SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------
Date of Report: August 18, 2000
GENETIC VECTORS, INC.
---------------------
(Exact Name of Registrant as Specified in Charter)
FLORIDA 0-21739 65-0324710
------- ------- ----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5201 N.W. 77TH AVENUE, SUITE 100, MIAMI, FLORIDA 33166
- ------------------------------------------------ -----
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (305) 716-0000
--------------
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 15, 2000, Genetic Vectors, Inc., a Florida corporation
("Genetic Vectors"), completed its acquisition of all of the outstanding shares
of capital stock of DNA Sciences, Inc., a California corporation ("DNA
Sciences"), from the shareholders of DNA Sciences for 450,000 shares of common
stock, par value $0.001 per share, of Genetic Vectors. The amount of
consideration paid for the shares of DNA Sciences was determined in arms-length
negotiations between Genetic Vectors and the shareholders of DNA Sciences. As a
result of the acquisition, DNA Sciences is a wholly owned subsidiary of Genetic
Vectors. The Merger has been accounted for as a pooling of interests. Subsequent
to the acquisition, DNA Sciences changed its name to Genetic Vectors of
California, Inc.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
-------------------------------------------
The audited financial statements of DNA Sciences, Inc. at December 31,
1999 and 1998 and for the two years in the period ended December 31, 1999 are
attached hereto as Attachment 7(a) and are incorporated herein by this
reference.
(b) UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION.
------------------------------------------------------------
Unaudited pro forma condensed combined financial information giving effect
to the merger with DNA Sciences, Inc. are attached hereto as Attachment 7(b) and
are incorporated herein by this reference.
(c) EXHIBITS.
--------
Exhibit 2.1 to this Report is the Stock Purchase Agreement among Genetic
Vectors, DNA Sciences and the shareholders of DNA Sciences, dated January 15,
2000, is incorporated herein by reference to Exhibit 2.1 of Genetic Vectors'
Form 8-K as filed with the Securities and Exchange Commission on February 14,
2000.
Exhibit 23.1 to this Report is the consent of Baum & Company, P.A. to
include the financial statements and auditors' report in this Report.
2
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 hereunto duly authorized.
GENETIC VECTORS, INC.
Date: August 22, 2000 By: /s/ Mead M. McCabe, Sr.
-------------------------
Name: Mead M. McCabe, Sr.
Its: Chairman
3
ATTACHMENT 7(A)
---------------
DNA Sciences, Inc.
CONTENTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS...........................F-2
FINANCIAL STATEMENTS
Balance sheets.........................................................F-3
Statements of income...................................................F-4
Statements of stockholders' equity ....................................F-5
Statements of cash flows...............................................F-6
Notes to financial statements..........................................F-7
BAUM & COMPANY, P.A.
Certified Public Accountants
1515 University Drive
Coral Springs, Florida 33071
INDEPENDENT AUDITOR'S REPORT
The Stockholders of
DNA Sciences, Inc.
Miami, Florida
We have audited the accompanying balance sheets of DNA Sciences, Inc. (Note 1)
as of December 31, 1999 and 1998 and the related statements of income,
stockholders' equity and cash flows for the year ended December 31, 1999 and
period commencing March 15, 1998 to December 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of DNA Sciences, Inc. (Note 1) at December 31,
1999 and 1998 and the results of its operations and its cash flows for the year
and period commencing March 15, 1998 to December 31, 1998 then ended in
conformity with generally accepted accounting principles.
June 23, 2000 /s/BAUM & COMPANY, P.A.
Coral Springs, Florida BAUM & COMPANY, P.A.
F-2
DNA SCIENCES, INC.
