SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 1997
Commission File Number 1-11831
SABRATEK CORPORATION
(Exact name of registrant as specified in its charter)
36-3700639
(I.R.S. Employer Identification Number)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
5601 West Howard Street
Niles, Illinois 60714
(Address of Principal Executive Offices, Including Zip Code)
(847) 647-2760
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act") during the preceding 12 months (or for such shorter
period that the registrants were required to file such reports), and (2) have
been subject to such filing requirements for the past 90 days.
Yes X No
As of August 1, 1997, 10,009,106 shares of Sabratek Corporation's Common Stock
were outstanding.
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SABRATEK CORPORATION
FORM 10-Q
For the Quarterly Period Ended June 30, 1997
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Page
Item 1. Financial Statements
Balance Sheets
June 30, 1997 (Unaudited) and December 31, 1996................... 3
Statements of Operations
Three Months and Six Months Ended June 30, 1997
and 1996 (Unaudited).............................................. 4
Statements of Cash Flows
Six Months Ended June 30, 1997 and 1996 (Unaudited)............... 5
Notes to Financial Statements (Unaudited)......................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations......................................... 9
PART II OTHER INFORMATION
Item 1. Legal Proceedings................................................ 13
Item 2. Changes In Securities............................................ 13
Item 6. Exhibits and Reports on Form 8-K................................. 13
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<TABLE>
<CAPTION>
SABRATEK CORPORATION
BALANCE SHEETS
(In thousands, except share data)
June 30, December 31,
1997 1996
------ -----
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash & cash equivalents $23,768 $ 10,447
Short-term investments in marketable securities 4,010 4,352
Receivables:
Trade, net of allowance for doubtful accounts
of $318 and $146 at June 30, 1997
and December 31, 1996, respectively 12,832 8,305
Other 308 125
-------- -------
Total receivables 13,140 8,430
-------- -------
Inventories 8,825 5,049
Other current assets 840 586
-------- --------
Total current assets 50,583 28,864
-------- --------
Property, plant and equipment, net 2,592 1,775
Intangible assets, net 4,532 41
Notes receivable 1,482 200
Long-term investments in marketable securities 3,985 2,012
Other 82 59
--------- -------
$63,256 $32,951
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $168 $168
Current portion of capital lease obligation 75 132
Current portion of long-term debt 102 3
Accounts payable 2,569 2,247
Accrued expenses:
Payroll & commissions 1,699 1,265
Warranty 276 236
Other 430 86
Due to affiliated company 125 140
------ ------
Total current liabilities 5,444 4,277
------ ------
Long-term capital lease obligation - 23
Long-term obligations 20 1
------ -------
Total liabilities 5,464 4,301
------ ------
Stockholders' equity:
Common stock, par value $.01, issued and 100 82
outstanding; 10,002,454 at June 30, 1997,
8,196,981 at December 31, 1996
Additional paid-in capital 69,309 42,891
Deferred compensation (15) (17)
Unrealized gains 36 4
Accumulated deficit (11,638) (14,310)
-------- --------
Total stockholders' equity 57,792 28,650
------- --------
$63,256 $32,951
======= ========
</TABLE>
See accompanying notes to financial statements
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<TABLE>
<CAPTION>
SABRATEK CORPORATION
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------------------------------------
1997 1996 1997 1996
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales $ 9,848 $ 3,771 $17,314 $ 6,715
Cost of sales 4,159 1,890 7,185 3,345
------------------------------------------------------------------------
Gross margin 5,689 1,881 10,129 3,370
Selling, general and administrative expenses 4,427 1,776 7,937 3,253
------------------------------------------------------------------------
Operating income 1,262 105 2,192 117
------------------------------------------------------------------------
Other income (expense):
Interest income 414 13 557 15
Interest expense (16) (133) (22) (237)
Stock appreciation rights - - - (1,628)
Other - 1 - 3
------------------------------------------------------------------------
Net income (loss) before taxes 1,660 (14) 2,727 (1,730)
Provision for income taxes 33 - 55 -
------------------------------------------------------------------------
Net income (loss) 1,627 (14) 2,672 (1,730)
========================================================================
Weighted average shares outstanding 11,022 6,736 10,101 6,673
========================================================================
Net income (loss) per share $ 0.15 $ 0.00 $ 0.26 $ (0.26)
========================================================================
</TABLE>
See accompanying notes to financial statements.
