<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 JUNE 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 August 12, 1999:
17,489,812
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE> 2
NUTRACEUTIX, INC.
FORM 10-QSB
Table of Contents
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements 1
Balance Sheets at June 30, 1999 (unaudited) and December 31, 1998 1
Statements of Operations for the six month period ended June 30,
1999 and June 30, 1998 (unaudited) 2
Statements of Cash flows for the six month period ended June 30,
1999 and June 30, 1998 (unaudited) 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition or
Plan of Operation 5
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
i
<PAGE> 3
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NUTRACEUTIX, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 192,973 $ 93,440
Accounts receivable - net 1,078,172 737,916
Inventories 2,137,103 824,293
Prepaid expenses 191,434 201,188
------------ ------------
Total current assets 3,599,682 1,856,837
EQUIPMENT AND FURNITURE - net 1,333,408 1,327,257
OTHER ASSETS - net 847,193 935,005
------------ ------------
$ 5,780,283 $ 4,119,099
============ ============
LIABILITIES
CURRENT LIABILITIES
Line of credit $ 884,500 $ 411,500
Current maturities of long-term obligations 229,363 194,390
Current maturities of capital lease obligations 145,992 135,794
Accounts payable 1,680,395 281,719
Advance royalties and customer deposits 45,937 11,518
Accrued liabilities 91,559 97,259
------------ ------------
Total current liabilities 3,077,746 1,132,180
LONG-TERM OBLIGATIONS, less current maturities 421,628 465,892
CAPITAL LEASE OBLIGATIONS, less current maturities 225,071 249,198
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 (93,750) --
Accumulated deficit (9,593,655) (9,315,164)
------------ ------------
Total stockholders equity 2,055,838 2,271,829
------------ ------------
$ 5,780,283 $ 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 6 Months Ended
June 30, June 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net revenues $ 2,732,508 $ 1,639,512 $ 4,322,441 $ 3,057,368
Cost of revenues 1,946,588 970,297 3,041,231 1,813,551
----------- ----------- ----------- -----------
Gross profit 785,920 669,215 1,281,210 1,243,817
Operating Expenses
Selling and marketing 217,434 212,271 422,242 365,462
Research and development 82,024 40,892 167,892 80,436
General and administrative 402,481 374,018 827,931 616,896
----------- ----------- ----------- -----------
Operating profit 83,981 42,034 (136,855) 181,023
Other income (expense)
Interest expense (54,945) (36,854) (105,615) (78,331)
Other 15,132 18 (36,021) 3,000
----------- ----------- ----------- -----------
(39,813) (36,836) (141,636) (75,331)
----------- ----------- ----------- -----------
NET EARNINGS (LOSS) $ 44,168 $ 5,198 $ (278,491) $ 105,692
=========== =========== =========== ===========
Net earnings per share $ 0.003 $ 0.00 $ (0.016) $ 0.007
=========== =========== =========== ===========
Net earnings per share assuming dilution $ 0.002 $ 0.00 $ 0.006
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE> 5
NUTRACEUTIX, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
June 30,
1999 1998
----------- -----------
<S> <C> <C>
Increase (Decrease) in Cash Cash flows from operating activities:
Net earnings (loss) $ (278,491) $ 105,692
Adjustments to reconcile net earnings (loss) to net
cash used in operating activities
Depreciation and amortization 184,072 146,302
Write-off of start-up costs 50,266 --
Issuance of common stock for services -- 33,137
Changes in assets and liabilities
Accounts receivable (340,256) (3,328)
Inventories (1,312,810) (232,647)
Prepaid expenses 9,754 (56,523)
Accounts payable 1,398,676 70,738
Accrued liabilities and advance royalties
and customer deposits 28,719 (114,377)
----------- -----------
Net cash used in operating activities (260,070) (51,006)
----------- -----------
Cash flows from investing activities: (66,348) (197,190)
Purchase of equipment and furniture (35,649) --
----------- -----------
Patent expenditures
Net cash used in investing activities (101,997) (197,190)
----------- -----------
Cash flows from financing activities:
Payments on long-term obligations and
capital lease obligations (163,600) (149,233)
Proceeds from long-term obligations 89,700 143,138
Net borrowings on line of credit 473,000 110,000
Net proceeds from issuance of common stock 62,500 175,250
----------- -----------
Net cash provided by financing activities 461,600 279,155
----------- -----------
Net increase in cash 99,533 30,959
----------- -----------
Cash at beginning of period 93,440 132,978
----------- -----------
Cash at end of period $ 192,973 $ 163,937
=========== ===========
Cash paid during the year for interest $ 105,615 $ 78,331
=========== ===========
Noncash investing and financing activities:
Purchase of equipment under capital lease obligations $ 50,680 $ 195,517
=========== ===========
Issuance of common stock for subscription receivable $ 156,250 $ --
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 6
NUTRACEUTIX, INC.
