UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
September 30, 2004 33-27042-NY
------------------------- ----------------------
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
(State of Incorporation) (I.R.S. Employer Identification No.)
1107 Bennet Drive
Port Coquitlam, British Columbia, Canada V3C 6H2
(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 [ ]
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [X] No [ ]
The number of shares of the Common Stock of the registrant outstanding as of
September 30, 2004 was 24,281,477. The aggregate common stock held by
non-affiliates on September 30, 2004 was 8,621,535.
2
FORM 10-K INDEX
PART I
Item 1. Description of the Business 4
Item 2. Properties 4
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote of Security Holders 4
PART II
Item 5. Market for Registrant's Common Equity 5
and Related Stockholders Matters
Item 6. Selected Financial Matters 5
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 6
Item 8. Financial Statements and Supplementary Data 6
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 6
PART III
Item 10. Directors and Executive Officers of Registrant 7
Item 11. Executive Compensation 7
Item 12. Security Ownership of Certain Beneficial Owners and Management 8
Item 13. Certain Relationships and Related Transactions 10
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 10
Financial Statements
Signatures
Officer Certifications
3
Item 1. Description of the Business
---------------------------
GENERAL
The Company continued in existence, searching for financing and/or potential
merger candidates to carry on the Company's existing or other business
opportunities.
The Company currently has no full time employees. The Company uses the part time
services of 2 individuals.
HISTORY AND DESCRIPTION OF COMPANY'S CURRENT BUSINESS
AVAILABLE INFORMATION
The Company files annual and quarterly reports (Forms 10-K and 10-Q with the
U.S. Securities and Exchange Commission and such other supplemental current
reports (Form 8-K) as may be required or appropriate from time to time.
These reports may be found at http://www.sec.gov/edgar.shtml.
Item 2. Properties
----------
The Company does not currently lease or own any properties.
Item 3. Legal Proceedings
-----------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
4
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
---------------------------------------------------------------------
(A) Stock transactions
The following summarizes stock transactions by the Company during 2003 and 2004.
From October 1, 2003 to September 30, 2004 the company issued 124,960
Shares for $121,960. Total shares outstanding at September 30, 2004 24,281,477
Common Shares. For additional detail see shareholder Equity Section of the
financial statements.
Item 6. Selected Financial Data
-----------------------
2004 2003
---- ----
Revenue 0 0
Loss (403,297) (2,087,689)
Loss Per Share 0.02 0.09
Working Capital (173,767) (411,858)
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
---------------------------------------------------------------
LIQUIDITY.
The Company currently has a short-term liquidity problem, as evidenced by its
current working capital deficit of $174,767. However, management believes that
it will able to settle all liabilities by issuing shares for debt.
OPERATIONS.
The Company had no material operations in 2004. In 2004, the Company incurred
operating expenses of $403,297. These expenses consisted primarily of $55,120
for professional fees, $99,653 for Fees, $24,729 for travel, obsolete equipment
$35,001 and write down of investment of $163,827.
BUSINESS PLANS FOR 2004/2005
The company is actively seeking a business opportunity. It is looking to secure
a merger or vend in of an operating business that will allow the company to move
forward.
5
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
None
The Company does not hold any material market risk sensitive instruments.
Item 8. Financial Statements and Supplementary Data
-------------------------------------------
Reference is made to the financial statements included later in this report
after Item 15.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
---------------------------------------------------------------
None
Item 9A. Controls and Procedures
-----------------------
(At the present time the company has no controls or procedures but will initiate
them once it is in business.
6
PART III
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
The following individuals currently serve as the Directors and executive
officers of the Registrant. Each Director serves for a term of one year or until
their successors have been elected at the annual meeting of shareholders in the
year each director's term expires. The year each director's term expires is
noted below. Under the Company's Articles of Incorporation, three-year staggered
terms are authorized. At the next annual shareholders meeting, it is anticipated
that Directors will be nominated for terms of one, two and three years to
implement this staggered Board provision.
