<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
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: 0-11914
CAPRIUS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-2457487
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
46 JONSPIN ROAD, WILMINGTON, MA 01887
----------------------------------------
(Address of principal executive offices)
(978) 657-8876
----------------------------------------------------
(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
-- --
As of May 17, 1999, there were 7,346,540 shares of Common Stock, $.01 par value,
outstanding.
<PAGE> 2
CAPRIUS, INC. AND SUBSIDIARIES
INDEX
PAGE NO.
PART I - FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets - March 31, 1999 and
September 30, 1998 3
Consolidated Statements of Operations - for the
three and six months ended
March 31, 1999 and 1998 4
Consolidated Statements of Stockholders' Equity 5
Consolidated Statements of Cash Flows - for the
six months ended March 31, 1999 and 1998 6
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9
PART II - OTHER INFORMATION 11
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 12
EXHIBIT INDEX
-2-
<PAGE> 3
CAPRIUS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, September 30,
1999 1998
--------- -------------
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 593,650 $ 1,791,476
Accounts receivable, net of reserve for bad debts of $80,259 at
March 31, 1999 and $663,314 at September 30, 1998 361,925 2,899,282
Note receivable 530,000 --
Inventory 721,394 720,858
Other current assets 535,672 584,875
------------ ------------
Total current assets 2,742,641 5,996,491
------------ ------------
PROPERTY AND EQUIPMENT:
Medical equipment 2,026,771 2,145,674
Office furniture and equipment 257,771 251,199
Other equipment 1,516,874 1,518,874
Leasehold improvements 855,840 1,153,576
------------ ------------
4,657,256 5,069,323
Less: accumulated depreciation and amortization 1,942,949 1,824,946
------------ ------------
Total property and equipment, at cost 2,714,307 3,244,377
------------ ------------
OTHER ASSETS:
Goodwill, net of accumulated amortization of $27,007 at
March 31, 1999 and $2,357,703 at September 30, 1998 693,175 1,053,797
Other intangibles, net of accumulated amortization of $528,456 at
March 31, 1999 and $371,698 at September 30, 1998 1,083,920 1,240,678
Other 31,534 32,037
------------ ------------
Total other assets 1,808,629 2,326,512
------------ ------------
$ 7,265,577 $ 11,567,380
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 552,156 $ 810,990
Accrued expenses 335,401 964,922
Accrued compensation 297,807 388,748
Other current liabilities -- 53,664
Current portion of long-term debt and capital lease obligations 647,687 915,608
------------ ------------
Total current liabilities 1,833,051 3,133,932
------------ ------------
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION 1,039,704 1,207,624
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value
Authorized - 1,000,000 shares Issued - Series A, none; Series B,
convertible, 27,000 shares at March 31, 1999 and September 30, 1998
Liquidation preference $2,700,000 2,700,000 2,700,000
Common stock, $.01 par value
Authorized - 50,000,000 shares
Issued and outstanding - 7,369,040 at March 31, 1999
and September 30, 1998 73,690 73,690
Additional paid-in capital 63,561,672 63,561,672
Accumulated deficit (61,940,290) (59,107,288)
Treasury stock (22,500 common shares, at cost) (2,250) (2,250)
------------ ------------
Total stockholders' equity 4,392,822 7,225,824
------------ ------------
$ 7,265,577 $ 11,567,380
============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
-3-
<PAGE> 4
CAPRIUS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
1999 1998 1999 1998
REVENUES: ------------------------------ -------------------------------
<S> <C> <C> <C> <C>
Net patient service revenues $ 928,762 $ 875,253 $ 2,073,291 $ 1,717,363
----------- ----------- ----------- ------------
Total revenues 928,762 875,253 2,073,291 1,717,363
----------- ----------- ----------- ------------
OPERATING EXPENSES:
Cost of service operations 887,926 660,016 1,858,601 1,483,500
Research and development 71,478 839,105 496,480 1,399,640
Purchased research and development (see note 2) -- (71,081) -- 7,097,566
Selling, general and administrative 1,142,589 1,611,962 2,011,987 2,817,856
