SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarterly Period Ended December 31, 2004
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____ to _____
Commission file number 0-26362
ADVANCED NUTRACEUTICALS, INC.
-----------------------------
(Exact name of small business issuer as specified in its charter)
Texas 76-0642336
----- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
106 South University Blvd., Unit 14
Denver, CO 80209
----------------
(Address of Principal Executive Offices)
(303) 722-4008
--------------
(Issuer's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
As of February 9, 2005 there were 5,097,830 shares of common stock $0.01 par
value per share, outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
ADVANCED NUTRACEUTICALS, INC.
Index
PART 1 - Financial Information
Page
Item 1. Unaudited Financial Statements
Consolidated Balance Sheet at December 31, 2004 3
Consolidated Statements of Operations for the Three
Months Ended December 31, 2004 and 2003 4
Condensed Consolidated Statements of Cash Flows for the
Three Months Ended December 31, 2004 and 2003 5
Notes to Unaudited Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis 9
Item 3. Controls and Procedures 13
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
2
ADVANCED NUTRACEUTICALS, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2004
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,240,289
Receivables, net 2,843,803
Inventories 2,197,381
Deferred tax assets 1,475,000
Prepaid expenses and other assets 8,101
------------
Total Current Assets 8,764,574
Property and equipment, net 1,229,248
Goodwill 7,563,913
Deferred tax assets 310,000
Other assets 115,964
------------
$ 17,983,699
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,186,356
Accrued compensation 67,994
Accrued expenses and other liabilities 28,646
Credit facility 1,034,922
Current portion of long-term debt 14,895
------------
Total Current Liabilities 2,332,813
------------
Long-term debt:
Credit facility 59,671
Other long-term debt 30,916
------------
90,587
------------
Total Liabilities 2,423,400
------------
Commitments and contingencies
Stockholders' equity:
Preferred stock; $.001 par value; 1,000,000
shares authorized; none outstanding --
Common stock; $.01 par value; 20,000,000
shares authorized; 5,097,830 issued and outstanding 50,978
Additional paid-in capital 20,356,281
Accumulated deficit (4,846,960)
------------
Total Stockholders' Equity 15,560,299
------------
$ 17,983,699
============
See accompanying notes to unaudited condensed consolidated financial statements.
3
ADVANCED NUTRACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
PERIODS ENDED DECEMBER 31,
(Unaudited)
Three Months
Ended
--------------------
2004 2003
---- ----
Net sales $ 4,491,507 $ 4,075,073
Cost of sales 3,049,574 2,746,153
----------- -----------
Gross profit 1,441,933 1,328,920
General and administrative
expenses 744,656 701,055
----------- -----------
Operating income 697,277 627,865
Other income (expense):
Interest expense, net (63,439) (56,017)
Other, net 697 32,509
----------- -----------
Income from continuing
operations before income taxes 634,535 604,357
Income tax expense 240,000 --
----------- -----------
Income from continuing operations 394,535 604,357
----------- -----------
Loss from discontinued operations -- (405,061)
----------- -----------
Net income $ 394,535 $ 199,296
=========== ===========
Earnings (loss) per share:
Basic:
Continuing operations $ .08 $ .12
Discontinued operations -- (.08)
----------- -----------
Net income $ .08 $ .04
=========== ===========
Diluted:
Continuing operations $ .07 $ .12
Discontinued operations -- (.08)
----------- -----------
Net income $ .07 $ .04
=========== ===========
Weighted average common shares outstanding:
Basic 5,097,830 4,992,789
=========== ===========
Diluted 5,947,917 5,001,834
=========== ===========
See accompanying notes to unaudited condensed consolidated financial statements.
