SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange
- --- Act of 1934 for the quarterly period ended September 30, 1998
__ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________________ to ________________________
Commission file number 0-20317
-------
Global Spill Management, Inc. **
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 88-0270266
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1244 Main Street, Linfield, Pennsylvania 19468
----------------------------------------------
(Address of principal executive offices)
(610) 495-8413
---------------------------
(Issuer's telephone number)
Indicate by check mark whether the Issuer: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities and 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 X No
--- ---
The number of shares outstanding of the Issuer's Common Stock, $.001 Par Value,
as of September 30, 1998 was 4,211,930.
Transitional small business disclosure format:
Yes X No
--- ---
** On October 7, 1998, subsequent to the date (September 30, 1998) of this
quarterly report on Form 10-QSB, the name of the registrant was changed to
BIOFARM, INC.
<PAGE>
GLOBAL SPILL MANAGEMENT, INC.
Form 10-QSB
INDEX
PART I - FINANCIAL INFORMATION
Page
----
Item 1. Financial Statements
Balance Sheets -
September 30, 1998 and June 30, 1998 3
Statements of Operations - Three months
ended September 30, 1998 and 1997 4
Statements of Cash Flows - Three months ended
September 30, 1998 and 1997 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on From 8-K 12
Signatures 13
<PAGE>
Global Spill Management, Inc.
and Subsidiaries
Balance Sheets
(Unaudited)
===============================================================================
September 30, June 30,
1998 1998
- -------------------------------------------------------------------------------
Assets
Current assets
Cash $ 10,203 $ 23,327
Subscriptions receivable -- 17,000
- -------------------------------------------------------------------------------
Total assets $ 10,203 $ 40,327
===============================================================================
Liabilities and Capital Deficit
Current liabilities
Accounts payable $ 61,098 $ 46,132
- -------------------------------------------------------------------------------
Commitments and contingencies
Stockholders' equity (deficit)
Preferred stock, $.001 par value
Authorized 5,000,000 shares, none issued -- --
Common stock, $.001 par value,
Authorized 25,000,000 shares
Issued and outstanding 4,211,930 4,212 4,212
Additional paid-in capital 16,334,717 16,334,717
Deficit (16,223,074) (16,144,234)
Less: subscriptions receivable (166,750) (200,500)
- -------------------------------------------------------------------------------
Total capital deficit (50,895) (5,805)
- -------------------------------------------------------------------------------
Total liabilities and capital $ 10,603 $ 40,327
===============================================================================
The accompanying notes are an integral part of these statements.
3
<PAGE>
Global Spill Management, Inc.
and Subsidiaries
Statements of Operations
(Unaudited)
- -------------------------------------------------------------------------------
Three months ended September 30, 1998 1997
- -------------------------------------------------------------------------------
Revenues $ -- $ --
- -------------------------------------------------------------------------------
Costs and expenses
Selling, general and administrative expenses 78,840 34,851
- -------------------------------------------------------------------------------
Total costs and expenses 78,840 34,851
- -------------------------------------------------------------------------------
Net (loss) $ (78,840) $ (34,851)
===============================================================================
Net (loss) per share $ (.02) $ (.01)
Weighted average number of common shares
outstanding 4,211,930 3,011,930
===============================================================================
The accompanying notes are an integral part of these statements.
4
<PAGE>
Global Spill Management, Inc.
and Subsidiaries
Statements of Cash Flows
(Unaudited)
===============================================================================
Three months ended September 30, 1998 1997
- -------------------------------------------------------------------------------
Cash flows from operating activities
Net (loss) $ (78,840) $ (34,851)
Adjustments to reconcile net (loss) to
net cash (used in) operating activities
Increase (decrease) in liabilities
Accounts payable 14,966 (66,937)
- -------------------------------------------------------------------------------
Net cash (used in) operating activities (63,874) (101,788)
- -------------------------------------------------------------------------------
Cash flows from financing activities
(Repayments) of borrowings from shareholder -- (12,500)
Proceeds from common stock receivable, net
of expenses 50,750 112,500
- -------------------------------------------------------------------------------
Net cash provided by financing activities 50,750 100,000
- -------------------------------------------------------------------------------
Net (decrease) in cash (13,124) (1,788)
Cash, at beginning of year 23,327 2,111
- -------------------------------------------------------------------------------
Cash, at end of year $ 10,203 $ 323
===============================================================================
The accompanying notes are an integral part of these statements.
