-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HNBOIqcVXUWE+XoWJhgzDkugXrlHhxgdu3XKSoOtFyqx76olQp5C1FT8zOyIFFWq 2dRNr92jN3TO7C7QzzC4Ig== /in/edgar/work/20000621/0000909012-00-000436/0000909012-00-000436.txt : 20000920 0000909012-00-000436.hdr.sgml : 20000920 ACCESSION NUMBER: 0000909012-00-000436 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000621 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FEMINIQUE CORP CENTRAL INDEX KEY: 0000733337 STANDARD INDUSTRIAL CLASSIFICATION: [2834 ] IRS NUMBER: 133186327 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09370 FILM NUMBER: 658179 BUSINESS ADDRESS: STREET 1: 990 STATION RD CITY: BELLPORT STATE: NY ZIP: 11713 BUSINESS PHONE: 5162865800 MAIL ADDRESS: STREET 1: 990 STATION ROAD CITY: BELLPORT STATE: NY ZIP: 11713 FORMER COMPANY: FORMER CONFORMED NAME: INTEGRATED GENERICS INC /NV/ DATE OF NAME CHANGE: 19880824 FORMER COMPANY: FORMER CONFORMED NAME: PATIENT MEDICAL SYSTEMS CORP DATE OF NAME CHANGE: 19880615 10-Q 1 0001.txt QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------------------------------------- FORM 10Q QUARTERLY REPORT UNDER SECTION 13 OF THE SECURITIES AND EXCHANGE ACT OF 1934 For Quarter Ended March 31, 2000 Commission File Number 1-9370 FEMINIQUE CORPORATION (Formerly BIOPHARMACEUTICS, INC.) DELAWARE 13-3186327 -------- ---------- (State of Incorporation) (I.R.S. Employer Identification No.) 990 STATION ROAD, BELLPORT, NEW YORK 11713 ------------------------------------ ----- (Address of Principal Executive Office) (Zip Code) Registrant telephone number, including area code: (631) 286-5800 Indicate the number of shares outstanding of each of the issuer's classes of common stock as of March 31, 2000. CLASS OUTSTANDING ----- ----------- Common Stock - $.001 Par Value 23,344,085 Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 of the Securities and Exchange Act of 1934 during the preceding twelve 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 ninety days. Yes __X__ No _____ FEMINIQUE CORPORATION INDEX ----- PAGE PART I FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Condensed Balance Sheet March 31, 2000 (Unaudited) and September 30, 1999 (Audited) 3 Consolidated Condensed Statements of Operations Three Months and Six Months Ended March 31, 2000 and 1999 (Unaudited) 4 Consolidated Condensed Statement of Shareholders' Equity for the Six Months Ended March 31, 2000 (Unaudited) 5 Consolidated Condensed Statement of Cash Flows for the Six Months Ended March 31, 2000 and 1999 (Unaudited) 6 Notes to the Consolidated Condensed Financial Statements (Unaudited) 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 PART II OTHER INFORMATION Item 1. Legal Proceedings 9 Item 2. Changes in Securities 9 Item 3. Default upon Senior Securities 9 Item 4. Submission of materials to a vote of security holders 9 Item 5. Other Information 9 Item 6. Exhibits and Reports on Form 8-K 9
PART I FINANCIAL INFORMATION --------------------- ITEM 1. FINANCIAL STATEMENTS --------------------- FEMINIQUE CORPORATION CONSOLIDATED CONDENSED BALANCE SHEET March 31, September 30, 2000 1999 ---- ---- (UNAUDITED) (AUDITED) ASSETS Current assets: Cash $ 30,347 $ 78,334 Trade receivables, less allowance for doubtful accounts 66,105 295,812 Inventories 0 156,716 Prepaid expenses and other assets 114,953 130,892 ------------ ------------ Total current assets 211,405 661,754 Property, plant and equipment, at cost, net of write-off and accumulated depreciation of $4,121 in Mar. 2000 and $4,405 in Sept. 1999 13,776 68,969 Intangible assets, at cost, net of write-off and accumulated 2,017,825 3,112,025 ------------ ------------ amortization of $753,600 in Mar. 2000 and $659,400 in Sept. 1999 $ 2,243,006 $ 3,842,748 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable-trade $ 693,865 $ 537,121 Accrued expenses 604,166 668,899 Net liability of discontinued operations 179,745 187,926 Current maturities of long-term debt 258,216 205,685 Conv. Prom. Note payable 137,000 100,000 Convertible debentures payable 575,000 575,000 ------------ ------------ Total current liabilities 2,447,992 2,274,631 ------------ ------------ Long-term debt 1,081,860 1,221,003 ------------ ------------ Shareholders' equity: Common Stock - par value $.00l per share 23,344 22,765 Authorized - 75,000,000 shares Issued 23,344,085 in Mar. 2000 and 22,765,399 in Sept. 1999 Additional paid-in capital 34,964,953 34,850,702 Deficit (35,330,531) (33,581,741) ------------ ------------ (342,234) 1,291,726 Less Treasury Stock, at cost (103,432 shares) (944,612) (944,612) ------------ ------------ (1,286,846) 347,114 ------------ ------------ $ 2,243,006 $ 3,842,748 ============ ============ The accompanying notes are an integral part of these financial statements 3