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
ASSETS
1999 1998
----------- -----------
Current Assets
Cash in bank $ 14,520 $ 7,888
Accounts receivable - trade 3,185 31,778
---------- --------
Total current assets 17,705 39,666
--------- --------
Fixed Assets (Net) (Note 2) 1,887 2,255
---------- ----------
Total assets $ 19,592 $ 41,921
======== ========
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities
Accounts payable and accrued expenses $ 43,064 $ 15,425
Loan payable - related party 0 6,692
--------- --------
Total current liabilities 43,064 22,117
--------- --------
Stockholders equity
Common stock, par value $.01, 1,000,000 shares
authorized; 3,000,000 issued and outstanding in
1999 (Note 1) 10,000 0
Accumulated surplus (deficit) (33,472) 19,804
-------- ---------
Total stockholders equity (23,472) 19,804
-------- ---------
Total liabilities & stockholders equity $ 19,592 $ 41,921
======== ========
See accountants report and notes to the financial statements.
F-3
DNA SCIENCES, INC.
STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
PERIOD COMMENCING MARCH 15, 1998 TO
DECEMBER 31, 1998
1999 1998
---------- ---------
Income $ 74,977 $ 67,936
Cost of goods sold 32,123 22,372
---------- ---------
Gross profit 42,854 45,564
Operating expenses 99,130 30,010
---------- ---------
Net income (loss) before other income (56,276) 15,554
Other income
Rent Income 3,000 4,250
--------- ----------
Net Income ( loss) $ (53,276) $ 19,804
========= ========
See accountants report and notes to the financial statements.
F-4
DNA SCIENCES, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
PERIOD COMMENCING MARCH 15, 1998 TO
DECEMBER 31, 1998
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit
Balance, March 15, 1998 0 $ 0 $ 0 $ 0
Net Income - 12/31/98 0 0 0 19,804
--------- ------ ------- ----------
Balance, December 31, 1998 0 0 0 19,804
Issuance of stock for services 1,000,000 10,000 0 0
Net Loss - 12/31/99 0 0 0 (53,276)
--------- ------ ----- ----------
Balance - December 31, 1999 1,000,000 $10,000 $ 0 $ (33,472)
========= ======= ======= =========
See accountants report and notes to the financial statements.
F-5
DNA SCIENCES, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
PERIOD COMMENCING MARCH 15, 1998 TO
DECEMBER 31, 1998
1999 1998
--------- --------
Cash flows from operations:
Net income (loss) (53,276) $ 19,804
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 368 123
Common stock issued for services 10,000 0
Changes in operating assets and liabilities
Increase (decrease) in accounts receivable 28,593 (31,778)
Increase in accounts payable and accrued expenses 27,639 15,425
---------- -------
Net cash provided by operations 13,324 3,574
--------- --------
Cash flows from investing activities:
Purchase of equipment 0 (2,378)
--------- -------
Cash flows from financing activities:
Increase in loan payable - related party (6,692) 6,692
---------- --------
Net cash provided by financing activities: (6,692) 6,692
---------- --------
Net increase in cash 6,632 7,888
Cash - beginning 7,888 0
-------- --------
Cash - ending $ 14,520 $ 7,888
======== =======
See accountants report and notes to the financial statements.
F-6
DNA SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
BUSINESS AND ORGANIZATION
The Company was organized as a partnership on March 15, 1998 and was
subsequently incorporated under the laws of the State of California
on March 9, 1999. The primary business of the Company is the
manufacture and marketing of research reagents and related DNA
molecular diagnostic products.
FINANCIAL STATEMENT PRESENTATION
For purposes of presentation, the financial information for DNA
Sciences (A Partnership) for the period March 15, 1998 (date of
inception) to March 8, 1999 (the predecessor entity) has been
combined with DNA Sciences, Inc (A Corporation) for the period March
9, 1999 (date of incorporation) to December 31, 1999 as a unified
entity for financial reporting.
BASIS OF ACCOUNTING
The Company's policy is to prepare its financial statements using the
accrual basis of accounting in accordance with generally accepted
accounting principles.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenues and expenses during the reported period. Actual results
could differ from those estimates.
FIXED ASSETS
Fixed assets are stated at cost and are depreciated over their
estimated useful lives (5 to 10 years), using the straight-line
method of depreciation. Expenditures for major renewals and
betterments that extend the useful lives of fixed assets are
capitalized. Expenditures for maintenance and repairs are charged to
expense as incurred.
