SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For Quarter Ended: March 31, 1996 Commission file number: 0-24930
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
(Exact name of registrant as specified in its charter)
Florida 59-3029743
(State or other jurisdiction IRS Employer Identification No.
of incorporation or organization)
3713 S.W. 42nd Avenue, Suite 3, Gainesville, Florida, 32608-2531
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 904-375-6822
Former name, former address and former fiscal year, if changed since last
report: N/A.
Indicate by check mark whether the registrant (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. Yes
As of March 31, 1996, the Company had outstanding ***1,100,000*** shares of
its common stock.
<PAGE>
PART I: Financial Information
Item 1 - Financial Statement
<TABLE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
BALANCE SHEET
(Unaudited)
<CAPTION>
ASSETS
March
31, 1996
<S> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ 8,449
Accounts Receivable 10,300
Inventory 76,469
Deposits and Prepaid Expenses 8,991
Note Receivable - Employee, Current Portion 4,326
________
TOTAL CURRENT ASSETS 108,535
________
PROPERTY AND EQUIPMENT
Furniture and Equipment 48,528
Leasehold Improvements 24,800
________
73,328
Less: Accumulated Depreciation 28,722
________
TOTAL PROPERTY AND EQUIPMENT 44,606
________
OTHER ASSETS
Note Receivable - Employee, Less Current Portion 4,639
Deposits and Other 12,317
Advances to and Investment in Joint Venture 37,008
License Fee 34,966
________
TOTAL OTHER ASSETS 88,930
________
TOTAL ASSETS $242,071
========
</TABLE>
<PAGE>
<TABLE>
(CONTINUED)
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
BALANCE SHEET
(Unaudited)
(CONCLUDED)
LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
March
31, 1996
<S> <C>
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 28,619
Note Payable on Line-of-Credit 5,000
Payable to Former Stockholder 6,421
___________
TOTAL CURRENT LIABILITIES 40,040
COMMON STOCK SUBJECT TO REPURCHASE
Common Stock, Par Value $.0001 Per Share,
100,000 Shares Authorized, 25,000 Shares
Issued and Outstanding, 6,250
___________
STOCKHOLDERS' EQUITY
Common Stock, Par Value $.0001 Per Share, 5,000,000
Shares Authorized, 993,700 Shares Issued and
Outstanding, 33,400 Shares Subscribed 103
Additional Paid-In Capital 1,574,945
Common Stock Issued for Future Services (22,813)
Accumulated Deficit (1,356,454)
___________
TOTAL STOCKHOLDERS' EQUITY 195,781
___________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 242,071
===========
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months
Ended March 31,
1996 1995
<S> <C> <C>
Product Sales $ 30,776 $ 135,128
Cost of Products Sold 4,526 21,617
_________ _________
GROSS PROFIT 26,250 113,511
_________ _________
OPERATING EXPENSES
Advertising 3,523 2,723
Depreciation and Amortization 22,002 3,557
Consulting Fees 4,660 7,875
Office Expenses 7,379 14,869
Professional Fees 11,651 41,585
Travel and Entertainment 4,002 2,916
Rent 5,373 5,478
Research and Development Costs 1,950 --
Salaries and Benefits 28,495 31,759
Taxes and Licenses 4,571 4,804
_________ _________
TOTAL OPERATING EXPENSES 93,606 115,566
_________ _________
LOSS FROM OPERATIONS (67,356) (2,055)
_________ _________
OTHER INCOME (EXPENSE)
Investment and Other Income 606 3,389
Equity in Loss from
Unconsolidated Subsidiary (5,487) --
Interest Expense (257) --
_________ _________
TOTAL OTHER INCOME (EXPENSE) (5,138) 3,389
_________ _________
NET (LOSS) INCOME $ (72,494) $ 1,334
========= =========
(LOSS) PER COMMON SHARE $ (.07) $ --
========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,018,700 1,018,700
========= =========
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(Unaudited)
<CAPTION>
Three Months
Ended March 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $(72,494) $ 1,334
________ _________
Adjustments to Reconcile Net Income (Loss)
to Net Cash Used for Operating Activities:
Depreciation and Amortization 22,002 3,557
Deferred Compensation Earned 1,437 --
Equity in Loss of Unconsolidated
Joint Venture 5,487 --
