<PAGE> 1
- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
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: 0-11371
BIOSONICS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2161932
- -------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
260 New York Drive
Fort Washington, Pennsylvania 19034
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(215) 646-7100
---------------------------------------------------
(Registrant's telephone number including area code)
N/A
----------------------------------------------
(Former name, former address and former fiscal
year, if changed since last report)
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 issuers shares of
common stock, as of the latest practicable date: As of September 30th 1997,
there were outstanding 306,364,536 shares of the Registrant's Common Stock,
$.0001 par value.
- -------------------------------------------------------------------------------
Page 1 of 13 pages
Exhibit Index is on Page 12
<PAGE> 2
BIOSONICS, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets:
September 30, 1997 and December 31, 1996 2
Statements of Loss:
Three and Nine Months Ended September 30, 1997 and 1996 3
Statements of Deficit Accumulated:
Nine Months Ended September 30, 1997 and 1996 4
Statements of Cash Flows:
Nine Months Ended September 30, 1997 and 1996 5
Statements of Shareholders' Equity - Paid-In-Capital:
November 30, 1980 (inception) to September 30, 1997 7
Note to Financial Statements 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
PART II OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures
</TABLE>
2
<PAGE> 3
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS (UNAUDITED)
- -------------------------------------------------------------------------------
ASSETS
<TABLE>
<CAPTION>
Unaudited DECEMBER
SEPTEMBER 31, 1996
30, 1997
------------ ------------
<S> <C> <C>
Current Assets
Cash (including interest bearing deposits of $10 in 1997 $ 260 $ 260
and 1996)
Accounts receivable (net of allowance for doubtful 5,827 8,196
accounts of $2,000 in 1997 and 1996)
Advances from IMRC 125,012 77,997
Loan Receivables 15,000 --
Inventory 62,695 64,271
Prepaid expenses and other current assets 6,571 25
------------ ------------
Total current assets 215,365 150,749
Equipment, furniture and leaseholds, net of accumulated
depreciation 10,504 15,007
Deposits 8,431 8,431
------------ ------------
Total assets $ 234,300 $ 174,187
============ ============
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
Notes payable, officer and affiliate $ 99,000 $ 115,000
Notes payable, other 128,000 173,000
Accrued payroll, officer 746,750 669,500
Accrued interest, officer and affiliate 64,130 55,905
Accrued interest, other 192,129 173,131
Accounts payable and other accrued expenses 863,048 824,790
Advances from affiliates 62,450 62,450
Payments received from unissued debentures 187,000 187,000
Proceeds from unissued securities 0 40,000
------------ ------------
Total current Liabilities 2,342,507 2,300,776
------------ ------------
Shareholders' deficit
Common stock - authorized 750,000,000 shares at .0001 30,636 28,787
par value; issued and outstanding 306,364,536 and
287,863,936 shares at September 30, 1997 and
December 31, 1996 respectively
Capital in excess of par value 12,468,180 11,763,002
Notes receivable from sale of stock (95,000) --
Deficit accumulated during development stage (14,512,023) (13,918,378)
------------ ------------
Total shareholders' deficit (2,108,207) (2,126,589)
------------ ------------
Total liabilities and shareholders, deficit $ 234,300 $ 174,187
============ ============
</TABLE>
- -------------------------------------------------------------------------------
The accompanying note is an integral part of these financial statements.
