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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A-2
CURRENT REPORT AMENDMENT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 9, 1998
DERMA SCIENCES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 1-31070 23-2328753
(State or other jurisdiction (Commission (IRS employer
of incorporation) File Number) identification number)
214 Carnegie Center, Suite 100
Princeton, NJ 08540
(609) 514-4744
(Address including zip code and telephone
number, of principal executive offices)
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<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
This Current Report amends the Company's Current Report on Form 8-K
filed September 23, 1998 and amended November 23, 1998 concerning the
acquisition by the Company of Genetic Laboratories Wound Care, Inc. ("GLWC").
The purpose of the amendment is the revision of certain pro forma financial
information relative to the Company and GLWC required by Form 8-K Item 7.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information
The Unaudited Pro Forma Combined Condensed Balance Sheets at June 30,
1998 and the Unaudited Pro Forma Combined Condensed Statements of Operations for
the Six Months Ended June 30, 1998 of the Company and GLWC are filed herewith as
Exhibit 99.1
(c) Exhibits:
99.1 Unaudited Pro Forma Combined Condensed Balance Sheets at
June 30, 1998 and Unaudited Pro Forma Combined Condensed
Statement of Operations for the Six months Ended June 30,
1998 of Derma Sciences, Inc. and Genetic Laboratories Wound
Care, Inc.
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<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DERMA SCIENCES, INC.
By: /s/ Stephen T. Wills
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Stephen T. Wills, CPS,MST
Vice President and
Chief Financial Officer
Dated: December 1, 1998
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EXHIBIT 99.1
DERMA SCIENCES, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEETS
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
DERMA GENETIC PRO FORMA COMBINED
SCIENCES LABS ADJUSTMENTS PRO FORMA
------------ ------------ ----------- ------------
Current Assets
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 1,627,402 $ 360,501 $ -- $ 1,987,903
Accounts receivable, net 712,499 380,582 -- 1,093,081
Securities subscriptions receivable 3,515,000 -- -- 3,515,000
Inventory 587,772 608,781 -- 1,196,553
Prepaid expenses and other current assets 323,886 71,384 -- 395,270
------------ ------------ ----------- ------------
Total Current Assets 6,766,559 1,421,248 -- 8,187,807
Property and equipment, net 122,557 120,840 -- 243,397
Other assets, net 403,686 14,052 -- 417,738
------------ ------------ ----------- ------------
Total Assets $ 7,292,802 $ 1,556,140 $ -- $ 8,848,942
============ ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
<S> <C> <C> <C> <C>
Bank line of credit $ 689,000 $ -- $ -- $ 689,000
Current portion of long-term debt -- 6,357 -- 6,357
Accounts payable 562,175 192,229 -- 754,404
Accrued expenses and other current liabilities 670,207 105,626 -- 775,833
------------ ------------ ----------- ------------
Total Current Liabilities 1,921,382 304,212 -- 2,225,594
Long-term debt -- 2,250 -- 2,250
------------ ------------ ----------- ------------
Total Liabilities 1,921,382 306,462 -- 2,227,844
------------ ------------ ----------- ------------
Shareholders' Equity
Common stock, $.01 par value, authorized
15,000,000 shares, issued and outstanding
4,570,456 shares 45,705 -- 16,829 62,534
Common stock, $.01 par value, authorized
12,000,000 shares, issued and outstanding
2,404,150 shares -- 24,042 (24,042) --
Convertible preferred stock, $.01 par value,
authorized 11,750,000 shares, issued and
outstanding 5,070,833 shares 50,708 -- -- 50,708
Additional paid-in capital 10,072,683 647,786 7,213 10,727,682
Retained earnings (accumulated deficit) (4,797,676) 577,850 -- (4,219,826)
------------ ------------ ----------- ------------
Total Shareholders' Equity 5,371,420 1,249,678 -- 6,621,098
------------ ------------ ----------- ------------
Total Liabilities and Shareholders' Equity $ 7,292,802 $ 1,556,140 $ -- $ 8,848,942
============ ============ =========== ============
</TABLE>
See accompanying notes.
