This refiling of Part I, Item 1. results from a change to Note 8 of the
Consolidated Financial Statements.
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 June 30, 1995
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: 0-12177
DNA PLANT TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-2395856
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
6701 San Pablo Avenue, Oakland, California 94608
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 547-2395
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
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Outstanding as of
Class June 30, 1995
Common Stock, $.01 par value 32,086,402
<PAGE>
DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1995
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Consolidated Balance Sheets as of June 30, 1995 and
December 31, 1994
(b) Consolidated Statements of Operations for the Three and
Six Months Ended June 30, 1995 and 1994
(c) Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 1995 and 1994
(d) Notes to Consolidated Financial Statements
<PAGE>
<TABLE>
DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
<CAPTION>
June 30, Dec.31,
1995 1994
(Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents 1,113 1,202
Temporary investments 249 3,287
Accounts receivable, net 1,792 2,344
Inventory 732 1,168
Other current assets 838 600
Assets held for sale 900 900
Total current assets 5,624 9,501
Fixed assets, net of accumulated depreciation of
$7,769 in 1995 and $7,834 in 1994 2,968 3,339
Note receivable 250 250
Patents and other assets, net of accumulated
amortization of $303 in 1995 and $256 in 1994 453 450
Excess of purchase price over net assets acquired,
net of amortization of $285 in 1995 and $190
in 1994 1,615 1,710
Total assets $ 10,910 $ 15,250
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 1,240 1,537
Dividend payable 791 776
Accrued compensation 727 462
Accrued restructuring and consolidation costs 680 808
Accrued liabilities 1,153 1,189
Amount payable to DuPont 983 983
Total current liabilities 5,574 5,755
Deferred revenue 438 518
Deferred compensation 347 285
Total deferreds 785 803
Stockholders' equity:
Preferred stock, par value $.01 per share;
authorized 5,000 shares; $2.25 convertible
preferred stock; issued and outstanding -
1,380 shares in 1995 and 1994
(aggregate liquidation preference of
$34,500) 14 14
Series A convertible preferred stock, par value
$.01 per share; authorized, issued and
outstanding 3 shares in 1995 and 1994
(aggregate liquidation preference of $16,500) -- --
Series B and C convertible preferred stock, par
value $.01 per share -- --
Common stock, par value $.01 per share;
authorized 60,000 shares; issued 32,086
shares in 1995 and 30,713 shares in 1994 321 307
Common stock to be issued, par value $.01 per
share, none in 1995, 100 shares in 1994 -- 1
Additional paid in capital 151,888 149,918
Accumulated deficit (147,847) (141,752)
Unrealized holding gain 175 204
Total stockholders' equity 4,551 8,692
Total liabilities and stockholders' equity $10,910 $15,250
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
Three Months Six Months
Ended Ended
June 30, June 30,
<S> <C> <C> <C> <C>
1995 1994 1995 1994
Revenues:
Produce sales $ 2,992 $ 3,671 $ 6,063 $ 7,125
Product development
agreements 534 615 874 1,133
Investment and royalty
income 32 62 1,510 118
Total revenues 3,558 4,348 8,447 8,376
Operating expenses:
Cost of produce sales 4,981 6,461 8,601 13,178
Exit carrot processing --- 810 380 810
Research and product
development 1,455 1,786 3,090 3,555
Selling, general and
administrative 1,124 2,076 2,464 3,743
Consolidation and relocation
costs 20 73 70 1,281
Total operating expenses 7,580 11,206 14,605 22,567
Loss from operations (4,022) (6,858) (6,158) (14,191)
Gain on sale of assets 41 --- 65 ---
Loss from continuing
operations (3,981) (6,858) (6,093) (14,191)
Discontinued operations:
Loss from operations --- --- --- (640)
Loss on disposition --- --- --- (1,623)
Total discontinued
operations --- --- --- (2,263)
Net loss (3,981) (6,858) (6,093) (16,454)
Preferred stock dividend (791) (776) (1,567) (1,552)
Net loss applicable to common
stockholders $(4,772)$(7,634)$(7,660)$(18,006)
Net loss per common share:
Continuing operations $ (.15) $ (.27) $ (.25) $ (.57)
Discontinued operations --- --- --- (.08)
