 5,325 2,856 -- 8,181
Insurance (2,347) -- -- (2,347)
Laboratory supplies 180 35,869 -- 36,049
Interest 13,823 2,189 -- 16,012
Amortization-patents 8,171 -- -- 8,171
Amortization of goodwill -- -- (b) 50,778 50,778
Consulting -- 3,259 -- 3,259
Debt expense -- -- -- --
Dues and subscriptions -- 1,349 -- 1,349
---------------------------- ----------------------------
Total expenses 352,054 153,004 113,028 618,086
---------------------------- ----------------------------
LOSS BEFORE INCOME TAXES (352,054) 59,928 (113,028) (405,154)
PROVISION FOR INCOME TAXES 625 -- -- 625
---------------------------- ----------------------------
NET LOSS $ (352,679) $ 59,928 $ (113,028) $ (405,779)
============================ ============================
PER SHARE:
Net loss $ (0.23) $ (0.26)
Weighted average number of
common shares outstanding 1,506,833 1,571,833
</TABLE>
(a) Adjust officer's compensation to reflect terms of post-acquisition
employment.
(b) Amortization of goodwill over a period of 10 years.
