SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter Ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-23031
DYNAMIC HEALTH PRODUCTS, INC.
(FORMERLY KNOWN AS NU-WAVE HEALTH PRODUCTS, INC.)
(Exact name of small business issuer as specified in its charter)
STATE OF FLORIDA 34-1711778
---------------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6950 BRYAN DAIRY ROAD, LARGO, FLORIDA 33777
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (727) 544-8866
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
The number of shares outstanding of the Issuer's common stock at $.01 par value
as of August 12, 1998 was 2,774,515 (exclusive of Treasury Shares).
<PAGE>
NU-WAVE HEALTH PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 AND 1997 (UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, 1998 JUNE 30, 1997
------------- ------------
<S> <C> <C>
A S S E T S
Current assets:
Cash and cash equivalents $ 324,940 $ 200,313
Accounts receivable, net 1,416,295 225,083
Inventory, net of allowance 1,404,873 254,615
Prepaids and other current assets 28,586 13,101
----------- -----------
Total current assets 3,174,694 693,109
Property, plant and equipment, at cost, net 1,691,546 117,804
Deposits 38,238 14,569
Investment in LLC 5,000 --
Intangible assets, net 3,045,959 10,916
----------- -----------
TOTAL ASSETS $ 7,955,437 $ 836,398
=========== ===========
L I A B I L I T I E S A N D S H A R E H O L D E R S ' E Q U I T Y
Current liabilities:
Accounts payable and accrued expenses $ 1,960,865 $ 351,396
Other payables 73,546 5,648
Interest payable -- 4,383
Capital lease obligations -- 8,708
Notes payable 83,391 3,211
Credit line payable 630,040 190,000
Related party notes payable 332,700 223,406
Unearned revenue 181,822 18,569
Current portion of long-term liabilities 547,798 --
----------- -----------
Total current liabilities 3,810,162 805,321
----------- -----------
Long-term liabilities:
Interest payable 25,817 --
Capital lease obligations 439,475 --
Notes payable 275,912 --
Mortgages payable 1,163,615 --
Minority interest -- 15,463
Current portion of long-term liabilities (547,798) --
----------- -----------
Total long-term liabilities 1,357,021 15,463
----------- -----------
TOTAL LIABILITIES 5,167,183 820,784
----------- -----------
Shareholders' equity:
Common stock, at par value 27,745 19,162
Series A Convertible Preferred stock, at face value 1,550,000 --
Additional paid-in capital 1,836,808 808,052
Accumulated deficit (859,783) (853,698)
Net income 233,484 42,098
----------- -----------
NET SHAREHOLDERS' EQUITY 2,788,254 15,614
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 7,955,437 $ 836,398
=========== ===========
</TABLE>
See notes to consolidated financial statements
-2-
<PAGE>
NU-WAVE HEALTH PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997 (UNAUDITED)
THREE MONTHS THREE MONTHS
ENDED ENDED
JUNE 30, 1998 JUNE 30, 1997
------------- -------------
Revenues:
Distributor sales $ 5,830,575 $ 1,551,184
Manufacturing 914,544 393,448
----------- -----------
TOTAL REVENUES 6,745,119 1,944,632
----------- -----------
Cost of goods sold:
Distributor sales $ 5,585,936 $ 1,470,920
Manufacturing 596,724 225,920
----------- -----------
TOTAL OF COST OF GOODS SOLD 6,182,660 1,696,840
----------- -----------
GROSS PROFIT 562,459 247,792
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 308,051 213,032
----------- -----------
OPERATING INCOME BEFORE
OTHER INCOME AND EXPENSE 254,408 34,760
Other income (expense):
Interest income 2,360 --
Other income and expenses, net 6,435 13,028
Interest expense (29,719) (5,690)
----------- -----------
TOTAL OTHER INCOME (EXPENSE) (20,924) 7,338
----------- -----------
NET INCOME 233,484 42,098
Accrued preferred share dividends -- --
----------- -----------
NET INCOME (LOSS ) AVAILABLE
TO COMMON SHAREHOLDERS $ 233,484 $ 42,098
=========== ===========
Basic income per share $ .013 $ .10
=========== ===========
Basic weighted number of
common shares outstanding 1,833,674 416,255
=========== ===========
Diluted income per share $ 0.12 $ 0.10
=========== ===========
Diluted weighted number of
common shares outstanding 1,889,474 416,255
=========== ===========
See notes to consolidated financial statements
-3-
<PAGE>
NU-WAVE HEALTH PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, 1998 JUNE 30, 1997
