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FORM 10-QSB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES ACT OF
1934
For the quarterly period ended August 31, 1999
Commission File Number 0-15382
Gamogen Inc.
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(Exact name of registrant as specified in its charter)
New York 13-3341562
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
24 Carpenter Road, Chester, NY, 10918
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(Address of principal executive Zip Code
offices)
Registrant's telephone number, including area code (914) 469-2042
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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 during the
past 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 ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at August 31, 1999
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Common stock, $.01 par value 1,230,000 shares
1
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GAMOGEN INC.
TABLE OF CONTENTS
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PART I FINANCIAL INFORMATION PAGE
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Consolidated balance sheets -
August 31, 1999 and February 28, 1999............................................... 3
Consolidated statements of income -
three months ended August 31, 1999 and August 31, 1998 and
six months ended August 31, 1999 and August 31, 1998 ............................... 4
Consolidated statements of cash flow -
Six months ended August 31, 1999 and August 31, 1998.............................. 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations ................................................ 6
PART II OTHER INFORMATION
Item 1. Legal Proceedings ............................................................ 8
Item 2. Changes in Securities and Use of Proceeds .................................... 8
Item 3. Defaults Upon Senior Securities .............................................. 8
Item 4. Submission of Matters to a Vote of Security Holders .......................... 8
Item 5. Other Information ............................................................ 8
Item 6. Exhibits and Reports on Form 8-K ............................................. 8
</TABLE>
2
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PART I - FINANCIAL INFORMATION
GAMOGEN INC AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
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8-31-99 2-28-99
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ASSETS
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CURRENT ASSETS
Cash and Cash Equivalents $ 106,008 $ 8,589
Short-term Investments 0 81,352
Accounts Receivable, net 17,780 24,196
Inventory 84,625 92,549
Prepaid Expenses 0 3,903
Due From Affiliate 51,890 176,889
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TOTAL CURRENT ASSETS 260,303 387,478
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PROPERTY, PLANT & EQUIPMENT - NET 0 4,421
OTHER ASSETS 186,219 188,790
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Total Property, Plant & Equipment & Other Assets 186,219 193,211
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TOTAL ASSETS $ 446,522 $ 580,689
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LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES
Current Liabilities
Accounts Payable $ 1,334 $ 39
Accrued Expenses 2,390 7,056
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TOTAL CURRENT LIABILITIES 3,724 7,095
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TOTAL LIABILITIES 3,724 7,095
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STOCKHOLDERS' EQUITY
Common Stock, $.01 Par Value Authorized 4,000,000 Shares,
Issued and Outstanding 1,230,000 12,300 12,300
Warrants Outstanding 40 40
Additional Paid - In Capital 1,579,723 1,579,723
Accumulated (Deficit) (1,149,265) (1,018,469)
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TOTAL STOCKHOLDERS' EQUITY 442,798 573,594
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 446,522 $ 580,689
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</TABLE>
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GAMOGEN, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
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<CAPTION>
FOR 3 MONTHS FOR 3 MONTHS FOR SIX FOR SIX
ENDED ENDED MONTHS MONTHS
8-31-99 8-31-98 ENDED 8-31-99 ENDED 8-31-98
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<S> <C> <C> <C> <C>
SALES:
Net Sales of Products $57,867 $64,948 $121,357 $125,649
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COSTS AND EXPENSES:
Cost of Goods Sold 48,678 31,242 69,466 56,259
Selling, General and Administrative 153,197 79,982 184,405 166,300
Depreciation and Amortization 6,562 4,610 6,993 9,220
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Total Expenses 208,437 115,834 260,864 231,779
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INCOME (LOSS) FROM OPERATIONS (150,570) (50,886) (139,507) (106,130)
Interest & Other Income 4,676 4,583 9,471 10,508
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INCOME BEFORE INCOME TAXES (145,894) (46,303) (130,036) (95,622)
Provision (Benefit) For Income Taxes (380) (250) (760) (250)
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NET INCOME (LOSS) $(146,274) $(46,553) $(130,796) $(95,872)
--------- -------- --------- --------
EARNINGS (LOSS) PER COMMON SHARE:
Primary $(0.12) $(0.04) $(0.11) $(0.08)
Fully Diluted $(0.11) $(0.03) $(0.10) $(0.07)
</TABLE>
4
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GAMOGEN, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOW
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<CAPTION>
FOR SIX MONTHS FOR SIX MONTHS
ENDED 8-31-99 ENDED 8-31-98
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OPERATING ACTIVITIES:
Income (Loss)from continuing operations $(130,796) $ (95,872)
Adjustments to reconcile net loss to cash provided by
(used in)
Operating activities:
Depreciation and amortization 6,993 9,220
Changes in assets and liabilities:
(Increase) Decrease in Short Term Investments 81,352 111,714
(Increase) Decrease in Prepaid Expenses 3,903 0
(Increase) Decrease in Accounts Receivables 6,416 14,145
(Increase) Decrease in Inventory 7,924 6,978
Increase (Decrease) in Accounts Payable 1,294 (3,568)
Increase (Decrease) in Accrued Expenses (4,666) (2,915)
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Net cash provided by (used in) operating activities (27,580) 39,702
Cash Flows from Financing Activities:
Increase (Decrease) Due to Affiliate 124,999 (42,703)
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Net increase (Decrease) in Cash & Cash Equivalents 97,419 (3,001)
Cash & Cash Equivalents, Beginning of Period 8,589 19,228
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Cash & Cash Equivalents, End of Period $106,008 $16,227
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Supplemental disclosures:
Cash Payments for:
Interest 0 0
Income taxes $380 $380
</TABLE>
5
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDING AUGUST 31, 1999 VS. AUGUST 31, 1998
Sales for the period ending August 31, 1999 decreased $7,081 over the
same period last year, primarily as a result of Gyneco's decreased sales of
Thermal Cautery products.
