UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
FORM 10-QSB/A
---------------
(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, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-28566
LASERMEDICS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 76-0335587
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
120 Industrial Boulevard, Sugar Land, Texas 77478
(Address of principal executive offices, including zip code)
713-276-7000
(Registrant's telephone number, including area code)
Check whether the Registrant (i) filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (ii) has been subject to such filing requirements for the past 90
days. Yes [x] No [ ]
As of August 12, 1996 Lasermedics, Inc. had 2,412,001 shares of Common
Stock outstanding.
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LASERMEDICS, INC.
FORM 10-QSB/A FOR THE QUARTER ENDED JUNE 30, 1996.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS............................ 3
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS................................ 12
PART II - OTHER INFORMATION
ITEM 2.CHANGES IN SECURITIES............................ 14
ITEM 5.OTHER INFORMATION................................ 14
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K................. 14
SIGNATURES................................ 16
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying financial statements are amended from the original filing
in order to correctly state the Company's position with respect to its covenants
under its loan agreement with Comerica Bank - Texas previously reported in Note
3 to the financial statements. This restatement has no effect on earnings, cash
flow, or statement of financial position.
Included in this report are "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. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations reflected in such forward-looking
statements will prove to have been correct.
The information required hereunder is included in this report as set forth
in the "Index to Financial Statements."
INDEX TO FINANCIAL STATEMENTS
PAGE
Balance Sheet ........................................................... 4
Statement of Operations ................................................. 5-6
Statement of Cash Flows ................................................. 7
Notes to Financial Statements ........................................... 8-11
3
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LASERMEDICS, INC.
BALANCE SHEET
(Unaudited)
June 30, December 31,
1996 1995
----------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $ 484,087 $ 203,364
Accounts receivable, net of allowance for doubtful
accounts of $178,195 at June 30, 1996 3,518,404 32,669
Inventory 5,717,867 114,732
Prepaid expenses 88,715 -
Other current assets 150,000 100,000
----------- -----------
Total current assets 9,959,073 450,765
Property, plant and equipment, net of
accumulated depreciation of $68,428 and
$16,002, respectively. 3,442,322 51,074
Goodwill and other intangibles, net of accumulated
amortization of $30,940 and $12,730, respectively 1,238,270 482
License agreement 101,850 101,850
----------- -----------
TOTAL ASSETS $14,741,515 $ 604,171
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities:
Line of credit - bank $ 2,533,455 -
Accounts payable:
Trade 619,020 $ 382,894
Related party 10,833 56,747
Accrued liabilities 924,378 95,564
Customer deposits 22,000 89,100
Current maturities of long-term debt 286,333 -
----------- -----------
Total current liabilities 4,396,019 624,305
Notes payable, net of unamortized
discount of $151,667 335,833
Other accrued liabilities 63,000 -
Long-term debt, net of current maturities 9,198,804 -
----------- -----------
Total liabilities 13,657,823 960,138
Stockholders' Equity (Deficiency):
Preferred stock - $.10 par value; authorized
1,000,000 shares; none issued and outstanding
Common stock - $.01 par value; authorized
10,000,000 shares; issued 2,691,001
shares at June 30, 1996, and issued
1,761,225 shares at December 31, 1995 26,910 17,612
Additional paid-in-capital 9,625,917 7,232,691
Accumulated deficit (8,341,335) (7,378,470)
----------- -----------
1,311,492 (128,167)
Treasury stock, at cost, 279,000 common shares (227,800) (227,800)
----------- -----------
Stockholders' equity (deficiency) 1,083,692 (355,967)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY) $14,741,515 $ 604,171
----------- -----------
See notes to financial statements.
4
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LASERMEDICS, INC.
STATEMENT OF OPERATIONS
(Unaudited)
Three months ended June 30, 1996 1995
----------- ----------
Net sales $ 2,717,546 $ 56,717
Cost of sales 1,315,953 20,747
----------- ----------
Gross profit 1,401,593 35,970
Operating expenses 1,615,819 388,497
----------- ----------
Loss from operations (214,226) (352,527)
Interest expense (293,838) (20,458)
Other income (expense), net (10,892) 3,056
----------- ----------
Net loss $ (518,956) $ (369,929)
----------- ----------
Net loss per common share $ (0.33) $ (0.26)
----------- ----------
Weighted average common shares outstanding 1,569,236 1,427,971
----------- ----------
See notes to financial statements.
