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BSTI SHARES OUT 10.81 Mil...Float 5.50 Mil as of 12/30/00
BSTI COMPANY NEWS LINKS
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ATLANTA, Dec. 21 /PRNewswire/ -- BioShield Technologies, Inc., today announced that we recently upgraded our telephone system at our Norcross, GA Office. The upgrade required us to change our direct dial phone numbers. The new phone numbers are as follows: (770) 925-4302 Direct
(770) 925-3923 Fax
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BioShield Determined to Increase Shareholder Value; Company Reorganizes and Prepares for Exciting 2001
ATLANTA, Dec. 18 /PRNewswire/ -- BioShield Technologies, Inc. (Nasdaq: BSTI - news) today announced it has completed its reorganization and has relocated to its offices at its Research and Development Center located in Norcross, GA. These efforts allow the Company to considerably reduce its overhead and operating expenses. Also, the Company for some time has recognized the need to replace and refresh its Board of Directors and has recently done so by adding three new directors, Dr. Rodothea Milatou, Mr. Alan Lingo and Mrs. Angela B. Howell. BioShield is presently awaiting approval of two additional distinguished board members to be added in the near future. With the new year rapidly approaching, the Company is very excited about its recently obtained EPA registrations and its additional pending registration approvals that combined give BioShield the ability to become one of the potentially dominant players in the EPA approved antimicrobial industry. Having ceased operations of its eMD division, BioShield is now poised to concentrate exclusively on its core business of anti-viral and antimicrobial research for the many uses and applications in which contaminants are a tremendous and ever growing world wide problem. After five years of research, development and EPA application submittals for registration approvals of the company's core technologies, BioShield has just in the first and last quarters of 2000 received three U.S. patents and six EPA registrations. The Company is currently seeking three additional EPA and FDA registrations on new molecular compounds to be used as a preservative and to be used in food processing plants. BioShield Technologies has a strong foundation; its many new EPA registrations and U.S. Patents coupled with pending additional approvals gives the Company a unique leadership position.
While countless companies over the past six to eight months across the country have suffered as a result of extremely poor market conditions, numerous interest rate increases, unexpected and massive margin calls, shorting of stocks, sour and unsuccessful acquisitions and the Country's inability to vote in a new President in a timely manner, BioShield's market indeed suffered as well and considerably so. Additionally, as a result of prior financing arrangements the Company's stock price continued to be adversely affected. The Company, however, is currently renegotiating prior financing agreements that should prove beneficial to BioShield's position. The Company is currently working diligently to fine tune its reorganization, rectify issues of concern and move aggressively forward to obtain national and worldwide distribution. The Company has received and welcomed many calls over the past several weeks from investors and market makers reflecting their concerns as to BioShield's status. The Company wishes to assure those concerned that it is strongly committed and determined to increase shareholder value and focus on the Company's considerable strengths. BioShield is preparing for what it believes will be an exciting 2001.
--------------------------------------------------FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net sales for the three month period ended September 30, 2000 were $478,000, an increase of $334,000 or 231% over the same period last year. The increase was a result of increased distribution of the OdorFree(TM) product, primarily in the mid and south-western United States, along with the introduction of two sizes of Hypoallergenic OdorFree(TM). During the last quarter of fiscal 2000, the Company also gained new market penetration in the southeastern United States. As of September 30, 2000, the Company had distribution in over 6,000 retail outlets with its product. Gross profit of $214,000 for the quarter ended September 30, 2000 represents 45% of net sales as compared to $54,000, or 37% of net sales, for the quarter ended September 30, 1999. The increase in gross margin is a result of the change in product mix and packaging year over year, combined with the continuous improvement in finding new ways to do business. The Company is gaining momentum as it enters new retail markets. The Company settled its outstanding claim with the EPA related to product labeling and, in fact gained EPA approval of its core products in February 2000. BioShield has continues to make breakthroughs in product development and testing. These events have bolstered the confidence of our retail customers and have prompted a significant increase in sales that the Company projects will continue throughout fiscal 2001.