Provision for bad debt and collection costs (8,486) 125,180 114,534 160,772
Loss (gain) on sale of imaging business -- (133,889) 12,670 (61,468)
Loss on sale of rehabilitation business 1,427,487 -- 1,427,487 --
----------- ----------- ----------- ------------
Total operating expenses 3,520,994 3,031,293 5,921,759 12,897,866
----------- ----------- ----------- ------------
Operating income (loss) from continuing operations (2,592,232) (2,156,040) (3,848,468) (11,180,503)
Other income 9,000 3,050 9,000 3,050
Interest income 9,684 112,316 25,842 232,443
Interest expense (60,454) (48,360) (119,376) (81,912)
----------- ----------- ----------- ------------
Income (loss) from continuing operations before minority
interests, equity in loss of subsidiary and provision
for income taxes (2,634,002) (2,089,034) (3,933,002) (11,026,922)
Equity in net loss of unconsolidated subsidiary -- -- -- (67,358)
----------- ----------- ----------- ------------
Loss from continuing operations (2,634,002) (2,089,034) (3,933,002) (11,094,280)
Income on disposal of discontinued operations -- -- 1,100,000 --
----------- ----------- ----------- ------------
Net Loss $(2,634,002) $(2,089,034) $(2,833,002) $(11,094,280)
=========== =========== =========== ============
Income (loss) per basic and diluted common share:
Loss from continuing operations $ (0.36) $ (0.28) $ (0.53) $ (1.66)
Income on disposal of discontinued operations -- -- 0.15 --
----------- ----------- ----------- ------------
Net loss per share $ (0.36) $ (0.28) $ (0.38) $ (1.66)
=========== =========== =========== ============
Weighted average number of common shares outstanding 7,369,040 7,340,038 7,369,040 6,682,325
=========== =========== =========== ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
-4-
<PAGE> 5
CAPRIUS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Preferred Stock Common Stock Treasury Stock
------------------- -------------------- ------------------- Additional Total
Number Number $0.01 Number $0.01 Paid-in Accumulated Stockholders'
of Shares Amount of Shares Par Value of Shares Par Value Capital Deficit Equity
--------- ------ --------- --------- --------- --------- ------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
SEPTEMBER 30, 1997 27,000 $2,700,000 4,374,763 $43,748 22,500 $(2,250) $56,170,271 $(41,588,585) $17,323,184
Issuance of common
stock related to
AMS merger -- -- 2,956,741 29,567 -- -- 7,362,287 -- 7,391,854
Conversion of note
payable -- -- 27,429 274 -- -- 20,725 -- 20,999
Exercise of stock
options -- -- 10,107 101 -- -- 8,389 -- 8,490
Net loss -- -- -- -- -- -- -- (17,518,703) (17,518,703)
------ ---------- --------- ------- ------ ------- ----------- ------------ -----------
BALANCE,
SEPTEMBER 30, 1998 27,000 2,700,000 7,369,040 73,690 22,500 (2,250) 63,561,672 (59,107,288) 7,225,824
Net loss (2,833,002) (2,833,002)
------ ---------- --------- ------- ------ ------- ----------- ------------ -----------
BALANCE,
MARCH 31, 1999 27,000 $2,700,000 7,369,040 $73,690 22,500 $(2,250) $63,561,672 $(61,940,290) $ 4,392,822
====== ========== ========= ======= ====== ======= =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
-5-
<PAGE> 6
CAPRIUS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended March 31,
1999 1998
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Loss $(2,833,002) $(11,094,280)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Equity in net loss of unconsolidated subsidiary - 67,358
Gain on disposal of discontinued operations (1,100,000) -
Gain on sale of imaging business (12,670) (61,468)
Loss on sale of rehabilitation business 1,427,487 -
Purchased research and development - 7,097,566
Depreciation and amortization 678,401 507,647
Changes in assets and liabilities:
Decrease in restricted cash - 1,744,967
Accounts receivable, net 113,272 (161,486)
Inventories (536) (375,025)
Other current assets 25,903 (132,637)
Accounts payable and accrued expenses (275,348) (111,133)
----------- ------------
Net cash used in operating activities (1,976,493) (2,518,491)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of imaging business 12,670 61,468
Proceeds from sale of rehabilitation business 266,438 -
Proceeds from disposal of discontinued operations 1,100,000 -
Cash used in AMS merger - (128,406)
Advances to unconsolidated subsidiaries - (479,673)
Purchase of equipment, furniture and leasehold improvements (164,600) (492,806)