------------- -------------
<S> <C> <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net income $ 233,484 $ 42,098
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 22,498 5,718
Changes in operating assets and liabilities:
Accounts receivable (357,137) (65,704)
Inventory (87,843) (107,584)
Prepaid expenses (8,094) 2,327
Accounts payable and accrued expenses (155,161) (5,910)
Unearned revenue (2,955) (13,620)
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (355,208) (142,675)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Deposits 1,891 (2,282)
Purchases of property and equipment (127,328) (12,250)
Purchase of intangible assets (1,225) --
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (126,662) (14,532)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 537,546 106,708
Proceeds from shareholder loan -- 33,406
Distributions to stockholders (108,503) --
Proceeds from issuance of common stock 50,000 --
Principal payments of debt and capital lease obligations (128,752) (2,422)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES 350,291 137,692
--------- ---------
NET INCREASE (DECREASE) IN CASH (131,579) (19,515)
CASH AT BEGINNING OF PERIOD 456,519 219,828
--------- ---------
CASH AT END OF PERIOD $ 324,940 $ 200,313
========= =========
</TABLE>
See notes to consolidated financial statements
-4-
<PAGE>
NU-WAVE HEALTH PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997 (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
JUNE 30, 1998 JUNE 30, 1997
-------------- -------------
<S> <C> <C>
Supplemental cash flow information:
Cash paid during the period for interest $ 17,386 $ 5,690
Supplemental schedule of non-cash financing activities:
Capital lease obligations incurred for purchase of
property and equipment $ 56,147 $ 9,007
Conversion of related party notes payable and
accrued interest to common stock $ 81,331 $ --
Acquisition of Energy Factors, Inc. through
issuance of 310,000 shares of preferred stock $ 1,550,000 $ --
Acquisition of Becan Distributors, Inc. through
issuance of 1,500,000 new shares of common stock $ 2,250,000 $ --
</TABLE>
See notes to consolidated financial statements
-5-
<PAGE>
Nu-Wave Health Products, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1998
NOTE A-BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instruction to Form 10-QSB and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three month
period ended June 30, 1998 and 1997 are not necessarily indicative of the
results that may be expected for the year ending March 31, 1999. For further
information, refer to the consolidated financial statements and footnotes
included in the Company's Form 10-KSB/A for the year ended March 31, 1998.
NOTE B-ACQUISITIONS AND DISPOSITIONS
On June 15, 1998, the Company acquired Energy Factors, Inc. (Energy
Factors), a wholly-owned subsidiary of U.S. Diversified Technologies, Inc. At
the closing, the Company acquired legal title to the net assets of Energy
Factors. The acquisition was accounted for as a purchase. U.S. Diversified
Technologies, Inc. received in exchange for its capital stock in Energy Factors,
310,000 shares of Series A Convertible Preferred Stock of the Company
representing a fair market value of approximately $1,550,000.
The aggregate cost of this acquisition was as follows:
Assumption of liabilities $2,874,000
Issuance of preferred stock 1,550,000
----------
$4,424,000
==========
The aggregate purchase price was allocated as follows:
Accounts receivable $ 26,000
Inventory 575,000
Property, plant and equipment 1,925,000
Other assets 75,000
Goodwill 1,823,000
----------
$4,424,000
==========
-6-
<PAGE>
Effective June 26, 1998, the Company acquired all of the issued and
outstanding capital stock of Becan Distributors, Inc. (Becan), in exchange for
1,500,000 new shares of common stock of the Company representing a fair market
value of approximately $2,250,000. The merger was accounted for as a combination
of entities under common control and treated as if a "pooling of interests". The
merger resulted in goodwill of approximately $700,000 due to the acquisition of
the minority interest. The financial statements have been retroactively adjusted
to reflect the results of Becan Distributors, Inc. for all periods presented.
