<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1996
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 0-24128
BIO-PLEXUS, INC.
(Exact name of Registrant as specified in its Charter)
Connecticut 06-1211921
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
384 Q Merrow Road, Tolland Connecticut 06084
(Address of principal executive offices including zip code)
(203) 871-8601
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Class of Common Stock Shares Outstanding as of May 6, 1996
- - --------------------- ------------------------------------
<S> <C>
Class A Common Stock, no par value 20,000
Common Stock, no par value 6,892,605
</TABLE>
<PAGE> 2
BIO-PLEXUS, INC.
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheet at March 31, 1996 and
December 31, 1995 1
Condensed Statement of Operations for the three months
ended March 31, 1996 and 1995 and for the period from
inception (September 2, 1987) through March 31, 1996 2
Condensed Statement of Cash Flows for the three months
ended March 31, 1996 and 1995 and for the period
from inception (September 2, 1987) through
March 31, 1996 3
Notes to Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
SIGNATURES 8
</TABLE>
EXHIBIT 11. COMPUTATION OF NET LOSS PER COMMON SHARE
<PAGE> 3
BIO-PLEXUS, INC.
(a development stage company)
CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
March 31,
1996 December 31,
(Unaudited) 1995
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,021,000 $ 11,842,000
Accounts receivable 312,000 138,000
Inventories
Raw materials 1,389,000 1,408,000
Work-in-process 150,000 150,000
Finished goods 702,000 1,071,000
------------ ------------
2,241,000 2,629,000
Other assets 224,000 228,000
Total current assets 11,798,000 14,837,000
------------ ------------
Fixed assets, net 8,376,000 8,262,000
Other assets:
Deferred debt financing expenses 231,000 260,000
Patents, net of amortization 37,000 30,000
------------ ------------
$ 20,442,000 $ 23,389,000
============ ============
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt $ 1,732,000 $ 1,663,000
Accounts payable 537,000 685,000
Accrued interest payable 115,000 29,000
Accrued employee costs 511,000 443,000
------------ ------------
Total current liabilities 2,895,000 2,820,000
------------ ------------
CII debt, net 119,000 116,000
Other long-term debt, net 8,670,000 8,983,000
Accrued financing expense - CII debt 550,000 550,000
Redeemable Class A common stock 20,000 20,000
Redeemable common stock warrants 149,000 149,000
Shareholders' equity
Common stock, no par value, 10,000,000 authorized,
6,592,827 and 6,568,938 shares issued and
outstanding 45,543,000 45,481,000
Deficit accumulated during the development stage (37,504,000) (34,730,000)
------------ ------------
Total shareholders' equity 8,039,000 10,751,000
------------ ------------
$ 20,442,000 $ 23,389,000
============ ============
</TABLE>
See notes to condensed financial statements.
-1-
<PAGE> 4
BIO-PLEXUS, INC
(a development stage company)
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
From Inception
(September 2,
1987) through
Three Months Ended March 31, March 31,
1996 1995 1996
<S> <C> <C> <C>
Revenue $ 453,000 $ 126,000 $ 1,661,000
------------ ----------- ------------
Costs and expenses:
Research and development 380,000 443,000 7,230,000
Other operating and engineering costs 942,000 1,540,000 11,792,000
Marketing, general and administrative 1,594,000 1,386,000 14,870,000
------------ ----------- ------------
Total operating costs and expenses 2,916,000 3,369,000 33,892,000
------------ ----------- ------------
Financing expenses:
CII debt:
Interest expense 6,000 2,000 447,000
Amortization of deferred debt financing 29,000 27,000 392,000
Accretion of repurchase premium 796,000
Loss on settlement of accrued interest 53,000
Other interest expense 414,000 294,000 3,384,000
Less: interest income (138,000) (75,000) (778,000)
------------ ----------- ------------
Total financing expenses 311,000 248,000 4,294,000
------------ ----------- ------------
Net loss before extraordinary item $ (2,774,000) $(3,491,000) (36,525,000)
============ =========== ------------
Extraordinary item (Note 3):
Loss on extinguishment of debt, net
of income taxes of nil 979,000
------------
Net loss after extraordinary item $(37,504,000)
============
Net loss per common share (Note 2) $ (0.42) $ (0.74)
============ ===========
Weighted average common shares
outstanding (Note 2) 6,576,783 4,744,825
============ ===========
</TABLE>
See notes to condensed financial statements.