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BioShield Signs Distribution Agreement With Apollo Chemical Corporation; Sales Estimated at $1MM Annually
ATLANTA, Oct. 13 /PRNewswire/ -- BioShield Technologies, Inc., (Nasdaq: BSTI - news) today announced that it has signed an agreement with Apollo Chemical Corporation to distribute its patented antimicrobial products, AM500 and BST1860.
The finalized agreement with Apollo Chemical represents yet another step in establishing BioShield's chemical distribution network. Apollo Chemical is a chemical sales company with over 30 years of experience in the textile industry, and it has recently obtained the ISO 9001 certification as a Chemical manufacture & distributor.
Apollo Chemical has been in business since 1959. As a leader in chemical specialty products, it has facilities in North Carolina, Alabama, and California, and distributorships in Mexico and Australia. Apollo Chemical has an experienced and proven sales force with substantial technical support and over 1,000 clients.
`This agreement with BioShield Technologies, Inc. allows Apollo Chemical to offer an EPA registered, patented antimicrobial technology to our clients in the United States and overseas,'' said Ed Rish, Vice President of Apollo Chemical.
``Our clients have been asking for an antimicrobial that has residual effects, is nontoxic, and EPA registered. We are extremely pleased to be able to fill these needs using BioShield products,'' said Mr. Dexter R. Barbee, Jr., President of Apollo Chemical.
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BIOSHIELD TECHNOLOGIES INC
Filed on Nov 20 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BioShield Technologies, Inc. is a Georgia corporation and was organized in 1995. We historically have been engaged in research and development, patent filings, regulatory issues and related activities geared towards the sale of our retail, industrial and institutional products. Due largely to recent Environmental Protection Agency, or EPA, approvals, we are currently selling and marketing primarily cleaning and deodorizing products. Many of these products provide long-term killing action of microorganisms responsible for cross contamination and viral contamination, along with inhibiting and controlling the growth of over 100 viral, bacteria, fungi and yeast organisms.
In 1999, we created a subsidiary to develop electronic commerce via the internet called Electronic Medical Distribution, Inc. or eMD. eMD integrates services for healthcare providers with a comprehensive internet-based product and healthcare website. These services include point of care medication management, electronic patient charting, pharmaceutical fulfillment and pharmaceutical care services. eMD launched its consumer and physician web site in January 2000. As a result, BioShield currently operates in two distinct business segments, antimicrobial and biostatic products for use within the retail and institutional markets through BioShield and pharmaceutical healthcare via the internet through eMD. BioShield is comprised of four business divisions for the sale, distribution, and development of antimicrobial, biostatic, and medical related products for the internet, retail, industrial and institutional, and specialty chemical markets.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net sales for the three month period ended September 30, 2000 were $478,000, an increase of $334,000 or 231% over the same period last year. The increase was a result of increased distribution of the OdorFree(TM) product, primarily in the mid and south-western United States, along with the introduction of two sizes of Hypoallergenic OdorFree(TM). During the last quarter of fiscal 2000, the Company also gained new market penetration in the southeastern United States. As of September 30, 2000, the Company had distribution in over 6,000 retail outlets with its product. Gross profit of $214,000 for the quarter ended September 30, 2000 represents 45% of net sales as compared to $54,000, or 37% of net sales, for the quarter ended September 30, 1999. The increase in gross margin is a result of the change in product mix and packaging year over year, combined with the continuous improvement in finding new ways to do business. The Company is gaining momentum as it enters new retail markets. The Company settled its outstanding claim with the EPA related to product labeling and, in fact gained EPA approval of its core products in February 2000. BioShield has continues to make breakthroughs in product development and testing. These events have bolstered the confidence of our retail customers and have prompted a significant increase in sales that the Company projects will continue throughout fiscal 2001.