Cost of goods sold increased $17,436 due to higher production costs.
Selling, general and administrative expenses were $73,215 higher for the
three month period due to increased administrative costs and higher allocated
expenses from an affiliated company for rent and associated costs for the first
six months.
The loss from operations was significantly impacted by the allocations
for selling, general and administrative expenses from an affiliated company.
Six months ended August 31, 1999 vs. August 31, 1998
Sales for the six-month period ending August 31, 1999 were 97% of the
comparable period in 1998.
Cost of goods for 1999 were $13,207 higher than 1998 as production
expenses increased with higher labor and material costs.
Selling, General and Administrative expenses increased period to period
(1999 vs. 1998) for allocations from an affiliated company.
The net loss of $130,796 for 1999 compares with $95,872 for 1998 as the
result of loss in product margins of approximately $17,000, high allocations
from an affiliated company of $18,000 and reduction in interest income of about
$1,000.
LIQUIDITY AND CAPITAL RESOURCES
For the period ending August 31, 1999, the Company had net working
capital of $256,579 reflecting a decrease of $123,804 from February 28, 1999.
The decrease in working capital was due primarily to the reduction in the
amount due from affiliate. Under terms of an agreement with the affiliate,
Repro-Med Systems, Inc., at the end of each quarter, the Company will be paid
interest on the balance outstanding for the quarter. These interest payments
will continue until the balance due from the affiliate is paid. Interest through
August 31, 1999 was $7,959.
The Company will be able to satisfy its cash requirements for the next
12 months through the use of available cash reserves and funds due from an
affiliated company.
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FORWARD LOOKING STATEMENTS
The Company has made and will make certain forward-looking statements in
the Quarterly Report relating to market and product s among others. These
forward-looking statements represent challenging goals for the Company and are
based on certain assumptions and estimates including the worldwide economy,
competitive activity, funding availability, product introductions, governmental
action and the development of certain markets. Some examples of key factors
necessary to achieve the Company's goals are: (1) the success of the Company's
joint venture relative to the Restore product (2) the avoidance of adverse cost
increases (3) the ability to achieve projected sales of the Company's products
(4) uncertainty related to Food and Drug Administration or other government
regulation (5) introduction by other companies of competitive products (6)
changes in the Company's relationships with its customers and distributors (7)
adequate and available sources of funds. If the Company's assumptions and
estimates are incorrect or do not come to fruition, or if the Company does not
achieve all of these key factors, then the Company's actual performance could
vary materially from the forward-looking statements made herein.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material litigation, nor to the
knowledge of the officers and directors of the Company, is there any material
litigation threatened against the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders of the Company
during the last quarter of the fiscal period ended August 31, 1999.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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 .Gamogen, Inc.
/s/ Andrew I. Sealfon
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Andrew I. Sealfon, President, Treasurer,
Chairman of the Board, Director, and
Chief Executive Officer
Dated: October 14, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Andrew I. Sealfon
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Andrew I. Sealfon, President, Treasurer,
Chairman of the Board, Director, and
Chief Executive Officer
Dated: October 14, 1999
8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-2000
<PERIOD-END> AUG-31-1999
<CASH> 106,008
<SECURITIES> 0
<RECEIVABLES> 17,780
<ALLOWANCES> 0
<INVENTORY> 84,625
<CURRENT-ASSETS> 260,303
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 446,522
<CURRENT-LIABILITIES> 3,724
<BONDS> 0
0
0
<COMMON> 12,300
<OTHER-SE> 430,498
<TOTAL-LIABILITY-AND-EQUITY> 446,522
<SALES> 121,357
<TOTAL-REVENUES> 121,357
<CGS> 69,466
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 260,864
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,795
<INCOME-PRETAX> (130,036)
<INCOME-TAX> 380
<INCOME-CONTINUING> (130,796)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (130,796)
<EPS-BASIC> (0.11)
<EPS-DILUTED> (0.10)
</TABLE>