5
<PAGE>
Global Spill Management, Inc. and Subsidiaries
Notes to Financial Statements
Unaudited
1. The accompanying unaudited financial statements, which are for an
interim period, do not include all disclosures provided in the annual
financial statements. These unaudited financial statements should be
read in conjunction with the financial statements and footnotes thereto
contained in the Annual Report on Form 10-KSB for the year ended June
30, 1998 of Global Spill Management, Inc. ("Global"), as filed with the
Securities and Exchange Commission. The June 30, 1998 balance sheet was
derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
2. In the opinion of Global, the accompanying unaudited financial
statements contain all adjustments (which are of a normal recurring
nature) necessary for a fair presentation of the financial statements.
The results of operations for the nine months and three months ended
September 30, 1998 are not necessarily indicative of the results to be
expected for the full year.
3. Per share data was calculated by dividing the net (loss) by the
weighted average number of shares outstanding during the period.
Global, on September 4, 1998, completed the transaction pursuant to which it
acquired approximately 87% of the issued and outstanding shares of capital stock
of Biofarm, S.A., a Romanian pharmaceutical manufacturer, from Litchfield
Continental, Ltd. (LCC). Global issued to LCC a convertible non-negotiable
secured debenture in the principal sum of $6,434,681. Such Debenture is
non-convertible prior to January 31, 1999, and thereafter only in increments of
2.5%. On October 5, 1998, the nominees of Litchfield to the Board of Global were
elected by vote of Global's shareholders.
Inasmuch as the shareholders of LCC obtained thereby board and management (and
potential voting) control of Global, for financial accounting purposes the
acquisition of Biofarm, S.A. by Global will be accounted for as a reverse
purchase in accordance with generally accepted accounting principles.
Accordingly, the statement of financial condition and statements of operations
and cash flow will reflect the historical balance sheet of Global at October 5,
1998, as well as any nominal expenses which Global may incur subsequent to that
date.
Inasmuch as Global is filing simultaneously herewith its Form 8-K reflecting the
acquisition of Biofarm, S.A. on September 4, 1998, and the election of the
Litchfield nominees to the Board of Global on October 5, 1998, and inasmuch as
such 8-K filing will also include the audited financial statements of Biofarm,
S.A. for the one year and nine-month period ended September 30, 1998, Global is
including herewith the separate unaudited financial statements of Global alone
for the first quarter ended September 30, 1998. Since Global is adopting the
fiscal period of Biofarm, S.A. commencing with the year ending December 31,
1998, the December 31, 1998, audited financial statements of Global will be
fully consolidated and audited as of that date.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
GENERAL
As a direct consequence of the implementation of the Plan of Reorganization
("Plan") described below, Global has (as of June 30, 1996) disposed of all its
operating subsidiaries and, thereafter and until September 4, 1998, may be
fairly characterized as a "shell" corporation. Therefore, there is no need for
discussion herein of prior results of operations, of year-to-year operating
results and comparisons, and of liquidity and capital resources. As of September
30, 1998, Global is able to discharge its capital requirements and to meet all
of its obligations as they mature. Such obligations (giving effect to the
successful implementation of the Plan) consist exclusively of legal, accounting
and miscellaneous expenses endemic to any public company. Such liabilities
amounted to $61,098 at September 30, 1998. Global received, during the first
quarter ended September 30, 1998, an aggregate of $50,750 in payment of
subscriptions receivable, thereby leaving a balance of $166,750 due and payable
to Global. All prior subscriptions receivable created subsequent to the adoption
of the Plan have been paid in full; and Global expects to receive the balance of
$166,750 in full.
PLAN OF REORGANIZATION
In April, 1996, because of a demonstrable inability to meet its debts as they
matured, Global and its financial advisors determined to undertake a
comprehensive Plan of Reorganization (the "Plan"). Such Plan included the (a)
sale of the four operating subsidiaries for cash consideration only, (b)
liquidation of the debt due to the senior secured creditor (Meridian Bank), (c)
elimination of debt in its entirety, and (d) reclassification of the issued and
outstanding shares of Common Stock.