Cost of sales was $264,000 or 55% of sales and $90,000 or 63% of sales for the three-month period ended September 30, 2000 and 1999, respectively. The lower cost of sales for the three month period ended September 30, 2000 was attributable to higher sales of the Hypoallergenic OdorFree(TM) product during the period, partially offset by efficiencies attained in the production of the Company's antimicrobial products and also due to the change in product mix, combined with the continuous improvement in finding new ways to do business.
The Company's research and development expenses decreased to $245,000 in the quarter ending September 30, 2000 from $634,000 for the quarter ending ended September 30, 1999. The decreased expenses related primarily to lower formulation development costs of the Company's antimicrobial products and other products under development in medical and clinical trials combined with a reduction in development cost paid to outside parties. All related research and development expenses for the quarter ending September 30, 2000 were directly related to BioShield Technologies, Inc.
Web site development cost net of related amortization in the amount of $4,180,000 as of September 30, 2000 were directly related to eMD.com (eMD.com began operation in April 1999 and incurred no significant start-up cost as of September 30, 1999). This includes third party programming, software and hardware purchases which were capitalized during the quarter ending September 30, 2000. These costs are amortized over a three year period.
Total marketing and selling expenses in the quarter ending September 30, 2000 were $1,615,000. Marketing and selling expenses related to BioShield were $805,000 for the quarter ended September 30, 2000, an increase of $50,000 from $805,000 incurred during the quarter ended September 30, 1999. This slight increase relates principally to the rollout of the OdorFree(TM) product line, repackaging efforts and other one-time setup charges for certain retail accounts related to slotting charges. Marketing and selling expenses related to eMD.com totaled $760,000 for the quarter ended September 30, 2000 as compared to zero for the same period in prior year (eMD.com began operation in April 1999 and incurred no significant start-up cost as of September 30, 1999). The increase is a result of pre-selling activities targeting physicians and physician groups in support of the new website. Significant costs include initial development of marketing materials and costs related to focus testing of the web site.
Total general and administrative expenses for the quarter ending September 30, 2000 were $5,678,000. General and administration expenses for BioShield were $2,265,000, an increase of $572,000 over the same period ending September 30, 1999. There were no borrowings or interest expense incurred for the quarter ending September 30, 2000. General and administrative expenses related to eMD.com totaled $3,567,000 as compared to $1,331,000 for the same period in prior year (eMD.com began operation in April 1999 and incurred no significant start-up cost as of September 30, 1999). These higher costs related primarily to an increase in personnel cost, legal and regulatory fees, consulting services and facility costs. A significant portion of the expenses incurred in the quarter will not be recurring in future periods as staff levels have increased to eliminate expensive consultant activity.
As a result of the reasons set forth above, the Company's operations generated a net loss of $7,323,000 or $1.00 per common share for the quarter ending September 30, 2000 compared to a net loss of $4,409,000 or $.69 per common share for the quarter ended September 30, 1999.
LIQUIDITY
The Company had cash and cash equivalents totaling $2,208,000 for the quarter ending September 30, 2000 compared to $5,074,000 for the quarter ending September 30, 1999. The Company's primary sources of cash included, but was not limited to, the redemption of the outstanding warrants attached to the Company's initial public offering which was completed on February 22, 2000 for $8,402,000, completion of convertible series A and series B preferred stock offerings totaling $14,000,000 in January 2000 and June 2000, respectively, and a $2,000,000 put on the Company's existing equity line in May 2000.
