SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 10-K/A
AMENDMENT NO. 3
(Mark one)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended March 31, 1997
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 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)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
Common Stock, no par value
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
State the aggregate market value of voting stock held by non-affiliates
of the registrant, as of May 31, 1997: $17,660,800
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of May 31, 1997: Common Stock, no par value,
19,540,413 shares.
Documents Incorporated by Reference:
Portions of the registrant's definitive Proxy Statement for the 1997
Annual Shareholders' Meeting are incorporated by reference into
Part III
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Operating losses have resulted in an accumulated deficit of approximately $34.3
million as of March 31, 1997. In fiscal 1995 and 1996, the Company incurred
significantly increased costs associated with the production and sale of the
Biojector 2000 system, including sales and marketing efforts, manufacturing
ramp-up and inventory build-up. The Company has been working on a product
cost reduction program which commenced phase-in during fiscal 1996 and results
from the initial phase of which were reflected in fiscal 1997 operating
performance. The Company's ability to achieve and sustain profitability will
depend in part upon customer acceptance of the Biojector 2000 system, sustained
product performance, implementing additional product cost reductions and
attaining revenues sufficient to support profitable operations.
In August 1994, Bioject signed an agreement with Health Management,
Inc. (HMI), granting HMI exclusive rights to purchase Bioject's Needle-Free
Injection Management System (trademark), the Biojector 2000, for use in the
home healthcare market. In return for HMI's commitment to purchase a minimum
of 8,000 Biojector units over the ensuing two years, the Company granted
volume pricing discounts to HMI. During the term of the contract, the
selling price of Biojectors to HMI exceeded their standard cost. During
fiscal 1995 and 1996, the Company sold approximately 2,100 and 4,300
Biojectors to HMI for total sales revenue including syringes of $1.1 million
and $2.2 million, respectively. HMI did not place the great majority of
these Biojectors with patients pending completion of negotiations with
pharmaceutical companies for certain pricing concessions for medication to
be administered with the Biojectors. In January 1996 HMI requested that
Bioject suspend shipments to HMI. In February 1996, the Company learned
from HMI's press releases that HMI expected to default under its loans, to
take significant write-offs for accounts receivable and inventories, planned
operational consolidations, and would restate certain prior period financial
statements. In fiscal 1997, although not obligated to do so, the
Company agreed to repurchase certain of the HMI inventories, including up to
6,000 Biojector units, for cash and forgiveness of accounts receivable
totalling $660,000. The repurchase of these inventories was at a
substantial discount to the original selling price to HMI.
In March 1994, the Company entered into an agreement with Schering AG,
Germany, for the development of a self-injection device for delivery of
Betaseron(R) to multiple sclerosis patients. During fiscal 1995, the Company
developed a proof-of-concept prototype and demonstrated this prototype to
Schering. The Company and Schering finalized product specifications. The
Company also commenced development of the preproduction clinical prototype.
During fiscal 1996, the Company delivered the preproduction clinical
prototypes to Schering and worked on finalizing the production prototype
design. During fiscal 1997, the Company entered into a supply agreement with
Schering AG and commenced activities related to full production of the self
injector. Schering loaned the Company a total of $1.6 million to purchase
molds and tooling for production of the product. In January 1997, the Company
received notice that its contract with Schering AG would be cancelled. 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 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(R)
product. Under terms of the contract, Schering was required to 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,
$106,000 of accrued interest was converted into approximately 27,000 shares
of Bioject common stock at a conversion price of $3.50 per share.
Approximately 487,000 shares of Bioject stock are held by Schering AG. In
addition, Schering is obligated to pay Bioject for the cost of product ordered
through the date of cancellation of the contract.
In January 1995, the Company signed a joint development agreement with
Hoffmann-La Roche to develop proprietary drug delivery systems for Roche
products. The agreement provides for Bioject to develop, manufacture and
sell Biojector needle-free drug delivery systems designed to Roche
specifications. In return, Bioject has granted Roche exclusive worldwide
rights to distribute these systems and their components for use with certain
Roche products. Hoffmann-La Roche Inc. is the United States affiliate of
the multinational group of companies headed by Roche Holding of Basel,
Switzerland, one of the world's leading research-intensive healthcare
companies. As of 1995 fiscal year end, the Company had commenced design of
a prototype device and had agreed with Roche on product specifications.
During fiscal 1996, the Company developed and delivered to Roche
preproduction prototypes for testing and developed the clinical
preproduction prototypes which were delivered to Roche in April 1996. As of
March 31, 1997, the Company and Hoffmann-LaRoche were finalizing their
submission to obtain regulatory approval to market the product. Hoffmann-
LaRoche was also gathering marketing information in order to sign a supply
agreement. In February 1995, Hoffmann-La Roche paid a one-time licensing
fee totalling $500,000 and the agreement provides that it will pay specified
product development fees on an agreed upon schedule of which $900,000 was
paid in fiscal 1996 and $250,000 was paid in fiscal 1997.
Throughout fiscal 1994 and 1995, the Company's manufacturing processes
were primarily manual. These processes did not permit the Company to
produce its products at costs which would allow it to operate profitably.
