-----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, EEo//b+7LDqdb0ymMzWDbsVOt9OKEk1MNrOo6Hy5QdW5abK3vf6DezYUBLOF0Ykm 9Zy83J9+AQBVOp6OGaHaOw== 0000811212-97-000015.txt : 19970515 0000811212-97-000015.hdr.sgml : 19970515 ACCESSION NUMBER: 0000811212-97-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 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: 97605619 BUSINESS ADDRESS: STREET 1: 3146 GOLD CAMP DRIVE CITY: RANCHO CORDOVA STATE: CA ZIP: 95670 BUSINESS PHONE: 9168585100 FORMER COMPANY: FORMER CONFORMED NAME: INSTA COOL INC OF NORTH AMERICA DATE OF NAME CHANGE: 19920703 10-Q 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q X Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended MARCH 31, 1997 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) Registrant's telephone number, including area code (916) 858-5100 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 15,861,305 shares of common stock outstanding on May 11, 1997. 1 THERMOGENESIS CORP. INDEX PAGE NUMBER PART I Condensed Financial Statements (Unaudited): Condensed Balance Sheets at March 31, 1997 and June 30, 1996 3 Condensed Statements of Operations for the Three and Nine Months ended March 31, 1997 and 1996 5 Condensed Statements of Cash Flows for the Three and Nine Months Ended March 31, 1997 and 1996 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 2 PART I - FINANCIAL INFORMATION THERMOGENESIS CORP. CONDENSED BALANCE SHEET (UNAUDITED) MARCH 31 JUNE 30 1997 1996
ASSETS Current Assets: Cash and cash equivalents $ 5,865,215 $ 1,243,079 Accounts receivable, net of allowance for doubtful accounts of $97,913 2,226,862 1,441,148 ($97,913 at June 30, 1996) Inventory 2,513,545 2,137,198 Net investment in sales-type leases 9,145 31,882 Prepaid expenses 164,281 44,177 Total current assets 10,779,048 4,897,484 Equipment, at cost less accumulated depreciation of $476,408 ($312,307 1,049,983 689,562 at June 30, 1996) Long-term net investment in sales-type 44,097 50,716 leases Prepaid royalties, net of accumulated amortization of $374,322 ($332,733 180,178 221,767 at June 30, 1996) Leased equipment, net of accumulated depreciation of $112,376 ($101,337 9,189 20,228 at June 30, 1997) Other assets 55,447 57,383 $12,117,942 $5,937,140
See accompanying notes. 3 THERMOGENESIS CORP. CONDENSED BALANCE SHEET (CONT'D) (UNAUDITED) MARCH 31 JUNE 30, 1997 1996
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $734,570 $931,944 Accrued payroll and related expenses 214,161 184,660 Customer deposits 66,939 35,891 Current portion of long-term capital lease 126,712 124,050 obligations Total current liabilities 1,142,382 1,276,545 Deferred rent 823 3,365 Long-term capital lease obligations 224,176 282,919 Commitments - - Shareholders' equity: Common stock, $.001 par value; 50,000,000 shares authorized; 15,861,305 issued and outstanding (12,708,967 at June 30, 1996) 15,862 12,709 Paid in Capital in excess of par 19,173,939 10,744,530 Accumulated deficit (8,419,240) (6,382,928) Total shareholders' equity 10,750,561 4,374,311 $12,117,942 $5,937,140
See accompanying notes. 4 THERMOGENESIS CORP. CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED MARCH 31 MARCH 31 MARCH 31 MARCH 31 1997 1996 1997 1996 Net sales $1,396,259 $1,062,503 $5,744,545 $2,744,485 Cost of sales 1,077,363 623,624 3,565,284 1,552,630 Gross Profit 318,896 438,879 2,179,261 1,191,855 Expenses: General and administrative expense 375,753 79,109 814,069 281,614 Selling and marketing expense 556,130 327,763 1,326,088 713,331 Research and development expense 858,646 437,695 2,052,793 881,796 Issuance of stock options for 14,000 - 42,000 - services Interest expense 22,001 9,781 58,448 21,119 Total expenses 1,826,530 854,348 4,293,398 1,897,860 Interest Income 16,021 11,149 57,825 19,842 Net loss ($1,491,613) ($404,320) ($2,056,312) ($686,163) Net loss per share ($0.09) ($0.03) ($0.14) ($0.06) Shares used in computing net loss per share 15,846,000 12,382,500 14,452,000 11,159,000
See accompanying notes. 5 THERMOGENESIS CORP. CONDENSED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED MARCH 31, 1997 AND 1996 INCREASE (DECREASE) IN CASH (UNAUDITED) 1997 1996 Cash flows from operating activities: Net loss ($2,056,312) ($686,163) Adjustments to reconcile net loss to net cash provided by (used) in operating activities: Depreciation and amortization 218,665 127,647 Issuance of stock options for services 42,000 - Issuance of common stock for inventory 432,395 - Net change in operating assets and liabilities: Accounts receivable (785,714) (819,345) Investment in sales type leases 29,356 27,208 Inventory (376,347) (338,584) Prepaid expenses (140,104) (62,970) Accounts payable and accrued liabilities (197,374) 90,227 Accrued payroll and related expenses 29,501 117,092 Customer deposits 31,048 146,107 Deferred revenue - (60,000) Deferred rent (2,542) (5,130) Total adjustments (719,116) (777,748) Net cash used in operating activities (2,775,428) (1,463,911) Cash flows from investing activities: Capital expenditures (512,620) (160,035) Net cash used in investing activities (512,620) (160,035) Cash flows from financing activities: Issuance of common stock 7,946,265 1,891,511 Principal payments on long-term lease (56,081) (30,498) obligations Net cash provided by financing activities 7,890,184 1,861,013 Net increase in cash 4,602,136 237,067 Cash at beginning of period 1,243,079 325,965 Cash at end of period $5,845,215 $563,032 See accompanying notes. 6 THERMOGENESIS CORP. NOTES TO CONDENSED FINANCIAL STATEMENTS MARCH 31, 1997 (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. All sales, domestic and foreign, are made in U.S. dollars and therefore currency fluctuations have no effect on the Company's net sales. 