UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
|X|QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the Quarterly period ended August 31, 1995
|_|TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT For
the transition period from _____ to _____
COMMISSION FILE NUMBER 0-11408
BIOSENSOR CORPORATION
______________________________________________________________________________
MINNESOTA 41-1427114
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
13755 First Avenue North,
Plymouth, Minnesota 55441
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (612) 449-9100
Check whether the Issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the 12 months (or for such shorter period
that registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES __X__ NO______
The number of shares outstanding of the registrant's common stock, $.05 par
value, as of September 25, 1995 is 2,800,555.
BIOSENSOR CORPORATION
CONDENSED BALANCE SHEETS
August 31, May 31,
1995 1995
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 8,720 $ 4,750
Receivables 410,980 395,309
Inventories 407,959 432,486
Prepaid expenses and other 28,809 22,032
Total Current Assets 856,468 854,577
DEPOSITS 8,666 9,643
PROPERTY AND EQUIPMENT at cost, net 62,705 65,334
$ 927,839 $ 929,554
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note Payable to bank $ 25,000 $ 20,000
Accounts payable
Trade 90,493 96,120
Other 10,000 20,000
Accrued expenses
Commissions 16,578 22,350
Compensation 47,293 43,333
Warranty 23,375 22,467
Other 29,954 27,182
Total Current Liabilities 242,693 251,452
DEFERRED RENT 3,690 5,195
STOCKHOLDERS' EQUITY
Common stock, par value $.05 per share 140,028 140,028
Additional paid-in capital 2,939,947 2,939,947
Accumulated deficit (2,398,519) (2,407,068)
Total stockholders' equity 681,456 672,907
$ 927,839 $ 929,554
<TABLE>
<CAPTION>
BIOSENSOR CORPORATION
CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended August 31 1995 1994
<S> <C> <C>
NET SALES $ 528,872 $ 718,262
COSTS AND EXPENSES
Cost of products sold 199,301 325,359
Research, development and engineering 39,597 68,523
Sales and marketing 152,901 239,837
General and administrative 126,179 121,146
517,978 754,865
Operating income (loss) 10,894 (36,603)
Nonoperating Income (Expense), net (656) 1971
Income (Loss) before income taxes 10,238 (34,632)
Federal and State Income Taxes 1,689 2,622
Net Income (Loss) $ 8,549 $ (37,254)
EARNINGS (LOSS) PER COMMON SHARE AND
COMMON EQUIVALENT SHARE $ 0.00 $ (.01)
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES
2,800,555 2,790,772
</TABLE>
BIOSENSOR CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended August 31, 1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 8,549 $ (37,254)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 6,175 5,454
(Gain) loss on sale of property and equipment 74 (73)
Changes in assets and liabilities:
(Increase) decrease in:
Receivables (15,671) 47,819
Inventories 24,527 (2,392)
Other Assets (5,800) (1,398)
Increase (decrease) in :
Accounts payable (5,627) 12,806
Accrued expenses 363 (69,720)
Net cash provided by (used in) operations 12,590 (44,758)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for purchase of product line (10,000) (30,000)
Purchase of property and equipment (4,620) --
Proceeds from sale of property and equipment 1,000 600
Net cash used in investing activities (13,620) (29,400)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing from note payable to bank 55,000 --
Payments on note payable to bank (50,000) --
Net proceeds from issuance of common stock -- 1,500
Net cash provided by financing activities 5,000 1,500
Increase (decrease ) in cash and cash equivalents 3,970 (72,658)
CASH AND CASH EQUIVALENTS
Beginning of period 4,750 125,208
End of period $ 8,720 $ 52,550
BIOSENSOR CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1. NATURE OF BUSINESS
The Company is engaged in the development, manufacture and marketing of
diagnostic equipment for physicians' offices, clinics and hospitals. The 24-hour
ambulatory cardiac monitoring, EKG telemetry, pulmonary function, EKG and
ambulatory blood pressure systems operate independently or in unison on an IBM
compatible office computer. The company also manufactures cardiac monitors for
OEM distributors.
NOTE 2. CONDENSED FINANCIAL STATEMENTS
The accompanying condensed financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations, and changes in cash flows have been
made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed financial statements should be
read in conjunction with the financial statements and notes thereto included in
the Company's Form 10-KSB for the year ended May 31, 1995.
The results of operations for the three months ended August 31, 1995, are not
necessarily indicative of the operating results for the full year.
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
The Company's sales were $529,000 for the first quarter ended August 31, 1995
compared to sales of $718,000 for the first quarter ended August 31, 1994. In
those same periods, cost of products sold as a percentage of sales were 38% and
45% respectively. In the second and third quarters of fiscal 1995, the Company
reorganized its US sales force by moving to the use of independent sales
representatives and increasing the emphasis on the profitability versus volume
of sales. This reorganization has resulted in lower, but more profitable sales
in the US market. The decrease in sales for the first quarter was also the
result of decreased OEM telemetry sales. The Company believes healthcare reforms
have resulted in a reduction in purchases of equipment sold by the manufacturers
we supply. International sales were also down slightly in the first quarter of
fiscal 1996, due to timing of purchases from international distributors.
Research, development and engineering expenditures decreased approximately
$29,000 for the first quarter of fiscal 1996 compared to the first quarter of
fiscal 1995. The decrease is due to decreases in personnel expenditures.
Sales and marketing expenses decreased $87,000 for the first quarter of fiscal
1996 compared to the first quarter of 1995. This decrease is a result of the
reorganization of the US sales force to change to direct representatives who are
compensated solely through commissions on sales versus base salaries and
expenses paid to employee sales representatives in the first quarter of fiscal
1995.
General and administrative costs in the first quarter of 1996 were consistent
with those in the first quarter of 1995.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations totaled $13,000. The net income of $9,000 and
decrease in inventory of $24,000 were partially offset by an increase in
receivables. The Company used cash of $14,000 for payments on the product line
purchased in 1994 and for purchases of property and equipment. Cash provided by
financing activities totaled $5,000 from net advances on the bank line of
credit.
At August 31, 1995 the Company had working capital of $614,000. The Company also
has a bank line of credit available of $150,000 due October 31, 1995 with
interest at 2 percent over prime. The balance outstanding on the line was
$25,000 at August 31, 1995. Advances are limited to a percentage of receivables
and are secured by substantially all the assets of the Company. In addition, the
line is personally guaranteed by the President of the Company. The line contains
certain financial and other covenants which include current ratio and tangible
net worth covenants, and prohibit the payment of dividends. The Company is
currently in the process of obtaining a renewal of this line. Management
believes that these sources, along with cash flows from operations will be
sufficient to fund operations for fiscal 1996.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable.
ITEM 2. CHANGES IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER MATERIALLY IMPORTANT EVENTS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BIOSENSOR CORPORATION
/s/ B. Steven Springrose
B. Steven Springrose
President and Chief Executive Officer
Date October 11, 1995
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