SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-24362
DRUGMAX.COM, INC.,
FORMERLY KNOWN AS NUTRICEUTICALS.COM CORPORATION
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(Exact name of small business issuer as specified in its charter)
STATE OF NEVADA 34-1755390
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
12505 STARKEY ROAD, SUITE A, LARGO, FLORIDA 33773
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (727) 533-0431
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 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. [X] Yes [ ] No
The number of shares outstanding of the Issuer's common stock at $.001 par value
as of February 14, 2000 was 6,076,707.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS.
DRUGMAX.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 1999
------------ ------------
(UNAUDITED) (AUDITED)
(AS RESTATED -
SEE NOTE B)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 8,200,631 $ 56,986
Accounts receivable, net 5,353,906 9,278
Due from affiliate 36,487 5,171
Inventory 1,291,968 16,303
Prepaid expenses and other current assets 225,973 --
------------ ------------
Total current assets 15,108,965 87,738
------------ ------------
Property and equipment, net 90,138 47,500
Intangible assets (primarily goodwill), net 21,709,690 --
Other assets 13,963 380
------------ ------------
TOTAL ASSETS $ 36,922,756 $ 135,618
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,803,479 $ 80,186
Accrued expenses 129,734 17,505
Due to affiliates 31,330 --
Credit line payable 1,752,785 --
------------ ------------
Total current liabilities 5,717,328 97,691
------------ ------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.001 par value; 2,000,000 shares authorized;
no preferred shares issued or outstanding -- --
Common stock, $.001 par value; 24,000,000 shares authorized;
6,076,707 and 2,676,707 shares issued and outstanding 6,077 2,677
Additional paid-in capital 32,034,926 139,725
Deficit (835,575) (104,475)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 31,205,428 37,927
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 36,922,756 $ 135,618
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
DRUGMAX.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1999 1999
------------------ -----------------
(AS RESTATED - (AS RESTATED -
SEE NOTE B) SEE NOTE B)
<S> <C> <C>
Net revenues $ 7,170,581 $ 7,221,279
Cost of goods sold 7,112,971 7,139,562
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GROSS PROFIT 57,610 81,717
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 514,356 784,474
----------- -----------
OPERATING LOSS BEFORE OTHER INCOME AND EXPENSE (456,746) (702,757)
Other income (expense):
Interest income 38,981 39,539
Other income and expenses, net (31,667) (31,307)
Interest expense (32,159) (36,575)
----------- -----------
TOTAL OTHER EXPENSE (24,845) (28,343)
----------- -----------
NET LOSS $ (481,591) $ (731,100)
=========== ===========
Basic and diluted net loss per share $ (0.12) $ (0.23)
=========== ===========
Basic and diluted weighted average number of
common shares outstanding 4,085,185 3,151,616
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
DRUGMAX.COM, INC. AND SUBSIDIARIES
STATEMENTS OF CHANGES IN NET DEFICIENCY IN LIQUIDATION (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1998 1998
------------------ -----------------
<S> <C> <C>
Decreases in net liabilities in liquidation:
Sales $ -- $ --
Bad debt recovery -- --
Increases in net liabilities in liquidation:
Professional fees 500 4,375
Office expense 115 175
--------- ---------
Increase in net liabilities in liquidation (615) (4,550)
Beginning net liabilities in liquidation (12,598) (8,663)
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Ending net liabilities in liquidation $ (13,213 $ (13,213)
--------- ---------
Loss per share:
Loss attributable to common stockholders $ (615) $ (4,550)
========= =========
Basic and diluted loss per share $ -- $ --
========= =========
Basic and diluted weighted average number of
common shares outstanding 175,514 175,514
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
DRUGMAX.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31,
1999
-----------------
(AS RESTATED -
SEE NOTE B)
<S> <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net loss $ (731,100)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 145,633
Impairment of intangible asset 31,667
Changes in operating assets and liabilities:
Accounts receivable (3,077,922)
Inventory (64,287)
Prepaid expenses and other current assets (159,080)
Increase in other assets (12,243)