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<TABLE>
<CAPTION>
SABRATEK CORPORATION
STATEMENTS OF CASH FLOWS
(In thousands)
(UNAUDITED)
Six Months Ended
---------------------------------------------------
June 30 June 30,
1997 1996
---------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 2,672 $ (1,730)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation and amortization 316 151
Deferred compensation 1 1
Stock appreciation rights expense - 1,628
Non-cash expense 51 -
Provision for bad debts 112 35
Changes in assets and liabilities
Receivables (4,107) (2,668)
Other receivable (184) -
Deferred revenue 46 (75)
Inventories (3,763) (517)
Unrealized gain 36 -
Accounts payable (230) (966)
Accrued expenses 509 1,062
Due to affiliated company (23) (65)
Other (261) (196)
--------------------------------------------------
Net cash used in operating activities (4,825) (3,340)
--------------------------------------------------
Cash flows from investing activities:
Purchases of property, plant, equipment 812 (101)
Purchase of intangible assets (12) -
Purchase of marketable securities, net (1,635) -
Purchase of Rocap, Inc., net of cash acquired (1,434) -
Issuance of note receivable (1,282) -
--------------------------------------------------
Net cash used in investing activities (5,175) (101)
--------------------------------------------------
Cash flows from financing activities:
Repayment of short-term debt (50) (491)
Repayment of long-term debt (1) (350)
Proceeds from issuance of long-term debt - 1,738
Payments of capital lease, net (81) (102)
Proceeds from exercise of stock options and warrants 1,848 -
Proceeds from issuance of stock, net 21,605 28,186
--------------------------------------------------
Net cash provided by financing activities 23,321 28,981
--------------------------------------------------
Increase in cash 13,321 25,540
Cash and cash equivalents at beginning of period 10,447 8
--------------------------------------------------
Cash and cash equivalents at end of period $ 23,768 $ 25,548
===================================================
</TABLE>
See accompanying notes to financial statements
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SABRATEK CORPORATION
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 and 1996
(UNAUDITED)
(1) Financial Statements
The financial statements included herein have been prepared by the
Company, without audit, and include all adjustments of a normal recurring nature
which are, in the opinion of management, necessary for fair presentation of the
results of operations for the three month and six month periods ended June 30,
1997 pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures in these
financial statements are adequate to make the information presented not
misleading. These financial statements should be read in conjunction with the
Company's financial statements and the notes thereto included in the Company's
Form 10-K filed by the Company with the Securities and Exchange Commission for
the year ended December 31, 1996. The results of operations for the three month
and six month periods ended June 30, 1997 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1997.
(2) Acquisition
On February 25, 1997, the Company purchased substantially all of the
assets of Rocap, Inc., a Massachusetts corporation ("Rocap"), which produces and
markets pre-packaged injectable prescription pharmaceuticals and pre-filled
flush syringes. Terms of the purchase are summarized as follows:
1) $100,000 in cash.
2) Forgiveness of $300,000 in debt owed to the Company as evidenced
by a bridge loan agreement entered into on January 15, 1997.
3) $2,900,000 in common stock of the Company, valued at 131,593
shares.
4) Assumption of $257,218 in net liabilities.
Using the purchase method of accounting, the purchase price was
allocated to assets acquired and liabilities assumed based on their estimated
fair values. This treatment resulted in the excess of the purchase price over
the estimated fair value of net tangible assets acquired being recorded as
goodwill of $4,564,062. The results of operations acquired have been included in
the statement of operations since the date of acquisition.
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(3) Public Offering
In April, 1997, the Company completed a public offering for 1,291,486
primary shares of common stock and 176,574 shares of common stock by and for the
account of existing stockholders at a price to the public of $18.00. Proceeds to
the Company were $21,968,177 after underwriters' discounts and commissions.
(4) Notes Receivable
The Company has loaned $1,482,000 to two non-affiliated corporations in
the form of NonNegotiable Promissory Notes due upon demand at various dates
between May 1, 1997 and February 28, 1999. The notes bear interest at a rate of
5.5% for $1,000,000 of the principal amount and 6% for $482,000 of the principal
amount.
