UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 1, 2002
BIOENVISION, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-24875 11-3375915
(State of other (Commission File Number) (IRS Employer
jurisdiction) Indentification No.)
One Rockefeller Plaza, Suite 1600, New York, New York 10020
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(212)445-6581
AMENDMENT NO. 1
This Amendment on Form 8-K/A amends the Current Report on
Form 8-K filed by Bioenvision, Inc. and subsidiaries (the
"Company") on February 21, 2002 with respect to the Company's
acquisition of Bridgeblood Technologies L.L.C.; DBA Pathagon Inc.
("Pathagon") This Amendment is being filed for the sole purpose
of filing the following Financial Statements and Exhibits that
were previously omitted.
Item 7 Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Audited consolidated financial statements of Pathagon
Inc. for the years ended December 31, 2001 and 2000.
(b) Pro forma financial information.
Unaudited Pro Forma Consolidated Balance Sheet of the
Company as of December 31, 2001, and Unaudited Pro
Forma Consolidated Income Statements for the twelve
months ended June 30, 2001 and six months ended
December 31, 2001.
(c) Exhibits.
2.2 Amended and Restated Agreement and Plan
of Merger dated as of February 1, 2002 by and
among Bioenvision, Inc., Bioenvision
Acquisition Corp. and Pathagon Inc.
10.18 Registration Rights Agreement dated
as of February 1, 2002 by and between
Bioenvision, Inc. and the former shareholders
of Pathagon. party thereto.
10.19 Stockholders Lock Up Agreement
dated as of February 1, 2002 by and among
Bioenvision, Inc., the former shareholders of
Pathagon party thereto, Christopher Wood,
Bioaccelerate Limited, Jano Holdings Limited
and Lifescience Ventures Limited.
23 Independent Auditor's Consent
Item 7(a)
REPORT OF INDEPENDENT AUDITORS
To the Members
Bridgeblood Technologies, L.L.C.
I have audited the accompanying Balance Sheet of Bridgeblood
Technologies, L.L.C. as of December 31, 2001 and the related
statement of Operations and Member's Equity (Deficiency) and
Statement of Cash Flows for the year then ended. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Bridgeblood Technologies, L.L.C. as of December 31, 2001, and the
results of its operations and cash flows for the year then ended
in conformity with generally accepted accounting principles.
Frank E Hanson, C.P.A.
Arlington, Virginia
April 12, 2002
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors:
To the Members
Bridgeblood Technologies, L.L.C.
I have audited the accompanying Balance Sheet of Bridgeblood
Technologies, L.L.C. as of December 31, 2000 and the related
statement of Operations and Member's Equity (Deficiency) and
Statement of Cash Flows for the year then ended. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Bridgeblood Technologies, L.L.C. as of December 31, 2000, and the
results of its operations and cash flows for the year then ended
in conformity with generally accepted accounting principles.
Frank E Hanson, C.P.A.
Arlington, Virginia
April 12, 2002
BRIDGEBLOOD TECHNOLOGIES L.L.C., DBA PATHAGON, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2001
ASSETS
INTANGIBLE ASSETS:
Net of accumulated amortization of $13,334 $36,666
LIABILITIES AND MEMBER'S EQUITY
LIABILITIES: Accounts Payable $108,074
MEMBER'S DEFICIENCY: (71,408)
NET LIABILITIES AND MEMBER'S DEFICIENCY: $36,666
The accompanying notes are an integral part of these financial
statements.
BRIDGEBLOOD TECHNOLOGIES L.L.C., DBA PATHAGON, INC.
STATEMENT OF OPERATIONS AND MEMBER'S EQUITY (DEFICIENCY)
FOR THE YEAR ENDED DECEMBER 31, 2001
REVENUE: $-0-
EXPENSES:
Amortization Expense 3,333
Expenses (See Schedule) 207,885
----------
Total Expenses 211,218
NET (LOSS): (211,218)
MEMBER'S DEFICIENCY - JANUARY 1, 2001: (666,786)
ACCOUNTS PAYABLE CONVERTED TO EQUITY: (806,596)
MEMBER'S DEFICIENCY-DECEMBER 31, 2001: $(71,408)
The accompanying notes are an integral part of these financial
statements
BRIDGEBLOOD TECHNOLOGIES L.L.C., DBA PATHAGON, INC.