FEMINIQUE CORPORATION CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (Unaudited) THREE MONTHS ENDED SIX MONTHS ENDED MARCH 31, MARCH 31, --------- --------- 2000 1999 2000 1999 ---- ---- ---- ---- Revenues: Net sales $ 127,205 $ 620,223 $ 696,312 $ 1,339,005 ------------ ------------ ------------ ------------ Costs and expenses: Cost of sales 228,757 256,392 529,769 502,438 Selling, general and administrative 268,233 412,491 629,842 770,255 Amortization of intangibles 47,100 47,100 94,200 94,200 ------------ ------------ ------------ ------------ 544,090 715,983 1,253,811 1,366,893 ------------ ------------ ------------ ------------ (416,885) (95,760) (557,499) (27,888) Other income (Deductions): Other income -- 57,638 290 57,638 Interest expense (58,804) (50,280) (117,304) (97,143) Intangible asset write-off (1,000,000) -- (1,000,000) -- Abandonment of fixed assets write-off (52,711) -- (52,711) -- Other promotional expenses write-off (18,520) -- (18,520) -- ------------ ------------ ------------ ------------ Net income (Loss) continuing operations (1,546,920) (88,402) (1,745,744) (67,393) Net income (Loss) discontinued operations (3,439) -- -- (3,046) ------------ ------------ ------------ ------------ Net Income (Loss) $ (1,550,359) $ (88,402) $ (1,748,790) $ (67,393) ============ ============ ============ ============ Income (Loss) per share Continuing operations $ (0.07) $ 0.00 $ (0.08) $ 0.00 Discontinued operations (0.00) 0.00 0.00 0.00 ------------ ------------ ------------ ------------ Income (Loss) per share $ (0.07) $ 0.00 $ (0.08) $ 0.00 ============ ============ ============ ============ Average shares outstanding 22,927,003 21,718,985 22,862,042 19,861,253 ============ ============ ============ ============ The accompanying notes are an integral part of these financial statements. 4
FEMINIQUE CORPORATION CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED) SIX MONTHS ENDED MARCH 31, 2000 COMMON STOCK ADDITIONAL NUMBER OF PAR PAID-IN TREASURY SHARES VALUE CAPITAL DEFICIT STOCK TOTAL ------ ----- ------- ------- ----- ----- Balance, September 30, 1999 22,765,399 $ 22,765 $ 34,850,702 $(33,581,741) $ (944,612) $ 347,114 (Audited) Shares issued to debenture holders for interest 220,305 220 28,420 -- -- 28,640 Shares issued in payment of professional services 358,381 359 85,831 -- -- 86,190 Net loss for the six months ended March 31, 2000 -- -- -- (1,748,790) -- (1,748,790) ------------ ------------ ------------ ------------ ------------ ------------ Balance, March 31, 2000 23,344,085 $ 23,344 $ 34,964,953 $(35,330,531) $ (944,612) $ (1,286,846) ============ ============ ============ ============ ============ ============ The accompanying notes are an integral part of these financial statements. 5
FEMINIQUE CORPORATION CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS INCREASE (DECREASE) IN CASH AND EQUIVALENTS (UNAUDITED) SIX MONTHS ENDED MARCH 31, 2000 1999 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Income (Loss) from continuing operations $(1,748,790) $ (67,393) Operating activities: Adjustments to reconcile net income (loss) to Net cash provided by (used in) Operating activities: Shares issued in lieu of payment 114,830 181,507 Depreciation and amortization Continuing operations 96,682 96,795 Intangible asset write-off 1,000,000 -- Abandonment of fixed assets write-off 52,711 -- Changes in certain assets and liabilities: Accounts receivable 229,707 (289,723) Inventories 156,716 (118,272) Other current assets 15,939 (62,964) Accounts payable and accrued expenses 120,830 (94,150) ----------- ----------- Net cash provided by (used in) operating activities 38,625 (354,200) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment -- (45,344) ----------- ----------- Net cash provided by (used in) investing activities -- (45,344) CASH FLOWS FROM FINANCING ACTIVITIES: Sale of common stock -- 800,000 Repayments of long-term debt (86,612) (47,689) ----------- ----------- Net cash provided by (used in) financing (86,612) 752,311 ----------- ----------- Net change in cash (47,987) 352,767 Cash at beginning of period 78,334 34,421 ----------- ----------- Cash at end of period $ 30,347 $ 387,188 =========== =========== The accompanying notes are an integral part of these financial statements. 6
