-----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, WZRcauMCWsN8J0h3xzI8pwT92rdAYmB1Qa/2GqDH2kf4BwwpGUYf5BBGSIS7d3qZ z6zEoSDWNORc+bi3cLGHNA== 0000897101-96-000346.txt : 19960603 0000897101-96-000346.hdr.sgml : 19960603 ACCESSION NUMBER: 0000897101-96-000346 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960531 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGEION CORP/MN CENTRAL INDEX KEY: 0000815093 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 411579150 STATE OF INCORPORATION: MN FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17019 FILM NUMBER: 96575219 BUSINESS ADDRESS: STREET 1: 3650 ANNAPOLIS LN STREET 2: STE 170 CITY: MINNEAPOLIS STATE: MN ZIP: 55447-5434 BUSINESS PHONE: 6125509388 MAIL ADDRESS: STREET 1: 3650 ANNAPOLIS LANE STREET 2: SUITE 170 CITY: PLYMOUTH STATE: MN ZIP: 55447-5434 FORMER COMPANY: FORMER CONFORMED NAME: VERDE VENTURES INC DATE OF NAME CHANGE: 19880714 10-Q 1 UNITED STATES 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 April 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From ________to________ Commission file number 0-17019 ANGEION CORPORATION (Exact name of registrant as specified in its charter) Minnesota 41-1579150 (State of Incorporation) (IRS Employer Identification No.) 3650 Annapolis Lane, Plymouth, MN 55447-5434 (Address of principal (Zip Code) executive offices) (612) 550-9388 (Telephone number) 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 ___ Common stock, par value $.01 per share: 24,222,207 shares outstanding as of May 21, 1996
PART I. FINANCIAL INFORMATION ITEM DESCRIPTION Page(s) ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS. Consolidated Balance Sheets (unaudited) - April 30, 1996 and 1 July 31, 1995. Consolidated Statements of Operations (unaudited) 2 - For the Three and Nine Months Ended April 30, 1996 and 1995. Consolidated Statements of Cash Flows (unaudited) - For the 3 Nine Months Ended April 30, 1996 and 1995. Notes to Consolidated Financial Statements (unaudited) 4 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 5 - 7 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. 8 Signature. 9
ANGEION CORPORATION Consolidated Balance Sheets April 30, 1996 and July 31, 1995 (Unaudited) April 30, July 31, ASSETS 1996 1995 ------------ ------------ Current Assets: Cash and Cash Equivalents $ 14,789,510 $ 2,367,764 Short Term Investments 7,328,201 -- Receivables 401,913 -- Inventories 2,909,277 398,788 Prepaid Expenses and Other Current Assets 151,272 172,955 ------------ ------------ TOTAL CURRENT ASSETS 25,580,173 2,939,507 Property and Equipment, Net 3,667,445 1,602,774 Patents and Trademarks, Net 1,190,277 1,055,229 Other Assets 135,073 153,684 ------------ ------------ TOTAL ASSETS $ 30,572,968 $ 5,751,194 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts Payable 1,778,547 836,301 Accrued Payroll, Vacation and Related Costs 611,327 238,599 Current Installments of Capital Lease Obligations 984 2,599 Other Accrued Expenses 236,306 192,454 ------------ ------------ TOTAL CURRENT LIABILITIES 2,627,164 1,269,953 Long-Term Debt 1,500,000 1,500,000 Capital Lease Obligations, Less Current Installments -- 1,091 ------------ ------------ TOTAL LIABILITIES 4,127,164 2,771,044 ------------ ------------ Shareholders' Equity: Class A Convertible Preferred Stock, $.01 par value Authorized 1,475,000 shares; issued and outstanding 875,000 shares at April 30, 1996, and July 31, 1995 3,166,425 3,166,425 Common Stock, $.01 par value. Authorized 35,000,000 shares; issued and outstanding 24,212,207 shares at April 30, 1996, and 17,500,529 at July 31, 1995 242,122 175,005 Additional Paid-In Capital 60,384,733 26,824,452 Accumulated Deficit (37,347,476) (27,185,732) ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 26,445,804 2,980,150 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 30,572,968 $ 5,751,194 ============ ============
See accompanying notes to consolidated financial statements.