Stock Issued for Services -- 1,875
Decrease (Increase) in Accounts
Receivable 26,185 (66,885)
Decrease in Inventory 1,812 7,917
Decrease (Increase) in Deposits
and Prepaid Expenses 150 (1,304)
(Decrease) Increase in Accounts Payable
and Accrued Expenses (17,001) 10,675
________ _________
Total Adjustments 40,072 (44,165)
________ _________
NET CASH USED FOR OPERATING ACTIVITIES (32,422) (42,831)
________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Advances to Joint Venture (10,000) --
Repayment of Employee Loan 1,203 --
Purchase of Equipment and Leasehold
Improvements (130) (10,652)
Cash Paid for License -- (38,742)
Cash Loan to Employee -- (13,000)
________ _________
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES (8,927) (62,394)
________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds From Issuance of Common Stock,
Net of Offering Costs 3,025 --
________ _________
NET CASH PROVIDED BY FINANCING ACTIVITIES 3,025 --
________ _________
</TABLE>
<PAGE>
<TABLE>
(CONTINUED)
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(Unaudited)
(CONCLUDED)
<CAPTION>
Three Months
Ended March 31,
1996 1995
<S> <C> <C>
NET DECREASE IN CASH AND CASH EQUIVALENTS (38,324) (105,225)
CASH AND CASH EQUIVALENTS, Beginning of Period 46,773 390,396
________ _________
CASH AND CASH EQUIVALENTS, End of Period $ 8,449 $ 285,171
======== =========
SUPPLEMENTALAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash Paid During the Year For:
Interest $ 257 $ --
</TABLE>>
See Accompanying Notes to Financial Statements.
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
The information presented herein as of March 31, 1996, and for the
three months ended March 31, 1996 and 1995, is unaudited.
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Rule 10-01 of
Regulations 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 required adjustments)
considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 1996, are
not necessarily indicative of the results that may be expected for the
year ending December 31, 1996. For further information, refer to the
financial statements and footnotes thereto included in the Company's
annual report on Form 10-KSB for the year ended December 31, 1995.
NOTE 2 - COMMITMENTS
Effective January 1, 1995, the Company obtained an exclusive right to
market a dietary supplement in the United States for three years. The
Company agreed to approximately $60,000 for this right. The agreement
allows the Company to recover this fee through discounts on inventory
purchased through December 31, 1997. Prior to December 31, 1995, the
amortization of this license fee was recognized as discounts were
received. However, after consultation with the Securities and Exchange
Commission, the license fee is now being amortized on a straight-line
basis over the three year period of the contract. The total
accumulated amortization expense under the straight line method since
the inception of the contract is $25,000. Since $7,200 has been
recorded as of December 31, 1995, the remaining $17,800 has been
recognized as amortization expense in the first quarter of 1996.
On August 1, 1994, the Company entered into a five year consulting
agreement (renewable annually by mutual agreement) with Yellen
Associates (Yellen), an unrelated company. Yellen agreed to provide
ideas for new products in the nutritional, geriatric, and related
health fields; to find companies and/or products suitable for
acquisition; to find products suitable for manufacture and/or
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(CONTINUED)
NOTE 2 - COMMITMENTS (concluded)
distribution; and to secure customers for Company products. All
products offered by Yellen and accepted by the Company will belong
exclusively to the Company with all related rights. In return, the
Company agreed to pay Yellen $2,000 per month for nine months. In May
1995, the Company discontinued its monthly payment to Yellen in
accordance with the agreement. Additionally, the Company will pay
Yellen royalties of up to 5% of sales for products acquired through
Yellen, or Cyclodextrin sales made by Yellen for three to five years.