----------- ------------
Net cash provided by (used in) investing activities 1,214,508 (1,039,417)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 297,484 813,347
Repayment of long-term debt and capital lease obligations (733,325) (348,845)
----------- ------------
Net cash provided by (used in) financing activities (435,841) 464,502
----------- ------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,197,826) (3,093,406)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,791,476 9,752,768
----------- ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD 593,650 6,659,362
=========== ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest during the period $ 12,727 $ 87,288
=========== ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
-6-
<PAGE> 7
CAPRIUS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The results of operations of Caprius, Inc. ("Caprius" or the
"Company") for the interim periods shown in this report are not necessarily
indicative of results to be expected for the fiscal year. In the opinion of
management, the information contained herein reflects all adjustments necessary
to make the results of operations for the interim periods a fair statement of
such operations. All such adjustments are of a normal recurring nature.
The accompanying financial statements do not contain all of the
disclosures required by generally accepted accounting principles and should be
read in conjunction with the financial statements and related notes included in
the Company's annual report on form 10-K for the fiscal year ended September 30,
1998.
NOTE 2 - THE COMPANY
Caprius, Inc. was founded in 1983 and through August 1996, operated
under two segments (one of which was discontinued during fiscal 1996) consisting
of Imaging Systems and Imaging and Rehabilitation Services. Pursuant to the
merger (see below) with Advanced Mammography Systems, Inc. ("AMS"), the Company
developed, and began marketing and commercializing a dedicated MRI system for
breast imaging known as the Aurora system prior to its sale in April 1999 (see
below). The Company currently owns and operates a comprehensive imaging center
located in Lauderhill, Florida.
On April 27, 1999, pursuant to an Asset Purchase Agreement (the
"Agreement") dated the same by and between Caprius, Inc. ("Caprius"), Caprius
Systems, Inc., a wholly owned subsidiary of Caprius ("Systems" and, together
with Caprius, the "Sellers") and Pacific Republic Capital Corp. ("Pacific"), the
Sellers consummated the sale of their Aurora breast scanner technology related
assets to Pacific for $854,490.68 in cash and the assumption by Pacific of
certain obligations associated with the transferred assets. The assets and
obligations transferred included all the shares of Caprius' wholly owned
subsidiary, Caprius Imaging Corp., various patents relating to the Aurora
technology and assets of Systems, including hospital equipment contracts and
equipment leases. The equipment debt of which Caprius is now relieved exceeds
$1.1 million. Caprius intends to aggressively pursue ways that can maximize
shareholder value. The Company currently has dramatically reduced its overhead,
provided for the extinguishment of its debt, and is left with limited funds and
the Strax Institute, a comprehensive breast-imaging center in Lauderhill,
Florida. Caprius shall focus its efforts in identifying, as quickly as possible,
a candidate who can help utilize the Company's assets as a vehicle for the
enhancement of shareholder value.
In March 1999, the Company transferred its interest in its
rehabilitation center to a limited liability company in exchange for $900,000,
which is to be paid in installments with $850,000 being due on or before July 1,
1999. In addition, the acquiring group shall assume certain liabilities totaling
approximately $400,000 and will be entitled to 10% of any financial recovery
obtained for a pending lawsuit by the Company against the former owner of the
center. The transfer price of $900,000 will be used in part to pay a balance of
approximately $360,000 to the former owner of the center, which is the remaining
amount due from the company's acquisition of its interest in the center. The
reductions in the line items in the accompanying balance sheet at March 31, 1999
compared to September 30, 1998, primarily relate to this transfer of interest.
