-----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, OmlNmUuMGXgXU7kD0a9Iw1ybB2ZLdJ4Av1IuFcbZw49tlfaduETVtIWpcrhcH+Em yIuDhEe3Od/sv0uTyb6N4Q== 0000830736-00-000006.txt : 20000516 0000830736-00-000006.hdr.sgml : 20000516 ACCESSION NUMBER: 0000830736-00-000006 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIOPOOL INTERNATIONAL INC CENTRAL INDEX KEY: 0000830736 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 581729436 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-14257 FILM NUMBER: 630740 BUSINESS ADDRESS: STREET 1: 6025 NICOLLE ST SUITE A CITY: VENTURA STATE: CA ZIP: 93003 BUSINESS PHONE: 8056540643 MAIL ADDRESS: STREET 1: 6025 NICOLLE STREET CITY: VENTURA STATE: CA ZIP: 93003 FORMER COMPANY: FORMER CONFORMED NAME: CYTRX BIOPOOL LTD DATE OF NAME CHANGE: 19890716 10QSB 1 10QSB FOR QUARTER ENDED 03/31/00 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF SECURITIES EXCHANGE ACT OF 1934 | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 2000 ------------------------------ COMMISSION FILE NUMBER 0-17714 ------------------------------ BIOPOOL INTERNATIONAL, INC. (Exact name of Registrant as specified in its charter) DELAWARE 58-1729436 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6025 NICOLLE STREET, VENTURA, CALIFORNIA 93003 (805) 654-0643 (Address of principal executive offices) (Registrant's telephone number including area 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 proceeding 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 / / Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Outstanding at March 31, 2000, Common Stock, $.01 par value per share, 8,319,951 shares. ================================================================================ PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS BIOPOOL INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31, 2000 1999 (Unaudited) - -------------------------------------------------------------------------------- (in thousands except share data) ASSETS CURRENT ASSETS Cash ......................................... $ 2,567 $ 2,749 Accounts receivable, net ..................... 1,925 1,770 Inventories .................................. 2,078 1,941 Prepaid expenses and other current assets .... 262 198 Deferred tax benefits ........................ 109 109 Net assets of discontinued operations ........ 2,064 2,256 - -------------------------------------------------------------------------------- TOTAL CURRENT ASSETS ........................... 9,005 9,023 PROPERTY AND EQUIPMENT ......................... 3,589 3,553 Less accumulated depreciation ................ (2,509) (2,427) - -------------------------------------------------------------------------------- PROPERTY AND EQUIPMENT, NET .................... 1,080 1,126 OTHER ASSETS ................................... 1,040 884 - -------------------------------------------------------------------------------- TOTAL ASSETS ................................... $ 11,125 $ 11,033 ================================================================================ LIABILITIES AND STOCKHOLDERS' EQUITY Total current liabilities ...................... $ 970 $ 1,077 DEFERRED TAX LIABILITY ......................... 126 122 STOCKHOLDERS' EQUITY: Common stock, $.01 par value, 50,000,000 shares authorized; 8,319,951 and 8,286,986 shares issued and outstanding in 2000 and 1999, respectively ............. 83 83 Other stockholders' equity ................... 9,946 9,751 - -------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY ..................... 10,029 9,834 - -------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..... $ 11,125 $ 11,033 ================================================================================ See accompanying notes to consolidated financial statements.
2 BIOPOOL INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
THREE MONTHS ENDING MARCH 31, 2000 1999 - -------------------------------------------------------------------------------- (in thousands except per share data) SALES ............................................. $ 2,409 $ 2,123 Cost of sales ..................................... 1,162 1,048 - -------------------------------------------------------------------------------- GROSS PROFIT ...................................... 1,247 1,075 Operating expenses: Selling, general and administrative ............. 886 602 Research and development ........................ 81 98 Other (income) expenses, net ...................... (35) 47 - -------------------------------------------------------------------------------- INCOME FROM CONTINUING OPERATIONS BEFORE TAXES .................................... 315 328 Income tax expense ................................ 115 127 - -------------------------------------------------------------------------------- INCOME FROM CONTINUING OPERATIONS ................. 200 201 DISCONTINUED OPERATIONS NET OF INCOME TAX EFFECT ...................................... -- -- - -------------------------------------------------------------------------------- NET INCOME ........................................ $ 200 $ 201 ================================================================================ WEIGHTED AVERAGE SHARES OUTSTANDING Basic ........................................... 8,294 8,541 Effect of dilutive shares ....................... 42 25 ---------------------- Diluted ......................................... 8,336 8,566 ====================== BASIC AND DILUTED EARNINGS PER SHARE Continuing operations ........................... $ 0.02 $ 0.02 Discontinued operations ......................... -- -- ---------------------- Net income ...................................... $ 0.02 $ 0.02 ====================== See accompanying notes to consolidated financial statements.
