Form 10-Q for GETTING READY CORP
13-Aug-2008
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion with regard to our financial condition and operating results contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current plans and expectations of Getting Ready Corporation (the "Company", "we" or "us") and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include, among others, our inability to consummate an acquisition of an operating business or, in the event that we do consummate the transaction contemplated, our ability to operate the combined business profitably.
The discussion of our financial condition should be read in conjunction with our unaudited, condensed financial statements and notes thereto included elsewhere in this Report and the Company's Annual Report on Form 10-KSB for the fiscal year ended September 30, 2007, which was filed with the Securities and Exchange Commission on December 26, 2007.
FINANCIAL RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2008
For the quarter ended June 30, 2008, we recorded a net loss of approximately $46,900 or less than $0.01 per share. Included in the financial results for the quarter ended June 30, 2008, were professional fees of approximately $39,600 and general and administrative expenses of approximately $14,000, which together constituted our total operating expenses. We had interest income of approximately $6,800 during the quarter. From inception (November 26, 2002) through June 30, 2008, our accumulated deficit was $1,407,711.
For the three months ended June 30, 2007, we recorded a net loss of approximately $26,900 or less than $0.01 per share. Our expenses for the three months ended June 30, 2007, consisted of professional fees of approximately $23,400 and general and administrative expenses of approximately $19,600, and we had interest income of approximately $16,100 for the quarter.
Our net loss was greater in the quarter ended June 30, 2008 than in the same quarter of the previous year as a result of higher professional fees incurred in connection with our planned merger with Winston Laboratories, Inc. In addition, our interest income was approximately $9,300 less in this quarter than in the same quarter of last year as a result of cash used for expenses while we have no operating revenues.
FINANCIAL RESULTS FOR THE NINE MONTHS ENDED JUNE 30, 2008
For the nine months ended June 30, 2008, we recorded a net loss of approximately $174,100 or $0.01 per share. The financial results for the nine months included professional fees of approximately $153,000 and general and administrative expenses of approximately $48,600, which together constituted our total operating expenses, and we had interest income of approximately $27,400.
For the nine months ended June 30, 2007, we recorded a net loss of approximately $174,100 or $0.02 per share. Our professional fees were approximately $158,600 and our general and administrative expenses were approximately $37,700, and we had interest income of approximately $22,200 during this period.
While the loss was approximately the same for the nine months ended June 30, 2008 and June 30, 2007, there were fewer outstanding shares during the nine months ended June 30, 2007, resulting in a greater loss per share. Our expenses have been relatively constant since the change of control in December 2006, and our general and administrative expenses have been minimal because we do not pay any salaries or rent.
We have never generated operating revenues or income and cannot expect to do so until such time as we effect a business combination with an operating company. However, in the event that we do consummate our proposed merger, there can be no assurances that the combined operation will operate profitably.
LIQUIDITY
As of June 30, 2008, we had cash of approximately $928,100 and liabilities of approximately $16,300, which consisted of current accounts payable. Our cash is invested in a certificate of deposit and money market accounts. We anticipate that the primary uses of working capital will include general and administrative expenses and costs associated with consummating our proposed business combination with Winston Laboratories, Inc., a Delaware corporation ("Winston"). We believe that we have sufficient funds to cover our expenses for at least the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS
We have no off-balance sheet arrangements and no contractual obligations. Our liabilities consist solely of current accounts payable, which were approximately $16,300 at June 30, 2008.
OUR PROPOSED MERGER
On November 13, 2007, we entered into a Merger Agreement and Plan of Reorganization (the "Agreement") with Winston and Winston Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the Company ("Merger Sub"). In connection with the Agreement, Dr. Phillip Frost and certain other investors (the "Frost investors") invested $5 million in Winston in exchange for shares of preferred stock of Winston and warrants to acquire preferred stock. In addition, Dr. Frost and certain other investors (together with the Frost Investors are referred to herein as the "New Investors"), including Glenn L. Halpryn and Noah Silver who are officers and directors of the Company, expect to invest an additional $4 million in Winston before the merger is consummated.
Under the terms of the Agreement, at the closing of the merger, each common share of Winston will be converted into approximately 17.51 shares of our common stock and each share of preferred stock of Winston will be converted into approximately .01751 shares of our preferred stock, each such preferred share being convertible into 1,000 shares of our common stock. The Agreement also provides that the Company will assume Winston's stock option plan. As of December 31 2007, Winston had outstanding 1,846,250 options to purchase 1,846,250 shares of Winston's common stock. These options, as a result of the merger, will represent options to purchase 32,332,239 shares of the Company's common stock. The Merger Agreement provides that all outstanding warrants to purchase Winston Series A Preferred Stock will be assumed by the Company and amended and converted into the right to acquire upon the exercise of such warrants an aggregate of 71,672 shares of the Company's Series A Preferred Stock. As a result of the merger, it is expected that our stockholders will receive approximately 2.6% of the combined company on a fully diluted basis and the New Investors will own convertible preferred stock representing approximately 24.4% of the combined company on a fully diluted basis. The holders of Winston common stock, options and warrants, which holders include the New Investors, will receive approximately 97.4% of the combined company on a fully-diluted basis.
The merger is subject to customary closing conditions, including the condition that the merger be approved by Winston stockholders. In addition, the merger is subject to the condition that Winston shall have closed on the additional $4 million investment and issued shares of Winston Series B preferred stock to such investors in Winston. Subject to these and other conditions, we expect the merger to close during the third calendar quarter of 2008, but there can be no assurance that the merger will in fact close.
We intend to carry on the business of Winston after the merger, and we expect to retain substantially all of Winston's current management. All of our directors except Glenn L. Halpryn and Dr. Curtis Lockshin will resign and will be replaced with directors selected by Winston. The business plan and operations of Winston will be our operations as a result of the merger.
The combined company will be renamed Winston Pharmaceuticals, Inc. and will be headquartered in Vernon Hills, Illinois, where Winston is currently located.
Winston was incorporated in Delaware in 1998 and focuses on major pain indications as well as on niche markets, where there is still significant need for pain management options. Winston's products span a range of pain indications, including episodic cluster headache, chronic daily headache, osteoarthritis, neuropathic pain, cancer pain and post-operative pain.
Winston's flagship compound is Civamide, a TRPV-1 (transient receptor potential vanilloid-1) receptor modulator, which Winston believes provides exceptionally long-lasting analgesic activity. A single oral dose of civamide, for example, provides effective analgesia for at least 7 days in a variety of animal pain models. Winston is engaged in late-stage development of civamide for various pain indications, and submitted its marketing authorization application in Europe in January 2008 for a topical formulation for relief of osteoarthritis pain (the "Topical Formulation").
During 2008 Winston intends to submit marketing authorization applications for the Topical Formulation in Canada and North America, but there can be no assurances that the applications will be made during the time period that is currently planned.
AI