During fiscal 1996, the Company implemented a plan to increase manufacturing
capacity and refine production methods to meet anticipated future demand and
to reduce product costs. For the Biojector 2000, cost reduction efforts
included converting from a two piece to a one piece housing, converting to
continuous process manufacturing and implementing volume purchasing programs
from suppliers. For the Biojector syringes, these efforts included
increasing supplier mold capacity and automating final assembly and
packaging. During fiscal 1997, the Company's manufacturing activities
focused on retesting the devices repurchased from HMI to ensure their
continuing compliance with new product standards and elective upgrade of
certain of these units to current version configuration. Manufacturing
also focused on finalizing product engineering and on planning
for, designing and bringing up the new self injector device and syringe
manufacturing lines in advance of product launch.
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" and "Business - Risk Factors." 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.
In the future, the Company may incur a non-cash charge to compensation
expense in connection with the issuance of 100,000 shares of Common Stock to
the Company's Chief Executive Officer. Under terms of his employment
agreement, the Company's Chairman will receive 100,000 shares of common
stock when the Company first achieves two consecutive quarters of positive
earnings per share. Upon issuance of such shares the Company will record a
non-cash charge to compensation at the fair market value of the stock on the
last day of the quarter in which the shares are earned.
During the next fiscal year, the Company will continue to focus its
efforts on expanding sales, reducing the cost of its products, developing
a 1.5 ml. injector 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 1998.
See "Forward Looking Statements" and "Risk Factors."
RESULTS OF OPERATIONS
Product sales increased from $1.5 million in fiscal 1995 to $3.1 million
in fiscal 1996 and declined to $1.3 in fiscal 1997. Sales in fiscal 1995
consisted of $1.1 million of sales to Health Management Inc., and the
remainder to hospitals, large clinics, individual physician offices and
certain selected distributors. Sales in fiscal 1996 consisted of $2.3 million
of sales to HMI with the remainder primarily to public health and flu
immunization clinics. Sales in fiscal 1997, consisted of $1.1
million of sales to public health and flu immunization clinics with the
balance to a strategic partner.
License and technology fees varied from $1.4 million in fiscal 1995 to $1.2
million in fiscal 1996 and $966,000 in fiscal 1997. The fiscal 1995 fees
included a one-time $500,000 licensing fee for access to the Company's
technology received from Schering and a similar one-time $500,000 licensing
fee received from Hoffmann-La Roche with the balance of the fiscal 1995 fees
consisting of product development revenues recognized in connection with the
Schering agreement. The fiscal 1996 and 1997 fees consisted principally of
product development revenues recognized for work performed under the Schering
and Hoffmann-La Roche agreements.
Manufacturing expense consists of the costs of product sold and manufacturing
overhead expense related to excess manufacturing capacity. The total of these
costs varied from $3.4 million in fiscal 1995 to $5.2 million in fiscal 1996
and $2.2 million in fiscal 1997 due in part to changes in sales and,
therefore, to changes in the total costs of product sold. The increase from
1995 to 1996 also reflects increased regulatory and quality assurance staff
to support the higher level of manufacturing and increased depreciation
expense associated with automated assembly equipment installed during fiscal
1996. The decrease in expense from fiscal 1996 to 1997 reflects reductions in
materials and labor for injectors and syringes and reductions in fixed and
variable manufacturing overhead expense. Fixed manufacturing overhead
totalled $1.3 million, $1.9 million and $1.5 million in fiscal 1995, 1996
and 1997, respectively.
Research and development expense increased slightly from to $1.4 million in
fiscal 1995 to $1.5 million in fiscal 1996 and then decreased to $1.3 million
in fiscal 1997. Fiscal 1995 expenditures related to work associated with
development of the Schering device and to initial work on the Hoffmann-La
Roche device. Fiscal 1996 expenditures related entirely to work performed
under the Schering and Hoffmann-La Roche agreements. Fiscal 1997 expenditures
related to final design and transfer to manufacturing of the Schering device
and additional development work on the Hoffmann-LaRoche system. Costs vary
from year to year depending on product activity.
Selling, general and administrative expense totalled $4.2 million, $3.2
million and $3.2 million in fiscal 1995, 1996 and 1997, respectively. Fiscal
1995 included expenses incurred in connection with the chief executive
officer transition totalling approximately $780,000 (or $0.06 per share) and
to higher levels of legal, insurance, bad debt and certain
promotional expenses. The decrease in fiscal 1996 resulted from planned
reductions in overhead personnel. Sales and marketing expenses comprise
slightly more than 50% of selling, general and administrative expenses in
fiscal 1996 and 1997.
Other income consists of earnings on available cash balances. Other income
varied as a result of changes in cash balances and interest rates from year
to year.
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. Net proceeds received upon issuance of securities
from inception through March 31, 1997 totalled approximately $40.0 million.
The Company has no long-term debt.
Cash, cash equivalents and marketable securities totalled $4.1 million at
March 31, 1996 and $2.1 million at March 31, 1997, which represented a
decrease of $2.0 million from 1996 to 1997. The decrease resulted from
operating losses and capital expenditures offset in part by net proceeds
from a private placement of common stock and warrants in December 1996 and
of long-term debt borrowing from Schering including accrued interest
which was converted into 487,390 shares of common stock in February 1997.