5
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LASERMEDICS, INC.
STATEMENT OF OPERATIONS
(Unaudited)
Six months ended June 30, 1996 1995
----------- ----------
Net sales $ 2,865,293 $ 127,539
Cost of sales 1,413,748 62,249
----------- ----------
Gross profit 1,451,545 65,290
Operating expenses 2,079,706 965,610
----------- ----------
Loss from operations (628,161) (900,320)
Interest expense (324,713) (20,458)
Other income (expense), net (9,991) 6,115
----------- ----------
Net loss $ (962,865) $ (914,663)
----------- ----------
Net loss per common share $ (0.63) $ (0.64)
----------- ----------
Weighted average common shares outstanding 1,525,280 1,423,364
----------- ----------
See notes to financial statements.
6
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LASERMEDICS, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
Six months ended June 30, 1996 1995
----------- ---------
Cash flows from operating activities:
Net loss $ (962,865) $(914,663)
----------- ---------
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense 70,595 4,321
Amortization of discount on notes payable 151,667 10,833
Bad debt expense 405,080 12,377
Compensation related to stock options and
warrants issued - 137,330
Shares issued for public relations agreement 8,000
Shares issued for clinical research studies 90,000
Shares issued for furniture 5,995
Changes in operating assets and liabilities:
Accounts receivable (618,995) 83,531
Inventory 320,943 23,577
Other current assets (116,695) (125,000)
Accounts payable 161,548 111,330
Accrued liabilities 320,924 (27,235)
Customer deposits 67,100 (16,245)
Other accrued liabilities 63,000 -
----------- ---------
Total adjustments 833,167 310,814
----------- ---------
Net cash used in operating activities (129,698) (603,849)
----------- ---------
Cash flows from investing activities:
Acquisition of Henley, net of cash
acquired of $1,909 (6,496,613) -
Capital expenditures (18,583) (1,858)
----------- ---------
Net cash used in investing activities (6,515,196) (1,858)
----------- ---------
Cash flows from financing activities:
Net proceeds from issuance of common stock 1,907,025 5,000
Subscriptions refunded on common stock (46,000)
Net proceeds from line of credit 2,533,455
Proceeds from long-term debt 2,508,998 487,500
Principal payments of long-term debt (23,861)
----------- ---------
Net cash provided by financing activities 6,925,617 446,500
----------- ---------
Net increase (decrease) in cash and cash equivalents 280,723 (159,207)
Cash and cash equivalents at beginning of period 203,364 310,742
----------- ---------
Cash and cash equivalents at end of period $ 484,087 $ 151,535
----------- ---------
See notes to financial statements.
7
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LASERMEDICS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION:
The accompanying unaudited interim financial statements of Lasermedics,
Inc., a Texas corporation (the "Company"), have been prepared in
accordance with generally accepted accounting principles and the rules
of the Securities and Exchange Commission (the "SEC"), and should be
read in conjunction with the audited financial statements and notes
thereto contained in the Company's latest Annual Report filed with the
SEC on Form 10-KSB. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the results of operations for the
interim periods presented have been reflected herein. The results of
operations for interim periods are not necessarily indicative of the
results to be expected for the full year. Notes to the financial
statements which would substantially duplicate the disclosure contained
in the audited financial statements for the most recent fiscal year,
1995, as reported in the Form 10-KSB, have been omitted.
2. LOSS PER SHARE:
The calculation of primary loss per share is based on the weighted
average number of shares outstanding during the period, after
consideration of the dilutive effect of stock options and warrants
reflected under the treasury stock method. Fully diluted loss per share
is not presented because such amounts would be the same as amounts
computed for primary loss per share.
