U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended November 30, 2000
Commission file number 0-10783
BSD MEDICAL CORPORATION
DELAWARE 75-1590407
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(State of Incorporation) (IRS Employer Identification Number)
2188 West 2200 South
Salt Lake City, Utah 84119
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (801) 972-5555
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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of January 15, 2001
---------------------------- -----------------------------------
Common stock, $.01 Par Value 17,490,551
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BSD MEDICAL CORPORATION
Condensed Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
Assets November 30,
------ 2000
------------------
<S> <C>
Current assets:
Cash and cash equivalents $ 579,640
Cash, restricted 100,000
Receivables, net 36,990
Inventories 1,065,747
Prepaid Expenses 15,747
Deposits 16,772
------------------
Total current assets 1,814,896
------------------
Property and equipment, net 104,253
Long-term trade receivables 175,993
Patents, net 13,041
------------------
$ 2,108,183
------------------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 45,073
Accrued expenses 852,570
Current portion of deferred revenue 53,970
Current portion on deferred gain on sale - leaseback 61,416
------------------
Total current liabilities 1,013,029
------------------
Long term liabilities
Deferred revenue 176,686
Deferred gain on sale leaseback 61,337
------------------
Total liabilities $ 1,251,052
------------------
Stockholders' equity:
Common stock, $.01 par value; authorized 20,000,000 shares; 174,889
issued and outstanding 17,488,851, shares
Additional paid-in capital 20,793,534
Deferred compensation (25,097)
Accumulated deficit (20,085,961)
Common stock in treasury 13,412 shares, at cost (234)
------------------
Net stockholders' equity 857,131
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$ 2,108,183
==================
</TABLE>
May 31, 1998 10-QSB Page -2-
<PAGE>
BSD MEDICAL CORPORATION
Condensed Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended:
-----------------------------
November November 30,
30, 2000 1999
------------ -------------
<S> <C> <C>
Product sales $ 51,284 $ 80,930
Grant and license revenue 28,110 112,036
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Total revenues 79,394 192,966
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Costs and expenses:
Cost of product sales 34,267 36,223
Research and development 153,264 125,051
Selling, general, and administrative 275,733 327,411
------------ -------------
Total costs and expenses 463,264 488,685
------------ -------------
Operating loss (383,870) (295,719)
Other income (expense):
Interest income 9,016 17,792
Interest expense - (284)
Loss income in joint venture - (114,999)
------------ -------------
Total other income (expense) 9,016 (97,491)
------------ -------------
Net loss $ (374,854) $ (393,210)
============ =============
Net loss per common and common equivalent share,
basic and diluted $ (.02) $ (.02)
------------ -------------
Weighted average number of shares outstanding, 17,489,000 16,694,000
basic and diluted
-
</TABLE>
See accompanying notes to financial statements.
May 31, 1999 10-QSB Page -3-
<PAGE>
BSD MEDICAL CORPORATION
Condensed Statements of Cash Flows (Unaudited)
Three months ended November 30, 2000, and 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Cash and Cash Equivalents Nov. 30, Nov. 30,
------------------------------------------------ 2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (374,854) $ (393,210)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization 7,183 5,178
Deferred gain on sale of building (15,354) (15,354)
Issuance of common stock to directors 12,001 -
Deferred compensation 3,800 3,800
(Increase) decrease in:
Receivables 154,560 (22,144)
Inventories (160,645) (231,152)
Prepaid expenses and deposits 17,927 8,831
Increase (decrease) in:
Accounts payable (16,464) 62,756
Accrued expenses 160,009 233,281
Deferred Income 184,632 (14,613)
Loss from equity investment - 114,999
------------ ------------
Net cash by used in operating activities (27,205) (247,628)
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (24,649) (10,439)
Purchase of patent license - (13,929)
------------ ------------
Net cash provided by (used in) investing activities (24,649) (24,368)
Cash flows from financing activities:
Principal payments on long-term debt obligation - (14,192)
------------ ------------
Net cash used in financing activities - (14,192)
------------ ------------
Decrease in cash and cash equivalents $ (51,854) $ (286,188)
Cash and cash equivalents, beginning of period 731,494 1,689,029
------------ ------------
Cash and cash equivalents, end of period $ 679,640 $ 1,402,841
============ ============
Supplemental Disclosure of Cash Flow Information
------------------------------------------------
Cash paid for interest during period $ - $ 284
</TABLE>
May 31, 1999 10-QSB Page -4-
<PAGE>
BSD MEDICAL CORPORATION
Notes to Condensed Financial Statements
Note 1. Basis of Presentation
The Condensed Balance Sheet as of November 30, 2000; the Condensed
Statements of Operations for the three months ended November 30, 2000; the
Condensed Statements of Cash Flow for the three months ended November 30, 2000,
and November 30, 1999, have been prepared by the Company without audit. In the
opinion of management, all adjustments to the books and accounts (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations, and changes in financial position of the
Company as of November 30, 2000, have been made. Because the method of
accounting was changed from a consolidation method to an equity method during
the year, the results from Thermatrx, Inc. are not reported on the November 30,
2000 financial statements. At August 31, 2000, the Company no longer recorded
the equity investment in Thermatrx, as the investment was reduced to less than
zero and continues to decline. The Company has no anticipated liabilities in
association with this investment.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The results of operations for the period ended
November 30, 2000, are not necessarily indicative of the results to be expected
for the full year.
