-----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, FOnotqq2jqWFtdfRjFff0AVZD+zsb49SqDsGG5LFeBB4KSYraJgg1gBujK3ZbF5F ONYMB2jnU0w0on+9iEMoOw== 0000897101-00-000386.txt : 20000417 0000897101-00-000386.hdr.sgml : 20000417 ACCESSION NUMBER: 0000897101-00-000386 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000229 FILED AS OF DATE: 20000414 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CELOX LABORATORIES INC CENTRAL INDEX KEY: 0000883720 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 363384240 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-19866 FILM NUMBER: 601688 BUSINESS ADDRESS: STREET 1: 1311 HELMO AVE CITY: ST PAUL STATE: MN ZIP: 55128 BUSINESS PHONE: 6127301500 MAIL ADDRESS: STREET 1: 1311 HELMO AVE CITY: ST PAUL STATE: MN ZIP: 55128 FORMER COMPANY: FORMER CONFORMED NAME: CELOX CORPORATION DATE OF NAME CHANGE: 19930328 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (X) Quarterly report under Section 13 of 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended FEBRUARY 29, 2000 or ----------------- ( ) Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _______________ to _______________. Commission file number 0-19866 ---------------- CELOX LABORATORIES, INC. (Exact name of small business issuer as specified in its charter) MINNESOTA 36-3384240 - ---------------------------------- -------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1311 HELMO AVENUE, SAINT PAUL, MINNESOTA 55128 - -------------------------------------------------- ------------ (Address of principal executive offices) (Zip Code) Issuers telephone number, including area code: (651) 730-1500 Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the past 12 months (or for such shorter periods that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ State the number of shares outstanding of each the issuer's classes of common equity, as of the latest practicable date. THE NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE, OUTSTANDING ON APRIL 1, 2000 WAS 3,563,169. Transitional small business format disclosure: Yes _____ No __X__ 1 Table of Contents CELOX LABORATORIES, INC. Report on Form 10-QSB for fiscal quarter ended February 29, 2000 PART I -- FINANCIAL INFORMATION Page ---- ITEM 1. Financial Statements Balance Sheet as of August 31, 1999 and February 29, 2000 3 Statement of Operations -- Three months ended February 29, 2000 and February 28, 1999, and six months ended February 29, 2000 and February 28, 1999 5 Statement of Changes in Shareholders' Equity for the year ended August 31, 1999 and the six months ended February 29, 2000 6 Statement of Cash Flows -- Six months ended February 29, 2000 and February 28, 1999 7 Notes to Financial Statements 8 ITEM 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations 9 PART II -- OTHER INFORMATION 14 2 PART I -- FINANCIAL INFORMATION ITEM 1 -- FINANCIAL STATEMENTS CELOX LABORATORIES, INC. BALANCE SHEET February 29, August 31, ASSETS 2000 1999 ------------ ------------ (Unaudited) (Audited) CURRENT ASSETS Cash and cash equivalents $ 104,834 $ 150,824 Certificates of deposit 444,270 378,514 Trade receivables 17,303 20,653 Officer note receivable 9,124 9,124 Accrued interest receivable 5,725 4,218 Inventories 53,444 57,906 Prepaid expenses 2,416 1,583 ------------ ------------ Total current assets 637,116 622,822 ------------ ------------ EQUIPMENT AND LEASEHOLD IMPROVEMENTS Laboratory and production equipment 225,242 219,724 Office furniture and equipment 93,359 93,359 Leasehold improvements 138,426 138,426 ------------ ------------ 457,027 451,509 Less accumulated depreciation (337,808) (321,410) ------------ ------------ 119,219 130,099 OTHER ASSETS Patents, net 53,605 55,356 ------------ ------------ TOTAL ASSETS $ 809,940 $ 808,277 ============ ============ See Notes to Financial Statements. 3 CELOX LABORATORIES, INC. BALANCE SHEET February 29, August 31, LIABILITIES AND SHAREHOLDERS' EQUITY 2000 1999 ------------ ------------ (Unaudited) (Audited) CURRENT LIABILITIES Accounts payable $ 6,288 $ 12,828 Accrued liabilities 35,825 28,066 Bank note payable - current 74,856 75,745 ------------ ------------ Total current liabilities 116,969 116,639 ------------ ------------ SHAREHOLDERS' EQUITY Common stock 31,382 29,092 Additional paid-in capital 5,485,346 5,312,486 ------------ ------------ 5,516,728 5,341,578 Accumulated deficit (4,823,757) (4,649,940) ------------ ------------ Total shareholders' equity 692,971 691,638 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 809,940 $ 808,277 ============ ============ See Notes to Financial Statements. 4 CELOX LABORATORIES, INC. STATEMENT OF OPERATIONS (Unaudited)
