-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F0VMZO7JfUBrqO8HOm+QuD2XS7noRRlQptISSGHgBuhNMpdUuQhZ0OCr54VOD6fv 1FsJYzClUYzP3hPsF7BvEw== 0000810084-97-000045.txt : 19970815 0000810084-97-000045.hdr.sgml : 19970815 ACCESSION NUMBER: 0000810084-97-000045 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIOJECT MEDICAL TECHNOLOGIES INC CENTRAL INDEX KEY: 0000810084 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 931099680 STATE OF INCORPORATION: OR FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15360 FILM NUMBER: 97661217 BUSINESS ADDRESS: STREET 1: 7620 S W BRIDGEPORT RD CITY: PORTLAND STATE: OR ZIP: 97224 BUSINESS PHONE: 5036397221 FORMER COMPANY: FORMER CONFORMED NAME: BIOJECT MEDICAL SYSTEMS LTD DATE OF NAME CHANGE: 19920703 10-Q 1 FORM 10-Q FOR THE QUARTER ENDED 06-30-97 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OR For the quarterly period ended June 30, 1997 Commission File No. 0-15360 BIOJECT MEDICAL TECHNOLOGIES INC. (Exact name of registrant as specified in its charter) Oregon 93-1099680 (State of other jurisdiction of (I.R.S. identification no.) employer incorporation or organization) 7620 SW Bridgeport Road Portland, Oregon 97224 (Address of principal executive offices) (Zip code) (503) 639-7221 (Registrant's telephone number, including areas code) 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 [ ] At June 30, 1997 there were 21,284,599 outstanding shares of common stock of the registrant. PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following unaudited consolidated financial statements of Bioject Medical Technologies Inc. (BMT) and its subsidiary, Bioject Inc. (BI) (together, unless the context otherwise requires, the "Company"), have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The Company's operations are conducted by Bioject Inc., an Oregon corporation, which is a wholly owned subsidiary of Bioject Medical Technologies Inc., an Oregon corporation. Although Bioject Inc. commenced operations in 1985, the Company was formed in December 1992 for the sole purpose of acquiring all the capital stock of Bioject Medical Systems Ltd., a Company organized under the laws of British Columbia, Canada, in a stock-for-stock exchange in order to establish a U.S. domestic corporation as the publicly traded parent company for Bioject Inc. and Bioject Medical Systems Ltd. Bioject Medical Systems Ltd. was terminated in fiscal 1997. All references to the Company herein are to Bioject Medical Technologies Inc. and its subsidiary, unless the context requires otherwise. The following 10-Q report reflects the consolidated results of operations, cash flows and financial position for the first quarter of the year ending March 31, 1998. The results of operations for interim periods are not necessarily indicative of the results to be expected for the year. - Consolidated Statements of Operations for the quarters ended June 30, 1997 and June 30, 1996 - Consolidated Balance Sheets dated June 30, 1997 and March 31, 1997 - Consolidated Statements of Cash Flows for the quarters ended June 30, 1997 and June 30, 1996 BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three-Month Period Ended June 30, 1997 1996 ------------------------- REVENUES: Net sales of products $ 342,614 $ 176,869 Licensing/technology fees 125,000 314,900 ----------- --------- 467,614 491,769 ----------- ----------- EXPENSES: Manufacturing 556,500 581,542 Research and development 155,755 408,368 Selling, general and administrative 754,563 747,427 Other (income) expense, net ( 6,630) (21,672) ----------- ----------- 1,460,188 1,715,665 ----------- ----------- INCOME (LOSS) BEFORE TAXES ( 992,574) (1,223,896) PROVISION FOR INCOME TAXES - - ----------- ----------- NET INCOME (LOSS) $( 992,574) $(1,223,896) =========== =========== EARNINGS (LOSS) PER SHARE $ (.05) $ (.08) =========== =========== SHARES USED IN PER SHARE CALCULATION 19,789,582 15,585,232 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
June 30, March 31, 1997 1997 -------------------------- (unaudited) ASSETS - ------------------------------------------ CURRENT ASSETS: Cash and cash equivalents $ 1,793,846 $ 2,116,478 Securities available for sale - - Accounts receivable 215,870 311,856 Inventories 1,639,105 1,706,456 Prepaid and other current assets 81,240 45,222 ----------- ----------- Total current assets 3,730,061 4,180,012 PROPERTY AND EQUIPMENT, at cost: Machinery and equipment 1,904,039 1,897,174 Production molds 1,801,493 1,798,630 Furniture and fixtures 177,397 176,897 Leasehold improvements 80,447 80,447 Capitalized Interest 106,228 106,228 ----------- ----------- 4,069,604 4,059,376 Less - Accumulated depreciation (1,562,343) (1,462,338) ----------- ----------- 2,507,261 2,597,038 OTHER ASSETS 314,551 310,981 ----------- ----------- $ 6,551,873 $ 7,088,031 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY - -------------------------------------------- CURRENT LIABILITIES: Accounts payable $ 521,848 $ 659,973 Accrued payroll 151,665 213,130 Other accrued liabilities 230,390 199,384 Deferred revenue 125,000 250,000 ----------- ----------- Total current liabilities 1,028,903 1,322,487 SHAREHOLDERS' EQUITY: Preferred stock, no