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net(Loss) $(211,218)
Adjustments to reconcile net (loss) to net
cash provided (used) by operating activities:
Amortization 3,333
Changes in assets and liabilities
Due to affiliate 207,885
----------
CASH-JANUARY 1, 2001 -0-
CASH-DECEMBER 31, 2001 -0-
The accompanying notes are an integral part of these financial
statements
BRIDGEBLOOD TECHNOLOGIES L.L.C., DBA PATHAGON, INC.
SCHEDULE OF EXPENSES
YEAR ENDED DECEMBER 31, 2001
EXPENSES:
Consulting $72,342
Professional Fees 132,768
Storage 2,865
----------
Total Expenses $207,885
The accompanying notes are an integral part of these financial
statements
BRIDGEBLOOD TECHNOLOGIES L.L.C., DBA PATHAGON, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2001
Note 1 : DESCRIPTION OF OPERATIONS:
Bridge Blood Technologies L.L.C. ("BBT" or the "Company") was
established to develop and acquire biotech and medical
technologies.
BBT is developing systems designed to improve the safety of blood
transfusions by inactivation of infectious pathogens in blood
components (fresh from frozen plasma of "FFP", platelets and red
blood cells) used for transfusion. BBT has the worldwide rights
to the use of thiazine dyes, including methylene blue, for in
vitro inactivation of pathogens in biological fluids. Methylene
blue is only two compounds used commercially to inactivate
pathogens in blood products, and is currently used in many
European countries to inactivate pathogens in FFP. The Company
believes that, as a result of the mechanism of action of its
proprietary technology, its systems also have the potential to
inactivate many new pathogens before they are identified and
before tests have been developed to detect their presence in the
blood supply. Because the Company's systems are being designed to
inactivate rather than merely test for pathogens, the Company's
systems also have the potential to reduce the risk of
transmission of pathogens that would remain undetected by
testing.
In February 2000, BBT acquired the OLIGON technology from
creditors to Implemed, Inc. The OLIGON technology is a patented
antimicrobial technology that can be incorporated into the
manufacturing process of many implantable devices. The patented
process, involving two dissimilar metals (silver and platinum)
creates an electrochemical reaction that releases silver ions
which destroy bacteria, fungi and other pathogens. BBT intends to
commercialize the technology in partnership with leading medical
devices manufacturers.
NOTE 2 : BASIS OF PRESENTATION:
The financial statements are prepared on an accrual basis of
accounting where revenue is recognized when earned and expenses
then incurred.
NOTE 3 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
INTANGIBLE ASSET
Intangible asset represents a license and is being amortized
using the straight line basis over 15 years.
ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ
from those estimates.
NOTE 4 : RELATED PARTY TRANSACTIONS:
The Company was charged $207,885 for the year ended in December
31, for related expenses paid by an affiliate on its behalf.
NOTE 5 : CONTIGENT LIABILITES:
The Company has a $300,000 demand note payable contingent on the
receipt by the Company of at least $5,000,000 of qualified
financing. The note bears interest at 1.5% per month. Total
accrued interest at December 31, 2001 amounted to $313,044.
BRIDGEBLOOD TECHNOLOGIES L.L.C., DBA PATHAGON, INC.
BALANCE SHEET
DECEMBER 31, 2000
ASSETS
INTANGIBLE ASSETS: Net of accumulated amortization
of $10,001 $39,999
LIABILITIES AND MEMBER'S EQUITY
LIABILITIES: Due to Affiliate $706,785
MEMBER'S DEFICIENCY: (666,786)
NET LIABILITIES AND MEMBER'S DEFICIENCY: $39,999
-----------
The accompanying notes are an integral part of these financial
statements
BRIDGEBLOOD TECHNOLOGIES L.L.C., DBA PATHAGON, INC.
