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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JULY 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-17521
ZILA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 86-0619668
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
5227 NORTH 7TH STREET, PHOENIX, ARIZONA 85014-2800
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (602) 266-6700
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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NONE N/A
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $.001 PAR VALUE
(TITLE OF CLASS)
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 registrant's 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. [ ]
At September 30, 1999, the aggregate market value of common stock held
by non-affiliates of the registrant was $129,528,641.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ] N/A
APPLICABLE ONLY TO CORPORATE REGISTRANTS
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
At September 30, 1999, the number of shares of common stock outstanding
was 40,863,895.
DOCUMENTS INCORPORATED BY REFERENCE
Materials from the Registrant's 1999 Proxy Statement have been
incorporated by reference into Part III, Items 10, 11, 12 and 13.
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The undersigned registrant hereby amends the following items, financial
statements, exhibits and other portions of its Annual Report on Form 10-K for
the fiscal year ended July 31, 1999 as set forth in the pages attached hereto:
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K is hereby amended to include certain pro forma information,
relating to the disposition of substantially all of the assets of Cygnus
Imaging, Inc., in Note 14 of the Consolidated Financial Statements of the
Company.
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES, AND REPORTS ON FORM 8-K
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METHOD OF FILING
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(a) Financial Statements
(1) Report of Deloitte & Touche LLP Filed herewith
(2) Consolidated Financial Statements and Notes thereto of the
Company including Consolidated Balance Sheets as of July 31,
1999 and 1998 and related Consolidated Statements of
Operations, Shareholders' Equity, and Cash Flows for each of
the years in the three-year period ended July 31, 1999 Filed herewith
(b) Reports on Form 8-K for the quarter ended July 31, 1999.
None.
(c) Exhibits.
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EXHIBIT
NUMBER DESCRIPTION METHOD OF FILING
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3-A Certificate of Incorporation, as amended **
3-B Bylaws **
3-C Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock D
4-A Specimen Stock Certificate **
4-B Form Stock Purchase Warrant re Series A Preferred Stock D
4-C Deere Park Capital Management Warrant C
4-D Bartholomew Investment, L.P. Warrant C
10-A Revolving Line of Credit Loan Agreement dated February 1, 1999 between
Zila, Inc. and Bank One, Arizona **
10-B# Stock Option Award Plan (as amended through April 10, 1991) A
10-C# Non-Employee Directors Stock Option Plan (as amended through April 10,
1991) A
10-D# 1997 Stock Option Award Plan D
10-E Agreement dated November 26, 1996 between Cheseborough Ponds USA Co and
Zila Pharmaceuticals, Inc. B
10-F Private Equity Line of Credit between Deere Park Capital Management
and Zila, Inc. Dated as of April 30, 1997 C
10-G Amendment to Private Equity Line of Credit Agreement C
10-H Registration Rights Agreement dated as of May 9, 1997 between Zila,
Inc. and Deere Park Capital Management C
10-I Registration Rights Agreement dated as of May 9, 1997 between Zila,
Inc. and Bartholomew Investment, L.P. C
10-J Securities Purchase Agreement dated as of October 17, 1997 by and among
Zila, Inc. and certain investors D
10-K Registration Rights Agreement dated October 17, 1997 by and among Zila,
Inc. and certain investors D
10-L Asset Purchase Agreement dated October 28, 1999 between Zila, Inc.,
Cygnus
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Imaging, Inc. and Procare Laboratories, Inc. **
10-M Secured Note dated October 28, 1999 between Zila, Inc. and Procare
Laboratories, Inc. **
21 Subsidiaries of Registrant E
23 Consent of Deloitte & Touche LLP (regarding Form S-8 and Form S-3
Registration Statements) **
24-A Power of Attorney of Joseph Hines **
24-B Power of Attorney of Bradley C. Anderson **
24-C Power of Attorney of Carl A. Schroeder **
