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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 quarter ended September 30, 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 1-10492
ORASURE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-4370966
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
8505 SW Creekside Place
Beaverton, Oregon 97008-7108
(Address of principal executive offices) (Zip code)
(503) 641-6115
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Number of shares of Common Stock, par value $.000001 per share, outstanding as
of November 9, 2000: 36,343,258
<PAGE>
PART I. FINANCIAL INFORMATION
Page No.
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets at September 30, 2000
and December 31, 1999................................. 2
Condensed Consolidated Statements of Operations for the
three months and nine months ended
September 30, 2000 and 1999........................... 3
Condensed Consolidated Statements of Changes in Stockholders'
Equity for the three months and nine months
ended September 30, 2000.............................. 4
Condensed Consolidated Statements of Cash Flows for the nine
months ended September 30, 2000 and 1999.............. 5
Notes to Condensed Consolidated Financial Statements..... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ..................... 10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK........................................ 13
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS........... 14
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 14
ITEM 5. OTHER INFORMATION................................... 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................... 17
1
<PAGE>
ORASURE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
<TABLE>
SEPTEMBER 30, 2000 DECEMBER 31, 1999
ASSETS
Current assets
<S> <C> <C>
Cash and cash equivalents......... $16,486,177 $ 2,049,644
Marketable securities............. 11,205,498 12,287,795
Trade accounts receivable, net ... 4,535,510 3,884,395
Other receivables................. 130,941 92,186
Inventories (Note 2) ............. 1,775,374 2,405,439
Prepaid expenses.................. 604,157 649,896
---------- ----------
34,737,657 21,369,355
Property and equipment, net......... 6,711,064 5,155,815
Patents and proprietary technology, net 2,388,192 2,598,308
Other assets and deposits........... 644,296 502,549
---------- ----------
$44,481,209 $29,626,027
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt. $ 1,054,461 $1,054,462
Accounts payable.................. 3,042,209 1,213,506
Salaries, benefits and other accrued
liabilities....................... 5,132,770 2,787,727
--------- ---------
9,229,440 5,055,695
Long-term debt...................... 5,036,371 5,819,980
Other liabilities................... 404,501 512,000
Stockholders' equity
Common stock...................... 148,784,219 128,115,522
Accumulated deficit............... (118,712,279) (109,617,952)
Accumulated other comprehensive loss
......................... (261,043) (259,218)
----------- -----------
29,810,897 18,238,352
$44,481,209 $29,626,027
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
ORASURE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
<TABLE>
2000 1999 2000 1999
Revenues
<S> <C> <C> <C> <C>
Product sales .............. $6,867,729 $6,537,458 $20,397,691 $17,087,602
Grants and contracts ....... 354,649 73,538 604,608 579,271
--------- --------- ---------- ----------
7,222,378 6,610,996 21,002,299 17,666,873
Costs and expenses
Product costs............... 3,096,668 2,574,537 8,210,484 6,840,808
Research and development costs 2,800,366 1,189,439 6,632,699 4,177,885
Acquired in-process technology - 1,500,000 - 1,500,000
Sales and marketing expenses 1,791,039 1,539,073 4,995,080 4,005,471
General and administrative
expenses................... 1,846,019 1,813,354 5,527,034 4,719,380
Merger expenses............. 5,919,764 - 5,919,764 -
---------- --------- ---------- ----------
15,453,856 8,616,403 31,285,061 21,243,544
Loss from operations.......... (8,231,478) (2,005,407) (10,282,762) (3,576,671)
Other income (expense), net
Interest income............. 396,686 249,418 943,869 413,698
Interest expense............ (122,869) (139,443) (375,677) (409,041)
Foreign currency gain (loss) 28,418 (45,186) 19,750 45,186
Other, net.................. 18,091 16,052 624,856 14,804
---------- --------- ---------- ----------
320,326 80,841 1,212,798 64,647
Net loss before income taxes.. (7,911,152) (1,924,566) (9,069,964) 3,512,024)
Income taxes.................. (12,673) - (24,363) -
Net loss...................... $(7,923,825) (1,924,566) (9,094,327) (3,512,024)
Basic and diluted net loss per
share...................... $ (0.22) $ (0.06) $ (0.26) $ (0.12)
Weighted average number of
shares outstanding......... 35,369,781 30,254,528 34,546,219 30,173,380
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
ORASURE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY (Unaudited)
<TABLE>
ACCUMULATED
OTHER
COMMON STOCK ACCUMULATED COMPREHENSIVE
SHARES DOLLARS DEFICIT LOSS TOTAL
---------- ------------ ------------- --------- -----------
<S> <C> <C> <C> <C> <C>
BALANCES AT DECEMBER 31, 1999.. 32,635,320 128,115,522 (109,617,952) (259,218) 18,238,352
Common stock issued upon
exercise of options......... 1,143,944 5,071,383 - - 5,071,383
Common stock issued upon
exercise of warrants........ 551,700 3,262,202 - - 3,262,202
Common stock issued under Employee
Stock Purchase Plan.......... 5,195 24,838 - - 24,838
Common stock issued as matching
savings plan contributions... 2,193 20,559 - - 20,559
Compensation expense for stock
option grants................ - 28,373 - - 28,373
Expenses related to equity issuance - (72,145) - - (72,145)
Other comprehensive net loss for
the quarter.................. - - - (23,345) (23,345)
Net loss for the quarter....... - - (833,748) - (833,748)
---------- ------------ ------------- --------- -----------
BALANCES AT MARCH 31, 2000..... 34,338,352 136,450,732 (110,451,700) (282,563) 25,716,469
Common stock issued upon exercise
of options................... 69,238 265,997 - - 265,997
Common stock issued upon exercise
of warrants.................. 672,267 3,975,115 - - 3,975,115
Common stock issued under Employee
Stock Purchase Plan.......... 1,522 5,024 - - 5,024
Common stock issued as matching
savings plan contributions... 1,345 18,495 - - 18,495
Compensation expense for stock
option grants................ - 59,451 - - 59,451