- --------------------------------------------------------------------------------------------- Three months ended Six months ended February 29, February 28, February 29, February 28, 2000 1999 2000 1999 - --------------------------------------------------------------------------------------------- REVENUES Net sales $ 42,442 $ 43,809 $ 94,817 $ 92,350 Cost of products sold 18,488 20,104 37,881 42,501 - --------------------------------------------------------------------------------------------- GROSS MARGIN 23,954 23,705 56,936 49,849 - --------------------------------------------------------------------------------------------- OPERATING EXPENSES Research and development 36,093 47,673 71,948 93,091 Marketing and sales 23,336 29,604 47,266 54,247 Administration 50,119 50,041 118,830 105,961 - --------------------------------------------------------------------------------------------- Total operating expenses 109,548 127,318 238,044 253,299 OPERATING LOSS (85,594) (103,613) (181,108) (203,450) OTHER INCOME (EXPENSE) Interest and investment income 4,175 7,572 9,174 16,555 Other income 0 150 350 8,054 Interest expense (1,275) (1,156) (2,233) (2,339) - --------------------------------------------------------------------------------------------- Total other income, net 2,900 6,566 7,291 22,270 NET LOSS $ (82,694) $ (97,047) $ (173,817) $ (181,180) ============================================================================================= BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.03) $ (0.04) $ (0.06) $ (0.07) - --------------------------------------------------------------------------------------------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 2,950,279 2,742,447 2,929,724 2,742,307 =============================================================================================
See Notes to Financial Statements 5 CELOX LABORATORIES, INC. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
Common Stock Additional ---------------------- Paid-in Accumulated Shares Amount Capital Deficit Total - ---------------------------------------------------------------------------------------------------------------------- BALANCE AT AUGUST 31, 1997 2,742,169 $27,422 $5,251,756 $(3,983,371) $1,295,807 Options exercised 2,000 20 2,980 3,000 Net loss for the year (302,604) (302,604) - ---------------------------------------------------------------------------------------------------------------------- BALANCE AT AUGUST 31, 1998 2,744,169 $27,442 $5,254,736 $(4,285,975) $996,203 Shares issued in private placement 165,000 1,650 57,750 59,400 Net loss for the year (363,965) (363,965) - ---------------------------------------------------------------------------------------------------------------------- BALANCE AT AUGUST 31, 1999 2,909,169 $29,092 $5,312,486 $(4,649,940) $691,638 Shares issued in private placement 229,000 2,290 172,860 175,150 Net loss for the period (173,817) (173,817) - --------------------------------------------------------------------------------------------------------------------- BALANCE AT FEBRUARY 29, 2000 3,138,169 $31,382 $5,485,346 $(4,823,757) $692,971
See Notes to Financial Statements. 6 CELOX LABORATORIES, INC. STATEMENT OF CASH FLOWS (Unaudited)
- -------------------------------------------------------------------------------------------------------- Six months ended February 29 February 28 2000 1999 - -------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss for the period $(173,817) $(181,180) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 18,149 24,896 Changes in assets and liabilities: (Increase) decrease in: Accounts receivable 3,350 (5,428) Accrued interest receivable (1,507) (2,376) Inventories 4,462 6,780 Prepaid expenses (833) (1,128) Officer note receivable 0 (10,466) Increase (decrease) in: Accounts payable (6,540) (1,702) Accrued liabilities 7,759 3,127 - ------------------------------------------------------------------------------------------------------ Net cash used in operating activities (148,977) (167,477) - ------------------------------------------------------------------------------------------------------ CASH FLOWS FROM INVESTING ACTIVITIES: Maturity (Purchase) of bank certificates of deposit, net (65,756) 94,563 Capital expenditures (5,518) 0 - ------------------------------------------------------------------------------------------------------ Net cash from (used for) investing activities (71,274) 94,563 - ------------------------------------------------------------------------------------------------------ CASH FLOWS FROM FINANCING Issuance of common stock 175,150 57,800 Principal payments on bank note payable (889) (4,161) - ------------------------------------------------------------------------------------------------------ Net cash From financing activities 174,261 53,639 Net decrease in cash and cash equivalents (45,990) (19,275) CASH AND CASH EQUIVALENTS: Beginning of period 150,824 350,120 - ------------------------------------------------------------------------------------------------------ End of period $ 104,834 $ 330,845 ======================================================================================================
