SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
For the quarterly period ended December 31, 1996
Commission File No. 0-15360
BIOJECT MEDICAL TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Oregon 93-1099680
(State of other jurisdiction of (I.R.S. identification no.)
employer incorporation or organization)
7620 SW Bridgeport Road
Portland, Oregon 97224
(Address of principal executive offices) (Zip code)
(503) 639-7221
(Registrant's telephone number, including areas 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 [ ]
At December 31, 1996 there were 19,051,205 outstanding shares of common
stock of the registrant.
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited consolidated financial statements of Bioject
Medical Technologies Inc. (BMT) and its subsidiaries, Bioject Medical Systems
Ltd. (BMSL) and Bioject Inc. (BI) (together, unless the context otherwise
requires, the "Company"), have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. BMT, BMSL and BI were
formed for the purpose of developing, manufacturing and distributing a new
drug delivery system, capable of injecting medications through the skin
without the traditional needle puncture. The following 10-Q report reflects
the consolidated results of operations, cash flows and financial position for
the second quarter of the year ending March 31, 1997. The results of
operations for interim periods are not necessarily indicative of the results
to be expected for the year.
- Consolidated Statements of Operations for the quarters ended
December 31, 1996 and December 31, 1995
- Consolidated Statements of Operations for the six months ended
December 31, 1996 and December 31, 1995
- Consolidated Balance Sheets dated December 31, 1996 and
March 31, 1996
- Consolidated Statements of Cash Flows for the quarters ended
December 31, 1996 and December 31, 1995
- Consolidated Statements of Cash Flows for the six months ended
December 31, 1996 and December 31, 1995
Page 1
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three-Month Period Ended
December 31,
1996 1995
-------------------------
REVENUES:
Net sales of products $ 325,791 $ 961,630
Licensing/technology fees 80,000 375,000
----------- ---------
405,791 1,336,630
----------- -----------
EXPENSES:
Manufacturing 422,344 1,353,714
Research and development 312,922 441,972
Selling, general and administrative 767,992 826,804
Other (income) expense, net (14,717) (38,722)
----------- -----------
1,488,541 2,583,768
----------- -----------
INCOME (LOSS) BEFORE TAXES (1,082,750) (1,247,138)
PROVISION FOR INCOME TAXES - -
----------- -----------
NET INCOME (LOSS) $(1,082,750) $(1,247,138)
=========== ===========
EARNINGS (LOSS) PER SHARE $ (.07) $ (.09)
=========== ===========
SHARES USED IN PER SHARE CALCULATION 16,189,127 14,206,700
=========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
Page 2
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine-Month Period Ended
December 31,
1996 1995
-------------------------
REVENUES:
Net sales of products $ 845,422 $ 2,595,649
Licensing/technology fees 665,500 825,000
----------- -----------
1,510,922 3,420,649
----------- -----------
EXPENSES:
Manufacturing 1,606,887 4,245,915
Research and development 1,005,402 1,169,956
Selling, general and administrative 2,340,058 2,506,017
Oher (income) expense, net (64,829) (147,468)
----------- -----------
4,887,518 7,774,420
----------- -----------
INCOME (LOSS) BEFORE TAXES (3,376,596) (4,353,771)
PROVISION FOR INCOME TAXES - -
----------- -----------
NET INCOME (LOSS) $(3,376,596) $(4,353,771)
=========== ===========
EARNINGS (LOSS) PER SHARE $ (.22) $ (.32)
=========== ===========
SHARES USED IN PER SHARE CALCULATION 15,807,517 13,579,878
=========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
Page 3
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, March 31,
1996 1996
--------------------------
ASSETS (unaudited)
- ------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 2,503,543 $ 3,098,251
Securities available for sale - 993,056
Accounts receivable 259,388 424,859
Inventories 1,723,474 1,255,945
Prepaid and other current assets 44,195 45,714
----------- -----------
Total current assets 4,530,600 5,817,825
CASH - RESTRICTED 308,558 -
PROPERTY AND EQUIPMENT, at cost:
Machinery and equipment 1,435,738 1,428,001
Production molds 780,980 777,353
Furniture and fixtures 163,832 163,116
Leasehold improvements 73,854 73,854
Equipment and molds under
construction, pledged 1,382,425 -
Capitalized interest 67,576
----------- -----------
3,904,405 2,442,324
Less - Accumulated depreciation (1,379,338) (1,048,638)
----------- -----------
2,525,067 1,393,686
OTHER ASSETS 290,594 307,105
----------- -----------
$ 7,654,819 $ 7,518,616