Name Age Position
- ---- --- --------
Phil E. Pierce 76 Chairman, and Director Term expires 2006
George Moore 62 President & Chief Executive Officer and
Director Term Expires 2006
Dr. A.E.J. Reynolds 57 Director Term Expires 2006
Lorne Broten C.M.A., CMC 63 CFO and Director Term Expires 2006
The Officers are elected annually by the Directors and serve at the discretion
of the Board of Directors
George Moore
- ------------
President & Chief Executive Officer & Director
In 1982, Mr. Moore was a founder of Uni-Ray Inc., a consulting company and was a
Senior Partner until 1992. His client list included many well-known
international companies such as IBM, Xerox, Nortel, Decorating Den Systems and
Travelodge. In 1993, he served as the Executive Director of the foundation for
the Advancement of Canadian Entrepreneurship. From 1994 to 1996, he served as
Director of Franchise Development for Decorating Den Systems Inc. From 1996 to
1999, Mr. Moore was Manager of Business Development, Western Canada, for
Travelodge Canada. In 1999, he joined the original Barrington Sciences
Corporation and served as its President until the fall of 2001. From 2001 to the
present he has served as President and CEO of BSC.
Dr. A.E.J. Reynolds
- -------------------
President ABP Diagnostics Ltd and Director
Dr. Reynolds was with Dixon Group PLC, in the position of the General Sales
Manager, Regional Manager and Commercial Manager from 1977 to 1990. From 1990 to
1993 he was Managing Director of Crawford Door Limited and Managing Director of
Eco Carpet Tiles (UK) Ltd from 1996 to 1998.. Dr, Reynolds has a Master of
Business Administration and a Doctor of Business Administration.
7
Lorne H. A. Broten, C.M.A. CMC
- ------------------------------
CFO and Director
Mr. Broten has been a self employed Management Consultant since 1967. Over the
past five years he has been involved in two start-up companies, Barrington
Sciences Corporation and a privately owned technology company. In addition he
has had a number of consulting jobs for private companies. Mr. Broten is a
Certified Management Accountant and a Certified Management Consultant. Section
16(a) Beneficial Ownership Reporting Compliance.
To the best of Registrant's knowledge, based solely upon a review of Forms 3 and
4 and amendments thereto furnished to Registrant pursuant to Rule 16a-3(e)
during the Company's most recent fiscal year (2004) and Form 5 and amendments
thereto furnished to the Registrant with respect to its most recent fiscal year,
the persons in the following table served as a director or officer of the
Company or owned more than 10 percent of any class of Registrant's equity
securities during Registrant's fiscal year ended September 30, 2004.
During 2004 and through the date of the filing of this Form 10-K, there has been
no trading of the Company's Common Stock or any other securities issued by the
Company. Although the Company continued to voluntarily file Form 10-Q's for
quarters ending during 2004 and a Form 10-K for 2003, the Company is not aware
of any filing by the Directors, Officers or 10% shareholders until after the
acquisition of Barrington was closed as of December 31, 2002.
The Company believes that all of its Officers and Directors are now current on
their filings of applicable forms.
The following table lists all of the Company Officers, Directors and known 10%
or more shareholders during 2004.
Name Offices Held in 2004 Forms Filed
- -----------------------------------------------------------------------------------
Phil Pearce Director Form 3, March 26, 2003
He resigned as Director Dec 6, 2006
George Moore President & CEO, Director from Form 3, March 26, 2003
Dec. 13, 2002
Charles Payne VP Investor Relations, Secretary, Form 3, March 26, 2003
Director From Dec 13, 2002
He resigned as a Director July 26, 2005
Lorne Broten CFO, Treasurer Director From Form 3, March 26, 2003
December 13, 2002
Dr. Tony Reynolds Director from December 13, 2002 Form 3, March 26, 2003
8
Item 11. Executive Compensation
----------------------
The Company did not pay any compensation to its Officers or Directors during 2004.
Annual Compensation Long-Term Compensation
---------------------------- ----------------------------------------
Awards Payouts
------ -------
All Other
Name and Year/ Compen- Restricted Securities
Principle term of sation Stock underlying All Other
Position service Salary Bonus (fees) Awards SARs/Options LTIP Payouts Compensation
- -------- ------- ------ ----- ------ ------ ------------ ------------ ------------
George Moore, CEO 2004 $21,000 *
- ----------
* Consulting fees.