3
<PAGE> 4
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE
STATEMENTS OF LOSS (UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED THREE MONTHS ENDED 11/13/80 (INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996 1997 1996
--------- --------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Sales $ 18,679 $ 34,911 $ 5,129 $ 5,786 $ 856,056 $ 831,514
Cost of sales 12,459 23,116 4,162 6,950 557,444 537,893
--------- --------- --------- --------- ------------ ------------
Gross Profit 6,220 11,795 967 (1,164) 298,612 293,621
--------- --------- --------- --------- ------------ ------------
Development stage expenses
Research and development costs 0 0 0 0 4,166,054 4,144,553
Professional fees 187,329 109,691 54,740 72,691 2,939,816 2,732,128
Other development stage expenses 416,824 471,091 129,279 250,853 8,582,383 7,912,411
--------- --------- --------- --------- ------------ ------------
Total development stage expenses 604,153 580,782 184,019 323,544 15,688,253 14,789,092
Less: Revenue from cost recovery
program -- -- -- -- 118,085 118,082
--------- --------- --------- --------- ------------ ------------
Net development stage expenses 604,153 580,782 184,019 323,544 15,570,168 14,671,010
Other income
Investment and other income 4,288 75 2,071 -- 731,913 727,626
Management fees 20,000 20,000
Gain on sale of equipment -- -- -- -- 7,620 7,620
--------- --------- --------- --------- ------------ ------------
Total other income 4,288 75 2,071 -- 759,533 755,246
--------- --------- --------- --------- ------------ ------------
Net loss $(593,645) $(568,912) $(180,981) $(324,708) $(14,512,023) $(13,622,143)
========= ========= ========= ========= ============ ============
Loss per common share ($ .00) ($ .00) ($ .00) ($ .00) ($ .05) ($ .06)
========= ========= ========= ========= ============ ============
</TABLE>
- -------------------------------------------------------------------------------
The accompanying note is an integral part of these financial statements.
4
<PAGE> 5
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE
(UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NINE MONTHS ENDED 11/13/80 (INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Beginning balance $(13,918,378) $(13,053,231) $ -- $ --
Net Loss (593,645) (568,912) (14,512,023) (13,622,143)
------------ ------------ ------------ ------------
Ending Balance $(14,512,023) $(13,622,143) $(14,512,023) $(13,622,143)
============ ============ ============ ============
</TABLE>
- -------------------------------------------------------------------------------
The accompanying note is an integral part of these financial statements.
5
<PAGE> 6
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NINE MONTHS ENDED 11/13/80 (INCEPTION) TO
SEPTEMBER 30 SEPTEMBER 30
1997 1996 1997 1996
--------- --------- ------------ ------------
<S> <C> <C> <C> <C>
Cash flows used in operating activities
Net loss $(593,645) $(568,912) $(14,512,023) $(13,622,143)
--------- --------- ------------ ------------
Adjustments to reconcile net loss to net cash used
Depreciation and amortization 4,503 4,005 383,190 372,688
Increase (decrease) in allowance for doubtful accounts -- -- 2,000 6,000
Increase (decrease) in reserve for inventory obsolescence -- -- 27,000 40,000
Loss on lease abandonment -- -- 19,550 19,550
Gain on sale of fixed assets -- -- (7,620) (7,620)
Common stock issued for services 29,500 167,750 573,459 625,959
Common stock options issued for services 14,398 -- 177,678 --
Common stock issued for interest 10,000 -- 10,000 --
Common stock issued for product rights -- -- 12,501 12,501
Change in
Accounts receivable 2,369 15,331 (7,827) (11,682)
Inventory 1,576 5,004 (89,695) (105,080)
Prepaid expenses and other current assets (6,546) 3,998 (6,571) (4,853)
Accrued payroll, officer 77,250 77,250 746,750 643,750
Accrued interest, officer and affiliates 8,225 24,024 138,333 127,630
Accrued interest, other 18,998 18,976 192,129 166,814
Accounts payable and accrued expenses 38,258 (21,297) 931,049 895,835
Advances from (to) affiliates (45,416) 3,871 62,358 28,442
--------- --------- ------------ ------------
Total adjustments 153,115 298,912 3,164,284 2,809,934
--------- --------- ------------ ------------
Net cash used in operating activities (440,530) (270,000) (11,347,739) (10,812,209)
--------- --------- ------------ ------------
Cash flows from investing activities
Sale of fixed assets $ -- $ -- $ 10,825 $ 10,825
Capital expenditures -- -- (363,305) (363,305)
Issuance of note receivable (15,000) -- (45,000) (30,000)
(Increase) decrease in deposits -- -- (8,431) (8,431)
Decrease in note receivable -- -- 30,000 30,000
Decrease in capitalized patents -- -- (45,690) (45,690)
--------- --------- ------------ ------------
Net cash used in investing activities (15,000) -- (421,601) (406,601)
--------- --------- ------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying note is an integral part of these financial statements.
