<PAGE>
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 June 30, 1997
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: 1-12128
MATRITECH, INC.
---------------
(Exact name of registrant as specified in its charter)
DELAWARE 04-2985132
-------- ----------
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
330 NEVADA STREET, NEWTON, MASSACHUSETTS 02160
----------------------------------------------
(Address of principal executive offices) (Zip Code)
(617) 928-0820
--------------
(Registrant's telephone number, including area code)
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
--- ---
As of July 15, 1997 there were 18,536,863 shares of Common Stock
outstanding.
The Exhibit Index is located on Page 17.
<PAGE>
MATRITECH, INC.
INDEX
PART I FINANCIAL INFORMATION
Page
----
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets as of December 31, 1996
and June 30, 1997 3
Statements of Operations for the three and
six months ended June 30, 1996 and 1997 5
Statements of Cash Flows for the six months ended
June 30, 1996 and 1997 6
Notes to Financial Statements 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10
PART II OTHER INFORMATION
ITEM 2. CHANGE IN SECURITIES 14
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
SIGNATURES 16
2
<PAGE>
PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MATRITECH, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1996 1997
------------ -------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $6,770,336 $14,826,514
Accounts receivable 814,544 276,418
Inventories 343,058 424,724
Prepaid expenses 123,401 134,068
---------- -----------
Total current assets 8,051,339 15,661,724
---------- -----------
PROPERTY AND EQUIPMENT, at cost:
Laboratory equipment 949,508 1,175,356
Office equipment 186,228 197,123
Laboratory furniture 55,772 56,955
Leasehold improvements 45,871 56,981
---------- -----------
1,237,379 1,486,415
Less-Accumulated depreciation
and amortization 701,769 775,233
---------- -----------
535,610 711,182
---------- -----------
OTHER ASSETS, net 82,912 106,191
---------- -----------
$8,669,861 $16,479,097
========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
MATRITECH, INC.
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1996 1997
------------- -------------
(UNAUDITED)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 422,559 $ 609,978
Accrued expenses 463,318 639,960
------------ ----------
Total current liabilities 885,877 1,249,938
------------ ----------
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par
value -
Authorized - 4,000,000 - -
shares
Issued and outstanding -
none
Common stock, $.01 par value -
Authorized -- 40,000,000
shares
Issued and outstanding --
16,032,734
shares at December 31,
1996, and 18,507,810
shares at June 30, 1997 160,327 185,078
Additional paid-in capital 33,764,062 44,794,269
Accumulated deficit (26,140,405) (29,750,188)
------------ ------------
Total stockholders' equity 7,783,984 15,229,159
------------ ------------
$ 8,669,861 $ 16,479,097
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
MATRITECH, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
------ ----- ----- -----
<S> <C> <C> <C> <C>
REVENUES:
Collaborative research
and development, license
fees and product sales $ 151,403 $ 502,099 $ 376,578 $ 680,792
Interest and other income 102,970 132,742 186,753 286,335
------------ ------------ ------------ ------------
254,373 634,841 563,331 967,127
------------ ------------ ------------ ------------
EXPENSES:
Research and
development 965,878 928,294 1,862,269 1,861,435
Selling, general and
administrative 1,375,678 1,131,385 2,310,844 1,937,355
------------ ------------ ------------ ------------
2,341,556 2,059,679 4,173,113 3,798,790
------------ ------------ ------------ ------------
Net Loss $ (2,087,183) $ (1,424,838) $ (3,609,782) $ (2,831,663)
============ ============ ============ ============
NET LOSS PER SHARE $ (.12) $ (.09) $ (.22) $ (.18)
============ ============ ============ ============
WEIGHTED AVERAGE
NUMBER OF
COMMON
SHARES
OUTSTANDING 16,899,740 15,954,031 16,470,442 15,809,538
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
MATRITECH, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(3,609,782) $(2,831,663)
Adjustments to reconcile net loss
to net cash used in operating
activities -
Depreciation and amortization 50,184 62,508
Amortization of deferred
compensation, net of
forfeitures -- 30,000
Operating expense related to
issuance of common stock
warrant 100,000 --
Changes in assets and
liabilities -
Accounts receivable 538,126 (282,858)
Inventories (81,666) (54,443)
Prepaid expenses (10,667) 3,771
Accounts payable 187,419 117,264
Accrued expenses 176,642 181,418
Deferred revenue -- (34,900)
---------- ----------
Net cash used in
operating activities (2,649,744) (2,808,903)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and
equipment (249,036) (125,743)
Purchase of marketable
