-----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, Vu4FQhiLEwcE8QB4Gjt12Mfp/VaSbC5u8GgkhORip/4UrutOnEQ2Mkp/8g7uVOGu MbCrrZpN/G2XwNNi9QGZzg== 0000936392-97-000686.txt : 19970514 0000936392-97-000686.hdr.sgml : 19970514 ACCESSION NUMBER: 0000936392-97-000686 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLANET POLYMER TECHNOLOGIES INC CENTRAL INDEX KEY: 0000896861 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS, MATERIALS, SYNTH RESINS & NONVULCAN ELASTOMERS [2821] IRS NUMBER: 330502606 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-26804 FILM NUMBER: 97603033 BUSINESS ADDRESS: STREET 1: 9985 BUSINESS PARK WAY STE A CITY: SAN DIEGO STATE: CA ZIP: 92131 BUSINESS PHONE: 6195495130 MAIL ADDRESS: STREET 1: 9985 BUSINESSPARK AVE STREET 2: STE A CITY: SAN DIEGO STATE: CA ZIP: 92131 FORMER COMPANY: FORMER CONFORMED NAME: PLANET POLYMER TECHNOLOGY INC DATE OF NAME CHANGE: 19950511 10QSB 1 FORM 10QSB 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (MARK ONE) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For Quarterly Period Ended March 31, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Commission File Number: 0-26804 PLANET POLYMER TECHNOLOGIES, INC. ----------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) CALIFORNIA 33-0502606 ----------------------------------------------------------------------- (State or other jurisdiction of I.R.S. Employer Identification No. incorporation or organization) 9985 Businesspark Ave., Suite A, San Diego, California 92131 ----------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (619) 549-5130 ----------------------------------------------------------------------- (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 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. [ X ] YES [ ] NO Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: Class Outstanding at March 31, 1997 Common Stock, no par value 5,271,270 2 PLANET POLYMER TECHNOLOGIES, INC. FORM 10-QSB QUARTERLY REPORT QUARTER ENDED MARCH 31, 1997 INDEX
PAGE NO. -------- PART I - FINANCIAL INFORMATION Item 1 Consolidated Balance Sheet (Unaudited) March 31, 1997 2 Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, 1997 and 1996 3 Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, 1997 and 1996 4 Notes to Unaudited Consolidated Financial Statements 5 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 6 PART II - OTHER INFORMATION Item 1 Legal Proceedings 9 Item 2 Changes in Securities 9 Item 3 Defaults upon Senior Securities 9 Item 4 Submission of Matters to a Vote of Security Holders 9 Item 5 Other Information 9 Item 6 Exhibits and Reports on Form 8K 9 SIGNATURES 10
3 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS PLANET POLYMER TECHNOLOGIES, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEET MARCH 31, 1997 (UNAUDITED)
ASSETS Current assets: Cash and cash equivalents $ 1,256,133 Accounts receivable 588,138 Inventories 322,698 Prepaid expenses and other receivables 147,920 Deferred income taxes 13,913 ------------ Total current assets 2,328,802 Property and equipment, net 889,956 Goodwill, net 600,299 Patents and other, net 341,799 ------------ Total assets $ 4,160,856 ============ LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 246,019 Notes payable 306,390 ------------ Total current liabilities 552,409 Other liabilities 304,932 Deferred income taxes 14,334 ------------ Total liabilities 871,675 ------------ Shareholders' equity: Preferred Stock, no par value, 5,000,000 shares authorized, no shares outstanding -- Common Stock, no par value, 20,000,000 shares authorized, 5,271,270 shares issued & outstanding 10,774,079 Accumulated Deficit (7,484,898) ------------ Total shareholders' equity 3,289,181 ------------ Total liabilities and shareholders' equity $ 4,160,856 ============
The accompanying notes are an integral part of the consolidated financial statements. 2 4 PLANET POLYMER TECHNOLOGIES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended March 31, ----------------------------- 1997 1996 ----------- ----------- Development revenue $ 19,007 $ 23,270 Product Sales 871,855 671,524 ----------- ----------- Total revenue 890,862 694,794 Cost of sales 623,038 423,702 ----------- ----------- 267,824 271,092 ----------- ----------- Operating expenses: General and administrative 277,920 931,720 Marketing 186,352 328,464 Research and development 125,359 215,836 ----------- ----------- Total operating expenses 589,631 1,476,020 ----------- ----------- Loss from operations (321,807) (1,204,928) Other income, net 21,676 31,840 ----------- ----------- Loss before income taxes (300,131) (1,173,088) Income taxes 15,067 -- ----------- ----------- Net loss $ (315,198) $(1,173,088) =========== =========== Net loss per share $ (0.06) $ (0.22) =========== =========== Shares used in per share computations 5,271,270 5,260,664 =========== ===========