par, 10,000,000 shares authorized; no shares issued and outstanding - - Common stock, no par, 100,000,000 shares authorized; issued and outstanding 21,284,599 shares at June 30, 1997 and 19,540,413 at March 31, 1997 40,785,736 40,035,736 Accumulated deficit (35,262,766) (34,270,192) ----------- ----------- Total shareholders' equity 5,522,970 5,765,544 ----------- ----------- $ 6,551,873 $ 7,088,031 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three-Month Period Ended June 30, 1997 1996 -------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $( 992,574) $(1,223,896) Adjustments to net loss: Depreciation and amortization 107,505 172,200 Common stock issued for services - 159,350 Net changes in assets and liabilities: Accounts receivable 95,986 352,149 Inventories 67,351 (261,235) Prepaid and other current assets (36,018) (2,068) Accounts payable (138,125) (244,197) Accrued payroll (61,465) (22,067) Other accrued liabilities 31,006 8,778 Deferred revenue (125,000) (265,400) ----------- ----------- Net Cash Used in Operating Activities (1,051,334) (1,326,386) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Transfers to restricted cash - (173,163) Sale of securities available for sale - 993,056 Capital expenditures ( 10,228) (286,480) Other assets ( 10,070) (1,789) ----------- ----------- Net Cash Used in Investing Activities ( 21,298) 531,624 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of long-term debt - 450,000 Cash proceeds from common stock 750,000 - ----------- ----------- Net Cash Provided by Financing Activities 750,000 450,000 ----------- ----------- CASH AND CASH EQUIVALENTS: Net increase (decrease) in cash and cash equivalents (322,632) (344,762) Cash and cash equivalents at beginning of period 2,116,478 3,098,251 ----------- ----------- Cash and cash equivalents at end of period $ 1,793,846 $ 2,753,489 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. THE COMPANY: The Company's operations are conducted by Bioject Inc., an Oregon corporation, which is a wholly owned subsidiary of Bioject Medical Technologies Inc., an Oregon corporation (the "Company"). All significant intercompany transactions have been eliminated. Although Bioject Inc. commenced operations in 1985, the Company was formed in December 1992 for the sole purpose of acquiring all the capital stock of Bioject Medical Systems Ltd., a Company organized under the laws of British Columbia, Canada, in a stock-for-stock exchange in order to establish a U.S. domestic corporation as the publicly traded parent company for Bioject Inc. and Bioject Medical Systems Ltd. Bioject Medical Systems Ltd. was terminated in fiscal 1997. All references to the Company herein are to Bioject Medical Technologies Inc. and its subsidiary, unless the context requires otherwise. The Company commenced operations in 1985 for the purpose of developing, manufacturing and distributing a new drug delivery system. Since its formation, the Company has been engaged principally in organizational, financing, research and development, and marketing activities. In the last quarter of fiscal 1993, the Company launched U.S. distribution of its Biojector 2000 system primarily to the hospital and large clinic market. The Company's products and manufacturing operations are subject to extensive government regulation, both in the U.S. and abroad. In the U.S., the development, manufacture, marketing and promotion of medical devices is regulated by the Food and Drug Administration ("FDA") under the Federal Food, Drug, and Cosmetic Act ("FFDCA"). In 1987, the Company received clearance from the FDA under Section 510(k) of the FFDCA to market a hand-held CO2-powered jet injection system. In June 1994, the Company received clearance from the FDA under 510(k) to market a version of its Biojector 2000 system in a configuration targeted at high volume injection applications. In October 1996, the Company received 510(k) clearance for a non-needle disposable vial access device. In March 1997, the Company received additional 510(k) clearance for certain enhancements to its Biojector 2000 system. The Company's revenues to date have been derived primarily from licensing and technology fees and more recently from sales of the Biojector 2000 system and Biojector syringes to public health clinics, flu immunization clinics and physicians offices. Future revenues will depend upon acceptance and use by healthcare providers of the Company's jet injection technology. Uncertainties over government regulation and competition in the healthcare industry may impact healthcare provider expenditures and third party payer reimbursements and, accordingly, the Company cannot predict what impact, if any, subsequent healthcare reforms might have on its business. In the future the Company may require additional financing. Failure to obtain such financing on favorable terms could adversely affect the Company's business. 