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>
June 30, December 31,
1999 1998
---------- ----------
(unaudited)
<S> <C> <C>
Raw materials $1,465,356 $ 386,625
Work in progress 608,786 374,584
Finished goods 62,961 62,084
---------- ----------
$2,137,103 $ 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 15,685,267 for the three
months ended June 30, 1999 and 1998, respectively, and 17,201,618 and 15,630,814
for the six months ended June 30, 1999 and 1998, respectively. The weighted
average shares for computing dilution were 18,152,012 and 17,250,032 for the
three months ended June 30, 1999 and 1998, respectively, and 17,195,579 for the
six months ended June 30, 1998.
4
<PAGE> 7
Options to purchase 1,291,233 and 472,500 shares of common stock at or above
$.44 and $.93 a share for the three and six months ended June 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 six months ended June 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 June 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.
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 contain 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 the 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.
5
<PAGE> 8
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 JUNE 30, 1999 AND THREE MONTHS ENDED JUNE 30, 1998
Net Revenues: Net revenues include product sales and royalty revenue.
Net revenues increased 67% or $1,092,996 to $2,732,508 for the three months
ended June 30, 1999 from net revenues of $1,639,512 for the three months ended
June 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. Comparisons of the quarter ended June 30, 1999 to quarter ended June 30,
1998 should take into account that net revenues for the three months ended June
30, 1999 reflect negligible royalties as compared to $100,000 in royalties for
the comparable three months ended June 30, 1998 due to termination of the
guaranteed royalties on the exclusive license of Calcium D-GLUCARATE(TM) to
Weider Nutrition. Product sales for the three months ended June 30, 1999
increased 78% or $1,194,607 to $2,734,119 compared to total product sales of
$1,539,512 for the comparable period in 1998.
SOURCE OF NET REVENUES
<TABLE>
<CAPTION>
3 MONTHS ENDED 3 MONTHS ENDED
JUNE 30, 1999 JUNE 30, 1998
-------------- --------------
<S> <C> <C>
PRODUCT SALES
Proprietary technology* $ 972,878 $ 585,608
Private label manufacturing 1,027,798 402,571
Fermentation 350,252 193,320
COBACTIN(R) 383,191 358,013
----------- -----------
Total product sales $ 2,734,119 $ 1,539,512
Royalty revenue (1,611) 100,000
----------- -----------
Total net revenues $ 2,732,508 $ 1,639,512
</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 17% or $116,705 to $785,920 for the three months ended
June 30, 1999 from $669,215 for the three months ended June 30, 1998. Royalties
for the three months ended June 30, 1999 were ($1,611)
6
<PAGE> 9
compared to $100,000 for comparable period in 1998. The gross profit from
product sales, not including royalties, increased 38% or $218,316 to $787,531
from $569,215 for the comparable period in 1998. The gross profit from product
sales in the first six 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, as discussed above, 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
increased 2% or $5,163 to $217,434 for the three months ended June 30, 1999 from
$212,271 for the three months ended June 30, 1998. The 1999 expenses reflect the
carry forward of increases resulting from the hiring of key sales and marketing
personnel in the third quarter of 1998.