-2-
<PAGE> 5
BIO-PLEXUS, INC.
(a development stage company)
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
From Inception
(September 2,
1987) through
Three Months Ended March 31, March 31,
1996 1995 1996
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net loss $ (2,774,000) $ (3,491,000) $(37,504,000)
Adjustments to reconcile net loss to cash used
by operating activities:
Depreciation and amortization 296,000 207,000 2,203,000
Writedown of equipment to net realizable value 54,000
Loss on early extinguishment of debt 979,000
Warrants granted 118,000
Accretion of repurchase premium 796,000
Amortization of deferred debt financing
expenses 29,000 27,000 471,000
Amortization of debt discount 116,000 99,000 1,063,000
Settlement of accrued interest with common
stock 158,000
Decrease (increase) in inventories 388,000 (582,000) (2,241,000)
Increase (decrease) in accounts payable (148,000) (143,000) 537,000
Increase in accrued interest payable 86,000 91,000 115,000
Increase in accrued employee costs 68,000 155,000 511,000
Other (169,000) 194,000 (231,000)
------------ ------------ ------------
Net cash used in operating activities (2,108,000) (3,443,000) (32,971,000)
------------ ------------ ------------
Cash Flows from Investing Activities
Purchases and construction of fixed assets (412,000) (786,000) (10,811,000)
Purchases of short-term investments (8,295,000)
Proceeds from sales of short-term investments 8,295,000
Cost of patents (8,000) (60,000)
------------ ------------ ------------
Net cash used in investing activities (420,000) (786,000) (10,871,000)
------------ ------------ ------------
Cash Flows from Financing Activities
Proceeds from sale of convertible preferred stock 3,066,000
Net proceeds from sale of common stock 35,941,000
Proceeds from exercise of common stock warrants 584,000 584,000
Proceeds from exercise of common stock options 28,000 119,000
Proceeds from long-term debt 2,500,000 14,222,000
Net decrease in notes payable (250,000)
Proceeds from sale and leaseback 178,000 5,409,000
Purchase of common stock warrant (280,000)
Purchase of common stock (27,000)
Repayments of long-term debt (321,000) (155,000) (6,171,000)
------------ ------------ ------------
Net cash (used in) provided by financing activities (293,000) 2,857,000 52,863,000
------------ ------------ ------------
Net (decrease) increase in cash and cash
equivalents (2,821,000) (1,372,000) 9,021,000
Cash and cash equivalents, beginning of
period 11,842,000 4,187,000
------------ ------------ ------------
Cash and cash equivalents, end of period $ 9,021,000 $ 2,815,000 $ 9,021,000
============ ============ ============
Supplemental cash flow disclosures:
Cash payments of interest $ 218,000 $ 137,000 $ 2,665,000
Cash payments of income taxes 7,000 3,000 37,000
Surrender of debt upon warrant exercise 35,000 -- 971,000
</TABLE>
See notes to condensed financial statements.
-3-
<PAGE> 6
BIO-PLEXUS, INC.
(a development stage company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The interim condensed financial statements included herein are
unaudited. In the opinion of management, all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations and cash flows for the periods presented
have been included. The results of operations for the interim period is not
necessarily indicative of the results of operations to be expected for the full
year. Bio-Plexus, Inc. is considered a development stage company as defined in
Statement of Financial Accounting Standards No. 7. These financial statements
should be read in conjunction with the financial statements and the notes
included in the 1995 Annual Report to Shareholders of Bio-Plexus, Inc.
NOTE 2 - LOSS PER SHARE
Net loss per common share is determined based on the weighted average
number of common shares outstanding during the period. In determining weighted
average common shares outstanding, common share equivalents are excluded from
the computation as their effect is anti-dilutive.
NOTE 3 - EXTRAORDINARY ITEM
During the third quarter of 1995, the Company incurred a $979,000
charge relating to the early extinguishment of various debt. The extraordinary
charge was comprised of the following:
- The unamortized debt discount of $226,000 associated with the early
extinguishment of a 1993 CDA loan in the original principal amount of
$600,000.