In June 1997, the Company completed private placement of its common stock
and warrants totalling $750,000.
Inventories increased from $1.3 million at March 31, 1996 to $1.7 million at
March 31, 1997 due to the build-up of inventories to support anticipated future
product sales and the repurchase of inventories from HMI.
The Company has fixed commitments for facilities rent and equipment leases
which total approximately $260,000 for fiscal 1998.
The Company expended approximately $1.6 million for capital equipment in
fiscal 1997. Substantially all of these expenditures related to ramp-up of
manufacturing for the Schering product launch. These assets continue to be
carried at their cost on the Company's balance sheet because the product is
suitable for other home injection applications which the Company is pursuing.
The Company expects to expend approximately $50,000 on non-manufacturing
capital equipment additions in fiscal 1998.
The Company believes that its current cash position and cash received from a
private placement of common stock and warrants in June 1997, combined with
revenues and other cash receipts will not be adequate to fund the Company's
operations through the end of fiscal 1998. The Company has identified a
number of potential financing sources and is pursuing them aggressively.
See "Forward Looking Statements." Even if the Company is successful in
raising additional financing unforeseen costs and expenses or lower than
anticipated cash receipts from product sales or research and development
activities could accelerate or increase 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
the Company's efforts will be successful, and there can be no assurance that
such financing will be available on terms which are not significantly dilutive
to existing shareholders. Failure to obtain needed additional capital on
terms acceptable to the Company, or at all, would significantly restrict the
Company's operations and ability to continue product development and growth
and materially adversely affect the Company's business. The Company has no
banking line of credit or other established source of borrowing. The Company's
independent accountants have qualified their opinion with respect to their
audit of the Company's 1997 consolidated financial statements as the result
of doubts concerning the Company's ability to continue as a going concern in
the absence of additional financing.
<PAGE>
Item 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
TABLE OF CONTENTS TO FINANCIAL STATEMENTS
Report of Independent Public Accountants
Consolidated Balance Sheets at March 31, 1997 and 1996
Consolidated Statements of Operations for the years ended
March 31, 1997, 1996 and 1995
Consolidated Statements of Shareholders' Equity for the years
ended March 31, 1997, 1996 and 1995
Consolidated Statements of Cash Flows for the years ended
March 31, 1997, 1996 and 1995
Notes to Consolidated Financial Statements
Supplementary Data (none required)
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of Bioject Medical Technologies Inc:
We have audited the accompanying consolidated balance sheets of Bioject
Medical Technologies Inc. (an Oregon corporation) and subsidiaries as of
March 31, 1997 and 1996, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the three years
in the period ended March 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Bioject Medical
Technologies Inc. and subsidiaries, as of March 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years
in the period ended March 31, 1997, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from
operations and, at March 31, 1997, has an accumulated deficit of $34.3
million that raises substantial doubt about the Company's ability to
continue as a going concern. Management's plan in regards to these matters
is also described in Note 1. The financial statements do not include any
adjustments relating to recoverability and classification of asset
carrying amounts that might result should the Company be unable to continue
as a going concern.
/S/ ARTHUR ANDERSEN LLP
Portland, Oregon
May 2, 1997 (except with respect to the matter discussed in Note 7 for
which the date is June 18, 1997)
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31,
1997 1996
____________ __________
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,116,478 $ 3,098,251
Securities available for sale - 993,056
Accounts receivable, net of allowance for
doubtful accounts of $27,500 and $55,000,
respectively 311,856 424,859
Inventories 1,706,456 1,255,945
Other current assets 45,222 45,714
____________ ___________
Total current assets 4,180,012 5,817,825
____________ ___________
PROPERTY AND EQUIPMENT, at cost:
Machinery and equipment 1,897,174 1,428,001
Production molds 1,798,630 777,353
Furniture and fixtures 176,897 163,116
Leasehold improvements 80,447 73,854
Capitalized Interest 106,228 -
____________ ___________
4,059,376 2,442,324
Less - accumulated depreciation (1,462,338) (1,048,638)
____________ ___________
2,597,038 1,393,686
____________ ___________
OTHER ASSETS 310,981 307,105
____________ ___________
$ 7,088,031 $ 7,518,616
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 659,973 $ 550,174
Accrued payroll 213,130 158,225
Other accrued liabilities 199,384 216,924
Deferred revenue 250,000 566,000
____________ ___________
Total current liabilities 1,322,487 1,491,323
____________ ___________
COMMITMENTS (Note 5) - -
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 19,540,413
and 15,585,232 shares at March 31, 1997 and
1996, respectively 40,035,736 36,001,158
Accumulated deficit (34,270,192) (29,973,865)
____________ ___________
Total shareholders' equity 5,765,544 6,027,293
____________ ___________
$ 7,088,031 $ 7,518,616
============ ===========
The accompanying notes are an integral part
of these consolidated financial statements.
