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 June 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 0-19472
CPX CORP.
- --------------------------------------------------------------------------------
(exact name of registrant as specified in its charter)
Delaware 94-3087971
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 East 52nd Street 21st Floor, New York, NY 10022
- --------------------------------------------------------------------------------
(Address of registrant's principal executive offices) (Zip Code)
(877) 431-2942
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
CELLPRO, INCORPORATED
22215 26th Avenue S.E., Bothell, WA 98021
- --------------------------------------------------------------------------------
(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 [ ]
Common Stock, $0.001 par value Outstanding at July 31, 1999:
14,633,985
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets - June 30, 1999 (unaudited)
and March 31, 1999 3
Consolidated Statements of Operations -
Three months ended June 30, 1999 and 1998 (unaudited) 4
Condensed Consolidated Statements of Cash Flows -
Three months ended June 30, 1999 and 1998 (unaudited) 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 6. Exhibits and Reports on Form 8-K 10
All other items under Part II are inapplicable or
have a negative response and are therefore omitted.
SIGNATURES 11
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CPX CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999 (UNAUDITED) AND MARCH 31, 1999
<TABLE>
<CAPTION>
ASSETS
June 30, March 31,
1999 1999
--------- ---------
(Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 1,090,424 $ 17,061,247
Accounts receivable, net of allowance for
doubtful accounts of $0 & $13,491 -- 213,690
Marketable securities -- 1,367,743
Prepaid expenses 711 222,239
Equipment -- 3,000
Investment in and receivable from subsidiary 370,030 370,030
------------ ------------
Total assets $ 1,461,165 $ 19,237,949
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ -- $ 6,284
Prepetition debt -- 12,683,306
Other liabilities -- 1,520,622
------------ ------------
Total liabilities -- 14,210,212
Stockholders' equity:
Common stock, $.001 par value; 25,000,000 shares
authorized; 14,633,985 shares issued
and outstanding 14,634 14,634
Additional paid-in capital 166,735,346 169,908,483
Accumulated deficit (165,288,815) (164,895,380)
------------ ------------
Total stockholders' equity 1,461,165 5,027,737
------------ ------------
Total liabilities and stockholders' equity $ 1,461,165 $ 19,237,949
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CPX CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
Three months ended June 30,
1999 1998
------------ ------------
Product sales $ -- $ 2,492,829
Contract revenue -- 95,443
----------- -----------
Total revenues -- 2,588,272
Costs and expenses:
Cost of product sales -- 1,232,677
Other cost of sales -- 685,324
Research and development -- 2,841,057
Selling, general and administrative 436,084 3,191,709
----------- -----------
Total costs and expenses 436,084 7,950,767
Loss from operations (436,084) (5,362,495)
----------- -----------
Other income (expense):
Interest income 159,675 349,808
Interest expense (117,026) (6,174)
Other, net -- 54,115
----------- -----------
Total other income 42,649 397,749
----------- -----------
Net loss $ (393,435) $ (4,964,746)
=========== ===========
Net loss per share - basic and diluted $ (0.03) $ (0.34)
Weighted average number of common shares
outstanding during the period - basic and diluted 14,633,985 14,621,040
See accompanying notes to consolidated financial statements.
<PAGE>
CPX CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended June 30,
1999 1998
-----------------------------------
<S> <C> <C>
Net cash used in operating activities $ (1,482,772) $ (5,591,887)
-------------- --------------
Cash flows from investing activities:
Purchase of property and equipment -- (37,311)
Proceeds from sales and maturities
of securities available for sale -- 2,068,780
Proceeds from sale of fixed assets 650 --
Purchase of restricted cash equivalents -- (756,789)
Change in other assets -- (6,185)
-------------- --------------
Net cash provided by investing activities 650 1,268,495
Cash flows from financing activities:
Principal payments on long-term debt -- (59,322)
Payments on pre petition debt, net (11,315,564) --
Issuance of Common Stock, net
of issuance costs -- 40,409
Distribution to shareholders (3,173,137) --
Other -- 20,687
-------------- --------------
Net cash provided by (used in) financing activities (14,488,701) 1,774
Net decrease in cash and cash equivalents (15,970,823) (4,321,618)
Cash and cash equivalents:
Beginning of period 17,061,247 12,463,465
End of period $ 1,090,424 $ 8,141,847
============== ==============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CPX CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements should be read
in conjunction with the audited financial statements and notes there to
contained in the Company's Report on Form 8-K for the year ended March 31, 1999.