4
ADVANCED NUTRACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended December 31,
-------------------------------
2004 2003
---- ----
Net cash provided by (used in) operating activities:
Continuing operations $ 613,931 $ 179,791
Discontinued operations - (147,642)
Net cash provided by (used in) investing activities:
Continuing operations (183,899) (49,163)
Discontinued operations 109,118 -
Net cash provided by (used in) financing activities:
Continuing operations (85,369) 78,139
Discontinued operations - (126,148)
----------- -----------
Net increase (decrease) in cash and cash equivalents 453,781 (65,023)
Cash and cash equivalents at beginning of period 1,786,508 1,043,926
----------- -----------
Cash and cash equivalents at end of period $ 2,240,289 $ 978,903
=========== ===========
See accompanying notes to unaudited condensed consolidated financial statements.
5
ADVANCED NUTRACEUTICALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
INTERIM FINANCIAL STATEMENTS
The accompanying financial statements of Advanced Nutraceuticals, Inc. (the
"Company" or "ANI") have been prepared in accordance with the instructions to
quarterly reports on Form 10-QSB. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present fairly
the financial position, results of operations and changes in financial position
at December 31, 2004, and for all periods presented have been made. Certain
information and footnote data necessary for fair presentation of financial
position and results of operations in conformity with accounting principles
generally accepted in the United States of America have been condensed or
omitted. It is therefore suggested that these financial statements be read in
conjunction with the summary of significant accounting policies and notes to
financial statements included in the Company's Annual Report on Form 10-KSB.
Certain amounts in the Company's prior year financial statements have been
reclassified to conform to the presentation used in the current year. The
results of operations for the period ended December 31, 2004 are not necessarily
an indication of operating results for the full year.
NOTE 1--OPERATIONS AND MAJOR CUSTOMERS
As described in Note 4, on March 23, 2004, the Company completed the sale
of substantially all of the assets and operations of the Company's subsidiary,
ANI Pharmaceuticals, Inc. ("ANIP") to an unrelated newly formed entity. The
operations of ANIP are accounted for as a discontinued operation within these
financial statements. The Company's operations are currently conducted through
one operating subsidiary, Bactolac Pharmaceutical Inc. ("Bactolac"), a private
label contract manufacturer of vitamins and supplements located in Hauppauge,
New York. The Company determines its operating results consistent with its
management reporting and consolidated accounting policies. All of the assets and
operating results as presented in the accompanying financial statements from
continuing operations are associated with the Bactolac operation.
Major Customers
Other than as detailed under foreign sales, the Company's revenues are
generated from customers located in the United States. The following table
summarizes sales from continuing operations to individual customers that
comprised more than 10% of the Company's net sales from continuing operations
for the three-month periods ended December 31.
Customer 2004 2003
-------- ---- ----
A 12.5% 11.0%
B 10.0% 8.2%
C 9.5% 16.2%
6
ADVANCED NUTRACEUTICALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Foreign Sales
Export sales from continuing operations, primarily from customer B above,
were approximately $451,000 and $334,000 for the three-month periods ended
December 31, 2004 and 2003. The Company has no foreign assets.
NOTE 2 - DEBT AGREEMENTS
In March 2003, the Company completed the refinancing of its senior debt
facility with a new lender (the "Agreement"). The Agreement, as amended,
provides the Company with a $3.4 million facility, consisting of a $2.5 million
revolver, a $650,000 equipment term loan and a $257,000 equipment acquisition
line. Interest on the revolver portion is paid monthly and the term loan portion
of the facility provides for monthly principal payments of approximately
$24,000, plus interest. Borrowings under the Agreement mature in March 2006, are
collateralized by substantially all of the Company's assets, and bear interest
at rates that fluctuate with the prime rate, with the revolver at 2% over prime
(not to be less than a total rate of 6.5%), 7.1% at December 31, 2004 and the
equipment lines at 4.75% over prime (not to be less than a total rate of 9.25%),
9.9% at December 31, 2004. Due to the "floor" interest amounts under the
Company's credit facility, the 2003-2004 prime rate levels have not impacted the
Company's interest rate. Increases in the prime rate subsequent to September 30,
2004, have increased the Company's interest expense. The credit facility
requires a lockbox arrangement, which requires all receipts to be swept daily to
reduce borrowings outstanding under the credit facility. This arrangement,
combined with a Subjective Acceleration Clause ("SAC") in the credit facility,
cause the revolving credit facility to be classified as a current liability, per
guidance in the FASB's Emerging Issues Task Force Issue 95-22, "Balance Sheet
Classification of Borrowings Outstanding under Revolving Credit Agreements that
Include Both a Subjective Acceleration Clause and a Lock-Box Arrangement."