24-D Power of Attorney of Patrick M. Lonergan **
24-E Power of Attorney of Michael S. Lesser **
24-F Power of Attorney of Curtis M. Rocca **
24-G Power of Attorney of Christopher D. Johnson **
24-H Power of Attorney of Kevin J. Tourek **
27 Financial Data Schedule **
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** Previously filed
A Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarterly period ended January 31, 1996, as amended
B Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarterly period ended October 31, 1996, as amended
C Incorporated by reference to the Company's Form S-3 Registration
Statement No. 333-31651
D Incorporated by reference to the Company's Annual Report on Form 10-K
for fiscal year ended July 31, 1997
E Incorporated by reference to the Company's Annual Report on Form 10-K
for fiscal Year ended July 31, 1998
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14. SUBSEQUENT EVENT
On October 28, 1999, Cygnus completed the sale of substantially all of its
assets and certain of its liabilities to Procare Laboratories, Inc. ("Procare"),
of Scottsdale, Arizona for approximately $4.0 million. Procare is controlled by
the former owner and President of Cygnus, Egidio Cianciosi. The purchase price
was paid through the issuance of a note receivable which was collateralized by
the assets of Procare and matured November 10, 1999. The note was paid in full
on November 10, 1999.
The following unaudited pro forma condensed financial information presents
the consolidated statement of operations as if the sale had occurred as of
August 1, 1998 and balance sheet as if the sale had occurred on July 31, 1999.
The pro forma data are not necessarily indicative of the financial position or
results of operations which would actually have been reported had the
transaction been consummated at the date mentioned above or which may be
reported in the future.
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Unaudited Condensed Statement of Operations
Year ended July 31, 1999 Historical
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(in thousands except per share data) Zila Pro forma
Consolidated Cygnus (a) Adjustments (b) Pro Forma
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Net revenues $71,295 $1,781 $69,514
Cost of products sold 34,335 1,759 32,576
Selling, general & administrative expenses 31,853 3,243 28,610
Research & development expenses 3,989 - 3,989
Depreciation & amortization 3,582 423 3,159
(Loss) income from operations (2,464) (3,644) 1,180
Net (loss) income (1,967) 38,013 1,695
Net (loss) income (basic) $(0.05) ($0.09) $0.04
Basic shares outstanding 38,013 38,013 38,013
Net (loss) income (diluted) $(0.05) ($0.09) $0.04
Diluted shares outstanding 38,013 38,013 40,394
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Unaudited Condensed Balance Sheet as of July 31, 1999
(in thousands)
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Trade receivables-net $8,741 $707 $8,034
Inventories - net 11,406 895 10,511
Total current assets 30,750 1,701 4,000 33,049
Goodwill - net 15,680 1,776 13,904
Trademarks - net 10,782 - 10,782
Total assets 76,555 3,833 4,000 76,722
Total current liabilities 8,704 36 8,668
Long-term debt 9,578 - 9,578
Redeemable preferred stock 8,787 - 8,787
Stockholders equity 49,487 (203) 49,690
Total liabilities & stockholders equity 76,555 (167) 76,722
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a. Represents Cygnus balances as of and for the year ended July
31, 1999. These amounts are removed to reflect the sale of
assets and the corresponding revenue and expenses thereby
reducing the consolidated balances for pro forma purposes.
b. The Company believes that no pro forma adjustments are
required other than the proceeds to be received on the sale.
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements No.
33-32805 and No. 33-32970 of Zila, Inc. on Form S-8 and Registration Statements
No. 33-46239, No. 333-06019, No. 333-00645 and No. 333-31651 of Zila, Inc. on
Form S-3 of our report dated October 27, 1999 appearing in this Annual Report on
Form 10-K/A of Zila, Inc. for the year ended July 31, 1999.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
December 3, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, this 3rd day of December, 1999.
ZILA, INC., a Delaware corporation
By /s/ BRADLEY C. ANDERSON
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Bradley C. Anderson
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
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