-----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, Mkz4GRKOZWfRpjFBxwtgZX3YzDokf2Jo7lDhTyiuNlVHX9d7TwXnAQQpFBi45JhF V5jtqcLGEmw6wX5arGOZ8g== 0000950124-01-501079.txt : 20010515 0000950124-01-501079.hdr.sgml : 20010515 ACCESSION NUMBER: 0000950124-01-501079 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SURMODICS INC CENTRAL INDEX KEY: 0000924717 STANDARD INDUSTRIAL CLASSIFICATION: ADHESIVES & SEALANTS [2891] IRS NUMBER: 411356149 STATE OF INCORPORATION: MN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-23837 FILM NUMBER: 1631861 BUSINESS ADDRESS: STREET 1: 9924 W 74TH ST CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 BUSINESS PHONE: 6128292700 MAIL ADDRESS: STREET 1: 9924 WEST 74TH ST CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 FORMER COMPANY: FORMER CONFORMED NAME: BSI CORP DATE OF NAME CHANGE: 19970506 10-Q 1 c62423e10-q.txt FORM 10-Q 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001 -------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ___________ Commission File Number 0-23837 ------- SURMODICS, INC. ------------------------------------------------------ (Exact name of registrant as specified in its Charter) MINNESOTA 41-1356149 ------------------------ ------------------------------------ (State of incorporation) (I.R.S. Employer Identification No.) 9924 West 74th Street Eden Prairie, Minnesota 55344 ---------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: (952) 829-2700 -------------- 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. Yes X No --- --- The number of shares of the registrant's Common Stock, $.05 par value per share, outstanding as of April 30, 2001 was 16,735,415. ================================================================================ 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements SURMODICS, INC. Condensed Balance Sheets (In thousands, except share data)
March 31, September 30, 2001 2000 ----------- ------------- ASSETS (Unaudited) CURRENT ASSETS: Cash & cash equivalents $ 4,143 $ 1,510 Short-term investments 14,938 15,847 Accounts receivable, net 2,159 1,406 Inventories 690 500 Deferred tax asset 745 912 Prepaids and other 864 911 --------- -------- Total current assets 23,539 21,086 PROPERTY AND EQUIPMENT, net 7,326 7,166 LONG-TERM INVESTMENTS 23,529 22,293 OTHER ASSETS, net 215 204 --------- -------- $ 54,609 $ 50,749 ========= ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 394 $379 Accrued liabilities 2,003 1,584 Deferred revenues 307 433 --------- -------- Total current liabilities 2,704 2,396 DEFERRED REVENUES, less current portion -- 50 --------- -------- Total liabilities 2,704 2,446 --------- -------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Series A Preferred stock- $.05 par value, 450,000 shares authorized; no shares issued and outstanding -- -- Common stock- $.05 par value, 45,000,000 shares authorized; 16,728,845 and 16,556,002 shares issued and outstanding 836 828 Additional paid-in capital 46,051 45,740 Unearned compensation (243) (289) Stock purchase notes receivable (7) (7) Accumulated other comprehensive income (loss) 259 (46) Retained earnings 5,009 2,077 --------- -------- Total stockholders' equity 51,905 48,303 --------- -------- $ 54,609 $ 50,749 ========= ========
The accompanying notes are an integral part of these condensed financial statements. 2 3 SURMODICS, INC. Condensed Statements of Income (In thousands, except per share data) (Unaudited)
Three Months Ended Six Months Ended March 31, March 31, ------------------------ ------------------------- 2001 2000 2001 2000 -------- -------- -------- -------- REVENUES: Royalties $ 2,878 $ 2,503 $ 4,936 $ 4,853 License fees 104 160 539 260 Product sales 1,518 1,188 3,075 2,422 Research and development 875 590 1,657 1,055 -------- -------- -------- -------- Total revenues 5,375 4,441 10,207 8,590 -------- -------- -------- -------- OPERATING COSTS AND EXPENSES: Product 624 467 1,232 862 Research and development 1,907 1,776 3,682 3,384 Sales and marketing 417 354 831 732 General and administrative 799 693 1,512 1,255 -------- -------- -------- -------- Total operating costs and expenses 3,747 3,290 7,257 6,233 -------- -------- -------- -------- INCOME FROM OPERATIONS 1,628 1,151 2,950 2,357 -------- -------- -------- -------- OTHER INCOME: Investment income, net 609 307 1,240 600 Gain (loss) on sale of investments 160 (11) 310 (10) -------- -------- -------- -------- Other income, net 769 296 1,550 590 -------- -------- -------- -------- INCOME BEFORE PROVISION FOR INCOME TAXES 2,397 1,447 4,500 2,947 INCOME TAX PROVISION 831 543 1,568 1,100 -------- -------- -------- -------- NET INCOME $ 1,566 $ 904 $ 2,932 $ 1,847 ======== ======== ======== ======== NET INCOME PER SHARE: Basic $ 0.09 $ 0.06 $0.18 $0.12 Diluted $ 0.09 $ 0.05 $0.17 $0.11 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic weighted average common shares outstanding 16,686 15,564 16,638 15,500 Dilutive effect of outstanding stock options 1,089 1,126 1,101 1,114 -------- -------- -------- -------- Diluted weighted average common shares outstanding 17,775 16,690 17,738 16,614