In July 1998, the Company acquired its first comprehensive breast
imaging center, the Strax Institute, located in Lauderhill, Florida. The Strax
Institute is a multi-modality breast care center that treats approximately
15,000 patients per year offering x-ray mammography, ultrasound, stereotactic
biopsy and bone densitometry.
Effective November 10, 1997, the Company completed a merger with AMS,
whereby AMS merged into AMS Merger Corp., a wholly owned subsidiary of Caprius,
and became a wholly owned subsidiary of Caprius (the "Merger"). AMS was
originally formed on July 2, 1992 as a wholly owned subsidiary of Caprius to
develop a dedicated breast MRI system.
-7-
<PAGE> 8
NOTE 3 - PREFERRED STOCK - SERIES B
On August 18, 1997, the Company entered into various agreements with
General Electric Company ("GE") including an agreement whereby GE purchased
27,000 shares of newly issued Series B Convertible Redeemable Preferred Stock
(the "Series B Preferred Stock") for $2,700,000.
The Series B Preferred Stock consists of 27,000 shares, ranks senior
to any other shares of preferred stock which may be created and the Common
Stock. It has a liquidation value of $100.00 per share, plus accrued and unpaid
dividends, is non-voting except if the Company proposes an amendment to its
Certificate of Incorporation which would adversely affect the rights of the
holders of the Series B Preferred Stock, and is initially convertible into
1,597,930 shares of Common Stock, subject to customary anti-dilution provisions,
commencing on August 18, 1998, or earlier upon a change of control as defined.
No fixed dividends are payable on the Series B Preferred Stock, except that if a
dividend is paid on the Common Stock, dividends are paid on the shares of Series
B Preferred Stock as if they were converted into shares of Common Stock.
NOTE 4 - PATENT INFRINGEMENT SETTLEMENT
In December 1998, the Company received $1,100,000 from a major MRI
manufacturer to resolve outstanding patent issues unrelated to the patents
protecting its Aurora technology.
NOTE 5 - PROFORMA INFORMATION
The following unaudited pro forma financial information sets forth the
results of the company as if the sale of the MVA rehabilitation center had
occurred prior to October 1, 1998. The pro forma financial information does not
purport to be indicative of what would have occurred had the acquisition been
made as of October 1, 1998 or results that may occur in the future.
Six Months Ended
March 31, 1999
----------------------
(000's omitted, except
per share amount)
Net revenues $ 1,022
Operating Expenses $ 2,893
Operating loss from continuing operations $ (1,871)
Loss from continuing operations $ (610)
Loss per common share $ (0.08)
(This space intentionally left blank.)
-8-
<PAGE> 9
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998
The results of operations for the three months ended March 31, 1999
and 1998 are not necessarily indicative of the results for future periods. The
following discussion should be read in conjunction with the attached notes
thereto, and with the audited financial statements and notes thereto for the
fiscal year ended September 30, 1998.
Due to the Merger of Advanced Mammographys Systems and Advanced NMR
Systems in November 1997 and the sale of the Rehabilitation business in March
1999, most of the categories included in the statements of operations will not
be comparable to prior year periods.
Net patient service revenue totaled $928,762 for the three months
ended March 31, 1999 versus $875,253 for the three months ended March 31, 1998.
Cost of service operations totaled $887,926 for the three months ended March 31,
1999 versus $660,016 for the three months ended March 31, 1998. These increases
were largely the result of the additional net patient revenue and operating
expenses for the Faulkner and Strax Centers.
Purchased research and development relates to the portion of the AMS
purchase price allocated to research and development projects in progress. (See
Note 2)
Selling, general and administrative expenses totaled $1,142,589 for
the three months ended March 31, 1999 versus $1,611,962 for the three months
ended March 31, 1998. This decrease reflects the Company's efforts to streamline
costs.