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- --------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 645,923 $ 550,174
Accrued payroll 188,362 158,225
Other accrued liabilities 241,487 216,924
Deferred revenue - 566,000
----------- -----------
Total current liabilities 1,075,772 1,491,323
LONG-TERM DEBT 1,606,000 -
COMMITMENTS
SHAREHOLDERS' EQUITY:
Preferred stock, no par, 10,000,000
shares authorized; no shares issued
and outstanding - -
Common stock, no par, 100,000,000 shares
authorized; issued and outstanding
19,051,205 shares at December 31, 1996
and 15,585,232 at March 31, 1996 38,323,508 36,001,158
Accumulated deficit (33,350,461) (29,973,865)
----------- -----------
Total shareholders' equity 4,973,047 6,027,293
----------- -----------
$ 7,654,819 $ 7,518,616
=========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
Page 4
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three-Month Period Ended
December 31,
1996 1995
--------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,082,750) $(1,247,138)
Adjustments to net loss:
Depreciation and amortization 49,000 132,600
Common stock issued for services - 23,195
Net changes in assets and liabilities:
Accounts receivable 10,198 187,625
Inventories (147,490) 158,727
Prepaid and other current assets (345) (28,470)
Accounts payable 203,609 (71,416)
Accrued payroll 3,430 5,532
Other accrued liabilities (44,664) (145,833)
Deferred revenue (30,000) 635,000
----------- -----------
Net Cash Used in Operating Activities (1,039,012) (350,178)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Transfers to restricted cash (206,000) -
Transfers from restricted cash 693,278 -
Purchase of securities available for sale - (3,454,102)
Sale of securities available for sale - -
Capital expenditures (814,929) (153,161)
Other assets (167) (18,002)
----------- -----------
Net Cash Used in Investing Activities (327,818) (3,625,265)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt 206,000 -
Cash proceeds from common stock 2,163,000 3,454,102
----------- -----------
Net Cash Provided by Financing Activities 2,369,000 3,454,102
----------- -----------
CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash and
cash equivalents 1,002,170 (521,341)
Cash and cash equivalents at beginning
of period 1,501,373 2,481,137
----------- -----------
Cash and cash equivalents at end
of period $ 2,503,543 $ 1,959,796
=========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
Page 5
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine-Month Period Ended
December 31,
1996 1995
--------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,376,596) $(4,353,771)
Adjustments to net loss:
Depreciation and amortization 353,200 397,800
Common stock issued for services 159,350 39,961
Net changes in assets and liabilities:
Accounts receivable 165,471 239,828
Inventories (467,529) (76,711)
Prepaid and other current assets 1,519 (2,536)
Accounts payable 95,734 (116,478)
Accrued payroll 30,137 63,249
Other accrued liabilities 24,578 (112,933)
Deferred revenue (566,000) 535,000
----------- -----------
Net Cash Used in Operating Activities (3,580,136) (3,386,591)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Transfers to restricted cash (1,606,000) -
Transfers from restricted cash 1,297,442 -
Purchase of securities available for sale - (3,454,102)
Sale of securities available for sale 993,056 3,989,468
Capital expenditures (1,462,081) (644,104)
Other assets (5,989) (56,361)
----------- -----------
Net Cash Used in Investing Activities (783,572) (165,099)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt 1,606,000 -
Cash proceeds from common stock 2,163,000 3,454,102
----------- -----------
Net Cash Provided by Financing Activities 3,769,000 3,454,102
----------- -----------
CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash and
cash equivalents (594,708) (97,588)
Cash and cash equivalents at beginning
of period 3,098,251 2,057,384
----------- -----------
Cash and cash equivalents at end
of period $ 2,503,543 $ 1,959,796
=========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
Page 6
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. THE COMPANY:
The consolidated financial statements of Bioject Medical Technologies
Inc. and its subsidiaries (the "Company"), include the accounts of Bioject
Medical Technologies Inc. ("BMT") and its wholly owned subsidiaries, Bioject
Medical Systems Ltd. ("BMSL") and Bioject Inc. ("BI"). All significant
intercompany transactions have been eliminated. BMT was incorporated on
December 17, 1992 under the laws of the State of Oregon for the purpose of
acquiring all of the outstanding common shares of BMSL in exchange for an
equivalent number of common shares of BMT stock under a plan of U.S.
