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 third quarter ended June 30, 2003
Commission file number 33-27042-NY
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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
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(State of Incorporation) (I.R.S. Employer 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
(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 X No (2) Yes X No
----- ----- ----- -----
The number of shares of the Common Stock of the registrant outstanding as of
June 30, 2003 was 24,024,467 The aggregate common stock held by non-affiliates
on June 30, 2003 was 7,204,803.
[GRAPHIC OMITTED]
BARRINGTON SCIENCES INTERNATIONAL CORPORATION
(A development stage enterprise)
-----------------------------
INDEX
Page No.
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Part I. Financial Information
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Item 1. Financial Statements
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Balance Sheet - at June 30, 2003 3
Statements of Operations - for the
quarters ended June 30, 2003 and
June 30, 2002 4
Statement of Cash Flows - for the
quarters ended June 30, 2003
and 2002 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
------
2
BARRINGTON SCIENCES CORPORATION
(A development stage enterprise)
Balance Sheet
As at June 30, 2003
Assets
- ------
Current assets: Cash
$ --
Accounts receivable 248
Prepaid and other current assets 399
-----------
Total current assets 647
-----------
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 $24,393 $ 139,271
Intangible assets, net of accumulated
amortization of $82,312 1,594,711
-----------
Total assets $ 2,174,629
===========
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities:
Bank overdraft $ 94,205
Accounts payable and accrued liabilities 298,936
-----------
Total current liabilities $ 393,141
-----------
Stockholders' equity:
Common stock $.001 par value;
100,000,000 authorized: 24,024,467 issued
and outstanding $ 24,025
Additional paid in-capital 3,968,274
Currency Exchange 32,705
-----------
4,025,004
Losses accumulated during the
development stage (2,243,516)
-----------
Total stockholders' equity 1,781,488
-----------
Total liabilities and stockholders' equity $ 2,174,629
===========
See accompanying notes
3
BARRINGTON SCIENCES CORPORATION
(A development stage enterprise)
STATEMENTS OF OPERATIONS
For the second quarters ended June 30, 2003 and 2002
2003 2002
------------ ------------
Income
- ------
Sales -- $ 16,753
Cost of Sales -- 25,296
------------ ------------
-- (8,543)
------------ ------------
Other
- -----
Profit on Sale of Fluid Separation -- 95,101
Inventory Write off -- (98, 190)
------------ ------------
Contribution (Loss) before Expenses -- (11,632)
------------ ------------
Operating expenses:
- -------------------
Legal & Professional $ 32,398 15,577
Bank Charges & Interest 7,220 20,998
Supplies 1,313 1,891
Office Expense 3,792 5,877
Rent 799 --
Telephone 3,073 194
Meetings 947 --
Internet & Web Site 1,266 600
Misc Expenses 3,503 448
Bad Debts 179 --
Travel 3,149 33,149
Postage & Courier 3,028 --
Insurance 978 --
Advertising & Samples 8,331 (3,806)
Research Costs 11,317 --
Wage Cost & Costs 11,997 --
Consulting fees 5,790 40,423
Management fees 60,000 69,287
Sundry 1,037 --
Depreciation and amortization 28,421 --
------------ ------------
Loss from operations $ 176,541 $ 184,683
------------ ------------
Net loss $ (176,541) ($ 196,270)
============ ============
Loss per share ($ 0.008) ($ 0.012)
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Weighted average
shares outstanding 21,414,249 15,824,791
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See accompanying notes
4
BARRINGTON SCIENCES CORPORATION
(A development stage enterprise)
STATEMENTS OF OPERATIONS
For the nine months ended June 30, 2003 and 2002
Inception
2003 2002 to date
------------ ------------ ------------
Sales -- $ 16,753 $ 16,753
Cost of Sales -- 25,296 25,296
------------ ------------ ------------
-- (8,543) (8,543)
------------ ------------ ------------
Other
- -----
Profit on Sale of Fluid Separation -- 95,101 95,101
Inventory Write off -- (98, 190) (98,190)
------------ ------------ ------------
Contribution (Loss) before Expenses -- (11,632) (11,632)
------------ ------------ ------------
Operating expenses:
- -------------------
Legal & Professional $ 185,228 52,174 233,769
Bank Charges & Interest 17,284 21,187 17,544
Other 4,486 -- 3,639
Office Expense 11,635 6.824 12,613
Rent 2,562 -- 4,162
Telephone 11,397 1,333 10,630
Meetings 5,163 -- 1,669
Internet & Web Site 2,655 3,271 5,791
Misc Expenses 8,639 323 8,452
Bad Debts 14,480 -- 14,480
Travel 55,487 48,193 114,122
Postage & Courier 10,875 297 9,481
Insurance 3,019 -- 3,019
Advertising & Samples 10,950 6,011 17,282
Research Costs 33,577 -- 50,896
License Fee 45,796 45,796
Wage Cost & Costs 58,658 15,563 61,449
Consulting fees 43,226 24,860 114,889
Management fees 203,904 170,709 423,904