6
<PAGE> 7
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NINE MONTHS ENDED 11/13/80 (INCEPTION) TO
SEPTEMBER 30 SEPTEMBER 30
1997 1996 1997 1996
--------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from financing activities
Proceeds for bonds unissued $ -- $ -- $ 190,000 $ 190,000
Repayments for bonds unissued -- -- (3,000) (3,000)
Proceeds for common stock unissued -- -- 311,000 271,000
Principal payments of note payable (61,000) (235,000) (368,000) (307,000)
Proceeds from issuance of note payable -- -- 834,444 789,444
Increase in capitalized organization costs -- -- (7,453) (7,453)
Proceeds from issuance of preferred stock -- 505,000 1,105,000 1,105,000
Proceeds from issuance of common stock 516,530 -- 9,707,609 9,181,079
--------- ----------- ------------ ------------
Net cash provided by financing activities 455,530 270,000 11,769,600 11,219,070
--------- ----------- ------------ ------------
Net increase decrease in cash and cash equivalents -- -- 260 260
Cash and cash equivalents, beginning 260 260 -- --
--------- ----------- ------------ ------------
Cash and cash equivalents, ending $ 260 $ 260 $ 260 $ 260
========= =========== ============ ============
Schedule of noncash financing transactions:
Issuance of common stock for non cash consideration:
Common stock unissued $ 40,000 $ 271,000 $ 311,000 $ 271,000
From Loan Receivable 95,000 -- 95,000 --
Repayment of notes payable to IMRC -- 182,444 182,444 182,444
Repayment of accrued expenses to IMRC 1,600 197,524 199,124 197,524
Employee compensation, consulting services 29,500 82,750 566,459 536,959
Services provided in exchange for stock options 14,398 75,530 177,678 163,280
Interest Expense 10,000 3,000 13,000 3,000
Loan origination fee -- -- 4,000 4,000
Acquisition of product rights -- -- 12,501 12,501
--------- ----------- ------------ ------------
$ 190,498 $ 812,248 $ 1,561,206 $ 1,370,708
========= =========== ============ ============
</TABLE>
- ------------------------------------------------------------------------------
The accompanying note is an integral part of these financial statements.
7
<PAGE> 8
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF SHAREHOLDERS' EQUITY - PAID-IN CAPITAL
NOVEMBER 13, 1980 (INCEPTION) TO SEPTEMBER 30, 1997
(UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DATE STOCK PRICE PER
ISSUED NUMBER OF SHARES SHARE AMOUNT RECEIVED NOTES
------ ---------------- ----- --------------- -----
<S> <C> <C> <C> <C>
1/13/81 150,000,000 $ .0001 $ 15,001 (A)
1/31/81 4,400,000 .025 110,000 (B)
1981 400,000 .025 10,000 (C)
1981 20,000,000 .05 1,000,000 (B)
1982 20,000 .40 8,000 (C)
1982 97,500 .20 19,500 (C)
1982 1,000,000 .06 60,100 (D)
1983 52,500 .20 10,500 (C)
1983 75,000 .305 22,875 (E)
1983 25,000 .235 5,875 (E)
1983 20,000 .50 10,000 (C)
12/29/83 7,300,000 .50 3,650,000 (F)
1984 390 1.00 390 (G)
1984 5,948 .50 2,975 (G)
1984 1,000 .375 375 (C)
1984 72,500 .25 18,125 (C)
1984 2,000 .375 750 (H)
1984 4,000 .25 1,000 (C)
1984 350,000 .20 70,000 (C)
1985 26,500 .281 7,453 (C)
1985 20,000 .25 5,000 (H)
1985 500 .50 250 (G)
1985 5,000 .344 1,719 (C)
1985 50 1.00 50 (G)
1985 2,000 .375 750 (H)
1985 7,500 .156 1,172 (C)
1986 6,882 .50 3,472 (G)
1986 85,000 .1875 15,938 (H)
1986 11,650 .281 3,276 (H)
1986 100,000 .219 21,875 (H)
1986 10,665,000 .181 1,929,737 (I)
1986 202,000 .156 31,562 (H)
1986 70,000 .313 21,875 (H)
1986 134,855 .20 26,939 (H)
1987 7,613,551 .20 1,522,710 (G)
1987 476,110 .295 140,478 (H)
1987 7,000 .159 1,113 (B)
1987 15,000 .312 4,687 (C)
1987 240,000 .20 48,000 (B)
1987 100,000 .218 21,875 (C)
1988 125,000 .25 31,250 (C)
1988 2,500 .218 547 (H)
1988 10,000 .20 2,000 (G)
</TABLE>
- --------------------------------------------------------------------------------
The accompanying note is an integral part of these financial statements.