The Chief Executive Officer has not received any other compensation than that
reported above, including any options or other rights to acquire any stock or
other interest in the Company. Neither the Chief Executive Officer nor any other
executive officer or Director of the Company holds any such rights as of the
date of this Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The following table is current as of September 30, 2004.
Name and Address of Number of Shares of Percentage
Beneficial Owner Common Stock Owned of Ownership
- ------------------- ------------------- ------------
Phil E. Pearce 1,725,000 7.1%
6624 Greenleaf Court
Charlotte, NC 28270
George Moore 3,749,633* Note 1 15.4%
15826 - 98th Ave.,
Surrey, BC V4N 2V3
Lorne Broten 2,289,009** Note 1 9.4%
1107 Bennet Dr
Port Coquitlam BC V3C 6H2
Charles Payne 4,027,126*** Note 1 16.5%
3213 W. Wheeler St PBM 249
Seattle, WA 98199
USA
Dr. Tony Reynolds 2,195,173 Note 1 9.0%
37 Reynolds Wharf, Coalport
Telford
Shropshire, England TF8 77HU
---------- -----
All Officers and Directors
and affiliates as a group 13,985,941 57.6%
---------- -----
9
* Anne Moore his wife owns 708,000. The balance of the shares are held George
Moore.
** Marc Broten son of Lorne Broten owns 700,000 of these shares and Lorne Broten
does not have control of them. Lorne Broten Family Trust owns the balance of the
shares. Lorne Broten is not a beneficiary of the trust.
*** Of these shares 3,830,849 are owned by Udici Ltd. PO Box 150 Leeward Highway
Providenciales Turks & Caicos Islands B.W.I. Estelle Payne, wife of Charles
Payne, controls this company.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
None.
Item 14. Principal Accounting Fees and Services
--------------------------------------
(1) Audit Fees
The audit fees for 2004, 2005, 2006 were $12,000.00 that amounts to
$4,000.00 per year.
There have been no other fees paid to the Principal Accountant
(2) The company does not have an audit committee.
PART IV
Item 15. Exhibits, Financial Statements Schedules and Reports on Form 8-K
----------------------------------------------------------------
(a) The financial statements are set forth below. Financial statement
schedules have been omitted since they are either not required, not
applicable, or the information is otherwise included.
10
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Barrington Science
We have audited the accompanying balance sheet of Barrington Science as of
September 30, 2004, and the related statements of operations, stockholders'
equity and cash flows through September 30, 2004. 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 audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Barrington Science as of
September 30, 2004 and the results of its operations and its cash flows through
September 30, 2004, in conformity with accounting principles generally accepted
in the United States of America.The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. The Company
experienced significant operating losses totaling approximately $4,400,000. In
addition, as at September 30, 2004, the Company has a working capital deficit
amounting to approximately $114,000. The consolidated financial statements have
been prepared assuming the Company will continue to operate as a going concern
which contemplates the realization of assets and the settlement of liabilities
in the normal course of business. No adjustment has been made to the recorded
amount of assets or the recorded amount of classification of liabilities which
would be required if the Company were unable to continue its operations.
/s/ Moore & Associates, Chartered
- ---------------------------------
Moore & Associates Chartered
Las Vegas, Nevada
April 13, 2007
2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146
(702) 253-7511 o Fax (702) 253-7501
11
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheet
ASSETS
------
September 30,
2004
-------------
Current assets:
Cash $ 13,676
-----------
Total current assets 13,676
Property and equipment, net of accumulated
depreciation of $44,521 --
Investment in joint venture 335,759
-----------
Total assets $ 349,435
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Bank overdraft $ --
Accounts payable 127,938
-----------
Total current liabilities 127,938
Loans from related parties 396,264
Minority interest in equity of consolidated subsidiary --
Preferred stock, $.001 par value
25,000,000 shares authorized --
Common stock, $.0001 par value,
100,000,000 shares authorized, 24,156,517
shares issued and outstanding 24,281
Additional paid in capital 4,173,252
(Deficit) accumulated during
development stage (4,372,300)
-----------
(174,767)
-----------
$ 349,435
===========
See accompanying notes to financial statements.
