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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2000
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[ ] 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. 33-245-66-A
BIO-LOK INTERNATIONAL INC.
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(Exact name of Registrant as specified in its Charter)
DELAWARE 65-0317138
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(State or other jurisdiction of (IRS Employee
incorporation or organization) Identification No.)
312 S. MILITARY TRAIL, DEERFIELD BEACH, FLORIDA 33442
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code (954) 698-9998
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. YES [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: AS OF APRIL 30, 2000, 6,055,358
SHARES OF COMMON STOCK AT A PAR VALUE OF $.01
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BIO-LOK INTERNATIONAL INC.
INDEX
<TABLE>
<CAPTION>
PAGE #
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<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets for April 30,
2000 and October 31, 1999............................................ 3
Condensed Consolidated Statements of Income Three and
Six months ended April 30, 2000 and 1999............................. 4
Condensed Consolidated Statements of Cash Flows Six
months ended April 30, 2000 and 1999................................. 5
Notes to Condensed Consolidated Financial Statements........................... 5
Item 2. Management's Discussion and Analysis or Plan of Operations
Results of Operations.......................................................... 7
Financial Condition............................................................ 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................................................. 8
Item 2. Changes in Securities......................................................... 8
Item 3. Defaults Upon Senior Securities.............................................. 8
Item 4. Submission of Matters to a Vote of Security Holders.......................... 8
Item 5. Other Information............................................................ 8
Item 6. Exhibits and Reports on Form 8-K............................................. 8
</TABLE>
Signature
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIO-LOK INTERNATIONAL INC.
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
April 30, 2000 October 31, 1999
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Unaudited Audited
<S> <C> <C>
ASSETS
Current Assets
Cash $ 60,292 $ 17,079
Accounts Receivable (Net) 515,455 390,008
Inventory 966,163 952,433
Other Current Assets 27,402 21,749
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Total Current Assets 1,569,312 1,381,269
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Net Machinery & Equipment 412,451 185,848
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Other Assets - Inventory 250,666 278,623
- Other 23,685 24,585
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Total Other Assets 274,351 303,208
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TOTAL ASSETS $ 2,256,114 $ 1,870,325
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LIABILITIES & EQUITY
Current Liabilities
Revolving Loan Payable $ 437,438 $ 417,410
Accounts Payable - trade & accrued expenses 97,873 72,338
Accounts Payable - other 7,720 12,279
Due to related parties 18,557 23,551
Current Portion of LTD 279,324 260,474
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Total Current Liabilities 840,812 786,052
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Long Term Debt
A/P Plan Pymts 232,352 275,596
Other Long Term Debt 211,628 54,040
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Total Long Term Debt 443,980 329,636
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Total Liabilities 1,284,892 1,115,688
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Equity
Common Stock - authorized 10,000,000 par value $.01;
outstanding 6,055,358 & 5,642,275 shares respectively; 60,554 56,423
Paid-in Capital 2,218,136 2,172,267
Retained Earnings (1,524,244) (1,474,053)
Retained Earnings - CY 216,776 0
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Total Equity 971,222 754,637
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TOTAL LIABILITIES & EQUITY $ 2,256,114 $ 1,870,325
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</TABLE>
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BIO-LOK INTERNATIONAL INC.
Condensed Consolidated Operating Results
Unaudited
<TABLE>
<CAPTION>
Three Months Ended April 30, Six Months Ended April 30,
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2000 1999 2000 1999
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<S> <C> <C> <C> <C>
NET SALES $ 664,701 $ 375,117 $ 1,117,304 $ 641,396
Cost of Goods Sold 200,268 118,107 350,999 201,010
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GROSS PROFIT 464,433 257,010 766,305 440,386
Selling 94,402 51,124 135,687 100,090
Admin. & General Exp 183,362 137,043 339,245 287,332
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277,764 188,167 474,932 387,422
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INCOME FROM OPERATIONS 186,669 68,843 291,373 52,964
Other (Income) & Expense 34,499 57,039 74,597 88,207
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Income before Taxes 152,169 11,804 216,776 (35,243)
Income Taxes 0 0 0 0
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NET INCOME (loss) $ 152,169 $ 11,804 $ 216,776 $ 35,243)
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Net Income Available to
Common Share Owners $ 152,169 $ 11,804 $ 216,776 $ (35,243)
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Net Income per Common Share $ .03 $ -- $ .04 $ --
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Dividends per Common Share $ -0- $ -0- $ -0- $ -0-
=========== =========== =========== ===========
Average Common Shares
Outstanding 5,859,802 4,432,275 5,756,457 4,331,942
</TABLE>
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BIO-LOK INTERNATIONAL INC.
