<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
COMMISSION FILE NUMBER 000-24693
NUTRACEUTIX, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 91-1689591
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
8340 - 154TH AVENUE NORTHEAST
REDMOND, WASHINGTON 98052
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(425) 883-9518
(ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Number of shares of issuer's common stock outstanding as of November 10, 1999:
7,489,812
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE> 2
NUTRACEUTIX, INC.
FORM 10-QSB
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets at September 30, 1999 (unaudited) and
December 31, 1998
Statements of Operations for the three month and nine month
periods ended September 30, 1999 and September 30, 1998
(unaudited)
Statements of Cash flows for the nine month period ended
September 30, 1999 and September 30, 1998 (unaudited)
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition or
Plan of Operation
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signature
<PAGE> 3
NUTRACEUTIX, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 DECEMBER 31,
ASSETS (UNAUDITED) 1998
------------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 163,213 $ 93,440
Accounts receivable - net 1,527,357 737,916
Inventories 2,364,071 824,293
Prepaid expenses 146,672 201,188
------------ ------------
Total current assets 4,201,313 1,856,837
EQUIPMENT AND FURNITURE - net 1,516,148 1,327,257
OTHER ASSETS - net 826,311 935,005
------------ ------------
$ 6,543,772 $ 4,119,099
============ ============
LIABILITIES
CURRENT LIABILITIES
Line of credit $ 1,119,500 $ 411,500
Current maturities of long-term obligations 192,602 194,390
Current maturities of capital lease obligations 153,844 135,794
Accounts payable 1,871,364 281,719
Advance royalties and customer deposits 961 11,518
Accrued liabilities 76,851 97,259
------------ ------------
Total current liabilities 3,415,122 1,132,180
LONG-TERM OBLIGATIONS, less current maturities 432,199 465,892
CAPITAL LEASE OBLIGATIONS, less current maturities 348,838 249,198
COMMITMENTS AND CONTINGENCY - -
STOCKHOLDERS' EQUITY
Preferred stock authorized, 5,000,000 shares at $.01 - -
par value
Common stock authorized, 30,000,000 shares $.001 17,489 16,864
par value
Additional contributed capital 11,725,754 11,570,129
Subscription receivable (46,875) -
Accumulated deficit (9,348,755) (9,315,164)
------------ ------------
Total stockholders' equity 2,347,613 2,271,829
------------ ------------
$ 6,543,772 $ 4,119,099
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
1
<PAGE> 4
NUTRACEUTIX, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
3 Months Ended 9 Months Ended
September 30, September 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net revenues $ 3,460,522 $ 1,632,499 $ 7,782,963 $ 4,689,867
Cost of revenues 2,482,063 987,128 5,523,294 2,800,679
----------- ----------- ----------- -----------
Gross profit 978,459 645,371 2,259,669 1,889,188
Operating Expenses
Selling and marketing 207,789 243,012 630,031 608,474
Research and development 56,143 62,892 224,035 143,328
General and administrative 405,937 317,086 1,233,868 933,982
----------- ----------- ----------- -----------
Operating profit 308,590 22,381 171,735 203,404
Other income (expense)
Interest expense (77,718) (31,353) (183,333) (109,684)
Other 14,028 (2,572) (21,993) 428
----------- ----------- ----------- -----------
(63,690) (33,925) (205,326) (109,256)
----------- ----------- ----------- -----------
NET EARNINGS (LOSS) $ 244,900 $ (11,544) $ (33,591) $ 94,148
=========== =========== =========== ===========
Net earnings (loss) per share $ 0.0140 $ (0.001) $ (0.002) $ 0.006
=========== =========== =========== ===========
Net earnings per share assuming dilution $ 0.013 $ 0.005
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE> 5
Nutraceutix, Inc.