SIX MONTHS ENDED MARCH 31, 1999 COMPARED TO SIX MONTHS ENDED MARCH 31, 1998
The results of operations for the three months ended March 31, 1999
and 1998 are not necessarily indicative of the results for future periods. The
following discussion should be read in conjunction with the attached notes
thereto, and with the audited financial statements and notes thereto for the
fiscal year ended September 30, 1998.
Net patient service revenue totaled $2,073,291 for the six months
ended March 31, 1999 versus $1,717,363 for the six months ended March 31, 1998.
Cost of service operations totaled $1,858,601 for the six months ended March 31,
1999 versus $1,483,500 for the six months ended March 31, 1998. These increases
were largely the result of the additional net patient revenue and operating
expenses for the Faulkner and Strax Centers.
Purchased research and development relates to the portion of the AMS
purchase price allocated to R&D projects in progress.
Selling, general and administrative expenses totaled $2,011,987 for
the six months ended March 31, 1999 versus $2,817,856 for the six months ended
March 31, 1998. This decrease reflects the Company's efforts to streamline
costs.
Equity in net loss of unconsolidated subsidiary reflects the Company's
share of losses in AMS prior to the AMS Merger.
LIQUIDITY AND CAPITAL RESOURCES
The Company had available cash and cash equivalents of $593,650 at
March 31, 1999. The Company intends to pursue efforts to identify a Strategic
Partner to utilize the remaining assets of the Company and maximize shareholder
value. If no Strategic Partner is identified, the Company's viability could be
threatened.
The significant cash flows used for investing activities for the three
months ended March 31, 1999 consists primarily of $164,600 for medical equipment
additions. Cash flows from financing activities include approximately $297,500
of proceeds from financing of medical equipment, offset by principal payments on
equipment debt. Cash used for operations amounted to approximately $1,976,500.
-9-
<PAGE> 10
Since February 1997, the Company has funded its operations principally
through the cash obtained from the MDI merger.
INFLATION
To date, inflation has not had a material effect on the Company's
business. The Company believes that the effects of future inflation may be
minimized by controlling costs and increasing efficiency through an increase in
the volume of MRI examinations performed.
The Company is including the following cautionary statement in this
Form 10-Q to make applicable and take advantage of the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 for any forward-looking
statements made by, or on behalf of, the Company. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance and underlying assumptions and other statements which are
other than statements of historical facts. Certain statements contained herein
are forward-looking statements and accordingly involve risks and uncertainties
which could cause actual results or outcomes to differ materially from those
expressed in the forward-looking statements. The Company's expectations, beliefs
and projections are expressed in good faith and are believed by the Company to
have a reasonable basis, including without limitations, management's examination
of historical operating trends, data contained in the Company's records and
other data available from third parties, but there can be no assurance that
management's expectation, beliefs or projections will result or be achieved or
accomplished. In addition to other factors and matters discussed elsewhere
herein, the following are important factors that, in the view of the Company,
could cause actual results to differ materially from those discussed in the
forward-looking statements: technological advances by the Company's competitors,
changes in health care reform, including reimbursement programs, capital needs
to fund any delays or extensions of research programs, delays in product
development, lack of market acceptance of technology and the availability of
capital on terms satisfactory to the Company. The Company disclaims any
obligation to update any forward-looking statements to reflect events or
circumstances after the date hereof.