STATEMENT OF OPERATIONS AND MEMBER'S EQUITY (DEFICIENCY)
FOR THE YEAR ENDED DECEMBER 31, 2000
REVENUE: $-0-
EXPENSES:
Amortization Expense 3,333
Expenses (See Schedule) 537,574
Total Expenses 540,907
NET (LOSS): (540,907)
MEMBER'S DEFICIENCY - JANUARY 1, 2000: (125,879)
MEMBER'S DEFICIENCY-DECEMBER 31, 2000: $666,786
The accompanying notes are an integral part of these financial
statements
BRIDGEBLOOD TECHNOLOGIES L.L.C., DBA PATHAGON, INC.
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $(540,907)
Adjustments to reconcile net (loss) to net cash
provided (used) by operating activities:
Amortization 3,333
Changes in assets and liabilities
Due to affiliate 537,574
CASH-JANUARY 1, 2000 -0-
CASH-DECEMBER 31, 2000 -0-
The accompanying notes are an integral part of these financial
statements
BRIDGEBLOOD TECHNOLOGIES L.L.C., DBA PATHAGON, INC.
SCHEDULE OF EXPENSES
YEAR ENDED DECEMBER 31, 2000
EXPENSES:
Consulting $81,387
Professional Fees 20,152
Acquisition Cost 173,250
Storage 2,565
Variable and Fixed Costs 260,220
----------
Total Expenses $537,574
The accompanying notes are an integral part of these financial
statements
BRIDGEBLOOD TECHNOLOGIES L.L.C., DBA PATHAGON, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2000
Note 1 : DESCRIPTION OF OPERATIONS:
Bridge Blood Technologies L.L.C. ("BBT" or the "Company") was
established to develop and acquire biotech and medical
technologies.
BBT is developing systems designed to improve the safety of blood
transfusions by inactivation of infectious pathogens in blood
components (fresh from frozen plasma of "FFP", platelets and red
blood cells) used for transfusion. BBT has the worldwide rights
to the use of thiazine dyes, including methylene blue, for in
vitro inactivation of pathogens in biological fluids. Methylene
blue is only two compounds used commercially to inactivate
pathogens in blood products, and is currently used in many
European countries to inactivate pathogens in FFP. The Company
believes that, as a result of the mechanism of action of its
proprietary technology, its systems also have the potential to
inactivate many new pathogens before they are identified and
before tests have been developed to detect their presence in the
blood supply. Because the Company's systems are being designed to
inactivate rather than merely test for pathogens, the Company's
systems also have the potential to reduce the risk of
transmission of pathogens that would remain undetected by
testing.
In February 2000, BBT acquired the OLIGON technology from
creditors to Implemed, Inc. The OLIGON technology is a patented
antimicrobial technology that can be incorporated into the
manufacturing process of many implantable devices. The patented
process, involving two dissimilar metals (silver and platinum)
creates an electrochemical reaction that releases silver ions
which destroy bacteria, fungi and other pathogens. BBT intends to
commercialize the technology in partnership with leading medical
devices manufacturers.
NOTE 2 : BASIS OF PRESENTATION:
The financial statements are prepared on an accrual basis of
accounting where revenue is recognized when earned and expenses
then incurred.
NOTE 3 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
INTANGIBLE ASSET
Intangible asset represents a license and is being amortized
using the straight line basis over 15 years.
ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ
from those estimates.
NOTE 4 : RELATED PARTY TRANSACTIONS:
The Company was charged $537,574 for the year ended in December
31, for related expenses paid by an affiliate on its behalf.
NOTE 5 : CONTIGENT LIABILITES:
The Company has a $300,000 demand note payable contingent on the
receipt by the Company of at least $5,000,000 of qualified
financing. The note bears interest at 1.5% per month. Total
accrued interest at December 31, 2000 amounted to $212,742.
Item 7(b)
PRO FORMA FINANCIAL INFORMTION
The following unaudited pro forma consolidated balance sheet as
of December 31, 2001 and unaudited pro forma consolidated
statements of income for the year ended June 30, 2001 and for the
six months ended December 31, 2001 (collectively. The "Pro Forma
Statements") are based on the unaudited historical Consolidated
Financial Statements of Bioenvision, Inc. and Subsidiaries(the
"Company"), included in the Company's Quarterly Report on Form
10-QSB for the quarter ended December 31, 2001, the
audited historical financial statements of the Company, included
in the Company's Annual Report on Form 10-KSB/A for the year
ended June 30, 2001 and the audited historical
consolidated Financial Statements of Bridgeblood Technologies
L.L.C DBA Pathagon Inc. ("Pathagon") included elsewhere in
this report on Form 8-K/A, adjusted to give effect to the
acquisition of Pathagon (the "Pathagon Acquisition") using
the purchase method of accounting and the assumptions and
adjustments in the accompanying Notes to the Unaudited Pro
Forma Consolidated Financial Statements. The pro forma
consolidated balance sheet gives effect to the transaction
as if it occurred on December 31, 2001 and the pro forma
consolidated statements of income for the year ended June 30,
2001 and the six-months ended December 31, 2001 give effect to
the transaction as if it occurred on July 1, 2000, the first
day of the Company's 2001 fiscal year.