reincorporation approved by the Company's shareholders on November 20, 1992.
BMSL was incorporated on February 14, 1985, under the laws of British
Columbia, and BI was incorporated on February 8, 1985, under the laws of the
State of Oregon.
The Company commenced operations in 1985 for the purpose of developing,
manufacturing and distributing a new drug delivery system. Since its
formation, the Company has been engaged principally in organizational,
financing, research and development, and marketing activities. In the last
quarter of fiscal 1993, the Company launched U.S. distribution of its
Biojector 2000 system primarily to the hospital and large clinic market.
The Company's products and manufacturing operations are subject to extensive
government regulation, both in the U.S. and abroad. In the U.S., the
development, manufacture, marketing and promotion of medical devices is
regulated by the Food and Drug Administration ("FDA") under the Federal Food,
Drug, and Cosmetic Act ("FFDCA"). In 1987, the Company received clearance from
the FDA under Section 510(k) of the FFDCA to market a hand-held CO2-powered
jet injection system. In June 1994, the Company received clearance from the
FDA under 510(k) to market a version of its Biojector 2000 system in a
configuration targeted at high volume injection applications.
The Company's revenues to date have been derived primarily from licensing
and technology fees and more recently from sales of the Biojector 2000 system
and Biojector syringes to public health clinics and to Health Management Inc.
with whom the Company signed a two-year distribution agreement in fiscal
1995. Subsequent to year end this agreement was cancelled. Although not
obligated to do so, the Company agreed to repurchase a portion of the goods
sold. Future revenues will depend upon acceptance and use by healthcare
providers of the Company's jet injection technology. Uncertainties over
government regulation and competition in the healthcare industry may impact
healthcare provider expenditures and third party payer reimbursements and,
accordingly, the Company cannot predict what impact, if any, subsequent
healthcare reforms might have on its business. In the future the Company may
require additional financing. Failure to obtain such financing on favorable
terms could adversely affect the Company's business.
2. ACCOUNTING POLICIES:
INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined in a
manner which approximates the first-in, first out (FIFO) method. Costs
utilized for inventory valuation purposes include labor, materials and
manufacturing overhead. Net inventories consist of the following:
December 31, March 31,
1996 1996
---------- ----------
Raw Materials $ 606,991 $ 697,694
Work in Process 210,000 12,467
Finished Goods 906,483 545,784
---------- ----------
$1,723,474 $1,255,945
========== ==========
Page 7
During the first nine months of the fiscal year, although not obligated to do
so, the Company committed to repurchase certain inventories from one customer.
The purchase price totalled $660,000 of which $491,000 has been satisfied and
the balance is still outstanding.
