<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Mark
One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 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 0-24128
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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)
129 Reservoir Road, Vernon Connecticut 06066
--------------------------------------------
(Address of principal executive offices including zip code)
(860) 870-6112
--------------
(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.
Shares Outstanding
------------------
Class of Common Stock as of November 10, 1999
- --------------------- -----------------------
Common Stock, no par value 13,785,086
<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 Sheets at September 30, 1999
(unaudited) and December 31, 1998 1
Condensed Statements of Operations for the three months
ended September 30, 1999 (unaudited) and 1998 2
Condensed Statements of Operations for the nine months
ended September 30, 1999 (unaudited) and 1998 3
Condensed Statements of Cash Flows for the nine months
ended September 30, 1999 (unaudited) and 1998 4
Notes to Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 2. Changes in Securities 18
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 6. Exhibits and Reports on Form 8-K 19
SIGNATURES 20
</TABLE>
<PAGE> 3
BIO-PLEXUS, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 195,000 $ 535,000
Accounts receivable 434,000 564,000
Inventories:
Raw materials 804,000 1,164,000
Work-in-process 645,000 470,000
Finished goods 1,070,000 390,000
--------------------- -------------------
2,519,000 2,024,000
--------------------- -------------------
Other current assets 186,000 246,000
--------------------- -------------------
Total current assets 3,334,000 3,369,000
--------------------- -------------------
Investment in Jordan Pharmaceuticals (Note 3) - 600,000
Fixed assets, net 4,456,000 4,661,000
Deferred debt financing expenses 382,000 10,000
Patents, net of amortization 293,000 252,000
Other assets 253,000 260,000
--------------------- -------------------
$ 8,718,000 $ 9,152,000
===================== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 599,000 $ 1,811,000
Note payable (Note 3) - 250,000
Accounts payable and accrued expenses 1,044,000 528,000
Accrued interest payable 12,000 28,000
Accrued vacation 187,000 196,000
Other accrued employee costs 208,000 213,000
Product replacement costs - 222,000
Deferred revenue (Note 6) - 875,000
--------------------- -------------------
Total current liabilities 2,050,000 4,123,000
--------------------- -------------------
Other long-term debt, net 2,496,000 2,403,000
Redeemable common stock warrants 149,000 149,000
Commitments and contingencies (Note 4) - -
Shareholders' equity:
Convertible preferred stock, no par value, 3,000,000
authorized, no shares issued and outstanding - -
Common stock, no par value, 25,000,000 authorized,
13,639,128 and 12,793,165 shares issued and outstanding 68,977,000 65,349,000
Accumulated deficit (64,954,000) (62,872,000)
--------------------- -------------------
Total shareholders' equity 4,023,000 2,477,000
--------------------- -------------------
$ 8,718,000 $ 9,152,000
===================== ===================
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
1
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BIO-PLEXUS, INC
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------------
1999 1998
---------------------- ----------------------
<S> <C> <C>
Revenue:
Product $ 1,143,000 $ 1,746,000
Services 148,000 1,242,000
---------------------- ----------------------
Total revenue 1,291,000 2,988,000
---------------------- ----------------------
Costs and expenses:
Product 630,000 1,483,000
Services 36,000 87,000
Research and development 248,000 157,000
Selling, general and administrative 1,211,000 1,049,000
---------------------- ----------------------
Total operating costs and expenses 2,125,000 2,776,000
---------------------- ----------------------
Operating loss (834,000) 212,000
Financing expenses:
Amortization of deferred debt financing 10,000 20,000
Interest expense 208,000 150,000
Other income (6,000) (20,000)
---------------------- ----------------------
Total financing expenses 212,000 150,000
---------------------- ----------------------
Net profit (loss) $ (1,046,000) $ 62,000
====================== ======================
Per share of common stock:
Basic and diluted $ (0.08) $ 0.01
====================== ======================
Weighted average common shares outstanding (Note 2):
Basic 13,552,117 12,181,826
Diluted 13,552,117 12,195,740
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
2
<PAGE> 5
BIO-PLEXUS, INC
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------------
1999 1998
---------------------- ----------------------
<S> <C> <C>
Revenue:
Product $ 3,713,000 $ 3,896,000
Services 1,325,000 2,973,000
---------------------- ----------------------
Total revenue 5,038,000 6,869,000
---------------------- ----------------------
Costs and expenses:
Product 2,165,000 3,547,000
Services 64,000 299,000
Research and development 846,000 376,000
Selling, general and administrative 3,472,000 3,480,000
---------------------- ----------------------
Total operating costs and expenses 6,547,000 7,702,000
---------------------- ----------------------
Operating loss (1,509,000) (833,000)
Financing expenses:
Amortization of deferred debt financing 36,000 61,000
Interest expense 593,000 493,000
Other income (56,000) (100,000)
---------------------- ----------------------
Total financing expenses 573,000 454,000
---------------------- ----------------------
Net loss $ (2,082,000) $ (1,287,000)
====================== ======================
Per share of common stock:
Basic and diluted $ (0.15) $ (0.11)
====================== ======================
Weighted average common shares
outstanding (basic and diluted) (Note 2) 13,449,889 12,160,987
====================== ======================
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
3
<PAGE> 6
BIO-PLEXUS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
----------------------------------------------------
1999 1998
---------------------- ----------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (2,082,000) $ (1,287,000)
Adjustments to reconcile net loss to cash used
by operating activities:
Depreciation and amortization 417,000 752,000
Writedown of equipment to net realizable value - 113,000
Amortization of deferred debt financing expenses 36,000 61,000
Amortization of debt discount 292,000 45,000
Decrease (increase) in assets:
Accounts receivable 130,000 (312,000)
Inventories (495,000) (299,000)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 414,000 425,000
Accrued interest payable (16,000) -
Accrued vacation and other accrued employee costs (14,000) (62,000)
Accrued product replacement costs (222,000) -
(Decrease) increase in deferred revenue (Note 6) (875,000) 2,205,000