In the opinion of management, all adjustments necessary for a fair presentation
of the interim operating results are reflected herein. All such adjustments are
normal and recurring in nature. Results for the three months ended June 30, 1999
are not necessarily indicative of the results that may be expected either for
any other quarter in the year ending March 31, 2000 or for the entire year
ending March 31, 2000.
2. Operations
The Company currently has no operating business. Management is pursuing
various strategic alternatives which include the possible use of the Company's
remaining net assets to acquire, merge, consolidate or otherwise combine with an
operating business or businesses; however, there is no assurance that any such
alternatives will occur.
3. Bankruptcy Plan and Distribution of Funds
On October 28, 1998, CellPro, Incorporated ("CellPro") filed for bankruptcy
protection under Chapter 11 of the United States Bankruptcy Code, Case No.
98-13604 in the United States Bankruptcy Court for the Western District of
Washington, Judge Karen Overstreet presiding (the "Bankruptcy Court"). On May
21, 1999 the Bankruptcy Court issued an order confirming CellPro's Second
Amended Plan of Reorganization (the "Plan") dated as of May 10, 1999. The
effective date of the Plan occurred on June 1, 1999.
4. Net Loss Per Share
Presentation of basic earnings per share ("EPS") and diluted EPS on the
face of the consolidated statements of operations is required for entities with
complex capital structures. Basic EPS is based on the weighted average number of
common shares outstanding during the period. Diluted EPS is based on the
potential dilution that would occur on exercise or conversion of securities into
common stock using the treasury stock method. However, potential common shares
that are considered to be anti-dilutive are excluded from the computation of
diluted EPS. Since the Company has a loss from operations, inclusion of
potential common shares would be anti-dilutive. Accordingly, such potential
common shares have been excluded from the computation of diluted EPS resulting
in the same amount for both basic and diluted EPS. Specifically, options to
acquire 2.7 million shares have been excluded from the calculation of diluted
EPS for the quarters ended June 30, 1998. Outstanding stock options could
potentially dilute EPS in future periods.
5. Comprehensive Income
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
130"). The Company implemented SFAS 30 during the quarter ended June 30, 1998.
Comprehensive income includes net loss as shown in the consolidated statement of
operations adjusted by certain amounts which are included in stockholders'
equity accounts. Net unrealized gains or losses on securities available for sale
and foreign currency translation adjustments resulting from the consolidation of
foreign operations are the only two adjustments to net loss to arrive at the
Company's comprehensive loss. The table below shows comprehensive loss for the
periods presented:
June 30, 1999 June 30, 1998
------------- -------------
Net loss $ (393,435) $ (4,964,746)
Foreign currency translation -- 20,686
Net unrealized gain (loss) on
securities available for sale -- (5,545)
------------ ------------
Comprehensive loss $ (393,435) $ (4,949,605)
============ ============
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The Company filed a voluntary petition for reorganization under Chapter 11
of the United States Bankruptcy Code on October 28, 1998, and the Company
commenced liquidation shortly thereafter. The Company announced in June that it
has changed its name to CPX Corp. from Cellpro, Incorporated. Also during June,
1999 the Company distributed funds to equity holders and in September 1999
intends to make final distribution of funds to equity holders pending the
receipt of the proceeds from the sale of its European subsidiaries. The Company
expects to receive $370,030 sales proceeds from the sale of its European
Subsidiaries.
Except for disclosures that report the Company's historical results, the
statements set forth in this section are forward-looking statements. Actual
results may differ materially from those projected in the forward-looking
statements. Additional information concerning factor that may cause actual
results to differ materially from those in the forward-looking statements are
set forth in the section entitled "Investment Considerations" in the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 1998," and in the
Company's other filings with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company assumes no obligation to update
any such forward- looking statements or comment on the reasons why actual
results may differ therefrom.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents totaled approximately $1,090,000 as
of June 30, 1999 and approximately $17,061,000 as of March 31, 1999. Elimination
of virtually all liabilities and payment to stockholders combined to account for
the decrease in cash. At June 30, 1999, the Company had no liabilities and
consequently the Company's working capital balance was approximately $1,090,000.