The Company also agreed to sell to Yellen over a period of three years
from August 1, 1994, up to 30,000 shares of Company stock at a
discount of 50% of the market price quoted at the time of purchase,
with the option remaining (exercisable) of 20,000 shares within the
next two years, reducing to 10,000 shares in the third year. Consulting
expense will be recognized during the period in which Yellen elects to
acquire shares of the Company's common stock based on the difference
between the market price and the sales price of the Company's common
stock. As of March 31, 1996, no options have yet been exercised.
On July 7, 1994, the Company entered into a five year noncancelable
operating lease for office space, commencing October 1994. The Company
has an option to rent additional space and a purchase option in which
ten percent of the lease payments may be applied to the purchase price.
Rent expense under the foregoing lease and all other operating leases
was $5,373 and $5,478 for March 31, 1996 and 1995, respectively.
On January 1, 1996, the Company resolved to issued 48,000 shares of its
common stock to various unrelated parties for services performed in
connection with the Company's anticipated self-underwritten stock
offering as noted below. Furthermore, two of these parties acknowledge
that in the event the gross proceeds of the offering are less than
$500,000, then one-half of their shares (20,000) shall be returned to
the Company. The shares issued will bear a restrictive legend.
Effective February 5, 1996, the Company filed Form SB-2 Registration
Statements with the Securities and Exchange Commission for a proposed
securities offering of 250,000 shares of common stock and 125,000 common
stock purchase warrants purchase with a combined proposed maximum
aggregate offering price of $1,250,000.
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(CONTINUED)
NOTE 3 - COMMON STOCK TRANSACTIONS
During 1994, the Company adopted a non-qualified employee stock plan and
in December 1994 issued 25,000 shares to employees for future services.
The shares are nontransferable by the employees for five years. During
years three through five, the employee may request the Company to
purchase all or part of the shares at 50% of the current market price
of the stock at that date.
The Company valued the 25,000 shares at $37,500, which is approximately
50% less than the bid price at the date of issuance. The quoted market
price was not used to value the stock since the stock does not trade
freely in an established market and, thus, a market price could not
accurately be established. The Company recorded the $37,500 as stock
issued for future services, which is classified as a reduction to
stockholders' equity in the accompanying financial statements. The
Company is amortizing this amount to expense over five years on the
straight-line basis, the estimated benefit period of the future
services. Any unamortized amount will be charged to expense if an
employee terminates their employment with the Company. The Company
expensed $1,437 and $1,875 under this plan for the three months ended
March 31, 1996 and 1995, respectively.
In June 1995, the Company purchased 10,000 shares of its own common
stock for $25,000 from a former employee, payable over the next twelve
months. This stock was held in treasury and reissued under the
employee stock plan as noted above. The Company recorded $6,250 as
stock issued for future services, which was approximately 50% less the
bid price at the date of issuance, which will be amortized over 5 years
on a straight line basis. Any unamortized amount will be charged to
expense if an employee terminates their employment with the Company.
The Company recognized $1,437 in compensation expense under this plan
for year ended March 31, 1995. There was no expense recorded for year
ended March 31, 1995.
Effective November 15, 1995, the Company adopted an employee stock
purchase plan. Under this plan, employees may purchase shares of
Company stock up to the amount of their gross pay for the period.
These shares will be restricted from sale for two years, therefore
they will be sold to employees at 50% of the most recent trading price
at the date of purchase. This plan will expire at the next
private/public offering of Company stock. As of March 31, 1996,
employees had purchased 33,400 shares for $9,953 under this plan.
These shares had not been issued as of March 31, 1996, and are
reflected as common stock subscribed in the accompanying financial
statements.
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(CONTINUED)
NOTE 4 - COMMON STOCK SUBJECT TO REPURCHASE
As detailed in Note 3 above, the Company established a nonqualified
employee stock plan in 1994, and issued shares under this plan in
December, 1994. Also, as noted above, the stock issued under this
Plan is redeemable by the Company at the option of the employee, at
50% of the then current market value. The employee can demand
redemption at any time beginning on the first day of the third year
after issuance ending five years after issuance.