The Series A Convertible Preferred Stock and the Common Stock were issued
upon the filing by the Company on August 10, 1998 of Articles of Amendment to
its Articles of Incorporation which effected a one-for-three reverse stock
split.
NOTE C-PRINCIPLES OF CONSOLIDATION
The accompanying condensed consolidated financial statements include the
accounts of Nu-Wave Health Products, Inc. and its subsidiaries, Energy Factors,
Inc. and Becan Distributors, Inc. (collectively the "Company"). All intercompany
balances and transactions have been eliminated.
NOTE D-STOCKHOLDERS' EQUITY
The Board of Directors of the Company has authorized a one-for-three
reverse stock split of the Common Stock of the Company. The accompanying
unaudited condensed consolidated financial statements have been retroactively
adjusted, as of June 30, 1998 and 1997, to reflect the one-for-three reverse
stock split, the issuance of 310,000 shares of Series A Convertible Preferred
Stock and the issuance of the 1,500,000 shares of Common Stock following the
one-for-three reverse stock split. In conjunction with the reverse stock split,
the effect of the elimination of fractional shares (which will be cashed out at
$1.50 per new share) is not reflected in the accompanying condensed consolidated
financial statements.
The Company has adopted Financial Accounting Standards Board ("FASB")
Statement of Financial Accounting Standards No. 128, "Earnings Per Share". Basic
earnings per common share is computed by dividing income available to common
stockholders by the weighted-average number of common shares outstanding during
the period. Diluted earnings per share gives effect to convertible preferred
shares which are considered to be dilutive common stock equivalents. Earnings
per share was retroatively restated, as of June 30, 1997, to reflect FASB No.
128.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
Three Months ended June 30, 1998 and June 30, 1997
Sales are recognized at the time the product is shipped. Net sales are
net of discounts, allowances, and returns and credits. Distributors sales
increased 276%, or $4,279,391, to $5,830,575 for the three months ended June 30,
1998 from $1,551,184 for the three months ended June 30, 1997. Of the $4,279,391
increase, $4,269,772 was attributable to net sales of Becan Distributors, Inc.,
acquired June 26, 1998 (accounted for as a combination of entities under common
control). The increase was primarily attributable to Becan's increased sales
with existing customers and expansion of the customer base resulting from
increased marketing efforts, with the remainder due to increased marketing
efforts of Diabetes Supplies. Manufacturing sales increased 132%, or $521,096,
to $914,544 for the three months ended June 30, 1998 from $393,448 for the three
months ended June 30, 1997. Of the $521,096 increase, $86,023 was attributable
to net sales of Energy Factors, Inc., acquired June 15, 1998 (accounted for as a
purchase), with the remainder due to increased volume of the Company's private
label sales resulting from continued expansion of marketing efforts and the
introduction of new products.
Gross profit from distributor sales increased 204%, or $164,375, to
$244,639 for the three months ended June 30, 1998 from $80,264 for the three
months ended June 30, 1997. Gross profit from manufacturing increased 90%, or
$150,292, to $317,820 for the three months ended June 30, 1998 from $167,528 in
the corresponding period. Gross margin from distributor sales decreased to
4.20% for the three months ended June 30, 1998 from 5.17% for the three months
ended June 30, 1997. The decline was primarily attributable to the change in the
mix of sales with the acquisition of Becan Distributors, Inc., which yields a
lower gross margin. Gross margin from manufacturing decreased to 34.75% for the
three months ended June 30, 1998 from 42.58% in the corresponding period. The
decrease was primarily attributable to the change in the mix of sales with an
expanded customer base.
