Edgar Filing 8/16/99 part II
BCAM INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIENCY
SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
COMMON STOCK $.01 PAR
VALUE
PAID-IN TREASURY
SHARES AMOUNT SURPLUS DEFICIT SUBTOTAL STOCK TOTAL
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Balance at January 1, 1999 21,754,471 $218,000 $30,126,000 $(30,581,000) $(237,000) $(899,000) $(1,136,000)
Shares issued in January and May
"repricing" increments of April
1998 offering 4,300,682 43,000 (43,000) - - - -
Net income - - - 554,000 554,000 - 554,000
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Balance at June 30, 1999 (a) 26,055,153(a) $261,000 $30,083,000 $(30,027,000) $ 317,000 $(899,000) $ (582,000)
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(a) Excludes additional shares issuable, without additional consideration,
pursuant to "repricing" provisions of the April 1998 offering of common
stock and warrants. See Note 5.
SEE ACCOMPANYING NOTES
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BCAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1999
1. 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 instructions to Form 10-QSB.
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
adjustments and accruals) considered necessary for a fair presentation have been
included. See Form 10-KSB for the year ended December 31, 1998 for more
information.
2. DESCRIPTION OF BUSINESS, PRINCIPLES OF CONSOLIDATION, GOING CONCERN
CONSIDERATION
BCAM International, Inc. and Subsidiaries (the "Company") has been
primarily a software, technology and consulting company, specializing in
providing ergonomic solutions (human factors engineering) to individuals,
corporations and government. The Company's revenues had historically been
derived primarily from ergonomic consulting services. Through a series of
actions since approximately September 1997 including the acquisition of 100% of
Drew Shoe Corporation ("Drew"), subsequent disposition of 100% of Drew and
certain other restructuring activities (which are summarized in the following
paragraph and described in more detail in Notes 3 and 5 to the Company's annual
Consolidated Financial Statements included with Form 10-KSB for the year ended
December 31, 1998), the Company is now a technology company in the field of
Intelligent Surface Technology ("IST") blending biomechanics and ergonomics with
innovative electronic systems and software (see, however, Going Concern
Consideration, below).
The acquisition and restructuring activity since approximately September
1997 has included the following. On September 22, 1997, the Company acquired
Drew as described in Note 4 to the Consolidated Financial Statements contained
in Form 10-KSB for the year ended December 31, 1998. Drew is a manufacturer,
marketer and distributor of medical footwear. The purchase of Drew was financed
principally by the issuance of 10%/13% Convertible Notes and Warrants. In
December 1997 the Board of Directors of the Company decided to sell the
operations of the Ergonomic Consulting Services Division ("ECSD") due to the
inability of that business to generate operating profits for the Company as
discussed further in Note 6. In February 1998, the Board of Directors of the
Company decided to discontinue the HumanCAD Systems Operations ("HCAD") as a
result of the lack of available financing, on acceptable terms to the Company,
to further the necessary business development activities of that operation as
discussed further in Note 6. In April 1998 the Company restructured the 10%/13%
Convertible Notes which included granting a 10% interest in the common stock of
Drew (and also 10% of the common stock of another subsidiary, BCAM Technologies,
Inc.) to the noteholders as further discussed in Note 5. In October 1998, the
Company sold 56.7% of Drew to the holder of the 10%/13% Convertible Notes and on
March 4, 1999 it sold its remaining 33.3% interest in the common stock of Drew,
after receipt of approval of the shareholders of the Company as discussed
further in Note 3.
The results of operations for the three and six month periods ended June
30, 1999 and 1998 reflect the results of operations of Drew as a discontinued
operation with a measurement date of October 2, 1998.
The consolidated financial statements include the accounts of BCAM
International, Inc. and its subsidiaries, principally BCAM Technologies, Inc.
(principally IST and related technologies).
Results of operations for the three and six month periods ended June 30,
1999 are not necessarily indicative of results of operations to be expected for
the year ending December 31, 1999. Further, the six months ended June 30, 1999
include a one-time, non-cash gain on the sale of Drew.
GOING CONCERN CONSIDERATION - As indicated in the accompanying consolidated
financial statements, as of June 30, 1999, the Company had negative working
capital of approximately ($755,000) and a shareholders' deficiency of
approximately ($582,000), and for the six months then ended had losses from
continuing operations of approximately ($439,000) with no revenues. Losses from
continuing operations have continued since June 30, 1999. Further, the Company
has a development agenda which requires additional financing. These factors,
among others, indicate that the Company is in need of significant additional
financing and/or a strategic business arrangement in order to continue its
operations through the 1999 fiscal year. The Company believes that its cash
resources at June 30, 1999 are insufficient to fund its operations through the
third quarter of 1999 and it will be required to raise additional capital or
enter into a strategic business arrangement in order to continue its planned
operations.
The Company's plans include undertaking a development program to
miniaturize and lower the cost of IST applications in the belief that the result
will be a more marketable product than the current IST application. The
development and subsequent marketing is a multi-year project. In order to
miniaturize and lower the cost of IST applications, the Company and a subsidiary
of MCNC (founded in 1980 as the Microelectronics Center of North Carolina and
now known simply as MCNC)("MCNC") have completed an alpha prototype of a
microvalve component to control air flow in the IST system. A beta (production
ready) version of the MCNC microvalve would be the subject of further
development about which the Company and MCNC have entered into a non-binding
letter of intent. The Company's ability to perform such further development will
be dependent upon its ability to obtain sufficient financial resources or its
ability to enter into a strategic transaction which would provide the Company
the resources to perform such development. Such further development would
involve costs incurred under arrangements with MCNC as well as costs incurred by
the Company. Beyond development, the Company would requ |