</TABLE>
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
For the Year Ended March 31,
1997 1996 1995
_______________________________________
<S> <C> <C> <C>
REVENUES:
Net sales of products $ 1,269,882 $ 3,059,018 $1,479,948
Licensing/technology fees 965,500 1,150,000 1,444,000
___________ __________ __________
2,235,382 4,209,018 2,923,948
___________ __________ __________
EXPENSES:
Manufacturing 2,184,050 5,195,914 3,394,089
Research and development 1,275,580 1,486,607 1,427,861
Selling, general and administrative 3,177,228 3,168,618 4,186,549
Other (income) expense (105,149) (211,049) (428,402)
___________ ___________ __________
6,531,709 9,640,090 8,580,097
___________ ___________ __________
LOSS BEFORE TAXES (4,296,327) (5,431,072) (5,656,149)
PROVISION FOR INCOME TAXES - - -
___________ ___________ ___________
NET LOSS $(4,296,327) $(5,431,072) $(5,656,149)
=========== =========== ===========
NET LOSS PER SHARE $ (0.26) $ (0.39) $ (0.43)
============ =========== ===========
SHARES USED IN PER SHARE CALCULATION 16,705,274 14,074,349 13,167,301
============ =========== ===========
The accompanying notes are an integral part
of these consolidated financial statements
</TABLE>
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
COMMON STOCK
________________________ Accumulated
Shares Amount Deficit Total
__________ ___________ ____________ ___________
<S> <C> <C> <C> <C>
BALANCES, MARCH 31, 1994 13,158,074 $32,263,783 $(18,886,644) $13,377,139
Issuance of common stock in
exchange for services 101,000 243,312 - 243,312
Net loss - - (5,656,149) (5,656,149)
__________ __________ ____________ ___________
BALANCES, MARCH 31, 1995 13,259,074 32,507,095 (24,542,793) 7,964,302
Issuance of common stock in
exchange for services 23,149 39,962 - 39,962
Issuance of common stock under
a private placement in
November and December 1995 2,303,009 3,454,101 - 3,454,101
Net loss - - (5,431,072) (5,431,072)
__________ ___________ ____________ ___________
BALANCES, MARCH 31, 1996 15,585,232 36,001,158 (29,973,865) 6,027,293
Issuance of common stock in
exchange for services 33,298 159,350 - 159,350
Issuance of common stock under
a private placement in
December 1996 3,434,493 2,163,000 - 2,163,000
Issuance of stock to Schering AG
in exchange for debt 487,390 1,712,228 - 1,712,228
Net loss - - (4,296,327) (4,296,327)
__________ ___________ _____________ ___________
BALANCES, MARCH 31, 1997 19,540,413 $40,035,736 $(34,270,192) $5,765,544
========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
For the Year Ended March 31,
1997 1996 1995
____________________________________________
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $(4,296,327) $(5,431,072) $(5,656,149)
Adjustments to net loss:
Depreciation and amortization 443,700 520,714 247,183
Contributed capital for services 159,350 39,962 243,312
Net changes in assets
and liabilities:
Accounts receivable 113,003 305,864 (561,616)
Inventories (450,511) (147,237) (144,982)
Other current assets 492 6,435 (6,773)
Accounts payable 109,799 (257,704) 593,498
Accrued payroll 54,905 (92,512) 52,436
Other accrued liabilities (17,540) (102,080) 273,305
Deferred revenue (316,000) 410,000 156,000
__________ ___________ ___________
Net Cash Used in Operating Activities (4,199,129) (4,747,630) (4,803,786)
__________ ___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
Securities purchased - (1,977,856) (6,951,390)
Securities sold 993,056 4,974,268 9,795,130
Property and equipment (1,617,052) (597,100) (956,487)
Other assets (33,876) (64,916) (65,723)
__________ ___________ ___________
Net Cash Provided By (Used In)
Investing Activities (657,872) 2,334,396 1,821,530
__________ ___________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from common stock 2,163,000 3,454,101 -
Borrowing from long-term debt
subsequently converted to common stock 1,712,228 - -
__________ ___________ ___________
Net Cash Provided by Financing
Activities 3,875,228 3,454,101 -
__________ ___________ ___________
CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash
and cash equivalents (981,773) 1,040,867 (2,982,256)
Cash and cash equivalents at
beginning of year 3,098,251 2,057,384 5,039,640
__________ ___________ ___________
Cash and cash equivalents at
end of year $2,116,478 $3,098,251 $2,057,384
========== =========== ==========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<PAGE>
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 subsidiary,
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 Bioject Medical Systems, Ltd. ("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 terminated in July 1996. 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(R) 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. In October 1996, the Company received 510(k) clearance for a
non-needle disposable vial access device. In March 1997, the Company
received a 510(k) clearance from the FDA to market a version of its
Biojector 2000 with certain additional features.
Since its inception the Company has incurred operating losses and at March 31,
1997 has an accumulated deficit of approximately $34.3 million. 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 flu immunization programs. 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. The Company's ability to achieve and sustain
profitability will depend in part upon the customer acceptance of the
Biojector 2000 system, sustained product performance, implementing additional
product cost reductions and attaining revenues sufficient to support
profitable operations.
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 increase, and its product costs are reduced,
its cost of goods as a percentage of sales will decrease and eventually the
Company will generate net income. 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 increase in its costs
should they occur.