Joint venture formation costs 22,089 855,102 918,591
Materials 53,001 -- 53,001
Depreciation and amortization 88,465 -- 106,705
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Total Expenses $ 846,780 1,252,789 2,231,884
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Net Loss $ (846,780) (1,264,421) (2,243,516)
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Loss per share ($ 0.039) ($ 0.079) ($ 0.130)
==============================================================
Weighted average Shares O/S 21,414,249 15,824,791 17,027,808
==============================================================
See accompanying notes
5
BARRINGTON SCIENCES CORPORATION
(A development stage enterprise)
STATEMENTS OF CASH FLOWS
For the Nine months ended June, 2003 and 2002
Inception
2003 2002 to date
----------- ---------- -----------
OPERATING ACTIVITIES
Net loss $ (846,780) (1,264,421) (2,243,516)
Items not affecting cash:
Depreciation and amortization 88,465 106,705
Changes in non-cash working capital:
Accounts receivable 22,724 (24,112) (248)
Subscriptions Receivable 71,640 -- --
Prepaids and other current assets 27,784 -- (399)
Bank overdraft 94,205 88,550 94,205
Loan Payable -- 395,820
Accounts payable and accrued liabilities 173,188 220,382 298,936
Inventory 51,688 (55,979) --
----------- ----------- -----------
Cash flow used by operating activities (317,086) (639,760) (1,744,317)
INVESTING ACTIVITIES
Investment In Joint Venture (400,000) -- (400,000)
Deposit on Acquisition (50,000) -- (50,000)
Purchase of capital assets (49,345) (85,489) (163,664)
Additions to intangible assets (5,476) (1,585,177) (1,667,023)
----------- ----------- -----------
Cash flow from investing activities (504,821) (1,670,666) (2,280,687)
FINANCING ACTIVITIES
Issuance of common shares & Paid In Capital 809,832 2,402,650 3,993,299
Foreign Currency Adjustment 35,897 32,705
----------- ----------- -----------
Cash flow from financing activities 845,729 2,402,650 4,025,004
----------- ----------- -----------
INCREASE IN CASH FLOW 23,822 92,224 --
CASH - Beginning of period (23,822) -- --
----------- ----------- -----------
CASH - End of period $ -- $ 92,224 $ --
=========== =========== ===========
See accompanying notes
6
BARRINGTON SCIENCES CORPORATION
NOTES TO FINANCIAL STATEMENTS
June 30, 2003
1. Basis of presentation
---------------------
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. 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
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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 and 2004, the Company is seeking
approximately $3,000,000 in financing. The financing could be in the form; of
debt or equity The Company has not obtained any of this financing and currently
has no commitments for any of this financing. If this financing is obtained, the
Company has established the following budgets as outlined below. This budget
assumes completion of the pending 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 scheduled for March 31,
2003, but was delayed due to the company not raising the required capital. The
cash for the closing will be paid from the completion of part or all of the $3
million financing The company is still working with VicTorch to find a suitable
alternate closing and expect to have this resolved soon. In 2002, VicTorch had
revenues in excess of $600,000 and current monthly revenues are approximately
$150,000. VicTorch has a number of products and has customers in the developing
world. If the VicTorch acquisition is completed, the Company will develop
VicTorch's existing customer base in order to increase revenues.
The Company has decided to not proceed with the purchase of Memco-Tec
Limited of Guangzhou, China.
VicTorch is a developer and manufacturer of medical diagnostic tests. The
following budget and projection includes all operations now owned by the Company
plus VicTorch.
The Company requires approximately a $3 million cash investment in order to
carry out its business plan and to achieve the projected results described
below.
VicTorch has sales, which will become part of the company's sales [but the
purchase of VicTorch has not closed as of this date. In order to close the
VicTorch deal, the Company requires approximately $1 million. The total purchase
price for VicTorch is $765,000.00 cash and 365,000 common shares valued at $2
per share for a total cost of $1,530,000.
The Company currently has a distribution agreement for all Asian countries,
excluding China. China sales will come from the joint venture in China with the
Shangdon Weigao Group. If the VicTorch acquisition is completed, the Company
8
plans to begin sales activity in China in the second calendar quarter of 2004.
Sales activity in all other Asian countries is expected to begin in the first
calendar quarter of 2004, and then in South America in the second calendar
quarter of 2004. VicTorch presently has sales in North America and the company
will utilize resources to increase these sales as rapidly as possible.
