<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1999
------------------
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 333-69207
---------
Careside, Inc.
--------------
(Exact name of registrant as specified in its charter)
Delaware 23-2863507
-------- ----------
(State or other jurisdiction (IRS employer identification no.)
of incorporation or organization)
6100 Bristol Parkway, Culver City, CA 90230
--------------------------------------------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (310) 338-6767
--------------
Indicate by check 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 No X
--- ---
The number of shares outstanding of the Registrant's common Stock, par
value $.01 per share, was 7,084,340 as of November 12, 1999
<PAGE>
CARESIDE, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Part I Financial Information
Item 1. Financial Statements (unaudited)
--------------------------------
Balance Sheets at December 31, 1998 and September 30, 1999................................................ 3
Statements of Operations for the three and nine months ended
September 30, 1998 and 1999............................................................................. 4
Statements of Cash Flows for the nine months ended
September 30, 1998 and 1999............................................................................. 5
Notes to Financial Statements............................................................................. 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations......................8
Item 3. Quantitative and Qualitative Disclosures about Market Risk................................................11
Part II Other Information
Item 2. Changes in Securities and Use of Proceeds.................................................................12
Item 6. Exhibits and Reports on Form 8-K..........................................................................13
Signatures.................................................................................................................14
</TABLE>
-2-
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
CARESIDE, INC.
(a development-stage company)
BALANCE SHEETS
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
ASSETS
------
December 31, 1998 September 30, 1999
----------------- ------------------
(unaudited)
-----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents......................................... $ 3,926.6 $ 8,533.3
Inventories....................................................... - 121.8
Prepaid expenses and other........................................ 82.1 119.6
---------- ----------
Total current assets............................................ 4,178.3 8,774.7
PROPERTY AND EQUIPMENT, net......................................... 3,386.5 5,546.1
DEFERRED OFFERING COSTS............................................. 498.4 -
DEPOSITS............................................................ 17.7 15.0
---------- ----------
$ 7,911.3 $ 14,335.8
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt................................. $ 187.0 $ 2,175.8
Accounts payable.................................................. 1,369.9 847.7
Accrued expenses.................................................. 160.4 350.2
---------- ----------
Total current liabilities....................................... 1,717.3 3,373.7
---------- ----------
LONG-TERM DEBT...................................................... 2,044.9 1,272.0
---------- ----------
STOCKHOLDERS' EQUITY
Series A convertible preferred stock, $.01 par value, 5,000,000
shares authorized, none issued and outstanding at December 31,
1998, 162,914 issued and outstanding at September 30, 1999.......
- 1.6
Common stock, $.01 par value, 50,000,000 shares authorized,
5,084,281 issued and outstanding at December 31, 1998, 7,084,281
issued and outstanding at September 30, 1999..................... 50.8 70.8
Additional paid-in capital........................................ 21,003.5 34,671.1
Deficit accumulated during development stage...................... (16,905.2) (25,053.4)
---------- ----------
Total stockholders' equity..................................... 4,149.1 9,690.1
---------- ----------
$ 7,911.3 $ 14,335.8
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
CARESIDE, INC.
(a development-stage company)
STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
<TABLE>
<CAPTION>
For the Period
Three Months Ended Nine Months Ended From Inception
September 30, September 30, (July 10, 1996)
------------------------ ------------------------ Through
1998 1999 1998 1999 September 30, 1999
---------- ---------- ---------- ---------- -------------------
<S> <C> <C> <C> <C> <C>
OPERATING EXPENSES:
Research and development......... $ 2,460.0 $ 2,074.8 $ 6,159.0 $ 5,931.1 $ 21,686.4
Sales and marketing.............. 57.0 307.8 184.0 577.0 826.0
General and administrative....... 177.5 422.2 464.5 957.1 2,254.3
---------- ---------- ---------- ---------- ----------
Operating Loss............. (2,694.5) (2,804.8) (6,807.5) (7,465.2) (24,766.7)
INTEREST INCOME...................... 80.4 132.1 195.9 202.0 649.7
INTEREST EXPENSE..................... - (73.1) - (856.0) (907.4)
---------- ---------- ---------- ---------- ----------
NET LOSS............................. (2,614.1) (2,745.8) (6,611.6) (8,119.2) (25,024.4)
DIVIDENDS ON SERIES A
PREFERRED STOCK................ - (26.2) - (29.0) (29.0)
---------- ---------- ---------- ---------- ----------
NET LOSS TO COMMON
STOCKHOLDERS........................ $ (2,614.1) $ (2,772.0) $ (6,611.6) $ (8,148.2) $(25,053.4)
========== ========== ========== ========== ==========
BASIC NET LOSS PER SHARE............ $ (0.51) $ (0.39) $ (1.48) $ (1.39)
========== ========== ========== ==========
SHARES USED IN COMPUTING BASIC NET
LOSS PER SHARE..................... 5,084,340 7,084,340 4,476,833 5,868,223
========= ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
CARESIDE, INC.