8
<PAGE> 9
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF SHAREHOLDERS' EQUITY - PAID-IN CAPITAL
NOVEMBER 13, 1980 (INCEPTION) TO SEPTEMBER 30, 1997
(UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DATE STOCK PRICE PER
ISSUED NUMBER OF SHARES SHARE AMOUNT RECEIVED NOTES
------ ---------------- ----- --------------- -----
<S> <C> <C> <C> <C>
1988 100,000 .25 25,000 (B)
1988 4,227,000 .20 845,400 (B)
1988 25,000 .156 3,906 (C)
1988 11,000 .013 143 (H)
1989 400,000 .080 32,000 (B)
1989 3,000 .0938 282 (H)
1989 100,000 .080 8,000 (B)
1990 25,000 .010 250 (H)
1990 20,311,000 .010 203,110 (B)
1990 10,500,000 .010 105,000 (B)
1991 1,100,000 .010 11,000 (B)
1991 100,000 .010 1,000 (H)
1991 48,000 .0625 3,000 (J)
1991 32,000 .0625 2,000 (J)
1991 1,100,000 .010 11,000 (J)
1991 1,100,000 .010 11,000 (B)
1991 400,000 .010 4,000 (C)
1995 -- 87,750 (Q)
1996 1,250,000 .08 100,000 (K)
1996 11,375,000 .0286 325,000 (K)
1996 16,100,000 .05 805,000 (K)
1996 1,300,000 .01 13,000 (L)
1996 12,900,000 .02 258,000 (L)
1996 300,000 .03 9,000 (M)
1996 280,000 .05 14,000 (M)
1996 400,000 .08 32,000 (M)
1996 100,000 .065 6,500 (M)
1996 250,000 .085 21,250 (M)
1996 (15,368,820) -0- (N)
1996 420,000 0.0238 10,000 (L)
1996 11,150,000 0.02 223,000 (L)
1996 428,600 .035 15,000 (L)
1996 250,000 .04 10,000 (L)
1996 1,075,220 .05 53,761 (L)
1996 350,000 .0258 9,032 (J)
1996 1,695,000 .0345 59,175 (J)
1996 75,000 0.04 3,000 (O)
1996 200,000 0.05 10,000 (B)
1996 -- 75,530 (Q)
1997 550,000 0.05 27,500 (M)
1997 200,000 0.05 10,000 (O)
</TABLE>
- -------------------------------------------------------------------------------
The accompanying note is an integral part of these financial statements.
9
<PAGE> 10
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF SHAREHOLDERS' EQUITY - PAID-IN CAPITAL
NOVEMBER 13, 1980 (INCEPTION) TO SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DATE STOCK PRICE PER
ISSUED NUMBER OF SHARES SHARE AMOUNT RECEIVED NOTES
------ ---------------- ----- --------------- -----
<S> <C> <C> <C> <C>
1997 5,000,000 0.01 50,000 (P)
1997 1,000,000 0.02 20,000 (P)
1997 - 14,398 (Q)
1997 11,130,600 0.05 556,530 (R)
1997 500,000 0.05 25,000 (P)
1997 40,000 0.05 2,000 (M)
1997 80,000 0.02 1,600 (L)
TOTAL SHARES - COMMON STOCK 306,364,536
=============
TOTAL PAID-IN CAPITAL $ 12,972,311
LESS: Notes Receivable for Stock Purchase 95,000
LESS: Offering Expenses 473,495
-------------
NET PAID-IN CAPITAL - COMMON STOCK $ 12,403,816
=============
</TABLE>
- -------------------------------------------------------------------------------
The accompanying note is an integral part of these financial statements.