Research and Development Expenses: Research and development expenses
increased 101% or $41,132 to $82,024 for the three months ended June 30, 1999
from $40,892 for the three months ended June 30, 1998 due to the further
development of the Company's licensed technologies. Research and development
expenses are expected to average approximately 3-5% 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 8% or $28,463 to $402,481 for the three months ended June 30, 1999
from $374,018 for the three months ended June 30, 1998. The increase is
primarily due to professional fees that support the Company's growth.
Interest Expense: Interest expense increased 49% or $18,091 to $54,945
for the three months ended June 30, 1999 from $36,854 for the three months ended
June 30, 1998. The increase in interest expense is a result of new 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 experienced an increase in profit in the
three months ended June 30, 1999 of $38,970 to $44,168 compared to net earnings
of $5,198 for the three months ended June 30, 1998. Factors affecting net
earnings are:
7
<PAGE> 10
1. Scale-up expenses associated with both controlled delivery
technology products and non-proprietary product for MET-Rx,
USA.
2. Increased operation expenses associated with elevated research
and development, and increases in manufacturing capabilities.
3. Decreased royalties associated with glucarate licensing.
4. Changes in product sales mix which vary as to the cost of
revenues.
SIX MONTHS ENDED JUNE 30, 1999 AND SIX MONTHS ENDED JUNE 30, 1998
Net Revenues: Net revenues include product sales and royalty revenue.
Net revenues increased 41% or $1,265,073 to $4,322,441 for the six months ended
June 30, 1999 from $3,057,368 for the six months ended June 30, 1998. The
increase in net revenues resulted primarily from a combination of new CDT and
LIVEBAC product introductions and the associated increase in private label
packaging business. These 1999 net revenues reflect negligible royalties whereas
the comparable period for 1998 included $200,000 in royalties. Product sales for
the six months ended June 30, 1999 increased 51% or $1,464,518 to $4,321,887
compared to product sales of $2,857,368 for the six months ended June 30, 1998.
SOURCE OF REVENUES
<TABLE>
<CAPTION>
6 MONTHS ENDED 6 MONTHS ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
PRODUCT SALES
Proprietary products* $1,327,947 $1,122,833
Private label manufacturing 1,687,201 710,096
Fermentation 610,601 383,616
COBACTIN(R) 696,138 640,823
---------- ----------
Total product sales: $4,321,887 $2,857,368
Royalty revenue 554 200,000
---------- ----------
Total net revenues $4,322,441 $3,057,368
</TABLE>
*CDT(TM) , MDT(TM) , LIVE-BAC(R), D-GLucarate(TM)
Gross Profit: Gross profit increased 3% or $37,393 to $1,281,210 for
the six months ended June 30, 1999 from $1,243,817 for the six months ended June
30, 1998. The net revenues for 1998 used to calculate gross profit comparison
included $200,000 of royalties that had no cost allocation while 1999 net
revenues resulted from actual product sales with cost allocations and negligible
royalties. Gross profit from product sales, not including royalties,
8
<PAGE> 11
increased 23% or $236,838 to $1,280,655 compared to $1,043,817 for 1998. Gross
profit from product sales for the six months ended June 30, 1999 were negatively
impacted by costs associated with the scale-up of new products.
Selling and Marketing Expenses: Selling and marketing expenses consist
primarily of costs of sales presentation, advertising and promotion, and related
payroll expenses and commissions. Selling and marketing expenses increased 16%
or $56,780 to $422,242 for the six months ended June 30, 1999 from $365,462 for
the six months ended June 30, 1998. The increase primarily reflects the hiring
of key sales and marketing personnel in the third quarter of 1998 and their
increased activities.
