UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A AMENDMENT NO. 1 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) December 4, 1998 BELL NATIONAL CORPORATION ------------------------------------------------------ (Exact Name of Registrant as Specified in Its Charter) California 0-935 94-1451828 - ------------------------------- ------------ ------------------- (State or Other Jurisdiction of (Commission (I.R.S. Employer Incorporation or Organization) File Number) Identification No.) 900 North Franklin Street, Suite 210, Chicago, Illinois 60610 - ------------------------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) (312) 640-8810 ----------------------------------------------------- (Registrant's Telephone Number, Including Area Code) 360 Rio Vista Avenue, Suite A, Orlando, Florida 32805 ------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Business Acquired. 1. Balance sheet of InPath, LLC as of September 30, 1998 2. Statement of Operations of InPath, LLC for the period from February 1, 1998 through September 30, 1998 3. Statement of Cash Flows of InPath, LLC for the period from February 1, 1998 through September 30, 1998 4. Notes to Financial Statements (b) Pro Forma Financial Information. 1. Pro Forma Consolidated Balance Sheet of Bell National Corporation at September 30, 1998 2. Pro Forma Consolidated Statement of Operations of Bell National Corporation for the eight months ended September 30, 1998 3. Notes to Pro Forma Consolidated Financial Statements InPath, LLC (A Development Stage Company) Balance Sheet September 30, 1998 (Unaudited) ------------- ASSETS Cash and cash equivalents . . . . . . . . . . . . . $ 631 ---------- Total current assets. . . . . . . . . . . . $ 631 Fixed assets, net . . . . . . . . . . . . . . . . . $ 43,126 Other assets, net License . . . . . . . . . . . . . . . . . . . . . $ 745,000 Patents . . . . . . . . . . . . . . . . . . . . . $ 5,993 ---------- Total assets. . . . . . . . . . . . . . . . $ 794,750 ========== LIABILITIES AND MEMBERS' EQUITY Current Liabilities: Accounts payable. . . . . . . . . . . . . . . . . $ 424,679 Notes payable, current. . . . . . . . . . . . . . $ 75,000 Other current liabilities . . . . . . . . . . . . $ 21,854 ---------- Total current liabilities . . . . . . . . . $ 521,533 Notes payable, long-term. . . . . . . . . . . . . . . $ 175,000 Members' Equity Capital stock . . . . . . . . . . . . . . . . . . . $ 398,834 Accumulated deficit . . . . . . . . . . . . . . . . $ (300,617) ---------- Total members' equity . . . . . . . . . . . $ 98,217 ---------- Total liabilities and members' equity . . . . . . . . $ 794,750 ========== The accompanying notes are an integral part of these financial statements. InPath, LLC (A Development Stage Company) Statement of Operations From February 1, 1998 (Inception) through September 30, 1998 (Unaudited) --------------------- Net sales . . . . . . . . . . . . . . . . . . . . . . $ -- Cost and expenses: Cost of sales . . . . . . . . . . . . . . . . . . . $ -- Selling general and administrative expenses . . . . $ 299,150 ---------- Operating loss. . . . . . . . . . . . . . . . . . . . $ (299,150) Other income (expense): Interest (expense). . . . . . . . . . . . . . . . . $ (1,917) Other . . . . . . . . . . . . . . . . . . . . . . . $ 450 ---------- Loss. . . . . . . . . . . . . . . . . . . . . . . . . $ (300,617) ========== The accompanying notes are an integral part of these financial statements. InPath, LLC (A Development Stage Company) Statement of Cash Flows From February 1, 1998 (Inception) through September 30, 1998 (Unaudited) --------------------- OPERATING ACTIVITIES: Net loss. . . . . . . . . . . . . . . . . . . . . . $ (300,617) Depreciation and amortization . . . . . . . . . . . $ 2,665 Changes in operating assets and liabilities: License . . . . . . . . . . . . . . . . . . . . . $ (500,000) Patents and trademarks. . . . . . . . . . . . . . $ (5,993) Accounts payable. . . . . . . . . . . . . . . . . $ 424,679 Other current liabilities . . . . . . . . . . . . $ 21,854 ---------- Net cash used in operating activities . . . $ (357,412) INVESTING ACTIVITIES: Purchase of fixed assets. . . . . . . . . . . . . . $ (45,791) FINANCING ACTIVITIES: Issuance of notes payable . . . . . . . . . . . . . $ 250,000 Sale of equity units. . . . . . . . . . . . . . . . $ 153,834 ---------- Net cash provided by financing activities . $ 403,834 ---------- NET INCREASE IN CASH AND CASH EQUIVALENTS . . . . . . $ 631 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD. $ -- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD. . . . . . $ 631 ========== The accompanying notes are an integral part of these financial statements. InPath, LLC (A Development Stage Company) Notes to Financial Statements NOTE 1: THE COMPANY AND BASIS OF PRESENTATION InPath, LLC, a development stage company incorporated in the State of Delaware, was formed on February 1, 1998. The Company is undertaking research to develop a proprietary sample collection device and a series of instruments to be used in a point of care cervical cancer screening process. In accordance with the terms of the Exchange Agreement dated December 4, 1998 InPath, LLC agreed to merge with Bell National Corporation (Bell), a company incorporated in the State of California. At the time of the merger Bell had no active operations. Under the terms of the Exchange Agreement, InPath unit holders received newly issued Bell common stock and warrants to purchase additional shares of Bell common stock. Upon exercise of the warrants, the former InPath holders will hold a 50% interest in Bell. The management of InPath has assumed management control of Bell and will continue and expand the current product development process. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FISCAL YEAR. The Company operates on a calendar fiscal year. CASH AND CASH EQUIVALENTS. The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. PROPERTY AND EQUIPMENT. Property and equipment are stated at cost and are depreciated using the straight-line method over the assets estimated useful lives. Principal useful lives are as follows: Furniture and fixtures 5 years Laboratory equipment 5 years Computer and telecommunications equipment 3 years Test instruments 3 years Leasehold Improvements Useful life or life of lease Accumulated depreciation at September 30, 1998 was $2,665. LICENSES, PATENTS, AND TECHNOLOGY: Licenses, patents, and purchased technology are recorded at their acquisition cost. During 1998, a portion of a license, valued at $245,000, was contributed to the Company in exchange for an equity stake of equal value. All costs are amortized over 10 years. Amortization is begun as of the date of acquisition or upon filing of final patent applications. There was no accumulated amortization at September 30, 1998. InPath, LLC (A Development Stage Company) Notes to Financial Statements - Continued REVENUE RECOGNITION. The Company will recognize revenue upon shipment of product to customers. INCOME (LOSS) PER COMMON SHARE. The Company reports income or loss per common share in accordance with Financial Accounting Standards Board Statement No. 128, Earnings Per Share, which replaced the calculation of primary and fully diluted earnings per share with basic and diluted earnings per share. Basic earnings per share excludes any dilutive effects of options or warrants. Diluted earnings per share is similar to the previously reported fully diluted earnings per share. USE OF ESTIMATES: The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. NOTE 3: NOTES PAYABLE On August 28, 1998, the Company issued a $75,000 note payable to its outside legal counsel, Holleb & Coff. The note is due on demand and interest is payable monthly at 12% per annum. Interest expense for the period ended September 30, 1998 was $750. On September 1, 1998, the Company issued a $175,000 note payable to Mr. Peter P. Gombrich, its Chairman and principal unit holder. The note is due September 1, 2003 and interest is payable at each anniversary date at 8% per annum. The note may be prepaid at any time without penalty. Interest expense for the period ended September 30, 1998 was $1,167. NOTE 4: LEASES Future minimum lease payments for operating leases with initial terms in excess of one year as of September 30, 1998 are as follows: 1999 $ 30,000 2000 $ 30,000 2001 $ 30,000 2002 $ 30,000 2003 $ 7,500 Rent expense for the eight months ended September 30, 1998 was $15,000. BELL NATIONAL CORPORATION UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS The following unaudited pro forma consolidated financial statements of Bell National Corporation (the"Company") as of and for the eight months ended September 30, 1998 give effect to the merger of the Company and InPath as if it occurred on February 1, 1998. Based upon the terms of the merger, for financial reporting and accounting purposes the merger has been accounted for as a reverse acquisition whereby InPath is deemed to have acquired the Company. However, the