UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
================================================================================
FORM 10-Q
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the second quarter ended Commission file number
March 31, 2003 33-27042-NY
- ----------------------------- ----------------------
BARRINGTON SCIENCES CORPORATION
(Formerly known as: Financial Express Corporation)
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
Nevada 93-0996537
(State of Incorporation) (I.R.S. Employer Identification No.)
1107 Bennet Drive
Port Coquitlam, British Columbia, Canada V3C 6H2
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (604) 868-7400
Securities registered pursuant to Section 12(b) of the Act:
NONE NONE
(Title of Each Class) (Name of Each Exchange
on which Registered)
Securities registered pursuant to Section 12 (g) of the Act:
Common
(Title of Class)
Indicate by check mark whether the registrant (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.
(1) Yes No X (2) Yes No X
----- ----- ----- -----
The number of shares of the Common Stock of the registrant outstanding as of
March 31, 2003 was 23,987,753 The aggregate common stock held by non-affiliates
on March 31, 2003 was 7,168,089
===========
BARRINGTON SCIENCES INTERNATIONAL CORPORATION
(A development stage enterprise)
-----------------------------
INDEX
Page No.
--------
Part I. Financial Information
------- ---------------------
Item 1. Financial Statements
------- --------------------
Balance Sheet - at December 31, 2002 3
Statements of Operations - for the
quarters ended December 31, 2002
and 2001 4
Statement of Cash Flows - for the
quarters ended December 31, 2002
and 2001 5-6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 8
Item 4. Controls and Procedures 8
Part II. Other Information
--------------------------
Item 1. Submission of Matters to a
Vote of Security Holders 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
BARRINGTON SCIENCES CORPORATION
(A development stage enterprise)
Balance Sheet
As at March 31, 2003
Assets
- ------
Current assets:
Cash $ 125,503
Accounts receivable 7,796
Prepaid and other current assets 25,349
-----------
Total current assets 158,648
-----------
Other Assets
Deposit for Acquisition $ 50,000
Equity Joint Venture 400,000
-----------
Total Other Assets 450,000
-----------
Property plant and equipment, net of
accumulated depreciation of $69,683 $ 106,692
Intangible assets, net of accumulated
amortization of $51,816 1,587,525
-----------
Total assets $ 2,302,865
===========
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities:
Notes payable to banks $ 199,911
Accounts payable and accrued liabilities 180,903
-----------
Total current liabilities $ 380,814
-----------
Stockholders' equity:
Common stock $.001 par value;
100,000,000 authorized: 23,987,753 issued
and outstanding $ 23,988
Additional paid in-capital 3,955,447
Foreign currency adjustment 9,591
-----------
3,989,026
Losses accumulated during the
development stage (2,066,975)
-----------
Total stockholders' equity 1,922,051
-----------
Total liabilities and stockholders' equity $ 2,302,865
===========
See accompanying notes
3
BARRINGTON SCIENCES CORPORATION
(A development stage enterprise)
STATEMENTS OF OPERATIONS
For the second quarters ended March 31, 2003 and 2002
2003 2002
------------ ----------
Income $ -- $ --
Operating expenses:
- -------------------
Legal & Professional $ 98,236 22,872
Bank Charges & Interest 9,846 130
Supplies 2,602 --
Office Expense 3,953 683
Rent 1,763 --
Telephone 4,936 640
Meetings 722 --
Internet & Web Site 994 707
Misc Expenses 4,636 3,308
Bad Debts 178 --
Travel 31,113 10,987
Postage & Courier 5,791 --
Insurance 2,041 --
Advertising & Samples 2,619 5,177
Research Costs 3,485 --
Wage Cost & Costs 30,761 --
Consulting fees 30,089 11,888
Management fees 58,691 40,000
Joint venture formation costs 3,991 --
Depreciation and amortization 49,215 --
------------ ------------
Loss from operations $ 345,662 $ 96,392
------------ ------------
Net loss $ (345,662) $ (96,392)
============ ============
Loss per share ($ 0.014) ($ 0.001)
============ ============
Weighted average
shares outstanding 23,987,753 12,293,593
============ ============
See accompanying notes
4
BARRINGTON SCIENCES CORPORATION
(A development stage enterprise)
STATEMENTS OF OPERATIONS
For the six months ended March 31, 2003 and 2002
Inception
2003 2002 to date
