<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 March 31, 2000
_______________
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 8,797,665 as of March 31, 2000.
<PAGE>
CARESIDE, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
Item 1. Financial Statements (unaudited)
--------------------------------
<S> <C>
Consolidated Condensed Balance Sheets at December 31, 1999 and March 31, 2000 unaudited............... 3
Consolidated Condensed Statements of Operations for the three months ended
March 31, 1999 and 2000 unaudited and the period from inception (July 10, 1996) through
March 31, 2000 unaudited....................................................................... 4
Consolidated Condensed Statements of Cash Flows for the three months ended
March 31, 1999 and 2000 unaudited and the period from inception (July 10, 1996) through
March 31, 2000 unaudited....................................................................... 5
Notes to Consolidated Condensed 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>
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<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
CARESIDE, INC.
(a development-stage company)
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands, except share amounts)
(unaudited)
<TABLE>
<CAPTION>
ASSETS
------
December 31, 1999 March 31, 2000
----------------- ---------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents......................................... $ 4,905.4 $ 11,260.9
Inventories....................................................... 548.6 1,078.5
Accounts Receivable............................................... 78.0 151.1
Prepaid expenses and other........................................ 102.7 257.7
---------- ----------
Total current assets............................................ 5,634.7 12,748.2
PROPERTY AND EQUIPMENT, net......................................... 5,939.2 6,405.6
DEFERRED OFFERING COSTS............................................. 2.3 -
GOODWILL,net........................................................ 2,798.2 2,656.4
DEPOSITS............................................................ 15.0 15.0
---------- ----------
$ 14,389.4 $ 21,825.2
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt................................. $ 2,327.2 $ 2,655.7
Accounts payable................................................. 844.9 2,685.8
Accrued interest.................................................. 156.5 206.4
Accrued expenses.................................................. 886.3 446.9
---------- ----------
Total current liabilities...................................... 4,214.9 5,994.8
---------- ----------
LONG-TERM DEBT...................................................... 1,095.7 1,410.8
---------- ----------
STOCKHOLDERS' EQUITY
Series A convertible preferred stock, $.01 par value,
5,000,000 shares authorized; 162,914 issued and outstanding at
December 31, 1999 and March 31, 2000............................. 1.6 1.6
Common stock, $.01 par value, 50,000,000 shares authorized;
7,609,581 and 8,797,665 issued and outstanding at
December 31, 1999 and March 31, 2000 respectively................ 76.1 87.9
Additional paid-in capital........................................ 37,497.0 47,025.8
Deficit accumulated during development stage...................... (28,495.9) (32,695.7)
---------- ----------
Total stockholders' equity.......................................... 9,078.8 14,419.6
---------- ----------
$ 14,389.4 $ 21,825.2
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-3-
<PAGE>
CARESIDE, INC.
(a development-stage company)
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended For the Period From Inception
March 31, (July 10, 1996)
--------- Through
1999 2000 March 31, 2000
---- ---- --------------
<S> <C> <C> <C>
SALES, net....................... $ - $ 282.7 $ 343.6
COST OF SALES.................... - 142.5 173.1
--------- --------- ----------
GROSS PROFIT..................... - 140.2 170.5
OPERATING EXPENSES:
Research and development....... 2,229.7 2,463.5 26,470.9
Sales and marketing............ 151.6 944.4 2,483.4
General and administrative..... 257.8 721.5 3,381.4
--------- --------- ----------
Operating Loss............... (2,639.1) (3,989.2) (32,165.2)
INTEREST INCOME.................. 42.1 77.5 816.1
INTEREST EXPENSE................. (401.8) (146.4) (1,168.3)
GOODWILL AMORTIZATION............ - (141.8) (178.3)
--------- --------- ----------
NET LOSS......................... (2,998.8) (4,199.9) (32,695.7)
DIVIDENDS ON SERIES A
PREFERRED STOCK............... - (25.8) (81.1)
--------- --------- ----------
NET LOSS TO COMMON
STOCKHOLDERS.................... $(2,998.8) $(4,225.7) $(32,776.8)
========= ========= ==========
BASIC NET LOSS PER COMMON SHARE.. $ (.59) $ (0.54)
========= =========
SHARES USED IN COMPUTING BASIC
NET LOSS PER COMMON SHARE....... 5,084,340 7,867,350
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-4-
<PAGE>
CARESIDE, INC.