(a development-stage company)
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the Period
From Inception
Nine Months Ended (July 10, 1996)
September 30, Through
----------------------------- September 30,
1998 1999 1999
--------- --------- ---------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net Loss $(6,611.6) $(8,119.2) $(25,024.4)
Adjustments to reconcile net loss to net cash used in
operating activities -
Depreciation 441.2 873.3 1,398.6
Imputed interest on long-term debt - 289.8 298.1
Amortization of debt discount - 309.2 330.2
Change in assets and liabilities-
Increase in inventories - (121.8) (121.8)
Decrease (increase) in prepaid expenses and other (668.9) (37.5) (289.2)
Decrease (increase) in deposits 80.1 2.7 -
Increase (decrease) in accounts payable 804.9 (23.8) 1,346.2
Increase (decrease) in accrued expenses (41.7) 199.4 379.4
--------- --------- ----------
Net cash used in operating activities (5,996.0) (6,627.9) (21,683.0)
--------- --------- ----------
INVESTING ACTIVITIES:
Purchases of short-term investments (1,647.9) - -
Purchases of property and equipment (861.7) (3,032.8) (6,271.5)
--------- --------- ----------
Net cash used in investing activities (2,509.6) (3,032.8) (6,271.5)
--------- --------- ----------
FINANCING ACTIVITIES:
Net borrowings (repayments) on line of credit - - -
Proceeds from issuance of notes - 2,021.8 5,562.9
Deferred offering costs (221.4) - (690.3)
Proceeds from the issuance of common stock 10,317.7 12,360.7 31,578.6
Payment on note payable - (115.1) (115.1)
Payment of stock subscription - - 99.0
Cash received from SmithKline Beecham Corporation in connection
with the asset purchase - - 52.7
--------- --------- ----------
Net cash provided by financing activities 10,096.3 14,267.4 36,487.8
--------- --------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,590.7 4,606.7 8,533.3
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD 1,237.1 3,926.6 -
--------- --------- ----------
CASH & CASH EQUIVALENTS, END OF PERIOD $ 2,827.8 $ 8,533.3 $ 8,533.3
========= ========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
CARESIDE, INC.
(a development-stage company)
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Note 1: BASIS OF PRESENTATION
The accompanying unaudited financial statements for the three and nine
months ended September 30, 1999 of Careside, Inc. (the "Company") have been
prepared 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. In management's opinion, all adjustments, consisting of normal
recurring adjustments, which are necessary for a fair presentation of the
financial position and results of operations, have been made. The results of
operations for the three and nine months ended September 30, 1999 are not
necessarily indicative of the results expected for the entire year. These
financial statements should be read in conjunction with the financial statements
and notes related thereto included in the Company's Registration Statement on
Form S-1 (File No. 333-69207). Certain prior period amounts have been
reclassified to conform to the current period presentation.
Note 2: STOCKHOLDERS' EQUITY
In June 1999, the Company completed its initial public offering (the
"IPO") of its units (the "Units"), each unit consisting of one share of the
Company's common stock, $.01 par value per share (the "Common Stock"), and one
redeemable common stock purchase warrant (the "Warrant") to purchase an
additional share of Common Stock. Two million Units were sold in the IPO at a
price of $7.50 per unit. The Company effected a 1 for 5.2 reverse stock split of
the Common Stock immediately prior to the IPO. All references in the
accompanying financial statements to the number of shares and per share amounts
have been restated to show the effect of this reverse stock split. Upon
consummation of the IPO, $1 million of debt plus accrued interest was converted
into 162,914 shares of the Company's Series A Convertible Preferred Stock
("Series A Preferred Stock").