General and Administrative Expenses: General and administrative
expenses consist primarily of personnel costs related to general management
functions, finance, accounting and information systems, research and development
expenses, as well as professional fees related to legal, audit and tax matters
and depreciation and amortization. General and administrative expenses increased
34% or $211,035 to $827,931 for the six months ended June 30, 1999 from $616,896
for the six months ended June 30, 1998. This increase was primarily attributable
to building the infrastructure to support and manage the Company's growth.
Interest Expense: Interest expense increased 35% or $27,284 to $105,615
for the six months ended June 30, 1999 from $78,331 for the six months ended
June 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 $278,491 for the
six months ended June 30, 1999. This reflects a loss of $322,659 for the three
months ended March 31, 1999. The factors largely attributed to the loss are as
follows:
1. Write off of capitalized start-up costs of approximately
$50,300.
2. Decreased royalties associated with glucarate licensing.
3. Increased operations expenses of approximately $200,000
associated with elevated expenses for marketing, SEC
reporting, and expansion of manufacturing capabilities.
4. Designing and developing controlled delivery technology
products for MET-Rx, USA. These products began shipment in
April 1999.
9
<PAGE> 12
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 June 30, 1999,
the Company had working capital of $521,936 as compared to working capital of
$261,408 at June 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.
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
10
<PAGE> 13
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.
Based on information compiled to date, the Company expects to substantially
complete its compliance project by the end of September 1999. 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 is conducting 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 is in the process of developing
contingency plans for those vendors and suppliers that will not be fully Year
2000 compliant.
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.
Part of the Company's Year 2000 compliance includes the preparation of
contingency plans. The Company anticipates completion of its contingency plans
by the end of September 1999.
11
<PAGE> 14
PART II: OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the May 25, 1999 Annual Meeting of Stockholders, the following
proposal was voted on by stockholders:
Election of directors.
Arthur S. Pearson and Carl W. Schafer were each elected as a Class 1
director of the Company to a three year term, which expires in the year 2002.
William D. St. John, Herbert L. Lucas and Daniel B. Ward continue as directors
of the Company.
Votes for election of directors.
<TABLE>
<S> <C>
Arthur S. Pearson
For: 10,561,286
Withheld: 432,497
Carl W. Schafer
For: 10,561,418
Withheld: 432,365
</TABLE>
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
June 30, 1999
(b) Reports on Form 8-K
None.
12
<PAGE> 15
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: August 13, 1999. By: /s/ WILLIAM D. ST.JOHN
------------------------------------
WILLIAM D. ST. JOHN
Chief Executive Officer, President,
Chairman of the Board
(Principal Executive Officer)
Date: August 13, 1999. By: /s/ STEVEN H. MOGER
------------------------------------
STEVEN H. MOGER
Vice President, Operations
(Principal Financial Officer)
13
<PAGE> 1
EXHIBIT 11.1
COMPUTATION OF EARNINGS (LOSS) PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30,
------------------------------ ------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
PRIMARY AND FULLY DILUTED:
Average shares outstanding 17,489,812 15,685,267 17,201,618 15,630,814
Effect of dilutive stock options 1,953,433 2,037,265 -- 2,037,265
Effect of shares over market (1,291,233) (472,500) -- (472,500)
------------ ------------ ------------ ------------
Total 18,152,012 17,250,032 17,201,618 17,195,579
============ ============ ============ ============
Net earnings (loss) $ 44,168 $ 5,198 $ (278,491) $ 105,692
============ ============ ============ ============
Primary net earnings (loss) per share $ 0.003 $ 0.000 $ (0.016) $ 0.007
============ ============ ============ ============
Fully diluted earnings per share $ 0.002 $ 0.000 $ 0.006
============ ============ ============
</TABLE>
14
<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 SIX MONTH
PERIOD ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 192,973
<SECURITIES> 0
<RECEIVABLES> 1,132,351
<ALLOWANCES> (54,179)
<INVENTORY> 2,137,103
<CURRENT-ASSETS> 3,599,682
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0
0
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</TABLE>