<PAGE>
DERMA SCIENCES, INC.
PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DERMA GENETIC PRO FORMA COMBINED
SCIENCES LABS ADJUSTMENTS PRO FORMA
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Net sales $ 3,666,709 $ 1,545,408 $ -- $ 5,212,117
Cost of sales 440,601 572,637 -- 1,013,238
------------ ------------ ----------- ------------
Gross profit 3,226,108 972,771 -- 4,198,879
Operating expenses 3,135,747 930,165 -- 4,065,912
------------ ------------ ----------- ------------
Income from operations 90,361 42,606 -- 132,967
Other income (expense) (807,184) 2,668 -- (804,516)
------------ ------------ ----------- ------------
Income (loss) before income taxes (716,823) 45,274 -- (671,549)
Provisions for income taxes -- 21,218 -- 21,218
------------ ------------ ----------- ------------
Net income (loss) $ (716,823) $ 24,056 $ -- $ (692,767)
============ ============ =========== ============
Net income (loss) per common
share - basic and diluted (0.16) $ 0.01 $ -- $ (0.11)
============ ============ =========== ============
Weighted average number of common
shares outstanding 4,570,186 2,402,350 (720,705) 6,253,831
============ ============ =========== ============
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEETS
AND STATEMENTS OF OPERATIONS
A. PRO FORMA BASIS OF PRESENTATION AND ADJUSTMENTS
On September 9, 1998, Derma Sciences, Inc. ("Derma Sciences") consummated
its merger (the "Merger") with Genetic Laboratories, Inc. ("Genetic Labs")
pursuant to which Derma Sciences acquired Genetic Labs in exchange for
approximately 1,683,000 shares of common stock, par value $.01 per share, of
Derma Sciences.
The Unaudited Pro Forma Combined Condensed Balance Sheets and Statements
of Operations are intended for information purposes and are not necessarily
indicative of the future combined financial position or future results of
operations of the combined entity. These Unaudited Pro Forma Combined Condensed
Balance Sheets and Statements of Operations should be read in conjunction with
the financial statements and notes thereto included in Derma Sciences' and
Genetic Labs Current Reports on Form 8-K, Annual Reports on Form 10-KSB, Interim
Reports on Form 10-QSB and Registration Statement (Derma Sciences only) on Form
S-4.
B. PRO FORMA ADJUSTMENTS TO UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE
SHEETS AND STATEMENTS OF OPERATIONS
Unaudited Pro Forma Combined Condensed Balance Sheet
The Unaudited Pro Forma Combined Condensed Balance Sheet reflects the
merger of Derma Sciences and Genetic Labs under the pooling method of accounting
as if the transaction had occurred on June 30, 1998. The Pro Forma adjustment to
reflect the cancellation of the outstanding common stock of Genetic Labs and the
issuance of new common stock for the Genetic Labs common shares by Derma
Sciences is reflected under the Stockholder's equity section of the balance
sheet through common stock and additional paid-in capital. The common stock of
Genetic Labs was reduced by $24,042 while the common stock of Derma Sciences was
increased by $16,829 and the additional paid-in capital of Derma Sciences was
increased by $7,213 due to the calculation of the Exchange Ratio of 0.7 shares
of Derma Sciences Common Stock for each share of Genetic Labs Common Stock
outstanding.
Unaudited Pro Forma Combined Condensed Statements of Operations
The Unaudited Pro Forma Combined Condensed Statements of Operations have
been prepared assuming the merger of Derma Sciences and Genetic Labs had taken
place on January 1, 1998. Pro Forma adjustments during the six months ended June
30, 1998, reflect the reduction in the weighted average number of common shares
outstanding for Genetic Labs due to the exchange/conversion with Derma Sciences
common shares. This reduction of shares amounted to approximately 721,000 during
the period. There were no inter-corporate transactions that required
elimination.