PROPERTY AND EQUIPMENT AND LONG-TERM DEBT
In the first nine months of fiscal 1997, the Company commenced acquiring
tooling and molds under a contract with Schering AG. Under the contract,
Schering agreed to advance the Company up to $1.6 million on an agreed-
upon schedule to acquire this capital equipment which was pledged to Schering
subject to repayment of the loans. Unexpended funds advanced to the
Company were held in a separate account and were also pledged against
repayment of the debt. Subsequent to quarter end, Schering notified the
Company that it was canceling its contract. Under the terms of the contract,
the loan will be converted into approximately 460,000 shares of common stock
of the Company and, therefore, repayment of the debt will not be required.
Upon issuance of such shares, the assets will be owned by the Company free of
any lien from Schering.
USE OF ESTIMATES
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 at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
3. BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying, unaudited consolidated financial statements do not
include all information and footnote disclosures normally included in an
audited financial statement. However, in the opinion of management, all
adjustments (which include only normal, recurring adjustments except as
described below) necessary to present fairly the financial position, cash
flows, and results of operations have been made. It is suggested that these
statements be read in conjunction with the financial statements included in
the Company's Annual Report on Form 10-K for the year ended March 31, 1996.
On June 3, 1996, the British Columbia Securities Commission informed the
Company that its Executive Director (formerly the Superintendent of Brokers)
consented to the release of all shares originally held in escrow pursuant to
an escrow agreement dated May 30, 1986. This means that the 1.5 million
shares of common stock which had been held under this escrow arrangement since
the Company's initial public offering in July 1986 are now held by the owners
of the shares without risk of cancellation and may be sold. As previously
disclosed, a non-cash charge to compensation expense was required to be
recorded for certain of the shares released from the escrow account and
transferred to certain former employees and consultants of the Company.
Accordingly, a non-cash charge totalling $120,000 has been recorded in the
financial statements in the first quarter of fiscal 1997. Effective with
release of these shares, the escrow has been terminated and no further charges
will be incurred by the Company as a result of the previously escrowed shares.
Page 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company has been developing a self-injection system for Schering AG,
Germany, under a multi-year contract signed in March 1994. On June 26, 1996,
the Company and Schering entered into a Supply Agreement which specifies the
terms under which the Company would manufacture and sell the self-injection
systems to Schering. Subject to Schering's satisfaction with certain product
test results and receipt of regulatory approval in the United States and
certain foreign countries, Bioject would have manufactured the self-injection
systems exclusively for Schering AG which would have distributed the systems
on a worldwide basis to multiple sclerosis patients using Betaseron. During
the quarter, the Company's activities were focused on completing pilot
production of the self-injector in preparation for full scale manufacture and
shipment which was expected to commence in April 1997. Subsequent to quarter
end, the Company was notified by Schering of Schering's intention to cancel
its contract with Bioject. Under provisions of the contract, Schering AG had
the option of canceling the agreement if the FDA required extensive clinical
studies beyond an originally planned safety study. Schering AG recently
received a review letter from the FDA which would have required Schering to
conduct additional material clinical studies in order to use non-traditional
delivery mechanisms with its Betaseron product. The Company understands that
the uncertain regulatory clearance schedule was a significant factor in
Schering's decision to cancel the contract. The Company retains the rights to
the self-injection technology and is actively seeking other strategic partners
for whom such a system would provide a competitive advantage. Under terms of
the contract, Schering must convert its $1.6 million note due from Bioject
into approximately 460,000 shares of Bioject common stock at a conversion
price of $3.50 per share. In addition, Schering is obligated to pay Bioject
for all product ordered to date.
The Company's revenues to date have not been sufficient to cover
operating expenses. However, the Company believes that if its products
achieve market acceptance and the volume of sales increases, and its product
costs are reduced, its costs of goods as a percentage of sales will decrease
and eventually the Company will generate net income. (See "Forward Looking
Statements") The level of sales required to generate net income will be
affected by a number of factors including the pricing of the Company's
products, its ability to attain efficiencies that can be attained through
volume and automated manufacturing, and the impact of inflation on the
Company's manufacturing and other operating costs. There can be no assurance
that the Company will be able to successfully implement its manufacturing cost
reduction program or sell its products at prices or in volumes sufficient to
achieve profitability or offset increases in its costs should they occur.
