UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the first quarter ended Commission file number
December 31, 2002 33-27042-NY
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BARRINGTON SCIENCES CORPORATION
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(Formerly known as: Financial Express Corporation)
(Exact name of registrant as specified in its charter)
Nevada 93-0996537
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1107 Bennet Drive
Port Coquitlam, British Columbia, Canada V3C 6H2
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(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
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(Title of Each Class) (Name of Each Exchange
on which Registered)
Securities registered pursuant to Section 12 (g) of the Act:
Common
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(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
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The number of shares of the Common Stock of the registrant outstanding as of
December 31, 2002 was 23,446,354. The aggregate common stock held by
non-affiliates on December 31, 2002 was 336,700.
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BARRINGTON SCIENCES INTERNATIONAL CORPORATION
(A development stage enterprise)
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INDEX
Page No.
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Part I. Financial Information
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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
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 8
Item 4. Controls and Procedures 8
Part II. Other Information
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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
2
BARRINGTON SCIENCES CORPORATION
(A development stage enterprise)
Balance Sheet
December 31, 2002
Assets
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Current assets:
Cash $ 232,388
Accounts receivable 2,061
Prepaid and other current assets 49,901
-----------
Total current assets 284,350
Property plant and equipment, net of
accumulated depreciation of $48,889 118,066
Intangible assets, net of accumulated
amortization of 23,395 1,615,946
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Total assets $ 2,018,362
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Liabilities and Stockholders' Equity
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Current liabilities:
Notes payable to banks $ 98,921
Accounts payable and accrued liabilities 94,859
Deposit received for share purchase 100,000
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Total current liabilities 293,780
Stockholders' equity:
Common stock $.001 par value;
25,000,000 authorized; 23,446,354 issued
and outstanding 23,446
Additional paid in-capital 3,412,858
Foreign currency adjustment 9,591
Losses accumulated during the
development stage (1,721,313)
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Total stockholders' equity 1,724,582
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Total liabilities and stockholders' equity $ 2,018,362
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See accompanying notes
3
BARRINGTON SCIENCES CORPORATION
(A development stage enterprise)
STATEMENTS OF OPERATIONS
For the quarters ended December 31, 2002 and 2001
Inception
2002 2001 to date
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Income $ -- $ -- $ --
Operating expenses:
Depreciation and amortization 48,642 -- 69,511
Bad debts 14,123 -- 14,123
Consulting fees 32,249 49,534 81,783
Management fees 61,309 -- 281,309
General and administrative expenses 26,360 5,275 40,984
Professional fees 44,507 13,725 107,453
Research costs 18,775 -- 36,094
Travel 3,424 3,072 77,972
License fees -- 45,796 45,796
Joint venture formation costs 18,098 855,102 914,600
Materials 51,688 -- 51,688
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Loss from operations (319,175) (972,504) 1,721,313
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Net loss $ (319,175) $ (972,504) $ (1,721,313)
============ ============ ============
Loss per share $ (0.017) $ (0.079) $ (0.125)
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Weighted average
shares outstanding 18,879,210 12,293,593 14,426,685
============ ============ ============
See accompanying notes
4
BARRINGTON SCIENCES CORPORATION
(A development stage enterprise)
STATEMENTS OF CASH FLOWS
For the quarter ended December 31, 2002 and 2001
(Unaudited)
Inception
2002 2001 to date
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OPERATING ACTIVITIES
Net loss $ (319,175) $ (972,504) (1,721,313)
Items not affecting cash:
Depreciation and amortization 48,642 -- 72,284
Changes in non-cash working capital:
Accounts receivable 20,911 -- (2,061)
Prepaids and other current assets (21,718) (2,487) (49,901)
Bank overdraft 75,099 -- 98,921
Accounts payable and accrued liabilities (27,392) 48,940 94,859
Other, net 8,459 -- --
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Cash flow used by operating activities (163,486) (926,051) (1,507,211)
INVESTING ACTIVITIES
Purchase of capital assets (8,767) (45,604) (166,955)
Additions to intangible assets (21,663) -- (1,639,341)
----------- ----------- -----------
Cash flow from investing activities (30,430) (45,604) (1,806,296)
FINANCING ACTIVITIES
Increase (decrease) in short term debt (3,497) 365,243 --
Increase in deposit
received for share purchase 100,000 -- 100,000
Issuance of common shares 329,801 625,738 3,445,895
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Cash flow from financing activities 426,304 990,981 3,545,895
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INCREASE IN CASH FLOW 232,388 19,326 232,388
CASH - Beginning of period -- -- --
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CASH - End of period $ 232,388 $ 19,326 $ 232,388
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See accompanying notes
5
BARRINGTON SCIENCES CORPORATION
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
1. Basis of presentation
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General
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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. FEC changed its name to Barrington Sciences
Corporation. 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.
Item 2. Management's Discussion and Analysis of Financial Condition and Plan
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of Operations
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(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
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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.
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.
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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 2002 and 2001
Operating costs, excluding joint venture related costs, increased
by over 400% in 2002 as the company incurred additional costs to get
prepared for a launch of the Company's products. The joint venture
costs were significantly higher in 2001, the year that the company
issued shares to acquire the rights for a joint venture in China. The
costs associated with this acquisition represented a recovery of the
seller's research, development and operating expenses incurred in the
development of a market for the company's products in China.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
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None. The Company does not hold any material market risk sensitive
instruments.
Item 4. Controls and Procedures
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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.
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.
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PART II Other Information.
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Item 1. Legal Proceedings.
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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
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(a) There were no material modifications in any of the
instruments defining the rights of the holders of any of the
Company's registered securities during the period covered by
this report.
(b) None of the rights evidenced by any class of the Company's
registered securities have been materially limited or
qualified by the issuance or modification of any other class
of the Company's securities.
Item 3. Defaults Upon Senior Securities
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(Not applicable)
Item 4. Submission of Matters to a Vote of Security Holders
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(Not applicable)
Item 5. Other Information
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(Not applicable)
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits
4.1 Share Purchase Warrant Certificate
10.1 Asset Acquisition Agreement between the Company and
Barrington International Sciences Corporation (previously
filed with Form 8-K filed on February 13, 2003)
10.2 Bill of Sale absolute effective as of December 31, 2003
10.3 Amendment to Acquisition Agreement between the Company and
Barrington International Corporation
10.4 Agreement for Acquisition of ABP Diagnostics Limited
10.5 Joint Venture Agreement with Shangdon Weigao Group Co. Ltd.
China
(b) Reports on Form 8-K
Reference 8 K filed February 10, 2003
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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 Brote Date: May 9, 2003
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Lorne Broten
CFO and director
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