Accounts payable 2,547,156
Accrued expenses (438,738)
------------
NET CASH USED IN OPERATING ACTIVITIES (1,758,914)
------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (32,783)
Increase in intangible assets (67,162)
Cash paid for acquisition (2,000,000)
------------
NET CASH USED IN INVESTING ACTIVITIES (2,099,945)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in revolving line of credit agreement 61,269
Proceeds from related party obligations 200,000
Payments of related party obligations (200,000)
Proceeds from issuance of common stock 11,898,601
------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 11,959,870
------------
NET INCREASE IN CASH 8,101,011
CASH AT BEGINNING OF PERIOD 99,620
------------
CASH AT END OF PERIOD $ 8,200,631
============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 49,739
============
In November 1999, the Company issued 2,000,000 shares of its common stock
for the acquisition of Becan Distributors, Inc. $ 20,000,000
============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
DrugMax.com, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
For the Three Months and Nine Months Ended December 31, 1999 (Restated)
and 1998
NOTE A-BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the
accounts of DrugMax.com, Inc. and its subsidiaries, Healthseek.com Corp., and
Becan Distributors, Inc. and its subsidiary Discount Rx, Inc. (collectively the
"Company"). All intercompany balances and transactions have been eliminated.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instruction to Form 10-QSB and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three month and nine
month periods ended December 31, 1999 and 1998 are not necessarily indicative of
the results that may be expected for the year ending March 31, 2000. For further
information, refer to the consolidated financial statements and footnotes
included in the Company's Form 10-KSB for the year ended March 31, 1999.
NOTE B-RESTATEMENT
Subsequent to the issuance of the Company's Quarterly Report on Form 10-QSB
for the quarter ended December 31, 1999, the Company's management revised its
estimate of fair value of the 2,000,000 shares of Company restricted common
stock issued to Dynamic Health Products, Inc. ("Dynamic"), in connection with
the acquisition of Becan Distributors, Inc. and its subsidiary Discount Rx, Inc.
(collectively "Becan") (see Note C). An estimated fair value of $5.00 per share
was originally used; the fair value was revised to $10.00 per share based upon
the trading price of the Company's common stock at the date of the acquisition.
As a result of the revised fair value, the Company's condensed consolidated
financial statements for the quarter ended December 31, 1999 have been restated
to increase the amount of goodwill by $10 million and increase the related
amortization expense by approximately $55,555 for the three and nine months
ended December 31, 1999.
A summary of the significant effects of the restatement is as follows:
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
AS PREVIOUSLY REPORTED AS RESTATED
BALANCE SHEET DATA: ---------------------- -----------
<S> <C> <C>
Intangible assets, net $11,765,246 $21,709,690
Additional paid-in capital 22,034,926 32,034,926
Deficit (780,019) (835,575)
<CAPTION>
THREE MONTHS ENDED DECEMBER 31, 1999 NINE MONTHS ENDED DECEMBER 31, 1999
AS PREVIOUSLY REPORTED AS RESTATED AS PREVIOUSLY REPORTED AS RESTATED
STATEMENTS OF OPERATIONS DATA: ---------------------- ----------- ---------------------- -----------
<S> <C> <C> <C> <C>
Selling, general and administrative
expenses $ 458,800 $ 514,356 $ 728,918 $ 784,474
Net Loss (426,035) (481,591) (675,544) (731,100)
Basic and diluted net loss per share $ (0.10) $ (0.12) $ (0.21) $ (0.23)
</TABLE>
NOTE C-ACQUISITIONS
On November 26, 1999, the Company acquired all of the issued and
outstanding capital stock of Becan from Dynamic, an affiliate of Jugal K.
Taneja, a principal shareholder and director of the Company, in exchange for
2,000,000 shares of restricted common stock of the Company (with an estimated
fair value of $10.00 per share) and $2,000,000 cash. Additional consideration of
1,000,000 shares of common stock of the Company was placed into escrow for
future issuance to Dynamic, upon the attainment by Becan of certain financial
targets for the fiscal years ending March 31, 2000 and 2001.
The acquisition was accounted for using the purchase method of accounting
and, accordingly, the total purchase price has been allocated to assets and
liabilities of Becan based upon their estimated fair values.