10
<PAGE> 11
BIOSONICS, INC
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF SHAREHOLDERS' EQUITY - PAID-IN CAPITAL
NOVEMBER 13, 1980 (INCEPTION) TO SEPTEMBER 30, 1997
(UNAUDITED)
- -------------------------------------------------------------------------------
NOTES
(A) $1 additional was paid on stock certificate #3.
(B) Cash Purchases.
(C) Represents stock issued in consideration for services rendered. The value
assigned was based on the fair market value of the stock on the date the
transaction was authorized.
(D) 1,000,000 common stock warrants were issued to the underwriter, Monarch
Funding Corporation, at par value ($.0001). On November 15, 1982, these
warrants were exercised at $.06 per share.
(E) Represents stock issued in consideration for services rendered and $7,500
cash. The value assigned was based on the fair market value of the stock
on the date the transaction was authorized.
(F) Stock issued as part of unit offering. Each unit consisted of 2 shares
common stock, 2 Series "A" warrants and 1 Series "B" warrant. No separate
value was assigned to the warrants.
(G) Issued pursuant to the exercise of warrants described in (F).
(H) Issued pursuant to the employee incentive stock bonus plan.
(I) Issued as part of an offering completed March 26, 1986 for cash and
redemption of warrants described in (F).
(J) Liabilities converted to common stock.
(K) Preferred Stock transferred to Common Stock as per agreement.
(L) Issued stock for monies received during time when common stock was not
able to be issued.
(M) Issued stock as payment for services rendered.
(N) Shares contributed by IMRCH.
(O) Issued stock as payment for services rendered.
(P) Issued pursuant to exercising stock purchase option.
(Q) Stock Options granted.
(R) Issued pursuant to a private offering.
- -------------------------------------------------------------------------------
The accompanying note is an integral part of these financial statements.
11
<PAGE> 12
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTE TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
- -------------------------------------------------------------------------------
NOTE 1 The unaudited financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principles. These statements should be
read in conjunction with the financial statements and notes thereto
included in the Company's Form 10-K annual report for the year ended
December 31, 1996. In the opinion of management, these financial
statements include all adjustments, consisting only of normal
recurring adjustments, necessary to summarize fairly the Company's
financial position and results of operations. The results of
operations for the nine-month period ended September 30, 1997 may
not be indicative of the results that may be expected for the year
ending December 31, 1997.
- -------------------------------------------------------------------------------
12
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Liquidity and Capital Resources
Biosonics' primary sources of funds to date have been proceeds from the sale of
its securities and investment income on such proceeds, including loans and
advances for security purchases through offerings.
Biosonics will require additional funds, estimated to be approximately $3.0
million in the immediate future to continue its operations and implement current
manufacturing and marketing plans as described below. Biosonics may receive a
portion of such funds from sales of the Salitron System and the Cystotron
Incontinence Control System. Biosonics is also considering obtaining funds
through venture capital or other private or public financing, joint venture or
merger transactions and research and development partnership financing. There is
no assurance, however, that the Company will be successful in obtaining
financing on terms favorable to the Company, or at all.
The Company has completed a tentative marketing plan for the Cystotron product.
This plan includes matters relating to the manufacturing and sales of the
devices as well as the production of a marketing study for the product. In
connection with this tentative marketing plan, the Company has recently added an
engineer to its staff to review and implement a manufacturing bid process for
the product. It is intended that this engineer will also review the Company's
other products. The Company is also planning to develop a strategy to market its
products in the international market. For example, the Company is looking to
hire a consultant to proceed with bringing the Salitron, Cystotron and Anotron
devices to the international market. In connection with such strategy, it plans
to attend two international conferences in late 1997.