The accompanying notes are an integral part of these condensed financial statements. 3 4 SURMODICS, INC. Condensed Statements of Cash Flows (In thousands) (Unaudited)
Six Months Ended March 31, ------------------------ 2001 2000 -------- -------- OPERATING ACTIVITIES: Net income $ 2,932 $ 1,847 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 748 485 Amortization of unearned compensation, net 46 43 Deferred tax provision 167 1,091 Change in assets and liabilities: Accounts receivable (753) 73 Inventories (190) (52) Prepaids and other 25 (358) Accounts payable and accrued liabilities 434 (309) Deferred revenues (176) (108) -------- -------- Net cash provided by operating activities 3,233 2,712 -------- -------- INVESTING ACTIVITIES: Purchases of property and equipment, net (897) (2,078) Purchases of available-for-sale investments (31,875) (13,626) Sales/maturities available-for-sale investments 31,853 13,729 Repayment of stock purchase notes receivable -- 20 -------- -------- Net cash used in investing activities (919) (1,955) -------- -------- FINANCING ACTIVITIES: Issuance of common stock 319 (92) -------- -------- Net increase in cash and cash equivalents 2,633 665 CASH AND CASH EQUIVALENTS: Beginning of period 1,510 1,975 -------- -------- End of period $ 4,143 $ 2,640 ======== ========
The accompanying notes are an integral part of these condensed financial statements. 4 5 SURMODICS, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (1) BASIS OF PRESENTATION In the opinion of management, the accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles and reflect all adjustments, consisting solely of normal recurring adjustments, needed to fairly present the financial results for these interim periods. These financial statements include some amounts that are based on management's best estimates and judgments. These estimates may be adjusted as more information becomes available, and any adjustment could be significant. The results of operations for the six months ended March 31, 2001 are not necessarily indicative of the results that may be expected for the entire fiscal year. According to the rules and regulations of the Securities and Exchange Commission, the Company has omitted footnote disclosures that would substantially duplicate the disclosures contained in the audited financial statements of the Company. Read together with the disclosures below, management believes the interim financial statements are presented fairly. However, these unaudited condensed financial statements should be read together with the financial statements for the year ended September 30, 2000 and footnotes thereto included in the Company's form 10-K as filed with the Securities and Exchange Commission. (2) NEW ACCOUNTING PRONOUNCEMENTS In March 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements." SAB 101 requires that license and other up-front fees be recognized over the term of the agreement unless the fee is in exchange for products delivered or services performed that represent the culmination of a separate earnings process. The Company will adopt SAB 101 when required, which is currently expected to be in the fourth quarter of fiscal 2001. The Company is currently evaluating SAB 101 to determine whether its implementation will have any material impact on the Company's financial position or results of operations with respect to the license fees earned by SurModics. Any adjustment would result in a charge to earnings for the cumulative effect of the change. This amount would then be deferred and be recognized as revenue in future periods. (3) COMPREHENSIVE INCOME The components of comprehensive income for the three-month and six-month periods are as follows:
Three months ended Six months ended March 31, March 31, ------------------- ------------------ (dollars in thousands) 2001 2000 2001 2000 --------- -------- -------- -------- Net income $ 1,566 $ 904 $ 2,932 $ 1,847 Other comprehensive income: Change in unrealized gain (loss) on available-for-sale securities 80 (4) 305 (100) ------- ------ ------- ------- Total comprehensive income $ 1,646 $ 900 $ 3,237 $ 1,747 ======= ====== ======= =======
5 6 (4) OPERATING SEGMENTS (dollars in thousands)
Research & Licensing Manufacturing Development Corporate Consolidated --------- ------------- ------------ ------------ ------------ Six Months Ended March 31, 2001 Revenues: PhotoLink $ 3,962 $ 1,368 $ 1,473 $ -- $ 6,803 Diagnostic 1,513 -- -- -- 1,513 Stabilization & other -- 1,707 -- -- 1,707 Government -- -- 184 -- 184 ------- ------- ------- -------- ------- Total Revenues 5,475 3,075 1,657 -- 10,207 Expenses -- 1,232 3,682 2,343 7,257 ------- ------- ------- -------- ------- Operating income (loss) 5,475 1,843 (2,025) (2,343) 2,950 Other income 1,550 1,550 Income tax provision (1,568) (1,568) ------- Net income $ 2,932 ======= Six Months Ended March 31, 2000 Revenues: PhotoLink $ 3,475 $ 1,106 $ 668 $ -- $ 5,249 Diagnostic 1,638 -- -- -- 1,638 Stabilization & other -- 1,316 -- -- 1,316 Government -- -- 387 -- 387 ------- ------- ------- -------- ------- Total Revenues 5,113 2,422 1,055 -- 8,590 Expenses -- 862 3,384 1,987 6,233 ------- ------- ------- -------- ------- Operating income (loss) 5,113 1,560 (2,329) (1,987) 2,357 Other income 590 590 Income tax provision (1,100) (1,100) ------- Net income $ 1,847 =======
(5) STOCKHOLDERS' EQUITY On November 13, 2000, the Board of Directors adopted a resolution that designated an additional 300,000 of the then 4,850,000 undesignated shares as Series A Preferred Stock. The total number of authorized shares of the Company is now 50,000,000, consisting of 45,000,000 shares of Common Stock, $0.05 par value per share, 450,000 of Series A Preferred Stock, $.05 par value per share, and 4,550,000 undesignated shares. In addition on November 13, 2000, the Board of Directors declared a 2-for-1 stock split of the Company's Common Stock, payable on December 6, 2000, to shareholders of record on November 27, 2000. All share, per share and weighted average share information has been restated to reflect the split. 6 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL SurModics is a leading provider of surface modification solutions to medical device manufacturers. The Company's revenues are derived from four primary sources: fees from licensing its patented technology to customers; royalties received from licensees; product sales (photoreactive chemical compounds to licensees, stabilization products to the diagnostics industry, and coated slides to the genomics market); and research and development fees generated on projects for commercial customers and pursuant to government grants. RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2001 AND 2000 Revenues. The Company's revenues were $5.4 million for the second quarter of fiscal 2001, an increase of $934,000, or 21%, over the same period of fiscal 2000. The revenue components were as follows (in thousands):
$ Increase % Increase 2001 2000 (Decrease) (Decrease) ------ ------ ---------- ---------- PhotoLink(R) revenue: Royalties $1,997 $1,571 $426 27% License fees 104 160 (56) (35%) Reagent chemical sales 645 501 144 29% Commercial development 764 396 368 93% ------ ------ ---- Total PhotoLink revenue 3,510 2,628 882 34% Other revenue: Diagnostic royalties 881 933 (52) (6%) Stabilization & slide sales 873 686 187 27% Government research 111 194 (83) (43%) ------ ------ ---- Total revenues $5,375 $4,441 $934 21% ====== ====== ====
Second quarter revenue growth was the result of a 34% increase in PhotoLink-related revenue. Commercial development revenue increased 93% to $764,000, a quarterly record. Much of this increase was due to a high level of effort on two projects: genomics work with Motorola and coating work on the drug delivery stent for Johnson & Johnson's Cordis division. PhotoLink royalties also increased to record levels, up $426,000 to $2.0 million, a 27% increase. Royalty revenue in the quarter was boosted by the first minimum royalty payment from Motorola Life Sciences and stronger royalties from several other licensees. Reagent chemical sales (those chemicals used by licensees in the PhotoLink coating process) increased 29% to $645,000. Historically, a single client purchased more than half of the reagents sold, but