------------ ------------ ------------
Income $ -- $ -- $ --
Operating expenses:
- -------------------
Legal & Professional $ 142,743 36,587 205,689
Bank Charges & Interest 10,064 189 10,324
Supplies 3,449 -- 2,602
Office Expense 7,843 1,244 8,821
Rent 1,763 -- 3,363
Telephone 8,324 1,139 7,557
Meetings 4,216 -- 772
Internet & Web Site 1,389 2,671 4,525
Misc Expenses 5, 136 3,806 4,949
Bad Debts 14,301 -- 14,301
Travel 52,308 14,919 110,973
Postage & Courier 7,847 -- 6,453
Insurance 2,041 -- 2,041
Advertising & Samples 2,619 6,011 8,951
Research Costs 22,260 -- 39,579
License Fee -- 45,796 45,796
Wage Cost & Costs 46,661 -- 49,452
Consulting fees 40,209 61,422 111,872
Management fees 120,000 40,000 340,000
Joint venture formation costs 22,089 855,102 918,591
Materials 51,688 -- 51,688
Depreciation and amortization 97,857 -- 118,726
------------ ------------ ------------
Loss from operations $ 664, 837 $ 1,068,896 $ 2,066,975
------------ ------------ ------------
Net loss ($ 664,837) ($ 1,068,896) ($ 2,066,975)
============ ============ ============
Loss per share ($ 0.028) ($ 0.087) ($ 0.130)
============ ============ ============
Weighted average
shares outstanding 23,987,753 12,293,593 15,835,883
============ ============ ============
See accompanying notes
5
BARRINGTON SCIENCES CORPORATION
(A development stage enterprise)
STATEMENTS OF CASH FLOWS
For the six months ended March 31, 2003 and 2002
Inception
2003 2002 to date
----------- ----------- ----------
OPERATING ACTIVITIES
Net loss $ (664,837) $(1,068,698) (2,066,975)
Items not affecting cash:
Depreciation and amortization 97,857 -- 121,499
Changes in non-cash working capital:
Accounts receivable 22,972 (8,348) --
Subscriptions Receivable 71,640 --
Prepaids and other current assets (4,962) (13,071) (33,145)
Bank overdraft 176,089 -- 199,911
Loan Payable -- 340,000 --
Accounts payable and accrued liabilities 58,653 34,540 180,903
Inventory 51,688 -- --
----------- ----------- -----------
Cash flow used by operating activities (190,900) (715,577) (1,597,807)
INVESTING ACTIVITIES
Investment In Joint Venture (400,000) -- (400,000)
Deposit on Acquisition (50,000) -- (50,000)
Purchase of capital assets (18,187) (51,704) (176,375)
Additions to intangible assets (21,663) -- (1,639,341)
Cash flow from investing activities (489,850) (51,704) (2,265,716)
FINANCING ACTIVITIES
Increase (decrease) in short term debt (3,498) -- --
Issuance of common shares & Paid In Capital 796,968 847,493 3,979,435
Foreign Currency Adjustment 12,783 -- 9,591
----------- ----------- -----------
Cash flow from financing activities 806,253 847,493 3,989,026
----------- ----------- -----------
INCREASE IN CASH FLOW 125,503 80,212 125,503
CASH - Beginning of period -- -- --
----------- ----------- -----------
CASH - End of period $ 125,503 $ 80,212 $ 125,503
=========== =========== ===========
See accompanying notes
6
BARRINGTON SCIENCES CORPORATION
NOTES TO FINANCIAL STATEMENTS
March 31, 2003
1. Basis of presentation
---------------------
General
-------
On December 30, 2002, Barrington Sciences International Corporation
("BSIC") completed the sale of its assets to Financial Express Corporation
("FEC"), a publicly traded Nevada corporation, in a reverse merger. The
accompanying financial statements include the accounts of Barrington
Sciences International Corporation and its wholly owned subsidiaries, and
the activity of FEC from the date of acquisition. In connection with the
transaction, the fiscal year of BSIC, September 30, was adopted.
The accompanying condensed unaudited financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to form 10-Q.
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) considered necessary for a fair presentation
have been included.
Stockholders' equity
--------------------
Basic (loss) per share was computed using the weighted average number
of common shares outstanding.
7
Item 2. Management's Discussion and Analysis of Financial Condition
and Plan of Operations
- --------------------------------------------------------------------------------
(a) Plan of Operation
The Company has generated no revenues from its operations and has been
a development stage enterprise since inception.
In order to implement its plans for 2003, the Company is seeking
approximately $3,000,000 in financing. If this financing is obtained, the
Company has established the following budget for 2003. This budget assumes
the acquisition of VicTorch Meditek, Inc.