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
Increase (Decrease) in Cash September 30,
1999 1998
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ (33,591) $ 94,148
Adjustments to reconcile net earnings (loss) to net
cash used in operating activities
Depreciation and amortization 274,750 231,056
Write-off of start-up costs 50,266 -
Issuance of common stock for services - 41,471
Changes in assets and liabilities
Accounts receivable (789,441) (190,627)
Inventories (1,539,778) (252,840)
Prepaid expenses 54,516 (29,775)
Accounts payable 1,589,645 (39,337)
Accrued liabilities and advance royalties
and customer deposits (30,965) (83,811)
----------- -----------
Net cash used in operating activities (424,598) (229,715)
----------- -----------
Cash flows from investing activities:
Purchase of equipment and furniture (126,444) (603,947)
Patent and technology rights expenditures (45,110) (12,534)
----------- -----------
Net cash used in investing activities (171,554) (616,481)
----------- -----------
Cash flows from financing activities:
Payments on long-term obligations and
capital lease obligations (312,989) (241,302)
Proceeds from long-term obligations 161,539 547,944
Net proceeds (borrowings) on line of credit 708,000 (221,500)
Net proceeds from issuance of common stock 109,375 794,000
----------- -----------
Net cash provided by financing activities 665,925 879,142
----------- -----------
Net increase in cash 69,773 32,946
----------- -----------
Cash at beginning of period 93,440 132,978
----------- -----------
Cash at end of period $ 163,213 $ 165,924
=========== ===========
Cash paid during the year for interest $ 173,309 $ 114,028
=========== ===========
Noncash investing and financing activities:
Purchase of equipment under capital lease obligations $ 233,659 $ 205,569
=========== ===========
Issuance of common stock for subscription receivable $ 156,250 $ -
=========== ===========
Issuance of common stock to prepay royalties $ - $ 15,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 6
Nutraceutix, Inc.
FORM 10-QSB
NOTES TO FINANCIAL STATEMENTS
NOTE 1. FINANCIAL STATEMENTS
The unaudited financial statements of Nutraceutix, Inc. (the Company) have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the entire fiscal year ending
December 31, 1999. The accompanying unaudited financial statements and related
notes should be read in conjunction with the audited financial statements and
the Form 10-KSB of the Company, for its fiscal year ended December 31, 1998.
NOTE 2. INVENTORIES
Inventories are stated at the lower of cost or market; cost is determined by the
first-in, first-out method. Inventories consist of the following:
<TABLE>
<CAPTION>
September 30,
1999 December 31,
(unaudited) 1998
------------ ----------
<S> <C> <C>
Raw materials $1,270,800 $ 387,625
Work in progress 829,517 374,584
Finished goods 263,754 62,084
---------- ----------
$2,364,071 $ 824,293
========== ==========
</TABLE>
NOTE 3. NET EARNINGS (LOSS) PER SHARE
Basic earnings per share are based on the weighted average number of shares
outstanding during each quarter and income available to common shareholders.
Earnings per share assuming dilution are based on the assumption that
outstanding stock options were exercised. The weighted average shares for
computing basic earnings per share were 17,489,812 and 16,610,798 for the three
months ended September 30, 1999 and 1998, respectively, and 17,299,794 and
15,767,220 for the nine months ended September 30, 1999 and 1998, respectively.
The weighted average shares for computing dilution were 18,333,578 for the three
months ended September 30, 1999 and 17,351,985
4
<PAGE> 7
for the nine months ended September 30, 1998. Options to purchase 1,262,066 and
472,500 shares of common stock at or above $.56 and $.88 a share for the three
and nine months ended September 30, 1999 and 1998, respectively, were not
included in the computation of diluted EPS as the options' exercise price was
greater than the average market price of the common shares.
Because of the net loss for the three months ended September 30, 1998 and nine
months ended September 30, 1999, common stock equivalent shares were not
included in the calculation of diluted earnings per share as their inclusion
would be anti-dilutive.
NOTE 4. EQUITY TRANSACTIONS
From January 1, 1999 through September 30, 1999, the Company has issued 625,000
shares of the Company's common stock at $0.25 per share or $156,250 through a
subscription agreement. The Company received a promissory note in the principal
amount of $140,625, which calls for monthly payment of $15,625 commencing April
1999.
5
<PAGE> 8
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION
The following discussion and analysis should be read in conjunction with
the financial statements, including the notes thereto, appearing in this Form
10-QSB and in the Company's 1998 annual report on Form 10-KSB.