Other 124,000 183,000
---------------------- ----------------------
Net cash (used in) provided by operating activities (2,291,000) 1,824,000
---------------------- ----------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases and construction of fixed assets (250,000) (479,000)
Long-term investments (Note 3) 627,000 -
Cost of patents (55,000) (102,000)
---------------------- ----------------------
Net cash provided by (used in) investing activities 322,000 (581,000)
---------------------- ----------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock (Note 3) 1,100,000 -
Proceeds from exercise of common stock options 91,000 23,000
Redemption of common stock - (20,000)
Decrease in notes payable (Note 3) (250,000) -
Proceeds from long-term debt 2,092,000 -
Proceeds from sale and leaseback 137,000 109,000
Repayments of long-term debt (Note 3) (1,541,000) (838,000)
---------------------- ----------------------
Net cash provided by (used in) financing activities 1,629,000 (726,000)
---------------------- ----------------------
Net (decrease) increase in cash and cash
equivalents (340,000) 517,000
Cash and cash equivalents, beginning of
period 535,000 1,502,000
---------------------- ----------------------
Cash and cash equivalents, end of period $ 195,000 $ 2,019,000
====================== ======================
Supplemental cash flow disclosures:
Cash payments of interest $ 316,000 $ 313,000
Cash payments of income taxes 4,000 3,000
Surrender of debt upon conversion to equity 83,000 -
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
4
<PAGE> 7
BIO-PLEXUS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and, in the opinion of
the management of the Company, include all adjustments which are of a normal
recurring nature, necessary for a fair presentation of financial position and
the results of operations and cash flows for the periods presented. However, the
financial statements do not include all information and footnotes required for a
presentation in accordance with generally accepted accounting principles. These
condensed financial statements should be read in conjunction with the financial
statements and the notes thereto included in the Company's 1998 Annual Report on
Form 10-K. The results of operations for the interim periods are not necessarily
indicative of the results of operations to be expected for the full year.
Certain reclassifications have been made to the 1998 financial statements
to conform with the 1999 presentation.
NOTE 2 - EARNINGS PER SHARE
In February, 1997, the FASB issued Statement of Financial Accounting
Standards No. 128 ("SFAS 128"), "Earnings per Share", which established new
standards for the computation and disclosure of earnings per share ("EPS"). The
statement requires dual presentation of "basic" EPS and "diluted" EPS. Basic EPS
is based on the weighted average number of common shares outstanding for the
period, excluding any dilutive common share equivalents. Diluted EPS reflects
the potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted. The Company adopted SFAS 128 for
the periods presented. In determining net loss per common share, common stock
equivalents are excluded from the computation as their effect is anti-dilutive.
NOTE 3 - OTHER SIGNIFICANT CAPITAL TRANSACTIONS
On December 31, 1998, the remaining principal balance of $710,000
associated with $4,230,000 of unsecured term notes issued in 1993 matured. In
January 1999, the Company repaid the outstanding principal balance plus accrued
interest thereon.
During the first quarter of 1999, a member of the Company's Board of
Directors and shareholder, Mr. David Himick, invested $1,000,000 in exchange for
502,500 shares of common stock and 75,000 warrants with a maturity date of
December 31, 2001 and an exercise price of $2.00 per share.
During the first quarter of 1999, a member of the Company's Board of
Directors and shareholder, Mr. Herman Gross, invested $100,000 in exchange for
47,058 shares of common stock.
On September 3, 1998, the Company loaned $600,000 to Jordan
Pharmaceuticals, Inc. ("Jordan"), a California corporation, in exchange for a
one-year promissory note. On October 31, 1998, the
5
<PAGE> 8
Company converted the promissory note into 120,000 shares of Jordan Series A
Preferred Stock. Pursuant to a stock option agreement dated October 31, 1998,
Jordan had a right to repurchase the shares of Series A Preferred Stock plus any
paid-in-kind shares owned by the Company (in lieu of interest paid in cash), at
a purchase price of $5.00 per share. On March 31, 1999, Jordan exercised its
option with respect to all the shares for total consideration of $627,000.
On March 24, 1999, the Company signed a commitment for a private placement
of up to $4,500,000 aggregate principal amount of 6% Convertible Debentures due
2004 ("the Debentures"). The initial purchase of $2,500,000 aggregate principal
amount of Debentures was made on April 27, 1999. The Debentures accrue interest
at the rate of 6% per annum, payable quarterly in arrears in cash. The
Debentures are convertible at any time at the option of the holders into shares
of the Company's common stock at the lesser of a fixed conversion price of $3.06
per share or a floating conversion price at the time of conversion. The
Debentures may be wholly or partially redeemed at the option of the Company for
an amount not to exceed 130% of the face value plus accrued and unpaid interest
at any time after the date of issuance. The Company and the Debenture holders
have limited put and call options, respectively, for additional Debentures. Net
proceeds from the financing were $2,092,000 after deducting fees and expenses.
Approximately $121,000 was allocated to common stock during the second quarter
to reflect the intrinsic value of the conversion feature. This amount was
calculated at the commitment date as the difference between the most beneficial
conversion price and the then fair value of the common stock. The corresponding
debt discount was charged to interest expense. The financing also included a
warrant to purchase 500,000 shares of common stock at an exercise price of
$3.38. The fair value of the warrants at the date of issuance was recorded as a
discount on the debenture which will be amortized over the term of the
debenture. On September 28, 1999, the holder of the debentures converted $83,000
of the outstanding principal balance into 27,124 shares of common stock.
On March 31, 1999, the Company paid the outstanding principal balance of
$250,000, and all accrued interest thereon, of a one-year promissory term note
to an officer of the Company, Mr. Carl Sahi.
On April 15, 1999, $300,000 of five-year term notes were converted into
153,633 shares of the Company's common stock.
On May 3, 1999, an officer of the Company, Thomas Sutton, exercised an
option to purchase 30,000 shares of common stock at an exercise price of $2.75.