Note 3: INCOME TAXES
As of December 31, 1998, the Company had approximately $2,148,000 and
$225,000 of net operating loss and research and development credit
carryforwards, respectively, for federal income tax purposes, which expire on
various dates between 2011 and 2013. As of December 31, 1998, the Company had
capitalized approximately $12.9 million of research and development expenses for
federal income tax purposes.
The availability of the net operating loss carryforward to reduce U.S.
federal taxable income is subject to various limitations under the Internal
Revenue Code of 1986 (the "Code"), as amended, in the event of an ownership
change as defined in Section 382 of the Code. The Company experienced a change
in ownership interest in excess of 50% as defined under the Code upon the
consummation of the IPO. The Company does not believe that this change in
ownership significantly impacts the Company's ability to utilize its net
operating loss and tax credit carryforwards as of December 31, 1998.
Note 4: INVENTORIES
At September 30, 1999, inventories consisted of raw materials to be
utilized in the manufacturing of disposable test cartridges.
Note 5: NET LOSS PER COMMON SHARE
Basic loss per share was computed by dividing net loss applicable to
common stockholders by the weighted average number of shares of Common Stock
outstanding during the period. Dilutive loss per share has not been presented,
since the impact on loss per share is anti-dilutive to the Company's loss per
share.
-6-
<PAGE>
Note 6: STATEMENTS OF CASH FLOW
During the nine-month periods ended September 30, 1998 and 1999, cash
paid for interest was approximatley zero and $104,000 respectively. During the
same periods the company made no cash payments for income taxes.
During the nine-month period ended September 30, 1999, non-cash
investing and financing activities, which are excluded from the statement of
cash flows are as follows. The company converted $1,000,000 of debt and $38,600
of accrued interest to Series A convertible preferred stock. This is reflected
as approximately $1,600 Paid-In Capital, with the difference credited to
additional paid-in capital. The company also accrued a dividend of $29,000 on
its Series A convertible preferred stock. In connection with the company's
initial public offering, $498,400 of unpaid deferred offering costs were offset
against accounts payable. The company had no non-cash investing and financing
activities in the nine-month period ending September 30, 1998.
-7-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
FORWARD-LOOKING STATEMENTS - CAUTIONARY STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-Q,
including statements regarding the anticipated development and expansion of the
Company's business and expenditures, the intent, belief or current expectations
of the Company, its directors or its officers, primarily with respect to the
future operating performance of the Company and other statements contained
herein regarding matters that are not historical facts, are "forward-looking
statements" (as such term is defined in the Private Securities Litigation Reform
Act of 1995). Because such statements include risks and uncertainties, actual
results may differ materially from those expressed or implied by such forward-
looking statements. Factors that could cause actual results to differ materially
from those expressed or implied by such forward-looking statements include, but
are not limited to, those discussed in other filings, including those contained
in the Company's Registration Statement on Form S-1 (File No. 333-69207), made
by the Company with the Securities and Exchange Commission.
GENERAL
The Company is the developer of the Careside System, a proprietary
blood testing system. It is designed to decentralize laboratory operations and
provides a solution to the limitations of central blood testing laboratories.
The Careside Analyzer System consists of a desktop testing instrument called the
CareSide Analyzer(TM), disposable test cartridges and an optional hematology
device which has been developed and is manufactured by a third party. The
Careside Analyzer System performs blood tests at the same location as the
patient, or what is commonly called near patient testing. It provides rapid test
results within 10 to 15 minutes from the time the blood is drawn from the
patient, in contrast to the traditional method of sending blood samples to
hospital or commercial laboratories and waiting between 4 and 24 hours to obtain
test results. Such centralized laboratories are burdened by transportation time
and volume processing steps. In addition, the Careside Analyzer System is
expected to be cost competitive and will offer a comprehensive test menu, which
the Company believes represents more than 80% of all routine blood tests ordered
on an out-patient basis. These include all of the most commonly ordered blood
tests, as well as blood tests required for critical care testing, including
chemistry, electrochemistry, coagulation and immunochemistry tests within a
single testing instrument and hematology testing in an optional separate but
integrated instrument. As of September 30, 1999, the CareSide Analyzer and 36
tests were cleared for marketing by the FDA or are exempt and can be marketed
for professional laboratory use. An additional 18 FDA approved hematology tests
will be available through the CDC Agreement signed in July 1999. The Company
believes that no other product for decentralized blood testing currently in the
market offers nearly as broad a menu of tests or combines these test categories.