Expenses related to equity issuance - (7,887) - - (7,887)
Other comprehensive net loss
for the quarter.............. - - - (92,636) (92,636)
Net loss for the quarter....... - - (336,754) - (336,754)
---------- ------------ ------------- --------- -----------
BALANCES AT JUNE 30, 2000...... 35,082,724 140,766,927 (110,788,454) (375,199) 29,603,274
Common stock issued upon exercise
of options................... 73,429 314,884 - - 314,884
Common stock issued upon exercise
of warrants.................. 1,181,940 6,988,811 - - 6,988,811
Common stock issued under Employee
Stock Purchase Plan.......... 2,206 8,736 - - 8,736
Compensation expense for stock
option grants................ - 704,861 - - 704,861
Other comprehensive net income for
the quarter.................. - - - 114,156 114,156
Net loss for the quarter....... - - (7,923,825) - (7,923,825)
---------- ------------ ------------- --------- -----------
BALANCES AT SEPTEMBER 30, 2000. 36,340,299 $148,784,219 $(118,712,279) $(261,043) $29,810,897
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
ORASURE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
NINE MONTHS ENDED SEPTEMBER 30,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net loss........................................ $(9,094,327) $(3,512,024)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization................... 1,332,532 1,411,057
Amortization of deferred revenue................ (107,499) (71,664)
Loss on disposition of assets................... 914 1,154
Acquired in-process technology.................. - 1,500,000
Increase in accounts receivable and other
receivables................................... (689,870) (515,781)
(Decrease) increase in inventories.............. 630,065 (752,827)
(Decrease) increase in prepaid expenses......... 46,802 (104,209)
Increase in accounts payable and accrued
liabilities................................... 4,173,744 627,434
Common stock issued as compensation for services - 29,996
Compensation expense for stock option grants and
deferred salary increases..................... 792,685 236,672
Other, net ..................................... 8,844 170,413
---------- --------
Net cash used in operating activities......... (2,906,110) (979,779)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in marketable securities............. (19,891,729) (33,339,705)
Proceeds from sale of marketable securities..... 20,974,026 24,780,716
Additions to property and equipment............. (2,542,540) (1,250,284)
Purchase of in-process technology............... - (1,500,000)
Expenditures for patents and proprietary technology (136,038) (76,246)
Investment in affiliated companies.............. (20,404) 65,919
---------- -----------
Net cash used in investing activities......... (1,616,685) (11,319,600)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock.......... 19,876,012 11,830,227
Proceeds from long-term debt.................... - 2,218,070
Repayments of long-term debt.................... (783,609) (1,668,516)
---------- ----------
Net cash provided by financing activities..... 19,092,403 12,379,781
Effect of foreign exchange rate changes on cash. (133,075) (74,448)
Net increase in cash and cash equivalents....... 14,436,533 5,954
Cash and cash equivalents at beginning of period 2,049,644 1,743,834
----------- ----------
Cash and cash equivalents at end of period...... $16,486,177 $1,749,788
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 THE COMPANY
On September 29, 2000, STC Technologies, Inc., a Delaware corporation (STC), and
Epitope, Inc., an Oregon Corporation (Epitope), were merged (the Merger) into
OraSure Technologies Inc.( the Company), a new corporation that was formed under
Delaware law solely for the purposes of combining the two companies and changing
the state of incorporation of Epitope from Oregon to Delaware. The companies
were merged pursuant to that certain Agreement and Plan of Merger, dated May 6,
2000 (the Merger Agreement), by and among Epitope, the Company and STC. The
shareholders of STC and Epitope approved the Merger Agreement on September 29,
2000.
The acquisition of STC was an all stock transaction valued at $260 million. As a
result of the Merger (i) each share of STC common stock was converted into the
right to receive five and two hundred ninety-six one thousandths (5.296) shares
of the Company's common stock and (ii) each share of Epitope common stock was
converted into the right to receive one share of the Company's common stock. Of
the 36,340,299 shares of common stock of the Company issued and outstanding at
September 30, 2000, 18,373,884 shares were issued to the former stockholders of
STC. In addition, prior to the merger, certain STC stockholders had been granted
options. After the merger these options, if exercised, would be converted into
989,356 shares of the Company's common stock at prices between $.80 and $2.83.
Epitope's options to purchase common stock were converted on a one-for-one basis
and became fully vested as a result of the Merger. There were 2,347,862 Epitope
options issued and outstanding at September 30, 2000 with an average exercise
price of $4.91.
The Merger is being accounted for as a "pooling of interests." See Note 2 for
additional information regarding the Merger transaction.
The Company develops, manufactures and markets oral specimen collection devices
using its proprietary oral fluid technologies, oral fluid assays, proprietary
diagnostic products including in vitro diagnostic tests, and other medical
devices. These products are sold to public and private-sector clients, clinical
laboratories, physician offices, hospitals, and for workplace point-of-care
testing in the United States and certain foreign countries. The Company's
primary oral fluid technology focus is on the detection of antibodies to the
Human Immunodeficiency Virus (HIV), the cause of Acquired Immune Deficiency
Syndrome (AIDS). The Company's technology is also being used to test for
drugs-of-abuse and other analytes.
In addition to these activities, the Company has made a net investment of more
than $13.0 million over the past five years to develop UPT(TM) (Up-converting
Phosphor Technology), a proprietary label detection technology for a broad range
of diagnostic applications, including but not limited to use in rapid
point-of-care oral fluid testing, and for the detection of drugs of abuse and
other substances. UPlink(TM), UPT's point-of-care application, has been licensed
to two outside companies for test development in 2000.