- 6 -
<PAGE>
The aggregate cost of this acquisition was as follows:
Cash $ 2,000,000
Issuance of common stock 20,000,000
Fees and expenses incurred
in connection with the acquisition 20,197
------------
Purchase price to be allocated
to individual assets and
liabilities acquired $ 22,020,197
============
The aggregate purchase price was allocated as follows:
Cash $ 42,635
Accounts receivable 2,266,706
Inventory 1,211,378
Property and equipment 25,175
Other assets 113,898
Goodwill 21,811,397
Assumption of liabilities (3,450,992)
------------
$ 22,020,197
============
<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, 1999(1) DECEMBER 31, 1998(2)
-------------------- --------------------
(Unaudited) (Unaudited)
<S> <C> <C>
Pro Forma Statements of Operations Data:
Net revenues $ 40,942,672 $ 22,299,035
============ ============
Net loss $ (1,655,923) $ (957,664)
============ ============
Basic and diluted net loss per share $ (0.53) $ (0.30)
============ ============
Basic and diluted weighted average
common shares outstanding 3,151,616 3,151,616
============ ============
</TABLE>
-----------
(1) The December 31, 1999 financial data includes the operations of
DrugMax.com, Inc., Becan Distributors, Inc., and Discount Rx, Inc. for the
nine month period.
(2) The December 31, 1998 financial data includes Becan Distributors, Inc. from
April 1, 1998 through December 31, 1998 and Discount Rx, Inc. from
September 1, 1998 (date of inception) through December 31, 1998.
-7-
<PAGE>
NOTE D-INCOME TAXES
The Company has adopted Statement of Financial Accounting Standards No.
109 ("SFAS 109"), Accounting for Income Taxes. Under SFAS 109, the Company uses
the asset and liability method which recognizes the amount of current and
deferred taxes payable or refundable at the date of the financial statements as
a result of all events that have been recognized in the financial statements and
as measured by the provisions of enacted tax laws.
The Company has a gross deferred tax asset as of December 31, 1999 that is
comprised of the potential future tax benefit of its operating losses to date.
Management has evaluated the available evidence regarding the future taxable
income and other possible sources of realization of deferred tax assets. A 100
percent valuation allowance has been established by management against the gross
deferred tax asset as it is more likely than not that the deferred tax asset
will not be realized.
NOTE E-COMMITMENTS
The Company has entered into an operating lease for office and warehouse
facilities in Largo, Florida that expires on November 30, 2002. Monthly rental
payments under the lease are approximately $3,800 through November 30, 2001 and
approximately $3,950 thereafter through November 30, 2002.
NOTE F-STOCKHOLDERS' EQUITY
In October 1999, the Company effected a one-for-two reverse stock split of
the Common Stock of the Company. The accompanying unaudited condensed
consolidated financial statements have been retroactively restated, as of
December 31, 1999, to reflect the one-for-two reverse stock split.
Basic and diluted net loss per common share is computed by dividing loss
available to common stockholders by the weighted-average number of common shares
outstanding during the period.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
OVERVIEW
The Company derives its revenues from traditional and online sales of
pharmaceuticals, over-the-counter products, health and beauty care products, and
nutritional supplements. Revenues are billed and recognized as product is
shipped to the customer, net of discounts, allowances, returns and credits.
Cost of goods sold is comprised of product costs. Selling, general and
administrative costs include administrative, sales and marketing and other
indirect operating costs.
The Company acquired Becan Distributors, Inc. on November 26, 1999. The
acquisition was accounted for under the purchase method of accounting (see Note
B). The results of operations of the Company for the three months and nine
months ended December 31, 1999 include the results of operations of Becan from
November 27, 1999 through December 31, 1999.
RESULTS OF OPERATIONS
Three Months and Nine Months ended December 31, 1999 and December 31, 1998
In March 1997, the Company adopted a plan of liquidation by which it sold
its major product line and subsequently disposed of all of its operating assets
by March 31, 1998. In March 1999, the Company acquired all of the outstanding
common stock of Nutriceuticals.com Corporation ("Nutriceuticals"), a Florida
corporation, which was organized in September 1998. The Company then merged with
Nutriceuticals and changed its name to Nutriceuticals.com Corporation. For the
three months and nine months ended December 31, 1998 and prior to the
acquisition of Nutriceuticals in March 1999, the Company was accounted for on
the liquidation basis of accounting.
