<PAGE> SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file number 0-27840
CELL ROBOTICS INTERNATIONAL, INC.
----------------------------------------------------------------
(Exact Name of small business issuer as Specified in its Charter)
Colorado 84-1153295
- ------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2715 Broadbent Parkway N.E., Albuquerque, New Mexico 87107
------------------------------------------------------------------------
(Address of Principal Offices) (Zip Code)
Registrant's telephone number, including area code: (505) 343-1131
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the last 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 [ ]
As of November 1, 1997, 5,222,414 shares of Common Stock of the Registrant
were outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [ X ]
<PAGE>
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet at September 30, 1997 (unaudited)
and December 31, 1996 (audited).
Consolidated Statement of Operations for the Three Months Ended
September 30, 1997 and September 30, 1996 (unaudited).
Consolidated Statement of Operations for the Nine Months Ended
September 30, 1997 and September 30, 1996 (unaudited).
Consolidated Statement of Cash Flows for the Nine Months Ended
September 30, 1997 and September 30, 1996 (unaudited).
Notes to Unaudited Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Conditions
and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------------------------------
The interim unaudited financial statements have been prepared by
Cell Robotics International, Inc. ("Cell" or the "Company") and, in the
opinion of management, reflect all material adjustments which are necessary to
a fair presentation of the financial position, results of operations and cash
flows for the interim periods presented. Such adjustments consisted only of
normal recurring items. Certain information and footnote disclosures made in
the Company's last annual report on Form 10-KSB have been condensed for or
omitted from the interim statements. These statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10-KSB for the year ended December 31, 1996. The results of
the interim periods are not necessarily indicative of results which may be
expected for any other interim period or for the full years.
FORWARD-LOOKING STATEMENTS
- --------------------------
In addition to historical information, this Quarterly Report
contains "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, and are thus prospective. The
forward-looking statements contained herein are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
reflected in the forward-looking statements. Factors that might cause such a
difference include, but are not limited to, competitive pressures, changing
economic conditions, those discussed in the Section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and
other factors, some of which will be outside the control of the Company.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis only as of the date hereof.
The Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date
hereof. Readers should refer to and carefully review the information in
future documents the Company files with the Securities and Exchange
Commission.
<PAGE>
<PAGE>
<TABLE>
CELL ROBOTICS INTERNATIONAL, INC.
BALANCE SHEETS
<CAPTION>
AS OF
9-30-97 AS OF
(UNAUDITED) 12-31-96
------------ ------------
<S> <C> <C>
ASSETS:
- ------
Current assets:
Cash and cash equivalents $ 559,060 $ 1,724,671
Accounts receivable, net of allowance
for doubtful accounts of $1,841 352,024 69,845
Inventory 523,010 408,173
Other 63,820 19,121
------------ -----------
Total current assets 1,497,914 2,221,810
Property and equipment, net 214,895 256,635
Other assets, net 71,514 92,507
------------ -----------
$ 1,784,323 $ 2,570,952
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
- ------------------------------------
Current liabilities:
Accounts payable $ 425,414 $ 160,824
Payroll related liabilities 121,019 128,932
Royalties payable 152,943 42,029
Other current liabilities 27,376 31,937
------------ -----------
Total current liabilities 726,752 363,722
Stockholders equity:
Preferred stock, $.04 par value,
Authorized 2,500,000 shares,
no shares issued and outstanding
in 1997 and 1996 0 0
Common stock, $.004 par value,
Authorized 12,500,000 shares,
5,222,414 and 5,003,414 shares
issued and outstanding at
September 30, 1997 and
December 31, 1996, respectively 20,890 20,014
Additional paid in capital 13,996,305 13,327,672
Accumulated deficit (12,959,624) (11,140,456)
------------ -----------
Total stockholders' equity 1,057,571 2,207,230
------------ -----------
$ 1,784,323 $ 2,570,952
============ ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
CELL ROBOTICS INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
<CAPTION>
UNAUDITED
THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996
------------- -------------
<S> <C> <C>
Product Sales $ 188,003 $ 129,682
Research and development grants 105,720 0
------------ -----------
