-----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, DH6AU1/JiZm9IfVjTWPzK6OcWOdBcLvondH3SsxOIn5k8d8Dc2ATsGdLNsWimgOI swcjdQt7uOD60Q6s46NN1w== 0000830736-95-000003.txt : 19951118 0000830736-95-000003.hdr.sgml : 19951118 ACCESSION NUMBER: 0000830736-95-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951109 SROS: NASD 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17714 FILM NUMBER: 95588617 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 10-Q 1 _______________________________________________________________________ _________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q /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 September 30, 1995 ___________________________________________________________ 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 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 805-654-0643 _______________________________________________________________________ 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 September 30, 1995, Common Stock, $.01 par value per share, 7,929,096 shares. _______________________________________________________________________ _______________________________________________________________________ BIOPOOL INTERNATIONAL, INC. TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Item 1- Financial Statements (Unaudited) Consolidated Balance Sheets as of September 30, 1995 and December 31, 1994 3 Consolidated Statements of Income for the Three-Month and Nine-Month Periods Ending September 30, 1995 and 1994 5 Consolidated Statements of Cash Flows for the Three-Month and Nine-Month Periods Ending September 31, 1995 and 1994 6 Notes to Consolidated Financial Statements 7 Item 2- Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION Item 1- Legal Proceedings 10 Item 2- Changes in Securities Not Applicable Item 3- Defaults upon Senior Securities Not Applicable Item 4- Submission of Matters to a Vote of Security Holders Not Applicable Item 5- Other Information Not Applicable Item 6- a) No Exhibits b) The Company did not file any reports on Form 8-K during the nine months ended September 30, 1995. SIGNATURES 11 2 BIOPOOL INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS
September 30, December 31, 1995 1994 (Unaudited) _______________________________________________________________________ ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,678,724 $ 1,841,475 Accounts receivable, net of allowance for doubtful accounts (1995 - $5,885, 1994 - $10,445) 1,127,446 875,978 Inventories 1,958,597 1,528,696 Prepaid expenses and other current assets 369,154 109,939 _______________________________________________________________________ TOTAL CURRENT ASSETS 5,133,921 4,356,088 _______________________________________________________________________ PROPERTY AND EQUIPMENT 3,320,173 2,480,480 Less accumulated depreciation and amortization (1,575,422) (1,309,787) _______________________________________________________________________ PROPERTY AND EQUIPMENT, NET 1,744,751 1,170,693 _______________________________________________________________________ OTHER ASSETS Patent application costs, net 148,827 141,180 Excess of cost over net assets of acquired companies, net 684,351 725,646 Other assets 309,079 65,055 _______________________________________________________________________ TOTAL OTHER ASSETS 1,142,257 913,881 _______________________________________________________________________ TOTAL ASSETS $ 8,020,929 $ 6,458,662 _______________________________________________________________________
See accompanying notes to consolidated financial statements. 3 BIOPOOL INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (continued)
September 30, December 31, 1995 1994 (Unaudited) _________________________________________________________________________ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Bank borrowings $ 26,087 --- Accounts payable 256,560 $ 218,056 Accrued wages and benefits 178,567 213,026 Accrued professional fees 590,502 78,070 Accrued interest 2,061 2,892 Accrued expenses 95,919 40,312 Income taxes payable 49,255 59,133 Current portion of long-term debt 150,060 68,984 Amount due to officer --- 10,634 _______________________________________________________________________ TOTAL CURRENT LIABILITIES 1,349,011 691,107 _______________________________________________________________________ LONG-TERM DEBT, NET 557,912 193,238 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Common stock, $.01 par value, 50,000,000 shares authorized; 9,421,875 and 9,386,145 shares issued and outstanding at September 30, 1995 and December 31, 1994 (less 1,492,779 shares held in treasury), respectively 93,861 93,861 Additional paid-in capital 9,488,606 9,488,606 Accumulated deficit (3,519,077) (3,953,979) Cumulative foreign currency translation adjustment 50,616 (54,171) ________________________________________________________________________ TOTAL STOCKHOLDERS' EQUITY 6,114,006 5,574,317 _______________________________________________________________________ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,020,929 $ 6,458,662 _______________________________________________________________________