See Notes to Financial Statements. 7 CELOX LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 29, 2000 NOTE A - BASIS OF PRESENTATION The accompanying 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 Item 310 of Regulation S-B. 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 only of normal recurring adjustments) considered necessary for a fair presentation have been included. The organization and business of the Company, accounting policies followed by the Company and other information are contained in the notes to the Company's financial statements filed as part of the Company's August 31, 1999 Form 10-KSB. This quarterly report should be read in connection with such annual report. NOTE B - CASH AND CASH EQUIVALENTS For purposes of reporting the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. NOTE C - SHORT-TERM INVESTMENTS As of February 29, 2000 the Company had investments of $444,270 in certificates of deposit. Certificates of deposit are made only with the highest rated banks. The Company also utilizes a money market fund, which is restricted by its charter to Tier 1 instruments, for a portion of its investments. At times throughout the year, the Company's cash, cash equivalents and certificates of deposit in financial institutions may exceed FDIC insurance limits. The Company has not experienced any losses in such accounts. NOTE D - NOTES PAYABLE BANK During April, 1997 the Company borrowed $100,000 from a local bank with the proceeds used for financing a portion of the tenant improvements in the Company's new facility. In February, 2000 the loan was renegotiated with a different bank. The new loan is secured by a certificate of deposit at this bank. The interest rate for this loan, currently 5.5%, is tied to the certificate of deposit rate. NOTE E - LOSS PER COMMON SHARE Basic loss per share is computed based upon the weighted average number of common shares outstanding during the period. Stock options for 292,000 shares were not included in the computation of diluted loss per share as the results were antidilutive. 8 ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION a. BACKGROUND AND PRODUCTS Celox Laboratories, Inc. ("Celox" or the "Company") is a cell technology company formed in 1985 that researches, develops, manufactures and markets cell biology products used in the propagation of cells derived from mammals, including humans, and other species. These specialized cell growth products are used primarily in academic, pharmaceutical, diagnostic and other commercial laboratories to improve the growth condition, productivity and quality of cell-derived medical and other biological products such as vaccines, monoclonal antibodies, interferons and human growth factor. The Company focuses primarily on solving the fundamental problems associated in culturing cells with the use of serum, which is derived from the whole blood of animals and humans. The Company's research activities have resulted in proprietary technology which has been used to commercialize its non-serum growth media, cell freezing solutions and other cell biology products. The Company markets over 25 different products. The Company's proprietary products consist of six different serum-free supplements: TCM(TM), TM-235(TM), TCH(TM), Nephrigen(TM), HemaPro(TM) and VaxMax(TM)and two cell freezing solutions, Cellvation(TM) and a newly introduced product, pZerve(TM). VaxMax(TM), introduced in September of 1993, was developed specifically for use in the production of veterinary vaccines. Nephrigen(TM) was introduced in fiscal 1998 and is a serum-free growth medium developed specifically for the culturing of Human Embryonic Kidney (293) cells. As part of the Nephrigen(TM) system, the Company also introduced a non-enzymatic dissociation solution that is used instead of an enzyme such as trypsin. HemaPro(TM) was also introduced in fiscal 1998 and is a low protein, serum-free medium for clonogenic assays or EX VIVO expansion of human progenitor cells. The Company intends to obtain IN VITRO diagnostic status for HemaPro(TM). pZerve(TM) was introduced in 1999 and is used primarily for cryopreserving human cells. pZerve(TM) is used as a research product only, it is not for human use. An additional proposed clinical product, ViaStem(TM), has completed preclinical testing. This product was developed to improve the preservation of critical cells (e.g., stem cells), which are required for bone marrow transplantation. The Company has received its first Drug Master File classification from the Food and Drug Administration (FDA) for TCM(TM). This classification will expedite the FDA approval process for customers who want to use the Company's TCM(TM) product in the manufacture of drugs or drug substances for human use. The Company is in the process of gaining similar status for several of its other proprietary products. The Company also manufactures eleven basal media formulations, a series of buffered saline solutions, other cell biology reagents, and a variety of custom formulations. In February, 1999 the Company announced the formation of Protide Pharmaceuticals, Inc., (Protide), a wholly owned subsidiary. Celox owns four million shares of Protide. Protide was formed in connection with the further development of ViaStem(TM) and other clinically related cell therapy and transfusion products. 