FEMINIQUE CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) MARCH 31, 2000 A. Consolidated Condensed Financial Statements The Consolidated Condensed Balance Sheet as of March 31, 2000, the Consolidated Condensed Statement of Operations for the three and six months ended March 31, 2000 and 1999, the Consolidated Condensed Statement of Shareholders' Equity for the six month period ended March 31, 2000, and the Consolidated Condensed Statements of Cash Flows for the periods ended March 31, 2000 and 1999 have been prepared by the Company without audit. In the opinion of Management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2000 and for all periods presented have been made. For information concerning the Company's significant accounting policies and Basis of Presentation, reference is made to the Company's Annual Report on Form 10-K for the year ended September 30, 1999. Results of operations for the period ended March 31, 2000 are not necessarily indicative of the operating results to be expected for the full year and such results are subject to year-end adjustment and independent audit. The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. The Consolidated Statements of Operations for all periods reflect the ongoing operations of the Company. At the Annual Meeting held June 2, 1999, the shareholders voted for and the Board of Directors passed a resolution to change the Company's name from Biopharmaceutics, Inc. to Feminique Corporation. The Company's Articles of Incorporation were amended to reflect the name change which became effective June 28, 1999. The Company's new ticker symbol on the NASDAQ Bulletin Board is FEMQ. B. Continuing Operations Feminique Corporation entered into a Licensing Agreement with Clay-Park Labs, Inc. (CPL) on May 4, 2000. The Agreement is for an initial term of six (6) months with automatic renewal for an additional term ending December 31, 2005, notwithstanding CPL's option to cancel the Agreement earlier, and gives CPL the right to manufacture and sell Quality Health Products, Inc.'s over-the-counter women's health branded products. As long as the Agreement is in force, the Company will receive a royalty based on net sales of the branded products. The Company entered into a Restructuring Agreement dated December 15, 1998 with London International Group, Inc., now known as SSL Americas, Inc. (SSL) whereby its trade payable to SSL was converted to long-term debt and its existing long-term debt was given extended terms. The original Agreement was for the purchase of the feminine hygiene products sold under the names of Koromex(R), Koroflex(R), Vaginex(R) and Feminique(R). The Company has not made payment relating to this contract since March 1, 2000 and is therefore in breach of said Agreement. The Company is presently negotiating with SSL as part of its Licensing Agreement with CPL. The Company has two convertible Promissory Notes with Renaissance Capital Group, Inc. totaling $137,000. In accordance with the Notes, all interest and principle was due and payable June 1, 2000. The Company has not paid interest since October 31, 1999 on $100,000 and has paid no interest since January 6, 2000 on $37,000, nor the principle amount due; therefore the Company is in breach of its Agreement with Renaissance Capital Group, Inc. The Company is contemplating filing for bankruptcy protection in order to protect the interest of its shareholders, and in the expectation of "cleaning" up the corporation, so that fresh revenue-generating assets may be injected into the Company. 7 C. Discontinued Operations In December 1998, the Company completed the sale of CMT. Under the terms of the sale, the common stock of CMT was sold for $4,700,000, payable as follows: $600,000 to be held in escrow for outstanding taxes, $2,600,000 in full settlement of promissory notes payable of $4,117,715 and the return of the note payable to the purchaser of $1,500,000. The forgiveness of debt of $1,517,715, on the settlement of the aforementioned note payable was credited to discontinued operations in 1998. The results of operations of CMT were classified as discontinued operations and prior periods were restated, accordingly. In addition, the Company wrote-off the excess of CMT's assets over liabilities as a loss on disposal of discontinued operations in its consolidated statement of operations for the year ended September 30, 1998. In connection with the Company's restructuring plan, the manufacturing operations of its generic pharmaceutical product subsidiary were discontinued effective September 30, 1998. The Consolidated Statement of Operations for the three and six months ended March 31, 2000 and 1999 reflects both the continuing operations of the feminine hygiene product line and discontinued operations. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES ------------------------------- The Company has financed its operating requirements, for the last three years, primarily by the issuance of short and long-term debt, convertible debentures or notes, and the sale of common stock in the Company. In fiscal 1997 the Company incurred long-term debt of $575,000 with the issuance of Convertible debentures. As of September 30, 1998, all other long-term debt incurred was converted to common stock, repaid or canceled. The Company also raised capital from the sales of common shares the proceeds of which were as follows: $1,075,000 in fiscal 1997, $182,556 in fiscal 1998 and $800,000 in fiscal 1999. As of March 31, 2000, the Company had