(5) Supplemental Disclosures of Cash Flow Information
Cash paid for interest during the six month periods ended June 30, 1997
and 1996 was $11,495 and $33,665, respectively.
(6) Stock Options
During the six month period ended June 30, 1997, the Company issued
294,843 shares, in aggregate, of common stock upon the exercise of stock options
pursuant to the Sabratek Corporation Amended and Restated 1993 Stock Option Plan
(the "Plan"). The option exercises resulted in proceeds to the Company of
$1,449,322, in aggregate.
Options for a total of 1,594,504 shares of common stock were granted
during the six month period pursuant to the Plan at an exercise price equal to
the fair market value on the date of grant. The stock options vest over a
multi-year period.
(7) Warrants
During the six month period ended June 30, 1997, the Company issued
95,034 shares, in aggregate, of common stock upon the exercise of warrants. The
warrant exercises resulted in proceeds to the Company of $398,465, in aggregate.
(8) Credit Facility
In March, 1997, the Company entered into a bank credit agreement which
matures in April, 1999, and provides for up to $9.5 million of available
borrowing at the bank's prime rate. As of June 30, 1997, no funds have been
borrowed under the agreement.
(9) Weighted Average Shares
Weighted average shares outstanding for the three month and six month
periods ended June 30, 1997 are calculated on a fully diluted basis applying the
treasury-stock method for options and warrants outstanding.
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Weighted average shares outstanding for the three month and six month
periods ended June 30, 1996 are calculated pursuant to Securities and Exchange
Commission Staff Accounting Bulletin No. 83 for stock options and warrants
outstanding and pro-rated based on the date of the initial public offering.
Other common stock equivalent shares from stock options and warrants are
excluded from the computation because their effect is anti-dilutive.
(10) Subsequent Events
In July, 1997, the Company entered into a licensing agreement with a
non-affiliated company whereby the Company will pay up to $7,000,000.
(11) Recent Accounting Pronouncement
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share" ("EPS"). Implementation of SFAS No. 128 is required for the periods
ending after December 15, 1997. The standard establishes new methods for
computing and presenting EPS and replaces the presentation of primary and
fully-diluted EPS with basic and diluted EPS. The new methods under this
standard are not expected to have a significant impact on the Company's EPS
amounts.
In June, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income." The Company is required to adopt the new standard for periods ending
after fiscal 1997. This statement establishes standards for reporting and
display of comprehensive income and its components in a fully set of general
purpose financial statements. The standard requires all items that are required
to be recognized under accounting standards as components of comprehensive
income be reported in a financial statement that is displayed in equal
prominence with the other financial statements. The standard is not expected to
have a material impact on the Company's current presentation of income.
In June, 1997, the Financial Accounting Standards Board also issued
Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information." The Company is required to adopt this
new standard for periods ending after fiscal 1997. This statement establishes
standards for the way companies are to report information about operating
segments. It also establishes standards for related disclosures about products
and services, geographic areas, and major customers. The Company is currently
evaluating the impact of this standard on its financial statements.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Since its inception in 1989, through mid 1992, the Company was in its
development stage and engaged primarily in research and development, product
engineering and activities related to obtaining clearance from the FDA for its
first product, the 3030 Stationary Pump. The Company has five years of operating
history and, although profitable for the last four calendar quarters, has
experienced significant operating losses since inception. Upon receiving FDA
clearance for the 3030 Stationary Pump in mid 1992, the Company focused its
efforts on creating a domestic and international sales and marketing network, as
well as a manufacturing capability, to assist in the distribution of its first
product to the alternate-site health care market. Concurrent with these sales
and marketing activities, the Company continued to fund the research,
development and regulatory clearance activities of other device and software
products.
The Company commercially launched the 6060 Ambulatory Pump and related
disposable supplies in late 1995 and both its proprietary medical software
system ("MediVIEW") and proprietary infusion pump testing device (the
"PumpMaster") in late 1996. Since then, the Company has continued its sales and
marketing activities domestically and internationally for the distribution of
its products and continued to fund the research and development of additional
products. On February 25, 1997, the Company acquired substantially all the
assets of Rocap which produces and markets pre-packaged injectable prescription
pharmaceuticals and pre-filled flush syringes. In addition, the Company derives
revenues from servicing of products and the sale of accessories.