On July 19, 1999, at the Annual Meeting of Shareholders, the Company
amended its Certificate of Incorporation to increase the authorized number of
common shares from 18,000,000 to 25,000,000.
On September 19, 1999, an officer of the Company, Carl Sahi, exercised a
warrant to purchase 125,000 shares of common stock granted in September 1992 in
a cashless exercise in exchange for 67,470 shares of common stock.
NOTE 4 - COMMITMENTS
As of September 30, 1999, the Company had capital expenditure purchase
commitments outstanding of approximately $217,000 which primarily represent
tooling for its blood collection and holder product lines.
6
<PAGE> 9
NOTE 5 - SEGMENT FINANCIAL DATA
The Company's operations consist of two worldwide business segments:
Safety Medical Products and Accessories and Joint Venture Design & Development.
The Safety Medical Products and Accessories segment includes blood collection
needles, needle holders and needle disposal containers. The Joint Venture Design
& Development segment includes revenue and costs associated with product design
and development, product licensing, and the design, development and construction
of machinery and tooling in connection with joint venture partners.
Information with respect to revenue, operating profit or loss and capital
expenditures attributable to each of the Company's business segments are as
follows:
SEGMENT REVENUE
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
1999 1998 1997 1999 1998 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Safety Medical Products and
Accessories $1,122,000 $ 921,000 $ 770,000 $3,668,000 $2,602,000 $2,836,000
Joint Venture Design & Development 169,000 2,067,000 -- 1,370,000 4,267,000 1,500,000
---------- --------- --------- --------- --------- ---------
Total Consolidated Revenue $1,291,000 $2,988,000 $ 770,000 $5,038,000 $6,869,000 $4,336,000
========== ========== ========== ========== ========== ==========
</TABLE>
MAJOR CUSTOMERS
There were two customers, domestic distributors of the Company's products,
Allegiance Healthcare and Fisher HealthCare, that exceeded 10% of the Company's
Safety Medical Products and Accessories segment revenue for the periods
presented. In the Joint Venture Design & Development segment, Johnson and
Johnson Medical, Inc. ("JJM") of Arlington, Texas contributed to more than 10%
of the revenues for the periods presented. The following table represents the
revenue associated with these major customers by segment:
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
1999 1998 1997 1999 1998 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
TOTAL REVENUE MAJOR CUSTOMERS:
Safety Medical Products and
Accessories $1,029,000 $ 710,000 $ 651,000 $2,847,000 $2,211,000 $2,121,000
Joint Venture Design & Development 68,000 2,067,000 -- 1,178,000 4,267,000 1,500,000
OTHER DOMESTIC SALES 173,000 124,000 110,000 484,000 254,000 344,000
EXPORT SALES:
Safety Medical Products and
Accessories 21,000 87,000 9,000 529,000 137,000 371,000
Joint Venture Design & Development -- -- -- -- -- --
---------- ----------- ---------- ---------- ---------- ----------
TOTAL CONSOLIDATED REVENUE $1,291,000 $.2,988,000 $ 770,000 $5,038,000 $6,869,000 $4,336,000
========== =========== ========== ========== ========== ==========
</TABLE>
During the periods presented, there were no material intersegment revenues.
7
<PAGE> 10
SEGMENT OPERATING PROFIT (LOSS)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30, 1999
-------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Safety Medical Products and Accessories $ 559,000 $ 280,000 ($ 330,000) $ 1,593,000 $ 473,000 ($1,203,000)
Joint Venture Design & Development 116,000 1,128,000 (364,000) 1,266,000 2,434,000 477,000
------- --------- -------- --------- --------- -------
Total Consolidated Operating Profit 675,000 1,408,000 (694,000) 2,859,000 2,907,000 (726,000)
------- --------- -------- --------- --------- --------
Selling, General and Administrative
Expenses (1,211,000) (1,049,000) (1,647,000) (3,472,000) (3,480,000) (5,480,000)
Other (298,000) (147,000) (37,000) (896,000) (260,000) (37,000)
Financing Expenses (212,000) (150,000) (396,000) (573,000) (454,000) (3,546,000)
-------- -------- -------- -------- -------- ----------
Net Profit (Loss) ($1,046,000) $ 62,000 ($2,774,000) ($2,082,000) ($1,287,000) ($9,789,000)
=========== =========== =========== =========== =========== ===========
</TABLE>
For the Safety Medical Products and Accessories segment, operating
profit consists of total revenues less product cost and expenses. In the Joint
Venture Design and Development segment, operating profit consists of total
revenues less costs and expenses and research and development expenses through
the first quarter of 1999, as the I.V. catheter project was completed at the end
of the first quarter. Subsequent to the first quarter of 1999, operating profit
for this segment consists of total revenues less costs and expenses. Interest
expense is not reported, as it is not included in the reporting of segment
operating profit (loss) for use internally by the chief decision maker.
SEGMENT CAPITAL EXPENDITURES
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
1999 1998 1997 1999 1998 1997
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Safety Medical Products and
Accessories $146,000 $240,000 $250,000 $479,000 $706,000 $ --
Joint Venture Design & Development -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total Consolidated Capital
Expenditures $146,000 $ -- $240,000 $250,000 $479,000 $706,000
======== ======== ======== ======== ======== ========
</TABLE>
There has been no material change in identifiable assets related to
reportable segments since the 1998 Annual Report.
NOTE 6 - LICENSING AGREEMENTS
During April 1998, the Company amended its original Development and
License Agreement and canceled its Supply Agreement with JJM. The amended terms
included certain changes in the licensing and royalty agreements as well as the
transfer of manufacturing of safety needle assemblies to JJM, in exchange for an
initial milestone payment of $3,500,000, with additional payments totaling
$500,000 payable upon the completion of certain milestones. The $3,500,000 was
recorded in 1998 as
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<PAGE> 11
deferred revenue and $2,625,000 was recognized into income during 1998, and
$875,000 was recognized during the first quarter of 1999. In addition, $200,000
in milestone payments were received and recognized into income during the first
quarter of 1999.