The Company believes that its current cash position and cash received from a
private placement of common stock and warrants in June 1997 (see note 7),
combined with revenues and other cash receipts will not be adequate to fund
the Company's operations through the end of fiscal 1998. The Company has
identified a number of potential financing sources and is pursuing them
aggressively. Even if the Company is successful in raising additional financing
unforeseen costs and expenses or lower than anticipated cash receipts from
product sales or research and development activities could accelerate or
increase 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. However, there can be no assurance
that the Company's efforts will be successful, and there can be no assurance
that such financing will be available on terms which are not significantly
dilutive to existing shareholders. Failure to obtain needed additional capital
on terms acceptable to the Company, or at all, would significantly restrict the
Company's operations and ability to continue product development and growth
and materially adversely affect the Company's business.
The financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts that might result
should the Company be unable to continue as a going concern.
2. ACCOUNTING POLICIES:
CASH EQUIVALENTS
The Company considers cash equivalents to consist of short-term, highly
liquid investments with an original maturity of less than three months.
SECURITIES AVAILABLE FOR SALE
The Company accounts for its investments in marketable securities in
accordance with Financial Accounting Standards Board Statement No. 115,
Accounting for Certain Investments in Debt and Equity Securities (SFAS 115).
Under provisions of SFAS 115, the Company is required to classify and account
for its security investments as trading securities, securities available
for sale or securities held to maturity depending on the Company's intent to
hold or trade the securities at time of purchase. As of March 31, 1997 and
1996, all securities held by the Company consisting entirely of short-term
debt instruments were available for sale and, accordingly, are stated on the
balance sheet at their fair market values which approximate cost. Realized
gains or losses are determined on the specific identification method and are
reflected in the accompanying financial statements. There were no significant
realized gains or losses for fiscal 1997, 1996 and 1995.
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:
<TABLE>
March 31,
1997 1996
__________ __________
<S> <C> <C>
Raw Materials $ 815,868 $ 697,694
Work in Process 9,763 12,467
Finished Goods 880,825 545,784
__________ __________
$1,706,456 $1,255,945
========== ==========
PROPERTY AND EQUIPMENT
For financial statement purposes, depreciation expense on property and
equipment is computed on the straight-line method using the following lives:
Furniture and Fixtures............................5 years
Machinery and Equipment...........................7 years
Computer Equipment................................3 years
Production Molds..................................5 years
Leasehold improvements are amortized on the straight-line method over the
shorter of the remaining terms of the lease or the estimated useful lives of
the assets.
Included in machinery and equipment and production molds are molds, tooling and
production fixtures constructed by the Company under a supply agreement with
Schering AG for the manufacture and sale of a needle-free self-injection
system. The construction of these assets commenced in May and June 1996 and
continued until January 1997 when they were ready for their intended use.
Schering loaned the Company $1.6 million to fund acquisition of the assets,
and therefore, in accordance with SFAS 34, the Company has capitalized
$106,000 of interest incurred on this debt.
OTHER ASSETS
Other assets include costs incurred for the application of patents, net of
amortization on a straight-line basis over 17 years. Accumulated
amortization totalled $144,713 and $114,713 at March 31, 1997 and 1996,
respectively. Amortization expense for the years ended March 31, 1997, 1996
and 1995 totalled $30,000, $20,000 and $31,000 respectively.
ACCOUNTING FOR LONG-LIVED ASSETS
In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets To Be Disposed Of"(SFAS 121), which requires the Company to review
for impairment of its long-lived assets and certain identifiable intangibles
whenever events or changes in circumstances indicate that the carrying
amount of an asset might not be recoverable. In certain situations, an
impairment loss would be recognized. SFAS 121 became effective for the
Company's year ended March 31, 1997. The Company has studied the
implications of SFAS 121 and, based on its evaluation, does not believe
that an adjustment to the carrying value of its long-lived assets is
necessary.
REVENUE RECOGNITION FOR PRODUCT SALES
The Company records revenue from sales of its products upon shipment. In
fiscal 1997, 1996 and 1995, sales to one customer accounted for 17%, 75% and
74% of net sales of products, respectively. At March 31, 1997, 62% of accounts
receivable were accounted for by one customer.
RESEARCH AND DEVELOPMENT AND LICENSING/TECHNOLOGY REVENUES
Licensing fees are recognized as revenue when due and payable. All
licensing fee arrangements for the Company have been on a non-refundable basis
and impose no future performance requirements or other obligations on the
Company. Product development revenue is deferred upon receipt and is
recognized as revenue as qualifying expenditures are incurred. Expenditures
for research and development are charged to expense as incurred.
In March 1994, the Company entered into a joint development agreement with
Schering AG, a major pharmaceutical manufacturer, for the development of an
application specific self injection system. Under terms of the agreement,
the Company received a $500,000 licensing fee in April 1994 and has received
partial funding of product development expenses on an agreed schedule. In
fiscal 1995, the Company received a total of $1.1 million from the
pharmaceutical company, composed of $500,000 in licensing fees which were
recognized as revenue during fiscal 1995 and $600,000 of Phase I product
development revenues, $444,000 of which were recognized as revenue in fiscal
1995. In fiscal 1996, the Company received an additional $660,000 and a total
of $751,000 was recognized as revenue. In fiscal 1997, the Company received
a final product development payments totalling $349,500 and recognized revenue
of $414,500. During fiscal 1997, the Company entered into a supply agreement
with Schering AG and commenced activities related to full production of the
self injector. Schering loaned the Company a total of $1.6 million to purchase
molds and tooling for production of the product. In January 1997, the Company
received notice that its contract with Schering AG would be cancelled. 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 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(R) product. Under terms of the contract, Schering was required to
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, $106,000 of accrued interest was converted into approximately
27,000 shares of Bioject common stock at a conversion price of $3.50 per
share. Schering is obligated to pay Bioject for the cost of product ordered
through the date of cancellation of the contract.