The Company sells its products both directly to alternate-site and
acute-care providers, as well as to third-party distributors. The Company's
distributors and customers may purchase several months of inventory at any one
time which may cause fluctuations in quarterly revenues. The Company also
markets and sells its products internationally and, as a result, its revenues
may be affected by fluctuations in exchange rates. Failure to obtain regulatory
approval for the distribution of new products domestically or in international
markets, or adverse regulatory changes, may affect the revenues of the Company.
Results of Operations
Three months ended June 30, 1997 vs. Three months ended June 30, 1996 and Six
Months Ended June 30, 1997 vs. Six Months Ended June 30, 1996
Net Sales. Net sales increased $6.1 million to $9.8 million for the
three month period ended June 30, 1997 as compared to $3.7 million for the three
month period ended June 30, 1996, an increase of 161%. Net sales for the six
month period ended June 30, 1997 increased $10.6 million to $17.3 million as
compared to $6.7 million for the six month period ended June 30, 1996, an
increase of 158%. The increase is attributable to several factors; incremental
unit sales volume of the 3030 Stationary Pump and 6060 Ambulatory Pump and their
respective disposables, an increase in the average per unit selling price due to
a higher ratio of direct sales versus dealer sales, the addition of the Rocap
product line in February, 1997, and the addition of the MediVIEW and PumpMaster
products.
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<PAGE>
Cost of Sales. Cost of sales increased $1.3 million to $4.2 million for
the three month period ended June 30, 1997 as compared to $1.9 million for the
three month period ended June 30, 1996, an increase of 120%. Cost of sales
increased $3.9 million to $7.2 million for the six month period ended June 30,
1997 as compared to $3.3 million for the six month period ended June 30, 1996,
an increase of 115%. The increase for the three month period and the six month
period is primarily attributable to direct product costs associated with
incremental unit sales volume of the 3030 and 6060 infusion pumps and related
disposables, as well as the addition of the Rocap product line. Also
contributing to the increase for the six month period were additional costs
relating to the expansion of production capacity.
Gross Margin. Gross margin increased $3.8 million to $5.7 million for
the three month period ended June 30, 1997 as compared to $1.9 million for the
three month period ended June 30, 1996, an increase of 202%. Gross margin
increased $6.7 million to $10.1 million for the six month period ended June 30,
1997 as compared to $3.4 million for the six month period ended June 30, 1996,
an increase of 201%. The increase for the three and six month periods is due
primarily to the incremental unit sales volume and the per unit contribution
thereon, including the allocation of fixed manufacturing costs over a greater
number of units. The increase is also attributable to higher average pricing
levels, a more favorable product mix of the 6060 Ambulatory Pump units to 3030
Stationary Pump units and continued reduction in direct product costs. Gross
margin as a percent of sales increased to 58% for the three and six month
periods ended June 30, 1997 from 50% for the three and six month periods ended
June 30, 1996.
Selling, General and Administrative Expenses. Selling, general
and administrative expenses increased $2.6 million to $4.4 million for the
three month period ended June 30, 1997 as compared to $1.8 million for the three
month period ended June 30, 1996, an increase of 149%. Selling,
general and administrative expenses increased $4.7 million to $7.9 million for
the six month period ended June 30, 1997 as compared to $3.3 million for the
six month period ended June 30, 1996, an increase of 144%. The increase for
the three and six month periods is due primarily to the expansion of the
Company's direct sales force and clinical support staff and the associated
travel thereby, as well as greater overall commissions paid in
conjunction with higher net sales. Also contributing to the increase
for the six month period ended June 30, 1997 was the addition of the Rocap
product line, as well as the addition of administrative and management
personnel, including other resources necessary to support the expansion of the
Niles, Illinois facility. Selling, general and administrative expenses as
a percent of sales decreased to 45% and 46%, respectively, for the
three and six month periods ended June 30, 1997 as compared to 47% and
48%, respectively, for the three and six month periods ended June 30, 1996.
Operating Income. Operating income increased to $1.3 million for the
three month period ended June 30, 1997 as compared to $105,000 for the three
month period ended June 30, 1996, an increase of 1,102%. Operating income
increased to $2.2 million for the six month period ended June 30, 1997 as
compared to $117,000 for the six month period ended June 30, 1996, an increase
of 1,773%. Operating income as a percent of sales increased to 13% for the three
and six month periods ended June 30, 1997 as compared to 3% and 2%,
respectively, for the three and six month periods ended June 30, 1996. The
increase in operating income is due primarily to incremental gross margin
generated by increased unit sales volume of new and existing products, as
described above.