NOTE 7 - SUBSEQUENT EVENTS
On October 21, 1999, as interim note financing, the Company issued $3
million aggregate principal amount of 7.5% secured notes (the "Bridge Notes")
and 2.5 million common stock warrants (the "Bridge Warrants") to entities
affiliated with Appaloosa Management, L.P. ("Appaloosa") of Chatham, New Jersey.
The Bridge Notes mature on the earlier of December 31, 1999 or the closing of a
permanent financing of $17.5 million in convertible debt and equity. The Bridge
Warrants consist of rights to purchase, in the aggregate, 1 million shares of
common stock at an initial exercise price of $3.00 per share (the "$3
Warrants"), and warrants to purchase 1.5 million shares of Common Stock at an
initial exercise price of $5.00 per share (the "$5 Warrants"). The exercise
price of the $3 Warrant will automatically increase to $5.00 per share and the
exercise price of the $5 Warrant will automatically increase to $7.00 per share,
in each case on the earlier of the closing of the permanent financing and
October 21, 2000. The $3 Warrants expire on the fifth anniversary of issuance
and the $5.00 Warrants expire on the ninth anniversary of issuance.
During October and November 1999, holders of the 6% Convertible
Debentures converted a total of $433,243 of the outstanding principal balance
into 145,958 shares of common stock.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The discussions set forth in this Management's Discussion and Analysis of
the Results of Operations and Financial Condition and elsewhere herein contain
certain statements which are not historical facts and are considered
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. Forward-looking statements can be identified by the use of such
forward-looking terminology as "believes," "expects," "may," "will," "should,"
or "anticipates" or negative thereof or other derivations thereon or comparable
terminology, or discussions of strategy that involve risks and uncertainties.
The Company's actual results could differ materially from those projected in the
forward-looking statements as a result of, among other factors, the Company's
expectation regarding gross profit and operating income, general economic
conditions and growth in the safety medical products industry, competitive
factors and pricing pressures, changes in product mix, product demand, risk of
dependence on third party suppliers, ability to obtain financing, and other risk
factors and uncertainties detailed in this report, described from time to time
in the Company's other Securities and Exchange Commission filings, or discussed
in the Company's press releases. All forward-looking statements included in this
document are based on information available to the Company on the date hereof,
and the Company assumes no obligation to update any such forward-looking
statements.
OVERVIEW
Since its inception in September 1987 through September 30, 1999, the
Company has incurred cumulative losses totaling $64,954,000. During the same
period, the Company's principal focus has been the design, development, testing
and evaluation of its blood collection safety needle and accessory products, and
the design and development of the molds, needle assembly machines and production
processes needed for manufacturing the blood collection safety needle as well as
the design and development of new products. The Company has also focused its
efforts on developing strategic partnerships with major healthcare companies in
order to assist with the development and expansion of its product lines.
9
<PAGE> 12
With the addition of a high-volume blood collection needle assembly and
packaging system in 1996, the Company believes it will have sufficient capacity
to meet its production needs for blood collection needles for the balance of
1999. For the Company to achieve profitability, further reductions in
manufacturing costs and increases in sales are necessary.
In January 1997, the Company entered into a Development and License
Agreement and a Supply Agreement with JJM. Pursuant to the original agreements,
the Company would develop and manufacture safety needle assemblies for JJM, to
become part of a new safety I.V. catheter to be manufactured and sold by JJM,
utilizing the Company's patented self-blunting needle design.
In April 1998, the Company amended the original Development and License
Agreement and canceled its Supply Agreement with JJM. The amended terms included
certain changes in the licensing and royalty agreements as well as the transfer
of manufacturing of the safety needle assemblies to JJM, in exchange for an
initial milestone payment of $3,500,000, with an additional $500,000 payable
upon the completion of certain milestones. The revised agreement also provided
for an additional $300,000 payable to the Company for initial capital equipment
purchases during 1998.
In December of 1998, the Company completed the construction of an
automated assembly machine for JJM under the terms of the amended agreement, and
the equipment was transferred to JJM's manufacturing facility. During the first
quarter of 1999, the Company continued to perform services for JJM under the
terms of the agreement; however, by the end of the first quarter of 1999,
substantially all of the contractual obligations had been met by the Company.
During the second and third quarters of 1999, the Company has continued to
provide consulting and engineering work for JJM for the I.V. catheter project;
however, this revenue is outside of the original agreements with JJM.
On October 6, 1998 the Company entered into a non-exclusive supply and
distribution agreement for the United States and Canada with Graphic Controls
Corporation (subsequently known as Kendall Healthcare Products
Company("Kendall")), a subsidiary of Tyco and a major supplier of sharps
containers in the United States. The agreement allows Kendall to purchase and
distribute Bio-Plexus Drop-It(R) Needle Disposal Containers and Drop-It(R) Quick
Release Needle Holders. The agreement has an initial term of three years, and
shall be automatically renewed for an additional year, unless either party
notifies the other of its intent not to renew.
On October 23, 1998 the Company entered into an exclusive License
Agreement and Design, Development and Asset Transfer Agreement for a PICC
Introducer Catheter with TFX Medical, a division of Teleflex Incorporated
("TFX"), the industry's dominant supplier of PICC Introducers. The License
Agreement includes certain minimum annual volume requirements and ongoing
royalties on the sale of PICC Introducer Catheters featuring the Company's
Punctur-Guard(R) technology. Under the Design, Development and Asset Transfer
Agreement, the Company will design and develop safety needle assemblies to be
used with the TFX Peelable Catheter, and will modify existing manufacturing
equipment to be transferred to TFX pursuant to the terms and conditions of the
agreement. On July 26, 1999, an agreement was entered into with TFX to modify
the License Agreement dated October 23, 1998. The amended agreement includes
additional licensing fees and changes in royalty revenue in exchange for TFX's
right to exclusively market to one of its customers.