The interim condensed consolidated financial statements included herein are
unaudited; however, in the opinion of the Company's management, the interim data
include all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of the results of operations for the interim
periods. These condensed consolidated financial statements should be read in
conjunction with the financial statements and notes thereto included in Epitope,
Inc.'s Annual Report on Form 10-K for the fiscal year ended September 30, 1999
and the Company's Registration Statement on Form S-4 filed on August 31, 2000.
Results of operations for the periods ended September 30, 2000 are not
necessarily indicative of the results of operations expected for the full year.
On September 29, 2000, Epitope changed its fiscal year-end from September 30 to
December 31. As a result of the fiscal year-end change, the balance sheet for
December 31, 1999 included herein is unaudited (in accordance with applicable
reporting requirements).
6
<PAGE>
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION. The information presented herein is a combination of the
results of operations of Epitope and STC as though the companies had been merged
during these reporting periods. The accompanying consolidated financial
statements include the accounts of the Company and its joint venture subsidiary
in Japan, Epitope KK, which has been accounted for under the equity method. This
joint venture in Japan has since been dissolved; the Company's products will be
sold in Japan through a distributor arrangement with its former joint venture
partner, Sigma Seiki. The Merger has been accounted for as a
pooling-of-interests and all intercompany transactions have been eliminated.
INVENTORIES. Inventory components are summarized as follows:
SEPTEMBER 30, DECEMBER 31
2000 1999
Raw materials................................. $564,379 $581,347
Work-in-process............................... 533,439 688,168
Finished goods ............................... 677,556 1,135,924
---------- ----------
$1,775,374 $2,405,439
NET LOSS PER SHARE. Basic and diluted loss per share has been computed using
the weighted average number of shares of common stock and potential common stock
outstanding during the period. Potential common stock consists of the number of
shares issuable upon exercise of outstanding warrants and options less the
number of shares assumed to have been purchased for the treasury with the
proceeds from such exercise. Potential common stock is excluded from the
computation if its effect is anti-dilutive. Basic and diluted net income (loss)
per share are the same for the comparable three-month and nine-month periods
ended September 30, 2000 and 1999. Shares of potential common stock that were
not included in the calculation of diluted loss per share since they were
anti-dilutive were as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
Number of Shares.... 2,948,364 974,801 3,036,026 634,848
EXERCISE OF OPTIONS AND WARRANTS. During the quarter ended September 30,
2000, 73,429 shares of common stock were issued for the exercise of employee
stock options, and 1,181,940 shares of common stock were issued for the exercise
of warrants. Proceeds from the exercise of options and warrants were $314,884
and $6,988,811, respectively. Employer payroll taxes related to the exercise of
employee stock options, which are charged to general and administrative
expenses, were $14,719 during the quarter and $285,302 for the current
nine-month period.
STATEMENT OF CASH FLOWS. Compensation expense related to the issuance of
compensatory equity securities, which also represents non-cash transactions,
amounted to $792,685, including $645,410 due to the accelerated vesting of
discounted options as a result of the Merger, and $236,672 in the first nine
months of 2000 and 1999, respectively. Cash paid for interest approximated
interest expense in the nine months ended September 30, 2000 and 1999. Cash paid
for foreign income taxes was $13,894 and $5,920 in the first nine months of 2000
and 1999, respectively.
MANAGEMENT ESTIMATES. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates relating to assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could vary from these
estimates.
RECLASSIFICATIONS. Certain reclassifications have been made to the prior
year's data to conform with the current year's presentation. These
reclassifications had no impact on previously reported results of operations or
Stockholders' equity. Management believes these reclassifications provide a more
meaningful presentation.
7
<PAGE>
ADVERTISING AND PROMOTIONAL EXPENSES. Advertising and promotional costs are
expensed as incurred. For the nine months ended September 30, 2000 and 1999,
advertising and promotional expenses were $843,219 and $338,129, respectively.
REVENUE RECOGNITION. In December 1999, the Securities and Exchange Commission
(SEC) issued Staff Accounting Bulletin No. 101, "Revenue Recognition," (SAB 101)
which provides guidance on the recognition, presentation, and disclosure of
revenue in financial statements filed with the SEC. SAB 101 outlines the basic
criteria that must be met to recognize revenue and provides guidance for
disclosures related to revenue recognition policies. Management believes that
the impact of SAB 101 will not have a material effect on the Company's financial
position or results of operations. The Company recognizes revenues from sales to
distributors and customers only when the related products are shipped. The
Company has not granted price protection rights or rights of return to any
customers, including distributors. Shipments to foreign distributors are made
only when cash is received in advance or when a letter of credit is provided.
Payments received in conjunction with the licensing of the UPT technology are
recognized ratably over the relevant development period.
VALUATION OF LONG-LIVED ASSETS. Long-lived assets such as property, plant and
equipment, patents, investments and software are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. If the total of the expected future discounted cash
flows (fair value) is less than the carrying amount of the asset, a loss is
recognized for the difference between the fair value and the carrying amount of
the asset.
COMPREHENSIVE INCOME (LOSS). The Company follows Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS No. 130).
This statement requires companies to classify items of other comprehensive
income (loss) by their nature in a financial statement and display the
accumulated balance of other comprehensive income (loss) separately from
retained earnings in the equity section of the balance sheet. For the three
months and nine months ended September 30, 2000 and 1999, comprehensive loss was
as follows:
<TABLE>
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net loss $ (7,923,825) $ (1,924,566) $ (9,094,327) $ (3,512,024)
Foreign currency translation
adjustments (73,344) 1,750 (133,075) (36,000)
Unrealized gain (loss) on
marketable securities 187,500 6,250 131,250 (68,750)
------------ ------------ ------------ ------------
Comprehensive loss $ (7,809,669) $ (1,916,566) $ (9,096,152) $ (3,616,774)
</TABLE>
NOTE 3 SEGMENT AND GEOGRAPHIC AREA INFORMATION
The following disclosures are required by Statement of Financial Accounting
Standards No. 131, "Segment Disclosures and Related Information" (SFAS 131):
The Company's products are included in the medical products industry segment.
