SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 30, 2000 Commission file number 0-10822 BICO, INC. (Exact name of registrant as specified in its charter) Pennsylvania 25-1229323 (State of other jurisdiction (IRS Employer of incorporation or organization) Identification no.) 2275 Swallow Hill Road, Bldg. 2500, Pittsburgh, PA 15220 (Address of principal executive offices) (Zip Code) (412) 429-0673 Registrant's telephone number, including area code 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. Yes X No As of June 30, 2000, 962,817,628 shares of BICO, Inc. common stock, par value $.10 were outstanding. 1 BICO, Inc. and Subsidiaries Consolidated Balance Sheets Jun. 30, 2000 Dec. 31, 1999 ------------- ------------- CURRENT ASSETS Cash and equivalents $ 11,827,763 $ 10,827,631 Accounts receivable - net of allowance for doubtful accounts 7,123 27,263 of $63,679 at Jun. 30, 2000 and $63,679 at Dec. 31, 1999 Inventory - net of valuation allowance 356,567 10,308 Notes receivable 20,000 200,000 Interest receivable 0 2,701 Prepaid expenses 535,186 192,246 Advances - Officers 127,290 125,290 Other assets 500,000 0 ------------ ------------- TOTAL CURRENT ASSETS 13,373,929 11,385,439 PROPERTY, PLANT AND EQUIPMENT Building 1,207,610 1,207,610 Land 133,750 133,750 Leasehold improvements 1,623,141 1,435,319 Machinery and equipment 4,911,026 4,676,330 Furniture, fixtures & equipment 1,000,477 841,308 ------------- ------------- Subtotal 8,876,004 8,294,317 Less accumulated depreciation 4,997,091 4,704,539 ------------- ------------- 3,878,913 3,589,778 OTHER ASSETS Related Party Receivables Notes receivable 1,422,024 1,491,261 Interest receivable 24,555 22,023 ------------- ------------- 1,446,579 1,513,284 Allowance for related party receivables (1,305,258) (1,340,560) ------------- ------------ 141,321 172,724 Notes receivable 212,000 12,000 Interest receivable 4,847 4,235 Investment in unconsolidated subsidiaries 1,615,581 485,284 Other assets 35,380 36,376 ------------- ------------- 2,009,129 710,619 ------------- ------------- TOTAL ASSETS $ 19,261,971 $ 15,685,836 ============= ============= The accompanying notes are an integral part of these statements. 2 BICO,Inc. and Subsidiaries Consolidated Balance Sheets (Continued) Jun. 30, 2000 Dec. 31, 1999 ------------- ------------- CURRENT LIABILITIES Accounts payable $ 257,734 $ 759,733 Current portion of long-term debt 4,093,608 4,159,684 Current portion of capital lease obligations 99,606 76,017 Debentures payable 9,500,000 0 Accrued liabilities 1,394,458 1,794,370 Escrow payable 2,700 2,700 ------------- ------------- TOTAL CURRENT LIABILITIES 15,348,106 6,792,504 LONG-TERM LIABILITIES Capital lease obligations 1,273,532 1,336,147 Long-term debt 1,241 2,240 ------------- ------------- 1,274,773 1,338,387 COMMITMENTS AND CONTINGENCIES UNRELATED INVESTORS'INTEREST IN SUBSIDIARY 9,360 0 STOCKHOLDERS' EQUITY Common stock, par value $.10 per share, authorized 1,700,000,000 shares, issued and outstanding 962,817,628 at Jun. 30, 2000 and 956,100,496 at Dec. 31, 1999 96,281,763 95,610,050 Series F 4% convertible preferred stock, par value $10 per share, authorized 500,000 shares issuable in series, shares issued and outstanding 452,000 at June 30, 2000 and 72,000 at December 31, 1999. 4,520,000 720,000 Additional paid-in capital 90,213,266 85,608,192 Warrants 6,718,837 6,791,161 Accumulated deficit (195,104,134) (181,174,458) ------------- ------------- TOTAL STOCKHOLDERS' EQUITY 2,629,732 7,554,945 ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDER' EQUITY $ 19,261,971 $ 15,685,836 ============= ============= The accompanying notes are an integral part of these statements. 3 BICO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the six months ended For the three months ended Jun. 30, Jun. 30, 2000 1999 2000 1999 -------------- -------------- -------------- -------------- Revenues Net Sales $ 38,813 $ 78,428 $ 19,815 $ 51,108 Other income - 14,397 - 7,630 -------------- -------------- -------------- -------------- 38,813 92,825 19,815 58,738 Costs and expenses Cost of products sold 58,228 132,991 27,568 66,572 Research and development 3,805,960 2,154,759 1,655,637 1,410,914 General and administrative 7,621,067 8,132,276 3,432,100 5,688,833 Amortization of goodwill 136,737 - 59,530 - -------------- -------------- -------------- -------------- 11,621,992 10,420,026 5,174,835 7,166,319 -------------- -------------- -------------- -------------- Loss from operations (11,583,179) (10,327,201) (5,155,020) (7,107,581) -------------- -------------- -------------- -------------- Other income Interest 327,949 60,758 163,631 34,052 Other expense Beneficial convertible debt feature 2,462,500 4,006,524 - 3,060,794 Interest expense 259,818 194,253 108,061 53,490 Loss on unconsolidated subsidiary 8,750 - - - Loss on disposal of assets 15,874 - - - -------------- -------------- -------------- ------------- 2,746,942 4,200,777 108,061 3,114,284 -------------- -------------- -------------- ------------- Loss before unrelated investors' interest (14,002,172) (14,467,220) (5,099,450) (10,187,813) Unrelated investors' interest in net (income) loss of subsidiary 72,496 2,314 301,320 (21,848) -------------- -------------- -------------- -------------- Net loss $ (13,929,676) $ (14,464,906) $ (4,798,130) $ (10,209,661) ============== ============== ============== ============== Loss per common share - Basic: Net Loss $ (0.01) $ (0.03) $ (0.01) $ (0.02) Less: Preferred stock dividends (0.00) (0.00) (0.00) (0.00) -------------- -------------- ------------- -------------- Net loss attributable to common stockholders: $ (0.01) $ (0.03) $ (0.01) $ (0.02) ============== ============== ============= ============== Loss per common share - Diluted: Net Loss $ (0.01) $ (0.03) $ (0.01) $ (0.02) Less: Preferred stock dividends (0.00) (0.00) (0.00) (0.00) -------------- -------------- ------------- -------------- Net loss attributable to common stockholders: $ (0.01) $ (0.03) $ (0.01) $ (0.02) ============== ============== ============= ============== See notes to consolidated financial statements. 4 BICO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the six months ended For the three months ended Jun. 30, Jun. 30, 2000 1999 2000 1999 -------------- -------------- -------------- -------------- Cash flows used by operating activities: Net loss ($13,929,676) ($14,464,906) ($4,798,130) ($10,209,661) Adjustments to reconcile net loss to net cash used by operating activities : Depreciation 309,646 880,777 152,590 439,228 Amortization 136,737 - 59,530 - Loss on disposal of assets 15,874 - - - Loss on unconsolidated subsidiary 8,750 - - - Reduction in goodwill - 2,000,000 - 2,000,000 Unrelated investors' interest in subsidiary (72,496) (2,314) (301,320) 21,848 Stock issued in exchange for services - 64,463 - - Beneficial convertible debt feature 2,462,500 4,006,524 - 3,060,794 Warrants granted 235,257 496,536 44,959 496,536 Warrants and warrant extensions by subsidiary 864,141 - 582,648 - (Decrease)increase in allowance for related party recv. (35,302) (19,803) (24,140) (847) Debenture interest converted to stock - 22,070 - 22,070 (Increase) decrease in accounts receivables 20,140 (20,470) 35,637 (14,886) (Increase) decrease in inventories 542,156 (11,891) (279,724) (16,768) Increase (decrease) in inventory valuation allowance (888,415) 85,836 (74,042) 85,836 (Increase) decrease in prepaid expenses (342,940) 21,103 (263,745) (23,950) (Increase) decrease in other assets (499,003) (355,810) 1,247 (350,000) (Decrease) increase in accounts payable (501,999) (1,096,090) (506,947) (290,317) (Increase) decrease in other liabilities (399,912) (466,053) 84,802 (364,156) Impairment loss - 283,208 - 283,208 -------------- -------------- -------------- -------------- Net cash flow used by operating activities (12,074,542) (8,576,820) (5,286,635) (4,861,065) -------------- -------------- -------------- -------------- Cash flows from investing activities: Purchase of property, plant and equipment (614,655) (121,038) (372,254) (112,274) Disposal of property, plant, and equipment - 175,000 - - (Increase) decrease in notes receivable (22,000) (49,341) 33,000 (51,975) Payments received on notes receivable 69,237 - 33,952 - (Increase) decrease in interest receivable (443) (22,345) (2,133) (802) Deposit on equipment - (45,547) - (12,738) Acquisition of unconsolidated subsidiary interests (1,275,784) - (52,000) - -------------- -------------- -------------- -------------- Net cash provided (used) by investing activities (1,843,645) (63,271) (359,435) (177,789) -------------- -------------- -------------- -------------- Cash flows from financing activities: Proceeds from warrants exercised 899,450 - - - Proceeds from sale of Preferred stock-Series F 4,275,000 - - - Proceeds from debentures payable 9,850,000 - - - Proceeds from public offering - 19,361,418 - 13,591,418 Payments on notes payable (67,075) (443,558) (29,169) (154,714) Payments on capital lease obligations (39,026) (67,484) (18,692) (33,091) -------------- -------------- -------------- -------------- Net cash provided by financing activities 14,918,319 18,850,376 (47,861) 13,403,613 -------------- -------------- -------------- -------------- (Decrease) increase in cash and equivalents 1,000,132 10,210,285 (5,693,931) 8,364,759 Cash and equivalents, beginning of period 10,827,631 125,745 17,521,694 1,971,271 -------------- -------------- -------------- -------------- Cash and equivalents, end of period $ 11,827,763 $ 10,336,030 $ 11,827,763 $ 10,336,030 ============== ============== ============== ============== See notes to consolidated financial statements. BICO, INC. NOTES TO FINANCIAL STATEMENTS NOTE A - Basis of Presentation The accompanying consolidated financial statements of BICO, Inc. (the "Company") and its 89.9% owned subsidiary, Coraflex, Inc., and its 52% owned subsidiary, Diasensor.com, Inc., and its 67% owned subsidiary, Petrol Rem, Inc., and its 99.1% owned subsidiary, ViaCirQ, Inc., and its 58.4% owned subsidiary, ICTI, Inc., and its 100% owned subsidiary Ceramic Coatings Technologies, Inc., have been prepared in accordance with generally accepted accounting principles for interim financial information, and with the instructions to Form 10-Q and Rule 10-O Regulation S-X. 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 accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes included in the Company's annual report on Form 10-K for the year ended December 31, 1999. NOTE B - Net Loss Per Common Share Net loss per common share is based on the average number of outstanding common shares. The loss per share does not include common stock equivalents since the effect would be anti-dilutive. The weighted average shares used to calculate the loss per share for the period ending June 30, 2000, and June 30, 1999, were 959,461,176 and 535,289,451, respectively. The net losses attributable to common stockholders for the six month period and the three month period ended June 30, 2000 were $15,813,009 and $5,899,871 which include constructive dividends to preferred stockholders of $1,883,333 and $1,101,741 respectively. NOTE C - Subordinated Convertible Debentures During the first quarter of 2000, the Company issued subordinated 4% convertible debentures totaling $9,850,000. In the second quarter, $350,000 of these debentures were converted to common stock. Such convertible debentures were issued pursuant to Regulation D, and /or Section 4(2), and have a one-year maturity and are not saleable or convertible for a minimum of 90 days from issuance. A $2,462,500 expense was recognized upon issuance for the beneficial conversion feature of these debentures. NOTE D - Stockholders Equity During the six months ended June 30, 2000, the Company raised $4,275,000 through sales of its Series F-Preferred Stock and $899,420 from warrants exercised. The Company's common stock is currently traded on the electronic bulletin board under the trading symbol "BICO". NOTE E - Legal Proceedings During April 1998, the Company and its affiliates were served with subpoenas by the U.S. Attorneys' office for the U.S. District Court for the Western District of Pennsylvania. The subpoenas requested certain corporate, financial and scientific documents and the Company continues to provide documents in response to such requests. On April 30, 1996, a class action lawsuit was filed against the Company, Diasense, Inc., and individual officers and directors. The suit, captioned Walsingham v. Biocontrol Technology,et al., has been certified as a class action, and is pending in the U.S. District Court for the Western District of Pennsylvania. The suit alleges misleading disclosures in connection with the Noninvasive Glucose Sensor and other related activities which the company denies. By mutual agreement of the parties, the suit remains in the pre-trial pleading stage, and the Company is unable to determine the outcome or its impact upon the Company at this time. NOTE F - Investments in Unconsolidated Subsidiaries In January 2000, the company acquired a twenty-five percent (25%) interest in Insight Data Link.com, Inc. for $100,000. Insight is a Pennsylvania corporation formed to engage in the business of acting as an internet clearinghouse for persons seeking to acquire, and persons having available, shopping mall space, as well as software development for related projects. In January 2000, Diasensor.com, acquired a ten percent (10%) interest in MicroIslet, Inc. for an investment of $500,000. MicroIslet is a California company, which has licensed several diabetes research technologies from Duke University with a specific focus on optimizing microencapsulated islets for transplantation. Also, during the six months ended June 30, 2000 the Company invested an additional $175,000 in American Inter- Metallics, Inc. ("AIM") an unconsolidated subsidiary interest initially acquired during 1999. AIM has its operations in Rhode Island, and is developing a product that enhances performance in rockets and other machinery by increasing the burn rate of propellants. In March 2000, Diasensor.com, acquired