3 BIOPOOL INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
THREE MONTHS ENDING MARCH 31, 2000 1999 - -------------------------------------------------------------------------------- (in thousands) OPERATING ACTIVITIES ............................. $(310) $ 291 INVESTING ACTIVITIES ............................. (59) (19) FINANCING ACTIVITIES ............................. 28 (142) DISCONTINUED OPERATIONS .......................... 192 -- EFFECT OF EXCHANGE RATES ......................... (33) (46) - -------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN CASH .................. $(182) $ 84 ================================================================================ See accompanying notes to consolidated financial statements.
4 BIOPOOL INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2000, is not necessarily indicative of the results that may be expected for the year ended December 31, 2000. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 1999. The balance sheet at December 31, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Financial information presented to the notes to the consolidated financial statements excludes discontinued operations except where noted.
2. INVENTORIES March 31, December 31, 2000 1999 ---------------------------- (in thousands) Raw materials ............................ $ 695 $ 710 Work in process .......................... 654 646 Finished products ........................ 729 585 ------ ------ $2,078 $1,941 ====== ======
3. EARNINGS PER SHARE Basic earnings per share is based upon the weighted-average number of common shares outstanding. Diluted earnings per share is based upon the weighted average number of common shares and dilutive potential common shares outstanding. Potential common shares are outstanding options under the Company's stock option plans and outstanding warrants, which are included under the treasury stock method. 4. COMPREHENSIVE INCOME SFAS No. 130 requires unrealized gains and losses on the Company's foreign currency translation adjustments to be included in other comprehensive income. However, the adoption of this statement had no impact on the Company's net income or stockholders' equity. Total comprehensive income was $167,000 and $155,000 for the three months ended March 31, 2000 and 1999, respectively. 5. RECLASSIFICATION Certain data in the prior year consolidated financial statements have been reclassified to conform to the 2000 presentation. The prior year consolidated financial statements have been restated to reflect ongoing operations and, accordingly, financial information presented in the notes to the consolidated financial statements excludes discontinued operations, except where noted. 5 6. SEGMENT INFORMATION The Company currently operates in one industry, in vitro diagnostic medical products. However, the Company has two reportable segments; Biopool International and its wholly-owned operating subsidiary, Biopool Sweden. The reportable segments are each managed separately because they manufacture and sell distinct products with different production processes. Biopool International manufactures hemostasis and drugs-of-abuse products, and Biopool Sweden primarily manufactures fibrinolytic system testing kits. The Company evaluates the segments and allocates resources based on net income or loss. The accounting policies of the reportable segments are the same as those described in the 1999 Form 10-KSB, "Summary of significant accounting policies." The consolidated financial statements include the following information for the continuing operation of Biopool International and Biopool Sweden in thousands of dollars.