While the Company seeks an acquisition or other business combination, management
believes its cash position is sufficient to cover administrative expenses and
current obligations for the foreseeable future. There can be no assurance that
the Company will be able to locate or purchase an additional business, or that
any such business will be profitable. In order to finance an acquisition, the
Company may be required to incur or assume indebtedness or issue securities.
RESULTS OF OPERATIONS
Losses from operations for the three months ended June 30, 1999 and 1998
were ($436,084) and ($5,362,495), respectively. The decreased loss during the
three months ended June 30, 1999 resulted from no product sales, costs of
production, or research and development activity during the first quarter of
1999.
General and administrative expenses of $436,084 for the quarter ended June
30, 1999 was down significantly from approximately $3.2 million for the quarter
ended June 30, 1998. The decrease was due to lower administrative demands as a
result of no operating activities.
Total other income for the three months ended June 30, 1999 and 1998 of
$42,649 and $397,749, respectively, was higher during the June 30, 1998 quarter
primarily due to higher interest income and lower interest expense.
YEAR 2000 COMPLIANCE
Many information technology and process control systems used in the current
business environment were designed to use only two digits in the date field and
thus may not function properly in the Year 2000 and after. This could result in
system failures or in miscalculations causing disruption of operations
including, but not limited to, an ability to process transactions, to send and
receive electronic data, or to engage in routing business activities and
operations.
The Company intends to make the necessary modifications to mitigate the
risk of disruption to its operations. The costs of this project and its timely
completion are dependent upon numerous assumptions about future events,
including availability of certain resources, third party remediation plans, and
other factors, many of which are beyond the Company's control. If such
modifications are not completed timely, or if any of the Company's customers and
suppliers do not successfully deal with the Year 2000 issue, the Year 2000 issue
could have a material adverse impact on the operations of the Company.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On October 28, 1998, CellPro, Incorporated ("CellPro") filed for bankruptcy
protection under Chapter 11 of the United States Bankruptcy Code, Case No.
98-13604 in the United States Bankruptcy Court for the Western District of
Washington, Judge Karen Overstreet presiding (the "Bankruptcy Court"). On May
21, 1999 the Bankruptcy Court issued an order confirming CellPro's Second
Amended Plan of Reorganization (the "Plan") dated as of May 10, 1999. The
effective date of the Plan occurred on June 1, 1999.
Details of information required by this item were included under the
captions "INVESTMENT CONSIDERATIONS" and "LEGAL PROCEEDINGS" in Part I, Item 2
in the Company's form 10-Q for the period ending June 30, 1998 filed with the
Securities and Exchange Commission on August 21, 1998 and is incorporated herein
by reference.
Further clarification of information required by this item was included in
the footnotes to the audited Financial Statements for the year ended March 31,
1999 on the Company's form 8-K filed with the Securities and Exchange Commission
on August 23, 1999 and is incorporated herein by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule (filed as part of the
electronic filing only).
(b) Reports on Form 8-K
The Registrant filed the following current report on Form 8-K during the
quarter for which this report is filed.
(i) Report on Form 8-K dated May 27, 1999 reporting Unscheduled
Material Events.
(ii) Report on Form 8-K dated April 20, 1999 reporting Unscheduled
Material Events.
<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.
CPX CORP. (Registrant)
/s/ Warren G. Lichtenstein
------------------------------------
Warren G. Lichtenstein
President
/s/ Brian Lorber
------------------------------------
Brian Lorber
Secretary/Treasurer
Date: August 23, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 30,
1999 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000878377
<NAME> CPX CORP.
<MULTIPLIER> 1,000
<CURRENCY> DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-1-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,090,424
<SECURITIES> 0
<RECEIVABLES> 370,030
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,461,165
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,461,165
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 14,634
<OTHER-SE> 1,446,531
<TOTAL-LIABILITY-AND-EQUITY> 1,461,164
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 436,084
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 117,026
<INCOME-PRETAX> (393,435)
<INCOME-TAX> 0
<INCOME-CONTINUING> (393,435)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (393,435)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