Except for the historical information contained herein, the matters
discussed in this quarterly report contain forward-looking statements that are
based on Management's beliefs and assumptions, current expectations, estimates,
and projections. Statements that are not historical facts, including without
limitation, statements which are preceded by, followed by or include the words
"believes", "anticipates," "plans," "expects," "may," "should," or similar
expressions, are forward-looking statements. Many of the factors that will
determine the Company's future results are beyond the ability of the Company to
control or predict. These statements are subject to risks and uncertainties and,
therefore, actual results may differ materially. The Company disclaims any
obligation to update any forward-looking statements whether as a result of new
information, future events or otherwise.
Important factors that may affect future results include, but are not
limited to: the impact of competitive products and pricing, product development,
changes in law and regulations, customer demand, litigation, availability of
future financing and uncertainty of market acceptance of new products. A more
detailed discussion of these factors is presented in the Company's 1998 annual
report on Form 10-KSB under the heading "Outlook - Issues and Uncertainties."
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND THREE MONTHS ENDED SEPTEMBER 30, 1998
Net Revenues: Net revenues include product sales and royalty revenue.
Net revenues increased 112% or $1,828,023 to $3,460,522 for the three months
ended September 30, 1999 from net revenues of $1,632,499 for the three months
ended September 30,1998. The increase primarily resulted from product sales
incorporating CDT (TM) Controlled Delivery Technology for MET-Rx USA,
LIVE-BAC(R) caplets for national brands, and private label manufacturing of
non-proprietary products for MET-Rx. The Company expects sales of CDT sports
supplements to materially decline in the fourth quarter due to the time required
to establish store placement, detail sales personnel and initiate promotions. As
a result, the Company does not expect to sustain sales growth during the fourth
quarter and may experience declining revenues until initial inventories of CDT
sports supplements are sold and reorders are received. Comparisons of the
quarter ended September 30, 1999 to quarter ended September 30, 1998 should take
into account that net revenues for the three months ended September 30, 1999
reflect negligible royalties as compared to $171,168 in royalties for the
comparable three months ended September 30, 1998 due to termination of the
guaranteed royalties on the exclusive license of Calcium D-Glucarate(TM) to
Weider Nutrition. Products sales for the three months ended September 30, 1999
increased 135% or $1,977,847 to $3,439,178 compared to total product sales of
$1,461,331 for the comparable period in 1998. Cobactin(R) sales were lower due
to a Product Marketing and Manufacturing Agreement with Biotal, Inc. effective
September 1, 1999. Per the agreement, Biotal, Inc. is the exclusive distributor
of Cobactin(R) microbial feed additive products for feedlot cattle. Biotal will
purchase Cobactin(R) from Nutraceutix at master distributor pricing. Under the
terms of the Agreement, Biotal assumes all marketing and sales expense related
to Cobactin(R) microbial feed additive for feedlot cattle. Nutraceutix will also
manufacture Biotal's own private label microbial feed additive, MICRO-CELL(R).
Although the agreement results in a slight decrease in net revenues from
Cobactin sales, the net financial effect of is not substantial for the quarter
ending September 30, 1999.
6
<PAGE> 9
SOURCE OF NET REVENUES
<TABLE>
<CAPTION>
3 MONTHS ENDED 3 MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
PRODUCT SALES
Proprietary technology* $ 2,024,138 $ 468,121
Private label manufacturing 774,873 471,881
Fermentation 359,214 187,597
COBACTIN(R) 280,953 333,732
------------- -------------
Total product sales $ 3,439,178 $ 1,461,331
Royalty revenue 21,344 171,168
------------- -------------
Total net revenues $ 3,460,522 $ 1,632,499
</TABLE>
- ------------
*CDT(TM), MDT(TM), LIVE-BAC(R), D-Glucarate(TM)
Gross Profit: Gross Profit is calculated as net revenues (product sales
plus royalties) minus cost of revenues which includes such things as materials,
manufacturing costs, overhead, and quality control/quality assurance costs.
Gross profit increased 52% or $333,088 to $978,459 for the three months ended
September 30, 1999 from $645,371 for the three months ended September 30, 1998.