The bid process in connection with the manufacturing of the Cystotron product is
expected to result in a bid being awarded in December 1997 or early in 1998. In
connection with the Company's marketing efforts in connection with the
Cystotron, the Company is planning to establish a medical board of advisors to
perform a six-month study of the Cystotron product. Depending on the Company's
ability to raise addition funds to commence and implement its marketing plan for
the Cystotron product and the establishment for the market study and a sales
team for the product, of which there can be no assurance, the Company
anticipates that sales of the product will commence in the latter part of 1998.
The Company does not have any material commitments for capital expenditures,
although the Company may make marketing capital expenditures during 1997 and
1998 in connection with the manufacture of the Cystotron Systems, if funds are
available. The extent of the development or testing, if any, of the Company's
other devices will depend on the availability of funds, and there is no
assurance that development or testing of the devices will occur or be
successful.
Results of Operations
Net development stage expenses for the nine months ended September 30, 1997 and
September 30, 1996 ($604,153 and $580,782 respectively) were slightly higher
than those for the comparable period. The net development stage expenses for the
three months ended September 30, 1997 and September 30, 1996 ($184,019 and
$323,544 respectively) were higher in the 1996 period due to expenses relating
to the Company's special shareholders meeting held in July 1996. Other
development stage expenses include primarily salaries, rent, supplies, transfer
agent fees, manufacturing, marketing, public relations and travel expenses. The
Company's professional fees for the nine months ended September 30, 1997
compared to professional fees for September 30, 1996 ($187,329 and $109,691
respectively) were higher due to legal, accounting and consulting expenses
incurred in connection with the Company's efforts to enhance its processes in
connection with this reporting and registration matters under federal
13
<PAGE> 14
securities laws and its application for Medicare reimbursement with HCFA. The
Company's professional fees for the three months ended September 30, 1997
compared to professional fees for the three month period ending September 30,
1996 ($54,740 and $72,691 respectively) were lower due to the extra accounting
and legal expenses incurred in connection with the Special Shareholders meeting
held in July 1996.
The Company's sales for the nine and three months ended September 30, 1997 were
($18,679 and $5,129 respectively) as compared to ($34,911 and $5,786
respectively) for the same period of the prior year. The decrease in sales
resulted primarily from not having available funds to continue the marketing
program for its SALITRON System.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
*3.1 Articles of Incorporation as amended (incorporated by
reference to Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1996).
*3.5 By-laws of Registrant, as amended. (incorporated by
reference to Registrants Quarter Report on
Form 10-Q for the quarter ended June 30, 1997).
27 Financial Data Schedule
(b) Reports on Form 8-K:
None
* Incorporated by reference
14
<PAGE> 15
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 thereunder duly authorized.
BIOSONICS, INC.
Date: February 10 , 1998 By: /s/Jack Paller
--------------------
Jack Paller, President, Chairman and
Executive Officer, Principal Financial
Officer and Principal Accounting Officer
and Sole Director.
15
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000352715
<NAME> BIOSONICS, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 260
<SECURITIES> 0
<RECEIVABLES> 7,827
<ALLOWANCES> 2,000
<INVENTORY> 62,695
<CURRENT-ASSETS> 215,365
<PP&E> 254,806
<DEPRECIATION> 244,302
<TOTAL-ASSETS> 234,300
<CURRENT-LIABILITIES> 2,342,507
<BONDS> 187,000
0
0
<COMMON> 30,636
<OTHER-SE> (2,108,207)
<TOTAL-LIABILITY-AND-EQUITY> 234,300
<SALES> 18,679
<TOTAL-REVENUES> 22,967
<CGS> 12,459
<TOTAL-COSTS> 604,153
<OTHER-EXPENSES> 416,824
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37,223
<INCOME-PRETAX> (593,645)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (593,645)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
