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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 1-10285
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BIOMAGNETIC TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
California 95-2647755
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9727 Pacific Heights Boulevard,
San Diego, California 92121-3719
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(Address of principal executive offices) (zip code)
(619) 453-6300
Registrant's telephone number, including area code)
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(Former name, former address and formal 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.
[X] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. [ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
As of July 1, 1997 Registrant had only one class of common stock of
which there were 47,691,824 shares outstanding.
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIOMAGNETIC TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30,
1997 SEPTEMBER 30,
(UNAUDITED) 1996
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ASSETS
<S> <C> <C>
Cash and cash equivalents $440 $1,752
Short-term investments 0 744
Restricted cash and short-term investments 1,456 6,085
Accounts receivable 438 17
Inventories 4,254 5,627
Prepaid expenses and other current assets 437 338
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Total current assets 7,025 14,563
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Property and equipment 7,731 9,478
Less accumulated depreciation and amortization (7,201) (8,570)
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Net property and equipment 530 908
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Investment in Magnesensors 80 0
Note Receivable (net) 300 0
Restricted cash 180 500
Other assets 348 279
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Total assets $8,463 $16,250
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LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Accounts payable $2,495 $2,633
Accrued liabilities 966 1,897
Accrued salaries and employee benefits 607 860
Customer deposits 4,922 9,208
Note payable-related party 0 3,000
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Total current liabilities 8,990 17,598
L/T Deferred Revenue 90
Other liabilities 0 48
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Total liabilities 9,080 17,646
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SHAREHOLDERS' (DEFICIT) EQUITY
Common stock -- no par value, 100,000,000 shares
authorized; 47,691,824 and 39,974,222 shares issued and
outstanding in June and September, respectively 81,554 78,467
Accumulated deficit (82,171) (79,863)
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Total shareholders' (deficit) equity (617) (1,396)
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Total liabilities and shareholders' (deficit) equity $8,463 $16,250
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</TABLE>
See notes to consolidated financial statements
2
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BIOMAGNETIC TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
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REVENUES
<S> <C> <C> <C> <C>
Product sales $ 5,198 $ 15 $ 6,733 $ 150
Contract research 0 0 0 29
Service revenue 91 176 278 355
Interest income 36 106 214 391
Other income (expense) 288 11 302 (96)
Fx effects (34) 22 267 36
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Total revenues 5,579 330 7,794 865
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EXPENSES
Production costs 2,857 326 3,941 876
Contract research costs 0 0 32
Service costs 47 32 119 83
Research and development 819 1,570 2,706 5,048
Marketing and sales 477 800 1,717 2,303
General and administrative 606 553 1,541 1,635
Interest expense 7 0 77 10
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Total expenses 4,813 3,281 10,101 10,037
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NET INCOME (LOSS) BEFORE INCOME TAXES $ 766 $(2,951) $(2,307) $(9,172)
Provision for income taxes 0 1 1 1
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NET INCOME (LOSS) $ 766 $(2,952) $(2,308) $(9,173)
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NET INCOME (LOSS) PER SHARE $ 0.02 $ (0.07) $ (0.05) $ (0.23)
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WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 47,692 39,944 45,119 39,963
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</TABLE>
See notes to consolidated financial statements
3
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BIOMAGNETIC TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30,
1997 1996
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<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $(2,308) $(9,173)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 342 733
(Gain) loss on sale /retirement of assets (226) 229
Interest expense 0 (381)
Changes in operating assets & liabilities:
Restricted cash 4,948 0
Accounts receivable (420) 761
Inventories 1,373 (2,230)
Prepaid and other current assets (99) 110
Other assets (449) 23
Accounts payable (138) 620
Accrued liabilities (1,206) (397)
Accrued salaries and employee benefits (253) 0
Customer deposits (4,286) 3,321
Other liabilities 42 43
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Net cash provided by (used for) operating activities (2,680) (6,341)
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INVESTING ACTIVITIES
Change in short-term investments 744 6,400
Capital expenditures (65) (520)
Proceeds from sale of assets 326 0
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Net cash (used for) provided by investing activities 1,005 5,880
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FINANCING ACTIVITIES
Proceeds from sale of common stock 3,088 34
Proceeds from bank loan 275 0
Repayment of Notes Payable (3,000)
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Net cash provided by financing activities 363 34
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,312) (427)
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CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,752 2,314
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CASH AND CASH EQUIVALENTS AT END OF PERIOD 440 1,887
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</TABLE>
See notes to consolidated financial statements.
4
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BIOMAGNETIC TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements included herein
include the accounts of Biomagnetic Technologies, Inc. and its subsidiary (the
"Company") and have been prepared in accordance with the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. Although the Company believes that the
disclosures made in this report are adequate to make the information not
misleading, it is suggested that these financial statements be read in
connection with the financial statements and notes thereto included in the
Company's annual report on Form 10-K for the fiscal year ended September 30,
1996.
In the opinion of the Company, the accompanying unaudited financial statements
contain all adjustments, consisting only of normal recurring accruals,
necessary to present fairly its financial position at June 30, 1997 and the
results of operations and its cash flows for the periods presented.
The preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
2. NET PROFIT (LOSS) PER SHARE
Shares used in computing net profit (loss) per share include the weighted
average of common stock outstanding. Common stock equivalents are antidilutive
and are excluded from the computation of net profit (loss) per share.
3. INVENTORIES
The composition of inventories is as follows:
June 30, September 30,
1997 1996
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Raw materials $ 310 $546
Work-in process 2,610 3,356
Finished goods 1,334 1,725
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$4,254 $5,627
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4. MAGNES-Registered Trademark- WHOLE HEAD SYSTEM PRODUCTION AND DELIVERY RISK
The Company's backlog at June 30, 1997 amounted to $7,736,000 and is composed of
orders for the new Magnes 2500 Whole Head Magnetic Source Imaging System
("Magnes 2500 WH"), service contracts and government contracts. The Company has
shipped eight (8) of its Magnes 2500 WH systems to customers and one (1) system
to the Company's application development site at Scripps Clinic and Research
Foundation, which is company owned. As of June 30, 1997 there have been five
(5) final acceptances received on the eight (8) shipped systems. The delay in
receipt of customer acceptances has been primarily due to a hardware upgrade,
the need for which was not identified prior to installing the systems at
customer sites, and additional software development required to meet unique
customer contractual agreements. The required hardware upgrades were shipped to
customer sites during the second quarter, and were either installed, or in the
process of installation at the customer sites during the second and third
quarters, thus facilitating the receipt of five (5) acceptances in the third
quarter. The Company anticipates that the additional system hardware upgrades
and specific customer software tools will be completed for the remaining three
(3) already shipped and installed systems during the fourth quarter of fiscal
year 1997. However, there can be no assurances that this will be accomplished.
In the event that the hardware upgrade and software tools are not completed as
anticipated for the three (3) systems, the remaining three customers final
5
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acceptances could be further delayed, which could have a material adverse effect
on the cash flow and cash resources of the Company.
6
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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.
BIOMAGNETIC TECHNOLOGIES, INC.
Date August 4, 1997 /s/ D. Scott Buchanan
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D. Scott Buchanan
President and Chief Executive
Officer
Date August 4, 1997 /s/ Herman Bergman
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Herman Bergman
Vice President of Finance,
Chief Financial Officer
Secretary
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