-----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, CMsFAdelq6vfFcb3Beq/poZDn3dPqOB+bYwEntCL83Ex1rWM88lwJk2AcoQEFaH3 O+iNNZ3DsmdEgPkNcqggnA== 0001009529-96-000015.txt : 19961202 0001009529-96-000015.hdr.sgml : 19961202 ACCESSION NUMBER: 0001009529-96-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 DATE AS OF CHANGE: 19961127 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMOGENESIS CORP CENTRAL INDEX KEY: 0000811212 STANDARD INDUSTRIAL CLASSIFICATION: 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: 96666823 BUSINESS ADDRESS: STREET 1: 11431 SUNRISE GOLD CIRCLE SUITE A CITY: RANCHO CORDOVA STATE: CA ZIP: 95742 BUSINESS PHONE: 9166388357 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 SEPTEMBER 30, 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.) 11431 SUNRISE GOLD, STE. A, RANCHO CORDOVA, CA. 95742 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (916) 638-8357 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 14,626,622 shares of common stock outstanding on November 11, 1996. 1 THERMOGENESIS CORP. INDEX PART I Condensed Financial Statements (Unaudited): PAGE NUMBER Condensed Balance Sheets at September 30, 1996 and June 30, 1996 2 Condensed Statements of Operations for the Three Months ended September 30, 1996 and 1995 4 Condensed Statements of Cash Flows for the Three Months Ended September 30, 1996 and 1995 5 Notes to Condensed Financial Statements 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II Item 6. Exhibits and Reports on Form 8-K. 10 SIGNATURES 11 2
THERMOGENESIS CORPORATION Condensed Balance Sheet (Unaudited) September June 30, 30, ASSETS 1996 1996 Current assets: Cash and cash equivalents $393,692 $1,243,079 Accounts receivable, net of allowance for doubtful accounts of $97,913 ($97,913 at June 30, 1996) 2,471,057 1,441,148 Inventory 2,469,467 2,137,198 Net investment in sales-type leases 23,895 31,882 Prepaid expenses 181,653 44,177 Total current assets 5,539,764 4,897,484 Equipment, at cost less accumulated depreciation of $370,456 ($312,307 at June 30, 1996) 721,655 689,562 Long-term net investment in sales-type leases 48,888 50,716 Prepaid royalties, net of accumulated amortization of $351,596 ($332,733 at June 30, 1996) 207,904 221,767 Leased equipment, net of accumulated depreciation of $106,322 ($101,337 at June 30, 1996) 16,254 20,228 Other assets 56,738 57,383 $6,591,203 $5,937,140 See accompanying notes.
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THERMOGENESIS CORPORATION Condensed Balance Sheet (Cont'd) (Unaudited) September 30, June 30, 1996 1996 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $919,435 $931,944 Current portion of long-term capital lease obligations 125,166 124,050 Accrued payroll and related expenses 219,145 184,660 Customer deposits 34,514 35,891 Total current liabilities 1,298,260 1,276,545 Deferred rent 1,329 3,365 Long-term capital lease obligations 268,041 282,919 Commitments Shareholders' equity: Common stock, $.001 par value; 50,000,000 shares authorized: 13,059,560 issued and outstanding (12,708,967 at June 30, 1996) 13,060 12,709 Paid in capital in excess of par 11,761,325 10,744,530 Accumulated deficit (6,750,812) (6,382,928) Total shareholders' equity 5,023,573 4,374,311 $6,591,203 $5,937,140 See accompanying notes.
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THERMOGENESIS CORPORATION Condensed Statements of Operations (Unaudited) Three Months Ended September 30, 1996 September 30, 1995 Net sales $1,697,596 $851,903 Cost of sales 973,965 443,535 Gross profit 723,631 408,368 Expenses: General and administrative expense 131,254 84,307 Selling and marketing expense 364,380 169,121 Research and development expense 568,735 155,214 Issuance of stock options for services 14,000 -- Interest expense 21,239 2,936 Total expenses 1,099,608 411,578 Interest income 8,093 2,823 Net loss ($367,884) ($3,323) Net loss per share ($0.03) ($0.00) Shares used in computing net loss per share 12,997,000 10,177,500 See accompanying notes.