The gross profit from product sales, not including royalties, increased 102% or
$482,911 to $957,115 from $474,204 for the comparable period in 1998. The gross
profit from product sales in the first nine months of 1999 continued to be
negatively impacted by scale-up costs associated with first production of
CDT(TM) Controlled Delivery Technology products which are not representative of
on-going production expenses. Furthermore, as a result of changes in product
sales mix and other factors, the Company experiences fluctuations in gross
profit and operations margins on a quarter-to-quarter basis.
Selling and Marketing Expenses: Selling and marketing expenses consist
primarily of cost of sales presentations, advertising and promotion,
commissions, travel related expenses and payroll. Selling and marketing expenses
decreased 14% or $35,223 to $207,789 for the three months ended September 30,
1999 from $243,012 for the three months ended September 30, 1998. The decrease
results from the Product and Manufacturing Marketing Agreement with Biotal, Inc.
effective September 1, 1999. Under this Agreement, sales and marketing expenses
related to Cobactin microbial feed additive sales to feedlots are paid by
Biotal, Inc.
Research and Development Expenses: Research and development expenses
decreased 11% or $6,749 to $56,143 for the three months ended September 30, 1999
from $62,892 for the three months ended September 30, 1998. The decrease results
from lower outside research costs associated with Calcium D-glucarate. Research
and development expenses are expected to average approximately 2-4% of net
revenues for the remainder of 1999.
General and Administrative Expenses: General and administrative expenses
consist primarily of personnel costs related to general management functions,
finance, accounting, depreciation and amortization, and professional fees
related to legal, audit and tax. General and administrative expenses increased
28% or $88,851 to $405,937 for the three months ended September 30, 1999 from
$317,086 for the three months ended September 30, 1998. The increase is
primarily due to salaries, professional fees, insurance and other expenses that
support the Company's growth.
7
<PAGE> 10
Interest Expense: Interest expense increased 148% or $46,365 to $77,718
for the three months ended September 30, 1999 from $31,353 for the three months
ended September 30, 1998. The increase in interest expense is due to the
manufacturing equipment leases for the Colorado private label manufacturing
facility. As a result, interest expense will remain at an increased level during
1999.
Net Earnings: The Company realized net profit in the three months ended
September 30, 1999 of $244,900 compared to a net loss of $11,544 for the three
months ended September 30, 1998. The change in net earnings is attributable to
the increase in proprietary product and private label manufacturing sales. The
Company does not expect to realize a profit in the fourth quarter due to the
expected decline in sales of CDT sports supplement products (as discussed under
Net Revenues, above), and the impact of planned investment in new production
facilities.
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND NINE MONTHS ENDED SEPTEMBER 30, 1998
Net Revenues: Net revenues include product sales and royalty revenue.
Net revenues increased 66% or $3,093,096 to $7,782,963 for the nine months ended
September 30, 1999 from $4,689,867 for the nine months ended September 30, 1998.
The increase in net revenues resulted from increased sales of proprietary
products and private label manufacturing. Product sales for the nine months
ended September 30, 1999 increased 80% or $3,442,365 to $7,761,065 compared to
product sales of $4,318,700 for the nine months ended September 30, 1998.
SOURCE OF REVENUES
<TABLE>
<CAPTION>
9 MONTHS ENDED 9 MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
PRODUCT SALES
Proprietary technology* $ 3,352,085 $ 1,590,954
Private label manufacturing 2,462,074 1,181,977
Fermentation 969,815 571,213
COBACTIN(R) 977,091 974,556
------------- -------------
Total product sales $ 7,761,065 $ 4,318,700
Royalty revenue 21,898 371,167
------------- -------------
Total net revenues $ 7,782,963 $ 4,689,867
</TABLE>
- ------------
*CDT(TM), MDT(TM), LIVE-BAC(R), D-Glucarate(TM)
Gross Profit: Gross profit increased 20% or $370,481 to $2,259,669 for
the nine months ended September 30, 1999 from $1,889,188 for the nine months
ended September 30, 1998. The net revenues for 1998 used in calculating gross
profit included $371,167 of royalties that had no cost allocation while 1999 net
revenues resulted from product sales with cost allocations and negligible
royalties. Gross profit from product sales, not including royalties, increased
47% or $719,750 to $2,237,771 compared to $1,518,021 for 1998. Gross profit from
product sales for the nine months ended September 30, 1999 were negatively
impacted by the one time costs associated with the scale-up of new products in
the quarter ended March 30, 1999.