On January 16, 2003 the Company entered into a definitive agreement
with VicTorch Meditek Inc. ("VicTorch"), a California diagnostic products
company, pursuant to which the Company will acquire all of the outstanding
shares of VicTorch in exchange for 382,500 shares of the Company's common
stock plus $765,000 in cash. The closing of this acquisition was expected
to occur on March 31, 2003. The company is working with VicTorch to find a
suitable alternate closing and expect to have this resolved within a few
days. In 2002, VicTorch had revenues in excess of $600,000. More
importantly, it has developed an HIV antigen that has been approved in
China. This product will be used to supply the Company's joint venture in
China with the HIV antigen for manufacturing the rapid test. In addition,
VicTorch has a host of other products and customers throughout the
developing world. The Company intends to develop VicTorch's customer base
in order to substantially increase revenues
The Company also recently signed a letter of intent to purchase the
assets of Memco-Tec Limited of Guangzhou, China. The consideration for the
assets will be 1,000,000 shares of the Company's common stock and
$50,000.00 in cash. Memco-Tec has developed an array of diagnostic testing
methods and is in the process of testing revolutionary methods for this
industry. In addition, Memco-Tec has extensive connections in India, China
and other Asian counties. Memco-Tec's personnel are also one of its
valuable assets. Its revenues in 2002 were approximately $200,000. In the
event the Company does not close the purchase with Memco-Tec, it would have
no immediate impact on the Company, but could affect new product
introduction and long-term revenues.
Both VicTorch and Memco-Tec are developers and manufacturers of
medical diagnostic tests. The following budget and projection includes all
operations now owned by the Company plus VicTorch and Memco-Tec.
The Company requires a $3 million cash investment in order to carry
out its business plan. Provided this investment occurs, the Company
projects the following range of results.
8
The Company has sales from VicTorch but has not closed the purchase of
VicTorch as of this date. In order to close the VicTorch deal, the Company
requires approximately $1 million.
Sales are expected to begin in China in the third calendar quarter of
2003, then in other Asian countries in the fourth calendar quarter 2003,
and then in North and South America in the first calendar quarter of 2004.
The following projections are for a one-year period after obtaining
funding of the $3 million.
o Sales: $8 million to $14 million with approximately 50% of the
sales made to the joint venture partner in China.
o Gross Profit: $2.8 million to $4.9 million based on 35% margin.
o Operating Expenses: $1.5 million to $3.6 million.
o Profit from the Joint Venture operation in China: $.2 million to
$1.3 million (this is in addition to the above gross profit on
sales to the JV).
(b) Liquidity and capital resources
The Company currently has a short-term liquidity problem based on near
term operating needs. However, management believes that it will able to
raise additional equity capital, due to the prospects for success with the
Company's products.
(c) Comparison of 2003 and 2002
Operating costs, excluding joint venture related costs, increased by
395% in 2003 as the company incurred additional costs to get prepared for a
launch of the Company's products and continued efforts to raise the capital
required to launch sales.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- ------------------------------------------------------------------
None. The Company does not hold any material market risk sensitive
instruments.
Item 4. Controls and Procedures
- -------------------------------
Under the supervision and with the participation of our management,
including our principal executive officer and principal accounting officer,
we conducted an evaluation of our disclosure controls and procedures, as
such term is defined under Rule 13a-14(c) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), within 90 days of
the filing date of this report. Based on their evaluation, our principal
executive officer and principal accounting officer concluded that our
disclosure controls and procedures are effective.
9
There have been no significant changes (including corrective actions
with regard to significant deficiencies or material weaknesses) in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation referenced in the
preceding paragraph.
10
PART II Other Information.
- ------- ------------------
Item 1. Legal Proceedings.
- --------------------------
There are no pending legal proceedings, and the Company is not aware
of any threatened legal proceedings, to which the Company is a party or to
which its property is subject.
Item 2. Changes in Securities
- -----------------------------
(a) The articles of the company were amended during the quarter. A
copy of the amended and restated Articles of Incorporation is
attached.
(b) The bylaws of the corporation were amended during this quarter. A
copy of the Bylaws as amended is attached.
Item 3. Defaults Upon Senior Securities
- ---------------------------------------
(Not applicable)
Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
Shareholders owning 23,109,654 hares of the Company's common stock,
representing 98.5% of the outstanding shares of common stock, voted by
written consent in February, 2003 to amend and restate the Articles of
Incorporation of the Company. In accord with Nevada law, those shareholders
not consenting to this action were notified of the action by the Company.
Item 5. Other Information
- -------------------------
(Not applicable)
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits
Exhibit Listing
3.1. Restated Articles of Incorporation of Barrington Sciences
Corporation
3.2. Bylaws of Barrington Sciences Corporation
10.1. Contract-Licensing Agreement with Egyptian Organization for
Biological Products & vaccines - Vacsera
11
(b) Reports on Form 8-K
Form 8-K filed February 5, 2003
Form 8 K filed April 14, 2003
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the Undersigned, thereunto duly authorized
BARRINGTON SCIENCES CORPORATION
By: /s/ Lorne Broten Date: May 12, 2003
--------------------------- --------------------------
Lorne Broten
CFO and director