The Company has reserved 100,000 of its common shares authorized of
5,000,000 to be used under this Plan.
The common stock subject to repurchase is reflected on the balance sheet
at 50% of the market value as of the balance sheet date.
Year Ending Shares Amount
1996 -- $ --
1997 15,000 3,750
1998 10,000 2,500
______ ______
Total 25,000 $6,250
====== ======
NOTE 5 - MAJOR CUSTOMERS
Sales to three customers for the three months ended March 31, 1996,
consisted of approximately 56% of total sales. Sales to these three
customers were 84% of total sales for the three months ended March 31,
1995.
NOTE 6- LINE OF CREDIT
The Company has a $75,000 line of credit with a bank. Interest is due
monthly at prime plus 2%. Any outstanding principal and interest is
due in June 1996. The line is collateralized by accounts receivable
and inventory.
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(CONCLUDED)
NOTE 7 - JOINT VENTURE
Effective May 1, 1995, the Company entered into a joint venture
agreement with Ocumed, Inc. (Ocumed), an unrelated company. The joint
venture is organized as Ocudex, Inc. (Ocudex) with the Company and
Ocumed each owning 50% of Ocudex. The Company has committed to funding
Ocudex up to $120,000 over the next twelve months. The Company has
advanced Ocudex $44,000 as of March 31, 1996.
The Company accounts for its investment in the Ocudex joint venture
using the equity method of accounting whereby its investment is
carried at cost, including advances, adjusted for the Company's share
of earnings and losses. The Company experienced a realized loss
associated with this investment of $5,487 for the first quarter of 1996.
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition and
Management Discussion and Analysis
Liquidity and Capital Resources
At March 31, 1996 the Company's main source of liquidity was in its inventory
holding of $76,469, which was 32% of total assets. The sources of liquidity at
December 31, 1995 were $46,773 in cash and $36,652 in accounts receivable
which represented 26% of total assets. The change in the source of liquidity
is expected since the Company has been active in the marketing of Garlessence
and other products. In anticipation of sales it has been necessary to build
up Garlessence inventory using cash.
The Company has established substantial inventory of Garlessence and does not
expect to expend more than an additional $10,000 in incidental costs to
distribute the product before substantial distributor sales are realized. In
the first quarter of 1996 the company sold directly about $500 of Garlessence
at more than a 70% gross profit. The Company has postponed purchasing
additional inventory of Garlessence until sales reach levels to support such
purchases. Therefore, no new expenditures are anticipated for
Garlessence(tm) or
Appromote(tm) until sales revenue is generated to cover
such expenditures.
However, should the rate of expansion and volume of sales increase
substantially, the Company would require additional funds to finance inventory
and accounts receivable and to fund increased costs of advertising and
marketing, among other things. To meet the expected future growth, the Company
expects to raise up to $1.25 million in a private offering in 1996. In
addition, in June of 1995, the Company obtained a $75,000 line of credit from
a commercial bank. The Company expects to use this line of credit to purchase
inventory needed to support the launch of Garlessence and for other short term
production working capital. As of March 31, 1996, there is a $5,000
outstanding balance on this line of credit.
On July 7, 1994 the Company entered into a five-year lease for 3,000 square
feet of space for an office, laboratory, and manufacturing plant. The Company
moved into the building during October 1994. Rent payments are $18,000 in
year one, $18,900 in year two, $19,484 in year three, $20,844 in year four,
and $21,888 in year five. Rent for year two has been prepaid and earns
interest at 9% on the balance not yet applied each month. The Company also
has a purchase option on this space in which ten percent of the lease payments
may be applied to the purchase price. The Company may exercise an option to
lease an additional 3,000 square feet of adjoining space. The Company houses
its administrative offices, laboratory, and manufacturing facility in this
complex utilizing an aggregate of approximately 1,650 square feet. This plant
has been built and can be expanded according to "GMP" (good manufacturing
practices) specifications anticipating the commercial needs of the markets the
Company serves. During 1994 and 1995, the Company expended significant effort
and $65,000 in capital improvements to complete the facility. The remaining
1,350 square feet of space is for pilot plant manufacturing and an analytical
laboratory. However, this expansion will require additional funding and there
is no assurance that any additional funding will be available. Management has
no immediate plans for this expansion.