Revenues and results of operations have fluctuated and can be expected to
continue to fluctuate significantly from quarter to quarter and from year to
year. Various factors may affect quarterly and yearly operating results
including (i) length of time to close product sales, (ii) customer budget
cycles, (iii) implementation of cost reduction measures, (iv) uncertainties
and changes in purchasing due to third party payor policies and proposals
relating to national healthcare reform, (v) timing and amount of payments
under technology development agreements and (vi) timing of new product
introductions by the Company and its competition.
Page 9
On June 3, 1996, the British Columbia Securities Commission informed the
Company that its Executive Director (formerly the Superintendent of Brokers)
consented to the release of all shares originally held in escrow pursuant to
an escrow agreement dated May 30, 1986. This means that the 1.5 million
shares of common stock which had been held under this escrow arrangement since
the Company's initial public offering in July 1986 are now held by the owners
of the shares without risk of cancellation and may be sold. As previously
disclosed, a non-cash charge to compensation expense is required to be
recorded for certain of the shares released from the escrow account and
transferred to certain former employees and consultants of the Company.
Accordingly, a non-cash charge totalling $120,000 has been recorded in the
financial statements during the first quarter of fiscal 1997.
During the last quarter of fiscal 1997, the Company will continue to
focus its efforts on expanding sales, reducing the cost of its products,
developing injectors for Hoffmann-La Roche, pursuing additional alliances with
pharmaceutical companies and conserving its fiscal resources. The Company
does not expect to report net income from operations in fiscal 1997. (See
Forward Looking Statements).
RESULTS OF OPERATIONS
QUARTER ENDED DECEMBER 31,1996 COMPARED TO QUARTER ENDED DECEMBER 31,1995.
Product sales decreased from $962,000 in the third quarter of fiscal 1996 to
$326,000 in the third quarter of fiscal 1997. Sales in the third quarter of
fiscal 1996 included approximately $700,000 of sales to Health Management
Inc., and the remainder to public health clinics. Product sales in the third
quarter of fiscal 1997 consisted primarily of sales to public health clinics
and for flu season immunizations. The decrease in product sales was directly
attributable to the previously announced suspension of shipments to HMI.
License and technology fees decreased from $375,000 in the third quarter of
fiscal 1996 to $80,000 in the third quarter of fiscal 1997. Both quarters
consisted of product development fees recognized for work performed to develop
a self injection device for the administration of Betaseron to multiple
sclerosis patients under an agreement with Schering, AG, and product
development fees for work to develop proprietary drug delivery systems under
an agreement with Hoffmann-La Roche. The decrease in fees reflected the
fluctuation of timing of strategic partner development payments.
Manufacturing expense decreased from the third quarter of fiscal 1996 to
the third quarter of fiscal 1997 by $931,000. This decrease was the result
of the decline in product sales and the elimination of certain excess
materials and labor costs incurred in connection with the testing of Biojector
unibody prototypes in the comparable period of the prior year. Research and
development expenses declined from $442,000 in the third quarter of fiscal
1996 to $313,000 in the third quarter of fiscal 1997 due to fluctuations in
out-of-pocket expenses associated with the Schering and Hoffmann-La Roche
projects. Selling, general and administrative expense declined from $827,000
in the third quarter of fiscal 1996 compared to $768,000 in the third quarter
of fiscal 1997. The slight decrease was due to normal variations in the
timing of some expenses.
Other income consists of earnings on available cash balances. Other
income decreased from $39,000 in the third quarter of fiscal 1996 to $15,000
in the third quarter of fiscal 1997 as a result of decreases in cash
balances.