See Note 1 for a description of the Company's business. The Company's products
are sold principally in the United States, Europe and Asia. Operating loss
represents revenues less product costs and operating expenses. The operating
loss outside the United States is reflected only for Europe, since revenues for
other geographic areas are exports from customers in the United States, or the
operating expenses associated with those customers are not easily identified and
tracked.
8
<PAGE>
<TABLE>
REVENUES OPERATING LOSS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 1999 2000 1999
(IN THOUSANDS)
GEOGRAPHIC AREA
<S> <C> <C> <C> <C>
United States.............................. $18,059 $15,167 $(8,791) $(3,502)
Canada..................................... 121 157 - -
Asia....................................... 289 177 - -
Latin America.............................. 12 4 - -
Europe..................................... 1,766 1,519 (303) (10)
Other...................................... 755 643 - -
------- ------- ------- -------
$21,002 $17,667 $(9,094) $(3,512)
</TABLE>
CUSTOMER CONCENTRATION. In the third quarter of 2000, four customers
accounted for 43 percent of product revenues as compared to 46 percent for the
same quarter of 1999. For the nine-month periods ended September 30, 2000 and
1999, the same four customers accounted for 45 percent and 48 percent,
respectively of product revenues. The Company believes that its relationship
with each of these customers is strong and believes that they will purchase
comparable or increasing volumes of the Company's products for the foreseeable
future. There can be no assurance, however, that sales to these customers will
not decrease or that these customers will not choose to replace the Company's
products with those of competitors. The loss of any of these customers or a
significant decrease in the volume of products purchased by them would have a
material adverse effect on the Company.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Statements below regarding future events or performance are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. The Company's actual results could be quite different from those
expressed or implied by the forward-looking statements. Factors that could
affect results include: loss of key personnel; failure to comply with
regulations of the FDA or other regulatory agencies; obstacles to international
marketing of the Company's products; loss or impairment of sources of capital;
ability of the Company to develop product distribution channels; ability of the
Company to develop new products; development of competing products; market
acceptance of oral fluid testing products; and changes in federal or state law
or regulations. These factors are discussed more fully under Part II, Item 5 of
this report and under "Forward-Looking Statements; Risk Factors" in Item 1 and
elsewhere in the Epitope Inc. Annual Report on Form 10-K for 1999 and in the
Company's Registration Statement on Form S-4 filed with the Securities and
Exchange Commission on August 31, 2000. Although forward-looking statements help
to provide detailed information about the Company, readers should keep in mind
that forward-looking statements are much less reliable than historical
information. Readers are cautioned not to place undue reliance on the
forward-looking statements.
MERGER
On May 6, 2000, Epitope, Inc. signed a definitive merger agreement, with STC
Technologies, Inc., a privately-held company based in Bethlehem, Pennsylvania.
The agreement was approved by the boards of directors of both companies. On
August 31, 2000, the Company filed with the Securities and Exchange Commission,
a Registration Statement on Form S-4 in connection with the proposed Merger. On
September 29, 2000, the stockholders of both companies voted to approve the
Merger, and both Epitope, Inc. and STC Technologies, Inc. merged into the
Company (the Merger). The Merger has been accounted for as a
pooling-of-interests and all intercompany transactions have been eliminated. The
information presented herein is a combination of the results of operations of
Epitope and STC as though the companies had been merged during these reporting
periods.
RESULTS OF OPERATIONS
The tables below show the amount and percentage of the Company's total revenue
contributed by each of its principal products and by licenses, grants and
contracts.
THREE MONTHS ENDED SEPTEMBER 30 2000 1999
(IN THOUSANDS, EXCEPT %) DOLLARS PERCENT DOLLARS PERCENT
Product Sales
OraSure(R)oral specimen collection devices. $2,856 40% $ 2,608 39%
Histofreezer(R)cryosurgical products.. 1,737 24 1,754 27
Immunoassay tests and reagents....... 1,445 20 1,448 22
Western blot HIV confirmatory tests.. 538 7 467 7
Other product sales.................. 291 4 260 4
--- - --- -
6,867 95 6,537 99
Licenses, grants, and contracts........ 355 5 74 1
--- - -- -
$7,222 100% $ 6,611 100%
10
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30 2000 1999
(IN THOUSANDS, EXCEPT %) DOLLARS PERCENT DOLLARS PERCENT
Product sales
OraSure(R)oral specimen collection devices $ 8,350 40% $ 6,278 36%
Histofreezer(R)cryosurgical products.. 4,681 22 4,083 23
Immunoassay tests and reagents........ 4,879 23 4,438 25
Western blot HIV confirmatory tests... 1,423 7 1,445 8
Other product sales................... 1,064 5 844 5
------ -- ------ ---
20,397 97 17,088 97
Licenses, grants and contracts......... 605 3 579 3
------ -- ------ ---
$ 21,002 100% $ 17,667 100%
REVENUES. Total product sales increased by $330,000 or 5 percent in the
current quarter as compared to the third quarter of 1999 and by $3.3 million or
19 percent compared to the nine-month period of 1999. The increase in both
periods was primarily a result of expanded sales volume of the Company's lead
product, the OraSure(R) oral specimen collection device. Total product sales
increased from the second quarter of 2000 by $180,000 or 2.5 percent. With the
additional products and customer base added as the result of the Merger, the
total sales to the Company's top four customers decreased to 43 percent of total
sales in the third quarter of 2000. See "Customer Concentration" in Note 3 to
the Condensed Consolidated Financial Statements, "Segment and Geographic Area
Information."