On November 26, 1999, the Company acquired all of the common stock of
Becan Distributors, Inc. ("Becan"), a wholesale distributor of pharmaceuticals,
over-the-counter drugs, and health and beauty care products. In connection with
the acquisition, the Company paid Becan's parent company, Dynamic Health
Products, Inc. ("Dynamic") the sum of $2,000,000 in cash and 2,000,000 shares of
the Company's restricted common stock in exchange for all of the outstanding
shares of Becan common stock. In addition, the Company deposited 1,000,000
shares of common stock of the Company into escrow for future issuance to Dynamic
upon the attainment by Becan of certain financial targets for the fiscal years
ending March 31, 2000 and 2001.
The Company had revenues of $7,170,581 and $7,221,279 for the three months
and nine months ended December 31, 1999. Gross profit was $57,610 and $81,717
respectively, for the three month and nine month periods ended December 31,
1999. Gross margin was .8% and 1.16% for the three months and nine months ended
September 30, 1999. The decline was primarily attributable to an increase in the
mix of sales associated with the acquisition of Becan, which yields a lower
gross margin. Selling, general and administrative expenses were $514,356 and
$784,474 respectively, for the three month and nine month periods ended December
31, 1999.
The Company has no income tax provision for the periods presented due to
its net operating losses. These net operating losses may be carried forward for
up to 15 years to offset future taxable income.
- 9 -
<PAGE>
Management believes that there was no material effect on operations or the
financial condition of the Company as a result of inflation for the three months
and nine months ended December 31, 1999. Management also believes that its
business is not seasonal; however, significant promotional activities can have a
direct impact on sales volume in any given quarter.
Interest expense was $32,159 and $36,575 for the three months and nine
months ended December 31, 1999 and was a result of increased borrowings for
financing of additional working capital needs prior to the success of a public
offering during such periods.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations through proceeds received from a
public offering. The Company had working capital of $9,391,637 at December 31,
1999. The Company estimates that it will need the proceeds from its public
offering for on-going Web site development, marketing, promotions, and for
general working capital purposes over the next twelve to eighteen months.
Net cash used in operating activities was $1,758,914 for the nine months
ended December 31, 1999. The usage of cash is primarily attributable to the net
operating loss as well as an increase in accounts receivable ($3,077,922), as a
result of increased sales associated with the Becan acquisition, an increase in
inventory ($64,287), an increase in prepaid expenses and other current assets
($159,080), an increase in other assets ($12,243), and an increase in accrued
expenses ($438,738), partially offset by an increase in accounts payable
$2,547,156 associated with the Becan acquisition.
Net cash used in investing activities was $2,099,945, representing
purchases of property and equipment ($32,783), an increase in intangible assets
($67,162), and cash paid for the acquisition of Becan ($2,000,000).
Net cash provided by financing activities was $11,959,870 representing the
net change in a revolving line of credit agreement $61,269, proceeds from
related party obligations $200,000, and proceeds from the issuance of common
stock $11,898,601, partially offset by repayments of related party obligations
($200,000).
In November 1998, Becan Distributors, Inc. and its subsidiary, Discount
Rx, Inc. established a $2,000,000 line of credit to provide additional working
capital to support its continued growth. The note bears interest at the Prime
Rate of The Chase Manhattan Bank in New York, New York, plus 1.25% per annum on
the unpaid outstanding principal of each advance, payable monthly. The note is
secured by a blanket lien on all business assets of Becan and is also secured by
personal guarantee from a Director of the Company, Jugal K. Taneja. At December
31, 1999, the outstanding principal balance on the line of credit was
approximately $1,750,000. Availability under the line is limited to certain
percentages of eligible Inventory and Accounts Receivable as defined.
In May 1999, 21st Century Healthcare Fund, LLC, an affiliate of a director
of the Company, Jugal K. Taneja, loaned $50,000 to the Company for the purpose
of assisting the Company with its working capital needs. The principal sum,
together with interest on the unpaid principal balance at an annual rate equal
to prime plus one percent, is due and payable on demand at any time following
the earlier to occur of either (i) a public offering of the Company's common
stock pursuant to a registration statement filed with the Securities and
Exchange Commission, or (ii) December 31, 1999. This note has since been repaid.