<PAGE>
On August 1, 1994, the Company entered into a five-year consulting agreement
(renewable annually by mutual agreement) with Yellen Associates ("Yellen"), an
unrelated company. Yellen agreed to provide ideas for new products in the
nutritional, geriatric, and related health fields; to find companies and/or
products suitable for acquisition; to find products suitable for manufacture
and/or distribution; and to secure customers for Company products. All
products offered by Yellen and accepted by the Company will belong exclusively
to the Company with all related rights. In return, the Company agreed to pay
Yellen $2,000 per month for nine months. In May 1995, the Company
discontinued its monthly payments to Yellen in accordance with the agreement.
Additionally, the Company will pay Yellen royalties of up to 5% of sales for
products acquired through Yellen or cyclodextrin sales made by Yellen. The
Company also agreed to sell to Yellen over a period of three years from August
1, 1994, up to 30,000 shares of Company stock at a discount of 50% of the
market price quoted at the time of purchase with the option remaining
(exercisable) of 20,000 shares within the next two years, reducing to 10,000
shares in the third year. The sale of this stock is not contingent upon
meeting any given sales amount. Yellen did not purchase any stock under this
agreement as of March 31, 1996.
Effective January 1, 1995, the Company obtained an exclusive right to market a
dietary supplement in the United States for three years. The Company agreed to
pay approximately $60,000 for this right. The agreement allows the Company to
recover this fee through discounts on inventory purchased through December 31,
1997. Prior to December 31, 1995, the amortization of this license fee was
recognized as discounts were received. However, after consultation with the
Securities and Exchange commission, the license fee is now being amortized on
a straight-line basis over the three year period of the contract. The total
accumulated amortization expense under the straight line method since the
inception of the contract is $25,000. Since $7,200 has been recorded as of
December 31, 1995, the remaining $17,800 has been recognized as amortization
expense in the first quarter of 1996.
On May 1, 1995 the Company entered into a joint venture operating as Ocudex,
Inc. The Company and Ocumed, Inc., an unrelated company, each own 50% of
Ocudex. The Company has agreed to fund on a best efforts basis up to $10,000
per month for not more than 12 months operations that will result in
profitable sales revenues to be credited to Ocudex and used for subsequent
expansion of Ocudex. CTD has advanced Ocudex $34,000 in 1995 on which it
realized an operating loss of $1,505, but a taxable profit of $63. As of
March 31, 1996, the Company advanced Ocudex an additional $10,000 and has
realized a loss of $5,487 for the first quarter 1996. The Company intends to
apply additional funds during 1996 to be used for inventory and production
costs and also to defray the costs of raising equity capital that will allow
Ocudex to obtain FDA approval for proprietary CD improved generic ophthalmic
drugs using CD's brought to it by CTD. Successfully obtaining such funding
will benefit CTD in terms of achieving a net asset value that will qualify it
for NASDAQ small cap listing. As of March 31, 1996 there have been no sales
of these products.
The Company purchased 10,000 shares of its own common stock for $25,000 from a
former employee on May 3, 1995 payable over the following 12 months. As of
March 31, 1996, $6,421 of that obligation remained for satisfaction in the
second quarter of 1996.
<PAGE>
In 1995, the Company sponsored validation testing at the University of Florida
on a new cyclodextrin-based veterinary euthanasia product; approximately
$12,500 has been spent in the initial studies required to test this new
product. No additional expenses were incurred for the new cyclodextrin-based
veterinary euthanasia product in the first quarter. Additional formulation
work and efficacy validation will be done along with the writing and
submission of the patent protecting the invention. The expenses for this work
will be spread out over the remainder of the year with the greatest impact to
be felt in the third and fourth quarter of 1996. The Company spent $12,500 in
the initial studies in 1995.