OraSure oral specimen collection device sales increased by $248,000 or 10
percent in the current quarter as compared to the third quarter of 1999 and by
$2.1 million or 33 percent in the comparable nine-month period. Histofreezer(R)
sales domestically and internationally declined $17,000 or 1 percent during the
current quarter as compared to the same quarter in 1999 but increased by
$598,000 or 15 percent in the comparable nine-month period. Immunoassay tests
and reagent sales declined by $3,000 or less than 1 percent during the third
quarter of 2000 as compared to the same quarter in 1999 and increased by
$441,000 or 10 percent in the comparable nine-month period. Sales of the
Company's Western blot HIV confirmatory tests increased by $71,000 or 15 percent
in the current quarter as compared to the third quarter of 1999, and declined
$22,000 or 2 percent in the comparable nine-month period. Other product sales
increased $31,000 or 12 percent during the current quarter as compared to the
same quarter in 1999 and increased by $220,000 or 26 percent in the comparable
nine-month period.
Product sales into the public health markets in the quarter ended September 30,
2000 totaled $2.1 million or 31 percent of total sales as compared to $2.1
million or 32 percent of total sales in the same quarter of 1999, and $5.8
million or 28 percent of total sales as compared to $4.8 million or 28 percent
of total sales comparable nine-month periods. The life insurance testing market
in the third quarter of 2000 contributed $2.7 million or 40 percent of total
sales as compared to $2.8 million or 43 percent of total sales in the third
quarter of 1999, and $8.8 million or 44 percent of total sales as compared to
$7.4 million or 43 percent of total sales in the comparable nine-month periods.
Sales into international markets in the current quarter were $810,000 or 10
percent of total sales as compared to $480,000 or 7 percent of total sales in
the same quarter of 1999, and $2.9 million 14 percent of total sales as compared
to $2.5 million or 15 percent of total sales in the comparable nine-month
periods. Other markets contributed $1.2 million or 18 percent of total sales
during the current quarter as compared to $1.2 million or 18 percent of total
sales in the same quarter of 1999, and $3 million or 15 percent of total sales
as compared to $2.4 or 14 percent of total sales in the comparable nine-month
periods.
License, grant and contract revenues increased by $281,000 or 382 percent in the
current quarter as compared to the third quarter of 1999, and by $25,000 or 4
percent for the comparable nine-month periods. During 2000, licensing and
product development revenue primarily consisted of income from a collaboration
with LabOne, Inc. related to the Intercept(TM) drugs-of-abuse service, a
research agreement with an outside party to develop specific target analytes for
UPlink point-of-care testing, and the first phase of a grant from the National
Institutes of Health for the development of an oral fluid test for syphilis.
During 1999, licensing and product development revenues consisted only of income
from the collaboration with LabOne, Inc. related to the Intercept drugs-of-abuse
service.
Sales for the full year are anticipated to continue to rise, compared to 1999.
However, sales may be affected by economic factors and seasonality of certain
markets. Expectations for future sales are based primarily on forecasts provided
to the Company by individual customers rather than firm orders, as many of the
customers in the public
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health and international markets do not have ongoing purchase commitments with
the Company.
GROSS MARGIN. Gross margin on product sales was 55 percent in the third
quarter of 2000 compared to 60 percent in the comparable period of 1999 as a
result of the write-off of $544,000 of expired and unusable inventory. For the
comparable nine-month periods gross margins were unchanged at 60 percent.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased by $1.6 million or 135 percent as compared to the third quarter of
1999, and by $2.5 million or 59 percent for the comparable nine-month periods
because of heavy emphasis on the new OraQuick(R) rapid test for HIV, the
development of the UPlink reader, test strip, and collector for drugs-of-abuse
applications, and DNA feasibility studies. Research and development expenses are
expected to increase in the fourth quarter of 2000 as clinical trials for
OraQuick and UPlink development continue. In an effort to meet an aggressive
development schedule for OraQuick and UPlink, the Company continues to hire
experienced personnel and has contracted with several outside consulting groups
to supplement the Company's internal work. The Company expects expenses related
to the development and commercialization of UPlink to increase over historical
levels, primarily due to expected increases in research and development,
although some of this increase will be offset by outside development funding.
ACQUIRED IN-PROCESS TECHNOLOGY. In 1999, the Company paid $1.5 million to TPM
Europe Holding B.V., its sublicensor, for the termination of an existing
license agreement with respect to the sublicense of UPT patents owned by
Leiden University. There were no such expenses in 2000.
SALES AND MARKETING EXPENSES. Sales and marketing expenses for the third
quarter of 2000 increased by $252,000 or 16 percent as compared to last year's
third quarter, and by $990,000 or 25 percent for the comparable nine-month
periods. The increase for the quarter was primarily a result of costs to develop
and establish foreign markets for OraQuick, which was launched at the XIII
International AIDS Conference in Durban, South Africa in July, 2000 and costs
associated with the national market launch for the Intercept drugs-of-abuse
service that began in February, 2000.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses for
the third quarter of 2000 increased by $33,000 or 2 percent as compared to last
year's third quarter, and by $808,000 or 17 percent for the comparable
nine-month periods. Costs associated with hiring the Company's chief executive
officer, increased staffing levels, operating costs associated with the building
expansion in Pennsylvania, and payroll taxes incurred on the exercise of
employee stock options accounted for the increase in the 2000 nine-month period.
MERGER EXPENSES. $5.9 million related to the Merger has been charged to
expense during the quarter. These costs included fees for investment bankers,
attorneys, and accountants, and filing and soliciting proxies .
INTEREST INCOME. Interest income for the third quarter of 2000 increased
$147,000 or 59 percent as compared to last year's third quarter, and by $530,000
or 128 percent in the comparable nine-month periods due to the significant
increase in cash and marketable securities as the result of the exercise of
stock options and warrants.