Condensed Consolidated Statement of Cash Flow
Unaudited
<TABLE>
<CAPTION>
Six Months Ended April 30,
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2000 1999
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<S> <C> <C>
OPERATING ACTIVITIES:
Net Income (Loss) $ 216,776 $ (35,243)
Adjustment to reconcile:
Depreciation 32,091 30,624
Stock issued for Services 0 70,840
Change in Current assets & liabilities:
(Incr.) decr. in accts. rec (121,702) (32,097)
(Incr.) decr. in inventory 14,227 (31,597)
(Incr.) decr. in prepaid & other 900 (7,931)
(Incr.) decr. in deposits (5,653) 0
Incr. (decr.) in A/P & Accr. Exp 14,960 28,180
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Net Cash (Provided) by Operating Activities 151,599 22,786
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FROM INVESTING ACTIVITIES:
Property, Plant & Equipment (23,375) (306)
Cash received in Orthogen Corporation purchase 1,214 0
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Net Cash (used) for Investing Activities (22,161) (306)
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FROM FINANCING ACTIVITIES:
Net Proceeds - revolving loan 20,028 24,713
Repayment of Long Term Debt (106,253) (37,940)
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Net Cash (used) for Financing Activities (86,225) (13,227)
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NET INCREASE (DECREASE) IN CASH $ 43,213 $ 9,253
Cash - Beginning of Period 17,079 373
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Cash - End of Period $ 60,292 $ 9,626
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Interest Paid $ 23,976 $ 26,434
Income Taxes Paid $ -0- $ -0-
</TABLE>
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BIO-LOK INTERNATIONAL INC.
Notes to Condensed Consolidated Financial Statements
Note A - Basis of Presentation. The financial statement for the second quarter
and year-to-date 2000 consists of all the accounts of Bio-Lok International Inc.
("BLLI") and its wholly owned subsidiaries. Micro-Lok Mexico was reclassified to
a wholly owned subsidiary as of the 2nd quarter and results have been restated
for the fiscal year 2000. Orthogen Corporation was acquired effective April 2000
and is being accounted for as separate wholly owned subsidiary. The entities are
not separately presented herewith since currently they represent less than 10%
of the corporation's revenues (see Change in Business Activity for more
information).
Note B - Nature of Business. BLLI is a manufacturer and distributor, both
domestic and internationally, of precision dental implants, related prosthetics,
associated tools, devices and irrigated drills. Domestically product is sold
directly to clinicians and internationally is sold to distributors or JV
entities that, in turn, sell the product to clinicians within their respective
markets.
Bio-Lok's principal product consists of a line of dental implants, their
prosthetic components, tools, devices and irrigated spade drills. The dental
implants are the foundation upon which natural looking teeth are placed via a
sound and lasting prosthesis. Dental implants are small anchor (root form)
shaped like screws or cylinders which when placed become an artificial
replacement of the natural roots, are made out of bio-compatible titanium, and
are placed into the maxilla and mandible of a patient. Many of the implants have
various coatings or treatments (Hydroxylapatite, Titanium Plasma Sprayed, or are
treated via a resorbable blasted material - RBM, etc.) which are bonded to the
implant to enhance the bone growth process -improve osseointegration.
Dental implant systems are placed by trained dentists, oral surgeons,
periodontists, implantologists, etc.. Implants can have a high success rate if
placed properly and expertly, and with proper oral care and regular dental
visits have lasted as long as 20 years and may last a lifetime. Micro-Lok
implants have over a 98.5% success rate as shown in university studies.
The dental products Bio-Lok manufactures and market include the following:
- implants in a 3.45mm, 4.00mm, 5.00mm and 6.50mm platform consisting
from 8.0mm to 18mm long and offered in various body styles and
designs;
- an extensive line of prosthetic abutments, tooling and devices and a
large selection of fluted spade drills, providing a practitioner
ease of identifying options available for completion of any
prosthesis;
Note C - Inventories. Inventories are stated at average cost. Inventories at
April 30, 2000 and October 31, 1999 consisted of the following:
<TABLE>
<CAPTION>
April 30, 2000 October 31, 1999
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<S> <C> <C>
Raw Materials & Supplies $ 28,510 $ 27,977
Consumable Tools -0- 35,000
Work in Process 542,750 343,601
Finished Goods 645,469 824,478
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$1,216,829 $1,231,056
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</TABLE>
Inventory reflects a net decrease for the period of $14k. The decrease is due to
increased sales realized to date inventory not anticipated to be sold within one
year is classified as long-term other asset.