8
<PAGE> 11
Selling and Marketing Expenses: Selling and marketing expenses consist
primarily of costs of sales presentations, advertising and promotion, and
related payroll expenses and commissions. Selling and marketing expenses
increased 4% or $21,557 to $630,031 for the nine months ended September 30, 1999
from $608,474 for the nine months ended September 30, 1998. This modest increase
is not reflective of increased health supplement marketing and sales activities
during the quarter ended September 30, 1999. These expenses were offset by
reduced marketing and sales expenses associated with the sales of Cobactin
microbial feed additive by Biotal, Inc.
Research and Development Expenses: Research and development expenses
increased 56% or $80,707 to $224,035 for the nine months ended September 30,
1999 from $143,328 for the nine months ended September 30, 1998 due to the
further development of the Company's licensed technologies. Research and
development expenses are expected to average approximately 2-4% of net revenues
for the remainder of 1999.
General and Administrative Expenses: General and administrative expenses
consist primarily of personnel costs related to general management functions,
finance, accounting and information systems, professional fees related to legal,
audit and tax matters. General and administrative expenses increased 32% or
$299,886 to $1,233,868 for the nine months ended September 30, 1999 from
$933,982 for the nine months ended September 30, 1998. This increase was
primarily attributable to building the infrastructure to support and manage the
Company's growth.
Interest Expense: Interest expense increased 67% or $73,649 to $183,333
for the nine months ended September 30, 1999 from $109,684 for the nine months
ended September 30, 1998. The increase in interest expense is a result of new
manufacturing equipment leases for the Colorado private label manufacturing
facility.
Net Earnings (Loss): The Company experienced a loss of $33,591 for the
nine months ended September 30, 1999 compared to net earnings of $94,148 for the
nine months ended September 30, 1998. The net loss for the nine months ended
September 30, 1999 continues to reflect the net loss of $322,659 for the three
months ended March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
On June 10, 1999, the Company received a $400,000 increase in its
conventional bank line of credit with a maturity date of April 30, 2000. To date
the Company has financed its operations and capital requirements primarily
through borrowing, raising equity capital, and operations. As of September 30,
1999, the Company had working capital of $786,191 as compared to working capital
of $724,657 at September 30, 1998. The Company anticipates that its working
capital needs for the remainder of the year will be met from operations and
available borrowing capacity.
One of the Company's business strategies is to pursue acquisition of
proprietary technologies that complement its existing products, expand its
distribution channels or are compatible with its business philosophy and
strategic goals. The Company regularly evaluates the potential technologies and
may hold discussions regarding such potential acquisitions of technologies. As a
general rule, the Company will publicly announce such acquisitions of
technologies only after a definitive agreement has been signed. Future
acquisitions of technologies and development of new products, if any, could be
financed by current cash on hand, bank borrowings, public offerings or private
placements of equity or debt securities, or a combination of the foregoing.
There can be no assurance that such additional financing will be available on
terms acceptable to the Company or at all. The failure to raise the funds
necessary to finance its future cash requirements or consummate future
acquisitions could adversely affect the Company's ability to pursue its strategy
and could negatively affect its operations in future periods.
9
<PAGE> 12
YEAR 2000
The Company has established a Year 2000 task force to assess and
remediate the impact of the Year 2000 on its internal computer systems,
products, customer base, service suppliers, financial institutions, original
equipment manufacturers and third party payees to identify the systems that
could be affected by the Year 2000 issue. The Year 2000 issues facing the
Company that may have a material impact on its ability to continue its business
practices as usual through the change of the century include: internal business
systems, internet and intranet service, telecommunications, power and the
compliance and readiness of the Company's third party suppliers, vendors and
customers.
To date, the Company is not aware of any information which indicates
that the magnitude of potential Year 2000 problems is material. The Company has
replaced obsolete systems and updated the hardware, applications and data. The
decision by the Company to acquire new manufacturing equipment, computers and
accounting hardware and software, and the timing thereof, arose in the ordinary
course of the growth of the Company, and is not considered a cost associated
with the Year 2000 issue. The Company has performed acceptance testing to
determine that the updated applications are ready for Year 2000. To date, the
Company has experienced incremental costs associated with Year 2000 compliance.