The pro forma adjustments are based upon available information
and certain assumptions that the Company believes are reasonable.
The Pro Forma Statements are provided for informational purposes
only and do not purport to represent what the Company's financial
position and results of operations would actually have been had
the Pathagon Acquisition in fact occurred on such date or to
project the Company's financial position or results of operations
for any future period. Additionally, the Pro Forma Statements do
no include any cost savings or other synergies expected to be
realized as a result of the integration of the two companies.
Furthermore, the allocation of the purchase price is preliminary
and subject to further revision.
The Pro Forma Statements and the Notes thereto should be read in
conjunction with the historical Consolidated Financial Statements
of the Company and Notes thereto included in the Company's
Quarterly Report on Form 10-QSB for the six months ended December
31, 2001, the Consolidated Financial Statements of the Company
and Notes thereto included in the Company's Annual Report on Form
10-KSB/A for the year ended June 30, 2001 and the historical
Financial Statements of Pathagon and Notes thereto included
elsewhere in this report on Form 8-K/A.
Bioenvision, Inc. and Subsidiaries
Pro Forma Consolidated Balance Sheet - Unaudited
December 31, 2001
BIOV PATHAGON
December 31, December 31,
2001 2001
(Unaudited) (audited)
ASSETS
Current assets
Cash $ 47,943 -
Accounts receivable related
party - -
Deferred costs 337,500 -
Deferred financing costs 1,535,625 -
Total current assets 1,921,068 -
Property plant & equipment,
net 9,362 -
Other assets
Intangible assets, net 14,716 36,666
Deferred costs - -
Deferred financing costs - -
$1,945,146 $36,666
LIABILITIES & STOCKHOLDERS'
DEFICIT
Liabilities
Current liabilities
Bank overdraft 152,119 -
Accounts payable 567,564 108,074
Other accrued liabilities 314,148 -
Deferred revenue 736,364 -
Loan payable 448,141 -
Total current liabilities 2,218,336 108,074
Long term liabilities
Deferred revenue - -
Officers salaries 933,748 -
Total long term liabilities 933,748 -
Stockholders' deficit
Common stock, $.001 par value 8,888 139,792
Authorized 25, 000,000 shares
Issued and outstanding:
8,607,252
Additional paid in capital 5,242,514 -
Accumulated other comprehensive
Income 152,346 (211,200)
Deficit accumulated during
development stage (6,610,686) -
(1,206,938) (71,408)
$ 1,945,146 $ 36,666
Bioenvision, Inc. and Subsidiaries
Pro Forma Consolidated Balance Sheet - Unaudited
December 31, 2001
Pro Form Pro forma
Adjustments Consolidated
December 31, December 31,
2001 2001
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash - $ 47,943
Accounts receivable related
Party - -
Deferred costs - 337,500
Deferred financing costs - 1,535,625
Total current assets 1,921,068
Property plant & equipment,
net - 9,362
Other assets
Intangible assets, net 12,563,334 a,b 12,614,716
Deferred costs 40,500 c 40,500
Deferred financing costs - -
$ 12,603,834 $ 14,585,646
LIABILITIES & STOCKHOLDERS'
DEFICIT
Liabilities
Current liabilities
Bank overdraft - 152,119
Accounts payable 40,500 c 716,138
Other accrued liabilities - 314,148
Deferred revenue - 736,364
Loan payable - 448,141
Total current liabilities 40,500 2,366,910
Long term liabilities
Deferred revenue - -
Officers salaries - 933,748
Total long term liabilities - 933,748
Stockholders' deficit
Common stock, $.001 par value (132,792) a 15,888
Authorized 25, 000,000 shares
Issued and outstanding:
8,607,252
Additional paid in capital 12,484,926 b 17,727,440
Accumulated other comprehensive
Income 211,200 a,b 152,346
Deficit accumulated during
development stage - (6,610,686)