3. ACQUISITION OF ASSETS:
On April 30, 1996 the Company entered into an agreement with Maxxim
Medical, Inc., a Delaware corporation ("Maxxim"), whereby the Company
purchased certain assets of (and assumed certain liabilities associated
with) the Henley Healthcare Division ("Henley") of Maxxim for an
estimated purchase price of approximately $13.5 million. The assets
acquired consist of real property; tangible personal property including
machinery, equipment, furniture and fixtures; general intangibles;
contracts; business licenses; accounts receivable; inventory; and
prepaid expenses. The purchase price was paid by the issuance of the
Company's convertible subordinated promissory note in the principal
amount of $7,000,000 (the "Note") with the balance of the purchase price
being paid in cash. The Company obtained the cash portion of the
purchase price pursuant to a loan agreement entered into with Comerica
Bank - Texas, a Texas banking corporation ("Comerica"), which loan is
secured by substantially all of the assets of the Company including the
Henley assets acquired from Maxxim.
The Note is due and payable on March 1, 2003 with interest payable
semi-annually on November 1 and May 1 of each calendar year and
calculated at a rate equal to 2% per annum and increasing annually 2%
per annum. The Company may redeem all or any portion of the outstanding
principal amount of the Note at redemption prices ranging from 104% to
110% of the principal amount being redeemed, depending on when the
redemption occurs as set forth in the Note. In addition, the Note is
subject to mandatory redemption in annual installments of $1.4 million
commencing on March 1, 1999 at premiums starting at 7% and decreasing 1%
each year. The Company is also required to redeem 40% of the Note upon
the completion of a public offering. The Note is convertible into common
stock at an initial conversion price of $3 per share, provided that upon
the occurrence of any default under the Note, the conversion price
continued
8
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LASERMEDICS, INC.
NOTES TO FINANCIAL STATEMENTS, Continued
(UNAUDITED)
3. ACQUISITION OF ASSETS, CONTINUED:
will be automatically adjusted to an amount equal to the lesser of the
conversion price then in effect or 80% of the average market price for
the Company's common stock for the 30 trading days immediately preceding
the event of default. The conversion price is also subject to adjustment
upon the occurrence of certain events (including certain issuances of
common stock for less than the conversion price) to provide
anti-dilution protection. Such conversion could, depending on the fair
market value of the Company's common stock at the time of conversion,
result in substantial dilution to holders of the Company's common stock.
The Company's common stock issuable upon conversion of the Note is
subject to the terms of a registration rights agreement entered into by
the Company and Maxxim whereby Maxxim (and certain subsequent holders)
shall retain certain demand and piggyback registration rights with
respect to those shares of common stock.
The loan agreement with Comerica (the "Loan Agreement") provides for (i)
a revolving loan ("Line of Credit" or "Revolver"), which permits
borrowings up to $4,000,000 pursuant to a borrowing base calculation
derived from the Company's accounts receivable and inventory and (ii)
two term loans in the amount of $893,000 and $1,616,000, respectively.
The Revolver also includes a $250,000 letter of credit facility.
Interest on the Revolver and the two term loans is payable monthly and
is calculated at a rate equal to the Prime Rate plus one-half of one
percent per annum. The Revolver's maturity date is two years from the
date of the Loan Agreement while the maturity dates of the $893,000 and
$1,616,000 term loans are five years and fifteen years, respectively,
from the date of the Loan Agreement, except that Comerica may call the
$1,616,000 term loan beginning on the fifth anniversary of the Loan
Agreement. All of the borrowings from Comerica are secured by
substantially all of the assets of the Company including the Henley
assets acquired from Maxxim. The loan agreement also contains a number
of affirmative covenants, negative covenants and financial covenants
with which the Company must comply including a minimum tangible net
worth, leverage ratio, working capital ratio, fixed charge ratio and
interest coverage ratio. The Company is also limited in the amount of
its capital expenditures and research and development expenditures, and
all future acquisitions and major corporate transactions require
approval of Comerica, as do offerings of securities by the Company.
At June 30, 1996, the Company was not in compliance with certain of its
covenants under the Loan Agreement. However, on October 25, 1996, the
Company and Comerica entered into an amended agreement (the "Amendment")
effective as of April 30, 1996 (the date of the Loan Agreement),
pursuant to which the Loan Agreement has been modified to waive defaults
under the loan covenants and to make certain other modifications to the
financial covenants and related provisions. Pursuant to the Amendment,
from the date of the Loan Agreement through June 30, 1996, the Company
has been and remains in compliance with its covenants under the Loan
Agreement.