Interest Income. Interest income increased to $414,000 for the three
month period ended June 30, 1997 as compared to $13,000 for the three month
period ended June 30, 1996. Interest income increased to $557,000 for the six
month period ended June 30,1997 as compared to $15,000 for the six
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month period ended June 30, 1996. The increase for the three and six month
periods is attributable to the investment return on unused proceeds of the
Company's initial public offering in June, 1996 and the Company's secondary
public offering in April, 1997.
Interest Expense. Interest expense decreased to $16,000 for the three
month period ended June 30, 1997 as compared to $133,000 for the three month
period ended June 30, 1996. Interest expense decreased to $22,000 for the six
month period ended June 30, 1997 as compared to $237,000 for the six month
period ended June 30, 1996. The decrease for the three and six month periods is
primarily attributable to the conversion of all convertible debt outstanding at
the Company's initial public offering in June, 1996.
Stock Appreciation Rights Expense. No stock appreciation rights expense
is recorded for the three and six month periods ended June 30, 1997 as compared
to $1.6 million for the six month period ended June 30, 1996. The stock
appreciation rights expense for the six month period ended June 30, 1996 was
non-recurring.
Provision for Income Taxes. The provision for income taxes of $33,000
and $55,000, respectively, for the three and six month periods ended June 30,
1997 reflect an effective rate for Alternative Minimum Tax. The Company expects
net operating loss carryforwards to offset pretax income for its 1997 tax year.
Due to net losses for the three and six month periods ended June 30, 1996, the
Company did not incur any federal or state income tax liability for the period.
Net Income. Net income was $1.6 million for the three month period
ended June 30, 1997 as compared to a net loss of $14,000 for the three month
period ended June 30, 1996. Net income was $2.7 million for the six month period
ended June 30, 1996 as compared to a net loss of $1.7 million for the six month
period ended June 30, 1996. Net income for the three and six month periods ended
June 30, 1997 was achieved primarily as a result of incremental gross margin
generated by increased unit sales volume of new and existing products. Also
contributing to net income for the three and six month periods ended June 30,
1997 was the increase in interest income from the investment of excess cash.
The six month period ended June 30, 1996 included the non-recurring charge for
stock appreciation rights of $1.6 million.
Liquidity and Capital Resources
In April, 1997, the Company completed a secondary public offering with
proceeds of approximately $22 million, after underwriters' discounts and
commissions. As of June 30, 1997, cash balances were invested in U.S. Treasury
Bills, U.S. Treasury Notes, Certificates of Deposit, commercial paper and a
money market account.
As of June 30, 1997, the Company had approximately $31.8 million in
cash, cash equivalents, short-term and long-term investments in marketable
securities, and had net working capital of approximately $45.1 million. In
March, 1997, the Company entered into a credit agreement with up to $9.5 million
of available borrowing. As of June 30, 1997, no borrowing has been made under
the credit agreement.
The Company used cash in its operations of approximately $4.8 million
for the six months ended June 30, 1997. Cash used in operations for the period
exceeds the Company's operating results for the
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same period due, primarily, to the growth in trade accounts receivable and
inventories as a result of actual and anticipated growth in sales volume.
The Company believes that its financial assets will be sufficient to
fund its operations for the foreseeable future. Future liquidity and capital
resources could be adversely influenced by certain factors including the
Company's dependence on a relatively new customer base, regulatory or
legislative changes pertaining to health care, product liability exposure
regarding the delivery of medication, dependence on future product development,
and others. There can be no assurance that the Company will not require
additional financing and may, in the future, seek additional funds through bank
facilities, debt or equity offerings and to the extent such additional financing
is not available, the Company could suffer material adverse effects to its
financial condition and the results of its operations.