-
$12,563,334 11,284,988
$12,603,834 14,585,646
Bioenvision, Inc. and Subsidiaries
Pro Forma Consolidated Statement of Income - Unaudited
for the Twelve Months Ended June 30, 2001
BIOV
PATHAGON
For the twelve For the
twelve
months ended months
ended
June 30, 2001 June 30,
2001
Contract revenue $ 245,455 $
-
Costs and expenses
Research & development costs 1,565,908
-
Administrative expenses 550,215
372,155
Interest and finance charges 228,787
-
Depreciation and amortization 22,809
3,333
Total costs and expenses 2,367,719
375,488
Net loss (2,122,264)
(375,488)
Basic & diluted net loss
per share (0.27)
-
Weighted average shares
used in Computing basis and
diluted net loss per share 7,976,419
-
Pro Form Pro
forma
Adjustments
Consolidated
For the twelve For the
twelve
months ended months
ended
June 30, 2001 June 30,
2001
(unaudited)
(unaudited)
Contract revenue $ - $
245,455
Costs and expenses
Research & development costs -
1,565,908
Administrative expenses -
922,370
Interest and finance charges -
228,787
Depreciation and amortization 842,700 d
868,842
Total costs and expenses 842,700
3,585,907
Net loss (842,700)
(3,340,452)
Basic & diluted net loss
per share -
(0.22)
Weighted average shares
used in computing basis and
diluted net loss per share 7,000,000
14,976,419
Bioenvision, Inc. and Subsidiaries
Pro Forma Consolidated Statement of Income - Unaudited
for the Six Months Ended December 31, 2001
BIOV
PATHAGON
For the six For
the six
months ended months
ended
December 31,
December 31,
2001
2001
(unaudited)
(unaudited)
Contract revenue $ 368,182 $
-
Costs and expenses
Research & development costs 403,215
-
Administrative expenses 303,655
103,385
Interest and finance charges 453,630
-
Depreciation and amortization 9,718
1,666
Total costs and expenses 1,170,218
105,051
Net loss (802,036)
(105,051)
Basic & diluted net loss
per share (0.09)
-
Weighted average shares
used in computing basis
and diluted net loss per
share 8,646,506
-
Pro Form Pro
forma
Adjustments
Consolidated
For the six For
the six
months ended
months ended
December 31,
December 31,
2001
2001
(unaudited)
(unaudited)
Contract revenue $ - $
368,182
Costs and expenses
Research & development costs -
403,215
Administrative expenses -
407,040
Interest and finance charges -
453,630
Depreciation and amortization 421,350 e
432,734
Total costs and expenses 421,350
1,696,619
Net loss (421,350)
(1,328,437)
Basic & diluted net loss
per share -
(0.08)
Weighted average shares
used in Computing basis
and diluted net loss per
share 7,000,000
15,646,506
BIOENVISION, INC. AND SUBSIDIARIES
Notes to Pro Forma Consolidated Financial Statements
December 31, 2001 and June 30, 2001
a. To eliminate equity of acquired company
b. To record purchase adjustments to reflect fair value of
assets acquired and liabilities assumed.
The acquisition was recorded as a purchase under SFAS 141.
The company issued 7,000,000 shares to complete the
acquisition, which was valued at $12,600,000 based on the 5-
day average trading price of the stock ($1.80) from November
22, 2001, the day of the company's announcement of the
intended acquisition. The purchase price was allocated to
the patents acquired net of assumed liabilities of $108,000.
The patents acquired have a finite life of 15 years. No
goodwill was recorded on the transaction.
c. Record professional fees related to acquisition
d. Record full year amortization of intangible assets related
to patents acquired in the acquisition
e. Record 6 months of amortization of intangible assets related
to acquisition
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
BIOENVISION, INC.
Date: April 15, 2002 By: /s/ Christopher B. Wood
Christopher B. Wood, MD
Chief Executive Officer