The acquisition has been accounted for as a purchase, and the results of
operations of Henley have been included in operations from the date of
acquisition. The estimated purchase price in excess of the estimated
fair value of the net assets acquired which is being amortized over 15
years on the straight line method aggregated approximately $1,239,000.
The estimated fair value of the Note amounted to $7,000,000 pursuant to
a valuation by an investment banking firm.
continued
9
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LASERMEDICS, INC.
NOTES TO FINANCIAL STATEMENTS, Continued
(UNAUDITED)
4. OTHER CURRENT ASSETS:
At June 30, 1996, the Company had two stand-by Letters of Credit (the
"LOCs") one of which is for the benefit of the Company's Danish
supplier, in the amount of $100,000, expiring October 31, 1996, and the
other is for the benefit of one of the Company's wholesale suppliers, in
the amount of $50,000, expiring December 31, 1996. The LOCs are
collateralized by certificates of deposit for a total of $150,000
included in other current assets.
5. RELATED PARTY TRANSACTIONS:
Included in accounts payable at June 30, 1996, were fees of $10,833
related to consulting agreements with two of the directors of the
Company.
6. STOCKHOLDERS' EQUITY:
In connection with an agreement it entered into (in December 1995) with
a public relations firm, the Company issued to the firm, in February
1996, 2,000 shares of its treasury common stock as compensation for
services. The Company has recognized $8,000 in related compensation
expense based on the market price of the common stock of $4.00 per share
on the date of the agreement.
During March 1996, the Company amended the terms of a "best-efforts"
private offering of its securities commenced in December 1995 (the
"Offering") by extending the Offering from January 31, 1996 to June 21,
1996, increasing the size of the Offering up to 1,000,000 units and
modifying the provisions of certain common stock registration rights
granted in the Offering.
On April 30, 1996 the Company consummated the Offering with respect to
those subscriptions received to that date. Pursuant to such consummation
the Company received an aggregate of approximately $1,300,000 from
investors and issued to such investors in exchange therefor, 433,333
units of its securities ("Units"), each Unit consisting of one share of
the Company's common stock and one four-year warrant to purchase one
share of the Company's common stock at an exercise price of $6.00 per
share. Subsequent to April 30, 1996 the Company consummated the Offering
with respect to those subscription agreements received after that date
and, in connection therewith, received approximately $734,000 and issued
an additional 244,670 Units.
Additionally, on April 30, 1996 the holders of all of the Company's
previously issued convertible, unsecured, non-negotiable promissory
notes ("Bridge Notes") converted the amounts due thereunder into an
aggregate of 176,773 shares of the Company's common stock and four-year
warrants to purchase an aggregate of 176,773 shares of the Company's
common stock at an exercise price of $6.00 per share. Such conversion
was effected under the same terms as those offered to investors in the
Offering.
7. STOCK OPTIONS & WARRANTS:
Effective January 15, 1996, the Board of Directors of the Company (the
"BOD") adopted, subject to approval by the Company's stockholders, a
1996 Incentive Stock Option Plan covering 1,200,000 shares of
continued
10
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LASERMEDICS, INC.
NOTES TO FINANCIAL STATEMENTS, Continued
(UNAUDITED)
7. STOCK OPTIONS & WARRANTS, CONTINUED:
the Company's common stock and a 1996 Non-employee Directors Stock
Option Plan (the "Non-Employee Director Stock Plan") covering 250,000
shares of the Company's common stock.
In connection with their election to the BOD in January 1996, two
non-employee directors were each granted a stock option under the
Non-Employee Director Stock Plan to purchase 25,000 shares of the
Company's common stock at a price of $5.50 per share. Also, in
connection with his election to the BOD concurrent with the closing of
the Henley transaction in April 1996, one non-employee director was
granted an option under the Non-Employee Director Stock Plan to purchase
10,000 shares of the Company's common stock at a price of $7.75 per
share. The grants of these options were subject to stockholder approval
of the Non-Employee Director Stock Plan which approval was obtained in
July 1996.
