-----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, EnIeXtJOCLhx2mEd4MZTS9wf+fSwCCJRBvM1aTCGE/beNa7GC2oaoP/pDd7XIC5T ITq27gIacdMxXgE/CpaJIQ== 0000811212-97-000002.txt : 19970222 0000811212-97-000002.hdr.sgml : 19970222 ACCESSION NUMBER: 0000811212-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970214 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMOGENESIS CORP CENTRAL INDEX KEY: 0000811212 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY APPARATUS & FURNITURE [3821] IRS NUMBER: 943018487 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16375 FILM NUMBER: 97531630 BUSINESS ADDRESS: STREET 1: 3146 GOLD CAMP DRIVE CITY: RANCHO CORDOVA STATE: CA ZIP: 95670 BUSINESS PHONE: (916) 858-5100 FORMER COMPANY: FORMER CONFORMED NAME: INSTA COOL INC OF NORTH AMERICA DATE OF NAME CHANGE: 19920703 10-Q 1 UNITED STATES U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended DECEMBER 31, 1996 Commission File Number: 0-16375 THERMOGENESIS CORP. . (Exact name of Small Business issuer as specified in its charter) DELAWARE 94-3018487 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 3146 GOLD CAMP DRIVE, RANCHO CORDOVA, CA.. 95670 (Address of principal executive offices) (Zip code) (916) 858-5100 (Registrant's telephone number, including area code) 11431 SUNRISE GOLD, STE. A, RANCHO CORDOVA, CA. 95742 Former name, former address and former fiscal year, if changed since last report. 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__ The issuer had 15,834,005 shares of common stock outstanding on February 11, 1997. THERMOGENESIS CORP. INDEX PART I PAGE NUMBER Condensed Financial Statements (Unaudited): Condensed Balance Sheets at December 31, 1996 and June 30, 1996 3 Condensed Statements of Operations for the Three and Six Months Ended December 31, 1996 and 1995 5 Condensed Statements of Cash Flows for the Six Months Ended December 31, 1996 and 1995 6 Notes to Condensed Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II Item 6. Exhibits and Reports on Form 8-K. 11 SIGNATURES 12 PART I - FINANCIAL INFORMATION THERMOGENESIS CORP. CONDENSED BALANCE SHEET (UNAUDITED) December 31, June 30, ASSETS 1996 1996 Current Assets: Cash and cash equivalents $6,732,114 $1,243,079 Accounts receivable, net of allowances for doubtful accounts of $97,913 ($97,913 at June 30, 1996) 3,012,028 1,441,148 Inventory 2,328,976 2,137,198 Net investment in sales-type leases 31,882 31,822 Prepaid expenses 221,714 44,177 Total current assets 12,326,714 4,897,484 Equipment, at cost less accumulated depreciation of $422,581 ($312,307 at June 30, 1996) 809,349 689,562 Long-term net investment in sales-type leases 36,770 50,716 Prepaid royalties, net of accumulated amortization of $369,459 ($332,733 at June 30, 1996) 194,041 221,767 Leased equipment, net of accumulated depreciation 11,252 20,228 Other assets 50,092 57,383 $13,434,218 $5,937,140 See accompanying notes. THERMOGENESIS CORP. CONDENSED BALANCE SHEET (CONT'D) (UNAUDITED) December 31, June 30, 1996 1996 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued liabilities $679,932 $931,944 Accrued payroll and related expenses 132,457 184,660 Customer deposits 63,914 35,891 Current portion of long-term capital lease obligations 125,166 124,050 Total current liabilities $1,001,469 $1,276,545 Deferred rent 1,546 3,365 Long-term capital lease obligations 256,703 282,919 Commitments Shareholders' equity: Common stock, $.001 par value; 50,000,000 shares authorized: 15,834,005 issued and outstanding (12,708,967 at June 30, 1996) 15,834 12,709 Paid in capital in excess of par 19,106,313 10,744,530 Accumulated deficit (6,947,647) (6,382,928) 12,174,500 4,374,311 Total shareholders' equity $13,434,218 $5,937,140 See accompanying notes. THERMOGENESIS CORP. CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended December 31, December 31, December 31, December 31, 1996 1995 1996 1995 Net sales $2,650,690 $ 830,079 $4,348,286 $1,681,982 Cost of sales 1,513,956 485,471 2,487,921 929,006 Gross profit 1,136,734 344,608 1,860,365 752,976 Expenses: General and administrative expense 307,062 118,198 438,316 202,505 Selling and marketing expense 405,578 216,447 769,958 385,568 Research and development expense 625,432 288,887 1,194,167 444,101 Issuance of stock options for services 14,000 -- 28,000 -- Interest expense 15,208 8,402 36,447 11,338 Total expenses 1,367,280 631,934 2,466,888 1,043,512 Interest income 33,711 5,870 41,804 8,693 Net loss ($196,835) ($281,456) ($564,719) ($281,843) Net loss per share ($0.01) ($0.03) ($0.04) ($0.03) Shares used in computing net loss per share 14,511,000 10,916,000 13,755,000 10,547,000