- 10 -
<PAGE>
In July 1999, Stephen M. Watters, the President of the Company, loaned
$70,000 to the Company for the purpose of assisting the Company with its working
capital needs. The principal sum, together with interest on the unpaid principal
balance at an annual rate equal to prime plus one percent, is due and payable on
demand at any time following the earlier to occur of either (i) a public
offering of the Company's common stock pursuant to a registration statement
filed with the Securities and Exchange Commission, or (ii) December 31, 1999.
This note has since been repaid.
In August 1999, Carnegie Capital, Ltd., an affiliate of a director of the
Company, Jugal K. Taneja, loaned $20,000 to the Company for the purpose of
assisting the Company with its working capital needs. The principal sum,
together with interest on the unpaid principal balance at an annual rate equal
to prime plus one percent, is due and payable on demand at any time following
the earlier to occur of either (i) a public offering of the Company's common
stock pursuant to a registration statement filed with the Securities and
Exchange Commission, or (ii) December 31, 1999. This note has since been repaid.
In August 1999, a director of the Company, Howard Howell D.D.S., loaned
$50,000 to the Company for the purpose of assisting the Company with its working
capital needs. The principal sum, together with interest on the unpaid principal
balance at an annual rate equal to prime plus one percent, is due and payable on
demand at any time following the earlier to occur of either (i) a public
offering of the Company's common stock pursuant to a registration statement
filed with the Securities and Exchange Commission, or (ii) December 31, 1999.
This note has since been repaid.
On September 8, 1999, the Company entered into an Agreement and Plan of
Reorganization with Dynamic Health Products, Inc., a Florida corporation, to
acquire its wholly-owned subsidiary, Becan Distributors, Inc., an Ohio
corporation. On November 26, 1999, the Company acquired Becan in exchange for
2,000,000 shares of restricted common stock and $2,000,000 cash. An additional
1,000,000 shares of common stock are held in escrow in connection with the
acquisition to be issued pending the attainment, by Becan, of certain financial
targets, for the fiscal years ending March 31, 2000 and 2001.
In October 1999, the Company established a $100,000 revolving line of
credit with First Community Bank of America, to provide additional working
capital for the Company. In November 1999, the borrowing limit on the line of
credit was increased to $250,000. The note bears interest at 6.5% per annum on
the unpaid outstanding principal of each advance, payable monthly. The note is
secured by a guarantee in the form of a Third Party Pledge Agreement in favor of
First Community Bank of America, from Dynamic Health Products, Inc., of which
Jugal K. Taneja is Chairman and a 33.18% shareholder. The principal on the note
is due and payable on October 10, 2000. At December 31, 1999, there was no
outstanding principal balance on the line of credit.
On November 22, 1999, the Company successfully completed a public
offering. Gross proceeds of the offering from the sale of common stock of the
Company were $13.8 million and net offering proceeds received by the Company
were approximately $11.9 million, after payment of underwriting discounts and
commissions and other offering expenses totaling $1,931,500. The Company
estimates that proceeds received from the offering should be sufficient to
satisfy the Company's cash requirements in the next twelve to eighteen months.
- 11 -
<PAGE>
On November 23, 1999, the Company entered into an operating lease for
office and warehouse facilities in Largo, Florida that expires on November 30,
2002. Monthly rental payments under the lease are approximately $3,800 through
November 30, 2001 and approximately $3,950 thereafter through November 30, 2002.
The Company has obtained a commitment for a new line of credit to
refinance its existing line of credit and to provide additional working capital
for the Company. The new line of credit will enable the Company to borrow a
maximum of $5 million, with borrowings limited to 80% of eligible Accounts
Receivable and 50% of Inventory (capped at $1 million). Under the terms of the
commitment, interest will be variable at a per annum rate equal to the sum of
2.50% plus the 30-day Dealer Commercial Paper Rate (as published in THE WALL
STREET JOURNAL).
- 12 -
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, the Company may become involved in litigation arising
in the ordinary course of its business. The Company is not presently subject to
any material legal proceedings.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. - NOT APPLICABLE.