10
<PAGE> 13
In October 1998, the Company entered into a distribution agreement with
Fisher HealthCare of Houston, Texas, the second largest operating unit of Fisher
Scientific. Fisher Scientific is one of the world leaders in serving science,
providing more than 245,000 products and services to research, health care,
industrial, educational and government customers in 145 countries. The
distribution agreement allows Fisher Healthcare to purchase and distribute all
of the Bio-Plexus blood collection products.
The Company believes that similar arrangements may be possible with one or
more major healthcare companies for its other products. Such arrangements could
assist the Company in raising additional capital and help fund research and
development of new products, as well as accelerate the rate of sales growth.
However, such arrangements could also decrease the revenue per unit for the
Company, as a result of sharing revenue with strategic partners. The Company
believes the overall benefits and potential for greater market share outweigh
the disadvantages that may result from such arrangements.
THE YEAR 2000 READINESS DISCLOSURE
The "Year 2000 Issue" is the result of computer systems recognizing two
digits rather than four to define the applicable year. Any of the Company's
computer applications, computer hardware, or other systems that have
date-sensitive capabilities may recognize a date using "00" as the year 1900
rather than the Year 2000.
The Company has designated a team of employees with management
representation, as well as representation from each functional area within the
Company to address the Year 2000 issue. The team has developed a project plan to
assess the impact of the Year 2000 on its internal systems, products and
facilities, as well as, its key suppliers and customers. The project plan
consists of the following: awareness of major areas affected, assessing the
degree of impact, remediation, and testing and contingency planning.
The Company has determined that its safety medical products are not
affected by the Year 2000 issue; and therefore, all on-hand inventories and
product at customer locations are not at risk.
The Company has completed the awareness and assessment phases with respect
to its internal systems and facilities, with remediation efforts well under way.
The following outlines the status of major compliance concerns within the
Company:
1. BUSINESS/ACCOUNTING/INVENTORY SYSTEMS: The Company's principal
business and accounting system is a standard product from a major
software company that is upgraded by the Company as new versions are
released by the software vendor. The Company has written evidence from
the vendor that the software is Year 2000 compliant. The business and
accounting software is currently running on a Windows NT server, and
the Company has determined that both the hardware and software
residing on the server are Year 2000 compliant.
2. OFFICE APPLICATIONS: Many desktop PC's have been recently replaced and
are using compliant operating systems and applications. Those not
scheduled to be replaced may have to be manually reset after the
millennium change. Any remaining non-compliant, mission critical PC's
will be replaced by year-end.
11
<PAGE> 14
3. PHONE: The Company's phone systems have been evaluated by a qualified
vendor and plans to upgrade the program cards that are in the
Company's existing systems are underway and will be completed by
year-end.
4. ELECTRICAL POWER: The Company is dependent on its electrical power
vendor to continue to deliver adequate supplies of power to the plant.
Contingency plans do not provide for power levels adequate to maintain
production. Interruptions in power delivery may result in diminished
production output during that time.
5. PRODUCTION EQUIPMENT: There are a number of microprocessor-controlled
devices designed into the Company's production equipment. All of these
devices are Year 2000 compliant. The Company has determined that its
manufacturing monitoring system is not compliant and remediation
efforts are well underway and will be complete by year-end.
6. SHIPPING AND RECEIVING: Order-picking at the Company is performed in a
manual fashion based on sales orders generated by the
Business/Accounting/Inventory system (see discussion of this system
above). Packaging and Shipping are likewise predominately manual, with
the exception of an electronic shipping scale, the date function of
which is not currently used. Printing of shipping labels has been
automated, though manual processes remain in place to enable label
creation with no interruption to order fulfillment.
7. FIRE/SECURITY: The Company has determined that both the fire alarm and
the security system at its plant in Vernon, CT are not date dependent.
Both systems include standby power capability in the event of power
loss. The alarm monitoring company has also certified that their
notification system is compliant.
8. HVAC: The Company's mechanical contractor has determined that its HVAC
systems are compliant and will continue to maintain the office, plant,
and manufacturing environments through the millennium change.
The Company has been assessing its Year 2000 risks related to significant
relationships with third parties via ongoing communication with its strategic
partners, distributors and customers, and critical suppliers. As part of the
process, the Company has requested written assurances from these suppliers and
customers that they have Year 2000 readiness programs in place, as well as an
affirmation that they will be compliant when necessary. Responses to these
inquiries have been gathered and reviewed. The following summarizes the
Company's contacts with third parties:
Strategic Partners: The Company has received written communication from
both of its strategic partners regarding each of their Year 2000 efforts:
JOHNSON & JOHNSON MEDICAL, INC.: In 1996, the Year 2000
issue was identified by JJM as a critical business initiative with
commitment of resources and funding from senior management. In
1997, a formal structure to address Year 2000 issues was put into
place, which included the appropriate resources from the
functional business areas along with resources from Information
Management. Policies, procedures and monitoring mechanisms were
implemented to provide project management coordination. JJM is
finalizing Year 2000 readiness of their current products, services
and business systems. Their goals are: to achieve full compliance
before Year 2000; to provide safe, continual flow of products as
they enter Year 2000; to work with their business partners to
jointly identify potential risks and develop strategies to
mitigate problems; to help business partners meet their
commitments to JJM and identify risks in the supply chain and to
work together on appropriate contingency plans; to plan so that
JJM's products are there when
12
<PAGE> 15
customers need them; and to achieve a smooth transition to the new
year. JJM completed their assessments and has made significant
progress toward achieving their readiness goals within their
Information Management and Non-Information Management and Product
areas. They are also engaged in a business partner program that
includes proactive meetings with a large number of their customers
and suppliers. They will continue to work on these readiness
efforts throughout the remainder of 1999 with a focus on risk
mitigation and contingency planning. JJM has stated in their
Readiness Disclosure that it is their belief that "the Year 2000
should have a minimal impact on their operations and product
availability and that a key principle for their business partners
is 'Business As Usual'". As of January 1, 1999, nearly
Ninety-eight percent of their current products were in complete
compliance. Ninety-five percent of their business systems and
supporting technical infrastructure along with manufacturing
facilities and equipment are currently compliant, and they expect
to have one hundred percent compliance in all critical areas well
before the year 2000.
