U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-QSB/A
X Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended MARCH 31, 1996
Commission File Number: 0-16375
THERMOGENESIS CORP.
(Exact name of Small Business issuer as specified in its charter)
DELAWARE 94-3018487
(State or other jurisdiction (I.R.S.Employer
of incorporation or organization) Identification No.)
11431 SUNRISE GOLD, STE. A, RANCHO CORDOVA, CA. 95742
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (916) 638-8357
Former name, former address and former fiscal year, if changed since last
report.
Check whether the issuer: (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__
The issuer had 24,765,434 shares of common stock outstanding on May 7, 1996.
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1
THERMOGENESIS CORP.
INDEX
PART I
PAGE NUMBER
Condensed Financial Statements (Unaudited):
Condensed Balance Sheets at
March 31, 1996 and June 30, 1995 2
Condensed Statements of Operations
for the Three and Nine Months ended
March 31, 1996 and 1995 4
Condensed Statements of Cash Flows
for the Nine Months Ended
March 31, 1996 and 1995 5
Notes to Condensed Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II
Item 6. Exhibits and Reports on Form 8-K. 10
SIGNATURES 11
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2
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THERMOGENESIS CORPORATION
Condensed Balance Sheet
(Unaudited)
March 31, June 30,
ASSETS 1996 1995
Current assets:
Cash and cash equivalents $563,032 $325,965
Accounts receivable, net of allowance for doubtful
of $97,913 ($72,913 at June 30, 1995) 1,494,585 675,240
Net investment in sales-type leases 35,731 35,731
Inventory 1,352,893 1,014,309
Prepaid expenses 72,681 9,711
Total current assets 3,518,922 2,060,956
Equipment, at cost less accumulated depreciation
of $263,205 ($200,557 at June 30, 1995) 625,225 176,535
Long-term net investment in sales-type leases 59,252 86,460
Prepaid royalties, net of accumulated amortization
of $323,870 ($277,259 at June 30, 1995) 235,630 277,241
Leased equipment, net 22,688 40,778
Other assets 18,933 20,869
$4,480,650 $2,662,839
See accompanying notes.
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3
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THERMOGENESIS CORPORATION
Condensed Balance Sheet (Cont'd)
(Unaudited)
March 31, June 30,
1996 1995
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $603,158 $512,931
Current portion of long-term lease obligations 90,135 --
Accrued payroll and related expenses 172,438 55,346
Deferred revenue -- 60,000
Customer deposits 165,630 19,523
Total current liabilities 1,031,361 647,800
Deferred rent 9,326 14,456
Long-term lease obligations 234,032 --
Commitments
Shareholders' equity:
Common stock, $.001 par value;
50,000,000 shares authorized:
24,765,434 issued and outstanding
(20,355,434 at June 30, 1995) 24,765 20,356
Paid in capital in excess of par 9,681,723 7,794,621
Accumulated deficit (6,500,557) (5,814,394)
Total shareholders' equity 3,205,931 2,000,583
$4,480,650 $2,662,839
See accompanying notes.
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4
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THERMOGENESIS CORPORATION
Condensed Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31, March 31, March 31,
1996 1995 1996 1995
Net sales $1,062,503 $907,364 $2,744,485 $2,745,526
Cost of Sales 623,624 619,133 1,552,630 1,641,552
Gross profit 438,879 288,231 1,191,855 1,103,974
Expenses:
General and administrative expense 79,109 83,391 281,614 247,891
Selling and marketing expense 327,763 181,831 713,331 561,046
Research and development expense 437,695 123,602 881,796 294,774
Total expenses 844,567 388,824 1,876,741 1,103,711
Interest income 11,149 4,259 19,842 8,929
Interest expense 9,781 -- 21,119 --
Net income (loss) ($404,320) ($96,334) ($686,163) $9,192
Net income (loss) per share ($0.02) ($0.00) ($0.03) $0.00
Shares used in computing
net income (loss) per share 24,765,000 20,349,000 22,318,000 20,858,000
See accompanying notes.