The Company's primary uses of cash to date have been in operating activities to fund research and development including clinical trials, and marketing and selling and general and administrative expenses. As of September 30, 2000, the Company's investment in equipment, website development cost and leasehold improvement, net of depreciation and amortization was $6,250,000. During the quarter ended September 30, 2000, the Company spent $1,042,000 in capital expenditures. The Company has approximately $8,000,000 available to draw upon at September 30, 2000 under an existing equity line of credit (which availability depends, among other things, upon the price of the Company's common stock being above $1 per share), and an additional $50 million under another equity line of credit available upon the effectiveness of a registration statement covering the issuance of shares and an increase in the price of the Company's common stock to above $7.50. The terms of those equity credit agreements are currently under renegotiation. We cannot assure you that we will be able to renegotiate the terms of the equity credit agreements or obtain additional capital from this or other investors. Our inability to successfully renegotiate these agreements could cause the company to dramatically curtail or cease operations.
The Company's ability to fund its operating requirements and maintain an adequate level of working capital until it achieves positive cash flows will depend primarily on its ability to borrow, raise capital in the public equity markets, and generate substantial growth in sales of its antimicrobial products combined with transaction, prescription and internet lab testing through its majority owned subsidiary, eMD.com. In order to raise working capital, the Company is negotiating with potential equity funding sources. The successful completion of a transaction with one or more of these sources of working capital is essential to the Company's ability to maintain operations. We cannot assure you that additional financing will be available on commercially reasonable terms, or at all. Any inability to obtain additional financing when needed could require us to significantly curtail or possibly cease operations.
The Company expects to continue to have a substantial need to fund operating losses and the purchases of additional capital equipment for an indefinite period. Accordingly, the Company will be required to obtain additional capital in the near future. The development of eMD.com, as well as commercialization of the parent company's antimicrobial products will require additional capital. The Company's failure to generate substantial growth in the sales of its antimicrobial and its e-commerce healthcare products; progress in research and development programs; the cost and timing of seeking regulatory approvals of the Company's product under development; the Company's ability to manufacture products at an economically feasible cost; cost in filing, prosecuting, defending and enforcing patent claims and other intellectual property rights and changes in economic, regulatory, or competitive conditions or the Company's planned business could cause the Company to require additional capital prior to obtaining positive cash flows and substantial delay or reduction of the scope of business. There can be no assurance that the Company or eMD.com will be successful in its efforts to obtain additional capital, and that capital will be available on terms acceptable to the Company or eMD.com or on terms that will not significantly dilute the interests of existing shareholders.
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains forward-looking information regarding BioShield, including our majority-owned subsidiary, eMD. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including statements as to industry trends, future economic performance, anticipated profitability, anticipated revenues and expenses, anticipated transactions and closing dates for these transactions, planned product development and products or service line growth may be significantly impacted by risks and uncertainties, including, but not limited to:
- inability to obtain required capital for operations and future
growth
- failure of our industries to develop at anticipated rates
- failure of our current and planned products and services to be
timely developed or to gain significant market acceptance
- failure to obtain regulatory approvals for antimicrobial and
biostatic products
- inability to commercialize our antimicrobial and biostatic
technology in a cost-effective manner
- the introduction of equally or more effective antimicrobial
and biostatic products by competitors, particularly larger
competitors with established distribution systems and
substantially greater financial resources
- failure to obtain new customers or retain existing customers
- inability to dispose of eMD or to carry out marketing and
sales plans or to establish eMD as a widely-used internet
resource
- loss of key executives
- delays in customer acceptance of our products and services,
and
- general economic and business conditions, competition and
other economic factors.
You can find many of these statements by looking for words such as "may", "will", "believes", "expects", "anticipates", "intends", "could", "would", "estimates" or similar expressions in this prospectus.
These statements are only predictions and involve known and unknown risks, uncertainties and other factors, that may cause our actual results to differ from results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither BioShield nor eMD, nor or any other person or entity, assumes responsibility for the accuracy and completeness of those statements. We are under no duty to update any of the forward-looking statements after the date of this prospectus to conform these statements to actual results. All subsequent written and oral forward-looking statements attributable to BioShield, eMD or any person acting on our behalf is expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not have a policy of updating or revising forward-looking statements and thus it should not be assumed that silence by us over time means that actual events are bearing out as estimated in such forward-looking statements.
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