during the current quarter, this percentage dropped to 38%, as sales to all other clients increased. Reagent sales to all other clients increased 78% between years. SurModics signed two new license agreements during the second quarter of fiscal 2001. Fees from the two new licenses and installment payments on previously executed licenses combined for total license revenue of $104,000. The Company has license agreements with 47 companies covering over 7 8 110 different product applications, 57 of which are currently on the market. A 27% increase in stabilization and DNA slides sales contributed to the balance of revenue growth outside of PhotoLink. Product costs. The Company's product costs were $624,000 for the second quarter of fiscal 2001, an increase of $157,000, or 34%, over the same period of fiscal 2000. Overall product margins decreased slightly to 59% in the second quarter of fiscal 2001 from 61% in the same period of fiscal 2000. Most of this change was due to a reduction in certain stabilization product prices that the Company implemented at the beginning of the fiscal year. Research and development expenses. Research and development expenses were $1.9 million for the second quarter of fiscal 2001, an increase of $131,000, or 7%, over the same period of fiscal 2000. The increase was primarily due to compensation and benefits associated with technical personnel added by the Company over the last year, higher foreign patent filing fees and increased depreciation and facilities costs due to last year's construction of additional laboratory facilities. Sales and marketing expenses. Sales and marketing expenses were $417,000 for the second quarter of fiscal 2001, a $63,000 or 18% increase from the same period of fiscal 2000. Increased compensation and benefits costs and additional business travel offset a decrease in promotional expenses. General and administrative expenses. General and administrative expenses were $799,000 for the second quarter of fiscal 2001, an increase of $106,000, or 15%, over the same period of fiscal 2000. The increase was the result of additional facilities costs related to building improvements made in the previous year, and higher utility, investor relations and compensation and benefit costs. Income from operations. The Company's income from operations was $1.6 million for the second quarter of fiscal 2001, an increase of $477,000, or 41%, over the same period of fiscal 2000. Other income, net. The Company's other income was $769,000 for the second quarter of fiscal 2001, an increase of $473,000, or 160%, over the same period of fiscal 2000. The increase in investment income was a direct result of the 91% increase in cash and investment balances from last year's second quarter. In addition, the Company sold a portion of its bond portfolio to take advantage of a tax capital loss carryforward, generating a realized gain of $159,000. Income tax expense. The Company's income tax provision was $831,000 for the second quarter of fiscal 2001 versus $543,000 in the same period of fiscal 2000. 8 9 SIX MONTHS ENDED MARCH 31, 2001 AND 2000 Revenues. The Company's revenues were $10.2 million for the first six months of fiscal 2001, an increase of $1.6 million, or 19%, over the same period of fiscal 2000. The revenue components were as follows (in thousands):
$ Increase % Increase 2001 2000 (Decrease) (Decrease) ------- ------ ---------- ---------- PhotoLink revenue: Royalties $ 3,423 $3,215 $208 6% License fees 539 260 279 108% Reagent chemical sales 1,368 1,106 262 24% Commercial development 1,473 668 805 121% ------- ------ ------ Total PhotoLink revenue 6,803 5,249 1,554 30% Other revenue: Diagnostic royalties 1,513 1,638 (125) (8%) Stabilization & slide sales 1,707 1,316 391 30% Government research 184 387 (203) (52%) ------- ------ ----- Total revenues $10,207 $8,590 $1,617 19% ======= ====== =====