(a development-stage company)
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the Period
From Inception
Three Months Ended (July 10, 1996)
March 31, Through
--------- March 31,
1999 2000 2000
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net Loss............................................................... $(2,998.8) $(4,199.9) $(32,695.7)
Adjustments to reconcile net loss to net cash used in
operating activities -
Depreciation and Amortization........................................ 234.7 644.1 2,526.9
Imputed interest on long-term debt................................... - - 8.3
Amortization of debt discount........................................ 309.1 - 330.1
Noncash interest expense............................................. - - 289.8
Change in assets and liabilities-
Inventories.......................................................... - (529.9) (1,002.0)
Accounts receivable.................................................. - (73.0) (146.5)
Prepaid expenses and other........................................... 168.2 (155.0) (257.6)
Deposits............................................................. - - -
Accounts payable..................................................... 555.3 1,843.1 3,140.1
Accrued interest..................................................... - 49.9 244.9
Accrued expenses..................................................... 24.2 (465.2) 385.5
--------- --------- ----------
Net cash used in operating activities.................................... (1,707.3) (2,885.9) (27,176.2)
--------- --------- ----------
INVESTING ACTIVITIES:
Cash acquired in purchase of Texas International Laboratories, Inc.... - - .1
Purchases of property and equipment.................................... (1,224.8) (968.8) (8,197.7)
--------- --------- ----------
Net cash used in investing activities.................................... (1,224.8) (968.8) (8,197.6)
--------- --------- ----------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt............................... 1,500.0 795.4 6,389.3
Deferred offering costs................................................ (388.1) - (692.6)
Proceeds from the issuance of common stock............................. - 9,566.6 41,162.0
Payments on long-term debt............................................. (44.3) (151.8) (375.7)
Payment of stock subscription.......................................... - - 99.0
Cash received from SmithKline Beecham Corporation in
connection with asset purchase...................................... - - 52.7
--------- --------- ----------
Net cash provided by financing activities................................ 1,067.6 10,210.2 46,634.7
--------- --------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS................................ (1,864.5) 6,355.5 11,260.9
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD............................. 3,926.6 4,905.4 -
--------- --------- ----------
CASH & CASH EQUIVALENTS, END OF PERIOD................................... $ 2,062.1 $11,260.9 $ 11,260.9
========= ========= ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-5-
<PAGE>
CARESIDE, INC.
(a development-stage company)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
Note 1: BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements 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. These interim financial statements should be read in conjunction
with the Company's Annual Report in Form 10-K for the year ended December 31,
1999. In management's opinion, all adjustments, consisting only 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 these interim financial statements are not necessarily indicative
of the results expected for the entire year. 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 consolidated
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").
In March 2000, the Company sold 1,184,091 shares of common stock in a
private placement for $8.77 per share. Proceeds, net of approximately $840,000
of offering costs, amounted to approximately $9.5 million. These shares were
subsequently registered with Securities and Exchange Commission in April 2000.
Note 3: INCOME TAXES
As of December 31, 1999, the Company had approximately $17,769,000 and
$759,000 of net operating loss and research and development credit
carryforwards, respectively, for federal income tax purposes, which begin to
expire in 2011.
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, 1999.
Note 4: INVENTORIES
At March 31, 2000, inventories consisted of raw materials to be utilized in
the manufacturing of disposable test cartridges and analyzers. Inventories are
carried at the lower of cost or market computed on a first-in, first-out (FIFO)
basis.
Note 5: NET LOSS PER COMMON SHARE
Basic loss per common share was computed by dividing net loss applicable to
common stockholders by the weighted average number of shares of common shares
outstanding during the period. Dilutive loss per common share has not been
presented, since the effect of common stock equivalents is anti-dilutive to the
Company's loss per common share.
-6-
<PAGE>
Note 6: REVENUE RECOGNITION
The Company recognizes revenue upon shipment, except that revenue from
analyzers is not recognized until customer acceptance.