TFX MEDICAL INC.: Early in 1997, TFX's parent company, Teleflex,
Incorporated, initiated a directed program to deal with Year 2000
issues. A full-time project manager was appointed, and a formal
awareness and assessment program was initiated corporate wide.
With the assistance of an outside professional firm, initial
position documents were prepared by all business units under the
Teleflex corporate umbrella, assessing initial status in relation
to business risks as posed by the millennium issue. TFX is
currently operating under a specific seven-phase audit/completion
plan. The listed phases are: Awareness, Inventory, Assessment,
Analysis, Conversion, Implementation and Post Implementation.
Internal analysis and remediation for main business systems and
all peripheral hardware applications is substantially complete,
with final upgrades and required adjustments identified and under
way. Assisted by a professional third party, a formal program was
initiated to identify and remediate the recognized risk as posed
by possible non-compliant business partners. TFX's corporate goal
of substantial conformance of primary internal systems with Year
2000 compliance standards was attained at year-end 1998. Teleflex
is now operating in the final phase of its project "post
implementation."
Distributors and Customers: The Company has received written
communication from both of its major distributors, Allegiance Healthcare
and Fisher Scientific, as well as many of its smaller customers. The
following is a summary of the Company's communications with its two
major distributors:
ALLEGIANCE HEALTHCARE: In late 1998, Allegiance completed their
$100 million installation of new information technology systems
for order entry, inventory management, Internet commerce, and
manufacturing and distribution automation. All of these systems
are Year 2000 compliant. Their self-manufactured products contain
no microprocessors or date-sensitive components; thus, they are
Year 2000 ready. Allegiance is working closely with their supply
chain partners to ensure that their partners products and systems
are compliant as well.
FISHER HEALTHCARE (FISHER SCIENTIFIC): In February 1997, Fisher's
Year 2000 Project was formally initiated and their Year 2000
Project Team created using export resources from
13
<PAGE> 16
Information Systems (IS), Material Management, Logistics,
Operations, and Quality Assurance. This team developed and
executed a detailed Year 2000 Readiness Plan. Fisher's Readiness
Plan identified Year 2000 issues within its IS systems.
Application code and hardware are being remediated or replaced and
tested again for compliance. The top 402 suppliers, representing
96% of products sold in the U.S. have been surveyed, and Fisher is
continuing to work closely with these organizations to assess and
test their systems compliance to assure that transactions are
functioning correctly under all circumstances. Fisher is testing
its most critical system interfaces and is in the process of
developing contingency and business continuation plans to address
supplier issues identified through its evaluations and
assessments. Fisher publishes a detailed status report of Product
Compliance of products they distribute currently and those they
distributed in the past. This report can be accessed on from their
website and assessments made on a product by product basis.
Suppliers: The Company monitors the status of its goods and service
providers with respect to the Year 2000 issue using a prioritized
matrix. All current and past suppliers of either goods or services are
categorized from 1 (highest priority) to 4 (lowest priority), as
follows:
CATEGORY 1: These are vendors that the Company relies heavily
upon to continue its operations. They might possess the
Company's custom tooling or be uniquely qualified to supply
a given product or to perform a given service. Alternate
suppliers would be costly to secure.
CATEGORY 2: These are vendors that supply important goods and
services to the Company, but whose goods and/or services are
of a less specialized nature and could be procured elsewhere.
CATEGORY 3: These are vendors who play an important role in
the Company's business, but either in a support function or
in a less time-dependent manner. Impact on the vendor from
Year 2000 problems may or may not be felt by Bio-Plexus.
CATEGORY 4: These are vendors for whom alternative sources
are known or could be located within a reasonable timeframe.
Past, or inactive, vendors will also be included in this
category. Compliance statistics are not tracked for this
category.
The Company has designated a specific person to establish
communications regarding Year 2000 compliance with all of its vendors
and suppliers. Specific status statistics for each category are outlined
below.
- --------------------------------------------------------------------------------
Category 1 Category 2 Category 3
- --------------------------------------------------------------------------------
Fully Compliant 9/11 14/24 27/47
In Process 2/11 6/24 9/47
Status Uncertain 0/11 4/24 11/47
- --------------------------------------------------------------------------------
The remainder of activities related to third parties will be completed by
the end of the year. Despite these efforts, the Company can provide no assurance
that supplier and customer Year 2000 compliance plans will be successfully
completed in a timely manner.
14
<PAGE> 17
The most "reasonably likely worst-case scenario" that could occur due to
the millennium change would result if the Company lost all electrical power to
its manufacturing facility. Contingency plans do not provide for backup power in
case of a loss. Interruptions in power delivery could result in diminished
production output and less shipping of product to customers during that time.
However, the Company's contingency plans do include additional inventory levels
at year-end to support its current level of sales to distributors and customers
in case of a loss of power. The Company does not believe that a complete loss of
electrical power for a limited amount of time would have a material adverse
effect on its results of operations, liquidity, and financial condition.
The Company is taking steps to prevent major interruptions in the
business due to Year 2000 problems using both internal and external resources to
identify and correct problems and test for readiness. The Company estimates that
the total costs to date are approximately $36,000 and that future costs of the
Year 2000 readiness project will not have a material adverse effect on its
financial position, results of operations or cash flows. The ultimate effects on
the Company of its suppliers and customers not being fully Year 2000 compliant
are not reasonably estimable. The Company, therefore, could be adversely
effected by such things as loss of revenue, production delays, lack of third
party readiness, and other business interruptions. However, the Company believes
its Year 2000 remediation efforts, together with the responses from primary
suppliers and customers to date, reduces the potential impact of non-compliance
to levels which will not have a material adverse effect on its financial
position, results of operations or cash flows.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1998
The Company had product sales of $1,143,000 for the three months ended
September 30 1999, compared to $1,746,000 for the same period in the prior year.