The Company's products are not yet available for sale. The Company
expects to have commercial sales in the fourth quarter of 1999. The Company has
incurred losses and expects to incur increasing losses for the foreseeable
future as the Company launches its products and its product development and
marketing expenditures continue. The Company's revenue for the immediate future
will be limited to interest income and other miscellaneous income.
-8-
<PAGE>
The following is a discussion of the financial condition and results
of operations for the Company for the three and nine months ended September 30,
1999 and 1998. It should be read in conjunction with the Interim Financial
Statements of the Company, the Notes thereto and other financial information
included elsewhere in this report.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Research and Developments Expenses. Research and development expenses
decreased to approximately $2.1 million for the three months ended September 30,
1999 from $2.5 million for the three months ended September 30, 1998. This
decrease of $0.4 million, or 16%, was primarily attributable to completion of
third party contract development work associated with producing the CareSide
Analyzer and a lower level of staffing associated with new test development.
Sales and Marketing Expenses. Sales and marketing expenses increased
to $308,000 for the three months ended September 30, 1999 from $57,000 for the
three months ended September 30, 1998. This increase of $251,000, or 440%, is
primarily attributable to increases in sales and marketing efforts associated
with the anticipated launch of the Careside Analyzer System, sales force
salaries and increases in marketing staff.
General and Administrative Expenses. General and administrative
expenses increased to $422,000 for the three months ended September 30, 1999
from $178,000 for the three months ended September 30, 1998. This increase of
$244,000, or 137%, is primarily attributable to increases in administrative
staff, expenses associated with being a public company and information
technology expenditures.
Net Interest Income (Expense). Net interest income decreased to
approximately $59,000 for the three months ended September 30, 1999 compared to
$80,000 for the three months ended September 30, 1998. This decrease of
$21,000, or 26%, is attributable to higher interest expense in 1999. Interest
expense increased to $73,000 in 1999 from $0 in 1998 due to equipment lease
financing and interest payable on the bridge loan (the "Bridge Loan") issued to
the Company by S.R. One, Limited ("S.R. One).
Net Loss. Net loss to common stockholders increased $157,000 or 6%,
to $2.8 million for the three months ended September 30, 1999 from $2.6 million
for the three months ended September 30, 1998. This increase reflects the
increase in interest expense, administrative and marketing expenses offset by
decreases in research and development expenses and increased interest income.
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Research and Developments Expenses. Research and development expenses
decreased to approximately $5.9 million for the first nine months of 1999 from
$6.2 million for the same period of 1998. This decrease of $228,000, or 4%, was
primarily attributable to completion of development efforts for the CareSide
Analyzer and reduced development costs for test submissions to the FDA.
Sales and Marketing Expenses. Sales and marketing expenses increased
to $577,000 for the first nine months of 1999 from $184,000 for the same period
of 1998. This increase of $393,000, or 214%, is primarily attributable to hiring
the sales force, preliminary sales and marketing efforts to launch the Careside
Analyzer System and increases in marketing staff.
General and Administrative Expenses. General and administrative
expenses increased to $957,000 for the first nine months of 1999 from $465,000
for the same period of 1998. This increase of $492,000, or 106%, is primarily
attributable to compensation related to adding a Chief Financial Officer and
other administrative staff, expenses for investor relations after the public
offering and information technology consulting.
Net Interest Income (Expense). Interest income increased to
approximately $202,000 for the nine months ended September 30, 1999 from
$196,000 for the nine months ended September 30, 1998. This increase of $6,000,
or 3%, is attributable to higher average balances of cash and cash equivalents
during 1999 after the initial public offering. Interest expense increased to
approximately $856,000 for the nine months ended September 30, 1999 from $0 for
the nine months ended September 30, 1998. This increase is due to a non-cash
interest charge
-9-
<PAGE>
associated with the Bridge Loan Warrants (as defined herein), a non-cash
interest charge associated with the Bridge Loan and equipment lease financing.