12
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Operations
Years Ended September 30, 2004 and 2003
For the Period From Inception (August 22, 2001) to September 30, 2004
(Unaudited)
Period From
Years Ended Inception To
September 30, September 30,
2004 2003 2004
------------ ------------ ------------
Sales $ -- $ -- $ 10,736
Costs and Expenses
Cost of sales -- -- 17,437
Selling, general and administrative 239,470 816,586 2,368,318
Write-down of goodwill -- 910,249 910,249
Write-down of intangibles and inventory -- 255,773 812,546
Write-down of other assets 163,827 69,967 233,794
------------ ------------ ------------
403,297 2,052,575 4,342,344
------------ ------------ ------------
(Loss) from operations (403,297) (2,052,575) (4,331,608)
Other income (expense)
Interest expense -- (35,123) (40,692)
------------ ------------ ------------
-- (35,123) (40,692)
Net (loss) $ (403,297) $ (2,087,698) $ (4,372,300)
============ ============ ============
Per share information:
Basic and diluted (loss)
per common share $ (0.02) $ (0.09)
============ ============
Weighted average shares outstanding 24,281,477 22,923,189
============ ============
See accompanying notes to financial statements.
13
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For The Years Ended September 30, 2004 and 2003
Common Stock Additional
-------------------------- Paid-in
ACTIVITY Shares Amount Capital Deficit Total
----------- ----------- ----------- ----------- -----------
Balance at inception (August 22, 2001) -- $ -- $ -- $ -- $ --
Shares issued for cash prior to
reverse acquisition 14,120,332 14,120 580,419 594,539
Shares issued for acquisitions
May 2002 at $.31 per share 4,552,570 4,553 1,420,306 1,424,859
Shares issued for debt conversion
In September 2002 at $1.22 per share 952,344 952 1,162,117 1,163,069
Net loss for the year ended
September 30, 2002 (1,881,306) (1,881,306)
----------- ----------- ----------- ----------- -----------
Balance September 30, 2002 19,625,246 19,625 3,162,842 (1,881,306) 1,301,161
Shares issued for cash:
October 2002 at $.48 per share 743,796 744 361,632 362,376
January 2003 at $.75 per share 533,333 533 399,467 400,000
March 2003 at $1.00 per share 8,066 8 8,058 8,066
April 2003 at $1.00 per share 11,714 12 11,702 11,714
May 2003 at $1.00 per share 15,000 15 14,985 15,000
June 2003 at $1.00 per share 12,500 13 12,488 12,500
July 2003 at $1.00 per share 15,000 15 14,985 15,000
Shares issued for services in
2003 & $.75 per share 91,266 91 68,359 68,450
Shares issued for reverse merger with
Financial Express Corporation 3,744,701 3,745 (3,745) --
Shares reacquired and cancelled (644,105) (644) 644
Net loss for the year ended
September 30, 2003 (2,087,698) (2,087,698)
----------- ----------- ----------- ----------- -----------
Balance September 30, 2003 24,156,517 $ 24,157 $ 4,051,416 $(3,969,004) $ 106,569
Shares Issued for Cash
October 2003 5,000 5 4,995
November 2003 32,460 32 32,428
December 2003 19,500 19 19,481
April 2004 5,000 5 4,995
July 2004 45,000 45 44,955
September 2004 15,000 15 14,985
Issued in lieu of finders fees 3,000 3 (3)
Net Loss for the year ended Sept 30/04 (403,296)
----------- ----------- ----------- ----------- -----------
Totals 24,281,477 24,281 4,173,252 (4,372,300) (174,767)
=========== =========== =========== =========== ===========
See accompanying notes to financial statements.