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5
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THERMOGENESIS CORPORATION
Condensed Statements of Cash Flows
Nine Months Ended March 31, 1996 and 1995
Increase (Decrease) in Cash
(Unaudited)
1996 1995
Cash flows from operating activities:
Net income (loss) ($686,163) $9,192
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization 127,647 150,447
Net changes in operating assets and libilities:
Accounts receivable (819,345) 48,920
Investment in sales type leases 27,208 (11,898)
Inventory (338,584) (320,252)
Prepaid expenses (62,970) 3,888
Accounts payable and accrued liabilies 90,227 99,973
Accrued payroll and related expenses 117,092 (12,718)
Customer deposits 146,107 (35,791)
Deferred revenue (60,000) --
Deferred rent (5,130) --
Total adjustments (777,748) (77,431)
Net cash used in operating activities (1,463,911) (68,239)
Cash flows from investing activities:
Capital expenditures (160,035) (144,559)
Sale of investments -- 45,000
Net cash used in investing activities (160,035) (99,559)
Cash flows from financing activities:
Issuance of common stock 1,891,511 10,600
Principal payments on long-term lease obligations (30,498) --
Net cash provided by financing activities 1,861,013 10,600
Net increase (decrease) in cash 237,067 (157,198)
Cash at beginning of period 325,965 347,769
Cash at end of period $563,032 $190,571
See accompanying notes.
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6
THERMOGENESIS CORP.
Notes to Condensed Financial Statements
March 31, 1996
(Unaudited)
1. Interim Reporting.
These Condensed Financial Statements should be read in conjunction with the
Company's Annual Report (Form 10-KSB) for the year ended June 30, 1995. In
the opinion of management, all adjustments (which consist of only normally
recurring adjustments) necessary for a fair presentation of the condensed
financial statements have been made. The results of operations for the
three and nine months ended March 31, 1996 are not necessarily indicative
of the results to be expected for the full year.
INVENTORIES
Inventories are stated at the lower of cost (First-In, First-Out) or market
and consist approximately of the following:
March 31, June 30,
1996 1995
Raw materials $ 552,500 $ 453,669
Work in process 137,520 113,508
Finished goods 662,873 447,132
Total $ 1,352,893 $ 1,014,309
NET INVESTMENT IN SALES TYPE LEASES
The net investment in sales type leases consists of the following:
March 31, June 30,
1996 1995
Total minimum lease payments receivable $106,185 $ 140,020
Less unearned interest (11,202) (17,829)
Net investment in sales type leases $ 94,983 $ 122,191
STATEMENT OF CASH FLOWS
The Company incurred approximately $354,500 in long-term lease obligations
for the purchase of computer equipment.
EQUITY
The Company completed a private placement of 4,400,000 common shares on
December 9, 1995 and received $1,891,511 net of expenses. The placement
consisted of 88 units. Each unit consisted of 50,000 common shares and
12,500 warrants to purchase common shares at $1.50 per share for six
months. The Company filed a registration statement covering the shares
issued within 90 days of completion of the offering as required by the
terms of the financing. The shares are subject to a six month lockup period
which will expire on approximately September 22, 1996, except under limited
circumstances providing for early release from the lockup by the placement
agent.
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7
THERMOGENESIS CORP.
Notes to Condensed Financial Statements (Cont'd)
March 31, 1996
(Unaudited)
2. Subsequent events
On May 9, 1996, the Company received 510K permission to market two licensed
hand held disposable applicators designed to improve a surgeon's ability to
achieve hemostasis and tissue bonding at a wound site during surgery. The
applicators combine fibrinogen and thrombin at a wound site in a spray,
line or dot that converts into an adhesive clot in less than one minute.
The Company believes, based upon the current usage of fibrin sealant, that
approximately a two million unit annual market for the applicators exists
in Europe, Japan, Canada and South America where fibrin sealant is a
licensed drug product. The Company expects to begin marketing the
applicators, expected to be priced between $30-$50 each, in those markets
late in this calendar year.
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8
Management's Discussion and Analysis of
Financial Condition and Results of Operation
for the Three and Nine Months Ended March 31, 1996
The following is Management's discussion and analysis of certain
significant factors which have affected the Company's financial condition
and results of operations during the periods included in the accompanying
financial statements.