The Company believes it will be able to correct any Year 2000 issues that may
arise without incurring material additional expense.
In addition to its own compliance efforts, the Company has conducted an
assessment of the third parties with which it has material relationships to
determine if they are Year 2000 compliant. The Company has contacted its key
vendors and suppliers by the distribution of questionnaires. A majority of the
vendors and suppliers have responded to the questionnaire with assurance that
they will be Year 2000 compliant. The Company has identified alternative vendors
and suppliers of raw materials.
Prior to the start of the Company's Year 2000 project, a new accounting
package was implemented to provide for the financial needs of the Company. This
software has been warranted by the vendor to be Year 2000 compliant. The Company
has also replaced its phone and voicemail systems with new, Year 2000 compliant
systems to better provide for expanding communication needs.
Despite the Company's efforts to date, a material Year 2000 problem
could result in an interruption in, or a failure of, certain normal business
activities or operations. If such failures occur, the Company's results of
operations, liquidity, and financial condition could be materially and adversely
affected and the Company may be required to incur unanticipated expenses to
remedy and problems not addressed by the Company's compliance efforts.
Additionally, if any of the Company's material suppliers or vendors are not
fully Year 2000 compliant, it is possible that a system failure or
miscalculations causing disruptions in the Company's operations or potential
problems with its products and services could result.
10
<PAGE> 13
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT NO. DESCRIPTION
11.1 Computation of Earnings (Loss) Per Share
27 Financial Data Schedule for the Quarter Ended
September 30, 1999
(b) Reports on Form 8-K
None.
11
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
NUTRACEUTIX, INC.
Date: By: /s/ WILLIAM D. ST.JOHN
----------------- -------------------------------
WILLIAM D. ST. JOHN
Chief Executive Officer, President,
Chairman of the Board
(Principal Executive Officer)
Date: By: /s/ STEVEN H. MOGER
----------------- -------------------------------
STEVEN H. MOGER
Vice President, Operations
(Principal Financial Officer)
12
<PAGE> 1
EXHIBIT 11.1
COMPUTATION OF EARNINGS (LOSS) PER SHARE
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------------------------- -------------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
PRIMARY AND FULLY DILUTED:
Average shares outstanding 17,489,812 16,610,798 17,299,794 15,767,220
Effect of dilutive stock options 2,105,832 -- -- 2,057,265
Effect of shares over market (1,262,066) -- -- (472,500)
------------ ------------ ------------ ------------
Total 18,333,578 16,610,798 17,299,794 17,351,985
============ ============ ============ ============
Net earnings (loss) $ 244,900 $ (11,544) $ (33,591) $ 94,148
============ ============ ============ ============
Primary net earnings (loss) per
share $ 0.014 $ (0.001) $ (0.002) $ 0.005
============ ============ ============ ============
Fully Diluted net earnings
per share $ 0.013 $ 0.005
============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEETS AND STATEMENTS OF OPERATIONS FOUND ON THE FORM 10-QSB FOR THE NINE
MONTHS PERIOD ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 163,213
<SECURITIES> 0
<RECEIVABLES> 1,527,357
<ALLOWANCES> 0
<INVENTORY> 2,364,071
<CURRENT-ASSETS> 4,201,313
<PP&E> 2,680,812
<DEPRECIATION> 1,164,664
<TOTAL-ASSETS> 6,543,772
<CURRENT-LIABILITIES> 3,415,122
<BONDS> 0
0
0
<COMMON> 17,489
<OTHER-SE> 2,330,124
<TOTAL-LIABILITY-AND-EQUITY> 6,543,772
<SALES> 7,782,963
<TOTAL-REVENUES> 7,782,963
<CGS> 5,523,294
<TOTAL-COSTS> 2,087,934
<OTHER-EXPENSES> 21,993
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 183,333
<INCOME-PRETAX> (33,591)
<INCOME-TAX> 0
<INCOME-CONTINUING> (33,591)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (33,591)
<EPS-BASIC> (.002)
<EPS-DILUTED> (.002)
</TABLE>