14
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows
Years Ended September 30, 2004 and 2003
For the Period From Inception (August 22, 2001) to September 30, 2004
Period From
Years Ended Inception To
September 30, September 30,
2004 2003 2004
----------- ----------- -----------
Net income (loss) $ (403,297) $(2,087,698) $(4,372,300)
Adjustments to reconcile net income to net
cash provided by operating activities:
Services provided for common stock 68,450
Depreciation (44,521) 26,281
Asset impairment losses 162,949 1,103,527
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable -- 22,972 --
Inventory -- 51,688 --
Prepaid expenses -- 7,590 --
Recoverable tax credit -- 20,593 --
Deferred charges -- 35,000 --
Increase (decrease) in:
Accounts payable 21,486 28,236 127,938
Bank overdraft (132,706) 108,884 --
----------- ----------- -----------
Total adjustments 7,208 1,473,221 127,938
----------- ----------- -----------
Net cash provided by (used in)
operating activities (396,089) (614,477) (4,244,362)
Cash flows from investing activities:
Acquisition of property & equipment -- (6,988)
Investment in joint venture (loss) 64,241 (400,000) (335,759)
Additions to intangible assets -- -- --
Purchase of bank indebtedness of subsidiary -- -- --
----------- ----------- -----------
Net cash provided by (used in)
financing activities 64,241 (406,988) (335,759)
----------- ----------- -----------
Cash flows from financing activities:
Proceeds from sale of common stock 121,960 896,296 4,197,533
Loans from related parties 219,882 128,851 396,264
----------- ----------- -----------
Net cash provided by (used in)
financing activities 341,842 1,025,147 4,593,797
----------- ----------- -----------
Increase (decrease) in cash 9,994 3,682 13,676
Cash and cash equivalents,
beginning of period 3,682 -- --
----------- ----------- -----------
Cash and cash equivalents,
end of period $ 13,676 $ 3,682 $ 13,676
=========== =========== ===========
See accompanying notes:
15
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(A development stage enterprise)
FOR THE YEARS ENDED SEPTEMBER 30, 2004 and 2003
(U.S. DOLLARS)
NOTE 1 ORGANIZATION AND NATURE OF BUSINESS
Financial Express Corporation ("FEC") was originally incorporated in the
State of Nevada on January 5, 1989, as Harley Equities, Inc. During
December 2002, the Company completed its acquisition of Barrington Sciences
International Corporation's ("BSIC") net assets, subsequently FEC changed
its name to Barrington Sciences Corporation (together with its
subsidiaries, the Company). The acquisition was accounted for as a reverse
take over and the comparative amounts represent BSIC's financial position,
results of operations and cash-flows.
The Company is a development stage enterprise and through its subsidiaries,
has been engaged in the research, development, manufacture and distribution
of specialized medical diagnostic test kits.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Going Concern
-------------
The Company experienced significant operating losses since inception
totaling approximately $4,400,000. In addition, as at September 30, 2004,
the Company has a working capital deficit amounting to approximately
$114,000. The consolidated financial statements have been prepared assuming
the Company will continue to operate as a going concern which contemplates
the realization of assets and the settlement of liabilities in the normal
course of business. No adjustment has been made to the recorded amount of
assets or the recorded amount of classification of liabilities which would
be required if the Company were unable to continue its operations.
Principles of Consolidation
---------------------------
The consolidated financial statements include the amounts of Barrington
Sciences Corporation and the following subsidiaries:
ABP Diagnostics Ltd.
Fluid Separation Ltd. (ABP Diagnostics Ltd. owns 70%)
Barrington Sciences Corporation SDN BHD
All material inter-company accounts and transactions have been eliminated.
Subsequent to the year end all subsidiaries ceased operations and have
become inactive.
16
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(A development stage enterprise)
FOR THE YEARS ENDED SEPTEMBER 30, 2004 and 2003
(U.S. DOLLARS)
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting Estimates
--------------------
Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were used.
Accounts Receivable
-------------------
Accounts receivable are reported at the customers' outstanding balances
less any allowance for doubtful accounts, marketing credits and allowance
for possible sales returns.
Allowance for Doubtful Accounts, Marketing Credits and Allowance for
Possible Sales Returns
--------------------------------------------------------------------
The allowance for accounts receivable is charged to income in amounts
sufficient to maintain the allowance at a level management believes is
adequate to cover any possible losses, credits or returns.
Inventory
---------
Inventory is stated at the lower of cost (determined on the first in,
first-out method) or market.