Sale of Subsidiaries
On June 28, 1996, Global sold the capital stock or the net assets of its then
four operating subsidiaries. An aggregate of $1,200,000 was paid to Meridian
Bank in full and complete satisfaction of secured indebtedness to Meridian Bank
in the principal amount of $1,480,000 (plus accrued interest of $47,000).
Meridian Bank satisfied its lien and executed a General Release in favor of
Global on June 28, 1996.
As a result of the disposition of all of its subsidiaries, Global ceased to be
an operating company.
Elimination of Debt
In addition to the discharge of all obligations due to Meridian Bank, Global
also undertook the elimination of all other debt. Employment contracts (under
which Global was obligated in the amounts of $1,230,600 for 1996 and $848,000
for 1997, respectively), were terminated, lease obligations were canceled and
general, unsecured creditors (other than those owed minimal amounts or those
professionals and firms continuing to provide necessary services for Global),
were resolved with an offer of 37.5 cents on the dollar.
7
<PAGE>
Giving effect to (a) the satisfaction of the indebtedness due Meridian Bank and
(b) the liabilities assumed by the purchasers of the four operating
subsidiaries, being treated herein as having occurred on June 28, 1996, Global
remained, as of June 30, 1996, with fixed liabilities of $814,000. Commencing in
July 1996, Global, as an alternative to creditor proceedings that would have
involved legal and accounting costs disproportionate to the dollar amount of its
remaining liabilities, commenced a voluntary plan of payment at a discount.
Creditors were offered an immediate settlement equal to 37.5% on the dollar
(except for claims under $100 (which were liquidated in full)). Such offer
resulted, as of March 31, 1998, in $794,622 in the aggregate of claims being
settled for the sum of $433,148. As of September 30, 1998, total liabilities of
Global were $61,098.
The results of the Plan were as follows: approximately $6.9 million of
indebtedness existing at June 30, 1996, has been eliminated in full,
approximately $1.2 million in cash was arranged by management to be contributed
to Global, all inchoate claims against Global (beyond the $6,900,000 of fixed
obligations) were resolved, and (except for the matters described hereinafter
under "Litigation") all litigation has been resolved.
Acquisition of Biofarm
Management did not deem it prudent to consider seriously the acquisition of a
going business until the Plan proved feasible. Accordingly, early in 1998, after
a period of eighteen months during which the Plan was activated, management
determined that Global was then in a position to effect a major acquisition.
Accordingly, negotiations were commenced with Suisse Capital Complex ("SCC"), to
acquire Biofarm, S.A. from Litchfield Continental, Ltd. SCC has acted as the
intermediary between Global and Litchfield. Management's goals during the
negotiations were to avoid the use of cash, minimize the debt to be issued to
effect the acquisition, avoid the immediate issuance of any substantial number
of shares of Common Stock, and defer the conversion of debt into Common Stock as
long as was possible in order to afford time for the anticipated earnings of
Biofarm to develop to their full potential.
Inasmuch as the shareholders of Litchfield will have voting, Board and
management control of Global once the election of nominees to the Board was
approved by the shareholders of Global, for financial accounting purposes the
acquisition of Biofarm by Global will be accounted for as a reverse purchase in
accordance with generally acceptable accounting principles. Accordingly, the
statement of financial condition and statements of operations and cash flow will
reflect the historical balance sheet and activities of Biofarm for all of the
required reporting periods as well as the balance sheet of Global as of the
acquisition date.
Information with respect to Biofarm is contained in the following documents:
Form 8-K filed March 6, 1998
Form 10-KSB filed September 10, 1998
Proxy Statement dated September 21, 1998
The Proxy Statement dated September 21, 1998, contains information with respect
to Biofarm's prior results of operations, year-to-year operating results and
comparisons, and liquidity and capital resources.
8
<PAGE>
Global intends to file with the Securities and Exchange Commission a
supplemental Form 8-K on or before 75 days from September 4, 1998, which
supplemental Form 8-K will contain audited financial statements of Biofarm for
the fiscal year ended December 31, 1997, and for the nine months ended September
30, 1998. Since Biofarm is on a calendar year basis, Global will, effective
December 31, 1998, change its fiscal period from June 30 to a calendar year
basis and will file consolidated financial statements on a fully audited basis
with its Form 10-K for the fiscal year ending December 31, 1998.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Litigation Instituted by Global
Global has previously advised its shareholders (and has brought to the attention
of the Securities and Exchange Commission both by letters and by filings under
the 1934 Act) of the litigation instituted by Global against thirteen persons
and firms (including former counsel, recipients of the Company's Common Stock
and broker-dealers) who, collectively and individually, participated in a scheme
to defraud Global and to violate the registration requirements of the 1933 Act.