Note D - Line of Credit. The outstanding revolving loan line of credit, which
was to expire April 25th, has been extended by the lender to the end of June
2000. Currently, the corporation is negotiating with another lender for a new
$1,000,000 line of credit. Bio-Lok International, Inc.expects to have the
existing line replaced by the end of June 2000.
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Note E - Change in Business Activity. Effective with the second quarter 2000 and
retroactive to November 1, 1999, Micro-Lok Mexico has been reclassified as
wholly owned subsidiary instead of a distributor location. The company employs
three individuals and covers the greater Mexico City dental implant market.
Operations turned profitable as of the second quarter 2000, hence the accounting
change.
Effective March 15, 2000, Orthogen Corporation was acquired for 400,000 shares
of common stock. With the purchase of all outstanding shares of Orthogen
Corporation, Bio-Lok International, Inc. acquired two patents and four patents
pending finalization along with a technology, which has dental and orthopedic
applications. Management was retained and employment contracts were entered into
with its President and a consulting agreement with another Doctor who has been
working closely with Orthogen in developing new technologies.
Authorized common stock shares have been increased to 10,000,000 from 7,000,000
effective 5/11/2000. The stockholders and Board of Directors previously approved
the issuance of up to 30,000,000 common stock shares. The increase in authorized
shares was issued to cover all options outstanding and avail the corporation of
approximately 2,500,000 shares for continued growth and acquisition development.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS FROM OPERATION. Revenues for the quarter increased by 47% or $212k over
the prior period and results reflected a 77% increase over the comparable
quarter prior year and a 74% increase for the comparable year-to-date period.
This increase in sales achieved by the company is a direct result of new
distribution coming on-line, growth in the overall international market and
expansion of the product line.
Cost of goods sold for the quarter and year-to-date reflected a 3% improvement.
This improvement has been achieved due to new more efficient machines having
been purchased and improved productivity.
Gross profit for the quarter totaled $464K, a 54% increase from prior quarter,
an 80% increase over same quarter prior year and a 74% increase over the same
period year-to-date. The results achieved are a direct result of increased sales
and improved profit margins.
Selling expenses increased for the quarter and on a year-to-date basis due to
market development both domestically and internationally, and the start of
hiring, advertising, developing new markets and R&D. Administrative and general
expenses have also increased for the period and on a year-to-date basis. The
Increased costs incurred are a direct results of increased sales and continued
patent development and filing.
Due to the increased sales achieved, results from operations for the quarter
increased by 78% from prior quarter and 171% over the comparable prior quarter.
Other income and expenses decreased by $22K for the quarter but reflected only a
$13K decrease from the comparable period prior year. The lower expenses incurred
are primarily due to no issue of common stock shares for services in support of
the company for the related periods.
Net income for the quarter increased by 133% from the prior quarter or $87K.
Year-to-date results totaled $217K and was $252K over prior years results. These
results are due to the increase in revenues achieved, continued improvements in
productivity and maintenance of cost controls.
Results for the balance of the year are expected to show continued improvement,
particularly as the domestic market is penetrated, existing foreign distributors
increase market coverage and new international distributors are signed-up for
targeted markets.
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FINANCIAL CONDITION. Cash flow provided from operations for the quarter
increased by $60k year-to-date. This increase is being utilized to build the
domestic market. The improvement of cash flow is expected to continue as revenue
increases are maintained.
Over the past quarter new equipment has been acquired and financed on a capital
lease basis. The corporation is currently borrowing $437K under its Revolving
Loan Agreement and is actively working to have the line replaced. (see also
"Line of Credit" above)
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - No legal proceedings exist.
Item 2. Changes in Securities - Company has issue 400,000 common stock
shares for the acquisition of Orthogen Corporation.
Item 3. Defaults Upon Senior Securities - none -
Item 4. Submissions of Matters to a Vote of Security Holders - items put to
a vote at the last Annual Stockholders Meeting dated March 22, 2000,
and approved at the meeting was as follows:
(1) Election of Board Member.
(2) Nomination of Weinberg & Company, P.A. as auditors for
2000.
Item 5. Other Information - Effective late April 2000 the company was
registered with NASDQ and placed its stock on the Bulletin Board. The
stock symbol is BLLI.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 20. Proxy Statement dated 2/22/00
Exhibit 27. Financial Data Schedule (SEC only)
(b) Reports on Form 8-K - none
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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.
BIO-LOK INTERNATIONAL INC.
(Registrant)
Date: June 14, 2000 By: /s/ Ingo K. Kozak
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Ingo K. Kozak, CFO and VP-Finance
Date: June 14, 2000 By: /s/ Bruce L. Hollander
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Bruce L. Hollander, President & CEO
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