5 THERMOGENESIS CORPORATION Statements of Cash Flows Three Months Ended September 30, 1996 and 1995 Increase and Decrease in Cash and Cash Equivalents 1996 1995 Cash flows from operating activities: Net loss ($367,884) ($387) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization 76,631 36,655 Issuance of stock options for services 14,000 -- Net changes in operating assets and liabilities: Accounts receivable (1,029,909) (140,238) Investment in sales type leases 9,815 8,768 Inventory (332,269) 79,872 Prepaid expenses (137,476) (11,723) Accounts payable and accrued liabilities (12,509) (112,893) Accrued payroll and related expenses 34,485 48,963 Customer deposits (1,377) 402 Deferred revenue -- (21,700) Deferred rent (2,036) (1,059) Total adjustments (1,380,645) (112,953) Net cash used by operating activities (1,748,529) (113,340) Cash flows from investing activities: Capital expenditures (90,242) -- Net cash used in investing activities (90,242) -- Cash flows from financing activities: Principal payments on long-term lease obligations (13,762) (19,175) Issuance of common stock 1,003,146 -- Net cash provided (used) by financing activities 989,384 (19,175) Net decrease in cash and cash equivalents (849,387) (132,515) Cash and cash equivalents at beginning of period 1,243,079 325,965 Cash and cash equivalents at end of period $393,692 $193,450 See accompanying notes. 6 THERMOGENESIS CORP. Notes to Condensed Financial Statements September 30, 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 nine months ended September 30, 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: September 30, June 30, 1996 1996 Raw materials $ 1,606,158 $ 1,273,889 Work in process 51,490 1,490 Finished goods 811,819 861,819 Total $ 2,469,467 $ 2,137,198 NET INVESTMENT IN SALES TYPE LEASES The net investment in sales type leases consists of the following: September 30, June 30, 1996 1996 Total minimum lease payments receivable $79,517 $ 91,888 Less unearned interest (6,734) (9,290) Net investment in sales type leases $ 72,783 $ 82,598 7 THERMOGENESIS CORP. Notes to Condensed Financial Statements (Cont'd) September 30, 1996 (Unaudited) EQUITY During the quarter ended September 30, 1996, the Company issued 132,487 shares of common stock for manufacturing services from a vender. The Company recorded these transactions at the estimated fair value 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, the Company has recorded consulting expense recognizing the estimated fair value of the options of $120,000. Subsequent Events The Company completed a minimum equity offering of units in a private placement and had an initial closing from that equity offering on November 1, 1996, in which it received gross proceeds of $4,417,873 (before costs of the offering). The proceeds from the initial closing were received from the sale of 783,834 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. The Company anticipates a final closing of the offering prior to November 30, 1996. 8 Management's Discussion and Analysis of Financial Condition and Results of Operation for the Three Months Ended September 30, 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 months ended September 30, 1996 by approximately 99% from the 1995 quarter ended September 30, 1995. 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 for the three months ended September 30, 1996 was approximately 57% as compared to 53% for the corresponding 1995 period. The increase in cost of sales as a percent of sales was due to greater than expected manufacturing and startup costs associated with the production of a new freezer for the above mentioned order. The Company is working to reduce these costs in future periods over which the order is spread. General and administrative expenses for the three months ended September 30, 1996 increased by 56% from the corresponding period in 1995. The year to date increase was due to expanded staff and facilities. Selling and marketing expenses for the three months ended September 30, 1996 increased by 115% over the corresponding period in 1995. Expenses increased due to added personnel, additional facilities and related operating expenses. 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 months ended September 30, 1996, increased by 266% over the corresponding 1995 period. 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. 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. 9 Management's Discussion and Analysis of Financial Condition and Results of Operation for the Three Months Ended September 30, 1996 and 1995 (Cont'd) ISSUANCE OF STOCK OPTIONS FOR SERVICES: During the quarter ended September 30, 1996, the Company recorded $120,000 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 $120,000 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 quarters ended September 30, 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 $620,565 from the first quarter of 1996. The increase was primarily due to the issuance of common stock upon the conversion of warrants which was offset by increases in accounts receivable, increases in inventory and operating losses primarily due to new product development. 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 September 30, 1996, 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. None 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 October 13, 1996 Walter J. Ludt, III Walter J. Ludt, III, Chief Financial Officer (Principal Financial and Accounting Officer) Philip H. Coelho 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 PERIOD ENDED SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000811212 THERMOGENESIS CORP. 3-MOS JUN-30-1997 SEP-30-1996 393,692 0 2,471,057 97,913 2,469,467 5,539,764 721,665 370,456 6,591,203 1,298,260 0 0 0 13,060 0 6,591,203 1,697,596 1,697,596 973,965 1,099,608 0 0 21,239 (367,884) 0 (367,884) 0 0 0 (367,884) (.03) (.03)
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