INTEREST EXPENSE. Interest expense declined by $17,000 or 12 percent during
the third quarter of 2000 as compared to last year's third quarter, and by
$33,000 or 8 percent in the comparable nine-month periods as the Company paid
down outstanding debt.
OTHER INCOME. Other income increased by $2,000 or 13 percent for the third
quarter of 2000 as compared to last year's third quarter, and by $610,000 or
over four thousand percent in the comparable nine-month periods. The nine-month
increase was due to the gain received on the sale of Andrew & Williamson Sales,
Co. preferred stock that was discussed in Epitope's quarterly report on Form
10-Q for the quarter ended June 30, 2000.
FOREIGN CURRENCY GAIN (LOSS). The foreign currency gain related to
Histofreezer international operations increased by $74,000 or 163 percent for
the third quarter of 2000 as compared to last year's third quarter, and declined
by $25,000 or 56 percent in the comparable nine-month periods primarily due to
fluctuations in the exchange rate for the Netherlands guilder during these
periods.
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INCOME TAXES. A provision for foreign income taxes of $13,000 was recorded
during the 2000 third quarter and a total of $24,000 was recorded for the
nine-month period ended September 30, 2000. No income tax expense was recorded
in the comparable periods of 1999.
LIQUIDITY AND CAPITAL RESOURCES
SEPTEMBER 30, DECEMBER 31,
(IN THOUSANDS) 2000 1999
Cash and cash equivalents....................... $16,486 $ 2,050
Marketable securities........................... 11,205 12,288
Working capital................................. 25,508 16,314
Net cash used by operating activities in the first nine months of 2000 increased
by $1.9 million compared to the nine-month period in 1999 primarily due to
payments of Merger-related expenses. The total of cash and cash equivalents plus
marketable securities increased by $4.2 million during the quarter due primarily
to the receipt of proceeds of $7.3 million from the exercise of options and
warrants to purchase common stock. The Company spent $486,000 to acquire
automated manufacturing equipment for OraQuick and on expansion of facilities in
Pennsylvania during the three-month period ending September 30, 2000.
At September 30, 2000, the Company had a $1.0 million equipment line of credit
and a $1.0 million working capital line of credit in place with a bank. There
were no borrowings under these lines of credit outstanding at September 30,
2000. Any future draws on the equipment line of credit will be used to purchase
equipment and the interest rate will be fixed at the then current prime rate.
Advances under the working capital line of credit will carry an interest rate of
LIBOR plus 2.35 percent. The unused portion of these credit facilities expires
April 30, 2001. The credit facilities require, among other items, the
maintenance of minimum financial ratios and a first lien position on all assets.
The Company anticipates that it will continue to need funds to support ongoing
research and development projects, to provide additional manufacturing capacity,
and to increase working capital to support growth. The Company believes that its
operating liquidity requirements for the foreseeable future can be met by
existing resources, including marketable securities, cash generated by
operations and the credit facilities described above. The Company may also
receive funds through the exercise of additional stock options and warrants as
well as research grants; however, there can be no assurances that funding from
these sources will be available.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company does not hold material amounts of derivative financial instruments,
other financial instruments, or derivative commodity instruments, and
accordingly has no material market risk to report under this item.
The Company's holdings of financial instruments are comprised of U.S. corporate
debt, certificates of deposit, government securities and commercial paper. All
such instruments are classified as securities available for sale. The Company's
debt security portfolio represents funds held temporarily pending use in its
business and operations. The Company seeks reasonable assuredness of the safety
of principal and market liquidity by investing in rated fixed income securities
while at the same time seeking to achieve a favorable rate of return. Market
risk exposure consists principally of exposure to changes in interest rates. If
changes in interest rates would effect the investments adversely the Company
continues to hold the security to maturity. The Company's holdings are also
exposed to the risks of changes in the credit quality of issuers. The Company
typically invests in the shorter end of the maturity spectrum.
The Company does not currently have any foreign currency exchange contracts or
purchase currency options to hedge local currency cash flows. The Company has
operations in the Netherlands which are subject to foreign currency
fluctuations. As currency rates change, translation of income statements of
these operations from local currencies to US dollars affects year-to-year
comparability of operating results. The Company's foreign operations represent
approximately $1.5 million or 7 percent of the Company's consolidated revenues
for the nine months ended September 30, 2000. Management does not expect the
risk of foreign currency fluctuations to be material.
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PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
CHANGES IN SECURITIES. As a result of the Merger, all outstanding shares of
common stock of Epitope, Inc., an Oregon corporation, were converted into stock
of the Company. In addition, the common stock of STC was converted into common
stock of the Company. There are important differences between the common stock
of Epitope and the common stock of the Company, including differences relating
to the fact that the Company is a Delaware corporation. There are also important
differences between the common stock of STC and the common stock of the Company.
A description of the common stock of the Company is attached as Exhibit 99 to
this report. As a result of the conversion of common stock in the Merger, no
shares of Epitope common stock remain outstanding and the shares of common stock
of the Company are deemed registered under Section 12(g) of the Securities
Exchange Act of 1934 as successor to Epitope, pursuant to Rule 12g-3.
RECENT SALES OF UNREGISTERED SECURITIES. From 1991 to 1994, Epitope issued
warrants in several private placement transactions. The warrants had an
expiration date, as extended, of September 30, 2000. During 2000, Epitope issued
common stock upon the exercise of these warrants as shown following the captions
"Common stock issued upon exercise of warrants" on the Condensed Consolidated
Statements of Changes in Stockholders' Equity included in Part I, Item 2 of this
report.
The warrantholders to whom the common stock was issued were primarily
institutional and private investors who reside or are domiciled in Europe and
elsewhere outside the United States. Commissions at the rate of 3 percent of the
exercise price have been paid or are payable to American Equities Overseas,
Inc., on certain of the sales as to which it acted as placement agent for the
underlying warrants.