Selling, general and administrative expenses consist primarily of
advertising and promotional expenses, personnel costs related to general
management functions, finance, accounting and information systems, payroll
expenses and sales commissions, professional fees related to legal, audit and
tax matters, and depreciation and amortization expense. Selling, general and
administrative expenses increased 1.45%, or $95,019, to $308,051 for the three
months ended June 30, 1998 from $213,032 for the three months ended June 30,
1997. The increase was primarily due to additional advertising, promotional
and payroll expenses to support increased net sales and the Company's growth,
as well as additional amortization of goodwill and depreciation of fixed assets
associated with the Energy Factors acquisition. As a percentage of net sales,
selling, general and administrative expenses decreased to 4.57% for the three
months ended June 30, 1998 from 10.95% for the three months ended June 30,
1997.
Interest expense, net of interest income, increased $21,669 to $27,359
for the three months ended June 30, 1998 from $5,690 for the three months ended
June 30, 1997. The increase was a result of increased borrowings to finance the
purchase of additional machinery and equipment and to make necessary plant
modifications, and for financing of additional working capital needs with the
acquisition of Energy Factors.
-8-
<PAGE>
The Company had no income tax expenses for the three months ended June
30, 1998 and 1997.
Management believes that there was no material effect on operations or
the financial condition of the Company as a result of inflation for the three
months ended June 30, 1998 and 1997. Management also believes that its
business is not seasonal; however, significant promotional activities can have
a direct impact on sales volume in any given quarter.
Although in the opinion of the management of the Company, the above
data reflects positive information concerning the present operations of the
Company, there can be no assurance that the Company's results of operations
will continue to the same extent or in the same manner as reflected above.
LIQUIDITY AND CAPITAL RESOURCES
The Company historically has financed its operations through funds from
operations and loans from within the Company. The Company had working capital
of ($635,468) at June 30, 1998, as compared to ($112,212) in working capital at
June 30, 1997. The decrease was primarily due to an increase in accounts
payable and accrued expenses, and an increase in current portion of long-term
liabilities as a result of the Energy Factors acquisition.
Net cash used in operating activities was ($355,208) for the three
months ended June 30, 1998 and ($142,675) for the three months ended June 30,
1997. The usage of cash is primarily attributable to an increase in accounts
receivable ($357,137), as a result of increased sales by the Company during such
period, and an increase in inventory ($87,843), an increase in prepaid expenses
($8,094), an increase in accounts payable and accrued expenses ($155,161), and
an increase in unearned revenue ($2,955), primarily attributable to the
acquisition of Energy Factors.
Net cash used in investing activities was ($126,662), representing the
purchase of property and equipment, plant modifications, and the acquisition of
other assets, offset by a decrease in deposits $1,891.
Net cash provided by financing activities was $350,291 representing
proceeds from issuance of common stock, proceeds of long-term debt, and capital
lease obligations, and borrowings on lines of credit $537,546, offset by
distributions to Becan shareholders ($108,503), and repayments of debt and
capital lease obligations ($128,752).
On May 29, 1998, notes payable to related parties of $81,331.80,
including principal and unpaid accrued interest were converted to 813,318 old
shares of common stock of the Company.
-9-
<PAGE>
In March and April 1998, the Company received $250,000 from investors
and issued non-negotiable promissory notes with stock warrants attached. The
notes bear interest at 10% per annum, compounded annually. The due date shall
be the earlier of (i) April 30, 1999, or (ii) the closing of a minimum of an
additional $1,000,000 of equity financing, by private placement or other
non-public offering. The note may be prepaid at any time by the Company to
Payee without any penalty or premium. The attached stock warrant entitles the
Payee to purchase common stock of the Company (based on one share for each one
dollar amount of the principal amount reflected in the note) at a purchase price
of $1.50 per new share. The stock warrant shall expire the earlier of, one year
from the closing of an additional $1,000,000 of equity financing, or December
31, 1999.
In May 1998, 100,000 shares of common stock of the Company were sold to
a non-affiliated third party investor at $.50 per old share, for gross proceeds
of $50,000. Proceeds were used for capital expenditures and plant
modifications.
On May 13, 1998, the Company loaned $100,000 to Energy Factors, Inc.
for the purpose of assisting Energy Factors with its working capital needs. The
company has since acquired Energy Factors.