However, the Company does not expect to repay, or to be required to repay,
within one year, the balance of the revolving credit facility classified as a
current liability. The SAC, which is a typical requirement in commercial credit
agreements, allows the lender to call the loan if it determines there has been a
material adverse effect on the Company's operations, business, properties,
assets, liabilities, condition or prospects. The classification of the revolving
credit facility as a current liability is a result only of the combination of
the two aforementioned factors, the lockbox arrangement and the SAC. However,
the revolving credit facility does not expire or have a maturity date within one
year. Additionally, the lender has not notified the Company of any indication of
a SAC as of the date of this filing.
The Agreement contains a number of covenants, which include, among other
items, maintenance of specified minimum net worth and fixed charge ratios, as
well as limitations on capital expenditures and the payment of dividends. As of
December 31, 2004, the Company was in compliance with the covenants of the
Agreement.
As of December 31, 2004, the total balance outstanding under the facility,
including $348,000 outstanding under the term loan portion, amounted to
$1,095,000, of which $1,035,000 has been classified as a current liability.
Borrowings under the revolving portion of the secured credit facility totaled
$746,000, with additional borrowings available of approximately $1,733,000, at
December 31, 2004, based upon accounts receivable and inventory levels.
7
NOTE 3 - STOCK BASED COMPENSATION AND EARNINGS PER SHARE
The Company applies APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations in accounting for its stock-based
employee compensation plans. The following table illustrates the effect on net
income and income per share if the Company had applied the fair value
recognition provisions of FASB Statement No. 123, Accounting for Stock-Based
Compensation, to its stock-based employee plans for options granted from 1999 to
2004, for the three month periods ended December 31. No options were granted
during the three month period ended December 31, 2004.
2004 2003
------------- -------------
Net income as reported $ 395,000 $ 199,000
Add: Stock-based employee compensation
expense included in reported net income
(loss), net of related tax effects -- --
Deduct: Total stock-based employee
compensation expense determined
under fair value method for all awards,
net of related tax effects (10,500) (52,000)
------------- -------------
Pro forma $ 384,500 $ 147,000
============= =============
Income (loss) per share:
As reported:
Basic $ .08 $ .04
Diluted $ .07 $ .04
============= =============
Pro forma:
Basic $ .08 $ .03
Diluted $ .06 $ .03
============= =============
NOTE 4 - DISCONTINUED OPERATIONS
On March 23, 2004, the Company completed the sale of substantially all of the
assets and operations of the Company's subsidiary, ANIP, to an unrelated newly
formed entity. The terms of the sale were cash of approximately $3.4 million and
the assumption by the buyer of approximately $1.7 million in liabilities,
primarily trade accounts payable. The Company used the entire cash proceeds, net
of closing expenses and a $250,000 escrow requirement, to repay the outstanding
balance on the mortgage on the ANIP facility and the balance to reduce the
Company's senior credit facility. The funds under the escrow requirement were
released to the Company in September 2004. As a result of the sale of the
assets, the Company recorded a loss of approximately $1,187,000 net of a
deferred income tax benefit of $663,000. ANIP had previously been reported as a
separate segment of the Company and was a contract and private label
manufacturer of over-the-counter liquid and powder pharmaceutical products,
primarily liquid stomach remedies, located in Gulfport, Mississippi. As a result
of the sale of ANIP, the Company's consolidated financial statements and related
notes thereto have been reclassified to present the operations of ANIP as
discontinued operations. Under the terms of the purchase agreement, typical
representations and warranties were made by the Company to the buyer, which are
the only remaining outstanding items from the sale transaction. The Company now
operates in only one segment.
Certain information with respect to discontinued operations of ANIP for the
three months ended December 31, 2003 follows.