ANGEION CORPORATION Consolidated Statements of Operations Three and Nine Months Ended April 30, 1996 and 1995 (Unaudited) Three Months Ended Nine Months Ended April 30, April 30, ---------------------------- ---------------------------- 1996 1996 1996 1995 ------------ ------------ ------------ ------------ Net Sales $ 452,600 $ -- $ 874,959 $ -- Operating Expenses: Manufacturing Expenses 1,053,444 -- 2,278,242 -- Research & Development 2,808,202 1,894,959 6,717,469 5,268,028 Sales & Marketing 199,187 7,208 387,634 12,767 General & Administrative 922,127 484,039 2,444,543 1,495,868 ------------ ------------ ------------ ------------ Total Operating Expenses 4,982,960 2,386,206 11,827,888 6,776,663 ------------ ------------ ------------ ------------ OPERATING LOSS (4,530,360) (2,386,206) (10,952,929) (6,776,663) ------------ ------------ ------------ ------------ Other Income (Expense): Interest Income 279,905 79,825 878,879 245,354 Interest Expense (29,088) (28,706) (87,694) (141,848) ------------ ------------ ------------ ------------ Other Income (Expense) 250,817 51,119 791,185 103,506 ------------ ------------ ------------ ------------ NET LOSS $ (4,279,543) $ (2,335,087) $(10,161,744) $ (6,673,157) ============ ============ ============ ============ NET LOSS PER SHARE $ (.18) $ (.14) $ (.46) $ (.41) ============ ============ ============ ============ Weighted Average Number of Shares Outstanding 23,301,937 17,059,537 21,953,593 16,291,900 ============ ============ ============ ============
See accompanying notes to consolidated financial statements.
ANGEION CORPORATION Consolidated Statements of Cash Flows For the Nine Months Ended April 30, 1996 and 1995 (Unaudited) 1996 1995 ------------ ------------ OPERATING ACTIVITIES: Net Loss $(10,161,744) $ (6,673,157) Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: Depreciation and Amortization 684,412 433,385 Compensation Expense on Grant of Stock and Stock Options 485,237 117,182 Notes Payable Discount Amortization -- 83,500 Changes in Operating Assets and Liabilities: Receivables (401,913) 183,675 Inventories (2,510,489) 430 Prepaid Expenses and Other Current Assets 21,683 36,654 Accounts Payable 942,246 135,001 Accrued Expenses 416,580 (129,843) ------------ ------------ Net Cash Used in Operating Activities (10,523,988) (5,813,173) ------------ ------------ INVESTING ACTIVITIES: Purchase of Short Term Investments (7,328,201) -- Purchases of Property and Equipment (2,543,497) (803,289) Increase in Other Assets (322,023) (281,234) ------------ ------------ Net Cash Used in Investing Activities (10,193,721) (1,084,523) ------------ ------------ FINANCING ACTIVITIES: Proceeds from Issuance of Common Stock, Net 20,327,045 10,599,122 Proceeds from Exercise of Stock Options 1,184,779 381,192 Proceeds from Exercise of Warrants 11,630,337 -- Repayments of Debt (2,706) (1,508,999) ------------ ------------ Net Cash Provided by Financing Activities 33,139,455 9,471,315 ------------ ------------ NET INCREASE IN CASH AND CASH EQUIVALENTS: 12,421,746 2,573,619 Cash and Cash Equivalents: Beginning of Period 2,367,764 2,127,358 ------------ ------------ End of Period $ 14,789,510 $ 4,700,977 ============ ============ Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 60,843 $ 160,533 ============ ============ Supplemental disclosure of non-cash investing and financing activities: During the nine months ended April 30, 1995, notes payable of $1,434,746 were converted into common stock.