9 b. VIASTEM(TM) In March 1995, the Company filed a patent application for ViaStem(TM) with the U.S. Patent and Trademark Office. The Company received the U.S. Patent in early December 1996. This patent provides protection of the Company's ViaStem(TM) technology through March of 2015. A second U.S. Patent was received in August, 1998. This second patent broadened the patented uses of ViaStem(TM) in bone marrow transplantation and related therapies. The Company has also filed the documents needed for an International Patent Application as required by the Patent Cooperation Treaty. In October, 1998 the Company received notice from the New Zealand and Australia Patent Office that a patent on ViaStem(TM) had been granted by each of the respective countries. In April, 1999 the Company received notice from the Russian Patent Office that a patent had been granted. Initial reports from other countries that have reviewed the International Patent Application have been positive. Due to the unique nature of ViaStem(TM)and its applications, the Company pursued the patent process for this product. On March 31, 2000, Protide Pharmaceuticals, Inc. (the wholly owned subsidiary of Celox) entered into an agreement with Fairview-University Medical Center (FUMC), Minneapolis, MN. FUMC will provide collecting, processing and assaying of human peripheral blood stem cells as part of Protide's clinical investigation of ViaStem(TM). c. DISTRIBUTION/MARKETING The Company continues to sell its products on a direct basis to customers around the world. In addition the Company has formed the following distribution avenues: The Company has a non-exclusive world-wide distribution agreement with ICN Pharmaceuticals, Inc. (NYSE:ICN), Costa Mesa, CA. Under the agreement, ICN is marketing Celox' TCM(TM), TCH(TM), TM-235(TM) serum replacement products as well as Cellvation(TM). The Company has also entered into an agreement with ICN to custom manufacture certain of the Company's basal media and balanced salt solutions to ICN for worldwide distribution. ICN manufactures and markets a broad range of prescription and over-the-counter pharmaceuticals, medical diagnostic products and biotechnology research products in North and Latin America, Eastern and Western Europe and the Pacific Rim countries. In 1997, the Company began providing its proprietary products to Sigma Chemical Company (NASDAQ:SIAL), St. Louis, MO. under a private label distribution agreement. In 1997, the Company entered into a non-exclusive distribution agreement with TaKaRa Shuzo Co., Ltd., Biomedical Group, Kyoto, Japan. Under the agreement, TaKaRa will initially market Celox' proprietary product Cellvation(TM). TaKaRa's Biomedical Group leads the industry in several areas owing to the international scope of its research operations which span from the People's Republic of China to North America and Europe. TaKaRa will market Cellvation(TM) in Japan, Taiwan, Korea and People's Republic of China. The Company also has distribution of its products in Japan through Funakoshi Co., LTD, a well established Japanese distributor. In March, 2000, the Company entered into an agreement with SciQuest.com, Inc. (NASDAQ:SQST) to sell its products online. SciQuest.com, Inc. is a leading business-to-business e-marketplace for scientific products used by pharmaceutical, clinical, biotechnology, chemical, industrial and educational organizations worldwide. 10 YEAR 2000 ISSUES Many existing computer programs use only two digits to identify a year in the date field. These programs were designed and developed without considering the impact of the change in the century. If not corrected, many computer applications could fail or create erroneous results by or at the Year 2000. The Year 2000 issue affects virtually all companies and organizations. At this time, no material problems have been encountered due to the Year 2000 issue. RESULTS OF OPERATIONS During the quarter ended February 29, 2000, the Company had net sales of $42,442 which was a decrease of $1,367 or 3% from $43,809 reported in the same quarter for the prior year. For the six month period ending February 29, 2000 net sales were $94,817 compared to $92,350 for the same quarter in the previous fiscal year. The small variations from the prior year for both the three and six month reporting periods is attributable to the amount and timing of custom orders as well as orders received from distributors and customers. The Company had a net loss of $82,694 for the quarter ended February 29, 2000 compared to a net loss of $97,047 for the same period in the previous year. For the six months ended February 29, 2000 a net loss of $173,817 was incurred compared to a net loss of $181,180 for the six months ended February 28, 1999. On a per share basis, the loss for the current quarter equaled 3 cents versus a 4 cent loss in the comparable period in fiscal 1999. For the six month reporting periods, a per share