See accompanying notes to consolidated financial statements. 4 BIOPOOL INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three months ending Nine months ending September 30, September 30, 1995 1994 1995 1994 _________________________________________________________________________ SALES $ 1,659,511 $1,363,385 $ 4,977,749 $4,058,124 _______________________________________________________________________ COSTS AND EXPENSES Cost of sales 828,424 659,268 2,434,455 1,799,738 Selling, general, and administrative 787,066 547,316 1,881,275 1,617,988 Research and devel- opment 37,736 17,354 159,701 89,309 ________________________________________________________________________ TOTAL COSTS AND EXPENSES 1,653,226 1,223,938 4,475,431 3,507,035 _______________________________________________________________________ OPERATING INCOME 6,285 139,447 502,318 551,089 _______________________________________________________________________ OTHER INCOME (EXPENSE) Interest income 21,231 15,389 61,433 41,129 Interest expense (20,461) (3,724) (37,444) (38,777) Gain (loss) on dis- posal of assets 999 --- (346) 26,518 Other 30,458 14,996 40,254 28,224 ________________________________________________________________________ TOTAL OTHER INCOME (EXPENSE) 32,227 26,661 63,897 57,094 ________________________________________________________________________ INCOME BEFORE TAXES 38,512 166,108 566,215 608,183 INCOME TAXES 40,972 6,737 131,313 58,985 _______________________________________________________________________ NET INCOME (LOSS) $ (2,460) $ 159,371 $ 434,902 $ 549,198 _________________________________________________________________________ ________________________________________________________________________ NET INCOME PER SHARE $ --- $ .02 $ .06 $ .07 _______________________________________________________________________ _______________________________________________________________________
5 BIOPOOL INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine months ended September 30, 1995 1994 ___________________________________________________________________________ CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 434,902 $ 549,198 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 328,699 235,700 (Gain) loss on disposal of assets 346 (26,518) Changes in operating assets and liabilities: Accounts receivable (251,468) (255,347) Inventories (429,901) (22,795) Prepaid expenses and other assets (200,966) (113,704) Refundable income taxes (58,249) 18,089 Accounts payable 38,504 (11,265) Accrued expenses 532,749 (100,534) Income taxes payable (9,878) 42,824 Amount due to officer (10,634) (1,859) ___________________________________________________________________________ CASH PROVIDED BY OPERATING ACTIVITIES 374,104 313,789 ___________________________________________________________________________ CASH FLOWS FROM INVESTING ACTIVITIES Additions to patent application costs (17,861) (51,985) Additions to property and equipment (854,295) (453,791) Proceeds from disposal of assets 2,701 31,598 Other assets (244,024) 17,028 ___________________________________________________________________________ CASH USED IN INVESTING ACTIVITIES (1,113,479) (457,150) ___________________________________________________________________________ CASH FLOWS FROM FINANCING ACTIVITIES Short-term borrowings 26,087 90,330 Repayment of long-term debt (74,992) (473,803) Issuance of long-term debt 520,742 227,100 Issuance of common stock --- 7,600 ___________________________________________________________________________ CASH PROVIDED BY FINANCING ACTIVITIES 471,837 (148,773) Effect of exchange rates 104,787 107,035 ___________________________________________________________________________ NET INCREASE (DECREASE) IN CASH (162,751) (185,099) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,841,475 1,707,141 ___________________________________________________________________________ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,678,724 $ 1,522,042 ___________________________________________________________________________
6 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-Q 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 nine-month period ended September 30, 1995 is not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1994. The balance sheet at December 31, 1994 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. 2. INVENTORIES Inventories consist of the following:
September 30, December 31, 1995 1994 Raw materials $ 602,017 $ 448,318 Work in process 830,905 643,813 Finished products 525,675 436,565 _____________ ____________ $ 1,958,597 $ 1,528,696 _____________ ____________ _____________ ____________
3. NET INCOME PER SHARE The net income per common share is based on the average number of common shares outstanding during each year (1995 - 7,897,336; 1994 - 7,871,144). The exercise of outstanding options would have an antidilutive effect on earnings per share. 4. RECLASSIFICATIONS Certain 1994 amounts have been reclassified to conform with the 1995 presentation. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales increased by $296,126, or 22%, to $1,659,511 for the three-month period ended September 30, 1995 and increased by $919,625, or 23%, to $4,977,749 for the nine months ended September 30, 1995, compared to the corresponding periods in 1994. Sales increased generally throughout all product areas and included enhanced sales to certain key OEM accounts. During the nine-month period ended September 30, 1995, one customer accounted for 11% of sales, and, for the three-month period ended September 30, 1995, two customers accounted for 23% of sales. Cost of sales, as a percent of sales, increased by 5%, from 44% to 49%, for the nine-month period ended September 30, 1995 compared to the corresponding period in 1994. This increase was due primarily to a shift in the product mix sold during the period from slightly lower cost products to slightly higher