securities -- (2,000,000)
---------- ----------
Net cash used in
investing activities (249,036) (2,125,743)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common
stock, options and warrants 10,954,958 1,428,291
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
MATRITECH, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1997 1996
----------- ------------
<S> <C> <C>
Payments on note payable - $ (8,965)
---------- ----------
Net cash provided by
financing activities 10,954,958 1,419,326
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 8,056,178 (3,515,320)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 6,770,336 11,009,310
__________ __________
CASH AND CASH EQUIVALENTS, END OF
PERIOD $14,826,514 $ 7,493,990
========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
MATRITECH, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. Operations and Basis of Presentation
- ---------------------------------------
Matritech, Inc. ("Matritech" or the "Company") was incorporated on
October 29, 1987 to develop, produce and distribute products for the diagnosis
and potential treatment of cancer based on its proprietary nuclear matrix
protein technology. This technology was licensed to the Company by the
Massachusetts Institute of Technology ("MIT").
The Company is devoting substantially all of its efforts toward product
research and development, raising capital and marketing existing products and
products under development. The Company is subject to risks common to companies
in similar stages of development, including dependence on key individuals,
competition from substitute products and larger companies, the uncertainty of
developing commercially usable products and the need to obtain adequate
additional financing necessary to fund the development of its future products.
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC") and include, in the opinion of management, all
adjustments, consisting of normal, recurring adjustments, necessary for a fair
presentation of interim period results. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The results for the interim periods
presented are not necessarily indicative of results to be expected for any
future period. It is suggested that these condensed financial statements be
read in conjunction with the audited financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1996 filed with the SEC (File No. 1-12128).
2. Cash Equivalents
- -------------------
Cash equivalents are short-term, highly liquid investments with original
maturities of less than three months. The Company's cash equivalents primarily
consisted of auction market equity securities, money market funds and repurchase
agreements at December 31, 1996 and June 30, 1997. The Company classifies its
investments in accordance with Financial Accounting Standards No. 115
"Accounting for Certain Investments in Debt and Equity Securities" (SFAS No.
115).
3. Net Loss Per Share
- ---------------------
Net loss per common share is based on the weighted average number of
common shares outstanding. Common stock equivalents have not been included for
any loss period as the amounts would be antidilutive. In March 1997, SFAS No.
128 Earnings Per Share was issued which established new standards for
calculating and presenting earnings per share. The Company will adopt this new
standard in its 1997 financial statements.
4. Private Placement
- --------------------
In May 1997, the Company completed a private placement of 2,200,000
shares of common stock at $5 per share resulting in proceeds of approximately
$10,915,000, net of issuance costs. In connection with the private placement,
the Company issued the placement agent 257,609 shares of common stock and a
warrant to purchase 245,761 shares of common stock at $5 per share which
represents the placement agent's commission.
8
<PAGE>
5. Public Relations Agreement
- -----------------------------
In April 1997, the Company issued a warrant for the purchase of up to
150,000 shares of the Company's common stock for a price of $6.50 per share to a
public relations consultant. In accordance with SFAS 123, these warrants were
valued at approximately $500,000. The Company will expense the warrant value
ratably over the one year term of the consultant agreement. As of June 30, 1997,
the Company expensed $100,000 as a component of selling, general and
administrative expenses on the accompanying statement of operations.
9
<PAGE>
MATRITECH, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company was incorporated in 1987 to develop, manufacture and market
innovative cancer diagnostic products based on its proprietary NMP technology.
Matritech has been unprofitable since inception and expects to incur significant
operating losses for at least the next two years. For the period from inception
to June 30, 1997, the Company incurred a cumulative net loss of approximately
$30 million.