2. ACCOUNTING POLICIES: INVENTORIES Inventories are stated at the lower of cost or market. Cost is determined in a manner which approximates the first-in, first out (FIFO) method. Costs utilized for inventory valuation purposes include labor, materials and manufacturing overhead. Net inventories consist of the following: June 30, March 31, 1997 1997 ---------- ---------- Raw Materials $ 854,848 $ 815,868 Work in Process 9,763 9,763 Finished Goods 774,494 880,825 ---------- ---------- $1,639,105 $1,706,456 ========== ========== USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 3. BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS The accompanying, unaudited consolidated financial statements do not include all information and footnote disclosures normally included in an audited financial statement. However, in the opinion of management, all adjustments (which include only normal, recurring adjustments except as described below) necessary to present fairly the financial position, cash flows, and results of operations have been made. It is suggested that these statements be read in conjunction with the financial statements included in the Company's Annual Report on Form 10-K for the year ended March 31, 1997. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS During the quarter, the Company continued its focus on sales to the public health clinic market for the broad range of immunizations and to nursing organizations for flu immunizations. Also during the quarter, the Company announced that approximately 400 Wal-Mart stores throughout the country will offer consumers flu vaccines with the Biojector(R) 2000 needle-free injection system as part of Wal-Mart's national flu program to launch this fall. In June and July 1997, the Company completed two private placements for a total proceeds of $1.25 million in an offering of 2.9 million shares of stock and 1.45 million warrants. At the completion of the second closing the Company had a total of 22,447,390 common shares outstanding. The Company's revenues to date have not been sufficient to cover operating expenses. However, the Company believes that if its products achieve market acceptance and the volume of sales increases, and its product costs are reduced, its costs of goods as a percentage of sales will decrease and eventually the Company will generate net income. (See "Forward Looking Statements") The level of sales required to generate net income will be affected by a number of factors including the pricing of the Company's products, its ability to attain efficiencies that can be attained through volume and automated manufacturing, and the impact of inflation on the Company's manufacturing and other operating costs. There can be no assurance that the Company will be able to successfully implement its manufacturing cost reduction program or sell its products at prices or in volumes sufficient to achieve profitability or offset increases in its costs should they occur. Revenues and results of operations have fluctuated and can be expected to continue to fluctuate significantly from quarter to quarter and from year to year. Various factors may affect quarterly and yearly operating results including (i) length of time to close product sales, (ii) customer budget cycles, (iii) implementation of cost reduction measures, (iv) uncertainties and changes in purchasing due to third party payor policies and proposals relating to national healthcare reform, (v) timing and amount of payments under technology development agreements and (vi) timing of new product introductions by the Company and its competition. During the fiscal year, the Company will continue to focus its efforts on expanding sales, reducing the cost of its products, developing a 1.5 ml. injector for Hoffmann-La Roche, pursuing additional alliances with pharmaceutical companies and conserving its fiscal resources. The Company does not expect to report net income from operations in fiscal 1998. See "Forward Looking Statements." RESULTS OF OPERATIONS Revenues from product sales increased from $177,000 in the first quarter of fiscal 1997 to $342,000 in the first quarter of fiscal 1998 due to increased orders for the Biojector(R) 2000 system from the public health sector and to a $40,000 payment from a strategic partner for self injection products. Licensing and technology revenues are recognized for work performed in conjunction with product development projects. In the first quarter of fiscal 1997 payments were received from Hoffmann-La Roche for development of a 1.5 ml. injector and from Schering AG for the development of a self injector and totalled $315,000. In the first quarter fiscal 1998, product development payments were received from Hoffmann-La Roche and totalled $125,000, a decrease from the prior year's first quarter due to the completion of the self injector project. Manufacturing expense is comprised of the direct costs of product sold, unabsorbed manufacturing overhead and manufacturing variances and totalled $582,000 in first quarter fiscal 1997 and $556,000 for the first quarter fiscal 1998. The decrease from the first quarter of the prior year reflects product cost reductions and lower manufacturing overhead. Research and development expenses decreased from $408,000 in the first quarter of fiscal 1997 to $155,000 in the first quarter of fiscal 1998, due to the completion the self injector project. Selling, general and administrative expense remained constant at $747,000 for the first quarter of fiscal 1997 and $755,000 for the first quarter of fiscal 1998, reflecting the Company's commitment to hold the line on these costs. Other income decreased from $22,000 in the first quarter of fiscal 1997 to $7,000 in the first quarter of fiscal 1997, as a result of decreases in cash balances. LIQUIDITY AND CAPITAL RESOURCES Since its inception in 1985, the Company has financed its operations, working capital needs and capital expenditures primarily from private placements of securities, exercises of stock options, proceeds received from its initial public offering in 1986, proceeds received from a public offering of Common Stock in November 1993, licensing and technology revenues and more recently from sales of products. Net proceeds received upon issuance of securities from inception through June 30, 1997 totalled approximately $41.0 million. During the first quarter of fiscal 1998 and subsequent to quarter end, the Company raised in two closings a total of $1.25 million in an offering of 2.9 million shares of common stock and 1.45 million warrants. If the entire offering had closed by June 30, 1997, cash and marketable securities would have totalled $2.3 million, assets would have totalled $7.1 million and net equity would have totalled $6.0 million. At the completion of the second closing, the Company had a total of 22,447,390 common shares outstanding. Cash, cash equivalents and marketable securities totalled, $1.8 million at June 30, 1997 compared to $2.1 million at March 31, 1997. The decrease resulted primarily from operating losses and from reductions in certain short term liabilities offset by proceeds received in the first closing of two private placement offerings. Inventories decreased from $1.7 million at March 31, 1997 to $1.6 million at June 30, 1997, due to product sales for the first quarter of fiscal 1998. The Company expects to expend approximately $50,000 on non-manufacturing capital equipment additions in fiscal 1998. The Company believes that its current cash position and cash received from a private placement of common stock and warrants in June and July 1997, combined with revenues and other cash receipts will not be adequate to fund the Company's operations through the end of fiscal 1998. The Company has identified a number of potential financing sources and is pursuing them aggressively. See "Forward Looking Statements." Even if the Company is successful in raising additional financing unforeseen costs and expenses or lower than anticipated cash receipts from product sales or research and development activities could accelerate or increase the financing requirements. The Company has been successful in raising additional financing in the past and believes that sufficient funds will be available to fund future operations. See "Forward Looking Statements." However, there can be no assurance that the Company's efforts will be successful, and there can be no assurance that such financing will be available on terms which are not significantly dilutive to existing shareholders. Failure to obtain needed additional capital on terms acceptable to the Company, or at all, would significantly restrict the Company's operations and ability to continue product development and growth and materially adversely affect the Company's business. The Company has no banking line of credit or other established source of borrowing. The Company's independent accountants have qualified their opinion with respect to their audit of the Company's 1997 consolidated financial statements as the result of doubts concerning the Company's ability to continue as a going concern in the absence of additional financing. FORWARD LOOKING STATEMENTS Certain statements in this report constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and factors are described in more detail in the Company's Annual Report on Form 10-K and other S.E.C. filings. PART II OTHER INFORMATION Item 1. Legal Proceedings None during the quarter ended June 30, 1997. Item 2. Changes in Securities None during the quarter ended June 30, 1997. Item 3. Defaults Upon Senior Securities None during the quarter ended June 30, 1997. Item 4. Submission of Matters to a Vote of Security Holders None during the quarter ended June 30, 1997. Item 5. Other Information None during the quarter ended June 30, 1997. Item 6. Exhibits and Reports on Form 8-K EXHIBITS: 27.1 Financial Data Schedule REPORTS ON FORM 8-K: None during the quarter ended June 30, 1997. SIGNATURE 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. BIOJECT MEDICAL TECHNOLOGIES INC. (Registrant) Date: August 14, 1997 /S/ James C. O'Shea --------------------------------- James C. O'Shea Chairman, Chief Executive Officer and President /S/ Peggy J. Miller --------------------------------- Peggy J. Miller Vice President and Chief Financial Officer EX-27 2 ART. 5 FDS FOR 1ST QUARTER 10-Q
5 1 3-MOS MAR-31-1998 JUN-30-1997 1,793,846 0 215,870 0 1,639,105 3,730,061 4,069,604 1,562,343 6,551,873 1,028,903 0 0 0 40,785,736 0 6,551,873 342,614 467,614 556,500 556,500 903,688 0 0 (992,574) 0 (992,574) 0 0 0 (992,574) (.05) (.05)
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