INTER- BIOPOOL COMPANY INTER- BIOPOOL ELIMINA- CONSOLI- NATIONAL SWEDEN TIONS DATED - -------------------------------------------------------------------------------- (in thousands) THREE MONTHS ENDED MARCH 31, 2000 Sales ........................... $ 1,852 $ 951 $ (394) $ 2,409 Less intercompany ............... (158) (236) 394 -- ------- ------- ------- ------- Sales to unafilliated customers ..................... 1,694 715 -- 2,409 Pre-tax income from continuing operations ......... 91 224 315 Total assets .................... 8,814 2,444 (133) 11,125 - -------------------------------------------------------------------------------- THREE MONTHS ENDED MARCH 31, 1999 Sales ........................... 1,615 781 (273) 2,123 Less intercompany ............... (100) (173) 273 -- ------ ------ ------ ------ Sales to unaffiliated customers ..................... 1,515 608 -- 2,123 Pre-tax income from continuing operations ......... 274 54 328 Total assets .................... 9,029 2,046 (42) 11,033 - --------------------------------------------------------------------------------
7. DISCONTINUED OPERATIONS On April 30, 1999, the Company consummated the sale of certain business assets of the Blood Group Serology Division (BCA) for $4.45 million in cash. BCA ceased operations to the Company's benefit effective May 1, 1999, but continued to convert certain inventory items on behalf of the buyer. At March 31, 2000, net assets of discontinued operations consisted of BCA property and plant amounting to $2.1 million. The property and plant are currently in escrow, which is expected to close by June 1, 2000. 6
THREE MONTHS ENDED MARCH 31, 1999 - -------------------------------------------------------------------------------- (in thousands) Sales as previously reported ................................ $3,907 LESS BCA SALES ......................................... 1,784 - -------------------------------------------------------------------------------- As reported September 30, 1999 .............................. $2,123 ================================================================================
8. LITIGATION On March 10, 2000, the Company was served with a complaint filed in U.S. District Court by Agen Biomedical Ltd. claiming that Biopool infringed an Agen patent. The Company prepared and filed an answer. Management believes the complaint to be without merit and that it will have no material impact to the Company's financial position or results of operations. 9. SUBSEQUENT EVENT On May 4, 2000, the Company and Xtrana, Inc., jointly announced that they entered into a definitive Agreement and Plan of Reorganization to merge. Pursuant to the Merger Agreement, Xtrana will be merged with and into Biopool, with Biopool surviving and the separate existence of Xtrana ceasing. Upon consummation of the Merger, Biopool will issue 9,369,461 shares of common stock in exchange for all outstanding common and preferred stock of Xtrana. As a result, immediately following the Merger, the former Xtrana stockholders will hold approximately 50% and Biopool stockholders will hold approximately 50% of the outstanding shares of capital stock of the surviving corporation. Of these shares, 1,873,892 shares will be issued and placed in an escrow account, and may be canceled if Xtrana suffers any liabilities under the indemnification provisions of the Merger Agreement or if Xtrana fails to meet the gross revenue targets agreed to in the Merger Agreement. In the future, we may have to issue additional shares of common stock to Xtrana stockholders if we suffer any liability under the indemnification provisions set for the in the Merger Agreement or if Xtrana meets certain gross revenue targets agreed to in the Merger Agreement. Biopool will be the surviving corporation in the merger, and at the effective time of the merger Xtrana will cease to exist as a separate corporate entity. The Certificate of Incorporation and Bylaws of Biopool will be the certificate of incorporation and bylaws of the combined corporation. Pursuant to the Merger Agreement, John H. Wheeler, the Chief Executive Officer of Xtrana, will be the Chief Executive Officer of the surviving corporation. After the effective time of the Merger, the board of directors of the surviving corporation will consist of seven members. Initially, Biopool and Xtrana will each have the right to designate three directors, and together they will select one additional mutually agreeable director. Xtrana was incorporated in Delaware in 1998. Xtrana, based in Denver, Colorado, has developed new proprietary nucleic acid (DNA/RNA) testing technology, which it plans to commercialize. Potential markets for this testing technology include the detection of food and environmental contamination, forensics and paternity identity testing, infectious human disease testing including bacterial warfare, and research and other clinical applications. The affirmative vote a majority of all outstanding shares of Biopool common stock entitled to vote is required to approve the Merger and the Merger Agreement. Biopool has filed a preliminary proxy statement with the Securities and Exchange Commission, and will be noticing its Annual Stockholders Meeting, which will include as an agenda item the approval of the proposed merger with Xtrana, and distributing to its stockholders a definitive proxy statement shortly. The meeting is expected to be held in the third quarter of this year. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION SALE OF BLOOD GROUP SEROLOGY DIVISION On April 30, 1999, we consummated the sale of certain business assets of our BCA Division for $4.45 million in cash. 7 BCA ceased operations to our benefit effective May 1, 1999, but continued to convert certain inventory items on behalf of the buyer through June 30, 1999. The Consolidated Statements of Operations have been restated to reflect ongoing hemostasis operations. The sale of BCA reduced the Company's sales by approximately 50%; however, the impact on pretax income was negligible. PROPOSED MERGER WITH XTRANA, INC. On May 4, 2000, we signed a definitive agreement to merge with Xtrana, Inc. The merger is subject to stockholder approval, which will be solicited in connection with our Annual Meeting of Stockholders, currently scheduled for sometime in the third quarter of this year. Xtrana was incorporated in Delaware in 1998. Xtrana, based in Denver, Colorado, has developed new proprietary nucleic acid (DNA/RNA) testing technology, which it plans to commercialize. Potential markets for this testing technology include the detection of food and environmental contamination, forensics and paternity identity testing, infectious human disease testing including bacterial warfare, and research and other clinical applications. Certain one-time costs associated with this merger will be reported during the first three quarters of 2000. Once the merger is consummated, we anticipate growth in revenues, as well as a corresponding increase in related expenses, especially research and development costs and amortization of purchased intangible assets. We anticipate this merger will have a material negative near-term impact on net income, but the specific magnitude is unknown at this time. We will also experience reduced earnings per share in the near-term as a result of the issuance of 9,369,461 shares of Biopool Common Stock related to the merger. RESULTS OF OPERATIONS Sales were $2.4 million for the three-month period ended March 31, 2000, compared with $2.1 million for the corresponding period of 1999, representing a 13% increase. This increase was the direct result of a renewed emphasis on marketing our core hemostasis products. Cost of goods sold were $1,162,000 for the quarter ended March 31, 2000, compared with $1,048,000 for the same period in 1999. The cost of sales as a percentage of revenues was 48% in 2000 versus 49% in 1999. Selling, general and administrative ("SG&A") expenses were $886,000 for the quarter ended March 31, 2000, compared with $602,000 for the same period of 1999. This increase was primarily the result of increased sales and marketing efforts to improve domestic sales and certain one-time professional fees. The 2000 Other income relates to interest income and favorable foreign exchange transactions. The 1999 Other expenses primarily related to costs incurred to move our Swedish operations (Biopool Sweden) into larger facilities. Discontinued operations reflect no activity in 2000 and breakeven results in 1999. FINANCIAL CONDITION As of March 31, 2000, working capital was $8 million, with a current ratio of 9.3 to 1.0. Net assets of discontinued operations, equal to $2.1 million, representing the BCA property, plant, and equipment, are stated at the estimated net realizable value and are expected to close escrow by June 1, 2000. Our current availability of cash, unused line of credit, working capital, cash flow from operations, and the pending sale of BCA assets are adequate to meet our ongoing hemostasis needs for at least the next twelve months. However, we may seek additional financing later this year to fully support the Xtrana activities. We will investigate and pursue financing options during the second quarter in anticipation of the merger. Upon consummation of the Xtrana merger, we will issue 9,369,461 shares of Biopool Common Stock to the Xtrana stockholders. This issuance will have a dilutive affect on earnings per share in the near term. 8 FORWARD LOOKING STATEMENTS Except for the historical information contained herein, this report contains forward-looking statements (identified by the words "estimate," "anticipate," "expect," "believe," and similar expressions) which are based upon management's current expectations and speak only as of the date made. These forward-looking statements are subject to risks, uncertainties and factors that could cause actual results to differ materially from the results anticipated in the forward- looking statements and include, but are not limited to, competitors' pricing strategies and technological innovations, changes in health care and government regulations, litigation claims, foreign currency fluctuation, product acceptance, Year 2000 issues, as well as other factors discussed in the Company's last Report on Form 10-KSB. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - None (b) Reports on Form 8-K. 1. Form 8-K dated April 3, 2000. Item 5 - Other Events: Press Release, Complaint Alleging Patent Infringement Filed Against Biopool International 9 BIOPOOL INTERNATIONAL, INC. 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. Date: MAY 12, 2000 BIOPOOL INTERNATIONAL, INC. ---------------------- --------------------------- (Registrant) /S/ MICHAEL D. BICK, PH.D. -------------------------- Michael D. Bick, Ph.D. President, Chief Executive Officer and Chairman of the Board /S/ ROBERT K. FOOTE -------------------------- Robert K. Foote Chief Financial Officer and Corporate Secretary 10 EX-27 2 FDS 03/31/00
5 1,000 3-MOS DEC-31-2000 MAR-31-2000 2,567 0 1,925 0 2,078 9,005 3,589 2,509 11,125 970 0 0 0 83 9,946 11,125 2,409 2,409 1,162 1,162 (35) 0 0 315 115 200 0 0 0 200 0.02 0.02
EX-27 3 RESTATED FDS 03/31/99
5 1,000 3-MOS DEC-31-1999 MAR-31-1999 1,035 0 1,506 0 2,059 4,973 1,609 (510) 10,657 1,023 0 0 0 85 9,426 10,657 2,123 2,123 1,048 1,048 47 0 0 328 127 201 0 0 0 201 0.02 0.02
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