Total revenues 293,723 129,682
Cost of goods sold (133,961) (94,187)
SBIR direct expenses (105,941) 0
------------ -----------
Total cost of goods sold (239,902) (94,187)
------------ -----------
Gross profit 53,821 35,495
------------ -----------
Operating expenses:
Salaries 148,449 148,009
Payroll taxes and benefits 31,983 17,638
Rent and utilities 42,253 29,669
Travel 35,505 22,420
Depreciation and amortization 24,875 28,922
Professional fees 223,557 45,279
Other operating expenses 262,956 175,406
------------ -----------
Total operating expenses 769,578 467,343
------------ -----------
Loss from operations $ (715,757) $ (431,848)
Other income (deductions):
Rental income 0 5,400
Interest income 3,237 3,197
Interest expense (207) (466)
------------ -----------
Total other 3,030 8,131
------------ -----------
Net Loss $ (712,727) $ (423,717)
============ ===========
Net Loss per common share (0.139) (0.103)
Weighted average shares outstanding 5,142,403 4,100,697
============ ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
CELL ROBOTICS INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
<CAPTION>
UNAUDITED
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996
------------- -------------
<S> <C> <C>
Product Sales $ 722,846 $ 523,612
Research and development grants 105,720 69,190
------------ -----------
Total revenues 828,566 592,802
Cost of goods sold (491,358) (331,807)
SBIR direct expenses (105,941) (69,190)
------------ -----------
Total cost of goods sold (597,299) (400,997)
------------ -----------
Gross profit 231,267 191,805
------------ -----------
Operating expenses:
Salaries 584,808 400,409
Payroll taxes and benefits 97,259 56,220
Rent and utilities 108,606 88,553
Travel 80,793 51,854
Depreciation and amortization 79,222 79,893
Professional fees 474,237 172,245
Other operating expenses 666,696 457,667
------------ -----------
Total operating expenses 2,091,621 1,306,841
------------ -----------
Loss from operations $ (1,860,354) $(1,115,036)
Other income (deductions):
Rental income 11,800 16,650
Interest income 30,066 18,032
Interest expense (680) (1,303)
------------ -----------
Total other 41,186 33,379
------------ -----------
Net Loss $ (1,819,168) $(1,081,657)
============ ===========
Net Loss per common share (0.360) (0.275)
Weighted average shares outstanding 5,054,026 3,926,416
============ ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
CELL ROBOTICS INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
<CAPTION>
UNAUDITED
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- ------------------------------------
Net loss $ (1,819,168) $(1,081,657)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 94,567 88,893
Decrease (Increase) in
accounts receivable (282,179) 293,984
Decrease (Increase) in inventory (114,837) (125,074)
Increase in other current assets (44,699) (1,737)
Increase in current liabilities 363,030 (30,146)
------------ -----------
Net cash used by operating activities (1,803,286) (855,737)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
- ------------------------------------
Purchase of fixed assets (31,834) (115,728)
Cash paid for the development or purchase
of intangible assets 0 (62,701)
------------ -----------
Net cash used by investing activities (31,834) (178,429)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
- ------------------------------------
Sale of common stock, net 669,509 0
Proceeds from the exercise of warrants, net 0 2,002,312
Release of formerly restricted proceeds from
a previous sale of common stock 0 425,000
------------ -----------
Net cash provided by financing activities 662,339 2,427,312
------------ -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS: (1,165,611) 1,393,146
- ----------------
Cash and cash equivalents:
Beginning of period 1,724,671 739,952
------------ -----------
End of period $ 559,060 $ 2,133,098
============ ===========
<PAGE>
SUPPLEMENTAL INFORMATION:
- ------------------------
Fair market value of common stock issued for
the acquisition of intangible assets 0 41,561
Interest paid 680 1,303
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE>
CELL ROBOTICS INTERNATIONAL, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(1) Presentation of Unaudited Financial Statements
----------------------------------------------
These unaudited financial statements have been prepared in accordance
with the rules of the Securities and Exchange Commission and, therefore, do
not include all information and footnotes otherwise necessary for a fair
presentation of financial position, results of operations and cash flows, in
conformity with generally accepted accounting principles. However, the
information furnished, in the opinion of management, reflects all adjustments
necessary to present fairly the financial position, results of operations and
cash flows on a consistent basis. The results of operations are not
necessarily indicative of results which may be expected for any other interim
period or for the year as a whole.