The common stock was issued in reliance on exemptions from registration provided
by Rule 903 of Regulation S promulgated under the Securities Act of 1933, as
amended (the Securities Act), and Rule 506 of Regulation D promulgated under the
Securities Act. With respect to shares issued under Regulation S, warrantholders
were required to certify that they were not U.S. Persons, were the sole
beneficial owners of the warrants being exercised, and were not exercising the
warrants for the benefit of any U.S. Person; procedures were implemented to
ensure that the common stock was issued only in offshore transactions; no
directed selling efforts were made in the United States; and the common stock
and the underlying warrants were issued in accordance with all other applicable
requirements of Regulation S. With respect to shares issued under Regulation D,
the original warrant issuance agreements contained representations as to
investment intent and accredited investor status, or the warrantholder was
required to make a representation as to investment intent and accredited
investor status; warrants were issued to six investors; Epitope did not engage
in any general solicitation or general advertising; warrantholders were informed
that the common stock had not been registered and could not be resold without
registration, unless an exemption was available; and Forms D were filed with the
Securities and Exchange Commission. In both cases, certificates for Epitope
common stock issued prior to the Merger bore restrictive legends indicating that
the shares had not been registered and could be transferred only pursuant to
registration or an applicable exemption. In addition, through the date of the
Merger, Epitope maintained registration statements on Form S-3 covering resale
of the common stock by warrantholders.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On September 29, 2000, a special meeting of the shareholders of Epitope, Inc.
was held to vote on the approval of the Agreement and Plan of Merger (Merger
Agreement) under which Epitope and STC would each be merged with and into
OraSure Technologies, Inc. Approximately 99 percent of the votes cast voted in
favor of the Merger. The voting results were: FOR 10,699,098, AGAINST 65,347,
ABSTAIN 28,415.
ITEM 5. OTHER INFORMATION
OraQuick Rapid HIV Test. On June 23, 2000, Epitope received approval for an
Investigational Device Exemption (IDE) from the U.S. Food and Drug
Administration (FDA) authorizing Epitope to begin formal clinical trials for
OraQuick HIV-1/2. The OraQuick HIV-1/2 device is the Company's new rapid test
designed to test an oral fluid,
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whole blood or serum/plasma sample for the presence of antibodies against HIV-1
or HIV-2 within 20 minutes. The IDE calls for testing approximately 3,300
subjects with multiple sample types at about 20 sites in the United States for
HIV-1, and in Cote d'Ivoire, West Africa for HIV-2, to support a Pre-market
Application (PMA) submission to the FDA for approval to sell OraQuick HIV-1/2 in
the U.S. market. Clinical trials were started in August 2000 and are targeted
for completion early in 2001. It is anticipated that the PMA will be submitted
in the first quarter of 2001.
The Company is also conducting an extensive evaluation of the OraQuick HIV-1/2
device program with public health organizations both in the U.S. and around the
world, going beyond the studies intended specifically for the data for FDA
submission. A study has been completed at the Thai Red Cross in Bangkok,
Thailand, showing 100% sensitivity and 99.9% specificity for the OraQuick
HIV-1/2 device in testing a population at high risk for HIV infection. A second
study at the University of Natal, Durban, South Africa is close to completion.
Additional international studies are underway or planned in: Peru (conducted by
University of Washington), seven Central American countries (USAID), Malawi and
Botswana (sites managed by the Centers for Disease Control and Prevention
(CDC)). Additional domestic studies are underway by the CDC which is continuing
a long-term study of more than 6,000 high-risk subjects in Los Angeles, and the
U.S. Army which is studying more than 12,000 subjects at the Walter Reed Army
Hospital. The combination of these studies is intended to demonstrate the
accuracy of OraQuick HIV-1/2 testing in many environments where diverse HIV
subtypes exist.
The importance of HIV-2 differs by country, and can be affected by both
regulatory requirements and by competitive pressures. In most countries, any
product used to screen the blood supply will require the ability to detect
HIV-2, although the OraQuick HIV-1/2 product has not been intended for that
market purpose. In other markets, including the United States, a test which can
detect only the more prevalent HIV-1 type is generally considered sufficient,
except in testing related to the blood supply. Because the competitive situation
in each country will be affected by the availability of other testing products
as well as each country's regulatory environment, the Company may be at a
competitive disadvantage in some markets without an HIV-2 product, even if it is
not required by regulations.
The overall sales potential, and the specific countries in which the Company
will be able to sell its OraQuick HIV-1/2 rapid test, will be affected by
whether it can arrange a sublicense or distribution agreement, related to the
patent for detection of the HIV-2 virus. HIV-2 is a type of the HIV virus
estimated to represent less than 2 percent of known HIV cases worldwide.
Nevertheless, HIV-2 is considered to be an important component in the HIV
testing regimen in many markets. In addition, a patent on the detection of HIV-2
is in force in most of the countries of North America and Western Europe, and in
Japan, Korea and South Africa. Access to a license for HIV-2 may be necessary to
sell HIV-2 tests in countries where this patent is registered, or to manufacture
in those same countries and sell into non-patent markets. Since the HIV-2 patent
is registered in the United States, the Company would be restricted from
manufacturing the HIV-1/2 version of its OraQuick product in the U.S. and
selling into other countries, even if the HIV-2 patent was not registered in
those other countries. The Company believes that the HIV-2 patent is not in
force in Sub-Saharan Africa (except South Africa), India, Pakistan, the People's
Republic of China, Thailand, Russia and Eastern European countries.
The Company is pursuing several alternatives to address this situation.