Page 10
NINE MONTHS ENDED DECEMBER 31, 1996 COMPARED TO NINE MONTHS ENDED DECEMBER 31,
1995. Revenues for the nine months ended December 31, 1996 consist of $845,000
in product sales and $666,000 in product development fees. This compares to
$2.6 million from product sales (77% of which were to HMI) and $825,000 in
product development fees earned in the comparable period in the prior year.
The decrease in product sales was directly attributable to the previously
announced suspension of shipments to HMI. Licensing and technology fees
consist entirely of product development fees recognized as revenue under the
Schering and Hoffmann-La Roche contracts.
Manufacturing costs decreased from $4.2 million in the first nine months of
the prior year to $1.6 million in the comparable period in the current year.
This decrease was due to lower product sales and, therefore, corresponding
decreases in the costs of product sold. It was also due to the elimination of
excess labor and materials associated with qualifying the syringe automation
equipment for production and to costs associated with Biojector unibody
prototype testing and qualification. Research and product development expenses
decreased approximately $165,000 due to fluctuation in prototype and other
out-of-pocket expenses. Selling, general and administrative costs decreased
approximately $166,000 due primarily to reduced personnel expenses.
Other income consists of earnings on available cash balances. Other income
decreased in relation to the comparable periods the prior year as a result of
decreases in cash balances.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception in 1985, the Company has financed its operations,
working capital needs and capital expenditures primarily from private
placements of securities, exercises of stock options, proceeds received from
its initial public offering in 1986, proceeds received from a public offering
of Common Stock in November 1993, licensing and technology revenues and more
recently from sales of products and private placements of common stock
completed in November 1995 and December 1996. Net proceeds received upon
issuance of securities from inception through December 31, 1996 totalled
approximately $38.0 million.
Cash, cash equivalents and marketable securities totalled, $2.5 million
at December 31, 1996 and $4.1 million at March 31, 1996. The decrease
resulted primarily from operating losses and from reductions in certain short
term liabilities, net of proceeds received in the private placement in
December 1996.
Inventories increased from $1.3 million at March 31, 1996 to $1.7 million
at December 31, 1996, due to the repurchase of certain inventories from HMI.
The Company has committed to repurchase an additional $169,000 in inventories.
The repurchase of these inventories was optional and was at a substantial
discount to the original selling price to HMI.
The Company will expend approximately $1.6 million for capital equipment
in fiscal 1997. Substantially all of these expenditures are related to ramp-up
of manufacturing for the Schering product launch. These expenditures were
funded by loans from Schering. During the fourth quarter of fiscal 1997, these
loans will be converted into approximately 460,000 shares of common stock of
the Company and the equipment will be owned free of lien by Schering.
Page 11
The Company believes that its current cash position combined with revenues
and other cash receipts will be adequate to fund the Company's operations to
the second quarter of fiscal 1998. (See "Forward Looking Statements").
Thereafter, the Company will require additional financing. However, unforeseen
costs and expenses or lower than anticipated cash receipts from product sales
or research and development activities could accelerate the financing
requirements. The Company has been successful in raising additional financing
in the past and believes that sufficient funds will be available to fund
future operations. (See "Forward Looking Statements"). However, there can be
no assurance that such financing will be available on favorable terms or at
all. Failure to obtain additional financing when required would significantly
restrict the Company's operations and ability to continue product development,
and materially adversely affect the Company's business. The Company has no
banking line of credit or other established source of borrowing.
FORWARD LOOKING STATEMENTS
Certain statements in this report constitute "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Company, or industry results, to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. Such risks, uncertainties and factors are
described in more detail in the Company's Annual Report on Form 10-K and other
S.E.C. filings.
Page 12
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
None during the quarter ended December 31, 1996.
Item 2. Changes in Securities
None during the quarter ended December 31, 1996.
Item 3. Defaults Upon Senior Securities
None during the quarter ended December 31, 1996.
Item 4. Submission of Matters to a Vote of Security Holders
None during the quarter ended December 31, 1996.
Item 5. Other Information
None during the quarter ended December 31, 1996.