[This space intentionally left blank]
-10-
<PAGE> 11
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On January 7, 1998, the Company and Jack Nelson, the Company's
Chairman and Chief Executive Officer were served with a complaint in connection
with a purported class action brought against them by Dorothy L. Lumsden in the
United States District Court of the District of Massachusetts. The complaint
contains claimed for alleged violations of Sections 10(b) and 20(a) under the
Securities Exchange Act and for common law. Ms. Lumsden purported to bring her
action "on behalf of herself and all other persons who purchased or otherwise
acquired the common stock of the Company during the period August 10, 1994
through and including December 12, 1997". On February 2, 1998, the Company and
Mr. Nelson were served with a second class action complaint naming them as
defendants in connection with another action brought in the United States
District Court for the District of Massachusetts. This action was brought by
Robert Curry and the complaint alleged the same purported class and contained
similar allegations and claims as the class action complaint discussed above. On
April 24, 1998, the District Court consolidated the two class actions claims
into one for pre-trial purposes. On January 7, 1999, the Company announced that
it has reached a preliminary settlement in the shareholder class action in
Federal Court in Boston. Under the terms of the settlement, Caprius made a cash
payment of $150,000 and will issue 325,000 shares of common stock to Plaintiffs.
Caprius' insurance carrier contributed $100,000 of the cash payment. In
addition, the settlement also stipulated that in the event Caprius sold all or
part of its business within 12 months an additional payment of $75,000 and
issuance of 100,000 additional shares would be made by Caprius to plaintiffs.
Consequently, on April 27, 1999, the additional payment was made and the
additional shares will be issued.
On October 19, 1998, the Company filed a complaint in the Middlesex
Superior Court against Eric T. Shebar, M.D. ("Shebar"), the former Chief
Operating Officer and Medical Director for the Company's motor vehicle accident
rehabilitation ("MVA") business, and MVA Center for Rehabilitation, Inc. ("MVA,
Inc.") whereby the Company alleges breach of contract and certain
misrepresentations and seeks damages in an amount to be determined at trial. The
Company filed a preliminary injunction to reach and apply a secured promissory
note to MVA, Inc. against damages sought from Shebar and to enjoin against any
remedies under default of the Note. The final Note payment of $347,000 was paid
as part of the sale of the MVA. The ruling on the injunction is pending.
In December 1998, the Company received $1,100,000 from a major MRI
manufacturer to resolve outstanding patent issues unrelated to the patents
protecting its Aurora technology.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports of Form 8-K
Date of Report
--------------
3/11/99 Interest Transfer Agreement by and among Middlesex MRI
Center Inc. ("Middlesex") and MDI Rehab Inc. and
Medical Diagnostics and Rehabilitation, LLC ("MDR") the
sole general partners of MVA Rehabilitation Associates
("MVA") for the transfer of Middlesex and MDR's
partnership interests in MVA.
4/27/99 Asset Purchase Agreement between Caprius Inc., Caprius
Systems Inc., and Pacific Republic Capital Corp. for
the sale of Caprius' Aurora breast scanner technology
related assets.
4/27/99 Press Release, dated April 28, 1999 issued by Caprius
Inc. announcing the sale of its Aurora breast scanner
technology related assets to Pacific Republic Capital
Corp.
-11-
<PAGE> 12
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.
CAPRIUS, INC.
(Registrant)
Date: May 20, 1999 /s/ Jack Nelson
-----------------------
Jack Nelson
Chief Executive Officer
Date: May 20, 1999 /s/ Steven J. James
-----------------------
Steven J. James
Chief Financial Officer
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CAPRIUS,
INC. FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1999, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> MAR-31-1999
<CASH> 594
<SECURITIES> 0
<RECEIVABLES> 442
<ALLOWANCES> (80)
<INVENTORY> 721
<CURRENT-ASSETS> 536
<PP&E> 4,657
<DEPRECIATION> (1,943)
<TOTAL-ASSETS> 7,266
<CURRENT-LIABILITIES> 1,833
<BONDS> 0
0
2,700
<COMMON> 74
<OTHER-SE> 4,393
<TOTAL-LIABILITY-AND-EQUITY> 7,266
<SALES> 2,073
<TOTAL-REVENUES> 2,073
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,922
<LOSS-PROVISION> (3,848)
<INTEREST-EXPENSE> 119
<INCOME-PRETAX> (2,833)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,833)
<DISCONTINUED> 0
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