The Company continues to explore the acquisition and development of new
products through licensing and joint ventures with and without cyclodextrins
to increase sales. However, the acquisition and development of these new
products may require additional funding and there is no assurance that any
additional funding will be available.
Results of Operations
Sales of cyclodextrins and related manufactured complexes have historically
been volatile. Sales are primarily to large pharmaceutical and food companies
for research and development purposes. Sales have also been concentrated
among a few large customers. Product sales were $30,776 and $135,128 for the
quarters ended March 31, 1996 and 1995, respectively. This 77% decrease is
primarily due to the ordering patterns of these few customers. Such
volatility will continue to make the Company's cash use planning from quarter
to quarter difficult. The Company is making consistent progress to moderate
the volatility by expanding its product line to more routinely purchased
products. The Company expects to increase sales from Garlessence in 1996.
Although sales have been much slower developing than anticipated, as they
grow, they will provide not only a substantial increase in sales revenues but
stability as well.
Despite the low first quarter sales, the Company continues to experience a
large gross profit margin. Gross profit for the first quarter of 1996 is
approximately 85%. The gross profit for the first quarter in 1995 was 84%.
Due to the fact that the cyclodextrin complexes are produced in the on-site
laboratory rather than contracted out as was done in the past, the gross
profit remains fairly high.
Operating expenses for advertising, travel & entertainment and research &
development have increased 68% from the prior year first quarter. Expansion
has significantly increased the Company's outflow for these expenses. These
costs have been incurred to allow the Company to expand its sales, develop new
products and implement its strategy of creating operational affiliates that
will use cyclodextrins in herbal medicines and water treatment. The Company
expects the small increases already seen in sales of these new products to
accelerate as these expansion efforts begin to coalesce. Sales in the second
quarter are expected to bring the Company back to its budgeted levels and
significantly reduce the rate at which the Company uses cash.
Operating expenses for such items as consulting and professional fees
decreased 67% from the same prior period. The Company enjoyed a 72% decrease
in professional fees from the first quarter 1995 ($41,585) to the first
quarter 1996 ($11,651) due to the non-recurrence of extraordinary legal and
auditing fees associated with the company becoming a reporting public company
and legal fees associated with the approval of Garlessence(tm).
<PAGE>
PART II: Other Information
Item 6. Exhibits and Reports on Form 8-K
None.
(a) Exhibits
Exhibit Description Page
(2) Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession None
(3) Articles of Incorporation and By-Laws:
(i) Certificate of Incorporation filed August 9, 1990,
incorporated by reference to the Company's Form 10-SB
filed with the U.S. Securities and Exchange Commission
February 1, 1994.
(ii) By-Laws incorporated by reference to the Company's
Form 10-SB filed with the U.S. Securities and Exchange
Commission February 1, 1994.
(iii) Certificates of Amendment to the Articles of
Incorporation filed November 18, 1993, and September 24,
1993, incorporated by reference to the Company's Form 10-SB
filed with the U.S. Securities and Exchange Commission
February 1, 1994.
(4) Instruments defining the Rights of Security Holders None
(10) Material Contracts None
(12) Statement re: Computation of Per Share Earnings
(15) Letter re: Unaudited Interim Financial Information None
(18) Letter re: Change in Accounting Principles None
(19) Report Furnished to Security Holders None
(22) Published Report re: Matters Submitted to Vote of
Security Holders None
(23) Consents of Experts and Counsel None
(24) Power of Attorney None
(27) Financial Data Schedule
(99) Additional Exhibits None
(b) Reports on Form 8-K None
<PAGE>
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 thereunto duly authorized.
Dated: May 14, 1996
C. E. RICK STRATTAN
C. E. RICK STRATTAN
President, Chief Executive Officer,
Chief Financial Officer
<PAGE>
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Net income (loss) per common share is based on the weighted average
number of shares outstanding during the periods. Those stock options
outstanding that are dilutive have been considered in determining net income
(loss) per share and the weighted average number of shares outstanding.