Company is the continuing legal entity and registrant for both Securities and Exchange Commission filing purposes and income tax reporting purposes. Since the Company is a non-operating public shell company, the merger will be recorded as the issuance of stock for the net monetary assets of the Company, accompanied by a recapitalization and no goodwill or other intangible assets will be recorded. The adjustments included in the unaudited pro forma consolidated financial statements represent the Company's preliminary determination of those adjustments based on available information. There can be no assurances that the actual adjustments will not differ significantly from the pro forma adjustments reflected in the pro forma consolidated financial information. The unaudited pro forma consolidated financial statements are not necessarily indicative of either future results of operations or results that might have been achieved if the merger had been consummated as of February 1, 1998. BELL NATIONAL CORPORATION PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1998 - UNAUDITED (Dollars in thousands) Bell Pro National forma Pro Corpor- InPath, Adjust- forma ation LLC ments Balance -------- ------- ------- ------- ASSETS Current assets: Cash and cash equivalents . . . . $ 1,148 $ 1 $1,149 Prepaid expenses. . . 13 -- 13 ------- ------ ------ Total current assets. . . . . . 1,161 1 1,162 Fixed assets, net . . -- 43 43 Other assets, net: License . . . . . . -- 745 745 Patents . . . . . . -- 6 6 ------- ------ ------ Total assets. . . . $ 1,161 $ 795 $1,956 ======= ====== ====== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable. . . $ 425 $ 425 Notes payable, current. . . . . . . 75 75 Accrued compensa- tion and benefits . . . . . . $ 348 $ (202) (2) 146 Other current liabilities. . . . . 392 22 (332) (2) 82 Reserve for asset sale . . . . . . . . 106 106 ------- ------ ------- ------ Total current liabilities . . . $ 846 $ 522 $ 834 Notes payable, long-term. . . . . . . 175 175 Stockholders' equity Capital stock . . . . $15,849 $ 399 $(15,461)(1) $1,321 534 (2) Additional paid in capital. . . . . . . 10 (10)(1) -- Accumulated deficit. . . . . . . (15,544) (301) 15,471 (1) (374) -------- ------ ------ 315 98 947 -------- ------ ------ Total Liabilities and Stockholders' Equity. . . . . . $ 1,161 $ 795 $1,956 ======== ====== ====== The accompanying notes are an integral part of these pro forma consolidated financial statements. BELL NATIONAL CORPORATION PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS EIGHT MONTHS ENDED SEPTEMBER 30, 1998 - UNAUDITED (Dollars in thousands) Bell Pro National forma Corpor- InPath, Adjust- As ation LLC ments Adjusted -------- ------- ------- --------- Net Sales . . . . . . . $ -- -- -- Cost and expenses: Cost of sales . . . . -- -- -- Selling, general and administra- tive expenses. . . . 116 $ 299 $ 415 ------- ------- ------- Operating loss. . . . . (116) (299) (415) Other income (expense): Interest income (expense). . . . . . 48 (2) 46 Other . . . . . . . . -- -- -- ------- ------- ------- Loss before income taxes . . . . . (68) (301) (369) Provision for income taxes . . . . . (5) -- (5) ------- ------- ------- Net loss. . . . . . . . $ (73) $ (301) $ (374) ======= ======= ======= Basic and diluted net loss per common share . . . . . $ (0.01) $ (0.02) ======= ======= Weighted average number of common . . . shares outstanding . . 5,916,686 9,241,306(3) 15,157,992 ========= ========= ========== The accompanying notes are an integral part of these pro forma consolidated financial statements BELL NATIONAL CORPORATION NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS Note 1: To reflect the exchange of common stock of the Company for Units of InPath, LLC, and the recapitalization of the Company. Note 2: To reflect the issuance of 1,776,666 shares of common stock of the Company insettlement of certain liabilities due to officers, directors, and shareholders in the amount of $534,000. Note 3: To reflect 4,288,790 new shares of common stock issued by the Company in exchange for Units of InPath, LLC. Also includes the InPath warrants to purchase 3,175,850 shares of common stock of the Company and the 1,776,666 shares of common stock issued in settlement of certain liabilities, see Note 2 above. SIGNATURE 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. BELL NATIONAL CORPORATION (Registrant) /s/ Leonard R. Prange --------------------------------------- (President and Chief Financial Officer) Date: February 16, 1999