loss of 6 cents was incurred in fiscal 2000 compared to a 7 cent loss in the preceding fiscal year. The cost of products sold was 44% of net sales for the three months ended February 29, 2000 as compared to 46% of net sales for the three months ended February 28, 1999. The cost of products sold for the six months ended February 29, 2000 was 40% compared to 46% for the comparable six month period in fiscal 1999. The decrease between the reporting periods for both the three and sixth months ended February 29, 2000 as compared to the prior fiscal year results from strict cost controls over labor, raw materials and other production costs. The mix of products sold also impacts the cost of sales comparisons. An operating loss of $85,594 was generated for the quarter ended February 29, 2000 compared to an operating loss of $103,613 for the same period in the previous fiscal year. An operating loss of $181,108 was generated for the six months ended February 29, 2000 compared to an operating loss of $203,450 for the six months ended February 28, 1999. The decrease between years for the three month reporting periods resulted from a decrease in research and development expense and marketing and sales expenses as compared to the previous fiscal year. For the six month reporting periods, the decrease resulted from lower research and development expenses and lower marketing and sales expenses offset by increased administrative expenses. Research and development expenses will vary based upon the status of preclinical and clinical trials for ViaStem(TM). The Company received interest and investment income of $4,175 during the quarter ended February 29, 2000 as compared to $7,572 in the prior fiscal year. For the six months ended February 29, 2000 the Company received $9,174 as compared to $16,555 in the six months ended February 28, 1999. Investment income is derived primarily from the investment of the proceeds of the Company's March 1992 initial public offering and subsequent private placement proceeds. The decrease in investment income during both the three and six month reporting periods as compared to the previous fiscal year results from reduced investment balances as the Company uses capital in its operations, as well as lower effective interest rates received on bank certificates of deposit. 11 Operating expenses decreased $17,770 (14%) to $109,548 from $127,318 for the quarter ended February 29, 2000 as compared to the prior fiscal year. Operating expenses decreased $15,255 (6%) to $238,044 from $253,299 for the six months ended February 29, 2000 as compared to the previous fiscal year. The decrease for the three month reporting period results from lower research and development expenses and marketing and sales expenses as compared to the prior fiscal year. For the sixth month reporting period the decrease results from lower research and development expenses and marketing and sales expenses, partially offset by higher administrative costs Research and development costs decreased by $11,580 (24%) to $36,093 from $47,673 in the current quarter as compared to the previous fiscal year. Research and development costs decreased by $21,143 (23%) to $71,948 in the six months ended February 29, 2000 from $93,091 for the comparable reporting period in the previous fiscal year. The decrease for both the three and six month reporting periods results from the timing of expenditures in the areas of salaries and wages, professional fees and preclinical testing incurred in connection with the ViaStem(TM) product. The Company expects the costs of research and development to fluctuate based on the status of preclinical and clinical trials for ViaStem(TM). Marketing expenses decreased by $6,268 (21%) to $23,336 from $29,604 for the quarter ended February 29, 2000 as compared to the previous year. For the sixth months ended February 29, 2000 marketing expenses decreased by $6,981 (13%) to $47,266 from $54,247 in the previous fiscal year. The decrease for both the three and six month reporting periods is due to expenses incurred for a marketing study in the comparable reporting periods in the previous fiscal year as well as the timing for promotional expenditures. The Company expects that marketing and sales expenses could trend higher during subsequent quarters as new studies, programs and advertising materials are developed. Administrative expenses increased by $78 for the quarter ended February 29, 2000 compared to the previous fiscal year to $50,119 from $50,041. Administrative expenses increase by $12,869 (12%) for the six months ended February 29, 2000 to $118,830 from $105,961 for the six months ended February 28, 1999. The increase for the six month reporting period is due to the timing of legal expenditures connected with the introduction of new products and certain matters related to ViaStem(TM) as well as higher operating expenses due to fully assessed real estate taxes. LIQUIDITY AND CAPITAL RESOURCES Capital resources on hand at February 29, 2000 include cash and short-term