Property and Equipment
----------------------
Property and equipment are stated at cost. Major renewals and improvements
are charged to the asset accounts while replacements, maintenance and
repairs, which do not improve or extend the lives of the respective assets,
are expensed. At the time property and equipment are retired or otherwise
disposed of, the asset and related accumulated depreciation accounts are
relieved of the applicable amounts. Gains or losses from retirements or
sales are credited or charged to income.
The Company depreciates its property and equipment for financial reporting
purposes using the straight-line method based upon the following useful
lives of the assets:
Furniture and equipment 20% Declining Balance
Machinery and equipment 20% Declining Balance
17
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(A development stage enterprise)
FOR THE YEARS ENDED SEPTEMBER 30, 2004 and 2003
(U.S. DOLLARS)
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
------------
Provisions for income taxes are based on taxes payable or refundable for
the current year and deferred taxes on temporary differences between the
amount of taxable income and pretax financial income and between the tax
basis of assets and liabilities and their reported amounts in the financial
statements. Deferred tax assets and liabilities are included in the
financial statements at currently enacted income tax rates applicable to
the period in which the deferred tax assets and liabilities are expected to
be realized or settled as prescribed in FASB Statement No. 109, Accounting
for Income Taxes. As changes in tax laws or rates are enacted, deferred tax
assets and liabilities are adjusted through the provision for income taxes.
Net (Loss) per Share
--------------------
The Company adopted Statement of Financial Accounting Standards No. 128
that requires the reporting of both basic and diluted (loss) per share.
Basic (loss) per share is computed by dividing net (loss) available to
common stockholders by the weighted average number of common shares
outstanding for the period. Diluted (loss) per share reflects the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock. In accordance with
FASB 128, any anti-dilutive effect on net (loss) per share are excluded.
Long-Lived Assets
-----------------
Statement of Financial Accounting Standards No.144, "Accounting for the
Impairment of Long-lived Assets and for Long-Lived Assets to be Disposed
of," requires that long-lived assets be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of the
assets in question may not be recoverable.
Disclosure about Fair Value of Financial Instruments
----------------------------------------------------
The Company estimates that the fair value of all financial instruments as
of September 30, 2004 and 2003, as defined in FASB 107, does not differ
materially from the aggregate carrying values of its financial instruments
recorded in the accompanying consolidated balance sheets. The estimated
fair value amounts have been determined by the Company using available
market information and appropriate valuation methodologies. Considerable
judgement is required in interpreting market data to develop the estimates
of fair value, and accordingly, the estimates are not necessarily
indicative of the amounts that the Company could realize in a current
market exchange.
18
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
(A development stage enterprise)
FOR THE YEARS ENDED SEPTEMBER 30, 2004 and 2003
(U.S. DOLLARS)
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Foreign Currency Translation
----------------------------
For the Company's subsidiaries outside of the U.S., the local currency is
the functional currency. In accordance with the Statement of Financial
Accounting Standards (SFAS) No. 52, "Foreign Currency Translation", the
financial statements of these subsidiaries are translated into U.S. dollars
as follows: assets and liabilities at year-end exchange rates; income,
expense and cash flows at average exchange rates; and stockholders' equity
at historical exchange rates. For those subsidiaries for whch he local
currency is the functional currency, the resulting translation adjustment
is recorded as a component of accumulated other comprehensive income (loss)
in the accompanying consolidated balance sheet. Translation adjustments are
not tax-effected since they related to investments, which are permanent in
nature.
For certain other subsidiaries, operations are conducted primarily in U.S.
dollars, which is therefore the functional currency. Monetary assets and
liabilities, and the related revenue, expense, gain and loss accounts, of
these foreign subsidiaries are re-measured at year-end exchange rates.
Non-monetary assets and liabilities, and the related revenue, expense, gain
and loss accounts, are re-measured at historical rates.
Shipping and Handling Costs
---------------------------
The Company's policy is to classify shipping and handling costs as part of
sales in the consolidated statement of operations.