Such scheme involved the filing of two Form S-8 Registration Statements with the
Commission in August and September, 1996, and the purported registration under
the 1933 Act of an aggregate of 1,135,000 shares of Global's Common Stock. Form
S-8 was not available for the registration of such 1,135,000 shares because (a)
Global was not then current in its 1934 Act filings when such two Form S-8
filings occurred (as indicated in a latter, dated September 19, 1996, from the
Commission to Global), and (b) the recipients of the 1,135,000 shares were not
bona fide consultants to Global or the type of consultant envisioned by Form
S-8.
On January 22, 1998, Global's complaint was sustained as to four of the five
causes of action alleged by Global against the several defendants. In a
Memorandum and Order entered on January 22, 1998, Judge Platt (USDC, Eastern
District of New York), sustained the complaint filed by Global as to the causes
of action for malpractice, breach of contract, breach of fiduciary duty and
unjust enrichment, and dismissed the cause of action for fraud. Global
determined not to appeal the dismissal of the cause of action for fraud because
the relief sought by Global (return of the 1,135,000 shares and of proceeds
derived from the sale thereof) is encompassed by the four causes of action that
were sustained.
On August 2, 1996, an aggregate of 385,000 shares of Global's Common Stock was
filed on Form S-8 at the price of $6.00 per share ($2,310,000 in the aggregate);
and on September 18, 1996, an aggregate of 750,000 shares of Global's Common
Stock was filed on Form S-8 at the price of $2.06 per share ($1,545,000 in the
aggregate), or a total of 1,135,000 shares at the registration price of
$3,855,000. With the exception of 50,000 of such 1,135,000 shares that were
returned to Global for cancellation, all of the remaining 1,085,000 shares were
immediately sold publicly by the recipients. At lest two of the defendants were
indicted for securities law violations in an unrelated matter in January, 1998;
two of the defendants were then registered broker-dealers; one
defendant-recipient received 300,000 shares in "settlement" of a claim (without
even the pretense of acting as consultant to Global); and one defendant is a
public relations firm involved in publicizing public companies. Among the
broker-dealers who executed orders for the sale of the 1,085,000 shares were;
Colin, Winthrop; H.J. Meyers; Meyers,
9
<PAGE>
Pollack & Robbins; SFI Investments; and Baker & Company. Among the clearing
brokers for such selling broker-dealers were Bear Stearns; Cowen; Ernst; Lewco;
Philadep; and Robb, Peck McCooley. Each of such introducing and clearing
broker-dealers has been advised in writing by Global of its liability for the
sale of unregistered stock (1933 Act) and of liability pursuant to Exchange Act
Release #28878 (1934 Act).
None of the present directors and officers of Global participated in any manner
in any aspect of the two Form S-8 filings. No Board of Directors meeting was
attended by any of such persons at which the subject of the S-8 filings was
discussed; in fact, no board meetings were held between June 28, 1996, and
November 15, 1996. Nor did any of the present officers of Global execute the
Form S-8 filings or any of the documents incident to the issuance of the
1,135,000 shares. Not only were the two Form S-8 filings not authorized by the
Board but, also, the signatories thereto were not holders of the offices
indicated in such filings.
It is the position of Global that the (a) 1,135,000 shares issued pursuant to
the two Form S-8 filings and 1,085,000 shares sold publicly have not been
registered under Section 5(a) of the 1933 Act and that it was unlawful to sell
such shares in interstate commerce; (b) persons who received and sold the
1,085,000 shares were not persons entitled to receive the same pursuant to the
Instructions to the use of Form S-8; (c) sellers of the 1,085,000 shares
violated the anti-fraud provisions of Section 10(b) of the 1934 Act and Rule
10b-5 promulgated thereunder; (d) former counsel violated Section 10(b) and Rule
10b-5 when it filed with the Commission two Form S-8 Registration Statements
that were materially false and misleading; and (e) former counsel violated the
anti-fraud provisions of Section 17(a)(3) in obtaining money by means of an
untrue statement of a material fact.