an equity interest in Diabecore Medical, Inc., a Toronto-based company working to develop a new insulin for the treatment of diabetes, for $500,784. With this initial investment, the Company owns 12% of Diabecore. These investments are being reported on the equity basis and differences in the investment and the underlying net assets of the unconsolidated subsidiaries are being amortized as goodwill over a 5 year period. NOTE G - Beneficial Conversion Feature of Preferred Stock As of June 30, 2000 the Company had issued 452,000 shares of its Series F 4% convertible preferred stock, which include a beneficial conversion feature providing the preferred stockholder a discount of 25% upon conversion to the Company's common stock after 120 days. The value of this beneficial conversion feature is determined by reducing the market price of the Company's common stock by the discounted conversion price on the date of commitment. This discount is recognized as a reduction in the preferred stock recorded at par and is amortized as constructive dividends to the preferred stockholders over the 120 day period using the effective interest method. The total valuation discount of this beneficial conversion feature on the 452,000 shares of preferred stock was $1,883,333 and was recognized as constructive dividends charged to Additional Paid in Capital during the six months ended June 30, 2000. NOTE H - Subsequent Events In July 2000, the Company entered into a capital lease for an industrial building adjacent to its existing manufacturing facility in Indiana County, Pennsylvania. Under the terms of the lease the Company will make total payments of $2,066,215 through December 2010 at which time title to the property will be transferred to the Company. Management recognized this property and the corresponding capital lease obligation at the present value of the lease payments which was $1,434,066, using an imputed rate of 9% per annum. The payment terms of the lease are as follows: July 2000 $ 463,994 October - December 2001 37,386 January - December 2002 154,033 January - December 2003 158,652 January - December 2004 163,413 January - December 2005 168,316 Thereafter thru 2010 920,421 ---------- TOTAL LEASE PAYMENTS 2,066,215 Less amount representing interest (632,149) ---------- Present value of lease payments $1,434,066 ========== Management's Discussion and Analysis of Financial Condition and Cash Flows Liquidity and Capital Resources Our cash increased to $11, 827,763 as of June 30, 2000 from $10,827,631 as of December 31, 1999. The increase was generated from sales of our securities, including: $9,850,000 from sales of our subordinated convertible debentures; $4,275,000 from sales of our Series F preferred stock; and $899,420 from warrants exercised. Our Series F Convertible Preferred Stock is not secured by any of our assets, and it is convertible by its holders beginning 120 days from when it's issued. Our preferred stock can be converted to our common stock at a price that is determined by computing 75% of the average closing bid price for the four days prior to and the day of conversion - or a 25% discount to a five-day average trading price. There is no minimum conversion price. Our Subordinated convertible debentures are not secured by any assets, and are subordinate to our corporate debt, except for debt to any related parties. Our debentures are convertible beginning 90 days from when we issue them. They can be converted to common stock at a price that is determined by computing 80% of the average closing bid price for the four days prior to and the day of conversion - or a 20% discount to a five-day average trading price. There is no minimum conversion price. During the six months ended June 30, 2000 our net cash flow used by operating activities was ($12,074,542). During the same period, our net cash flow used by investing activities was ($1,843,645) due primarily to our investments in the following unconsolidated subsidiaries: Insight Data Link.com, Inc., American Inter-Metallics, Inc., MicroIslet, Inc., and Diabecore Medical, Inc., which we discuss in the following three paragraphs. During the first six months of 2000, we made investments in unconsolidated subsidiaries. In January, BICO acquired a 25% interest in Insight Data Link.com, Inc. for $100,000. Insight is a start-up corporation with a software program and website business that acts as an internet clearinghouse for the rental of shopping mall space. Insight also plans to develop additional software for related projects. We also invested an additional $175,000 in American Inter-Metallics, bringing our total investment in AIM's rocket propulsion project to $700,000. We made these