The Company sells its NMP22 Test Kit through its own direct sales force
in the United States and through distributors outside the United States. The
Company entered into agreements with several new distributors in Europe and the
Far East in the second half of 1996. See "Factors that may Affect Future Results
- - Fluctuating Operating Results."
RESULTS OF OPERATIONS
- ---------------------
THREE MONTHS ENDED JUNE 30, 1997 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1996
- -------------------------------------------------------------------------------
Collaborative research and development revenue, license fees and product
sales decreased to $151,000 for the quarter ended June 30, 1997 from $502,000
for the quarter ended June 30, 1996. Revenue from product sales decreased to
$151,000 for the quarter ended June 30, 1997 as compared to $406,000 in the
second quarter of 1996 due to decreased sales of the NMP22 Test Kit and research
use only products. The Company's 1996 product revenue included initial stocking
orders of the NMP22 Test Kit from new distributors which were not repeated in
the 1997 period. Quarterly product revenue may fluctuate from quarter to
quarter based on the timing of distributors' orders for the NMP22 Test Kits.
The Company recorded $60,000 in milestone revenue relating to a funded
development agreement with Bayer Corporation ("Bayer") and $36,000 in SBIR
funding for its cancer therapy development project during the second quarter of
1996.
Interest and other income was $103,000 for the quarter ended June 30,
1997 and $133,000 for the quarter ended June 30, 1996. The decrease was due to
lower average cash balances available for investment in 1997 as compared to
1996.
Research and development expenses increased slightly to $966,000 for the
quarter ended June 30, 1997 from $928,000 for the quarter ended June 30, 1996.
The increase is primarily related to product development personnel, reagents and
supplies for the Company's colorectal and cervical cancer projects.
Selling, general and administrative expenses increased to $1,376,000 for
the quarter ended June 30, 1997 from $1,131,000 for the quarter ended June 30,
1996. The increase was primarily related to increased selling expenses from
augmenting the U.S. sales force and the costs associated with their payroll,
travel and promotional aids in their respective territories in conjunction with
sales activities for the NMP22 Test Kit. During the second quarter of 1996,
the Company expensed approximately $209,000 of costs associated with a proposed
public offering which the Company elected not to complete. During the second
quarter of 1997, the Company expensed $100,000 of costs associated with a public
relations consultant warrant which was valued at approximately $500,000 and will
be expensed ratably over the one year term of the agreement.
The Company incurred a net loss of $2,087,000 for the quarter ended June
30, 1997, as compared to a net loss of $1,425,000 for the quarter ended June 30,
1996. The increased loss was primarily the result of increased selling expenses
for the NMP22 Test Kit and a decrease in total revenues.
10
<PAGE>
SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1996
---------------------------------------------------------------------------
Collaborative research and development revenue, license fees and product
sales decreased to $377,000 for the six months ended June 30, 1997 from $681,000
for the first six months of last year. Revenue from product sales totaled
$317,000 for the six months ended June 30, 1997 and $537,000 for the six months
ended June 30, 1996. The decrease was primarily due to decreased sales of the
NMP22 Test Kit and research use only products. The Company's 1996 product
revenue included initial stocking orders of the NMP22 Test Kit from new
distributors which were not repeated in the 1997 period. Quarterly product
revenue may fluctuate from quarter to quarter based on the timing of
distributors' orders for the NMP22 Test Kits. Matritech's revenue from
collaborative research and development for the six months ended June 30, 1997
and 1996 consisted of $60,000 in milestone revenue from a funded development
agreement with Bayer. Matritech also received $84,000 in SBIR funding for its
cancer therapy development project during the six months ended June 30, 1996.
Interest and other income was $187,000 for the first six months of 1997
compared with $286,000 for the same period last year. The decrease was due to
lower average cash balances available for investment in 1997 compared to 1996.
Research and development expenses were consistent for the six months
ended June 30, 1997 and 1996.