In January 1995, the Company entered into a joint development agreement with
Hoffmann-La Roche, a major pharmaceutical manufacturer, for the development
of application specific products. The Company received a licensing fee
totalling $500,000 which was recognized as revenue in fiscal 1995. The
Company is also receiving specified product development fees on an agreed
upon schedule. In fiscal 1996, the Company received $900,000, of which
$399,000 was recognized as revenue. In fiscal 1997, the Company received
$250,000 in product development fees and recognized revenue of $501,000.
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, Accounting For Income Taxes (SFAS
109). Under the liability method specified by SFAS 109, the deferred tax
assets and liabilities are determined based on the temporary differences
between the financial statement and tax bases of assets and liabilities as
measured by the enacted tax rates for the years in which the taxes are
expected to be paid. At March 31, 1997, the Company had total deferred tax
assets of approximately $13.0 million, consisting principally of available
net operating loss carryforwards. No benefit for these operating losses has
been reflected in the accompanying financial statements as they do not
satisfy the recognition criteria set forth in SFAS 109. Total deferred tax
liabilities were insignificant as of March 31, 1997.
As of March 31, 1997, BMT has net operating loss carryforwards of
approximately $799,000 available to reduce future federal taxable income,
which expire in 2008 through 2012. BI has net operating loss carryforwards of
approximately $34 million available to reduce future federal taxable income,
which expire in 2001 through 2012. Approximately $3.0 million of BI's
carryforwards were generated as a result of deductions related to exercises
of stock options. When utilized, this portion of BI's carryforwards, as tax
effected, will be accounted for as a direct increase to contributed capital
rather than as a reduction of that year's provision for income taxes.
The principal differences between net operating loss carryforwards for
tax purposes and the accumulated deficit result from capitalization of
certain start-up costs and deductions related to the exercise of stock options
for income tax purposes.
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.
NET LOSS PER SHARE
Net loss per share is computed based on the weighted average number of
common shares outstanding during the period. The effects of common stock
equivalents have not been included in the calculation as they would be anti-
dilutive.
3. 401(K) RETIREMENT BENEFIT PLAN:
The Company has a 401(k) Retirement Benefit Plan for its employees. All
employees subject to certain age and length of service requirements are
eligible to participate. The plan permits certain voluntary employee
contributions to be excluded from the employees' current taxable income
under provisions of the Internal Revenue Code Section 401(k) and regulations
thereunder. Effective January 1, 1996, the Company amended the plan to
provide for voluntary employer matches of employee contributions up to 6% of
salary and for discretionary profit sharing contributions to all employees.
Such employer matches and contributions may be in either cash or Company
common stock. For calendar 1996, the Company agreed to match 25% of
employee contributions up to 6% of salary with Company stock. For calendar
1997, the Company has agreed to match 37.5% of employee contributions up to
6% of salary with Company stock. In fiscal 1997 and 1996, the Company
recorded an expense of $25,000 and $4,800, respectively, related to voluntary
employer matches under the 401(k) Plan. The Board of Directors has reserved
up to 100,000 shares of common stock for these voluntary employer matches of
which 31,630 shares have been committed through March 31, 1997.
4. SHAREHOLDERS' EQUITY:
PREFERRED STOCK
The Company has authorized 10 million shares of preferred stock, without par
value, to be issued from time to time with such designations and preferences
and other special rights and qualifications, limitations and restrictions
thereon, as permitted by law and as fixed from time to time by resolution of
the Board of Directors. As of March 31, 1997, no preferred shares had been
issued by the Company.
COMMON STOCK
Holders of common stock are entitled to one vote for each share held of
record on all matters to be voted on by shareholders. No shares have been
issued subject to assessment, and there are no preemptive or conversion
rights and no provision for redemption, purchase or cancellation, surrender
or sinking or purchase funds. Holders of common stock are not entitled to
cumulate their shares in the election of directors. A total of 100,000 shares
of common stock have been reserved by the Board of Directors for issuance to
401(k) plan participants (see note 3) of which 31,630 shares have been issued
through March 31, 1997.
ESCROWED SHARES
As a result of the Company's initial public offering on the Vancouver Stock
Exchange, 1.5 million shares of the Company had been held in escrow pursuant
to an Escrow Agreement dated May 30, 1986, among the Company, WAM Partnership
and the escrow agent, Montreal Trust Company. WAM Partnership was owned by
Carl E. Wilcox, former Chairman and C.E.O., and J. Thomas Morrow, former
Director, and managed by Mr. Wilcox. Both Mr. Wilcox and Mr. Morrow are
founders of the Company. The Escrow Agreement provided that these escrowed
shares would be released from escrow based on a cash flow formula or,
alternatively, the shares could be released by making application and
obtaining consent of the Superintendent of Brokers of British Columbia based
on demonstrating company value. Under the escrow agreement, any shares not
released by July 14, 1996 would be cancelled.