The recovery by Global of any portion of the sales proceeds received by the
sellers of the 1,085,000 shares will, by agreement with Litchfield, belong
exclusively to the shareholders of Global other than Litchfield. Since
Litchfield is able to convert its Debenture into Common Stock in increments over
a five year period, and since the recovery date (if there be such) is not known,
Litchfield's non-participation in any such recovery will be assured by assigning
the proceeds of any such recovery to a new entity to be organized simultaneously
with the Litchfield closing. The sole directors of the new entity will be the
present three directors of Global. The shares of capital stock of the new
subsidiary will be distributed to the shareholders of Global other than
Litchfield upon the earlier of the (a) recovery of any such proceeds, or (b)
date on which Litchfield commences conversion of its Debenture. Notwithstanding
that recovery is mandated by the Instructions to Form S-8, there can be no
assurance that recovery will be awarded or that, if awarded, any resulting
judgment will be collectible. It is for this reason that Global has notified the
introducing and clearing broker-dealers of potential liability for the recovery
of such proceeds.
Litigation Instituted Against Global
From the time Global became a public company in 1992 until the time (June 28,
1996), Global disposed of all of its then operating subsidiaries, Global itself
never engaged in environmental clean-up activities. All such work was conducted
by the former wholly-owned subsidiaries.
Subsequent to June 28, 1996, various claims have been asserted against Global
seeking damages for non-performance by certain of the former subsidiaries. All
such matters have been resolved and disposed of conclusively, except that Global
remains a defendant in one such matter.
10
<PAGE>
Global was named a defendant in a 1995 complaint, filed in the Court of Common
Pleas (Philadelphia County) in 1995. In 1992, Plaintiff hired the co-defendant
(Terminix International) to remedy a termite infestation problem. While doing so
defendant Terminix ruptured an oil line, thereby causing fuel to be deposited in
and around Plaintiff's residence. Plaintiff then retained a former subsidiary of
Global (GSME) to clean-up the resulting oil spill. The gravament of the
complaint is that Global conspired with Terminix to cover-up the true extent of
damages to the residence. In March, 1998, the matter was submitted to binding,
non-appealable arbitration. Terminix has offered to purchase Plaintiff's
residence for $300,000; the purchase price for the residence was $138,000 and
the assessed value is $5,100. Global's defense is that it did not cause the
damage, the claim of conspiracy is false, Terminix is solely responsible and, in
any event, Global is not a proper party defendant because its former subsidiary
(GSME) and not Global itself performed the services for plaintiff.
Global knows of no other pending or threatened litigation of any amount in
excess of $5,000.
It is the position of Global that, should certain former subsidiaries of Global
receive claims that they are or may be liable for environmental clean-up costs
and related damages, and should Global also be named a party defendant, Global
will vigorously defend any such claims based upon the facts and the current laws
and regulations applicable to environmental matters. On the basis of its
experience and the information currently available to it, Global believes that
the one claim described herein will not have a material adverse effect on its
results of operations, financial position or liquidity. Buttressing Global's
position (and consistent with the general rule of corporate law), the United
States Supreme Court recently decided in a "superfund" matter that non-operating
parent companies are not responsible for the environmental problems of
wholly-owned subsidiaries.
Litigation Terminated
Global was sued, in May 1998, in the United States Bankruptcy Court for the
Eastern District of Louisiana (case number 96-14702) by Gulf South Systems,
LLP., a successor to a debtor in possession. Plaintiff sought recovery of
$78,213.20. Global retained counsel and, prior to being required to file an
answer, counsel arranged to settle the matter for $10,000. Plaintiff's claim was
predicated upon alleged performance by a former subsidiary of Global. Global
demonstrated to Plaintiff that Global was not a proper party defendant, that the
work was performed by a former subsidiary, that all payments were received by
that subsidiary, and that such former subsidiary performed the work for
Plaintiff under a fictitious name certificate filed with the Commonwealth of
Pennsylvania. In exchange for the settlement sum of $10,000 (to be paid in
October, 1998, when final documentation is prepared), Plaintiff has agreed to
assign all of its rights to Global. Global was motivated to settle because of
the assignment of the claim and the avoidance of legal fees and expenses and
managements' time. The aforementioned amount is reflected within the statement
of operations contained herein.