Selling, general and administrative expenses increased to $2,311,000 for
the six months ended June 30, 1997 from $1,937,000 for the six months ended June
30, 1996. The increase is primarily attributable to increased staffing in the
sales department including recruitment, travel, administrative supplies and
promotional materials for the Company's seven sales representatives for NMP22 in
the United States. During the second half of 1996, the Company expensed
approximately $209,000 of costs associated with a proposed public offering which
the Company elected not to complete. During the second half of 1997, the
Company expensed $100,000 of costs associated with a public relations consultant
warrant which was valued at approximately $500,000 and will be expensed ratably
over the one year term of the agreement.
The Company incurred a net loss of $3,610,000 for the six months ended
June 30, 1997 as compared with a net loss of $2,832,000 for the six months ended
June 30, 1996. The increased loss resulted primarily from increased selling
expenses for the NMP22 Test Kit for bladder cancer, and decreased total
revenues and interest income.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Since its inception, the Company has financed its operations primarily
through private and public offerings of its securities and through funded
development and marketing agreements. In May 1997, the Company received net
proceeds of approximately $10,915,000 from the private sale of Common Stock.
During the year ended December 31, 1996, the Company received net proceeds of
approximately $1,514,000 from the exercise of common stock options and warrants.
In June 1995, the Company signed a product development and marketing option
agreement with Bayer and received a $150,000 initial payment. In the year ended
December 31, 1996 and six months ended June 30, 1997 the Company recorded
$120,000 and $60,000 respectively in milestone revenue under this agreement. At
June 30, 1997 the Company had cash and cash equivalents of $14,826,000 and
working capital of $14,412,000.
The Company's operating activities used cash of approximately $2,809,000
and $2,650,000 for the six-month periods ended June 30, 1996 and 1997,
respectively, primarily to fund the Company's operating loss.
11
<PAGE>
The Company's investing activities used cash of approximately $2,126,000
and $249,000 in the six-month periods ended June 30, 1996 and 1997,
respectively, for the purchase of computer systems, office and laboratory
equipment and leasehold improvements, as well as the purchase of marketable
securities in the six-month period ended June 30, 1996.
Financing activities provided cash of approximately $10,955,000 in the
six-month period ended June 30, 1997, from the private sale of common stock and
the exercise of common stock options and warrants. Financing activities
provided cash of approximately $1,419,000 in the six-month period ended June 30,
1996, from the exercise of stock options and warrants, net of payments of
capital lease obligations.
Capital expenditures totaled approximately $249,000 during the six months
ended June 30, 1997, which amount was expended primarily for the purchase of
laboratory equipment, computer systems, office equipment and leasehold
improvements.
The Company expects to incur continued research and development expenses
and other costs, including costs related to clinical studies to commercialize
additional products based upon its NMP technology. The Company expects that
such costs will increase in the second half of fiscal year ending December 31,
1997 and will result in continued losses from operations. The Company may
require substantial additional funds to complete new product development,
conduct clinical trials and manufacture and market its products.
The Company's future capital requirements will depend on many factors,
including: continued scientific progress in its research and development
programs; the magnitude of these programs; progress with clinical trials for its
diagnostic products; the time involved in obtaining regulatory approvals; the
costs involved in filing, prosecuting and enforcing patent claims; competing
technological and market developments; the ability of the Company to establish
additional development and marketing arrangements to provide funding for
research and development and to conduct clinical trials; obtain regulatory
approvals, and manufacture and market certain of the Company's products.
The Company may from time to time consider obtaining additional long-
term funding for its operations from various sources including collaborative
arrangements and additional public or private financings. The Company
anticipates that its existing capital resources including working capital and
interest thereon will satisfy its capital needs at least through 1998. The
foregoing forward-looking statement is subject to uncertainties and there can be
no assurance that the Company's needs may not change. See "Factors that may
Affect Future Results-Access to Capital." The survival of the Company in the
long term, however, is dependent on its ability to generate revenue from sales
of its products. There can be no assurance that such additional funding will be
available on terms acceptable to the Company, if at all, or that in the long
term, the Company will be able to generate sufficient revenue to achieve and
maintain profitability.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's future financial and operational results are subject to a
number of material risks and uncertainties that may affect such results or
conditions, including:
History of Operating Losses and Anticipated Future Losses. The Company
has incurred operating losses since its inception and expects to incur
significant operating losses for at least the next two years. The Company
expects to improve operating results in future periods, however, there can be no
assurance that the Company will achieve or maintain profitability or that its
revenue growth can be sustained in the future.