8
Net sales $ 2,681,478
-----------
Gross profit 559,851
Operating expenses 843,471
-----------
Operating loss (283,620)
Other expenses, including interest (121,441)
-----------
Net loss $ (405,061)
===========
During November 2004, the Company closed on the sale of the remaining asset
that was held for sale relating to the ANIP operations. The sale resulted in
cash proceeds of approximately $109,000 and no gain or loss on the disposal.
NOTE 5 - CONTINGENCIES
The Company's subsidiary, Bactolac, has pending legal actions and claims
incurred in the normal course of business. One action from a former customer
seeks claims exceeding $650,000 on three causes of action. During the period
subsequent to when the former customer alleges that Bactolac violated a
production agreement, Bactolac produced less than $450 for this customer and
during the Company's entire relationship with the customer, less than $3,000 in
product was sold to them. The next hearing on this matter has been scheduled for
the spring of 2005. The Company believes that these actions, to the extent that
they are material, are without merit and is actively pursuing the defense
thereof. The Company believes that the ultimate resolution of these matters will
not have a material effect on the Company's financial condition, results of
operations or cash flows. Depending however, on the amount and timing of an
unfavorable resolution of these items, it is possible that the Company's future
results of operations or cash flows could be materially impacted in a particular
period.
NOTE 6 - SUBSEQUENT EVENT - STOCKHOLDERS' EQUITY
During January 2005, the Company's Board of Directors granted options to
purchase 220,000 shares of common stock at $3.95 to $4.35 per share under the
Incentive Stock Option Plan. The exercise price is equivalent to the fair market
value of the common stock when granted and the options have a terms ranging from
five to ten years.
ITEM 2.
ADVANCED NUTRACEUTICALS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
The Company's operations are currently conducted through one operating
subsidiary, Bactolac Pharmaceutical Inc. ("Bactolac"), a private label contract
manufacturer of vitamin and supplement products. As a result of the sale of
ANIP, the historical financial statements of the Company have been revised to
reflect the operations of ANIP as a discontinued operation.
Comparison of the Presented Results of Operations for the Three Months Ended
December 31, 2004 to the Three Months Ended December 31, 2003.
Net sales for the 2004 period totaled $4,492,000, a $416,000 or 10.2%
increase over the 2003 period. The increase was primarily attributable to sales
of products to new customers.
9
Gross profit for the 2004 period increased to $1,442,000, a $113,000
increase over the 2003 amount. Gross profit as a percentage of net sales
decreased to 32.1% in 2004, as compared to 32.6% in the 2003 period. The
majority of the change resulted from changes in the product mix during the
period.
Total operating expenses increased to $745,000 in 2004 from $701,000 in
2003. This represents an increase of $44,000, or 6.2%. The increase relates
primarily to increased expenses associated with personnel costs.
Liquidity and Capital Resources
Prior to the ANIP sale, ANI met its consolidated working capital and
capital expenditure requirements, including funding for debt repayments, mainly
through net cash provided under the Company's revolving line of credit.
Management plans to continue to strive to maintain and enhance the profitability
of the Bactolac operation to meet currently anticipated funding requirements.
In March 2003, the Company completed the refinancing of its senior debt
facility with a new lender (the "Agreement"). The Agreement, as amended,
provides the Company with a $3.4 million facility, consisting of a $2.5 million
revolver, a $650,000 equipment term loan and a $257,000 equipment acquisition
line. Interest on the revolver portion is paid monthly and the term loan portion
of the facility provides for monthly principal payments of approximately
$24,000, plus interest. The Agreement that matures in March 2006 is
collateralized by substantially all of the Company's assets, and bears interest
at rates that fluctuate with the prime rate, with the revolver at 2% over prime
(not to be less than a total rate of 6.5%), 7.1% at December 31, 2004 and the
equipment lines at 4.75% over prime (not to be less than a total rate of 9.25%),
9.9% at December 31, 2004. Due to the "floor" interest amounts under the
Company's credit facility, the 2003-2004 prime rate levels have not impacted the
Company's interest rate. Increases in the prime rate subsequent to September 30,
2004, have increased the Company's interest expense.