cost products and does not, in the opinion of management, reflect a significant trend toward higher cost of sales. Selling, general and administrative expenses ("SG&A"), increased approximately $263,000, or 16%, over the corresponding nine-month period in 1994. This increase is the result of dramatically increased professional fees incurred by the Company in connection with its litigation with Medical Analysis Systems, Inc. (see "LEGAL PROCEEDINGS"). The case is currently scheduled for trial on November 20, 1995; consequently, management expects to cease incurring such expenses prior to the end of the fourth quarter. The Company is currently recording its legal fees in connection with the litigation net of expected insurance reimbursement. Through September 30, 1995, the Company has recorded legal expenses of $230,000, which amount is net of approximately $371,000 in insurance proceeds actually received or expected to be received from the Company's general liability insurance carrier, Golden Eagle Insurance Co. The Company has also tendered a claim under its D & O insurance policy, which management believes may result in further insurance reimbursement. Golden Eagle is currently reimbursing legal expenses under a reservation of its rights, and has filed an action for declaratory relief against the Company asserting that it is not liable to defend the Company under its insurance policy. Although management believes that Golden Eagle is obligated to pay all of its legal expenses under the policy (which include amounts in excess of those which Golden Eagle is currently paying), the outcome of the declaratory relief action cannot be ascertained at this time. The Company incurred a minor loss of $2,460 in the third quarter of 1995 versus a profit of $159,371 in the same period in 1994, and net income decreased 21%, from $549,198 to $434,902, for the corresponding nine- month periods ended September 30, 1994 and 1995, respectively. This was largely due to the significant professional fees noted above. Had the 8 Company not incurred the expenses associated with the litigation, it would have had net income for the three-month period of $192,000. During the nine-month period ended September 30, 1995, the Company received approval from the U.S. FDA, by way of 510(k) Pre-market Notification, to market eight new products; namely, a diagnostic kit for the detection of von Willebrands disease by electroimmunodiffusion, an alpha-2-antiplasmin test kit, a multi-analyte drugs-of-abuse control, and five new clinical chemistry reagents. LIQUIDITY AND SOURCES OF CAPITAL At September 30, 1995, the Company had cash and cash equivalents of approximately $1,679,000 and unused lines of credit of approximately $676,000. Cash flows from operating activities were $374,104 for the nine months ended September 30, 1995, an increase of approximately $60,315, or 19%, over the same period in 1994. This increase was primarily due to an increase in accrued expenses offset by an increase in inventories. In addition, the Company expects to incur significant additional professional fees in the fourth quarter as the lawsuit proceeds to trial. The Company believes that its current capital resources, including existing cash and access to available lines of credit together with funds generated from operations, should be sufficient to meet the Company's operating requirements through the remainder of 1995. 9 PART II ITEM 1. LEGAL PROCEEDINGS On November 30, 1994, a complaint was filed in Ventura County Superior Court against the Company and two of its employees by Medical Analysis Systems, Inc., alleging misappropriation of certain trade secrets, unfair competition, interference with prospective economic advantage and other tort- and contract-based claims. On January 4, 1995, the Company filed a cross complaint in the action alleging defamation, unfair competition and interference with economic advantage. The lawsuit is currently scheduled to go to trial in November 1995. Although the ultimate outcome of this suit cannot be ascertained at this time and liabilities of indeterminate amounts may be imposed upon the Company, it is the opinion of management, based on information currently available, that the allegations are without merit and that the resolution of this suit will not have a material adverse effect on the consolidated financial position, results of operations, or cash flows of the Company. On June 22, 1995, a complaint was filed in Ventura County Superior Court against the Company by Golden Eagle Insurance Co. for declaratory relief as to its rights under the Company's general liability insurance policy with respect to the Medical Analysis Systems, Inc., litigation, and for reimbursement of all defense costs paid by Golden Eagle in connection with that action to date. The outcome of this action cannot be ascertained at this time. In the event that the Company is required to repay the costs of defense to date, it will likely be required to record additional SG&A expense, and the impact on the Company's consolidated financial position and results of operation could be material. 10 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: November 7, 1995 BIOPOOL INTERNATIONAL, INC. ___________________ ___________________________ (Registrant) Michael D. Bick, Ph.D. ___________________________ Michael D. Bick, Ph.D. Chief Executive Officer and Chairman of the Board Jeffrey C. Hass ___________________________ Jeffrey C. Hass Secretary and Director of Finance 11 -----END PRIVACY-ENHANCED MESSAGE-----