- The unamortized debt discount and deferred financing costs of
$705,000 associated with the early extinguishment of $4.0 million of
private placement notes sold to certain investors on August 4, 1995.
- The unamortized $48,000 associated with the early extinguishment on a
$1,000,000 line of credit which expired in September 1995 upon
completion of the Company's public offering.
4
<PAGE> 7
NOTE 4 - COMMITMENTS
As of March 31, 1996, the Company had capital expenditure purchase
commitments outstanding of approximately $1,000,000.
NOTE 5 - SUBSEQUENT EVENT
On April 30, 1996, two principal officers exercised warrants previously
issued at an exercise price of $1.38 per share resulting in net proceeds to the
Company of $345,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Bio-Plexus is a development stage company with limited sales of its
products, the Punctur-Guard(R) blood collection needle and needle holders. From
its inception in September 1987 through March 31, 1996, the Company recorded
revenues of $1,661,000 and incurred cumulative ongoing losses from operations
totaling $37,504,000. During the same period, the Company's principal focus has
been the design, development, testing and evaluation of the Punctur-Guard(R)
blood collection needle and the design and development of the molds, needle
assembly machines and production processes needed for manufacturing the
Punctur-Guard(R) blood collection needle and holders.
The Company had $453,000 in revenues for the quarter ended March 31,
1996, compared to $126,000 for the same period a year ago. Operating costs and
expenses, consisting of marketing, general and administrative expenses together
with research and development costs and other operating and engineering expenses
declined from $3,369,000 in the first quarter of 1995 to $2,916,000 during the
first quarter of 1996.
The Company is currently in the process of expanding its production
capacity with a new generation needle assembly and packaging system which it
expects will be completed in mid-year. During this period, the Company has
continued its accelerated research and development efforts on new products
including a needle disposal container, a winged intravenous set and an I.V.
catheter, and in March 1996 filed its 510(k) notification with the Food and Drug
Administration for its winged intravenous set and needle disposal container.
The Company anticipates substantial progress in sales growth during
1996, but expects ongoing losses from operations to continue at least for the
balance of the year.
5
<PAGE> 8
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1995
Revenues increased to $453,000 for the three months ended March 31,
1996 compared to $126,000 for the same period a year ago. The increase in sales
is primarily the result of the expansion of the Company's marketing staff during
1995.
Research and development expenses were $380,000 during the first
quarter of 1996, compared to $443,000 for the three months ended March 31, 1995.
These costs reflect the Company's continuing focus on improving and expanding
production processes and tooling, as well as its ongoing efforts to develop new
products.
Other operating and engineering costs declined from $1,540,000 for the
three months ended March 31, 1995 to $942,000 for the first quarter of 1996
primarily as a result of a reduction in the Company's production workforce which
occurred in late summer of 1995.
Marketing, general and administrative expenses were $1,594,000 for the
three months ended March 31, 1996 compared to $1,386,000 for the same period a
year ago. The increase is primarily attributable to the Company's increased
marketing activities and the expansion of its salesforce during 1995.
Financing expenses were $311,000 for the first quarter of 1996 compared
to $248,000 for the three months ended March 31, 1995. Financing expenses
include interest expense and amortization of deferred debt financing expenses,
less interest income. The overall increase in financing expenses for the period
resulted primarily from an increase in other interest expense which rose from
$294,000 for the three months ended March 31, 1995 to $414,000 in the first
quarter of 1996. This increase is primarily due to higher outstanding balances
on the Company's equipment lease financing arrangements and a full period of
expense on a term loan with the Connecticut Development Authority which was
originated in March 1995. During this period, interest income increased as a
result of investment earnings from the proceeds of the Company's 1995 public
offering.
LIQUIDITY AND CAPITAL RESOURCES
The Company's need for funds has increased from period to period as it
has increased its research and development activities surrounding the
Punctur-Guard(R) blood collection needle and its production processes, increased
its capital expenditures on molds and production equipment, expanded staff and
commenced commercial production of the blood collection needle. To date, the
Company has financed its operations primarily through borrowings and the sale of
equity securities. Through March 31, 1996, the Company has received net proceeds
of approximately $21,912,000 through borrowings and the sale of debt securities
and $39,710,000 through the sale of equity securities. Of the net equity
proceeds, $17,575,000 was raised in the Company's 1995 public offering,
$14,191,000 was raised in the Company's initial public offering and the balance
of $7,944,000 was raised through the private placement of equity securities.