Whichever alternative is ultimately chosen will affect the overall potential
timing and amount of revenue from the OraQuick product. The first alternative is
to negotiate an agreement with a company that holds an HIV-2 license, and to
manufacture an HIV-1/2 version of the OraQuick product in the U.S. for domestic
use and for export to other countries. This alternative would provide wide
market access, but may require distribution through the license holder to some
countries and royalty payments related to the HIV-2 license. A second
alternative is to sell an OraQuick HIV-1 version in markets such as the United
States that do not require HIV-2 for most diagnostic testing, and to export this
version to other countries, which also do not require HIV-2 detection. The third
alternative is to sell an HIV-1 version of OraQuick in the U.S. market, and to
manufacture an OraQuick HIV-1/2 version in a country where the HIV-2 patent is
not in force, for export to countries where market pressures require an HIV-1/2
test. Both the second and third alternatives could delay introduction of the
OraQuick test into the U.S. market.
FDA COMPLIANCE. The Company's Western blot products and its medical devices must
be manufactured in compliance with the Food and Drug Administration's (FDA's)
"good manufacturing practices" (GMP) regulations. In June 2000, the FDA issued
observations of deficiencies following an inspection of Epitope's manufacturing
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facilities in Beaverton, Oregon, stating the FDA's view that some of Epitope's
products were not manufactured in compliance with GMP regulations. The FDA had
previously issued a warning letter in September 1998, and observations of
deficiencies in January 1999 to Epitope based on prior inspections. The FDA has
questioned Epitope's compliance with GMP regulations in areas such as process
validation, purchasing controls, complaint handling, and equipment controls. The
Company has undertaken a substantial review of its manufacturing and quality
assurance, and has either already made changes or has changes in process, to
satisfy the FDA's regulations with respect to its GMP compliance. These plans
were communicated to the FDA in a written reply in September 2000.
On October 20, 2000, the FDA sent a letter to the Company regarding the serum
Western blot product voicing the agency's concern over the previously observed
deficiencies and stating its intent to revoke the Company's license to
manufacture this product if the problems were not corrected in sufficient time.
The FDA acknowledged the receipt of the Company's written responses and found
that those items which had been completed appeared to be adequate, but required
the Company to submit a comprehensive report by November 20, 2000 on the
Company's corrective action plans and the schedule to address the remaining
items. Although the serum Western blot product line is a small part of the
Company's revenue, OraSure Technologies has recognized that the basic changes to
the overall quality systems needed to remedy the FDA's observations would also
assist in the quality for all of the Company's product lines, and therefore has
devoted a considerable amount of time and resources to improving quality
procedures across the Company.
Even with the substantial efforts and the progress made to-date, there is a risk
that the FDA will not be satisfied by the Company's efforts. If the FDA is not
satisfied, it could take action intended to force OraSure Technologies to stop
manufacturing its Western blot products until the FDA believes the Company is in
compliance with GMP requirements. Also, although the FDA has recently granted
the Company permission to obtain certificates needed for export of products, the
FDA could refuse export permission in the future if the agency determines that
the Company's progress toward GMP compliance is not sufficient.
Fiscal Year End Change. On September 29, 2000, the board of directors of
Epitope, Inc. adopted a resolution to change Epitope's fiscal year end from
September 30 to December 31. On November 13, 2000, the Company filed a report on
Form 10-QT for the transition period of October 1, 1999 to December 31, 1999,
and intends to file a report on Form 10-K for the year ending December 31, 2000.
The following table presents the Company's unaudited condensed consolidated
results of operations on a quarterly basis for fiscal years ended December 31,
1999 and 2000 giving effect to the Merger for all periods shown.
1999 2000
(IN THOUSANDS) _____________________________ _____________________
MARCH JUNE SEPTEMBER DECEMBER MARCH JUNE SEPTEMBER
31 30 30 31 31 30 30
Revenues
Product sales.......... $4,824 $5,727 $6,537 $6,423 $6,479 $7,051 $6,868
Grants and contracts... 109 396 74 360 133 117 354
----- ----- ----- ----- ----- ----- ------
4,933 6,123 6,611 6,783 6,612 7,168 7,222
Costs and expenses
Cost of goods sold..... 1,920 2,347 2,574 2,527 2,484 2,629 3,097
Research and development
costs................ 1,209 1,779 1,190 1,411 1,718 2,115 2,800
Acquired in-process
technology........... - - 1,500 - - - -
Selling, general &
administrative expenses 2,506 2,867 3,352 3,183 3,263 3,622 3,637
Merger expenses........ - - - - - - 5,920
----- ----- ----- ----- ----- ----- ------
5,635 6,993 8,616 7,121 7,465 8,366 15,454
Loss from operations.... (702) (870) (2,005) (338) (853)(1,198) (8,232)
Interest income......... 9 156 249 87 228 319 397
Interest expense........ (139) (131) (139) (134) (128) (125) (123)
Other, net.............. 78 12 (30) (106) (9) 607 47
----- ----- ----- ----- ----- ----- ------
Loss before income taxes (754) (833) (1,925) (491) (762) (397) (7,911)
Income taxes............ - - - 50 56 (44) 12
Net loss................ $(754) $(833)$(1,925) $(541) $(818) $(353)$(7,923)
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibits are listed on the attached exhibit index following the signature page
of this report.
(b) Reports on Form 8-K
Current Report on Form 8-K dated September 29, 2000, reporting under Item 5
action by the board of directors of Epitope, Inc. to change Epitope's fiscal
year end from September 30 to December 31.
Current Report on Form 8-K dated September 29, 2000, reporting under Item 2 the
Merger of Epitope, Inc. and STC Technologies, Inc. with and into the Company.
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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.
ORASURE TECHNOLOGIES, INC.
November 14, 2000 /s/ CHARLES E. BERGERON
Date Charles E. Bergeron
Chief Financial Officer
(Principal Financial Officer)
November 14, 2000 /s/ THEODORE R. GWIN
Date Theodore R. Gwin
Controller
(Principal Accounting Officer)
<PAGE>
EXHIBIT INDEX
27. Financial Data Schedule
99. Description Of Orasure Technologies Capital Stock