12
<PAGE>
Fluctuation in Operating Results. The Company's future operating results
may vary significantly from quarter to quarter or from year to year depending on
a number of factors including: the timing and size of orders from the Company's
customers and distributors; the timing of payments from corporate partners and
research grants; regulatory approvals and the introduction of new products by
the Company; and the market acceptance of the Company's products. The Company's
current planned expense levels are based in part upon expectations as to future
revenue. Consequently, profits may vary significantly from quarter to quarter
or year to year based on the timing of revenue. Revenue or profits in any
period will not necessarily be indicative of results in subsequent periods.
Access to Capital. The Company may from time to time seek to raise
additional capital and will consider various financing alternatives including
equity or debt financings and corporate partnering arrangements. There can be
no assurance, however, that this funding will be available on terms acceptable
to the Company, if at all.
Uncertainties Associated with Future Performance. The Company's success
in the market for diagnostic products will depend, in part, on the Company's
ability to: successfully develop, test, produce and market its products; obtain
necessary governmental approvals in a timely manner; attract and maintain key
employees; and successfully respond to technological changes in its marketplace.
The Company's success in markets outside the United States is dependent on the
performance of independent distributors over which the Company has limited
control.
Near-Term Dependence Upon NMP22. The Company anticipates that in the
near-term it will be substantially dependent on the success of the NMP22 Test
Kit, which was approved for sale in the U.S. by the FDA in July 1996 and expects
to generate substantially all of its near-term product sales, if any, from the
sale of NMP22 Test Kits. The Company would experience a material adverse effect
on its business, financial condition and results of operations if the NMP22 Test
Kit does not achieve wide market acceptance. The remainder of the Company's
products are in clinical trials or in development and there can be no assurance
that it will be successful with such clinical trials and product development.
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
---------------------
a) Warrant to Purchase Common Stock. On April 18, 1997 the Company
--------------------------------
issued a Warrant for the purchase of up to 150,000 shares of Common
Stock at an exercise price of $6.50 per share within five years of
issuance (the "Public Relations Warrant"). The Public Relations
Warrant was issued to a consultant in connection with a Public
Relations Retainer Agreement with Sunrise Financial Group, Inc. No
separate consideration was provided to the Company. The issuance
relied on Section 4(2) of the Securities Act of 1933, as amended (the
"Act"). The Company subsequently registered the shares underlying such
warrant on a Registration Statement on Form S-3 (File No. 333-30179)
which was declared effective on July 3, 1997.
b) Private Placement. On May 30, 1997, the Registrant completed a
-----------------
private placement of 2,200,000 shares of Common Stock, at a purchase
price equal to $5.00 per share. The Registrant received net proceeds
of approximately $10.9 million after deducting the estimated expenses
of the transaction. The placement agent, Sunrise Securities Corp.,
elected to receive all of its commission and expenses (less $25,000)
in the form of 257,609 shares of restricted Common Stock and five year
warrants for the purchase of an additional 245,761 shares of Common
Stock exercisable at $5 per share (the "Placement Agent Warrants").
These securities were offered and sold only to "qualified
institutional buyers" (as defined in Rule 144A) and to "accredited
investors" as defined in Regulation D, pursuant to Section 4(2) and
Regulation D of the Act.
In connection with this transaction, the Registrant agreed to file,
within 30 days after the final closing on May 30, 1997, a registration
statement with the Securities and Exchange Commission covering the
resale from time to time of the shares of Common Stock issued in
connection with this private placement and underlying the Placement
Agent Warrants, and to use its best efforts to cause the Registration
Statement to become effective. Such Registration Statement was filed
on Form S-3 (File No. 333-30179) and was declared effective on July 3,
1997.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
a) The annual meeting (the "Annual Meeting") of stockholders of Matritech
was held on June 13, 1997.