The credit facility requires a lockbox arrangement, which requires all
receipts to be swept daily to reduce borrowings outstanding under the credit
facility. This arrangement, combined with a Subjective Acceleration Clause
("SAC") in the credit facility, cause the revolving credit facility to be
classified as a current liability, per guidance in the FASB's Emerging Issues
Task Force Issue 95-22, "Balance Sheet Classification of Borrowings Outstanding
under Revolving Credit Agreements that Include Both a Subjective Acceleration
Clause and a Lock-Box Arrangement." However, the Company does not expect to
repay, or to be required to repay, within one year, the balance of the revolving
credit facility classified as a current liability. The SAC, which is a typical
requirement in commercial credit agreements, allows the lender to call the loan
if it determines there has been a material adverse effect on the Company's
operations, business, properties, assets, liabilities, condition or prospects.
The classification of the revolving credit facility as a current liability is a
result only of the combination of the two aforementioned factors, the lockbox
arrangement and the SAC. However, the revolving credit facility does not expire
or have a maturity date within one year. Additionally, the lender has not
notified the Company of any indication of a SAC as of the date of this filing.
10
The Agreement contains a number of covenants, which include, among other
items, maintenance of specified minimum net worth and fixed charge ratios, as
well as limitations on capital expenditures and the payment of dividends.
In connection with continued expansion and upgrades of the business
including the recent addition of the 29,000 square foot leased facility, the
Company estimates that capital needs for equipment purchases and leasehold
improvements during the remainder of the 2005 fiscal year will total $100,000 to
$300,000. It is expected that funding for the capital additions will be provided
out of working capital with a portion funded out of the credit facility.
At December 31, 2004, the Company had working capital of $6,432,000.
Borrowings under the revolving portion of the secured credit facility totaled
$746,000, with additional borrowings available of $1,733,000, based upon
accounts receivable and inventory levels.
Operating Activities
Net cash flows from continuing operating activities provided approximately
$614,000 in 2004 and approximately $180,000 in 2003. The net cash flow provided
in 2004 resulted primarily from the $395,000 income from continuing operations
plus the non-cash depreciation and amortization of $97,000 and $268,000 increase
in accounts payable. This was reduced by a $381,000 increase in inventories.
The net cash flow generated in 2003 resulted primarily from the $604,000
income from continuing operations plus the non-cash depreciation and
amortization of $65,000 and a $184,000 net increase in accounts payable. A
$686,000 increase in accounts receivable and a $78,000 decrease in accrued
expenses, consumed cash.
Discontinued operations consumed $148,000 in 2003 which related primarily
to a $405,000 net loss plus a $227,000 increase in inventory and a $183,000
decrease in accrued expenses. This was offset by a $471,000 increase in accounts
payable.
Investing Activities
Investing activities from continuing operations consumed approximately
$184,000 in 2004 which was used primarily for additions to equipment.
Investing activities consumed approximately $49,000 in 2003 which was
principally related to equipment additions.
Discontinued operations generated cash of approximately $109,000 in 2004,
arising from the completion of the sale of the asset held for sale. Discontinued
operations did not consume or generate cash in 2003.
Financing Activities
Financing activities from continuing operations consumed approximately
$85,000 in 2004, and generated $78,000 in 2003. This consisted primarily of net
borrowings and repayments under the Company's debt obligations.
Discontinued operations consumed approximately $126,000 in 2003. These
amounts consisted primarily of debt repayments and net borrowings under the
Company's debt obligations for ANIP in 2003.
11
Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 123(R) "Share-Based Payment", which addresses the accounting for
share-based payment transactions. SFAS No. 123(R) eliminates the ability to
account for share-based compensation transactions using APB 25, and generally
requires instead that such transactions be accounted and recognized in the
statement of operations based on their fair value. SFAS No. 123(R) will be
effective for public companies that file as small business issuers as of the
first interim or annual reporting period that begins after December 15, 2005.
The Company is evaluating the provisions of the standard. Depending upon the
amount of and terms for options that are granted in future periods, the
implementation of this standard could have a significant non-cash impact on
results of operations in future periods.