See accompanying notes to consolidated financial statements. ANGEION CORPORATION Form 10-Q April 30, 1996 Notes to Consolidated Financial Statements 1. BASIS OF PRESENTATION The unaudited interim consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles, pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements have been omitted or condensed pursuant to such rules and regulations. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the financial statements and related notes included in the Company's July 31, 1995 Annual Report to Shareholders. Effective November 1, 1995, the Company established a European subsidiary, Angeion Europe Limited, to facilitate clinical trials of its Implantable Cardioverter Defibrillator and expand its European business activities. The information furnished reflects, in the opinion of the management of Angeion Corporation, all adjustments consisting primarily of recurring accruals, considered necessary for a fair presentation of the financial position and the results of operations. 2. NET LOSS PER SHARE Net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of common stock outstanding during the period. Common equivalent shares representing stock warrants and options were excluded in the Fiscal 1995 and 1996 periods presented due to their anti-dilutive effect. 3. PUBLIC OFFERING On September 19, 1994, the Company completed a public offering of 4.9 million shares of newly issued common stock and 4.9 million warrants to purchase one-half of a share of common stock, which raised proceeds of $10,599,122 net of expenses. The exercise price of the warrants per whole share is $4.75 per share and they expire in March 1996. Net proceeds of the sale of the securities are being used for research and development, investment in capital equipment and leasehold improvements, general corporate purposes, including working capital, and for the repayment of unconverted short-term bridge loans. On August 2, 1995, the Company completed a public offering of 3.4 million shares of newly issued common stock for proceeds of approximately $20,300,000, net of expenses. During the nine months ended April 30, 1996, warrants that would have expired in March 1996 were exercised, along with certain stock options, which provided to the Company net proceeds of approximately $12,800,000. The Company intends to apply the net proceeds of the sale of securities for research and development and leasehold improvements, and general corporate purposes, including working capital. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The Company's operations consist of the research and development efforts of its two divisions, the implantable cardioverter defibrillator group and the catheter ablation group. These divisions are developing medical devices to treat various types of arrhythmias (irregular heartbeats). These devices are currently undergoing human clinical trials. Effective November 1, 1995, the Company also established a European subsidiary, Angeion Europe Limited, to facilitate its clinical trials of the implantable cardioverter defibrillator and expand its European business activities. LIQUIDITY AND CAPITAL RESOURCES The Company's liquidity needs have related to, and are expected to relate to, the research and development activities of its ICD and catheter ablation divisions, working capital and expenditure requirements of its manufacturing operations, the acquisition of businesses, products and technologies, and expanded marketing expenditures. The Company has financed its liquidity needs over the last three fiscal years through the sale of Common Stock and other equity securities, issuance of long-term debt and notes payable and the proceeds from the sale of the Angeion Medical Products division. Net cash used in operating activities was $10,523,988 in the nine months ended April 30, 1996 compared to $5,813,173 in the nine months ended April 30, 1995 and was $8,566,889, $5,151,520 and $5,345,958 in fiscal 1995, 1994, and 1993, respectively. The cash used during these periods was primarily related to research and development activities of the Company's ICD and catheter ablation divisions (including clinical trials) and, during the nine months ended April 30, 1996, was also related to the build-up of inventory and the increase in sales and marketing expenses as the Company began manufacturing and marketing activities. The Company continues to expand its patent and trademark portfolio through internal proprietary development, and the acquisition of developed technologies. The Company's investment in patents and trademarks for the nine months ending April 30, 1996 totaled $322,023. The Company invested $337,158 and $311,767 in patents and trademarks in fiscal 1995 and 1994, respectively. The Company will continue to invest in proprietary technologies and procedures as warranted. The Company's expenditures for fixed assets were $2,543,497 for the nine months ended April 30, 1996, $989,351 in fiscal 1995 and $244,254 in fiscal 1994. Fixed asset expenditures related primarily to computer equipment, office furniture, production equipment for the ICD division and research and development equipment. As the Company expands its ICD production and catheter ablation research capabilities, fixed asset expenditures are expected to increase. At April 30, 1996, cash and cash equivalents was $14,789,510 and short term investments were $7,328,201. In August 1995, the Company completed a public offering of $3.4 million shares of Common Stock that resulted in net proceeds to the Company of $20,327,045. In September 1994, the Company completed a public offering of 4.9 million shares of Common Stock and 4.9 million warrants that resulted in net proceeds of $10,599,122. An additional $11,630,338 in net proceeds was received from the exercise of the warrants, which would have expired on March 12, 1996. In fiscal 1993, the Company completed the sale of AMP and in 1993 consummated the strategic alliance with Pacesetter Inc. ("Pacesetter"). The Company will need additional financing. The timing of that financing depends on a number of factors, including progress with clinical trials; time and costs involved in obtaining regulatory approvals, costs involved in filing, prosecuting and enforcing patents or defending against patent infringement claims; competing technological and market developments; and costs of manufacturing and marketing scale-up potential acquisitions of products, businesses and technologies. However, there can be no assurance that such additional financing will be available on acceptable terms or at