The accompany notes are an integral part of the consolidated financial statements. 3 5 PLANET POLYMER TECHNOLOGIES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 30, ----------------------------- 1997 1996 ----------- ----------- Cash flows from operating activities: Net loss $ (315,198) $(1,173,088) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 41,367 60,615 Compensation expense - non cash -- 592,370 Gain on disposal of assets (375) -- Change in assets and liabilities, net of effects of acquisition: Accounts receivable (14,752) (68,162) Inventories 46,877 (32,924) Prepaid expenses and other assets 3,871 5,518 Accounts payable and accrued expenses (117,939) (365,300) ----------- ----------- Net cash used by operating activities (356,149) (980,971) ----------- ----------- Cash flow from investing activities: Purchases of property and equipment (621) (30,817) Proceeds from the sale of property and equipment 3,000 -- Cost of patents, licenses and trademarks (4,260) (12,597) Acquisition of subsidiary, net of cash acquired -- (803,945) Sales (purchases) of investments, net -- (1,054,654) ----------- ----------- Net cash used by investing activities (1,881) (1,902,013) ----------- ----------- Cash flow from financing activities: Payments on note payable -- (10,417) Payments on short-term borrowings (26,229) (11,195) ----------- ----------- Net cash used by financing activities (26,229) (21,612) ----------- ----------- Net decrease in cash and cash equivalents (384,259) (2,904,596) Cash and cash equivalents at beginning of period 1,640,392 3,257,471 ----------- ----------- Cash and cash equivalents at end of period $ 1,256,133 $ 352,875 =========== =========== Supplemental disclosure of non-cash activity: Stock options granted to a consultant $ -- $ 592,370 Restricted Common Stock issued in connection with acquisition -- 508,069
The accompanying notes are an integral part of the consolidated financial statements. 4 6 PLANET POLYMER TECHNOLOGIES, INC. NOTES TO UNAUDITED FINANCIAL STATEMENTS 1. Basis of Presentation The accompanying unaudited financial statements of Planet Polymer Technologies, Inc. (the "Company" or "Planet") have been prepared in accordance with the interim reporting requirements of Form 10-QSB, pursuant to the rules and regulations of the Securities and Exchange Commission. 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 only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1997 are not necessarily indicative of results that may be expected for the year ending December 31, 1997. For additional information, refer to the Company's financial statements and notes thereto for the year ended December 31, 1996 contained in the Company's Form 10-KSB for the fiscal year ended December 31, 1996. 2. Recent Accounting Pronouncements In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement Accounting Standards No. 128 "Earnings per Share" ("SFAS No. 128"). SFAS No. 128 requires dual presentation of newly defined basic and diluted earnings per share on the face of the income statement for all entities with complex capital structures. The accounting standard is effective for fiscal years ending after December 15, 1997, including interim periods. The Company does not believe that the adoption of SFAS No. 128 will have a material impact on the computation of its earnings per share in future periods. 5 7 PART I - FINANCIAL INFORMATION ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PLANET POLYMER TECHNOLOGIES, INC. Except for the historical information contained herein, the discussions in this report contain forward looking statements that involve certain risks and uncertainties. The Company's actual results could differ materially from those discussed in this report. Factors that could cause or contribute to such differences include, but are not limited to, the development of new products, market acceptance of new products, general economic conditions and the availability of additional financing, as well as those discussed in the Company's Form 10-KSB for the fiscal year ended December 31, 1996 in "Item 1 - Description of Business," including the section therein entitled "Risk Factors," and "Item 6 - Management's Discussion and Analysis of Financial Condition and Results of Operations." Overview Planet Polymer Technologies, Inc. (the "Company" or "Planet") emerged from the development stage as a result of its acquisition of Deltco of Wisconsin, Inc., a Wisconsin corporation ("Deltco"), effective January 1, 1996. Prior to this acquisition, substantially all of the Company's resources had been devoted to the development and commercialization of its seven Enviroplastic technologies and products. Deltco is a manufacturer and reprocessor of thermoplastic scrap resins located in Ashland, Wisconsin. The Company maintains Deltco as a wholly owned subsidiary, and uses its plant, equipment and other physical property in the manner in which it was used prior to the acquisition. The Company plans to leverage its Enviroplastic technologies and sales and marketing expertise with Deltco's manufacturing experience. Research and development and marketing expenses are expected to increase significantly in the future as the Company's products are commercialized and continued efforts are focused on Deltco's resins. General and administrative expenses are not expected to increase significantly in the next three months. Planet has incurred operating losses since inception and had an accumulated deficit at March 31, 1997 of approximately $7.5 million. The Company expects to incur additional losses for the foreseeable future. Results of Operations Three months ended March 31, 1997 and 1996 The Company's revenues increased from approximately $695,000 during the three months ended March 31, 1996 to approximately $891,000 during the three months ended March 31, 1997. This increase primarily reflects increased sales volume at Deltco. The Company continued to focus on internally-funded, rather than customer-funded product development during the three months ended March 31, 1997. The Company will continue to participate in customer-funded development when appropriate, but believes internally-funded development is advantageous as to certain technologies and applications. 