Note 2. Net Loss Per Common Share
Net Loss per common share for the quarters ended November 30, 2000 and
November 30, 1999 are based on the weighted average number of shares outstanding
during the respective periods.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
-------------------------------
Total assets decreased from $2,154,413 at August 31, 2000, to $2,108,183 at
November 30, 2000, a decrease of $46,230, or 2.14%. Receivables (including long
term) decreased by $154,560, a decrease of 42.05%, due to normal periodic
business fluctuations while total inventories increased by $160,645, an increase
of 17.74% resulting from the purchase of materials for future shipment.
Restricted cash consist of a certificate of deposit used as security for a
customer's loan. The cash will become unrestricted as the loan is paid down,
when the Company achieves certain financial quotas, or when the loan is paid in
full, whichever occurs first. The Company has long term receivables for field
service contracts as of November 30, 2000, of $175,993.
Total current liabilities increased by $164,577, an increase of 19.40%. The
increase was primarily caused by increases in customer deposits, and accrued
expenses.
May 31, 1999 10-QSB Page -5-
<PAGE>
Fluctuations in Operating Results
---------------------------------
The Company's sales and operating results historically have varied (and
will likely continue to vary) on a quarter-to-quarter and a year to year basis
due to budgeting considerations of the Company's customers; the nature of the
medical capital equipment market; the relatively large per unit sales prices of
the Company's products; the typical fluctuations in the mix of orders for
different systems and system configurations; and other factors. For these and
other reasons, the results of operations for a particular fiscal period may not
be indicative of results for any other period.
Results of Operations:
----------------------
Three Months ended November 30, 2000
Product Sales decreased from $80,930 in the three months ended November 30,
1999, to $51,284 in the three months ended November 30, 2000, a decrease of
$29,646 or 36.63. Grant and License revenue consist of fees paid to the Company
for the use of certain patents based on certain reported sales of the Licensee.
This revenue decreased from $112,036 to $28,110 primarily due to a reduction in
sales applicable to the licensing agreement. Selling, General and Administrative
Expenses decreased from $327,411 in the three months ended November 30, 1999, to
$275,733 in the three months ended November 30, 1999, a decrease of $51,678, due
to changes in the cycle of promotional expenses. Total Costs and Expenses
decreased by $25,421, a decrease of 5.2%, primarily due to the aforementioned
decrease in Selling, General and Administrative expense. The Net Loss for the
three months ending November 30, 2000, was $374,854, as compared with a Net Loss
of $393,210 for the three months ending November 30, 1999.
Research and Development Expenses increased from $125,051 for the three
months ended November 30, 1999, to $153,264 in the three months ended November
30, 2000, an increase of $28,213, or 22.56% to support completion of the new
commercial products under development.
May 31, 1999 10-QSB Page -6-
<PAGE>
FORWARD OUTLOOK AND RISKS. From time to time, the Company may publish
forward-looking statements relating to such matters as anticipated financial
performance, business prospects, technological development, new products,
research and development activities and similar matters. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements. In order to comply with the terms of the safe harbor, the Company
notes that a variety of factors could cause the Company's actual results and
experience to differ materially from the anticipated results or other
expectations expressed in any of the Company's forward-looking statements.
This form 10-QSB contains and incorporates by reference certain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act with respect to results of operations
and businesses of the Company. All statements, other than statements of
historical facts, included in this Form 10-QSB, including those regarding market
trends, the Company's financial position, business strategy, projected costs,
and plans and objectives of management for future operations, are
forward-looking statements. These forward-looking statements are based on the
Company's current expectations. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, there
can be no assurance that such expectations will prove to be correct.
CHANGING REGULATORY ENVIRONMENT. The Company's business is subject to
extensive federal, state and local regulation. Political, economic and
regulatory influences are subjecting the health care industry in the United
States to fundamental change. See "Government Regulation" in the Company's
fiscal 1998 10-KSB.
PART II - OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits
The following exhibit is filed as part of this report:
Exhibit
Number Description
------ -----------
27 Financial Data Schedule.
b) Reports on Form 8-K - During the quarter, no reports on Form 8-K were filed
by the Company.
May 31, 1999 10-QSB Page -7-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, BSD
Medical Corporation, the registrant, has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BSD MEDICAL CORPORATION
Date: January 16, 2001 /s/ Hyrum A. Mead
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President
May 31, 1999 10-QSB Page -8-