(2) Reclassification
----------------
Certain 1996 amounts have been reclassified to conform with the 1997
presentation.
<PAGE>
<PAGE>
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF CELL ROBOTICS INTERNATIONAL, INC.
--------------------------------------------------------------
The following discussion and analysis should be read in conjunction with
the Financial Statements and Notes thereto appearing elsewhere in this report.
PLAN OF OPERATION - OVERVIEW
- ----------------------------
In 1995, the Company first introduced its laser-based scientific research
instruments which in 1996 were refined and redesigned into the modularized
Cell Robotics Workstation. Sales of these scientific instruments during 1995
and 1996 were disappointing, resulting in significant operating losses in both
periods. Given the limited market for the scientific research instruments, in
January 1996, the Company acquired certain technology (see "Intellectual
Property") which it has used to develop medical laser products for the
clinical and consumer markets. Having now completed the development of the
Lasette(-TM-) (skin perforator), the RevitaLase(-TM-) (skin resurfacer) and
the IVF Workstation(-TM-), and having obtained initial regulatory clearances
for limited domestic sales of the Lasette(-TM-) and RevitaLase(-TM-), Company
intends to focus on domestic and international sales of its new products and
concurrently complete the processes necessary for additional domestic and
international regulatory clearances for those products. In view of the
foregoing, it is unlikely that the Company's current financial condition or
historical results of operations are indicative of future operating results.
RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE
THREE MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
- -------------------------------------------------------------------------
During the three month period ending September 30, the Company's total
revenues increased 126.5%, from $129,682 during the 1996 period to $293,723
during the same period in 1997. The Company's gross margin as a percentage of
total revenue decreased from 27.4% during the 1996 period to 18.3% during the
1997 period. However, gross profit increased $18,326 from $35,495 to $53,821,
or 51.6%.
Total operating expenses increased $302,235 or 64.7%, from $467,343
during the three month period ending September 30, 1996, to $769,578 during
the comparable period in 1997. Professional fees and other operating expenses
were the primary factors in this increase. Professional fees increased
$178,278, or 393.7%, due primarily to professional design and engineering
consulting fees relating to the Company's new medical products currently under
development. Also the result of the Company's ongoing development efforts was
a $87,550, or 49.9%, increase in other operating expenses. The Company also
experienced smaller increases in rent and utilities, travel, and depreciation
and amortization.
The foregoing resulted in the Company's incurring a loss from operations
of $715,757 during the three month period ending September 30, 1997, an
increase of $283,909 over the $431,848 loss from operations incurred during
the comparable period of 1996.
During the three months ended September 30, other income and expenses
decreased from a $8,131 net contribution to income during the period in 1996,
to a $3,030 net contribution to income during the period in 1997. The primary
factor in this decrease was the loss of rental income.
The Company's net loss for the three months ended September 30, 1997 was
$712,727, an increase of $289,010 over the net loss of $423,717 incurred
during the comparable period of 1996. On a per weighted average share basis,
this amounts to a $(0.139) loss per share during the third quarter 1997,
compared to a $(0.103) loss per share during the third quarter of 1996. The
weighted average common shares outstanding increased from 4,100,697 for the
three months ended September 30, 1996 to 5,142,403 for the three months ended
September 30, 1997.
RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE
NINE MONTHS ENDED SEPTEMBER 30, 1996
- ---------------------------------------------------------------------------
During the nine month period ended September 30, 1997, the Company's
operating activities limited to continuing efforts to complete the development
of its medical laser products, with product sales consisting of its scientific
research instruments. Total revenues increased from $592,802 for the nine
month period ended September 30, 1996 to $828,566 for the nine month period
ended September 30, 1997, an increase of 39.8%. Cost of sales increased by
approximately the same proportion as the increase in revenues. Research and
development grant revenue increased as well, from $69,190 during the nine
months ended September 30, 1996 to $105,720 during the nine month period ended
September 30, 1997, an increase of 53%. As a result, the Company's gross
profit for the nine months ended September 30, 1997 increased by 20.6%, from
gross profit of $191,805 for the period ended September 30, 1996 to $231,267
for the period ended September 30, 1997.
Total operating expenses for the nine month period increased from
$1,306,841 for the period ended September 30, 1996 to $2,091,621 for the
period ended September 30, 1997, an increase of $784,780, or 60.1%. This
increase was principally attributable to costs related to the continuing
design and development of the Company's medical laser products.
Specifically, salaries increased by $184,399, or 46.1%, due to the addition of
personnel and increased wage rates. Payroll and benefits also increased in
approximately the same proportion as salaries. Professional fees increased by
$301,992, or 175.3%, principally as a result of professional design and
engineering consulting fees related to the development of the Company's
medical laser products. Other operating expenses also increased, from
$457,667 during the nine months ended September 30, 1996 to $666,696 for the
comparable period ended September 30, 1997, an increase of $209,029, or 45.7%.
This increase is also related to the Company's accelerated product development
activities during the period.
During the nine month period ended September 30, 1997, other income and
expenses also increased from a $33,379 net contribution to income for the nine
month period ended September 30, 1996 to a $41,186 net contribution to income
during the period ended September 30, 1997. This increase was due almost
exclusively to an increase in interest income of $12,034, or 66.7%, realized
from the Company's short term investment of the remaining proceeds from the
sale of securities during the third quarter of 1996.
As a result of the foregoing, the Company's net loss for the nine month
period ended September 30, 1997 increased by $737,511, or 68.2%, from a net
loss of $1,081,657 for the nine month period ended September 30, 1996 to a
loss of $1,819,168 for the comparable period ended September 30, 1997. This
resulted in a loss of $.36 per share on 5,054,026 weighted average shares
outstanding for the nine months ended September 30, 1997 compared to a loss of
$.28 per share on 3,926,416 weighted average shares outstanding for the
comparable period ended September 30, 1996.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Since its inception, the Company has relied principally upon the proceeds
of both debt and equity financings to provide working capital for its product
development and marketing activities and, to a lesser extent, the proceeds of
two small SBIR grants. The Company has not been able to generate sufficient
cash from operations and, as a consequence, additional financings have been
required to fund ongoing operations. Initially, the Company relied upon one
investor, Mitsui Engineering & Shipbuilding Company ("Mitsui"), a Japanese
corporation, which provided, through a series of loans and stock purchases, in
excess of $7 million in working capital. In 1995, the Company completed a
private offering of equity in which it raised approximately $2.875 million.
As part of that private offering, the Company issued a series of warrants,
whose exercise during the third quarter of 1996 resulted in an additional
capital infusion of approximately $2 million. Finally, in connection with the
private offering, the Company issued to Paulson, who served as placement
agent, warrants exercisable for a period of five years to purchase 11.5 units
at a price of $25,000 per unit, each unit consisting of 20,000 shares of
Common Stock and 10,000 Class A Warrants (the "Placement Agent's Warrants").
As of the date of this Prospectus, none of the Placement Agent's Warrants have
been exercised. Most recently, the Company completed a private sale of
200,000 shares for net proceeds of $630,500.
Cash used in operations for the year ended in December 31, 1996 and nine
months ended September 30, 1997 were $1,315,930, and $1,803,286, respectively.
The primary reason for the increase in the negative cash flow from operations
in the nine months ended September 30, 1997 as compared to prior periods is
the increase in product development and operating expenses during that period.