In connection with Mr. Wilcox's resignation as chairman and chief executive
officer of the Company (see Note 6), the Board of Directors granted Mr. Wilcox
a special power of attorney to exclusively perform all acts necessary to obtain
extension of the escrow and/or release of the WAM Partnership escrow shares.
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. This
means that the 1.5 million shares of common stock which had been held under
this escrow arrangement are now held by the owners of the shares without
risk of cancellation and may be sold. Upon release, approximately 150,000
of these shares were considered to have been contributed back to the Company
and reissued to certain former employees in consideration for past services
rendered on behalf of the Company. The Company recorded the shares as
contributed capital with a corresponding non-cash charge to compensation
expense at the fair market value of the stock on the date of issuance.
Accordingly, a non-cash charge of $120,000 was recorded in the financial
statements in the first quarter of fiscal 1997.
STOCK OPTIONS
Options may be granted to directors, officers and employees of the Company
by the Board of Directors under terms of the Bioject Medical Technologies
Inc. 1992 Stock Incentive Plan (the "Plan"), which was approved by the
Company's shareholders on November 20, 1992 and adopted by the Board
effective December 17, 1992. Under the terms of the Plan, eligible employees
may receive statutory and nonstatutory stock options, stock bonuses and
stock appreciation rights for purchase of shares of the Company's common
stock at prices and vesting as determined by a committee of the Board.
Except for options whose terms were extended, options granted under a prior
plan maintain their previous option price, vesting and expiration dates. As
amended in fiscal 1995, a total of up to 3,000,000 shares of the Company's
common stock including options outstanding at the date of initial
shareholder approval of the Plan may be granted under the Plan. Options
outstanding at March 31, 1997 expire through March 31, 2005.
In October 1995, the Financial Accounting Standards Board issued Statement
No. 123, Accounting for Stock-Based Compensation (SFAS 123), which
establishes a fair value-based method of accounting for stock-based
compensation plans and requires additional disclosures for those companies
that elect not to adopt the new method of accounting. The Company has elected
to continue to account for stock options under APB Opinion No. 25, Accounting
for Stock Issued to Employees. However, as prescribed by SFAS 123 the Company
has computed, for pro forma disclosure purposes, the value of all options
granted during fiscal year 1997 and 1996 using the Black-Scholes option-pricing
model, using the following weighted average assumptions for grants in 1997 and
1996:
Risk-free interest rate 6%
Expected dividend yield 0%
Expected life 1.5 years
Expected volatility 47%
The total value of options granted during 1997 and 1996 would be amortized on
a pro forma basis over the vesting period of the options. Options generally
vest equally over three years. If the Company had accounted for these plans in
accordance with SFAS 123, the Company's net loss and net loss per share would
have increased as reflected in the following pro forma amounts
(in thousands of $):
Year ended March 31,
1997 1996
______ ______
Net loss:
As reported $(4,296) $(5,431)
Pro forma (4,480) (5,541)
Net loss per share:
As reported (0.26) (0.39)
Pro forma (0.27) (0.39)
The above determination of proforma expense has been calculated consistent
with SFAS 123 which does not take into consideration limitations on
exercisability and transferability imposed by the Company's Stock Incentive
Plan. Further, the valuation model is heavily weighted to stock price
volatility, even with a declining stock price, which tends to increase
calculated value. The actual value, if any, and, therefore, imputed
proforma expense will vary based on the exercise date and the market price
of the related common stock when sold.
</TABLE>
<TABLE>
<CAPTION>
Stock option activity is summarized as follows:
Exercise
Shares Price Amount
_________ ____________ __________
<S> <C> <C> <C>
Balances March 31, 1994 1,068,625 $3.20 - 5.00 $4,424,252
Options granted 1,427,250 2.60 - 4.75 5,387,632
Options exercised - - -
Options canceled or expired (952,225) 3.00 - 5.00 (3,904,917)
_________ ____________ ___________
Balances March 31, 1995 1,543,650 2.60 - 5.00 5,906,967
Options granted 1,316,439 1.25 - 4.50 3,129,177
Options exercised - - -
Options canceled or expired (1,161,150) 2.34 - 5.00 (4,302,332)
__________ ____________ ___________
Balances March 31, 1996 1,698,939 1.25 - 4.50 4,733,812
Options granted 705,525 1.00 - 1.30 830,006
Options exercised -
Options canceled or expired (472,906) 1.00 - 4.00 (809,880)
__________ ____________ ___________
Balances March 31, 1997 1,931,558 $1.00 - 4.50 $4,753,938
========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
The following table sets forth as of March 31, 1997 the number of shares
outstanding, exercise price, weighted average remaining contractual life,
weighted average exercise price, number of exercisable shares and weighted
average exercise price of exercisable options by groups of similar price and
grant date:
<S>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
Exercise Outstanding Weighted Average Weighted Exercisable Weighted
Price shares Remaining Average Options Average
at 3/31/97 Contractual Exercise Exercise
Life(Years) Price Price
- ------ ----------- ----------- -------- ---------- --------
<C> <C> <C> <C> <C> <C>
$1.00- 1.25 690,125 4.37 $1.17 476,688 $1.23
1.26 - 2.50 338,933 5.01 1.57 181,999 1.75
2.51 - 3.75 380,000 6.60 3.07 305,000 2.97
3.76 - 4.88 522,500 4.29 4.08 322,500 4.16
</TABLE>
As of March 31, 1997, current officers and employees of the Company held
approximately 1.0 million stock options, under the original terms of their
issuance included above. Subsequent to year end, the Stock Option Committee of
the Board of Directors approved a plan whereby employees may elect to reprice
their outstanding options to an exercise price of $.75 per share subject to
a 25% reduction in outstanding option shares and a deferral of exercisability
until April 3, 1998.