The revenue growth for the first six months of fiscal 2001 was distributed across several PhotoLink revenue categories. Commercial development revenue increased 121% to nearly $1.5 million. Most of the growth is related to genomics and drug delivery stent work described earlier. The growth in PhotoLink royalties was primarily due to increased sales of coated products by the Company's licensees. PhotoLink revenue growth was masked somewhat by a one-time $225,000 royalty payment received in the first half of last year. Approximately 81% of the PhotoLink royalties received were earned royalties based on the clients' sale of coated products. The remaining royalties were minimum payments made to SurModics prior to a medical device reaching the market. The 24% increase in reagent chemical sales was due to a greater number of clients purchasing reagents and to the growing production of PhotoLink-coated devices by SurModics' clients. SurModics signed four new PhotoLink license agreements during the first six months of fiscal 2001. The fees from these agreements, in addition to progress payments made on previously executed license agreements resulted in $539,000 of revenue, a 108% increase from the $260,000 recorded on the five license agreements signed in the same period last year. Stabilization and DNA slide sales increased 30% from the same period in fiscal 2000. Product costs. The Company's product costs were $1.2 million for the first six months of fiscal 2001, an increase of $370,000, or 43%, over the same period of fiscal 2000. Overall product margins were 60% in the first six months of fiscal 2001 compared to 61% in the same period of fiscal 2000. Research and development expenses. Research and development expenses were $3.7 million for the first six months of fiscal 2001, an increase of $298,000, or 9%, over the same period of fiscal 2000. The change was primarily due to compensation and benefits associated with technical personnel added by the Company over the last year, increased legal fees for foreign patents, higher utility costs and increased depreciation on equipment purchases. Sales and marketing expenses. Sales and marketing expenses were $831,000 for the first six months of fiscal 2001, an increase of $99,000 or 14% from the same period of fiscal 2000. The change was primarily due to compensation and benefits associated with sales and marketing staff hired in the last half of the previous year and to a corresponding increase in business travel. Decreased promotional expenses offset a portion of the above increases. 9 10 General and administrative expenses. General and administrative expenses were $1.5 million for the first half of fiscal 2001, an increase of $257,000, or 20%, over the same period of fiscal 2000. The increase was the result of higher compensation and benefit costs, rising utility costs, and increased investor relations expenditures. Income from operations. The Company's income from operations was $3.0 million for the first six months of fiscal 2001, an increase of $593,000, or 25%, over the same period of fiscal 2000. Other income, net. The Company's other income was $1.6 million for the first half of fiscal 2001, an increase of $960,000, or 163%, over the same period of fiscal 2000. Investment income increased 107% to $1.2 million in the current period on higher cash and investment balances. In addition, during the first half of the fiscal year, the Company sold a portion of its bond portfolio generating a realized gain of $309,000. Income tax expense. The Company's income tax provision was $1.6 million for the first six months of fiscal 2001 versus $1.1 million in the same period of fiscal 2000. Other comprehensive income. The Company's other comprehensive income was $305,000 for the first six months of fiscal 2001. This gain was due to an increase in the market value of the Company's investments available-for-sale. As of March 31, 2001, the Company had a net $259,000 unrealized gain related to those investments. LIQUIDITY AND CAPITAL RESOURCES As of March 31, 2001, the Company had working capital of $20.8 million and cash, cash equivalents and investments totaling $42.6 million. The Company's investments principally consist of U.S. government and government agency obligations and investment grade, interest-bearing corporate debt securities with varying maturity dates, the majority of which are five years or less. The Company generated positive cash flows from operating activities of $3.2 million in the first six months, which was an increase of 19% for the same period of last year, primarily due to the increase in net income. As of March 31, 2001, the Company had no debt, nor did it have any credit agreements. The Company believes that its existing capital resources will be adequate to fund the Company's operations into the foreseeable future. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company maintains an investment portfolio in accordance with its investment policy. The primary objectives of the Company's investment policy are to preserve principal, maintain proper liquidity to meet operating needs and maximize yields. The Company's investment policy requires investments with high-credit-quality issuers and limits the amount of credit exposure to any one issuer. The Company's investments principally consist of U.S. government and government agency obligations and investment grade, interest-bearing corporate debt securities with varying maturity dates, the majority of which are five years or less. All of the Company's cash equivalents and marketable securities are classified as available-for-sale securities. 10 11 The Company holds $1.0 million of interest-bearing debt of Southern California Edison, a California utility, which is scheduled to mature on June 1, 2001. Southern California Edison has indicated it may be unable to continue to service its debt under the existing regulated rate structure unless they receive relief from state regulators. At this time it is not known whether such financial support will be made available to California utilities. Due to these circumstances, various rating agencies have lowered the credit rating of the California utilities to below investment grade. The Company could ultimately incur a loss on the sale of this investment. The securities held in the Company's investment portfolio are subject to interest rate risk. Changes in interest rates affect the fair value of the available-for-sale securities. The Company has determined that a hypothetical ten percent increase in interest rates would result in an approximate $380,000 decrease in the fair value of the Company's available-for-sale securities as of March 31, 2001, but no material impact on the results of operations or cash flows. FORWARD LOOKING STATEMENTS The statements contained in this quarterly report relating to future revenue growth and expense levels are based on current expectations and involve a number of risks and uncertainties. These statements are forward looking and are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. The following factors could cause royalty revenue to materially and adversely differ from that anticipated: the ability of the Company's licensees to successfully gain regulatory approval for, market and sell products incorporating the Company's technology; the amount and timing of resources devoted by the Company's licensees to market and sell products incorporating the Company's technology; the Company's ability to attract new licensees and to enter into agreements for additional applications with existing licensees; the Company's ability to maintain a competitive position in the development of technologies and products in its areas of focus; and business and general economic conditions. Investors should consider these risks and other risks identified in the Company's filings with the SEC when making investment decisions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. SurModics undertakes no obligation to update publicly or revise any forward-looking statements. 11 12 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS Use of Proceeds through the period ending March 31, 2001. (1) Effective Date: March 3, 1998 SEC File Number: 333-43217 (2) Offering Date: March 3, 1998 (4)(i) The offering has terminated; all securities registered were sold. (4)(ii) Managing Underwriter: John G. Kinnard and Company, Incorporated (4)(iii) Title of Securities: Common Stock (4)(iv) Amount Registered: 2,300,000 Aggregate Offering Price: $17,250,000 Amount Sold: 2,300,000 Aggregate Offering Price Sold: $17,250,000 (4)(v) Underwriting Discount and Commissions $ 1,293,750 Other Expenses $ 435,148 Total Expenses $ 1,728,898 All the above items represented direct or indirect payments to others. (4)(vi) Net Offering Proceeds $15,521,102 (4)(vii) Use of Net Offering Proceeds: Research and development $ 3,110,000 Sales and marketing $ 1,728,000 Property and equipment upgrades $ 8,892,000 Patent protection $ 401,000 Working capital and general corporate purposes $ 1,150,000 Administration $ 240,102 All the above items represented direct or indirect payments to others.
12 13 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) Exhibits - None (b) Reports on Form 8-K - None 13 14 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. SURMODICS, INC. May 11, 2001 By: /s/ Stephen C. Hathaway -------------------------------------- Stephen C. Hathaway Vice President & CFO (Principal Financial Officer) 14 -----END PRIVACY-ENHANCED MESSAGE-----