6 8 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) PLANET POLYMER TECHNOLOGIES, INC. Results of Operations, Continued General and administrative expenses decreased from approximately $932,000 during the three months ended March 31, 1996 to approximately $278,000 for the three months ended March 31, 1997. This decrease was primarily attributable to a $592,000 one time, non-cash compensation expense for the fair market value of options granted to an outside consultant during the three months ended March 31, 1996. These options values were later revised downward by approximately $114,000 during the three months ended June 30, 1996. In addition, during the three months ended March 31, 1996 the Company incurred certain costs associated with the acquisition of Deltco. The costs of outside services and the costs of general and administrative staff decreased during the three months ended March 31, 1997. Marketing expenses decreased from approximately $328,000 during the three months ended March 31, 1996 to approximately $186,000 for the three months ended March 31, 1997. This decrease was primarily due to a reduction in sales and marketing personnel, the reduction of outside services and the reduction in international travel expenditures while increasing marketing efforts in North America. Research and development expenses decreased from approximately $215,000 during the three months ended March 31, 1996 to approximately $125,000 for the three months ended March 31, 1997. This decrease was due primarily to the decreased use of outside resin processors and a reduction in technical operations staff offset by the addition of a scientist. Research and development expenses are expected to increase significantly in the future as the Company's products are commercialized and continued efforts are focused on Deltco's resins. The Company is actively seeking to reduce costs such that general and administrative and marketing expenses are not expected to increase in the next three months. Liquidity and Capital Resources Since its inception, Planet has financed its operations primarily through the sale of equity securities and revenue from customer development agreements. The Company has raised approximately $4 million (net of issuance costs) from the private sale of Common Stock. In September 1995 the Company completed its initial public offering in which it sold an aggregate of 1,150,000 shares of Common Stock and received net proceeds of approximately $5.6 million. In January 1996, the Company used $1,125,000 in cash and issued 96,775 shares of restricted Common Stock valued at approximately $508,000 to acquire Deltco in a purchase transaction. In connection with the purchase, the Company now has one outstanding debt agreement related to a Small Business Administration loan collateralized by Deltco. As of March 31, 1997 the loan balance was approximately $244,000. The Company has no material commitments for capital expenditures. The Company used approximately $356,000 for operations for the three months ended March 31, 1997. Such funds were used for research and development activities, marketing efforts and administrative support. The Company used approximately $26,000 for the repayment of debt for the three months ended March 31, 1997. 7 9 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) PLANET POLYMER TECHNOLOGIES, INC. The Company believes that its existing sources of liquidity and anticipated revenue, including revenues generated from Deltco, will satisfy the Company's projected working capital and other cash requirements through at least September, 1997. There can be no assurance, however, that changes in the Company's plans or other events affecting the Company's operating expenses will not result in the expenditure of such resources before such time. The Company expects that it will need to raise substantial additional funds to establish large-scale manufacturing capabilities. The Company intends to seek additional funding from existing and potential customers or through public or private equity or debt financing. There can be no assurance that additional financing will be available on acceptable terms, or at all. 8 10 PLANET POLYMER TECHNOLOGIES, INC. PART II - OTHER INFORMATION PLANET POLYMER TECHNOLOGIES, INC. Item 1 - Legal Proceedings: None Item 2 - Changes in Securities: None Item 3 - Defaults upon Senior Securities: None Item 4 - Submission of Matters to a Vote of Security Holders. None Item 5 - Other Information: None Item 6 - Exhibits and Reports on Form 8-K: (a) 1. Financial Statements. Financial statements are included as Part I, Item 1 of this report. 2. Financial Statement Schedules. All schedules are omitted since the required information is not present or is not present in amounts sufficient to require a submission of the schedules, or because the information required is included in the financial statements and notes thereto. 3. Exhibits. Exhibit Number Description -------------- ----------- 27.1 Financial Data Schedule (b) Reports on Form 8-K: None 9 11 PLANET POLYMER TECHNOLOGIES, INC. SIGNATURES In accordance with the requirements of the Securities and 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 13, 1996 Planet Polymer Technologies, Inc. /S/ Robert J. Petcavich --------------------------------------- President, Chief Executive Officer and Director (Principal Financial and Accounting Officer) 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S UNAUDITED MARCH 31, 1997 BALANCE SHEET AND STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS AS FILED IN THE COMPANY'S FORM 10-QSB FOR THE THREE MONTHS ENDED MARCH 31, 1997. 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 1,256,133 0 598,138 (10,000) 322,698 2,328,802 1,642,746 (752,790) 4,160,856 552,409 0 0 0 10,774,079 (7,484,898) 4,160,856 890,862 890,862 623,038 623,038 589,631 0 9,728 (300,131) 15,067 (315,198) 0 0 0 (315,198) (0.06) (0.06)
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