Net Loss. The net loss increased $1.5 million, or 23%, to
approximately $8.1 million for the nine months ended September 30, 1999 from
$6.6 million during the nine months ended September 30, 1998. This increase was
attributable to increases in operating and non-cash interest expense.
The Company expects that results of operations in the future will
fluctuate significantly from period to period. Such fluctuations may result from
numerous factors, including the amount and timing of revenues earned from sales,
proceeds from existing or future collaborative distribution relationships or
joint ventures, if any, the cost of preparing, filing, prosecuting, maintaining,
defending and enforcing patent claims and other intellectual property rights,
the status of competing products and technologies and the timing and
availability of financing for the Company. In the near term, the Company
believes that comparisons of its quarterly and annual historical results may not
be meaningful and should not be relied upon as an indication of future
performance.
INCOME TAXES
As of December 31, 1998, the Company had approximately $2,148,000 and
$225,000 of net operating loss and research and development credit
carryforwards, respectively, for federal income tax purposes, which expire on
various dates between 2011 and 2013. As of December 31, 1998, the Company had
capitalized approximately $12.9 million of research and development expenses for
federal income tax purposes.
The availability of the net operating loss carryforward to reduce U.S.
federal taxable income is subject to various limitations under the Code, as
amended, in the event of an ownership change as defined in Section 382 of the
Code. The Company experienced such an ownership change upon consummation of the
IPO. The Company does not believe that this change in ownership significantly
impacts the Company's ability to utilize its net operating loss and tax credit
carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations primarily through sales of its
capital stock. On June 21, 1999, the Company completed an IPO of 2,000,000
Units. Each Unit was comprised of one share of Common Stock and one Warrant. The
IPO transaction substantially increased cash available to the Company and is
reflected in the financial statements included elsewhere in this document. As of
September 30, 1999, the Company had cash and cash equivalents of approximately
$8.5 million and working capital of approximately $5.4 million. The Company
expects that such amounts will be used primarily to complete product development
and to launch its product, to purchase manufacturing equipment, to build
inventory and to provide working capital. As of September 30, 1999, the Company
had a material commitment for capital expenditures relating to completion of the
automated assembly line for producing its test cartridges. The Company estimates
that its current liquidity, sales revenue expected after 1999 and equipment
lease financing (under the Company's current equipment lease facility) will be
sufficient to fund the Company's operating expenses and capital requirements
excluding bridge debt repayment for at least the next 9 to 12 months. The
Company's operating expenses will increase as it approaches market launch of its
product in the fourth quarter of 1999. The Company also expects that the
development of additional tests will require research expenditures at a level
comparable to past spending for test development. Initiation of manufacturing
activities will require hiring approximately 10 additional staff and capital
expenditures to purchase the equipment needed for the automated assembly line.
In addition, the Company is pursuing alternative means of restructuring its
bridge debt. The estimate of the period for which the Company expects its
available sources of cash sufficient to meet its funding needs is a forward
looking statement that involves risks and uncertainties. The Company's future
expenditures and capital requirements will depend on numerous factors,
including, without limitation, the progress of its market launch, development
programs, the time and costs involved in obtaining regulatory approvals, the
cost of filing, prosecuting, defending and enforcing any patent claims and other
intellectual property rights, competing technological and market developments,
changes in or termination of existing collaborative arrangements, the ability of
the Company to establish, maintain and avoid termination of collaborative
arrangements and the purchase of capital equipment and acquisitions of
compounds, technologies or businesses. The Company's cash requirements are
expected to continue to increase each year as it expands its activities and
operations. There can be no assurance that the Company will ever be able to
generate product revenue or achieve or sustain profitability.
-10-
<PAGE>
YEAR 2000 COMPLIANCE
The Company has identified Year 2000 risks in the following
categories: internal business operations software; software utilized within the
CareSide Analyzer; and software used by the Company's external suppliers. A
review of the Company's non-information technology systems did not identify any
material risks.
With respect to internal operations, most of the Company's computers
and software programs have been recently acquired. The Company has relied on
the efforts of computer and software vendors to make their latest hardware and
software releases Year 2000 compliant. As a result, no incremental material
compliance cost is expected to be incurred in this area. Management of the
Company has contacted vendors to confirm the status of their software that the
Company uses. In addition, the Company has utilized Year 2000 test software to
evaluate compliance.