In February 1996, the Company extended the expiration date from February
16, 1997 to February 1, 1999 of an immediately exercisable option to
purchase 75,000 shares of the Company's common stock at a price of $4.25
per share granted in connection with an agreement entered into with a
consultant of the Company in February 1994.
In March 1996, the Company extended the expiration date from July 15,
1996 to March 12, 1998 of an immediately exercisable option to purchase
20,000 shares of the Company's common stock at a price of $4.00 per
share granted in connection with an agreement entered into with a
financial public relations firm in December 1995.
Effective June 14, 1996 the Company entered into a settlement agreement
with J.W. Cabott Holding Corp. ("JWC") and certain of JWC's principals
with respect to an agreement the Company entered into with JWC in July
1994 pursuant to which JWC was granted a warrant to purchase 125,000
shares of the Company's common stock at $.10 per share. The settlement
agreement provides for, among other things, a reduction in the number of
shares issuable pursuant to the warrant granted to JWC from 125,000 to
75,000 and the transfer of such warrant to three principals of JWC. The
Company subsequently issued 75,000 shares of its common stock to the
three principals of JWC pursuant to their exercise of the warrant at the
specified price of $.10 per share.
8. SUBSEQUENT EVENTS:
At the Company's annual shareholders' meeting held in July 1996, the
Company's shareholders, among other things, approved the 1996 Incentive
Stock Option Plan and the Non-Employee Director Plan as adopted by the
BOD in January 1996. (See Item 5 of Part II.)
In connection with their re-election to the BOD in July 1996, four
non-employee directors were each granted a stock option under the
Non-Employee Director Stock Plan to purchase 10,000 shares (for an
aggregate of 40,000 shares) of the Company's common stock at a price of
$6.125 per share.
9. DEVELOPMENT STAGE:
For financial reporting purposes the Company was considered to be in the
development stage at March 31, 1996. Subsequent to April 30, 1996 (date
of acquisition of Henley) the Company is no longer in the development
stage.
11
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
Operating deficit for the quarter ended June 30, 1996 increased
approximately 40% to $518,956 compared to operating deficit of $369,929 for the
same period in 1995. Operating deficit for the six months ended June 30, 1996
increased approximately 5% to $962,865 compared to operating deficit of $914,663
for the same period in 1995. The increase in operating deficit results primarily
from the effects of certain expenses incurred in the consolidation of the
newly-acquired Henley operations partially offset by less expenses recognized
during the first quarter of 1996 in connection with stock or stock
options/warrants issued for compensation or under certain agreements which the
Company entered into.
Net sales for the three months ended June 30, 1996 increased to
$2,717,546 compared to $56,717 reported for the same period in 1995. For the six
months ended June 30, 1996 net sales increased to $2,865,293 compared to
$127,539 reported for the same period in 1995. Gross margin for the three months
ended June 30, 1996 increased to $1,401,593 compared to $35,970 reported for the
same period in 1995, and for the six months ended June 30, 1996 gross margin
increased to $1,451,545 compared to $65,290 reported for the same period in
1995. These increases in net sales and gross margins resulted primarily from the
effects of the Henley acquisition completed in the quarter ended June 30, 1996.
Operating expenses for the quarter ended June 30, 1996 were $1,615,819
compared to $388,497 reported for the same period in 1995. For the six months
ended June 30, 1996 operating expenses were $2,079,706 compared to $965,610
reported for the same period in 1995. The increase in operating expenses was
directly attributable to the acquisition of the Henley operations.
For the three months and six months ended June 30, 1996 the Company had
interest expense of $293,838 and $324,713, respectively, compared to $20,458
reported for the same periods in 1995. The increase in interest expense is
directly related to the long-term debt incurred and the credit facility
established to finance the Henley acquisition as well as the effects of the
conversion of the Bridge Notes into shares of the Company's common stock.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1996 the Company had cash and cash equivalents of $484,087
compared to cash and cash equivalents of $203,364 at December 31, 1995. The
increase in cash and cash equivalents resulted from proceeds of the Offering
consummated during the quarter ended June 30, 1996. Also, at June 30, 1996, the
Company had two stand-by letters of credit expiring October 31, 1996 and
December 31, 1996, respectively, aggregating $150,000 under which CBS and
another supplier are the beneficiaries. The letters of credit are collateralized
by certificates of deposit for a total of $150,000 classified as other current
assets in the financial statements.