The company and Shangdon Weigao Group of Weihai own the joint venture in
China equally. The name of the joint venture company is: Weihai Barrington
Biological Engineering Co. Ltd. The joint venture company has been funded by the
partners and has US $800,000.00 in the bank. The joint venture company will
employ its own sales staff and will have access to markets that have been
developed by Weigao Group over the past twenty years.
The following projections are for a one-year period [following completion
of the Company's $3 million financing and the VicTorch acquisition.] [Before the
Company can complete the VicTorch acquisition, it will need to raise at least
approximately $1 million of the financing. None of the $3 million financing has
been obtained and no financing commitments are in place.]
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).
If financing in the amount projected herein is not obtained the company
will become a customer of VicTorch's and purchase products and ingredients from
VicTorch to supply to the Asian distributor and the joint venture in China.
However the company will require working capital in order to carry out the
distribution activities. The company presently estimates this to be about $1
Million.
(b) Liquidity and capital resources
The Company is currently addressing short-term liquidity issues based on
near term operating needs and requirement to purchase VicTorch. Management
believes that it will able to raise additional equity capital to meet the
Company's liquidity needs, due to the prospects for success with the Company's
products. However, the Company has no commitments from potential equity
investors and has never generated any revenues from its products or operations.
(c) Comparison of 2003 and 2002
Operating costs, excluding joint venture related costs, increased by 212%
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.
9
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.
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
- ------- ---------------------
None this quarter
Item 3. Defaults Upon Senior Securities
- ------- -------------------------------
(Not applicable)
Item 4. Submission of Matters to a Vote of Security Holders
- ------ ---------------------------------------------------
None
Item 5. Other Information
- ------ -----------------
(Not applicable)
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits
None this quarter
(b) Reports on Form 8-K
Form 8-K filed February 5, 2003
Asset Purchase Agreement dated October 17, 2002, between Barrington
Sciences International Corporation, a Canadian corporation, and
Financial Express Corporation, a Nevada corporation.
Consent of Independent Auditors
Financial Statements of Business Acquired. NOTE: These statements were
prepared in accord with Canadian generally accepted accounting
principles. Financial Statements of the Company reflecting the
Business Acquired as of December 31, 2002 prepared in accord with U.S.
generally accepted accounting principles will be filed as soon as
available.
Form 8 K filed April 14, 2003
Change of year-end from December 31 to September 30
11
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: August 12, 2003
--------------------------- ---------------------------
Lorne Broten
CFO and Director (Principal Financial
Officer)
12
Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act
No annual report or proxy material has been sent to security holders of the
Company. The Company does not anticipate sending out a separate annual report or
proxy material to its security holders subsequent to the filing of the annual
report. In the event that the Company determines that it will send out either a
separate annual report or any proxy materials, the Company will furnish copies
of such material to the Securities and Exchange Commission when it is sent to
security holders.
CERTIFICATIONS
I, George Moore Chief Executive Officer, certify that:
1) I have reviewed this Quarterly Report on Form 10-Q of Barrington Sciences
Corporation
2) Based on my knowledge, this Quarterly Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Quarterly Report;
3) Based on my knowledge, the financial statements, and other financial
information included in this Quarterly Report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
Quarterly Report;
4) The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
a.) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
Quarterly Report is being prepared;
b.) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this Quarterly Report (the "Evaluation Date"); and
13
c.) presented in this Quarterly Report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5) The Registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent functions):
a.) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Registrant's
ability to record, process, summarize and report financial data
and have identified for the Registrant's auditors any material
weaknesses in internal controls; and
b.) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal controls; and
6) The Registrant's other certifying officers and I have indicated in this
Quarterly Report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: August 12, 2003 By: /s/George Moore
---------------------
George Moore
Chief Executive Officer
14
CERTIFICATIONS
I, Lorne Broten Chief Financial Officer, certify that:
1) I have reviewed this Quarterly Report on Form 10-Q of Barrington Sciences
Corporation
2) Based on my knowledge, this Quarterly Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Quarterly Report;
3) Based on my knowledge, the financial statements, and other financial
information included in this Quarterly Report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
Quarterly Report;
4) The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
a.) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
Quarterly Report is being prepared;
b.) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this Quarterly Report (the "Evaluation Date"); and
c.) presented in this Quarterly Report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5) The Registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent functions):
a.) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Registrant's
ability to record, process, summarize and report financial data
and have identified for the Registrant's auditors any material
weaknesses in internal controls; and
15
b.) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal controls; and
6) The Registrant's other certifying officers and I have indicated in this
Quarterly Report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: August 12, 2003 By: /s/ Lorne Broten
----------------------------------
Lorne Broten
Chief Financial Officer
16