Mera’s top executive
resigns; third-quarter
loss narrows
Mera Pharmaceuticals Inc., which reported a narrower third-quarter fiscal 2004 loss yesterday, has shaken up its top management team.
The maker of the nutritional product AstaFactor said in a Securities and Exchange Commission filing that Richard Propper resigned as chief executive, chairman and director of the company on July 16 and was replaced as CEO by Daniel Beharry, formerly the chief operating officer and secretary.
Propper resigned to "pursue other interests," the filing said, and his departure "was not motivated by any disagreements with respect to any of the company's operations, policies and practices."
First Honolulu Securities broker-dealer Gregory Kowal, a current board member and investor in the company, was elected chairman on Aug. 21.
Mera said Propper will remain a consultant to the company on a month-to-month basis due to a number of international projects that were under way at the time of his resignation. He also may become involved with new initiatives as they arise, the filing said.
The former Aquasearch Inc., which emerged from Chapter 11 bankruptcy reorganization on Sept. 16, 2002, has lost $2.1 million since that time through the end of its last quarter on July 31, 2003. Since its inception, the company has lost $24.4 million. Mera, whose current liabilities exceed current assets by $683,629, earlier this week said it was changing its auditors to Jewett, Schwartz & Associates from Buttke, Bersch and Wanzek. Mera acknowledged that Buttke Bersch expressed uncertainties about the company's ability to continue as a going concern, but said it had no disagreements with the auditors before ending their association.
Mera said its third-quarter loss narrowed as a result of improvement in product sales, contract services and royalties. The company, which has a plant in Kona and its administrative headquarters in Solana Beach, Calif., posted a net loss of $155,757 compared with a loss of $423,108 a year ago. On an operating basis, Mera's loss narrowed to $178,499 from $499,606 a year ago.
Revenues rose 55.6 percent to $342,022 from $219,775 in the comparable quarter a year ago. Product sales were up 33.9 percent, contract services gained 127.3 percent and royalties improved 89.2 percent.
Beharry cited the increasing revenues, as well as decreased expenses, for the improvement.
"We completed the Chapter 11 reorganization of Mera less than a year ago, and while the company still faces some challenges, the continued progress shown by these results is encouraging," Beharry said. "We believe there is a lot of room for improvement still on our production efficiency, which will help to increase margins. However, the key to success is a continued increase in revenues."
Beharry said the company has increased its sales and marketing efforts by launching a television, radio and print advertising campaign in Hawaii during the third quarter and by increasing its advertising in the Southern California market.
He also said the company has three new products in the planning stage that are expected to be in test production no later than the first calendar quarter of 2004. Beharry said the company is expanding its distribution to international markets and is engaged in discussions with several parties seeking distribution rights for AstaFactor in markets where margins and product acceptance tend to be higher.
"That work is in addition to efforts to expand distribution domestically through private label companies," he said.
Beharry said there will be upfront costs associated with all the company's initiatives but that "by bearing those costs now we will prepare the company to make progress toward profitability in the future."