Net loss per common share $ (.15) $ (.27) $ (.25) $ (.65)
Weighted average common shares
outstanding 31,520 28,666 31,203 27,580
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<CAPTION>
Six Months Ended
June 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss from continuing operations $(6,093)$(14,191)
Reconciliation of net loss to net cash used in
operating activities:
Depreciation and amortization 230 807
Change in allowance for doubtful accounts (200) ---
Compensation in common stock 54 60
Gain from disposal of fixed assets (66) ---
Loss from discontinued operations --- (1,243)
Net changes in:
Accounts receivable 752 (1,293)
Inventory 436 (742)
Other current assets (238) 767
Other assets (50) 83
Accounts payable and accrued liabilities 197 (2,481)
Deferred revenue and compensation (18) ---
Net cash provided by (used in) operating
activities (4,996) (18,233)
Cash flows from investing activities:
Capital expenditures (95) (244)
Purchases of temporary investments --- (12,618)
Sales and maturities of temporary investments 3,009 11,028
Net proceeds from sale of assets 66 ---
Net cash provided by (used in) investing
activities 2,980 (1,834)
Cash flows from financing activities:
Proceeds from sale of common and preferred
stock 3,494 18,929
Proceeds from exercise of options --- 48
Preferred stock dividends (1,567) (1,552)
Net cash provided by (used in) financing
activities 1,927 17,425
Net increase (decrease) in cash and cash equivalents (89) (2,642)
Cash and cash equivalents, beginning of period 1,202 3,254
Cash and cash equivalents, end of period $ 1,113 $ 612
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1995
(Unaudited)
Note 1 - BASIS OF PRESENTATION
The consolidated financial statements included herein have been
prepared by the DNA Plant Technology Corporation ("the Company"), without
audit, pursuant to 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. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's 1994 Annual Report on Form 10-K.
In the opinion of the Company's management, the accompanying
unaudited, consolidated financial statements contain adjustments, all of
which are of a normal recurring nature, necessary to present fairly the
Company's financial position as of June 30, 1995 and the results of its
operations for the three and six months ended June 30, 1995 and 1994 and
its cash flows for the six months ended June 30, 1995 and 1994.
Certain reclassifications have been made to prior period amounts to be
consistent with the current period presentation.
Interim results are not necessarily indicative of results for the full
fiscal year.
Note 2 - EXIT CARROT PROCESSING
During 1994, the Company discontinued processing its own carrots and
shut down its carrot processing plant. As a result of the plant closure,
all carrot processing personnel were terminated in the fourth quarter of
1994. The Company's current plans are either to (a) enter a partnership
arrangement with another carrot processor in which the Company would
contribute its carrot processing equipment to the partnership or (b)
dispose of the equipment by selling it to a third party.
During 1994, the Company recorded a charge of $2.4 million consisting
of a $1.6 million non-cash charge to write down the equipment to estimated
net realizable value, a $.5 million charge to write down packaging material
and seed inventory, a $.2 million charge for lease payments, and
$.1 million for severance and termination benefits. This charge is based
on the assumption that the Company will be able to enter into a partnership
arrangement with another carrot processor where the Company would
contribute its carrot processing equipment at the net book value of
$3.2 million and sublease its facility at the current monthly lease amount.
As a result of experiencing delays in closing a partnership agreement,
during the six month period ended June 30, 1995 the Company recorded
additional charges of approximately $.4 million for estimated lease
<PAGE>
payments to be incurred prior to finalizing a partnership arrangement. The
ultimate charge for the plant closure is dependent on the outcome of
certain future events, including negotiations regarding the carrot
processing partnership referred to above. The ultimate resolution of this
matter may result in additional charges, currently estimated to be up to
$1.9 million, being recognized.