Item 6. Exhibits and Reports on Form 8-K
EXHIBITS:
10.5 Lease Extension Agreement dated October 4, 1994, between
Earl J. Itel and Loris Itel Trust and Bioject, Inc., for
the 6000 sq. ft. Tualatin, Oregon warehouse.
REPORTS ON FORM 8K:
January 14, 1997 reporting unaudited proforma results of
operations and financial position as of November 30, 1996
reflecting results of the private placement completed in
December 1996.
January 28, 1997 announcing cancellation of the Schering
contract.
Page 13
SIGNATURE
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.
BIOJECT MEDICAL TECHNOLOGIES INC.
(Registrant)
Date: February 14, 1996 /S/ James C. O'Shea
---------------------------------
James C. O'Shea
Chairman, Chief Executive Officer
and President
/S/ Peggy J. Miller
---------------------------------
Peggy J. Miller
Vice President and Chief Financial Officer
Page 14
EXHBIT 10.5
LEASE EXTENSION AGREEMENT
In regards to the Lease dated October 4, 1994 ("Lease") by and between Earl J.
Itel and Loris Itel Trust ("Lessor"), and Bioject Inc. ("Lessee"), the lease
is hereby amended and restated as follows:
1. Premises
Lessor hereby leases to Lessee that certain real property situated in the
County of Washington, State of Oregon, commonly known as 19439 S.W. 90th Ct.,
Tualatin, Oregon, and described as a portion of a multi-tenant warehouse
building consisting of approximately 6,000 square feet of space.
2. Term
Upon expiration of the current lease term ending September 30, 1997, paragraph
1.3 Term will be amended as follows:
The term of this lease shall be for a period of five (5)
years commencing on October 1, 1997 and ending on
September 30, 2002.
3. Rent
Upon expiration of the current lease term, paragraph 1.5 base rent will be
amended as follows:
Year One: 10/01/97 - 09/30/98 $2,015.00 per month
Year Two: 10/01/98 - 09/30/99 $2,075.00 per month
Year Three: 10/01/99 - 09/30/00 $2,140.00 per month
Years Four and Five: 10/01/00 - 09/30/02 $2,200.00 per month
All other terms and conditions of the lease will remain unchanged.
"LESSEE" "LESSOR"
BIOJECT INC. EARL J. ITEL AND LORIS ITEN TRUST
/s/ Peggy J. Miller /s/ Earl J. Itel and Loris Itel
- ------------------------- ----------------------------------
By: PEGGY J. MILLER BY: EARL J. ITEL AND LORIS ITEL
Date: 11/06/96 Date: 11/14/96 11/14/96
------------------ --------------------------
[ARTICLE] 5
[LEGEND]
EXHIBIT 27.1
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND THE CONSOLIDATED STATEMENTS OF OPERATIONS
FILED AS PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q.
[/LEGEND]
[MULTIPLIER] 1
<TABLE>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] MAR-31-1997
[PERIOD-END] DEC-31-1996
[CASH] 2,503,543
[SECURITIES] 0
[RECEIVABLES] 259,388
[ALLOWANCES] 0
[INVENTORY] 1,723,474
[CURRENT-ASSETS] 4,530,600
[PP&E] 3,904,405
[DEPRECIATION] 1,379,338
[TOTAL-ASSETS] 7,654,819
[CURRENT-LIABILITIES] 1,075,772
[BONDS] 1,606,000
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 38,323,508
[OTHER-SE] 0
[TOTAL-LIABILITY-AND-EQUITY] 7,654,819
[SALES] 325,791
[TOTAL-REVENUES] 405,791
[CGS] 422,344
[TOTAL-COSTS] 422,344
[OTHER-EXPENSES] 1,066,197
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] (1,082,750)
[INCOME-TAX] 0
[INCOME-CONTINUING] (1,082,750)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (1,082,750)
[EPS-PRIMARY] (.07)
[EPS-DILUTED] (.07)
</TABLE>