The decrease was attributable to a decrease in the sales of equipment of
$814,000 associated with the I.V. catheter project for JJM, partially offset by
an increase in sales of safety medical devices of $201,000 over the prior year.
The Company had revenues from services totaling $148,000 for the three
months ended September 30, 1999, compared to $1,242,000 for the same period in
the prior year. The decrease was primarily attributable to completion of the
I.V. catheter development project for JJM in the first quarter of 1999.
Product costs were $630,000 for the three months ended September 30, 1999,
compared to $1,483,000 for the same period in the prior year. The decrease in
these costs resulted primarily from lower costs associated with the I.V.
catheter project for JJM and lower manufacturing costs associated with the blood
collection needle product line.
Service costs were $36,000 for the three months ended September 30, 1999,
compared to $87,000 for the same period in 1998. These costs represent
engineering time billed for various development projects. The decrease in these
costs is the result of the completion of the I.V. catheter development project
during the first quarter of 1999.
Research and development expenses were $248,000 for the three months ended
September 30, 1999, compared to $157,000 for the same period a year ago. The
increase in these costs resulted from
15
<PAGE> 18
a decrease of $211,000 in 1999 of deferred revenue related to the development of
the I.V. catheter for JJM that was amortized into income as a reduction in
research and development expenses during 1998, partially offset by decreased
research and development expenses in 1999 as compared to 1998.
Selling, general and administrative expenses were $1,211,000 for the three
months ended September 30, 1999, compared to $1,049,000 for the same period a
year ago. The increase is primarily attributable to increased expenses in the
area of sales and marketing of $167,000, partially offset by decreases in
administrative costs in the areas of accounting, human resources and facility
costs.
Financing expenses were $212,000 for the three months ended September 30,
1999, compared to $150,000 for the same period in 1998. The increase in these
costs resulted primarily from increased amortization expense of $84,000 from the
recording of warrants associated with the convertible debenture financing in the
second quarter of 1999, partially offset by decreased interest expense of
$28,000 associated with equipment lease financing.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1998
The Company had product sales of $3,713,000 for the nine months ended
September 30 1999, compared to $3,896,000 for the same period in the prior year.
The decrease was attributable to a decrease in sales of equipment associated
with the I.V. catheter project for JJM of $1,263,000 due to its completion in
the first quarter of 1999, partially offset by increased sales of safety medical
devices of $1,067,000 due to the continued expansion of its domestic account
base and better pricing on its products.
The Company had revenues from services totaling $1,325,000 for the nine
months ended September 30, 1999, compared to $2,973,000 for the same period in
the prior year. The decrease was primarily attributable to lower billable
engineering time associated with I.V. catheter development project for JJM of
$1,151,000 in the first quarter of 1998 versus 1999 and decreased deferred
revenue of $875,000 also associated with the JJM I.V. catheter development
project, partially offset by increased billable engineering time of $179,000
associated with the TFX PICC Introducer Catheter and increased revenues of
$200,000 for certain milestones that were met under the JJM agreements.
Product costs were $2,165,000 for the nine months ended September 30,
1999, compared to $3,547,000 for the same period in the prior year. The decrease
in these costs resulted primarily from lower costs of $1,118,000 associated with
the I.V. catheter project for JJM and lower manufacturing costs associated with
the blood collection needle product line.
Service costs were $64,000 for the nine months ended September 30, 1999,
compared to $299,000 for the same period in 1998. These costs represent
engineering time billed for various development projects. The decrease in these
costs is the result of the completion of the I.V. catheter development project
during the first quarter of 1999.
Research and development expenses were $846,000 for the nine months ended
September 30, 1999, compared to $376,000 for the same period a year ago. The
increase in these costs resulted primarily from a decrease of $631,000 in 1999
of deferred revenue related to the development of the I.V. catheter for JJM that
was amortized into income as a reduction in research and development
16
<PAGE> 19
expenses during 1998, partially offset by decreased research and development
expenses in 1999 as compared to 1998.
Selling, general and administrative expenses were $3,472,000 for the nine
months ended September 30, 1999, compared to $3,480,000 for the same period a
year ago.
Financing expenses were $573,000 for the nine months ended September 30,
1999, compared to $454,000 for the same period in 1998. The increase in these
costs resulted primarily from the recording of the intrinsic value of the
conversion feature associated with the convertible debenture financing of
$121,000 to interest expense in the second quarter of 1999 and increased
amortization expense of $84,000 from the recording of warrants associated with
the convertible debenture financing in the second quarter of 1999, partially
offset by lower interest expense related to equipment leases.
LIQUIDITY AND CAPITAL RESOURCES
The Company's need for additional funds has continued from period to
period, as a result of its ongoing losses from operations, and its continued
efforts to develop new products. To date, the Company has financed its
operations primarily through borrowings and the sale of equity securities.
Through September 30, 1999, the Company has received net proceeds of
approximately $31,913,000 through borrowings and the sale of debt securities and
$50,273,000 through the sale of equity securities. Of the net equity proceeds,
$17,575,000 was received from its 1995 public offering, $14,191,000 was received
from the Company's initial public offering and the balance of $18,507,000 was
received through the private placement of equity securities.
Cash used in operating activities for the nine months ended September 30,
1999 totaled $2,291,000 and was primarily due to a net loss for the period of
$2,082,000. Also contributing was an increase in inventory balances due to
higher anticipated sales volumes in the future. In addition, there were
decreases in accrued product replacement costs of $222,000 as a result of the
near completion of the product recall in the fourth quarter of 1998, and in
deferred revenue resulting from the recognition into income of $875,000 of
development funds associated with the JJM I.V. catheter project during the first
quarter of 1999.