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<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
On February 5, 1997, SIMS Deltec filed a complaint in the
United States District Court for the District of Minnesota alleging that
Sabratek's manufacture, use and/or sale of the MediVIEW software in conjunction
with its infusion pumps infringes on a patent entitled "Systems and Methods of
Communicating with Ambulatory Medical Devices Such as Drug Delivery Devices"
previously issued to SIMS Deltec. Subsequently, SIMS Deltec filed other
pleadings that raised additional claims against Sabratek and three of its
employees including trade secret misappropriation, unfair competition and
interference with SIMS Deltec's customers. SIMS Deltec seeks injunctive relief,
unspecified monetary damages and costs. In addition, SIMS Deltec filed for a
preliminary injunction against Sabratek seeking to prevent on a preliminary
basis Sabratek's manufacture and sale of the MediVIEW system. On August 4,
1997, the District Court denied the motion for preliminary injunction. The
Company and the individual defendants intend to vigorously defend against the
allegations made by SIMS Deltec. Protracted litigation or an adverse outcome in
this matter could have a material adverse impact on the Company's
business, financial condition and results of operations.
In addition, Sabratek has filed a complaint against SIMS
Deltec in the United States District Court for the Northern District of Illinois
alleging that SIMS Deltec employees have made misstatements about Sabratek's
products. Sabratek has stated claims under the Federal Lanham Act to stop SIMS
Deltec's improper disparagement and has requested preliminary and permanent
injunctive relief, monetary damages and costs.
Item 2. Changes In Securities
During the period covered by this report, the Company issued
the following securities without registration under the Securities Act of 1933,
as amended.
From April 3, 1997 to June 27, 1997, the Company issued 18,667
shares of common stock upon the exercise of warrants not covered by a
registration statement. The Company received proceeds of approximately $76,465
upon the exercise of such warrants. All such issuances of common stock were
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
as amended.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Page Incorporation
Exhibit Number (if by Reference
Number Description of Documents applicable) (if applicable)
------ ------------------------ ----------- ---------------
<S> <C> <C> <C>
2
3.1 Articles of Incorporation +
3.2 ByLaws +
10.1 Agreement with Americorp Financial, Inc. re: Leasing +
Services, dated March 22, 1995
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10.1.1 Amendment, dated September 16, 1996, to Agreement +++
with Americorp Financial, Inc.
10.2 Agreement with Clintec Nutrition Company re: +
Development Agreement, dated September 1, 1995
10.3 Intentionally Omitted
10.4 Intentionally Omitted
10.5 Distributorship Agreement with CO-Medical, Inc., +
dated February 17, 1992
10.6 Distributorship Agreement with Clinical Technology +
Inc., dated August 1, 1992
10.7 Intentionally Omitted
10.8 Intentionally Omitted
10.9 Distributorship Agreement with Advanced Medical, +
Inc., dated September 1, 1991
10.10 Distributorship Agreement with Healthcare +
Technology, dated October 9, 1991
10.11 Intentionally Omitted
10.12 Intentionally Omitted
10.13 Pump Contract with Chartwell Home Therapies, dated +
November 22, 1993
10.14 Sales Agreement with Pharmacy Corporation of +
America, dated March 17, 1995
10.15 Sales & Marketing Agreement with Alpha +
Group, dated November 6, 1995
10.16 Foreign Distributorship Agreement with MED-O-GEN +
INC., dated September 22, 1995
10.17 Foreign Distributorship Agreement with Yoon Duk +
Separation Technology, dated April 17, 1995
10.18 Foreign Distributorship Agreement with Upwards +
Biosystems Ltd., dated March 8, 1995
10.19 Foreign Distributorship Agreement with Grupo Grifols, +
S.A., dated September 17, 1993
10.20 Foreign Distributorship Agreement with JMS +
Company, dated March 22, 1996
10.21 Foreign Distributorship Agreement with Brasimpex +
10.22 Foreign Distributorship Agreements with Medicare (s) +
PTE LTD., dated February 10, 1995
10.23 Intentionally Omitted
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10.24 Intentionally Omitted
10.25 Master Lease Agreement with Comdisco, Inc., dated +
August 9, 1994
10.26 Stock Option Plan +
10.27 Lease for Real Property located at 5601 West Howard, +
Niles, Illinois, dated as of May 31, 1994
10.27.1 Amendment, dated October 30, 1996, to Lease for Real +++
Property located at 5601 West Howard, Niles, Illinois
10.28 Employment Agreement for K. Shan Padda +
10.29 Employment Agreement for Anil Rastogi +
10.30 Asset Purchase Agreement, dated February 25, 1997, ++
by and among Sabratek Corporation; Rocap, Inc. and
Elliott Mandell
10.31 Employment Agreement for Stephen L. Holden ++++
10.32 Employment Agreement for Elliott Mandell ++
10.33 Lease Agreement for property located at 11 Sixth ++++
Road, Woburn, Massachusetts, dated February 1, 1997
10.34 Lease Agreement for property located at 5 Constitution ++++
Way, Woburn, Massachusetts, dated June 26, 1995
10.35 Lease Agreement for property located at 1629 Prime +++++
Court, Suite 100, Orlando, Florida, dated March 11,
1997
11.1 Statement re: computation of per share earnings E-16
27 Financial Data Schedule E-17
</TABLE>
+ Incorporated by reference to the Company's Registration Statement on
Form S-1, declared effective by the Commission on June 21, 1996 (File
No. 333-3866).