The Company's current sources of liquidity consist primarily of (i)
funds held at the end of fiscal year 1995, (ii) proceeds received from the
Offering and (iii) the amounts, if any, available under the revolving loan from
Comerica (the "Revolver".) As of June 30, 1996 the Company had consummated the
Offering and in connection therewith had received an aggregate of approximately
$2,000,000, portions of which were used in operations. Also, as of June 30, 1996
the Company had approximately $1,700,000 available for borrowing pursuant to the
Revolver. The total amount available for borrowing under the Revolver is the
lesser of (i) $4,000,000 and (ii) a variable borrowing base calculated based on
the amount and type of outstanding accounts receivable and the value of certain
items of inventory.
The Company's on-going efforts to obtain FDA approval for Microlight
830(TM) continues to be a source of depletion of capital resources. If the
Company's operating cash flow from the recently
12
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acquired Henley assets is not adequate, the Company may require new sources
of liquidity to (i) fund future activities required to obtain FDA approval
of the Microlight 830(TM), (ii) make the required payments under the Note
and term loans with Comerica, (iii) make the payments required to obtain
the exclusive manufacturing and marketing rights to the Microlight 830(TM),
(iv) expand the Henley operations, (v) begin full-scale manufacturing of
the Microlight 830(TM) and (vi) pursue additional acquisitions. The Company
believes that its success in obtaining the necessary financing will depend
on, among other factors, (i) successfully operating the recently-acquired
Henley business, (ii) successfully marketing the Microlight 830(TM) when
FDA clearance is obtained and (iii) the availability of competing products.
The failure to accomplish any of the foregoing could have a significant
adverse impact on the Company's business and financial condition. Sources
of additional financing may include additional bank debt or public or
private sale of equity or debt securities. There can be no assurance that
the Company will be successful in arranging such financing on terms
commercially acceptable to the Company.
13
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PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
At the Company's annual meeting of shareholders held in July 1996, the
Company's shareholders approved an amendment to the Company's Articles of
Incorporation that, among other things, eliminated the cumulative voting of
shares of the Company's common stock in the election of directors.
ITEM 5. OTHER INFORMATION
In April 1996 the Company submitted its PMA supplement to the FDA in
response to the FDA's request for additional information and some clarification
of certain data submitted in the Company's original PMA application. In June
1996 the FDA informed the Company that the PMA submission was formally accepted
for filing and substantive review. However, there can be no assurance that the
Company's submission will ultimately satisfy the FDA's requirements or that the
FDA will grant PMA approval on a timely basis, if at all. The Company will be
unable to sell the Microlight 830(TM) in commercial quantities for human
application in the U.S. market until it obtains the FDA's clearance to market
the device.
In July 1996 the Company was informed that the FDA had reviewed the
Company's response to the FDA's October 1995 warning letter and had no further
concerns with respect to the matters covered in the warning letter. The FDA's
warning letter was issued pursuant to a June 1995 inspection of the Company's
clinical studies program involving the Microlight 830(TM).
At the Company's annual meeting of shareholders held in July 1996, in
addition to approving the stock option plans discussed in Part I hereof, the
Company's shareholders (a) elected a board of six directors and (b) approved a
proposal amending the Company's Articles of Incorporation which (i) increased
the authorized number of shares of the Company's Common Stock, par value $.01
per share from 10,000,000 shares to 20,000,000 shares; (ii) increased the
authorized number of shares of the Company's Preferred Stock, par value $.10 per
share from 1,000,000 shares to 2,500,000 shares; (iii) granted specific
authority to the Company's Board of Directors to designate the rights,
preferences, terms and conditions of one or more series of Preferred Stock
without further shareholder approval; and (iv) eliminated cumulative voting in
the election of directors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
See "Index of Exhibits" on page 18 which lists the documents required to
be filed as exhibits to this Form 10-QSB/A by Item 601 of Regulation S-B.
