-----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, GY+6GxaXzPYg3ElbbSRq8UuQQZ9ro89XFbeWnt4X2l4+5QwQR0MDrCghqA46qE5G hfsR6Hhm+Z45knEOMzOlhQ== 0000950130-96-004148.txt : 19961101 0000950130-96-004148.hdr.sgml : 19961101 ACCESSION NUMBER: 0000950130-96-004148 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19961031 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEUROMEDICAL SYSTEMS INC CENTRAL INDEX KEY: 0000866933 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 133526980 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-97722 FILM NUMBER: 96651379 BUSINESS ADDRESS: STREET 1: TWO EXECUTIVE BLVD STE 306 CITY: SUFFERN STATE: NY ZIP: 10901 BUSINESS PHONE: 9143683600 MAIL ADDRESS: STREET 1: TWO EXECUTIVE BLVD STREET 2: SUITE 306 CITY: SUFFERN STATE: NY ZIP: 10901-4164 424B3 1 PROSPECTUS SUPPLEMENT Filed pursuant to Rule 424(b)(3) Registration Statement No.: 33-97722 Prospectus Supplement No. 1, dated October 31, 1996 (To the Prospectus dated September 30, 1996) NEUROMEDICAL SYSTEMS, INC. Common Stock Par Value $.0001 Per Share FDA Supplement Approval - ----------------------- On October 24, 1996 the Company received FDA approval of a supplement to its original pre-market approval application which permits the Company to promote PAPNET(R) testing as a substitute for the random portion of the 10 percent manual quality control rescreening of cervical smears as required by federal regulations. See "Business--Regulation of Cervical Pap Smear Analysis." In addition, the Company received an additional claim for the performance of the PAPNET(R) system. The Company may now claim that PAPNET(R) testing of presumed negative Pap smears can be conservatively expected to identify at least 7.1 times more false negatives than routine manual reexamination of the same number of smears. This new clinical claim is in addition to the claims approved in November 1995. Third Quarter 1996 Results - -------------------------- On October 28, 1996, the Company reported the results for its third quarter ending September 30, 1996. Revenues for the third quarter were $1,286,000, an increase of 84% from $698,000 for the third quarter of 1995. Of such revenues, $1,234,000 represented per slide charges for the screening of Pap smears, and the balance of such revenues represented rental payments on PAPNET (R) Review Stations. The revenue increase over 1995 was due primarily to a significant increase in both unit volume and unit pricing in the United States market. The Company reported a net loss for the third quarter of 1996 of $9,588,000, or $.33 per share, compared to a net loss of $6,288,000, or $.37 per share (on a pro forma basis), for the third quarter of 1995. The increased net loss during the third quarter of 1996 was due primarily to the increase in marketing and sales expenses required to initiate the PAPNET (R) direct-to- consumer campaign. During the third quarter, the Company announced several initiatives intended to increase awareness of the PAPNET (R) test, including a co-promotion agreement with the Parke-Davis division of the Warner Lambert Company and an agreement with MagnaCare/MagnaHealth that it provide PAPNET (R) testing as a covered benefit with Pap smears when ordered through its physician network. For the nine month period ended September 30, 1996, revenues were $2,954,000, an increase of 67% from $1,765,000 during the corresponding period of 1995. The Company reported a net loss for the first nine months of 1996 of $23,813,000, or $.82 per share, compared to a net loss of $15,208,000, or $.90 per share (on a pro forma basis), for the corresponding period of 1995. As was the case for the third quarter, the increased net loss during 1996 for the nine months period was due primarily to an increase in marketing and sales expenses, including the cost of the PAPNET (R) Testing System direct-to-consumer campaign. The Company also increased its worldwide marketing and sales organization during the quarter to a total of 57 persons. During the third quarter, the Company increased the number of U.S. laboratories offering PAPNET (R) testing by 55, bringing the total number of U.S. facilities offering the test as of September 30, 1996 to 193. PAPNET (R) testing is now available nationwide through a network of local, regional and national laboratories throughout the United States. The Company also continued to expand its international laboratory distribution. PAPNET (R) testing is now available in 23 countries worldwide. By the end of the third quarter, PAPNET (R) testing was available through 44 laboratories in European countries and 10 laboratories were offering PAPNET (R) testing in Australia. In Asia, the Company continued to expand its business in Hong Kong, Taiwan and mainland China. During the third quarter, the Company received limited slide processing revenue from 27 laboratories in mainland China. Safe Harbor Statement - --------------------- Statements which are not historical facts, including statements about the Company's confidence and strategies and its expectations about new and existing products, technologies and opportunities, market growth, demand for and acceptance of new and existing products (including the PAPNET (R) Testing System) and returns on investments are forward-looking statements that involve risks and uncertainties. These include, but are not limited to, the Company's continuing negative operating cash flow, reliance on a single product, competition, dependence on key personnel, the impact on the Company of territorial license agreements, dependence on patents and proprietary technology, government regulation, limited marketing and sales history, the impact of third-party reimbursement decisions, the risk of litigation and other risks detailed in the Company's Securities and Exchange Commission filings, including its Annual Report on Form 10-K for the year ended 1995. NEUROMEDICAL SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, ------------- ------------- 1996 1995 ------------- ------------- (unaudited) ASSETS Cash and marketable securities $ 87,126,000 $ 114,143,000 Other current assets 4,227,000 1,601,000 Property, plant and equipment, net 15,256,000 11,216,000 Other assets 1,264,000 388,000 ---------------- -------------- Total Assets $ 107,873,000 $ 127,348,000 ================ ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 7,897,000 $ 6,631,000 Other liabilities 7,226,000 6,050,000 Stockholders' equity 92,750,000 114,667,000 Total Liabilities and ---------------- -------------- Stockholders' Equity $ 107,873,000 $ 127,348,000 ================ ==============
NEUROMEDICAL SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------------------- ------------------------------- 1996 1995 1996 1995 ----------------- -------------- -------------- -------------- REVENUES $ 1,286,000 $ 698,000 $ 2,954,000 $ 1,765,000 COSTS AND EXPENSES Costs of sales 2,085,000 1,741,000 5,709,000 4,635,000 Research and development 1,945,000 1,554,000 5,024,000 4,111,000 Marketing and sales 6,262,000 1,614,000 13,635,000 3,726,000 General and administrative 1,559,000 1,791,000 5,115,000 4,157,000 ----------------- -------------- -------------- -------------- Total Costs and Expenses 11,851,000 6,700,000 29,483,000 16,629,000 ----------------- -------------- -------------- -------------- Other income (expense), net 977,000 (286,000) 2,716,000 (344,000) ----------------- -------------- -------------- -------------- NET LOSS $ (9,588,000) $ (6,288,000) $ (23,813,000) $ (15,208,000) ================= ============== ============== ============== NET LOSS PER SHARE (1) $ (0.33) $ (0.37) $ (0.82) $ (0.90) ================= ============== ============== ============== WEIGHTED AVERAGE SHARES OUTSTANDING 29,450,000 16,978,000 29,117,000 16,863,000 ================= ============== ============== ==============
1) 1995 on a pro forma basis -----END PRIVACY-ENHANCED MESSAGE-----