SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE OF 1934
For the transition period from to
Commission file number: 0-24736
BioProgress Technology International, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 88-0361701
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
9055 Huntcliff Trace, Atlanta, Georgia 30350-1735
(Address of Principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 641-0264
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. Yes [X] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of May 14, 1998, there were
approximately 4,999,753 shares outstanding.
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I. PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC.
(a development stage company)
BALANCE SHEETS
March 31, 1998 December 31,
(unaudited) 1997
ASSETS
Current assets
Cash $500 $---
Payments in advance 96,994 ---
Total current assets 97,494 ---
Other assets
Distributorship agreement 4,000 4,000
Inter-company 0 120,000
Total other assets 4,000 121,000
Total assets $101,494 $124,000
LIABILITIES AND
STOCKHOLDERS' EQUITY:
Current Liabilities
Accounts payable 7,820 ---
Inter-company 5,850 ---
Total current liabilities: 13,670 ---
Stockholders' equity (deficit)
Common stock, $001 par value,\
10,000 shares authorized, 4,999,753
outstanding
5,000 5,000
Additional paid-in capital 4,313,065 4,313,065
Preferred stock, $.01 par value,
1,000,000 shares authorized, none
outstanding
Deficit accumulated during development stage (4,230,242) (4,309,065)
Total shareholders' equity (deficit) 87,823 279,000
Less stock subscription receivable ------ 155,000
Total Liabilities and Stockholders'
Equity (Deficit) 101,494 124,000
The accompanying notes form an integral part of these statements.
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BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC.
(a development state company)
STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
1998 1997
Revenues $------- $-------
Expenses
Legal 7,500 ------
Audit and accountancy 5,000 ------
Administrative expenses 178,007 ------
Professional fees 870 ------
Total expenses 191,177 26,866
Income (loss) before provision for income taxes (191,177) (26,866)
Provisions for income taxes ------ ------
Net gain (loss) (191,177) (26,866)
Net gain (loss) per common share * (26,866)
Weighted average shares 4,999,753 - 1998;
390,367 - 1997
* - Less than $.01 per share
The accompanying notes from an integral part
of these statements
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BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
Three Months Ended March 31
(Unaudited)
1998 1997
Cash Flows Provided (Used) by
Net Loss $(191,177) $(26,866)
Adjustments to reconcile net
gain (loss) to net cash provided
by operating activities:
Increase in payments in advance (96,993) ---
Decrease in inter-company
receivable 120,000 ---
Increase in inter-company
payable 5,850 ---
Increase in accounts payable 7,820 26,866
Net cash flows provided (used) by
operating activities (154,500) ---
Cash Flows Provided by
Investing Activities:
Stock subscription receivable 155,000 ---
Increase (Decrease) in cash: 500 ---
Cash at beginning of the period: --- ---
Cash at end of period: --- ---
The accompanying notes form an integral part of these statements.
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BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC.
(a development stage company)
Notes to Financial Statements
(Unaudited)
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation of the financial
condition of registrant have been included, and the disclosures are adequate to
make the information presented not misleading.
Note 1. A summary of significant accounting policies is currently on file with
the U.S. Securities and Exchange Commission in registrant's Form 10.
Note 2. The loss per share was computed by dividing net loss by the weighted
average number of shares of common stock outstanding during the period.
Note 3. Registrant has not declared or paid dividends on its common shares since
inception.
Note 4. The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and do not include all
information and footnotes required by generally accepted accounting principles
for complete financial statements.
Note 5. Income taxes have not been provided for in that registrant has not had a
tax liability from inception to the date of these notes.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations:
Registrant, BioProgress Technology International, Inc., a Nevada corporation
(the "Company") had no operations or revenues during the first quarter of 1997.
On November 17, 1997, the Company entered into a "Reorganization Agreement" by
which it acquired its now sole wholly-owned subsidiary, BioProgress Technology,
Inc., a Colorado corporation ("BioProgress Technology").
BioProgress Technology has entered into an "Exclusive Distributor Agreement"
with BioProgress Technology, Limited, an entity incorporated in the United
Kingdom (the "Distributor"). The Distributor is engaged in the development,
manufacture, sale and distribution of materials and processes used to replace
gelatin in the manufacture of soft capsules. BioProgress Technology, under this
agreement, has been granted the right to serve as the "Exclusive Distributor" of
the foregoing products in the United States and Canada. BioProgress Technology
has not yet commenced other than start-up operations under the Distributor
Agreement; thus, it had no revenues since November 17, 1997, to the date of this
report.
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The Company's expenses during the first quarter of 1997 were entirely start-up
and administrative in nature, and during the first quarter of 1998 related
entirely to placing itself into a position by which it could pursue its
obligations under the Exclusive Distributor Agreement. Thus, no meaningful
comparison can be made between 1998 and 1997 since the Company had no operations
during this time and incurred only administrative expenses.
Liquidity and Capital Resources:
During the first quarter of 1997, the Company had no source of liquidity, other
than the largesse of its former sole director and executive officer in his
extension of credit. In the last quarter of 1997, the Company sold 435,000
shares of Common Stock under an option with a consultant at a price per share of
$.875, for aggregate consideration of $385,000. The Company then paid all past
due obligations with these monies, and continues to use this cash in the
development of its business.
PART II - OTHER INFORMATION
Item 1. Litigation
No material legal proceedings to which the Company (or any officer or director
of the Company, or any affiliate or owner of record or beneficially of more than
five percent of the Common Stock, to management's knowledge) is a party or to
which the property of the Company is subject is pending and no such material
proceeding is known by management of the Company to be contemplated.
Item 2. Change in Securities
This item is not applicable to the Company for the period covered by this
report.
Item 3. Defaults Upon Senior Securities
This item is not applicable to the Company for the period covered by this
report.
Item 4. Submission of Matters to a Vote of Security Holders
There were no meetings of security holders during the period covered by this
report; thus, this item is not applicable.
Item 5. Other Information
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There is no additional information which the Company is electing to report under
this item at this time.
Item 6. Exhibits and Reports on Form 8-K
This item is not applicable to the Company for the period covered by this
report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 this 15th day of May, 1998.
BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC.
(Registrant)
By: /s/ Barry J. Muncaster
----------------------
Barry J. Muncaster, President
and Chief Executive Officer
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