With respect to the CareSide Analyzer, all development work has
occurred since the widespread recognition of the Year 2000 problem. The Company
designed its products and the software in its system to be Year 2000 compliant.
The Company plans to issue software updates for the CareSide Analyzer on a
routine basis to add additional tests to the menu. If an unforeseen Year 2000
issue arises, the Company could distribute compliant software to its customers
at little or no incremental cost as part of these routine updates. In the
future, it will also be necessary to link the CareSide Analyzer with customer
systems. If these systems are Year 2000 compliant, management's time addressing
Year 2000 issues on the CareSide Analyzer's interface with customer systems will
be minimal. If they are not, management's time may be more significant. As the
specific customers are not known at this time, it is not possible to measure the
opportunity cost.
Regarding the Company's critical suppliers, the Company might at most
encounter a short-term disruption of supply if a vendor were impacted by an
unforeseen Year 2000 failure. The Company inquires regularly regarding its
suppliers' Year 2000 compliance programs. To date, the Company believes that its
suppliers either are or will be Year 2000 compliant. The Company expects to
establish appropriate contingency plans by the end of the fourth quarter of 1999
in the event certain key suppliers are not Year 2000 compliant. These
contingency plans could include utilizing alternative suppliers or building
inventory of critical parts as appropriate. The Company does not anticipate any
incremental material costs if it is required to implement its contingency plans.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable
-11-
<PAGE>
PART II
OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
Sale of Unregistered Securities; Changes in Securities
None
Use of Proceeds
On June 15, 1999, the Company's Registration Statement on Form S-1
(File No. 33-69207) (the "Registration Statement") was declared effective by the
Securities and Exchange Commission, which registration statement related to the
Company's initial public offering of up to 2,000,000 Units (not including the
over-allotment option granted to the underwriters). The Registration Statement
also related to the shares of Common Stock and Warrants included in such
2,000,000 Units, warrants to purchase up to 200,000 Units granted to the
representatives underwriters of the Company in the IPO, and 2,200,000 Shares of
Common Stock underlying the Warrants included in all of the Units. The managing
underwriters of the IPO were Paulson Investment Company, Inc., Millennium
Financial Group, Inc. and marion bass securities corporation. Two million Units
were sold at a public offering price of $7.50 per share, for an aggregate
offering price of $15.0 million. Expenses of the IPO were $2.6 million,
including an underwriting discount of $920,000 and other offering expenses of
$1.7, for net proceeds to the Company of $12.4 million. As of September 30,
1999, approximately $2,772,000 has been used for research and development and
other operating costs. Remaining net proceeds of the IPO have been invested in
short term interest bearing investments.
-12-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit.
<TABLE>
<CAPTION>
Exhibit No. Description
<C> <S>
27.1 Financial Data Schedule
</TABLE>
_____________
No reports on Form 8-K were filed during the quarter ended September 30, 1999.
-13-
<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 hereunto duly authorized.
CARESIDE, INC.
Date: November 12, 1999 By: /s/ W. Vickery Stoughton
---------------------------------------------
W. Vickery Stoughton
Chairman and Chief Executive Officer
(Principal Executive Officer)
By: /s/ James R. Koch
---------------------------------------------
James R. Koch
Executive Vice President and Chief
Financial Officer
(Principal Financial and Accounting
Officer)
-14-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> SEP-30-1999 SEP-30-1998
<CASH> 8,533 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 122 0
<CURRENT-ASSETS> 8,775 0
<PP&E> 6,945 0
<DEPRECIATION> (1,399) 0
<TOTAL-ASSETS> 14,336 0
<CURRENT-LIABILITIES> 3,374 0
<BONDS> 0 0
0 0
2 0
<COMMON> 71 0
<OTHER-SE> 34,671 0
<TOTAL-LIABILITY-AND-EQUITY> 14,336 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 7,465 6,808
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 856 0
<INCOME-PRETAX> (8,119) (6,612)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (8,119) (6,612)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (8,148) (6,612)
<EPS-BASIC> (1.39) (1.48)
<EPS-DILUTED> (1.39) (1.48)
</TABLE>