NOTE 3 RECENT ACCOUNTING PRONOUNCEMENTS
In 2003 and 2004, the FASB issued the following:
SFAS No. 141 Business combinations
SFAS No. 142 Goodwill and other intangible assets
SFAS No. 143 Accounting for asset retirement obligation
SFAS No. 144 Accounting for the impairment of disposal of long-
lived assets
SFAS No. 145 Recession of FASB statements, 4, 44 and 64 and amendment
of FASB 13
SFAS No. 146 Accounting for costs associated with exit or disposal
activities
SFAS No. 147 Acquisitions of Certain Financial Institution
SFAS No. 148 Accounting of Stock-based Compensation - Transition and
Disclosure, an amendment of FASB statement No.123
SFAS No. 149 Amendment of Statement No.133 on Derivative Instruments and
Hedging Activities
SFAS No. 150 Accounting for Certain Financial Instruments with
Characteristic's of Both Liabilities and Equity
19
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(A development stage enterprise)
FOR THE YEARS ENDED SEPTEMBER 30, 2004 and 2003
(U.S. DOLLARS)
NOTE 3 RECENT ACCOUNTING PRONOUNCEMENTS (Continued)
The Company followed the guidance of SFAS No.141 and 142 in recording the
acquisitions of ABP Diagnostics Ltd. and Barrington Sciences International
Corporation. SFAS No.143-147 and 149 did not have a material impact on the
Company's financial position and results of operations.
The disclosure and valuation method provisions of SFAS No.148 have been
adopted by the Company, however, the Company did not issue any stock
options to its officers and employees during the years. SFAS No.150 is
effective for financial instruments entered into or modified after May 31,
2003 and is otherwise effective at the beginning of the first interim
period beginning after June 15, 2003. SFAS No.150 did not have a material
impact on the Company's financial position and results of operations.
NOTE 4 REVERSE ACQUISTION
On December 30, 2002, The Company acquired the net assets of Barrington
Sciences International Corporation ("BSIC") including its wholly owned
subsidiaries in exchange for 19,701,653 common shares and 396,416 common
share warrants of the Company. This transaction has the effect of what is
commonly referred to as "reverse acquisition" in that the Company is the
legal acquirer; however, BSIC is the accounting acquirer. Therefore, the
acquisition has been accounted for as a reverse take-over of the Company by
BSIC.
Application of reverse take-over accounting results in the following:
a) The consolidated financial statements of the combined entity are
issued under the name of Barrington Sciences Corp. (formerly FEC), but
are considered the continuation of the financial statements of BSIC.
However, the stated capital of the consolidated entity at September
30, 2003 is that of BSC. This capital structure Is different from the
capital structure appearing in the comparative financial statements
for BSIC due to the application of reverse take-over accounting. Prior
to the acquisition, there were 19,701,653 common shares of BSIC
outstanding with a stated capital of $3,616,373.
b) As BSIC is deemed to be the acquirer for accounting purposes, its
assets, liabilities and operations since incorporation are included in
these financial statements at their historical carrying value. The
operations of BSC are included from December 30, 2002.
20
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(A development stage enterprise)
FOR THE YEARS ENDED SEPTEMBER 30, 2004 and 2003
(U.S. DOLLARS)
NOTE 4 REVERSE ACQUISTION (Continued)
c) Control of the assets and operations of BSC is considered to be
acquired by BSIC. Immediately prior to the acquisition, there were
3,743,900 common shares of BSC outstanding with a stated capital of
$3,744.
All direct costs relate to the reverse take over acquisition have been
included in the Company's results of operations.
NOTE 5 PROPERTY AND EQUIPMENT
2004 2003
---- ----
Property and equipment and accumulated
depreciation consists of:
Furniture and equipment $ -- $ 45,801
Machinery and equipment -- 117,148
--------- ---------
162,949
Less accumulated depreciation -- (44,521)
--------- ---------
$ -- $ 118,428
========= =========
NOTE 6 DEFERRED CHARGES
During the year ended September 30, 2002, BSIC incurred the cost of $20,000
in relation to the sale of its consolidated assets to BSC, formerly FEC.
The costs were expensed in current year in which the sale of assets was
completed.
During the year ended September 30, 2003, the Company incurred the cost of
$15,000 in relation to its plan to acquire the assets of Memco-Tec Limited
of Guangzhou, China. The acquisition plan was abandoned and the costs were
expensed in the year.