(b) REPORTS ON FORM 8-K
The Company filed a Current Report on Form 8-K (and a subsequent
amendment on Form 8-K/A) dated April 30, 1996 in which the following items were
reported:
Acquisition of certain assets of Henley;
Increase in the number of directors constituting the entire Board of
Directors of the Company from two to six; and
The adoption by the Board of Directors of a 1996 Incentive Stock Option
Plan and a 1996 Non-Employee Directors Stock Option Plan.
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(b) REPORTS ON FORM 8-K, CONTINUED
The following financial statements of the business acquired (Henley) were
also filed as part of the Current Report on Form 8-K/A:
Divisional statement of net assets as of October 29, 1995 (audited.)
Statements of revenues and direct expenses for the years ended October 29,
1995 and October 30, 1994 (audited) and for the six months ended April 30,
1995 and 1996 (unaudited.)
Statements of cash flows for the years ended October 29, 1995 and October
30, 1994 (audited) and for the six months ended April 30, 1995 and 1996
(unaudited.)
15
<PAGE>
SIGNATURES
IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF
1934, THE REGISTRANT CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, HEREUNTO DULY AUTHORIZED.
LASERMEDICS, INC.
(Registrant)
By : MICHAEL M. BARBOUR
Date: OCTOBER 25, 1996
Michael M. Barbour
(President and Chief Executive Officer)
By : CHIKE J. OGBOENYIYA
Date: OCTOBER 25, 1996
Chike J. Ogboenyiya
(Vice President and Chief Financial Officer)
16
<PAGE>
LASERMEDICS, INC.
EXHIBITS TO FORM 10-QSB/A
for the quarter ended June 30, 1996
INDEX OF EXHIBITS
Exhibits incorporated by reference to a prior filing are designated by
an asterisk (*); all exhibits not so designated are documents required to be
filed as exhibits to this Form 10-QSB/A.
Report or SEC File or
Exhibit Registration Registration Exhibit
NUMBER DESCRIPTION STATEMENT NUMBER REFERENCE
2.1* Agreement of Form 8-K/A dated
Purchase and Sale April 30, 1996 33-49972 1(A)
of Assets dated
April 30, 1996
with Maxxim.
3.1* Amendment to Form 10-QSB for
By-Laws the quarter ended
June 30, 1996 0-28566
3.2* Articles of Form 10-QSB for
Amendment to the quarter ended
Articles of June 30, 1996 0-28566
Incorporation
10.1* Convertible Form 8-K dated
Subordinated April 30, 1996 33-49972 1(B)
Promissory Note
dated April 30,
1996 payable to
Maxxim.
10.2* Registration Form 8-K dated
Rights Agreement April 30, 1996 33-49972 1(C)
dated April 30, 1996
with Maxxim.
10.3* Voting and Form 8-K dated
Shareholders April 30, 1996 33-49972 1(D)
Agreement dated
April 30, 1996 by
and between M.M.
Barbour, Dr. C. F.
Smith and Maxxim.
10.4* Loan Agreement Form 8-K dated
dated April 30, April 30, 1996 33-49972 1(E)
1996 with
Comerica Bank-
Texas.
27 Financial Data Schedule
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM BALANCE SHEET, STATEMENT OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 484,087
<SECURITIES> 0
<RECEIVABLES> 3,518,404
<ALLOWANCES> 0
<INVENTORY> 5,717,867
<CURRENT-ASSETS> 9,959,073
<PP&E> 3,442,322
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,741,515
<CURRENT-LIABILITIES> 4,396,019
<BONDS> 0
0
0
<COMMON> 26,910
<OTHER-SE> 1,311,492
<TOTAL-LIABILITY-AND-EQUITY> 14,741,515
<SALES> 2,865,293
<TOTAL-REVENUES> 2,865,293
<CGS> 1,413,748
<TOTAL-COSTS> 1,413,748
<OTHER-EXPENSES> 2,079,706
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (324,713)
<INCOME-PRETAX> (962,865)
<INCOME-TAX> 0
<INCOME-CONTINUING> (962,865)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (962,865)
<EPS-PRIMARY> (0.63)
<EPS-DILUTED> (0.63)
</TABLE>