ITEM 4. - NOT APPLICABLE.
ITEM 5. OTHER INFORMATION.
In October 1999, the Company effected a one-for-two reverse stock split of
the Common Stock of the Company. The accompanying unaudited condensed
consolidated financial statements have been retroactively restated, as of
December 31, 1999, to reflect the one-for-two reverse stock split.
The Company completed a public offering pursuant to a Registration
Statement on Form SB-2 (Registration Statement No. 333-81835) that was declared
effective on November 19, 1999. Kashner Davidson Securities Corporation was the
managing underwriter and the offering price was $10.00 per share of common
stock. A total of 1,380,000 shares of common stock, $.001 par value, were
registered and sold for the account of the Company, including 180,000 shares
sold upon exercise of the underwriters' over-allotment option.
Prior to November 22, 1999, the Company's common stock was quoted on the
OTC Electronic Bulletin Board and was traded under the symbol "JCOM". Commencing
on November 22, 1999, the Company's common stock is quoted on the Nasdaq
SmallCap Market and is traded under the symbol "DMAX". The Company's common
stock is also listed on the Boston Stock Exchange under the symbol "DMA".
Pursuant to a meeting of the shareholders on January 11, 2000, the name of
the Company was changed to DrugMax.com, Inc., by the filing of Articles of
Amendment to Articles of Incorporation of Nutriceuticals.com, Corporation.
On February 4, 2000, the Company engaged Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ended March 31, 2000,
replacing the firm of Kirkland, Russ, Murphy & Tapp, CPAs, which served as the
Company's independent auditors for the fiscal year ended March 31, 1999. The
change was approved by the Company's audit committee. The reason for the change
to a global firm was to better position the Company for access to the public
capital markets.
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<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
The following exhibits are filed with this report:
2.1 Agreement And Plan Of Reorganization, dated September 8, 1999, by and
between Nutriceuticals.com Corporation and Dynamic Health Products, Inc,
the sole stockholder of Becan Distributors, Inc. (1)
2.2 Addendum To Agreement And Plan Of Reorganization, dated September 8,
1999, by and between Nutriceuticals.com Corporation and Dynamic Health
Products, Inc. (3)
2.3 Articles and Plan of Merger of Becan Distributors, Inc. and
Drugmax.com, Inc, dated March 29, 2000.
3.1 Articles Of Amendment To Articles Of Incorporation Of Nutriceuticals.com
Corporation, dated January 11, 2000 and filed January 11, 2000. (3)
10.1 Loan And Security Agreement between Becan Distributors, Inc. and
Discount Rx, Inc. and The CIT Group/Credit Finance, Inc. dated November
30, 1998. (3)
10.2 Line of Credit Agreement in favor of First Community Bank of America,
from the Company, dated October 4, 1999. (2)
10.3 Line of Credit Agreement in favor of First Community Bank of America,
from the Company, dated November 10, 1999. (2)
10.4 Lease Agreement between Pinellas Center Limited and Becan Distributors,
Inc., dated November 23, 1999. (3)
27.1 Financial Data Schedule (for SEC use only).
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(1) Incorporated by reference to the Company's Registration Statement on
Form SB-2, Amendment No. 1, filed September 13, 1999, Registration
Statement No. 333-81835.
(2) Incorporated by reference to the Company's Quarterly Report on Form
10-QSB for the quarter ended September 30, 1999, file number 0-24362,
filed in Washington, D.C.
(3) Incorporated by reference to the Company's Quarterly Report on Form
10-QSB for this quarter ended December 31, 1999, file number 0-24362,
filed in Washington, D.C.
(b) REPORTS ON FORM 8-K.
During the nine months ended December 31, 1999, the Company filed one
report on Form 8-K.
Form 8-K dated December 10, 1999, with respect to the Company's November
26, 1999 acquisition of Becan Distributors, Inc.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DRUGMAX.COM, INC.
Date: June 19, 2000 By: /s/WILLIAM L. LAGAMBA
----------------------
William L. LaGamba
Chief Executive Officer
and Director
Date: June 19, 2000 By: /s/ RONALD J. PATRICK
----------------------
Ronald J. Patrick,
Chief Financial Officer
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