In December 2003, the FASB issued SFAS Interpretation 46R ("FIN 46R"), a
revision to SFAS Interpretation No. 46 ("FIN 46"), "Consolidation of Variable
Interest Entities". FIN 46R clarifies some of the provisions of FIN 46 and
exempts certain entities from its requirements. FIN 46R is effective at the end
of the first interim period ending after March 15, 2004. Entities that have
adopted FIN 46 prior to this effective date can continue to apply the provision
of FIN 46 until the effective date of FIN 46R or elect early adoption of FIN
46R. The adoption of FIN 46 and FIN 46R did not have a material impact on the
Company's consolidated financial statements.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity". This
statement establishes standards for how an issuer classifies and measures in its
financial position certain financial instruments with characteristics of both
liabilities and equity. In accordance with this standard, financial instruments
that embody obligations of the issuer are required to be classified as
liabilities. SFAS No. 150 is effective for all financial instruments entered
into or modified after May 31, 2003, except for those provisions relating to
mandatorily redeemable non-controlling interests, which have been deferred. The
Company has adopted the applicable provisions of SFAS No. 150, however.
Management believes if the deferred provisions are finalized in their current
form, the adoption of these provisions will not have a material impact on the
Company's operations or financial condition.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
Certain statements in Management's Discussion and Analysis of Results of
Operations and Financial Condition and other portions of this report are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and are subject to the safe harbor created
thereby. These statements relate to future events or the Company's future
financial performance and involve known and unknown risks, uncertainties and
other factors that may cause the actual results, levels of activity, performance
or achievements of the Company or its industry to be materially different from
those expressed or implied by any forward-looking statements. In some cases,
forward-looking statements can be identified by terminology such as "may,"
"will," "could," "would," "should," "expect," "plan," "anticipate," "intend,"
"believe," "estimate," "predict," "potential" or other comparable terminology.
Please see the "Cautionary Note Regarding Forward-Looking Statements" on page 2
of the Company's Form 10-KSB for the year ended September 30, 2004 for a
discussion of certain important factors that relate to forward-looking
statements contained in this report. Although the Company believes that the
expectations reflected in these forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to be correct. Unless
otherwise required by applicable securities laws, the Company disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
12
Item 3. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Management of the Company, including the Chief Executive Officer and the
Chief Financial Officer, has conducted an evaluation of the effectiveness of the
Company's disclosure controls and procedures pursuant to Rule 13a-14 under the
Securities Exchange Act of 1934 as of a date (the "Evaluation Date") within 90
days prior to the filing date of this report. Based on that evaluation, the
Chief Executive Officer and the Chief Financial Officer concluded that, as of
the Evaluation Date, the Company's disclosure controls and procedures were
effective in ensuring that all material information relating to the Company
required to be filed in this quarterly report has been made known to them in a
timely manner.
(b) Changes in Internal Controls
There have been no significant changes made in the Company's internal
controls or in other factors that have significantly affected internal controls
subsequent to the Evaluation Date.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits 31.1, 31.2 and 32 are furnished.
(b) The following Reports on Form 8-K reports were filed during the
period.
a. On October 6, 2004, the Company filed an 8-K Report reporting
under Items 2.01, 8.01 and 9.01, the issuance of a press release
covering the release of escrow funds from the prior sale of ANI
Pharmaceuticals and other corporate matters.
b. On October 25, 2004, the Company filed an 8-K Report reporting
under Items 8.01 and 9.01, entering into an agreement with The
Seidler Companies.
c. On January 13, 2005, the Company filed an 8-K Report reporting
under Items 12, 5 and 7, the issuance of a press release
regarding year-end results.
13
ADVANCED NUTRACEUTICALS, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ADVANCED NUTRACEUTICALS, INC.
(Registrant)
By: /s/ Jeffrey G. McGonegal
-----------------------------
Jeffrey G. McGonegal
Senior Vice President--Finance and
Chief Financial Officer
Dated: February 14, 2005
14