investments because our management believes they will generate revenue. Our subsidiary, Diasensor.com, Inc. also made investments in unconsolidated subsidiaries. In January 2000, Diasensor.com initiated an alliance with MicroIslet, Inc.; in return for its initial equity investment of $500,000, Diasensor.com received a 10% stake with an option to purchase an additional 10% in the future. MicroIslet is developing several diabetes research technologies with Duke University that focus on optimizing microencapsulated islets for transplantation. The project is in the research and development phase. Diasensor.com also invested in Diabecore Medical, Inc. Diabecore is a company in Toronto working with other research institutions to develop a new insulin to treat diabetes. Diasensor.com invested $500,784 in Diabecore and received a 12% ownership interest. This project is also in the research and development phase. Diasensor.com made these investments because management believes that these diabetes research organizations and the institutions they affiliate with will bring strength and support to our own diabetes research and development projects. As a result of those investments in Insight Data Link.com, American Inter-Metallics, MicroIslet and Diabecore Medical, our overall investment in unconsolidated subsidiaries increased from $485,284 as of December 31, 1999 to $1,615,581 at June 30, 2000. The money we spent investing in those four companies came from stock and debenture sales during 1999 and 2000. All the investments were our initial investments in those companies, except American Inter-Metallics - we've invested a total of $700,000 in AIM as of June 30, 2000. Our net inventory increased from $10,308 as of December 31, 1999 to $356,567 as of June 30, 2000 as a result of inventory build up for our hyperthermia products (approximately $250,000) and our noninvasive glucose sensor product. Current - short-term - notes receivable increased by $20,000 due to a note to one individual that is being repaid currently, with a full payoff by August 1, 2000, and decreased by $200,000 when a short-term note was reclassified as a long- term note. Interest receivable decreased from $2,701 as of December 31, 1999 to zero at June 30, 2000 due to timing of interest payments on certain debt. Prepaid expenses increased from $192,246 at December 31, 1999 to $535,186 as of June 30, 2000 due to prepayments required in the ordinary course of business. Other current assets of $500,000 resulted from a deposit we made during the first quarter on a transaction that we later cancelled; we expect to have the deposit returned during the third quarter of 2000. Leasehold improvements increased by $187,822; machinery and equipment increased by $234,696; and furniture, fixtures and equipment increased $159,169 for the six month period ended June 30, 2000 due to purchases we made in connection with our noninvasive glucose sensor and hyperthermia projects. Related party receivables decreased by $31,403 during the six month period ended June 30, 2000 due to scheduled repayments on related party debt. Notes receivable increased by $200,000 when a note previously carried as a current asset was reclassified as a long-term asset. Debentures payable of $9,850,000 were incurred because we sold convertible subordinated debentures during the first quarter to raise capital to fund operations. During the second quarter, $350,000 of debentures were converted to common stock. Accrued liabilities decreased from $1,794,370 to $1,394,458 primarily due to accrued bonuses paid to employees during the first six months. Results of Operations Our sales and corresponding costs of products sold during the six months decreased to $38,813 and $58,228 respectively in 2000 from $78,428 and $132,991 in 1999. The decreases were due to fluctuations in sales of our various products. Our costs decreased due to our overall reduced sales. Our overall sales decreased because we have not been able to successfully market our products. For example, we had sales of the Diasensor totaling $47,500 in the first six months of 1999, and no sales of the Diasensor during the first six months of 2000, because we haven't been able to successfully sell the device in Europe. We're not sure why we were only able to sell a few sensors in 1999, and none in 2000. We've hired marketing consultants to help us figure out why, and to help us learn how to sell more. We had minor sales totaling $3,500 of other biomedical products, primarily leftover parts from previous models of the Diasensor, during the first six months of 1999, but we sold all of them in 1999 and had no similar sales in 2000. Our other product sales increased, but not