Note 7: PURCHASE OF TEXAS INTERNATIONAL LABORATORIES, INC. (TIL)
In December 1999, the Careside acquired all of the outstanding common stock
of Texas International Laboratories, Inc. in exchange for 521,739 shares of
Careside's common stock. TIL was then merged into Careside's newly formed,
wholly-owned subsidiary, Careside Hematology. The transaction was accounted for
using the purchase method of accounting. Careside acquired substantially all
assets of TIL for $2,869,565, which represented the market value of the 521,739
shares of common stock on the date of acquisition. The excess of the purchase
price over the book value of TIL was recorded as goodwill in the amount of
$2,834,747. Goodwill is amortized over a five-year period. Amortization expense
for the three months ended March 31, 2000 was $141,737.
Note 8: LONG-TERM DEBT
The Company's long-term debt consists of an obligation under a capital lease
agreement, equipment loans due to a finance company and bridge financing due to
a related party. The capital lease obligation carries monthly payments through
2003 and the equipment loans carry monthly payments through 2002 and 2003. The
bridge financing of $2,000,000 and is due in June 2000.
Note 9: STATEMENTS OF CASH FLOWS
During the three-month periods ended March 31, 1999 and 2000 cash paid for
interest was approximately $36,000 and $106,000 respectively. During the same
periods the Company made no cash payments for income taxes.
During the three-month period ended March 31, 2000, the Company accrued a
dividend of $25,894 on it's Series A convertible preferred stock. The impact of
this dividend on accrued liabilities and additional paid-in capital has been
excluded from the consolidated condensed statement of cash flows. The Company
had no non-cash investing and financing activities in the three-month period
ending March 31, 1999.
-7-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Development of the point-of-care technology used in the Careside system began in
1994 at SmithKline Beecham Clinical Laboratories, Inc., a subsidiary of
SmithKline Beecham Corporation. In November 1996, we acquired the intellectual
property, equipment and other assets from SmithKline to continue the development
of point-of-care diagnostic technology and to create a commercial product. As
part of the consideration paid for the acquisition, SmithKline Beecham
Corporation became an equity owner in Careside. In December 1999, we expanded
the Careside system by acquiring Texas International Labs and the rights to
their hematology testing device.
Since November 1996, we have devoted substantially all of our resources to
research and development activities. We have incurred losses since inception. As
of March 31, 2000, the aggregate loss incurred was approximately $32.7 million.
We expect to incur significant additional losses over at least the next 12
months as we continue product development activities, complete a pilot marketing
program and expand marketing efforts.
Results of Operations
Three Months Ended March 31, 2000 and 1999
Sales and Cost of Sales. Sales increased to $283,000 in the first quarter of
2000. The sales were predominately sales of Careside H-2000's, the product we
acquired in December 1999. The cost of sales represents the cost of instruments
and reagents sold.
Research and Development Expenses. Research and development expenses of $2.5
million remained consistent for the quarter ended March 31, 2000 as compared to
spending of $2.2 million for the quarter ended March 31, 1999. This reflects the
Company's efforts to refine operating software and resolve one hardware issue
identified at in initial marketing sites of the Careside Analyzer, and to
support additional test submissions to the FDA.
Selling and Marketing Expenses. Selling and marketing expenses increased to
$944,000 for the first quarter of 2000 compared to $152,000 for the same period
in 1999. This increase reflects the expense associated with building and
training the sales force to sell the Careside system in 2000, trade show
activity and initial promotion during 2000.
General and Administrative Expenses. General and administrative expenses
increased to $722,000 for the first quarter of 2000 compared to $258,000 in the
same period in 1999. This increase reflects the increase in efforts related to
computer systems and software consulting, increased legal expense, public
company reporting expenses and investor relations efforts resulting from being a
public company in 2000 versus a private company in 1999.
Interest Income Expense and Interest expense was $146,000 for the first quarter
of 2000 as compared to $402,000 for the same period in 1999. This decrease
reflects the one-time, non-cash interest charges associated with the bridge loan
facility S.R. One of $285,000 incurred in 1999 and not in 2000. Remaining
interest expense is associated with the line-of-credit to purchase equipment and
accrued interest on the remaining S.R. One bridge loan. Interest income for the
first quarter of 2000 increased to $78,000 from $42,000 for the first quarter of
1999 due to larger cash and cash equivalent balances.
Goodwill. Goodwill amortization of $142,000 associated with the December 1999
acquisition of Texas International Laboratories, Inc. was recorded for the first
quarter of 2000. No such expense occurred in the comparable prior year period.
Net Loss. The net loss increased to approximately $4.2 million for the three
months ended March 31, 2000 compared to $3.0 million for the same period in
1999. This increase reflects the increase in selling and marketing, and
administrative expenses.