F-7
DNA SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
-------------------------------------------
RESEARCH AND DEVELOPMENT COSTS
In accordance with generally accepted accounting principles costs
incurred for research and development have been charged to expense
when incurred rather than capitalized.
INCOME TAXES
In February 1992 the Financial Accounting Standards Board issued a
Statement on Financial Accounting Standards No. 109. "Accounting for
Income Taxes." Under FASB No. 109. deferred assets and liabilities
are recognized for the estimated future tax consequences attributable
to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective basis.
In accordance with FASB 109 due to the uncertainty of future
operating profits the company has taken a 100% valuation allowance
against the tax benefits resulting from the net operating losses.
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
Fixed assets are comprised of:
1999 1998
------- -------
Equipment 2,378 2,378
Less: accumulated depreciation 491 123
--------- ---------
Net fixed assets $ 1,887 $ 2,255
======= =======
NOTE 3 - CAPITAL TRANSACTIONS
The Company on May 10, 1999 issued to the stockholders 1,000,000
shares of common stock for services rendered to the company.
NOTE 4 - RELATED PARTIES
The Company entered into a informal agreement for the rental of its
facilities from a shareholder of the company. The payments for rent
amounted to $14,580 and $7,600 for 1999 and 1998 respectively. The
agreement terminated on date of acquisition January 17, 2000 (see
Note 5).
F-8
DNA SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 4 - RELATED PARTIES - CONTINUED
---------------------------
The shareholders of the Company have received approximately $16,000
and $4,000 for services rendered for 1999 and 1998 respectively.
A shareholder's related company has performed services for the
company for approximately $9,200. This balance has been disputed and
has been reflected as a accrued expense until resolved.
NOTE 5 - SUBSEQUENT EVENT
On January 17, 2000, the Company entered into a stock purchase
agreement with Genetic Vectors, Inc. ( A Publicly Traded Company)
whereby its 1,000,000 shares of outstanding common stock were
acquired from its stockholders for 450,000 shares of common stock of
Genetic Vectors, Inc.
F-9
ATTACHMENT 7(B)
GENETIC VECTORS, INC.
AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
(UNAUDITED)
The Unaudited Pro Forma Condensed Combined Financial information reflects
financial information which gives effect to GENETIC VECTORS, INC.'s ("GVI" or
the "Company") merger (the "Merger") with DNA Sciences, Inc. ("DNA"), which
provided for the issuance of 450,000 shares of GVI common stock for all of the
outstanding stock of DNA. The Pro Forma Financial Information included herein
reflects the use of the pooling of interests method of accounting, after giving
effect to the pro forma adjustments discussed in the accompanying notes. Such
financial information has been prepared from, and should be read in conjunction
with, the historical consolidated financial statements and notes thereto of GVI
and DNA.
The Pro Forma Condensed Combined Balance Sheet gives effect to the Merger as if
it had occurred on December 31, 1998, combining the balance sheets of GVI at
December 31, 1999 and 1998, with that of DNA as of December 31, 1999 and 1998.
The Pro Forma Condensed Combined Statements of Operations gives effect to the
Merger as if it had occurred at the beginning of the earliest period presented,
combining the results of GVI for each of the two years in the two ended December
31, 1999 with those of DNA.
The Pro Forma Condensed Combined Financial Information is unaudited and is not
necessarily indicative of the consolidated results which actually would have
occurred if the above transactions had been consummated at the beginning of the
periods presented, nor does it purport to present the future financial position
and results of operations for future periods.
GENETIC VECTORS, INC.
AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
(UNAUDITED)
PRO
GVI DNA FORMA PROFORMA
BALANCE SCIENCES ADJUST- BALANCE
12/31/99 12/31/99 MENTS 12/31/99
------------------------------------------
Cash and cash equivalents $206,802 $14,520 $221,322
Accounts receivable 5,940 3,185 9,125
Inventory 7,081 7,081
Prepaid expenses 50,424 50,424
------------ --------- -------------
Total current assets 270,247 17,705 287,952
------------ --------- -------------
Equipment & improvements, net 282,734 1,887 284,621
Patents & license agreements, net 206,611 206,611
Restricted cash 46,130 46,130
------------ --------- -------------
805,722 19,592 825,314
=========== ========= =============
Accounts payable 283,965 43,064 327,029
Accrued expenses 148,481 148,481
Notes payable,net 805,412 805,412
------------ --------- -------------
Total liabilities 1,237,858 43,064 1,280,922
Common stock - 10,000 $(10,000) (a) -
Common stock of DNA 2,975 $ 450 (b) 3,425
Additional paid in capital 8,485,245 $ 9,550 (a)(b) 8,494,795
Deficit accumulated during
development stage (8,920,356) (33,472) (8,953,828)
------------ --------- -------------
Total capital deficit (432,136) (23,472) (455,608)
------------ --------- -------------
$805,722 $19,592 $825,314
============ ========= =============
F-2
GENETIC VECTORS, INC.
AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS
(UNAUDITED)
PRO
GENETIC DNA FORMA PRO
VECTORS SCIENCES, ADJUST- FORMA
INC. INC. MENTS BALANCE
12/31/99 12/31/99 12/31/99
- ------------------------------------------------------------------------------------------
Total Revenue $44,832 $74,977 $119,809
---------------------------- -------------
Cost of sales 9,188 32,123 41,311
Research & development 566,036 566,036
Selling, general & administrative 1,257,546 99,130 1,356,676
Depreciation & Amortization 139,233 139,233
---------------------------------------------------
Total expenses 1,972,003 131,253 - 2,103,256
---------------------------------------------------
Amortization of deferred loans (748,037) - (748,037)
Interest income (expense) (131,703) 3,000 - (128,703)
---------------------------------------------------
$(2,806,911) $(53,276) - $(2,860,187)
===================================================
Weighted average common shares
outstanding 2,724,092 450,000 3,174,092
Net loss per common share - basic
and diluted $(1.03) $(.90)
F-3
GENETIC VECTORS, INC.
AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS
(UNAUDITED)
PRO
GENETIC DNA FORMA PRO
VECTORS SCIENCES, ADJUST- FORMA
INC. INC. MENTS BALANCE
12/31/98 12/31/98 12/31/98
- -----------------------------------------------------------------------------------------
Total Revenue $47,172 $67,936 $115,108
--------------------------- -------------
Cost of sales - 22,372 22,372
Research & development 984,937 984,937
Selling, general & administrative 1,555,557 30,010 1,585,567
Depreciation & Amortization 125,427 125,427
--------------------------- -------------
Total expenses 2,665,921 52,382 - 2,718,303
--------------------------------------------------
Amortization of deferred loans (18,525) (18,525)
-
Interest income (expense) 61,807 4,250 - 66,057
--------------------------------------------------
$(2,575,467) $19,804 - $(2,555,663)
==================================================
Weighted average common shares
outstanding 2,344,696 450,000 2,794,696
Net loss per common share - basic $(1.10) $(.91)
and diluted
F-4
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Note 1
(a) Par value of the DNA shares is eliminated and reclassified as newly issued
GVI common stock.
(b) Represents par value of the 450,000 shares issued in connection with the
Merger.
NOTE 2
All fees and expenses related to the business combination and to the
consolidation of the combining companies will be expensed as required under the
pooling-of-interest accounting method. In addition, during January 2000, a
former stockholder of DNA Sciences entered into an employment agreement with
Genetic Vectors, Inc. that provides for annual compensation of $125,000. These
expenses have not been reflected in the unaudited pro forma condensed
consolidated statements of operations, but will be reflected in the statement of
operations of the Company in the period the business combination is consummated.
Such fees and expenses are presently estimated to approximate $100,000, most of
which are direct transaction costs.
F-5