See accompanying notes. THERMOGENESIS CORP. STATEMENTS OF CASH FLOW SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1996 1997 Cash flows from operating activities: Net los s ($564,719) ($281,843) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization 148,267 80,447 Issuance of stock options for services 28,000 -- Net changes in operating assets and liabilities: Accounts receivable (1,570,880) (430,601) Investment in sales-type leases 13,946 17,900 Inventory (191,778) (34,835) Prepaid expenses (177,537) (52,635) Accounts payable and accrued liabilities (252,012) (110,369) Accrued payroll and related expenses (52,203) 15,431 Customer deposits 28,023 7,340 Deferred revenue -- (60,000) Deferred rent (1,819) (3,094) Total adjustments (2,027,993) (570,416) Net cash used by operating activities (2,592,712) (852,259) Cash flows from investing activities: Capital expenditures (230,061) (46,784) Net cash used by investing activities (230,061) (46,784) Cash flows from financing activities: Principal payments on long-term lease obligations (25,100) (11,483) Issuance of common stock 8,336,908 1,906,243 Net cash provided by financing activities 8,311,808 1,894,760 Net increase in cash and cash equivalents 5,489,035 995,717 Cash and cash equivalents at beginning of period 1,243,079 325,965 Cash and cash equivalents at end of period $6,732,114 $1,321,682 See accompanying notes. THERMOGENESIS CORP. NOTES TO CONDENSED FINANCIAL STATEMENTS DECEMBER 31, 1996 (UNAUDITED) 1. Interim Reporting. These Condensed Financial Statements should be read in conjunction with the Company's Annual Report (Form 10-KSB) for the year ended June 30, 1996. In the opinion of management, all adjustments (which consist of only normally recurring adjustments) necessary for a fair presentation of the condensed financial statements have been made. The results of operations for the three and six months ended December 31, 1996 are not necessarily indicative of the results to be expected for the full year. INVENTORIES Inventories are stated at the lower of cost (First-In, First-Out) or market and consist approximately of the following: December 31, June 30, 1996 1996 Raw materials $1,405,799 $1,273,889 Work in process 304,972 1,490 Finished goods 618,205 861,819 Total $2,328,976 $2,137,198 NET INVESTMENT IN SALES TYPE LEASES The net investment in sales type leases consists of the following: December 31, June 30, 1996 1996 Total minimum lease payments receivable $71,226 $91,888 Less unearned interest (2,574) (9,290) Net investment in sales type leases $68,652 $82,598 THERMOGENESIS CORP. NOTES TO CONDENSED FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 1996 (UNAUDITED) EQUITY During the six ended December 31, 1996, the Company issued 146,000 shares of common stock for manufacturing services from a vendor. The Company recorded these transactions at the estimated fair value of $444,297 on the date of the transaction. On July 31, 1996, the Company issued options to purchase 200,000 shares of the Company's common stock for consulting services from key advisors in the product area of CryoSeal. The exercise price is equal to the fair market value as determined by the closing bid price for the Company's common stock as quoted by the Nasdaq SmallCap market on the date of grant. Accordingly, through December 31, 1996, the Company has recorded consulting expense recognizing the estimated fair value of the options of $28,000. The Company completed a minimum equity offering of units in a private placement on November 27, 1996, in which it received gross proceeds of $8,268,006 (before costs of the offering). The proceeds from the offering were received from the sale of 1,378,001 units at $6.00 per unit. Each unit consisted of two shares of common stock and a seven year warrant representing the right to acquire one additional share of common stock at an exercise price of $3.885 per share. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995 The following is Management's discussion and analysis of certain significant factors which have affected the Company's financial condition and results of operations during the periods included in the accompanying financial statements. RESULTS OF OPERATIONS SALES AND REVENUES: Net sales increased for the three and six months ended December 31, 1996, by approximately 219% and 159%, respectively, from the corresponding 1995 period. Sales increased primarily due to increased shipments of the Company's human blood plasma freezer to a key customer who placed an order for approximately $3,900,000. Cost of sales as a percent of sales was approximately 57% for the three months ended December 31, 1996, as compared to 58% for the corresponding 1995 period and 57% for the six months ended December 31, 1996, as compared to 55% for the corresponding 1995 period. Before an inventory adjustment of $150,000 to reflect a write down for