b) The following directors were elected at the Annual Meeting:
<TABLE>
<CAPTION>
Election of Directors: For Withheld
--- --------
<S> <C> <C>
J. Robert Buchanan 14,103,822 186,788
Stephen D. Chubb 14,103,972 186,638
David L. Corbet 14,102,272 188,338
Thomas R. Morse 14,103,472 187,138
David Rubinfien 14,080,072 210,538
T. Stephen Thompson 14,101,272 189,338
C. William Zadel 14,104,972 185,638
</TABLE>
14
<PAGE>
c) The following other matters were proposed and voted upon as indicated:
1. To approve an amendment to the Company's 1992 Stock Plan (the "1992
Plan") to (i) increase the number of shares of the Company's Common
Stock authorized for issuance pursuant to the 1992 Plan from
1,000,000 shares to 1,500,000 shares, and (ii) increase the
limitation on the maximum aggregate number of shares that may be
issued to any one person under the 1992 Plan from 300,000 shares to
500,000 shares. With 13,344,329 shares voting for, 812,212 shares
voting against and 134,069 abstaining, the proposal passed.
2. To ratify the selection of the firm of Arthur Andersen LLP as
auditors for the fiscal year ending December 31, 1997. With
14,096,977 shares 98,280 shares voting against, voting for, and
95,353 abstaining, the proposal passed.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
----------------------------------
(a) Exhibits:
---------
4.1 Placement Manager Agreement dated May 28, 1997 between the
Company and Sunrise Securities Corp. (filed as Exhibit 4.1
to the Company's Form 8-K, filed on June 4, 1997 and
incorporated herein by reference).
4.2 Form of Warrant Agreement used for the Placement Agent
Warrants and Public Relations Warrants (filed as Exhibit
4.2 to the Company's Form 8-K, filed June 4, 1997 and
incorporated herein by reference).
4.3 Form of Subscription Agreement between the Company and the
several purchasers (filed as Exhibit 4.3 to the Company's
Form 8-K, filed on June 4, 1997 1997 and incorporated
herein by reference).
27 Financial Data Schedule
(b) Form 8-K:
On June 4, 1997 the Company filed a Current Report on Form 8-K
dated as of May 28, 1997 including Items 5 and 7.
Item 5 reported the following Other Event:
(i) a Private Placement which closed on May 30, 1997.
Item 7 included the actual and pro forma unaudited balance sheet
of the Company as of March 31, 1997.
15
<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.
MATRITECH, INC.
Date: August 8, 1997 By: /s/ Stephen D. Chubb
_______________________
Stephen D. Chubb
Chairman and Chief
Executive Officer
(principal executive
and financial officer)
Date: August 8, 1997 By: /s/ Leslie R. Teso
________________________
Leslie R. Teso
Vice President, Finance,
Secretary and Treasurer
(principal accounting officer)
16
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page
- ------ ----------- ----
4.1 Placement Manager Agreement dated May 28, 1997 between
the Company and Sunrise Securities Corp. (filed as Exhibit
4.1 to the Company's Form 8-K, filed on June 4, 1997 and
incorporated herein by reference).
4.2 Form of Warrant Agreement used for the Placement Agent
Warrants and Public Relations Warrants (filed as Exhibit 4.2
to the Company's Form 8-K, filed on June 4, 1997 and
incorporated herein by reference).
4.3 Form of Subscription Agreement between the Company and the
several purchasers (filed as Exhibit 4.3 to the Company's
Form 8-K, filed on June 4, 1997 and incorporated herein
by reference).
27 Financial Data Schedule. 18
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 14,826
<SECURITIES> 0
<RECEIVABLES> 276
<ALLOWANCES> 0
<INVENTORY> 425
<CURRENT-ASSETS> 15,662
<PP&E> 1,486
<DEPRECIATION> 775
<TOTAL-ASSETS> 16,479
<CURRENT-LIABILITIES> 1,250
<BONDS> 0
0
0
<COMMON> 185
<OTHER-SE> 44,794
<TOTAL-LIABILITY-AND-EQUITY> 16,479
<SALES> 151
<TOTAL-REVENUES> 254
<CGS> 0
<TOTAL-COSTS> 2,342
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,087)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,087)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> 0
</TABLE>