At its present level of research, development and product introduction,
the Company requires approximately $200,000 per month to cover operating
expenses, in excess of cash flow currently generated from operations. In
August, 1997, the Company sold in a private transaction to one investor
200,000 shares of Common Stock at a price of $3.25 per share. The proceeds of
that private sale are being used to satisfy the Company's working capital
requirements pending completion of this offering. The Company does not have
any available commercial lines of credit or other sources of capital to
satisfy its cash requirements until revenues from operations can be realized
through future product introduction and sales. Accordingly, the Company will
rely exclusively upon the proceeds of this offering to satisfy its working
capital requirements for the foreseeable future.
Cash provided by financing activities for the year ended December 31,
1996 and nine months ended September 30, 1997 were $2,444,812, and $669,509,
respectively. These figures reflect the equity financings discussed above.
The Company's liquidity and capital resources continued to decrease
during the nine month period ended September 30, 1997, due primarily to the
Company's ongoing operating losses.
The Company's current ratio at September 30, 1997 was 2.1:1, compared to
a current ratio of 6.1:1 on December 31, 1996. This decrease in liquidity is
primarily due to a reduction of the Company's current assets, principally
cash. Total assets decreased from $2,570,952 at December 31, 1996 to
$1,784,323 at September 30, 1997, a decrease of $786,629, or 30.6%. Of this
decrease, current assets accounted for $723,896, or 92.0%.
The decrease in the Company's current assets of $723,896, or 32.6%, was
the result of a large decrease in cash and cash equivalents which fell from
$1,724,671 at December 31, 1996, to $559,060 at September 30, 1997, a decrease
of $1,165,611 or 67.6%. This decrease in cash and cash equivalents was
primarily the result of continuing operating losses. Slightly offsetting the
decrease in cash and cash equivalents was an increase in accounts receivable
of $282,179, from $69,845 at the end of fiscal 1996, to $352,024 at September
30, 1997. The increase in accounts receivable was primarily due to increased
sales during the first nine months of fiscal 1997 of the Cell Robotics
Workstation. Inventory increased in the amount of $114,837, or 28.1% to
respond to increased sales. Finally, as a result of the pre-payment of a
purchase commitment made to a supplier of a particular inventory component,
other current assets increased from $19,121 to $63,820, an increase of 233.8%.
During the nine month period ended September 30, 1997, the Company's
total liabilities increased $363,030, from $363,722 at December 31, 1996 to
$726,752 at September 30, 1997. Increases in accounts payable of $264,590, or
165%, and royalties payable of $110,914, or 264%, and a smaller increase in
payroll related liabilities were slightly offset by a small decrease in other
current liabilities of $4,561, or 14.3%. The Company did not have any long
term liabilities on December 31, 1996 or September 30, 1997.
As a result of the foregoing, the Company's working capital decreased
from $1,858,088 at December 31, 1996 to $771,162 at September 30, 1997, a
decrease of $1,086,926. This decrease was due almost exclusively to the
Company's operating loss incurred during the nine month period.
The Company expects that its cash used in operating activities will
increase in the near future. The timing of the Company's future capital
requirements, however, cannot accurately be predicted. The Company's capital
requirements depend upon numerous factors, principally the market acceptance
of its new medical laser products. The Company will require additional
financing, which it is planning to satisfy with the sale of equity securities
through a secondary public offering. However, there can be no assurance that
the public offering will be successful. If the Company is unable to obtain
additional financing as needed, the Company may be required to reduce the
scope of its operations, which would have a material adverse effect upon the
Company's business, financial condition and results of operation.
NET OPERATING LOSS CARRYFORWARDS
- --------------------------------
At December 31, 1996, the Company had a net operating loss carryforward
for income tax purposes of approximately $10,000,000, which expires beginning
in 2006. Under the Tax Reform Act of 1986, the amounts of and the benefits
from net operating loss carryforwards are subject to certain limitations in
the amount of net operating losses that the Company may utilize to offset
future taxable income. It is likely that the ownership changes in 1995 in
connection with the Acquisition (as hereafter defined) will limit the use of
this net operating loss carryforward under applicable Internal Revenue Service
regulations.