Net cash provided by investing activities amounted to $322,000 primarily
due to the Company's conversion of a loan to Jordan Pharmaceuticals, Inc. in the
amount of $600,000 into shares of Jordan Series A Preferred Stock. Pursuant to
the terms of the stock option agreement, Jordan exercised its option to
repurchase the shares for total consideration to the Company of $627,000.
Offsetting the receipt of cash from Jordan, was the purchase and construction of
fixed assets totalling $250,000 and patent costs of $55,000 for the nine month
period.
Net cash provided by financing activities amounted to $1,629,000 for the
nine months ended September 30, 1999. Proceeds from the sale of stock of
$1,100,000 and proceeds from long-term debt of $2,092,000, offset by the
repayment of debt totalling $1,541,000 accounted for the net increase in cash
for financing activities.
The Company's primary cash requirement for the remainder of 1999 will be
for working capital to sustain ongoing operations for the blood collection
needle program, debt service, and further research
17
<PAGE> 20
and development on its winged intravenous set, PICC introducer, and other new
products. The Company believes that, in addition to cash generated from sales of
its products, it will need approximately $1.5 million in working capital to fund
operations for the balance of 1999, exclusive of funds needed to develop and
launch new products.
On October 21, 1999, as interim note financing, the Company issued $3
million aggregate principal amount of 7.5% secured notes (the "Bridge Notes")
and 2.5 million common stock warrants (the "Bridge Warrants") to entities
affiliated with Appaloosa Management, L.P. ("Appaloosa") of Chatham, New Jersey.
The Bridge Notes mature on the earlier of December 31, 1999 or the closing of a
permanent financing of $17.5 million in convertible debt and equity. The Bridge
Warrants consist of rights to purchase, in the aggregate 1 million shares of
common stock at an initial exercise price of $3.00 per share (the $3 Warrants"),
and warrants to purchase 1.5 million shares of Common Stock at an initial
exercise price of $5.00 per share (the "$5 Warrants"). The exercise price of the
$3 Warrant will automatically increase to $5.00 per share and the exercise price
of the $5 Warrant will automatically increase to $7.00 per share, in each case
on the earlier of the closing of the permanent financing and October 21, 2000.
The $3 Warrants expire on the fifth anniversary of issuance and the $5.00
Warrants expire on the ninth anniversary of issuance.
Funds needed to support the Company's working capital requirements for the
balance of 1999 will come from current cash on-hand, cash generated from sales
of its products, and the Bridge Notes as discussed above. In addition to the
Bridge Note financing, the Company has received a commitment from Appaloosa for
$17.5 million (including the Bridge Notes) consisting of $16.75 million
zero-coupon convertible secured notes and an equity investment of $750,000 in
exchange for 250,000 shares of common stock, plus additional warrants. The
financing is subject to shareholder approval and is expected to be completed by
December 31, 1999. This financing will allow the Company to fund the development
and expansion of its product lines beyond 1999. Failure to raise the needed
capital could have an adverse effect on the Company's operations, development
plans and cash flows.
To date the Company has not been adversely impacted by inflation.
PART II. OTHER INFORMATION
Item 2. Changes in Securities
On September 19, 1999, an officer of the Company, Carl R. Sahi, exercised
a warrant granted in September 1992 to purchase 125,000 shares of common stock
in a cashless exercise in exchange for 67,470 shares of common stock.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Shareholders on July 19, 1999.
Matters that were acted upon included: the election of the Board of Directors;
an amendment to the Company's Certificate of Incorporation; and ratification of
the selection of Mahoney Sabol & Company, LLP as independent public accountants
for the current fiscal year.
Five (5) persons were elected as members of the Board of Directors. They
included: Richard L. Higgins, Carl R. Sahi, Richard D. Ribakove, David Himick
and Herman Gross.
The votes cast were as follows:
Votes For Votes Withheld
--------- --------------
Richard L. Higgins 11,095,462 91,441
Carl R. Sahi 11,097,931 88,972
18
<PAGE> 21
Richard D. Ribakove 11,101,812 85,091
David Himick 11,094,812 92,091
Herman Gross 11,041,207 145,696
The shareholders approved an amendment to the Company's Certificate of
Incorporation which increased the number of shares of Common Stock to
twenty-five (25) million shares. The amendment required a vote of holders of a
majority of the issued and outstanding shares of common stock entitled to vote
on the amendment present in person or represented by proxy at the Annual Meeting
when a quorum is present. The amendment was approved by the following vote: for:
10,864,395; against: 279,155; abstain: 43,353. There were no broker non-votes.
The shareholders also ratified the selection of Mahoney Sabol & Company,
LLP as the independent accountants to examine the accounts of the Company for
the current fiscal year and to report on the Company's financial statements for
that period. The ratification was made by the following vote: for: 11,150,924;
against: 16,724; abstain: 19,255. There were no broker non-votes.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit No. Description Method of Filing
----------- ----------- ----------------
27 Financial Data Schedule Filed with this report.
(b) Reports on Form 8-K
No reports were filed on Form 8-K.
19
<PAGE> 22
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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)
November 15, 1999 /s/ Carl R. Sahi
----------------- ---------------------------------
(Date) Carl R. Sahi
President and Chief Executive Officer
November 15, 1999 /s/ Kimberley A. Cady
----------------- ---------------------------------
(Date) Kimberley A. Cady
Vice President of Finance and Chief
Financial Officer
20
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 195,000
<SECURITIES> 0
<RECEIVABLES> 434,000
<ALLOWANCES> 0
<INVENTORY> 2,519,000
<CURRENT-ASSETS> 3,334,000
<PP&E> 4,456,000<F1>
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<TOTAL-ASSETS> 8,718,000
<CURRENT-LIABILITIES> 2,050,000
<BONDS> 2,496,000
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<COMMON> 68,977,000
<OTHER-SE> 149,000<F2>
<TOTAL-LIABILITY-AND-EQUITY> 8,718,000
<SALES> 5,038,000
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