-8-
<PAGE>
Liquidity and Capital Resources
We have financed our operations since inception primarily through the net
proceeds generated from the issuance of common stock and preferred stock,
warrants, long-term debt and certain short-term borrowings that were
subsequently converted into equity securities. As of March 31, 2000, we have
received net proceeds aggregating approximately $46.6 million from these
transactions.
Net cash used in operating activities for the three months ended March 31, 2000
was approximately $2.9 million. This amount included an increase in inventory of
$529,000, a net increase in accrued expenses and accounts payable of $1.4
million and operating losses of $4.0 million. Cash used for operations was
primarily related to funding expansion of as the expansion of marketing, sales
and administrative infrastructure. Net cash used in operating activities was
approximately $1.7 million for the three months ended March 31, 1999. For the
three months ended March 31, 1999, cash used in operating activities represents
the net loss for the period offset by an increase in depreciation and
amortization expense accounts payable.
Cash used in investing activities for the purchase of property and equipment was
approximately $1.0 million for the three months ended March 31, 2000 and $1.2
million for the three months ended March 31, 1999. The cash was used primarily
for the acquisition of automated manufacturing equipment and demonstration
analyzers used in marketing.
At March 31, 2000, our principal source of liquidity was approximately $11.3
million in cash and cash equivalents.
In December 1998, we entered into an agreement with an equipment lease financing
company regarding a $2.5 million facility secured by specific equipment. Each
draw will be a separate loan under the facility. Approximately $1.5 million of
this facility was drawn by December 1999 and was secured by our existing
equipment. We drew $0.8 million in the first quarter secured by manufacturing
equipment for cartridge assembly which we have purchased previously. Each
equipment loan has a 48-month term and bears an interest rate of approximately
14% per annum adjusted for an index rate based on four-year U.S. Treasury Notes
at the time of borrowing.
In addition, we entered into an agreement for bridge financing with S.R. One,
Limited in December 1998. Under this agreement, $1.5 million was funded in
December 1998 and $1.5 million was funded in January 1999. In June 1999, S.R.
One, Limited agreed to convert $1 million of the $3 million loan, together with
accrued interest at the rate of 8% on $1 million, into shares of Series A
Convertible Preferred Stock. The remaining $2 million of the loan matures in
June 2000. At that time, we expect either to repay the $2 million balance on the
bridge financing with the proceeds of a new loan or to negotiate to convert the
balance of it into equity. The annual interest rate on the remaining $2 million
has been decreased to 8% on May 1, 2000. S. R. One has the option to convert all
or any portion of the remaining loan, plus accrued interest thereon, into shares
of Series A Convertible Preferred Stock on the same basis as the previous $1
million conversion discussed above.
We issued a bridge warrant to S.R. One, Limited in connection with the bridge
financing. The bridge warrant was initially exercisable for the number of shares
of common stock equal to $750,000 divided by 85% of our initial public offering
price of the common stock. The number of warrants doubled if the loan was not
repaid by June 30, 1999. As part of the conversion of a portion of the bridge
financing into shares of Series A Convertible Preferred Stock, the bridge
warrant was modified such that it will be exercisable in all events for the
number of shares of common stock which is equal to $1,500,000 divided by $6.375.
Upon completion of our initial public offering, the bridge warrant became
exercisable for 235,294 shares of common stock. The bridge warrant also has an
exercise price of 6.375 and became exercisable on December 31, 1999. It will
expire on June 16, 2003.
In March 2000, the Company completed the sale of an additional 1,184,091 shares
of common stock in a private placement to 9 institutional investors at a price
of $8.77 per share, raising a gross amount of $10.4 million. Expenses of the
transaction were approximately $840,000. Based on the net proceeds from this
transaction, plus existing sources of liquidity, which contemplate that $2
million of bridge financing will be converted to equity, we project adequate
cash to fund planned operations into 2001. However, until the $2 million of
bridge financing has been converted and the Company has successfully entered its
targeted markets, there are uncertainties that may impact the Company's ability
to fund its planned operations and meet its operational objectives.
-9-
<PAGE>
To the extent that we need additional funds in connection with our commercial
product launch, we expect to borrow funds to complete our automated cartridge
assembly line and build sufficient cartridge inventory for launch and subsequent
sales. We also expect that the development of additional tests will require
research expenditures at a level lower than past spending for test development.