technological obsolescence of stock plasma freezers, cost of sales decreased. The after adjustment decrease in cost of sales as a percent of sales for the three month period was due to changes in product mix with a higher percent of blood plasma freezers and economies of scale allowed by production of a new freezer for the above mentioned order. General and administrative expenses for the three and six months ended December 31, 1996 increased by 160% and 116%, respectively, from the corresponding 1995 periods. A significant portion of the increase was due to non-recurring expenses of approximately $120,000 for consulting services to refine the Company's policy and procedures and internal processing systems while the remainder of the increase was due to expanded staff and facilities. Selling and marketing expenses for the three and six months ended December 31, 1996 increased by 87% and 100%, respectively, over the corresponding 1995 periods. Expenses increased due to added personnel and additional facilities. These increased expenses are intended to upgrade and prepare sales, marketing and customer service personnel and systems for new products nearing completion of research and development. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995 (CONT'D) RESULTS OF OPERATIONS (CONT'D) Research and development expenses for the three and six months ended December 31, 1996, increased by 117% and 169%, respectively, over the corresponding 1995 periods. The increase was due to accelerated research and development of three programs: (I) BioArchive System: a computerized human blood plasma sample storage and retrieval system, (ii) N{2} BioArchive System: a computerized liquid nitrogen biological storage and retrieval system and (iii) CryoSeal{TM}: a system that converts a surgical patient's blood plasma into an autologous tissue sealant and hemostatic agent. Additionally, the Company expensed $30,000 for CryoSeal{TM} for testing and surgical support in clinical trials under way and $63,000 of equipment and disposables consumed in the CryoSeal{TM} clinical trials. Management believes that research and development is essential to maintaining the Company's market position. Therefore, the Company considers such costs a continuing cost of doing business. ISSUANCE OF STOCK OPTIONS FOR SERVICES: During the period ended December 31, 1996, the Company recorded $28,000 of consulting expense for issuance of stock options issued to two key advisors in the product area of CryoSeal. The options are exercisable at the fair market value as determined by the closing bid price for the Company's common stock as quoted by the Nasdaq SmallCap market on the date of grant. While the $28,000 is a non-monetary transaction, the Company has recorded the estimated fair value of the options under generally accepted accounting principles. LIQUIDITY AND CAPITAL RESOURCES During the periods ended December 31, 1995 and 1996, the Company had consumed cash resources for operating activities. These resources were primarily used to fund increases in accounts receivable, the net loss resulting from marketing activities and product development. Working capital increased by $7,704,306. The increase was primarily due to the issuance of common stock upon the conversion of warrants and placement of 1,378,001 units. The Company does not believe that inflation has a significant impact on the Company and believes it can pass any cost increases due to inflation on to the customer. The Company believes it has sufficient resources to continue to operate for the next twelve months. At December 31, 1996, the Company has no significant outstanding capital commitments. PART II - OTHER INFORMATION Item 1. Legal proceedings. None. Item 2. Changes in Securities. None. Item 3. Default Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. None. Item 5. Other Information. None Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits None (b) Reports on Form 8-K. Form 8-K for event dated November 27, 1997 Announcing Closing of Equity Offering THERMOGENESIS CORP. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THERMOGENESIS CORP. (Registrant) Dated February 13, 1997 WALTER J. LUDT, III Walter J. Ludt, III, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) PHILIP H. COELHO Philip H. Coelho, President and Chief Executive Officer (Principal Executive Officer) EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FROM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS JUN-30-1997 DEC-31-1996 6,732,114 0 3,012,028 97,913 2,328,976 12,326,714 809,349 422,581 13,434,218 1,001,469 0 0 0 15,834 0 13,434,218 4,348,286 4,348,286 2,487,921 2,466,888 0 0 36,447 (564,719) 0 (564,719) 0 0 0 (564,719) (.01) (.01)
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