NOTE 7 INVESTMENT IN WEIHAI BARRINGTON BIOLOGICAL ENGINERRING CO. LTD. (JOINT
VENTURE)
The Company and Shangdon Weigao Group of Weihai own Weihai Barrington
Biological Engineering Co. Ltd., the joint venture in China equally. During
the 2003, the Company has contributed $400,000 as registered capital of the
joint venture. The joint venture has been unable to obtain the necessary
licenses to market its products. Consequently the joint venture was
terminated subsequent to year-end. The liquidation proceeds are estimated
at $324,000. Subsequent to the year-end these funds were received by the
Company.
21
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(A development stage enterprise)
FOR THE YEARS ENDED SEPTEMBER 30, 2004 and 2003
(U.S. DOLLARS)
NOTE 8 GOODWILL AND OTHER INTANGIBLE ASSETS
2004 2003
Technology $ - $ -
-------- --------
$ - $ -
======== ========
The Company adopted the provisions of FASB 142 for the accounting of
intangibles. According to the FASB requirements, these intangible assets
are capitalized and not amortized. Each year, management is required to
review the intangible assets to determine if there has been an impairment
loss to recognize on their carrying value. Management believes that there
has been an impairment of these intangible assets for the year-ended
September 30, 2003 and has accordingly wrote-off the balance of technology
in the amount of $556,773.
NOTE 9 ACQUISITION OF ABP DIAGNOSTIC LTD.
On May 31, 2002, the Company acquired 100% of the outstanding common stock
of ABP Diagnostic Ltd. The results of ABP Diagnostic Ltd. operations have
been included in the consolidated financial statements since that date. ABP
has available technical information relating to the manufacture of a
cassette and the assembly of a range of individual diagnostic rapid test
kits.
The business combination is accounted for using the purchase method. The
fair value of the assets acquired at the date of acquisition are as
follows:
Current assets $ 62,795
Furniture, equipment and machinery 100,228
Intangibles 647,662
Goodwill 910,249
----------
Net assets acquired at fair values $1,720,934
==========
Total consideration:
Liabilities assumed $ 850,208
3,450,000 common shares of the Company 870,726
----------
$1,720,934
==========
22
BARRINGTON SCIENCES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(A development stage enterprise)
FOR THE YEARS ENDED SEPTEMBER 30, 2004 and 2003
(U.S. DOLLARS)
NOTE 10 SHARE CAPITAL AND COMMITMENTS
Share Purchase Warrants
-----------------------
As at September 30, 2004, the Company has 560,067 share purchase warrants
outstanding which are exercisable at the option of the shareholders, with
an exercise price of CDN $0.75 per common share.
NOTE 11 RELATED PARTY TRANSATIONS
2004 2003
Due to directors and officers $396,266 $176,382
======== ========
The amounts due to directors and officers are non-interest bearing and have
no set terms of repayment.
During the years, the Company, pursuant to the terms of various management
and service agreements, paid or made provision in the accounts for the
payments of the following amounts to its directors and officers.
2004 2003
Management fees $ 60,000 $327,534
Consulting fees 47,312 87,683
-------- --------
$107,312 $415,217
======== ========
NOTE 12 MATERIAL CONTRACTS
On September 3, 2003, the Company entered into an 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 1,200,000 shares of the Company's common shares
plus $330,000 in cash. Payment of $30,000 has been made during 2003. The
acquisition did not complete and consequently the non-refundable deposit
has been expensed in the current year.
23
NOTE 13 COMPARITIVE FIGURES
Certain of the comparative figures have been restated to conform with the
current year's presentation.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BARRINGTON SCIENCES CORPORATION
By: /S/ George Moore Date: May 1, 2007
- ----------------------------
George Moore
President and CEO and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the date indicated.
NAME & POSITION DATE: May 1, 2007
/S/ George Moore
- -------------------------------
George Moore
President CEO and Director
/S/ Lorne Broten
- -------------------------------
Lorne Broten
CFO and Director
/S/ Dr. Anthony Reynolds
- -----------------------------
Dr. Anthony Reynolds
Director
24