investments of $549,104 and net working capital of $520,147. This represents an increase of $19,766 (4%) in cash and short-term investments and an increase of $13,964 (3%) in net working capital as compared to August 31, 1999. The Company is leasing approximately 9,500 square feet of office, laboratory and warehouse space in St. Paul, MN under a seven year lease. The Company moved into the new facility during March, 1997. As partial payment for tenant improvements in the new facility, the Company borrowed $100,000 from a local bank. In February, 2000 the loan was renegotiated with a different bank. The new loan is secured by a certificate of deposit at this bank. The interest rate for this loan, currently 5.5%, is tied to the certificate of deposit rate. The loan is for a one year term with a maturity in February, 2001. The balance of the tenant improvements over this amount was paid with Company funds. 12 During fiscal 1999 the Company raised $59,400 in additional capital by selling 55,000 units at $1.00 per unit to five accredited investors through a private placement. Each unit consisted of one share of common stock and a warrant to purchase an additional two shares of common stock at an exercise price of $0.04 per share. The units were sold at a premium to the share price on the OTC Bulletin Board at the time of the placement. During the second quarter of fiscal 2000 the Company raised $175,150 in additional capital by selling 145,000 units at $1.15 per unit to five investors through a private placement. Each unit consisted of one share of common stock and a warrant to purchase an additional two shares of common stock at an exercise price of $0.10 per share. Additionally, funds in the amount of $211,750 were raised after the end of the quarter by selling units at $1.15 per unit and common stock at $1.40 per share to other investors. The additional funds raised will be primarily used for advancing ViaStem(TM) through the necessary testing before FDA approval can be obtained. The Company intends to pursue additional financing, subject to prevailing market conditions. There is no guarantee however, that the Company will be able to successfully raise an adequate amount of additional funds. In addition, there can be no assurance that the Company will be able to obtain the necessary FDA approvals for ViaStem(TM). The Company anticipates spending approximately $50,000 during fiscal 2000 on capital expenditures. Through February 29, 2000 the Company has made capital expenditures in the amount of $5,518. The majority of the planned expenditures will be used to fund additional sales, research and development, manufacturing growth, as well as computer upgrades. The Company believes that its capital resources on hand at February 29, 2000 together with revenues from product sales, will be sufficient to meet its cash requirements for the fiscal year. FORWARD LOOKING INFORMATION Information contained in this Form 10-QSB contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by the use of forward-looking terminology such as "may", "will", "expect", "plan", "anticipate", "estimate" or "continue" or the negative thereof or other variations thereon or comparable terminology. There are certain important factors that could cause results to differ materially from those anticipated by some of these forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. The factors, among others, that could cause actual results to differ materially include the Company's ability to obtain FDA approval for its clinical products, the ability of the Company to raise additional capital and the ability to execute its business plan. 13 PART II -- OTHER INFORMATION ITEM I. -- LEGAL PROCEEDINGS The Company is not presently involved in any material legal proceedings. ITEM 2. -- CHANGES IN SECURITIES None ITEM 3. -- DEFAULTS UPON SENIOR SECURITIES None ITEM 4. -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS In December, 1999 the Company solicited the vote of shareholders to amend the Articles of Incorporation to increase the corporation's authorized capital stock from four million (4,000,000) to forty million (40,000,000), par value $0.01 per share, by means of a Written Action of the Shareholders of Celox Laboratories, Inc. in Lieu of a Special Meeting. A majority of shareholders approved this resolution in lieu of a special meeting. ITEM 5. -- OTHER INFORMATION None ITEM 6. -- (A) EXHIBITS 27 Financial Data Schedule (B) REPORTS ON FORM 8-K None SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CELOX LABORATORIES, INC. Dated: April 12, 2000 By: /S/ Milo R. Polovina ------------------------------ Milo R. Polovina, President & CEO (Principal Financial Officer) 14 EX-27 2 ARTICLE 5 - FINANCIAL DATA SCHEDULE
5 6-MOS AUG-31-2000 FEB-29-2000 104,834 444,270 17,303 0 53,444 637,116 457,027 337,808 809,940 116,969 0 31,382 0 0 692,971 809,940 94,817 94,817 37,881 85,147 190,778 0 2,233 (173,817) 0 (173,817) 0 0 0 (173,817) (0.06) (0.06)
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