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
11
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
Pursuant to a Proxy Statement, dated September 21, 1998, Global held its Annual
Meeting of Shareholders on October 5, 1998. Proxies for the Annual Meeting were
solicited pursuant to Regulation 14 under the 1934 Act, there was no
solicitation in opposition to management's nominees to the Board listed in the
Proxy Statement, and all such nominees were elected. The vote for the election
of nominees to the Board (of a total of 4,211,930 shares eligible to vote) was
2,351,754 in favor and 382 opposed.
The Proxy Statement also included two specific proposals. On the proposal to
change the name of Global to BIOFARM, INC., the vote was 2,351,337 in favor, 799
opposed and 801 abstaining. On the proposal to appoint BDO International as
independent auditors, the vote was 2,351,871 in favor, 265 opposed and 808
abstaining.
Giving effect to the filing of the Certificate of Amendment to the Certificate
of Incorporation on October 7, 1998, in Nevada, Global has obtained a new CUSIP
number (#09058S 10 0) and has advised NASDAQ of such change name and new CUSIP
number.
Item 5. Other information
For information with respect to the acquisition by Global of approximately 87%
of the capital stock of Biofarm, Inc., a Romanian pharmaceutical manufacturer,
reference is made to Form 8-K filed March 6, 1998, Form 10-KSB filed September
10, 1998, and the Proxy Statement dated September 21, 1998, all of which are
incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits:
Financial Data Schedule
Press release, dated October 5, 1998, concerning
disposition of matters submitted to vote of security
holders on October 5, 1998
(B) Reports on Form 8-K (for the third quarter ended
September 30, 1998):
None
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereto duly authorized.
Date: November 12, 1998 By: /s/ David R. Stith
as of October 5, 1998 -------------------------------
David R. Stith,
Acting President
Date: November 12, 1998 By: /s/ Allan Esrine
as of October 5, 19 -------------------------------
Allan Esrine,
Acting Principal Financial
and Accounting Officer
13
Contact: Desiree Pierson FOR IMMEDIATE RELEASE
(610) 495-8413
GLOBAL SPILL SHAREHOLDERS APPROVE
PROXY STATEMENT PROPOSALS
Linfield, Pennsylvania, October 5, 1998 ... Shareholders of GLOBAL SPILL
MANAGEMENT, INC. (BIOF) at the Annual Meeting held today approved the proposals
to (a) elect the eight nominees of LITCHFIELD CONTINENTAL to the Board, (b)
change the name to BIOFARM, INC., and (c) appoint BDO International (Munich,
Germany) as independent auditors.
As soon as a Certificate of Amendment is filed in Nevada to effect the name
change, NASDAQ will advise all broker-dealers of the name change. The symbol
BIOF will remain the same. The name change is designed to reflect the principal
business of the Company. As previously reported, the acquisition of BIOFARM
S.A., a full product pharmaceutical entity located in Romania, was completed on
September 4, 1998, when the previous escrow was terminated.
BDO's initial engagement will be to conduct the audit of Biofarm, Inc. on a
fully consolidated basis for the fiscal year ending December 31, 1998. The audit
of Biofarm S.A. for the nine-month period ended September 30, 1998, which will
be filed with the Form 8-K report reporting the Biofarm acquisition on or before
75 days from September 4, 1998, will be conducted by Coopers & Lybrand.
Shareholders of BIOFARM, INC. may continue to reach the Company at (610)
495-8413.
As reported at the Annual Meeting, a Litchfield spokesman confirmed that
earnings of the Romanian pharmaceutical subsidiary are running ahead of
expectations and that a two-shift manufacturing schedule has been instituted to
attempt to accommodate the demand for products. It was also reported that
negotiations to acquire additional pharmaceutical companies are expected to be
finalized shortly.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 10
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10
<CURRENT-LIABILITIES> 61
<BONDS> 0
0
0
<COMMON> 4
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 79
<LOSS-PROVISION> (79)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (79)
<INCOME-TAX> 0
<INCOME-CONTINUING> (79)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (79)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
