DNAP filing
- As of February 28, 2001, there were 598 owners of record of the Company's common stock.
- o/s 384,360,986 - 115,200,000 of the outstanding shares held in escrow
- At this stage of its development, the Company's revenues consist primarily
of sales of products incidental to research activities. For the year ended
December 31, 2000, revenues decreased from $133,187 in 1999 to $33,226, a
decrease of $99,961, or 75%. The decrease was a result of a change in focus to
almost pure research from incidental genomics sales. For the same period, cost
of sales declined from $51,893 in 1999 to $4,039, a reduction of 92%, resulting
in an increased gross profit margin of 88%, as compared to 39% for 1999.
Management believes that a change in product mix caused the increase in margin.
Nevertheless, because of the small sales volume and its dependence on the type
of testing conducted in a particular period, these results are not indicative of
the margins that the Company may attain if its long-term goals are achieved.
- Other income from the right of first refusal agreement with Orchid
Biosciences, Inc., ("Orchid") was $350,000 in 2000. This agreement grants
Orchid, under certain circumstances, in the event we decide to sell any
technologies developed from certain equipment and supplies, to match the price
of another purchaser so they can acquire such technology. The Company does not
anticipate a recurrence of this arrangement in the future.
- Management expects that personnel costs will increase substantially in
2001 and future years as the Company expands its research efforts. Most of the
Company's other operating expenses, however, are expected to grow with time and
expansion. Management believes that the level of professional fees paid by the
Company in 1999 and 2000 will decline. We will increase rents and insurance and
utilities because of our new facility. We will also require testing to establish
the efficacy of our products as current research and development matures and as
its products are exposed to the marketplace through the efforts of its
licensees. Management expects to see the results of these efforts beginning in
2001.
- Based upon the Company's current plans, the Company anticipates that it
will need to seek additional financing. The Company is pursuing entering into
license agreements with entities for the distribution of its products. Pursuit
of licensing relationships is in its early stages, however, and it is difficult
to predict what revenue stream, if any, they will generate.
The Company does not expect its revenue stream to be sufficient to cover
costs of operations in the immediate future. The Company expects that it will
continue to be required to raise capital to fund operations at least through the
second quarter of 2002. The Company will attempt to raise this capital by
borrowing, but no lender has issued a binding commitment to the Company.
Therefore, the Company expects to engage in one or more private placements of
common stock to fund its operating needs. The Company has engaged in discussions
with several parties who have expressed interest in assisting the Company in
such a private offering. Management is confident that private equity financing
will be available to fund it until revenues from operations are sufficient to
fund operations.
- Management intends to make significant capital expenditures in the coming
year. The Company's minimum needs are approximately $250,000, which it believes
can be leased, but it intends to raise capital to acquire $2,000,000 of
additional facilities. If it is unable to raise the capital needed to acquire
the equipment, it will greatly curtail planned operations. No assurance can be
given that we will raise the needed capital.
Staffing
The Company plans to increase its work force. Currently, the Company has
five full-time employees. The Company plans to add three research scientists to
develop its products. Upon development of the products, the Company's marketing
plan does not call for building a sales force to sell to end-users but instead
to license the technology to market segment leaders with existing sales forces.
The Company will train these sales forces to sell the Company's products and to
provide technical assistance through quarterly service to the systems. The
Company also intends to add additional help in the accounting, administrative
and investor relations areas. Management expects to add at least four employees
in 2001. The cost of these additional employees is expected to be in excess of
$250,000 in 2001. |