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 nine months ended March 31, 1997 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: March 31, June 30, 1997 1996 Raw materials $1,859,391 $1,273,889 Work in process 59,352 1,490 Finished goods 594,802 861,819 Total $2,513,545 $2,137,198 NET INVESTMENT IN SALES TYPE LEASES The net investment in sales type leases consists of the following: March 31, June 30, 1997 1996 Total minimum lease payments receivable $57,355 $91,888 Less unearned interest (4113) (9,290) Net investment in sales type leases $53,242 $82,598 7 THERMOGENESIS CORP. NOTES TO CONDENSED FINANCIAL STATEMENTS (CONT'D) MARCH 31, 1997 (UNAUDITED) EQUITY During the nine months ended March 31, 1997, 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. Of the $444,297, the amount of $11,902 was capitalized in equipment as of March 31, 1997. 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 $42,000. The Company received proceeds of $577,500 upon exercise of outstanding warrants in July 1996. 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. 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 1997 AND 1996 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 nine months ended March 31, 1997, by approximately 31% and 109%, respectively, from the corresponding 1996 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 77% for the three months ended March 31, 1997, as compared to 59% for the corresponding 1996 period and 62% for the nine months ended March 31, 1997, as compared to 57% for the corresponding 1996 period. Cost of sales increased as a percentage of revenues due to higher overhead from staff increases, facility expansion in anticipation of production of new products and decreased production volume. Manufacturing facility space increased by 33%, staff increased by 30% (primarily document control and quality assurance) and production volume decreased by 40% from the previous quarter. Additionally, during the nine month period ended march 31, 1997, the Company made an inventory adjustment of $150,000 to reflect a write down for technological obsolescence of stock plasma freezers. General and administrative expenses for the three and nine months ended March 31, 1997 increased by 375% and 189%, respectively, from the corresponding 1996 periods. A 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 nine months ended March 31, 1997 increased by 70% and 86%, respectively, over the corresponding 1996 periods. Expenses increased due to added personnel, non-recurring market studies ($65,000) 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. Research and development expenses for the three and nine months ended December 31, 1996, increased by 92% and 131%, respectively, over the corresponding 1996 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: 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 1997 AND 1996 (CONT'D) RESULTS OF OPERATIONS (CONT'D) 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 for testing and surgical support in clinical trials under way, $63,000 of equipment and disposables consumed in the CryoSeal clinical trials and expanded the R&D facility. Management believes that research and development is essential to maintaining the Company's market position and therefore, considers such costs a continuing cost of doing business. ISSUANCE OF STOCK OPTIONS FOR SERVICES: During the period ended March 31, 1997, the Company recorded $42,000 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 $42,000 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 March 31, 1996 and 1997, the Company had consumed cash resources for operating activities. These resources were primarily used to fund increases in accounts receivable, reduce accounts payable and the net loss resulting from marketing activities and product development. Working capital increased by $6,015,727. 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 used $2,775,428 for operations for the nine months ended March 31, 1997. This was due to increased research and development, lower sales volume in relationship to manufacturing fixed costs and added personnel in anticipation of new products production. Additionally, the Company has invested $512,620 in capital equipment for expected production and sales of new products. Cash flow from financing activity totaled $7,890,184 for the nine months ended March 31, 1997. This was attributable to proceeds from the November 1996 unit offering and the exercise of warrants and options. The Company expects, based upon its current business plan, its existing cash equivalents and/or investment capital will be available to satisfy its current working capital needs for the next twelve months. At March 31, 1997, the Company has no significant outstanding capital commitments. 10 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 March 27, 1997 - License Agreement with Pall Medsep and NYBC. 11 THERMOGENESIS CORP. Signatures In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THERMOGENESIS CORP. (Registrant) Dated May 14, 1997 WALTER J. LUDT, III Chief Financial Officer (Principal Financial and Accounting Officer) PHILIP H. COELHO President and Chief Executive Officer (Principal Executive Officer) EX-27 2
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000811212 THERMOGENESIS CORP. 9-MOS JUN-30-1997 MAR-31-1997 5,865,215 0 2,324,775 97,913 2,513,545 10,799,048 1,526,391 476,408 12,137,942 1,142,382 0 0 0 15,862 10,754,699 12,137,942 5,744,545 5,802,370 3,565,284 3,565,284 0 0 58,448 (2,036,312) 0 (2,036,312) 0 0 0 (2,036,312) (0.14) (0.14)
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