cash of approximately $30,000 With the restructuring of the Company, the feminine hygiene branded products had become the core business with which the company expected to grow. The acquisition price of approximately $3,600,000 in March 1996 was financed by a combination of Regulation S common stock sales, and notes for $2,000,000 whose payment was restructured in December 1998. The Brands which were acquired have been established approximately thirty years on average and are sold under the names Vaginex(R), Koromex(R), Koroflex(R) and Feminique(R). Since the Company entered into a Licensing Agreement with Clay-Park Labs, Inc. (CPL) on May 4, 2000, CPL is now responsible for selling the Brands to food and drug chains, drug wholesalers, domestic and overseas distributors, clinics and domestic government agencies, and via the Internet. The Company's sales were conducted by one independent Sales Representative Organization, which called on key accounts that carry the lines. This independent Sales Representative Organization terminated their services on March 10, 2000. 8 RESULTS OF OPERATIONS --------------------- Revenues of continuing operations for the quarter ended March 31, 2000 were $127,205 compared to $620,223 for the quarter ended March 31, 1999. For the six months ended March 31, 2000 revenues were $696,312 versus $1,339,005 in the comparable six months of fiscal 1999. Gross margins of continuing operations for the quarter ended March 31, 2000 were (79.8%) compared to 58.7% in the same quarter in 1999. Gross margins of continuing operations for the six months ended March 31, 2000 were 23.9% compared to 62.5% in the same period in 1999. The net loss of continuing operations for the second quarter of fiscal 2000 was $1,546,920 compared to $88,402 in 1999. For the six months ended March 31, 2000 the loss of continuing operations was $1,745,744 compared to $67,393 in 1999. The decrease in gross margin and the net losses from continued operations were primarily due to discounts given and certain intangible assets written off. Selling, general and administrative expenses of continuing operations decreased to $268,233 from $412,491 and $629,842 from $770,255 for the quarter and six months ended March 31, 2000 and 1999 respectively. Interest expense of continuing operations for the quarter ended March 31, 2000 was $58,804 compared to $50,280 in the same quarter in 1999. For the six months ended March 31, 2000 interest expense was $117,304 versus $97,143 for the same period in 1999. The increase in interest expense was primarily due to the Company's note obligations which was restructured December 15, 1998 and the addition of promissory notes. PART II OTHER INFORMATION ----------------- Item 1. Legal Proceedings The Company is currently negotiating with the Food and Drug Administration ("FDA"), to prevent the FDA from debarring Biopharmaceutics, Inc. from submitting abbreviated drug applications. Biopharmaceutics, Inc. New York discontinued its generic pharmaceutical products operations effective September 30, 1998. Management and counsel are of the opinion that this debarment will not affect its current operations within its consumer feminine hygiene products' subsidiary. This proceeding arose as a result of the Company and its prior management being convicted of certain violations, for which the resulting penalties and fines were paid in full in October 1997. On July 28, 1998, the Company's former President tendered his resignation and then commenced an action on September 15, 1998 against the Company asserting non-payment of, among things, salary of $23,000 and fees arising from a consulting agreement aggregating approximately $94,000. The Company intends to vigorously defend this lawsuit and has filed counterclaims for breach of contract and breach of fiduciary duty. Due to uncertainties inherent in litigation and the Company's intention to pursue its counterclaims, only $23,000 of accrued payroll has been provided for in the accompanying financial statements. The Company has accrued estimated settlements of pending litigation aggregating $47,000 and recorded this amount in its consolidated statements of operations. These claims are substantially in connection with disputes over merchandise purchased. Item 2. Changes in Securities-Not applicable Item 3. Default upon Senior Securities-Not applicable Item 4. Submission of materials to a vote of security holders-Not applicable Item 5. Other information-Not applicable Item 6. Exhibits and Reports on Form 8-K-Not applicable SIGNATURES ---------- Pursuant to the requirements of Section 13 of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized. /S/ JONATHAN ROSEN ------------------ FEMINIQUE CORPORATION REGISTRANT By: JONATHAN ROSEN, Acting President and Chief Executive Officer Dated: June 21, 2000 -----END PRIVACY-ENHANCED MESSAGE-----