On March 16, 1998, Becan Distributors, Inc. established a bank line of
credit. The principal amount of the note is $700,000. The note bears interest
at 1.0% plus the Prime Rate of the Bank per annum on the unpaid outstanding
principal of each advance payable monthly. The due date is March 1, 1999. The
note or any portion thereof may be prepaid without penalty. This line of credit
is secured by a blanket lien on all business assets of Becan and is also secured
by personal guarantees from the Company's Chairman of the Board, and the
Company's Chief Executive Officer.
In June 1998, the Company established a bank line of credit. The
principal amount of the note is $200,000. The note bears interest at 4.08% per
annum on the unpaid outstanding principal of each advance, payable monthly. The
due date is June 3, 1999. The note or any portion thereof may be prepaid
without penalty. This line of credit is secured by $200,000 cash maintained in
a Money Market account with the bank.
Effective June 15, 1998, the Company acquired legal title to the net
assets of Energy Factors, Inc. in exchange for 310,000 shares of Series A
Convertible Preferred Stock in the Company.
Effective June 26, 1998, the Company acquired all of the issued and
outstanding capital stock of Becan Distributors, Inc. in exchange for 1,500,000
new shares of common stock in the Company.
Management is hopeful liquidity and capital difficulties will be
resolved but provides no assurance. The Company expects to meet its cash
requirements from operations, current cash reserves, and existing financial
arrangements. In addition, the Company has initiated a Private Placement
offering of a maximum of 800,000 shares of Series B 6% Cumulative Convertible
Preferred Stock, par value $.01 per share, for $2.50 per share, but provides no
assurance as to the success of the offering.
The Company also is in the process of negotiating a $2,000,000 line of
credit with Republic Bank to refinance the building and equipment of the
Company, but provides no assurance as to the success of establishing the line
of credit.
-10-
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time the Company is subject to litigation incidental to
its business. Such claims, if successful, could exceed applicable insurance
coverage.
The Company is not currently a party to any material legal
proceedings.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
In May 1998, 100,000 shares of common stock of the Company were sold to
a non-affiliated third party investor at $.50 per old share, for gross proceeds
of $50,000. Proceeds were used for capital expenditures and plant
modifications.
The Company filed Articles of Amendment to Articles of Incorporation
of Nu-Wave Health Products, Inc. on August 10, 1998 to increase its authorized
shares to 20,000,000 shares of common stock, $.01 par value and 2,000,000
shares of preferred stock, $.01 par value and to effectuate a one-for-three
reverse stock split such that each three (3) shares of currently issued and
outstanding common stock shall be converted into one (1) share of common stock,
$.01 par value per share.
ITEM 3. - NOT APPLICABLE.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Nu-Wave Health Products, Inc., held a meeting of its shareholders on July
2, 1998, at the offices of the corporation, 5905-A Hampton Oaks Parkway, Tampa,
FL 33610 for approval of amendment to its Articles Of Incorporation to increase
its authorized shares, to authorize the one-for-three reverse stock split, and
to amend its Articles of Incorporation to change the name of the Company to
Dynamic Health Products, Inc. Present in person and/or by proxy were persons
holding 2,278,553 shares of common stock of the corporation, which represented
59.6% of the issued and outstanding stock. There was therefore a quorum present.
The amendment of Articles Of Incorporation of the Company was unanimously
approved by all of the shareholders present holding 2,278,553 shares of the
common stock of Nu-Wave Health Products, Inc.
Pursuant to Section 607.0704 of the Florida Business Corporation Act,
the Company gave notice to those shareholders who had not consented in writing
to the matters described herein.
Pursuant to Articles of Amendment to Articles of Incorporation of
Nu-Wave Health Products, Inc. filed August 10, 1998, the Articles of
Incorporation were amended to authorize 20,000,000 shares of common stock, $.01
par value and 2,000,000 shares of preferred stock, $.01 par value and to
effectuate a one-for-three reverse stock split, and to change the name of the
Company to Dynamic Health Products, Inc.
ITEM 5. OTHER INFORMATION.
The Company has filed Form 15C211 with NASDAQ and is in the process of
listing its outstanding common stock on Pink Sheets.