all, and the failure to obtain any such additional financing would have a material adverse effect on the Company. The Company has net operating loss carryforwards for financial reporting and federal income tax purposes of approximately $35,000,000, which can be used to offset taxable income in future years. Future equity offerings combined with sales of the Company's equity during the preceding years may cause changes in ownership under section 382 of the Internal Revenue Code of 1986, which would limit the use of the Company's net operating loss carryforwards existing as of the date of the ownership change. Given that the Company anticipates continued losses during the next few years, it is not anticipated that any limitations would have a material adverse effect. RESULTS OF OPERATIONS THREE MONTHS ENDED APRIL 30, 1996 COMPARED TO THE THREE MONTHS ENDED APRIL 30, 1995 Net sales increased from $0 in the quarter ended April 30, 1995 to $452,600 in the quarter ended April 30, 1996. The increase was due to the initiation of sales of defibrillator products to Pacesetter and sales in connection with U.S. and European clinical trials. Manufacturing expenses increased from $0 in the quarter ended April 30, 1995 to $1,053,444 in the quarter ended April 30, 1996. The increase was due to the cost of products sold during the quarter, as well as start up costs associated with the establishment of the Company's manufacturing capabilities. Manufacturing costs were higher than net sales due to the low volume of net sales relative to the significant costs incurred as the Company establishes its manufacturing capabilities. Research and development expenses increased from $1,894,959 in the quarter ended April 30, 1995 to $2,808,202 in the quarter ended April 30, 1996. This increase of $913,243 was primarily due to an acceleration of research and development activity (including clinical trials) in connection with the implantable cardioverter defibrillator (ICD) products. Research and development activity is currently focused on the Company's ICD products, which accounted for $2,543,557 of the expense for the quarter ended April 30, 1996, while the laser catheter ablation development activities accounted for $264,645 of the expense. The Company expects that research and development expenses will continue to increase as the Company expands human clinical trials and enhances current products and accelerates the development of its new products Sales and marketing expenses increased from $7,208 in the quarter ended April 30, 1995 to $199,187 in the quarter ended April 30, 1996 reflecting the hiring of a sales and marketing Vice President and the initiation of marketing activity. General and administrative expenses increased from $484,039 in the quarter ended April 30, 1995 to $922,127 in the quarter ended April 30, 1996. The increase is due to increased legal expenses, payroll costs and consulting expenses. The net loss for the quarter ended April 30, 1996 was $4,279,543 or $.18 per share, compared to a net loss of $2,335,087 or $.14 per share for the quarter ended April 30, 1995. NINE MONTHS ENDED APRIL 30, 1996 COMPARED TO THE NINE MONTHS ENDED APRIL 30, 1995 Net sales increased from $0 in the nine months ended April 30, 1995 to $874,959 in the nine months ended April 30, 1996. The increase was due to the initiation of sales of defibrillator products to Pacesetter and sales in connection with U.S. and European clinical trials. Manufacturing expenses increased from $0 in the nine months ended April 30, 1995 to $2,278,242 in the nine months ended April 30, 1996. The increase was due to the cost of products sold during the period, as well as start up costs associated with the establishment of the Company's manufacturing capabilities. Manufacturing costs were higher than net sales due to low volume of net sales relative to the significant costs incurred as the Company establishes its manufacturing capabilities. Research and development expenses increased from $5,268,028 in the nine months ended April 30, 1995 to $6,717,469 in the nine months ended April 30, 1996. This increase of $1,449,441 was primarily due to an acceleration of research and development activity (including clinical trials) in connection with the implantable cardioverter defibrillator products. Research and development activity is currently focused on the implantable cardioverter defibrillator products, which accounted for $5,898,322 of the expense for the nine months ended April 30, 1996, while the catheter ablation research and development activities accounted for $819,147 of the expense. The Company expects that research and development expenses will continue to increase as the Company expands human clinical trials and enhances current products while accelerating the development of its new products. Sales and marketing expense increased from $12,767 in the nine months ended April 30, 1995 to $387,634 in the nine months ended April 30, 1996 reflecting the hiring of a sales and marketing Vice President and the initiation of marketing activity. General and administrative expenses increased from $1,495,868 in the nine months ended April 30, 1995 to $2,444,543 in the nine months ended April 30, 1996. The increase was primarily due to an increase in non-cash compensation expenses resulting from the grant of stock and options and the start up costs associated with the establishment of the European subsidiary. The net loss for the nine months ended April 30, 1996 was $10,161,744 or $.46 per share, compared to net loss of $6,673,157 or $.41 per share for the nine months ended April 30, 1995. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibit 27-Financial Data Schedule (for SEC use only). (b) A current report on Form 8-K, dated April 8, 1996, was filed during the three months ended April 30, 1996, pursuant to Item 5. This filing was made in reference to an announcement of the Company's adopting a shareholder's rights plan. No financial statements or Proforma Financial information was filed with this Form 8-K. SIGNATURES 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. ANGEION CORPORATION Dated: May 31, 1996 By________________________________ David L. Christofferson Vice President of Finance EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS JUL-31-1996 APR-30-1996 14,789,510 7,328,201 401,913 0 2,909,277 25,580,173 5,289,444 1,621,999 30,572,968 2,627,164 0 0 3,166,425 242,122 23,037,257 30,572,968 874,959 874,959 2,278,242 2,278,242 9,549,646 0 87,694 (10,161,744) 0 (10,161,744) 0 0 0 (10,161,744) (.46) 0
-----END PRIVACY-ENHANCED MESSAGE-----