++ Incorporated by reference to the Company's Current Report on Form 8-K
filed with the Commission on March 11, 1997.
+++ Incorporated by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 filed with the Commission
on March 31, 1997.
++++ Incorporated by reference to the Company's Registration Statement on
Form S-1, declared effective by the Commission on April 4, 1997
(File No. 333-23437).
+++++ Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1997 filed with the Commission on
May 15, 1997.
- 15 -
<PAGE>
(b) Reports on Form 8-K
The Company's current report on Form 8-K, dated February 25, 1997
(filed March 12, 1997), is incorporated herein by this reference.
- 16 -
<PAGE>
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.
SABRATEK CORPORATION
Date: August 14, 1997 By: /s/ K. Shan Padda
------------------------
K. Shan Padda
Chairman and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the undersigned, in his capacity as the principal
financial officer of the registrant.
Date: August 14, 1997 By: /s/ Stephen L. Holden
----------------------------
Stephen L. Holden
Principal Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the undersigned, in his capacity as the chief
accounting officer of the registrant.
Date: August 14, 1997 By: /s/ Scott Skooglund
--------------------------
Scott Skooglund
Chief Accounting Officer
- 17 -
EXHIBIT 11.1
<TABLE>
<CAPTION>
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
Three Months Ended Six Months Ended
-------------------------------------------------------------------------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income (loss) in
thousands $ 1,627 ($14) $ 2,672 ($1,730)
===========================================================================================
Weighted average common
shares outstanding 9,822,570 2,259,478 9,054,708 2,077,834
Weighted average preferred
shares outstanding - 1,838,113 - 1,838,113
Effect of conversion of
convertible subordinated
debentures - 1,245,002 - 1,245,002
Additional shares pursuant to
SAB 83 - 1,393,353 - 1,511,807
Additional shares for options
and warrants outstanding
under treasury-stock method 1,199,144 - 1,046,288 -
-------------------------------------------------------------------------------------------
11,021,714 6,735,946 10,100,996 6,672,756
===========================================================================================
$0.15 $0.00 $0.26 ($0.26)
===========================================================================================
</TABLE>
- E-1 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Appendix A to Item 601(c) of Regulation S-K
Commercial and Industrial Companies
Article 5 of Regulation S-X
(amount in dollars)
</LEGEND>
<CIK> 0001012480
<NAME> Sabratek Corporation
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 23,767,805
<SECURITIES> 7,995,610
<RECEIVABLES> 13,149,330
<ALLOWANCES> 317,769
<INVENTORY> 8,825,120
<CURRENT-ASSETS> 50,583,145
<PP&E> 3,558,901
<DEPRECIATION> 967,267
<TOTAL-ASSETS> 63,255,863
<CURRENT-LIABILITIES> 5,443,436
<BONDS> 0
0
0
<COMMON> 100,025
<OTHER-SE> 57,692,208
<TOTAL-LIABILITY-AND-EQUITY> 63,255,863
<SALES> 17,314,457
<TOTAL-REVENUES> 17,314,457
<CGS> 7,185,177
<TOTAL-COSTS> 7,185,177
<OTHER-EXPENSES> 7,937,107
<LOSS-PROVISION> 111,619
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,727,345
<INCOME-TAX> 54,539
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,672,406
<EPS-PRIMARY> 0.26
<EPS-DILUTED> 0
</TABLE>