EARNINGS PER SHARE
- ------------------
In February 1997, the Financial Accounting Standards Board issued SFAS
128, "Earnings Per Share." SFAS 128 establishes new standards for computing
and presenting earnings per share ("EPS"). Specifically, SFAS 128 replaces
the currently required presentation of primary EPS with a presentation of
basic EPS, requires dual presentation of basic and diluted EPS on the face of
the income statement for all entities with complex capital structures, and
requires a reconciliation of the numerator and denominator of the basic and
diluted EPS computations to the financial statements issued for periods ending
after December 15, 1997, and early application is not permitted. Upon
adoption, SFAS 128 requires restatement of prior period EPS presented to
conform to the requirements of SFAS 128. Management believes the adoption of
SFAS 128 will not have a material effect on the Company's previously-issued
financial statements.
COMPREHENSIVE INCOME
- --------------------
In June 1997, the Financial Accounting Standards Board issued SFAS 130,
"Reporting Comprehensive Income." SFAS 130 establishes standards for
reporting and display of comprehensive income and its components (revenues,
expense, gains, and losses) in a full set of general purposes financial
statements. Specifically, SFAS 130 requires that all items that meet the
definition of components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements. However, SFAS 130 does not specify when to recognize or how to
measure the items that make up comprehensive income. SFAS 130 is effective
for fiscal years beginning after December 15, 1997, and early application is
permitted. SFAS 130 requires reclassification of financial statements for all
periods presented for comparative purposes. Management believes the adoption
of SFAS 130 will not have a material effect on the Company's future financial
statements.
REPORTING FOR SEGMENTS
- ----------------------
In June 1997, the Financial Accounting Standards Board issued SFAS 131,
"Financial Reporting for Segments of a Business Enterprise." SFAS 131
supersedes the "industry segment" concept of SFAS 14 with a "management
approach" concept as the basis for identifying reportable segments. SFAS 131
is effective for fiscal years beginning after December 15, 1997, and early
application is permitted. Management believes the adoption of SFAS 131 will
not have a material effect on the Company's future financial statements.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No legal proceedings were filed on behalf of or against the Company,
nor were any claims made, during the quarter ended September 30, 1997.
However, in October 1997, a civil action was brought by Venisect, Inc. against
the Company in the United States District Court of the Eastern District of
Arkansas, Case No. LR-C-97-877 (the "Lasette(-TM-) Litigation") in which
Venisect claims that the Company's compact, lightweight, portable skin
perforator, known as the Lasette(-TM-), infringes a U.S. patent underlying
Venisect's competitive laser skin perforator. The Company and its advisors,
including patent counsel, have conducted a comprehensive investigation of the
basis of the claims underlying the Lasette(-TM-) Litigation and believe that
the Lasette(-TM-) does not infringe upon the Venisect U.S. patent or any of
its related foreign patents. The Company intends to vigorously defend the
claims being asserted in the Lasette(-TM-) Litigation.
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
Exhibits:
Exhibit 27 Financial Data Schedule
Reports on Form 8-K:
None
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CELL ROBOTICS INTERNATIONAL, INC.
Dated: November 19, 1997 By: /s/ Ronald K. Lohrding
------------------- --------------------------------------
Ronald K. Lohrding, President
Dated: November 19, 1997 By: /s/ Jean Scharf
------------------- --------------------------------------
Jean Scharf, Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEETS AND STATEMENTS OF OPERATIONS FOUND ON PAGES 4, 5 AND 6 OF THE COMPANY'S
FORM 10-QSB FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1997
<CASH> 559,060
<SECURITIES> 0
<RECEIVABLES> 353,865
<ALLOWANCES> 1,841
<INVENTORY> 523,010
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0
0
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