RESULTS OF OPERATIONS
SALES AND REVENUES:
Net sales increased for the three months ended March 31, 1996 by
approximately 17% while showing no increase for the nine months ended March
31, 1996 from the corresponding 1995 periods. Sales increases for the three
month period were primarily due to increased sales of the Company's human
blood plasma freezer and thawer products. The nine month period showed no
increase due to lower than expect sales of freezers and thawers in the
second fiscal quarter.
Cost of sales as a percent of sales for the three and nine months ended
March 31, 1996 were approximately 59% and 57% respectively, as compared to
68% and 60% respectively, for the corresponding 1995 periods. The decrease
in cost of sales as a percent of sales was due to improved manufacturing
methods and a reduction of component costs.
General and administrative expenses for the three and nine months ended
March 31, 1996 decreased by 5% for the three month period but increased by
14% for the nine month period from the corresponding periods in 1995. The
year to date increase was due to expanded staff and space. The quarter
decrease was due to lower than expected legal and accounting expenses.
Selling and marketing expenses for the three and nine months ended March
31, 1996 increased by 80% and 27%, respectively, over the corresponding
periods in 1995. Expenses increased due to added personnel, additional
space and related operating expenses. These increased expenses are intended
to upgrade and prepare sales, marketing and customer service personnel and
systems for new products nearing completion of research and development.
Research and development expenses for the three and nine months ended March
31, 1996, increased by 254% and 199%, respectively, over the respective
1995 periods. The increase was due to accelerated research and development
of three programs: (i) a computerized human blood plasma sample storage and
retrieval system, (ii) a computerized liquid nitrogen biological storage
and retrieval system and (iii) a system that converts a surgical patient's
blood plasma into an autologous tissue sealant and hemostatic agent.
Additional expenses have been incurred for continuing development of
computer controllers for plasma thawers and freezers which feature remote
diagnostics and compliance with CE96 European Union electronics standards.
Management believes that research and development is essential to
maintaining the Company's market position. Therefore, the Company
considers such costs a continuing cost of doing business.
LIQUIDITY AND CAPITAL RESOURCES
The Company has consumed cash resources for operating activities. These
resources have been primarily consumed for marketing activities and product
development.
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9
Management's Discussion and Analysis of
Financial Condition and Results of Operation
for the Three and Nine Months Ended March 31, 1996 (Cont'd)
LIQUIDITY AND CAPITAL RESOURCES (CONT'D)
Working capital increased by $1,074,405 from June 30, 1995. This increase
was primarily due to the issuance of common stock which raised $1,891,511
which was offset by increases in accounts receivable, increases in
inventory and operating losses primarily due to new product development.
The Company believes it has sufficient resources to continue to operate for
the next twelve months.
The Company has no significant outstanding capital commitments at March 31,
1996.
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10
PART II - OTHER INFORMATION
Item 1. Legal proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Default Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None
(b) Reports on Form 8-K.
None
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11
THERMOGENESIS CORP.
Signatures
In accordance with the requirements of the Exchange Act, the
registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THERMOGENESIS CORP.
(Registrant)
Dated May 31, 1996
s/ Merrill L. Parker
Merrill L. Parker,
Controller (Principal Financial and Accounting Officer)
s/ Philip H. Coelho
Philip H. Coelho,
President and Chief Executive Officer
(Principal Executive Officer)
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<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S
FORM 10-QSB/A FOR THE PERIOD ENDED MARCH 31, 1996, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 563,032
<SECURITIES> 0
<RECEIVABLES> 1,494,585
<ALLOWANCES> 97,913
<INVENTORY> 1,352,893
<CURRENT-ASSETS> 3,518,922
<PP&E> 888,430
<DEPRECIATION> 263,205
<TOTAL-ASSETS> 4,480,650
<CURRENT-LIABILITIES> 1,031,361
<BONDS> 0
0
0
<COMMON> 24,765
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,480,650
<SALES> 2,744,485
<TOTAL-REVENUES> 2,744,485
<CGS> 1,522,630
<TOTAL-COSTS> 1,876,741
<OTHER-EXPENSES> 1,277
<LOSS-PROVISION> 20,000
<INTEREST-EXPENSE> 21,119
<INCOME-PRETAX> (686,163)
<INCOME-TAX> 0
<INCOME-CONTINUING> (686,163)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (686,163)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
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