Note 3 - SALE OF FROST TECHNOLOGY CORPORATION
In February 1995, the Company sold the stock of Frost Technology
Corporation, a wholly-owned subsidiary, to a third party for $1.3 million
of consideration. The assets of this subsidiary consisted of technology
rights and the subsidiary had no operating activities. This transaction
resulted in net revenues of $1.1 million which are recorded as investment
and royalty income in the accompanying Consolidated Statements of
Operations. The Company received $1.0 million of the consideration in the
first quarter of 1995. The remaining $.3 million is due
September 30, 1995, and is recorded as an other current asset in the
accompanying Consolidated Balance Sheets.
Note 4 - CONSOLIDATION AND RELOCATION OF FACILITIES
During 1994, the Company relocated its headquarters and consolidated
its research operations from its New Jersey facility to its research
facility in Oakland, California. This consolidation and relocation was a
further step in the Company's efforts to consolidate its operations,
eliminate duplication of staff and facilities, and focus primarily on the
development and marketing of fresh and processed fruits and vegetables. In
1994, the Company incurred $2.0 million of non-recurring costs to
accomplish this relocation and consolidation. During the six months ended
June 30, 1995 the Company incurred $70,000 of costs associated with this
consolidation and relocation.
Note 5 - INVENTORIES
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
(Unaudited)
<S> <C> <C>
Prepaid grower fees $268 $ 581
Raw materials and seed 395 407
Finished goods 69 180
Total Inventory $732 $1,168
</TABLE>
<PAGE>
Note 6 - SALE OF COMMON STOCK
During the six months ended June 30, 1995, the Company, in private
placement transactions pursuant to Regulations D and S of the Securities
Act of 1933, has sold 1,255,000 shares of the Company's common stock for
net proceeds, after commissions and expenses, of $2.2 million.
Note 7 - SALE OF PREFERRED STOCK
During the second quarter of 1995 the Company sold 750 shares of
Series B and 750 shares of Series C preferred stock for $1,000 per share.
As a result of the sales, at June 30, 1995 the Company had authorized,
issued, and outstanding 750 shares of Series B and 750 shares of Series C,
$.01 par value convertible preferred stock. Each share of Series B and
Series C preferred stock is convertible at a per share rate that varies
depending on the market price of the common stock at the time of the
conversion. Dividends on the Series B and Series C preferred stock at an
annual rate of $100 per share are cumulative and payable quarterly when and
as declared by the Company's Board of Directors. The liquidation value of
each share of Series B and Series C preferred stock is $1,000.
Note 8 - SUBSEQUENT EVENTS
In May 1995, a lawsuit was brought against the Company by Monsanto
Company ("Monsanto") in the United States District Court for the District
of Delaware. Monsanto alleged that the Company had infringed two of
Monsanto's United States patents relating to the use of promoter and gene
marker technology in plants. During the third quarter the Company and
Monsanto agreed to settle the legal action for an immaterial amount to be
paid in equal annual installments over a four year period beginning
January 1996.
During the third quarter the Company entered into an agreement with a
consultant to privately place up to 9,700,000 restricted shares of common
stock of the Company together with warrants entitling the holders to
purchase an additional 5,050,000 shares of common stock at $2.50/share. The
estimated net proceeds of such proposed placements (if all securities are
sold) will be approximately $9.1 million. The restriction prohibits
these shares from being publicly traded until April 1996. The shares of
stock issuable upon the exercise of the warrants are subject to shareholder
approval on or prior to June 30, 1996; if shareholders do not approve the
warrants, the Company will be obligated to redeem the warrants at $.25 per
warrant. As part of the compensation to the consultant who is assisting
the Company in placing the stock, the Company will grant the consultant
options to purchase up to 1,475,000 shares of common stock at a price
related to the market price on the final closing date.
Under this agreement and as of the date of this filing, the Company
has privately placed 2,000,000 restricted shares of the Company's common
stock together with warrants to purchase 1,200,000 shares of its common
stock and received net proceeds after commissions and expenses of
$1.9 million. There can be no assurance that the balance of the placement
will be consummated.
<PAGE>
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.
DNA PLANT TECHNOLOGY CORPORATION
Date: August 15, 1995 By: /s/ Robert Serenbetz
Robert Serenbetz, Chairman
and Chief Executive Officer
(Principal Operating Officer
and Principal Financial Officer)
