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 November 30, 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
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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 December 31, 1995 is 2,805,555.
BIOSENSOR CORPORATION
CONDENSED BALANCE SHEETS
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November 30, May 31,
1995 1995
(Unaudited)
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ASSETS
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CURRENT ASSETS
Cash $4,617 $4,750
Receivables 496,747 395,309
Inventories 391,728 432,486
Prepaid expenses and other 21,091 22,032
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Total Current Assets 914,183 854,577
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DEPOSITS 8,666 9,643
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PROPERTY AND EQUIPMENT at cost, net 62,185 65,334
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$985,034 $929,554
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES
Note Payable to bank $20,000 $20,000
Accounts payable
Trade 105,849 96,120
Other - 20,000
Accrued expenses
Commissions 12,654 22,350
Compensation 52,492 43,333
Warranty 20,525 22,467
Other 30,654 27,182
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Total Current Liabilities 242,174 251,452
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DEFERRED RENT 2,181 5,195
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STOCKHOLDERS' EQUITY
Common stock, par value $.05 per share 140,153 140,028
Additional paid-in capital 2,940,135 2,939,947
Accumulated deficit (2,339,609) (2,407,068)
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Total stockholders' equity 740,679 672,907
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$985,034 $929,554
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<TABLE>
<CAPTION>
BIOSENSOR CORPORATION
CONDENSED STATEMENTS OF INCOME
(Unaudited)
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For the Three Months Ended For the Six Months Ended
November 30, November 30,
--------------------------------------------------------------------------
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
NET SALES $570,056 $640,646 $1,098,928 $1,358,908
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COSTS AND EXPENSES
Cost of products sold 200,125 251,228 399,426 576,587
Research, development and engineering 40,342 69,521 79,939 138,044
Sales and marketing 150,133 235,569 303,034 475,406
General and administrative 119,594 130,990 245,773 252,135
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510,194 687,308 1,028,172 1,442,172
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Operating income (loss) 59,862 (46,662) 70,756 (83,264)
Nonoperating Income (Expense), net (951) 1,340 (1,607) 3,311
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Income (Loss) before income taxes 58,911 (45,322) 69,149 (79,953)
Federal and State Income Taxes -- -- 1,689 2,622
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Net Income (Loss) $58,911 $(45,322) $67,460 $(82,575)
================================================================================================================================
EARNINGS (LOSS) PER COMMON SHARE AND COMMON
EQUIVALENT SHARE $ .02 $(.02) $ .02 $(.03)
================================================================================================================================
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT
SHARES 2,802,286 2,800,555 2,801,420 2,795,637
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
BIOSENSOR CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
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Six Months Ended November 30, 1995 1994
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $67,460 $(82,575)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 12,313 10,908
(Gain) loss on sale of property and equipment 74 (73)
Changes in assets and liabilities:
(Increase) decrease in:
Receivables (101,438) 68,409
Inventories 40,758 (43,554)
Other Assets 1,918 (5,200)
Increase (decrease) in:
Accounts payable 9,729 1,508
Accrued expenses (2,022) (76,007)
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Net cash provided by (used in) operations 28,792 (126,584)
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CASH FLOWS FROM INVESTING ACTIVITIES
Payment for purchase of product line (20,000) (40,000)
Purchase of property and equipment (10,238) --
Proceeds from sale of property and equipment 1,000 600
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Net cash used in investing activities (29,238) (39,400)
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CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing from note payable to bank 110,000 110,000
Payments on note payable to bank (110,000) (60,000)
Net proceeds from issuance of common stock 313 1,500
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Net cash provided by financing activities 313 51,500
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Decrease in cash and cash equivalents (133) (114,484)
CASH AND CASH EQUIVALENTS
Beginning of period 4,750 125,208
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End of period $4,617 $10,724
=====================================================================================================
</TABLE>
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 and six months ended November 30,
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 $570,000 and $1,099,000 for the second quarter and six
months ended November 30, 1995, respectively, compared to $641,000 and
$1,359,000 for the second quarter and six months ended November 30, 1994. Cost
of goods sold as a percentage of sales were 35% for the second quarter and 36%
for the six months ended November 30, 1995. This is down from 39% and 42% for
those same periods in the previous year. 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 in the United States. This reorganization
has resulted in a lower volume but more profitable sales in the US market. The
decrease in sales was also the result of decreased OEM equipment sales. The
Company believes U.S. healthcare reforms have resulted in a reduction in
purchases of diagnostic equipment sold. These decreases in sales were slightly
offset by increases in international sales.
Research, development and engineering expenditures decreased approximately
$29,000 for the second quarter and $58,000 for the six months ended November 30,
1995 compared to the previous year. These decreases are due to decreases in
research supplies and personnel expenditures.
Sales and marketing expenses decreased $85,000 for the second quarter and
$172,000 for the six months ended November 30, 1995. These decreases are a
result of the reorganization of the US sales force to change to sales
representatives who are compensated solely through commission on sales versus
base salaries and expense paid to employee sales representatives in the previous
year.
General and administrative costs decreased $11,000 and $6,000 for the second
quarter and six months ended November 30, 1995. These decreases are the result
of decreased administrative costs relating to the OEM equipment sales.
LIQUIDITY AND CAPITAL RESOURCES
For the six month period ending November 30, 1995, cash provided by operations
totaled $29,000. The net income of $67,000, decrease in inventory of $41,000 and
increase in liabilities were offset by an increase in receivables. The Company
used cash of $30,000 for payments on the product line purchased in 1994 and for
purchases of property and equipment.
At November 30, 1995 the Company had working capital of $672,000. The Company
also has a bank line of credit available of $150,000 due October 31, 1996 with
interest at 2 percent over prime. The balance outstanding on the line was
$20,000 at November 30, 1995. Advances are limited to a percentage of
receivables and are secured by substantially all the assets 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.
Management believes that these sources, along with anticipated 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 January 2, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> NOV-30-1995
<CASH> 4,617
<SECURITIES> 0
<RECEIVABLES> 508,777
<ALLOWANCES> 12,000
<INVENTORY> 391,728
<CURRENT-ASSETS> 914,183
<PP&E> 333,718
<DEPRECIATION> 271,533
<TOTAL-ASSETS> 985,034
<CURRENT-LIABILITIES> 242,174
<BONDS> 0
0
0
<COMMON> 140,153
<OTHER-SE> 600,526
<TOTAL-LIABILITY-AND-EQUITY> 985,034
<SALES> 570,056
<TOTAL-REVENUES> 570,056
<CGS> 200,125
<TOTAL-COSTS> 190,475
<OTHER-EXPENSES> 118,158
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,436
<INCOME-PRETAX> 58,911
<INCOME-TAX> 0
<INCOME-CONTINUING> 58,911
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58,911
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