<TABLE>
<CAPTION>
WARRANTS
All warrants described below have been issued in connection with private
equity placements by the Company and were immediately exercisable upon
issuance. Warrant activity is summarized as follows:
Exercise
Shares Price Amount
_________ ____________ __________
<S> <C> <C> <C>
Balances March 31, 1994 60,000 $ 4.50 $ 270,000
Warrants exercised - - -
Warrants canceled or expired (60,000) 4.50 (270,000)
_________ ____________ __________
Balances March 31, 1995 - - -
Warrants issued expiring Nov. 2000 1,864,343 1.97 - 2.00 3,724,401
Warrants issued expiring Feb. 1998 575,752 2.00 1,151,505
Warrants exercised - - -
Warrants canceled or expired - - -
_________ ____________ __________
Balances March 31, 1996 2,440,095 1.97 - 2.00 4,875,906
Warrants issued expiring Dec. 2001 3,590,490 .82 - 1.00 3,562,413
Warrants exercised - - -
Warrants canceled or expired - - -
_________ ____________ __________
Balances March 31, 1997 6,030,585 $ .82 - 2.00 $8,438,319
========== ============ ==========
</TABLE>
5. COMMITMENTS:
BI has operating leases for its manufacturing, sales and administrative
facilities and warehouse facilities with options to renew for an additional
five-year term upon expiration. BI also leases office equipment under
operating leases for periods up to five years. At March 31, 1997, future
minimum payments under noncancellable operating leases with terms in
excess of one year are as follows:
Year Ending March 31, Facilities Equipment
__________ _________
1998 $212,000 $45,000
1999 219,000 24,000
2000 220,000 4,000
2001 235,000 3,000
2002 236,000 -
118,000 -
Thereafter
Lease expense for the years ended March 31, 1997, 1996 and 1995 totalled
$283,000,$221,000, and $214,000, respectively.
6. RELATED PARTY TRANSACTIONS:
On January 12, 1995, the Board of Directors announced the resignation of the
Company's Chairman and Chief Executive Officer, Carl E. Wilcox. In
consideration for Mr. Wilcox's long service to the Company, the Board
granted Mr. Wilcox 100,000 shares of common stock valued at $241,000 and
cash compensation totalling $247,000. The Board agreed to pay Mr. Wilcox
$20,000 per year for two years under a covenant not-to-compete. The Board also
vested 200,000 previously granted option shares at $4.00 per share and extended
the expiration date to January 14, 1998. The Board granted Mr. Wilcox
a special power of attorney to exclusively perform all acts necessary to
obtain extension and/or release of the WAM Partnership escrow shares.
In addition, the Board agreed to pay up to $10,000 of costs associated with
such extension and/or release. On June 3, 1996, the British Columbia Securities
Commission informed the Company that release of the escrow shares had been
granted (see Note 4). The value of the severance agreement totalling $488,000
was recorded as general and administrative expense in the accompanying
financial statements in fiscal 1995.
7. SUBSEQUENT EVENT:
On June 18, 1997, the Company completed a private placement of units (one unit
consisting of one share of common stock and one-half warrant for purchase of
common stock at $.71 per share)for total proceeds of $750,000. The Company
has committed to register the $1.7 million shares and, if possible, the common
shares underlying the 872,000 warrants issued in the private placement on a
Form S-3 registration statement within 20 days of close of the transaction.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Bioject Medical Technologies
Inc. has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized:
BIOJECT MEDICAL TECHNOLOGIES INC.
(Registrant)
January 22, 1998 By: /S/ PEGGY J. MILLER
Peggy J. Miller
Vice President, Chief Financial
Officer and Secretary/Treasurer
INDEX TO EXHIBITS
Exhibit
Number Exhibit Description
_______ __________________________________________________________
4.3* Bioject Medical Technologies, Inc. 1992 Stock Incentive Plan,
as amended through July 25, 1996.
10.36* Form of Series "F" Common Stock Purchase Warrant.
10.37* Form of Series "G" Common Stock Purchase Warrant.
10.38* Form of Registration Rights Agreement between Bioject Medical
Technologies Inc. and the participants in the 1997 private
placement.
23.2 Consent of Independent Public Accountants
27.1* Financial Data Schedule
*Previously filed with 10-K on July 1, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 10-K into the Company's previously filed
Registration Statements on Form S-3, File Nos. 333-80679, 333-18933,
333-30955 and 333-39421, and Registration Statements on Form S-8, File Nos.
33-94400, 33-56454, 333-42156 and 333-37017.
/S/ ARTHUR ANDERSEN LLP
Portland, Oregon
January 21, 1998