significantly. Bioremediation product sales totaled $15,700 during the first six months of 1999, with a slight decrease to $12,200 during the first six months of 2000. During the first six months of 1999 and 2000, sales of $8,350 and $5,400, respectively, were from sales of our theraPORT, an implantable device used by patients who have to have repeated injections of drugs. The theraPORT is implanted in the patient's chest, and provides a fixed port for catheters used to deliver the drugs the patient needs. Those sales decreased because we had fewer orders in the second quarter of 2000. We also had sales of our metal-coating products totaling $3,350 during the first six months of 1999 and $21,200 during the first six months of 2000. The increase was due to repeat customers who sent us more work once they were satisfied with our earlier performance. Until we have significant sales, we can't predict any trends for future revenues. Interest income increased during the first six months to $327,949 in 2000 from $163,631 in 1999. The increase occurred because we had more funds to invest. Other income decreased from $14,399 during the first six months of 1999 to zero during the first six months of 2000. The decrease was due to the loss of rental income. Research and Development expenses during the first six months increased to $3,805,960 in 2000 from $2,154,759 in 1999. The increase was due to increased spending on our noninvasive glucose sensor project, made possible due to the availability of additional funds. We used those additional funds to replace scientists and engineers who left during 1998 when we had serious cash flow problems, and to work on future versions of the noninvasive glucose sensor. General and Administrative expenses during the first six months decreased from $8,132,276 in 1999 to $7,621,067 in 2000. The decrease is primarily due to a $925,000 decrease in commissions on sales of our debentures because we sold less of those securities compared to last year. We also had a $603,000 increase in expenses recognized for warrants granted. We had a loss in unconsolidated subsidiary during the first six month of $8,750. This loss resulted because we absorbed part of a loss incurred by an unconsolidated subsidiary. Our share of the loss is determined by applying our ownership percentage to the total loss incurred, and we get to deduct the portion of the loss allocated to the unrelated investors from our total net loss. Beneficial conversion terms included in our convertible debentures are recognized as expense and credited to additional paid in capital at the time the associated debentures are issued. We recognized $2,462,500 of expense in connection with the issuance of our subordinated convertible debentures in the first six months of 2000 compared to $4,006,524 for the same period in 1999. The amount decreased primarily because we issued less debentures this year compared to last year. Similarly, we recognized a beneficial conversion feature for our preferred stock during the first six months of 2000. As of June 30, 2000, we issued 452,000 shares of our Series F preferred stock. The preferred stock is convertible into our common stock at a discount of 25% after 120 days. Based on accounting rules, the value of the beneficial conversion feature of the preferred stock is calculated as the difference between the market price and the discounted price for the corresponding common stock on the date the preferred stock was purchased. The total discount of $1,883,333, or $4.17 per preferred share, was recognized as a constructive dividend on our preferred stock during the first six months of 2000. We charged the $1,883,333 to additional paid-in capital. We did not have any of these charges or constructive dividends during the first six months of 1999 because we had not yet issued our preferred stock. PART II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (A) Exhibits (B) Reports on Form 8-K (1) A report on form 8-K dated May 11, 2000, for the event dated May 11, 2000, with respect to Item 5 other events. and Item 7 (c), Exhibit. (2) A report on form 8-K dated May 22, 2000, for the event dated May 22, 2000, with respect to Item 5 other events and Item 7 (c), Exhibit. (3) A report on form 8-K dated June 2, 2000, for the events dated June 1 and June 2, 2000 with respect to Item 5 other events, Item 6 Resignation of Registrant's Directors and Item 7 (c), Exhibit. (4) A report on form 8-K dated June 5, 2000, for the event dated June 5, 2000, with respect to Item 5 other events and Item 7 (c), Exhibit. 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 on this 15th day of August, 2000 . BIOCONTROL TECHNOLOGY, INC. By /s/ Fred E. Cooper Fred E. Cooper CEO