-11-
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
The following exhibits are filed with this report:
2.1 Agreement and Plan of Reorganization dated June 12, 1998,
effective June 15, 1998, by and among Nu-Wave Health Products,
Inc., Nu-Wave Acquisition, Inc., Energy Factors, Inc., U.S.
Diversified Technologies, Inc., Paul Santostasi, Chris Starkey,
and Marvin Deutsch.(2)
2.2 Agreement and Plan of Reorganization dated June 26, 1998,
effective June 26, 1998, by and between Nu-Wave Health Products,
Inc., buyer, and Manju Taneja, Mihir K. Taneja, Mandeep K.
Taneja, William LaGamba custodian for Anthony LaGamba, William
LaGamba custodian for Nicholl LaGamba, William LaGamba custodian
for Courtney LaGamba, Michele LaGamba, and Phillip J. Laird and
William LaGamba, each individually a seller, each of which is a
stockholder of Becan Distributors, Inc.(2)
3.1 Articles of Incorporation of Nu-Wave Acquisition, Inc. dated June
11, 1998 and filed June 12, 1998.(2)
3.2 Articles of Amendment to Articles of Incorporation of Dynamic
Health Products, Inc., dated July 22, 1998 and filed July 23,
1998.(2)
3.3 Articles of Amendment to Articles of Incorporation of Nu-Wave
Health Products, Inc., dated August 10, 1998.(2)
10.1 Promissory Note in favor of the Company from Energy Factors, Inc.
dated May 13, 1998.(1)
10.2 Revolving Line of Credit Agreement between Becan Distributors,
Inc. and Mellon Bank dated March 16, 1998.(2)
10.3 Revolving Line of Credit Agreement between the Company and
Republic Bank dated June 3, 1998.(1)
27.1 Financial Data Schedule (for SEC use only).
(1)Incorporated by reference to the Company's Annual Report on
Form 10-KSB for the fiscal year ended March 31, 1998, file number
0-23031, filed in Washington, D.C.
(2)Incorporated by reference to the Company's Quarterly Report on
Form 10-QSB for the quarter ended June 30, 1998, file number
0-23031, filed in Washington, D.C.
(b) REPORTS ON FORM 8-K.
During the three months ended June 30, 1998, the Company filed three
reports on Form 8-K.
-12-
<PAGE>
Form 8-K dated April 1, 1998, with respect to the change of domicile of
or reincorporation of the Company to the State of Florida and the change of
name of the Company from Direct Rx, Inc. to Nu-Wave Health Products, Inc.
Form 8-K dated June 23, 1998, with respect to the June 15, 1998
acquisition of Energy Factors, Inc.
Form 8-K dated July 9, 1998, with respect to the June 26, 1998
acquisition of Becan Distributors, Inc.
-13-
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DYNAMIC HEALTH PRODUCTS, INC.
Date: March 1, 1999 By: /s/ WILLIAM L. LAGAMBA
-------------------------
William L. LaGamba
Chief Executive Officer
Date: March 1, 1999 By: /s/ CANI I. SHUMAN
-------------------------
Cani I. Shuman
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27 Financial Data Schedule (for SEC use only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 324,940
<SECURITIES> 0
<RECEIVABLES> 1,474,795
<ALLOWANCES> (58,500)
<INVENTORY> 1,404,873
<CURRENT-ASSETS> 3,174,694
<PP&E> 1,758,206
<DEPRECIATION> 66,660
<TOTAL-ASSETS> 7,955,437
<CURRENT-LIABILITIES> 3,810,162
<BONDS> 0
1,550,000
0
<COMMON> 27,745
<OTHER-SE> 1,210,509
<TOTAL-LIABILITY-AND-EQUITY> 7,955,437
<SALES> 5,830,575
<TOTAL-REVENUES> 6,745,119
<CGS> 6,182,660
<TOTAL-COSTS> 6,182,660
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,719
<INCOME-PRETAX> 233,484
<INCOME-TAX> 0
<INCOME-CONTINUING> 233,484
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 233,484
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0.10
</TABLE>