6
<PAGE> 9
As of March 31, 1996 the Company's principal source of liquidity was
cash totaling $9,021,000, and accounts receivable of $312,000.
The Company's primary cash requirement for 1996 will be for working
capital to sustain ongoing operations including debt service, and to continue
its research and development efforts to improve and increase manufacturing
capacity and capabilities and reduce manufacturing costs. The Company also
anticipates additional capital expenditures for molds and equipment both for its
blood collection needle program as well as new products, including further
research and development on its winged intravenous set and I.V. catheter. The
Company is currently expanding its manufacturing capacity through the purchase
of additional production equipment at a cost of approximately $2,200,000,
against which approximately $1,200,000 had already been paid at March 31, 1996.
The Company is considering the development of a strategic partnership with
another company to assist with the development and expansion of its product
line, and in particular with the I.V. catheter. Its overall strategy is to
minimize expenditures on new product research and development, as well as
production capacity for new products until such time as either additional
financing is secured or until it determines that a strategic partnership is
feasible. Based on the above, the Company believes that the remaining balance of
the net proceeds from its 1995 public offering, which at March 31,1996 totaled
approximately $9,000,000, together with funds generated from increasing sales of
its products will be sufficient to meet its ongoing cash requirements and
planned expenditures for the blood collection needle program through 1996. These
estimated capital requirements do not include significant expenditures in new
product areas, and amounts needed could vary based on the actual growth of sales
and the level of additional investment and time required to further increase
manufacturing capacity and capabilities, and reduce manufacturing costs. In
addition to considering a strategic partnership, the Company is reviewing
alternative financing strategies that would allow it to accelerate development
of its new products and to develop the equipment and production molds needed for
the new products in order to achieve commercial levels of production. Failure to
raise needed capital would likely have an adverse effect on the Company's
operations, development plans and cash flows. In such case, the Company would
expect to reduce costs and expenses, in turn slowing the Company's planned rate
of expansion.
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
Exhibits
Exhibit 11 - Computation of Net Loss Per
Common Share
Reports on Form 8-K
There were no reports on Form 8-K for the quarter ended March
31, 1996.
7
<PAGE> 10
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.
Bio-Plexus, Inc.
------------------------------
(Registrant)
- - ----------------------------- ------------------------------
(Date) Ronald A. Haverl
Chairman of the Board, Chief
Executive Officer, and Treasurer
(Principal Executive, Financing
and Accounting Officer)
8
<PAGE> 1
EXHIBIT 11
BIO-PLEXUS, INC.
STATEMENT RE COMPUTATION OF LOSS PER COMMON SHARE
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
<S> <C> <C>
Net loss $(2,774,000) $(3,491,000)
Computation of weighted average
common shares outstanding (1):
Common Stock 6,556,783 4,724,825
Class A Common Stock 20,000 20,000
----------- -----------
Total pro forma weighted average 6,576,783 4,744,825
=========== ===========
Net loss per common share $ (0.42) $ (0.74)
=========== ===========
</TABLE>
- - ---------------
(1) Common share equivalents (stock options and warrants) are excluded from
the computation as their effect is anti-dilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 9,021,000
<SECURITIES> 0
<RECEIVABLES> 312,000
<ALLOWANCES> 0
<INVENTORY> 2,241,000
<CURRENT-ASSETS> 11,798,000
<PP&E> 8,376,000<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,442,000
<CURRENT-LIABILITIES> 2,895,000
<BONDS> 9,339,000
0
0
<COMMON> 45,543,000
<OTHER-SE> 169,000<F2>
<TOTAL-LIABILITY-AND-EQUITY> 20,442,000
<SALES> 453,000
<TOTAL-REVENUES> 453,000
<CGS> 0
<TOTAL-COSTS> 2,916,000
<OTHER-EXPENSES> (109,000)<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 420,000
<INCOME-PRETAX> 2,774,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,774,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,774,000
<EPS-PRIMARY> .42
<EPS-DILUTED> .42
<FN>
<F1>This value is net of depreciation.
<F2>Value represents redeemable common stock & redeemable common stock warrants.
<F3>Value includes $138,000 of interest income.
</FN>
</TABLE>