Sales and marketing activities will require hiring and training of additional
staff in 2000. This estimate of the period for which we expect our available
sources of cash to be sufficient to meet our funding needs is a forward looking
statement that involves risks and uncertainties. There can be no assurance that
we will be able to meet our capital requirements for this period. In the event
our capital requirements are greater than estimated, we may need to raise
additional capital to fund our research and development activities, to scale-up
manufacturing activities and to expand our sales and marketing efforts. Our
future liquidity and capital funding requirements will depend on numerous
factors, including the extent to which our products under development gain
market acceptance, the exercise of outstanding warrants to purchase common
stock, the timing of regulatory actions regarding our products, the costs and
timing of expansions of sales, marketing and manufacturing activities,
procurement and enforcement of patents important to our business, and the impact
of competitors' products. There can be no assurance that such additional capital
will be available on terms acceptable to us, if at all. Furthermore, any
additional equity financing may be dilutive to stockholders, and debt financing,
if available, may include restrictive covenants. If adequate funds are not
available, we may be forced to curtail our operations significantly or to obtain
funds through entering into collaborative agreements or other arrangements on
unfavorable terms. Our failure to raise capital on acceptable terms could have a
material adverse effect on our business, financial condition or results of
operations.
Income Taxes
As of December 31, 1999, we had approximately $17.8 million and $759,000 of net
operating loss and research and development credit carryforwards, respectively,
for federal income tax purposes, which expire on various dates between 2011 and
2014. These amounts reflect different treatment of expenses for tax reporting
than are used for financial reporting. The Tax Reform Act of 1986 contains
certain provisions that may limit our ability to utilize net operating loss and
tax credit carryforwards in any given year. We experienced a change in ownership
interest in excess of 50% as defined under the Tax Reform Act upon the first
closing of our 1997 equity financing. We do not believe that this change in
ownership will impact our ability to utilize our net operating loss and tax
credit carryforwards. There can be no assurance that ownership changes in future
periods will not significantly limit our use of existing or future net operating
loss and tax credit carryforwards.
-10-
<PAGE>
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 March 31, 2000
approximately $4,225,700 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.
Forward-Looking Information
This document includes or incorporates by reference information which
constitutes forward-looking statements within the meaning of the federal
securities laws, including but not limited to, information about our cash
available to fund our future operations and meet our operation objectives;
actions we may take with respect to the S.R. One bridge financing; future
borrowings; the planned additions of further tests to our menu; and research
expenditures. Although the Company believes such forward-looking statements are
reasonable, based on management's current plans and expectations, the statements
are subject to a number of uncertainties and risks that could significantly
affect current plans, anticipated actions and the Company's future financial
condition and results, and therefore, no assurances can be given that such
statements will prove correct. These uncertainties and risks include, but are
not limited to, risks and uncertainties relating to: our limited operating
history; additional funding required; delays in developing additional tests or
product upgrades; problems in production; manufacturing distribution; management
or marketing; medical community acceptance of our product; third party
reimbursement for diagnostic tests; our competitors; our proprietary technology;
government regulation; and general economic conditions. Certain additional risks
and uncertainties are set forth in the Company's Registration Statement on Form
S-1 filed with the Securities and Exchange Commission. As a consequence, future
results may differ materially from those expressed in any forward-looking
statements made by or on behalf of the Company.
-12-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit.
(b) Reports on Form 8-K
A report on Form 8-K was filed on January 28, 2000 reporting that the
Company issued a press release announcing a proposed equity private
placement
A report on Form 8-K was filed on February 22, 2000 reporting Item 7
Financial Information related to the Company's acquisition of Texas
International Laboratories, Inc.
Exhibit No. Description
27.1 Financial Data Schedule
_________
No reports on Form 8-K were filed during the quarter ended March 31, 2000.
-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: May 12, 2000 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> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-2000 DEC-31-1999
<PERIOD-START> JAN-01-2000 JAN-01-1999
<PERIOD-END> MAR-31-2000 MAR-31-1999
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0 0
1 0
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<INCOME-PRETAX> (4,199) (2,998)
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<CHANGES> (4,225) (2,998)
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<EPS-BASIC> (.54) (.59)
<EPS-DILUTED> (.54) (.59)
</TABLE>
