UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended December 31, 1996
UROPLASTY INC
(Exact name of registrant as specified in its charter.)
Minnesota, U.S.A. 41-1719250
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2718 Summer Street NE,
Minneapolis, Minnesota 55413
(Address of principal executive offices)
Registrant's telephone number, including area code:
(612) 378-1180
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 [ ]
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS)
Check whether the registrant filed all documents and reports required to be
filed by Section 12,13 or 15(b) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
YES [ ] NO [ ] Not subject to Exchange Act at time [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 3.632.525 on
February 12, 1997
Transitional Small Business Disclosure Format
YES [ ] NO [X]
<PAGE>
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UROPLASTY, INC, and Subsidiairies
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
December 31,1996 March 31, 1996
_________________ ______________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 746,795 $ 718,630
Accounts receivable trade 498,231 336,148
Inventories 377,227 256,655
Prepaid expenses 86,667 93,563
Notes receivable 22,595
_________ _________
Total Current Assets 1,708,920 1,427,591
Property, Plant and Equipment
Property, plant and equipment 556,868 518,376
Less accumulated depreciation
and amortization (402,737) (362,349)
_________ _________
154,131 156,027
Other assets
Intangible assets, net of
accumulated amortization 86,375 88,768
_________ _________
TOTAL ASSETS $ 1,949,426 $ 1,672,386
</TABLE>
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<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' DEFICIT
<S> <C> <C>
Current Liabilities
Current maturities - long termt debt $ 72,903 $ 49,139
Accounts payable 195,778 208,403
Accrued liabilities
Compensation and payroll taxes 65,752 110,093
Other 59,448 132,962
_________ _________
Total Current Liabilities 393,881 500,597
Long Term Debt, less current maturities 415,680 437,847
Shareholders' deficit
Common stock $.01 par value;
Authorized 20,000,000 shares
Issued and outstanding -
3,632,525 shares 36,325 34,725
Capital in excess of par value 1,955,230 1,811,830
Accumulated deficit (722,377) (882,691)
Cumulative translation adjustment (124,313) (224,922)
Note receivable (5,000) (5,000)
__________ __________
Total Stockholders' Equity 1,139,865 733,942
TOTAL LIABILITIES AND SHAREHOLDERS' __________ __________
DEFICIT $ 1,949,426 $ 1,672,386
<FN>
Accompanying Notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
UROPLASTY, INC, and Subsidiairies
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Nine months ended
December 31
1996 1995
__________ __________
<S> <C> <C>
Net revenue $ 2,415,923 $ 1,667,941
Cost of revenue 571,356 653,898
__________ __________
Gross profit 1,844,567 1,014,043
Selling, general and administrative 1,605,020 1,510,280
---------- ----------
Operating gain 239,547 (496,237)
Other income (expense)
Interest income 1,592 6,664
Interest expense (27,749) (33,045)
Gain on sale of assets 0 497,015
Other 60,175 9,473
Exchange gain (loss) (113,251) (168,783)
---------- ----------
(79,233) 311,324
Net income (loss) $ 160,314 $ (184,913)
========== ==========
Net income (loss) per common share $.05 $(.05)
Three months ended
December 31
1996 1995
__________ __________
<S> <C> <C>
Net revenue $ 906,250 $ 553,252
Cost of revenue 231,293 222,689
__________ __________
Gross profit 674,957 330,563
Selling, general and administrative 549,776 527,922
---------- ----------
Operating gain 125,181 (197,359)
Other income (expense)
Interest income 1,059 5,808
Interest expense (9,038) (10,082)
Gain on sale of assets 0 497,015
Other 0 8,754
Exchange gain (loss) (26,181) 12,945
---------- ----------
(34,160) 514,440
Net income (loss) $ 91,021 $ 317,081
========== ==========
<FN>
Accompanying Notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
UROPLASTY, INC, and Subsidiairies
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine months ended
December 31
1996 1995
__________ __________
<S> <C> <C>
Net cash used in operating activities $ (190,509) $ (434,505)
Net cash used in investing activities (51,127) 448,944
Cash flows from financing activities:
Repayment of long-term debt (39,503) (36,231)
Proceeds from long-term obligation 41,100 15,000
Payments received on note receivable 22,595 134,511
Added note receivable 0 (367,500)
Net proceeds from issuance of stock 145,000 491,060
__________ __________
Net cash provided by financing activities 169,192 236,840
Effect of exchange rate changes on cash 100,609 (61,227)
__________ __________
Net decrease in cash and cash equivalents 28,165 190,052
Cash and cash equivalents beginning
of period 718,630 427,790
Cash and cash equivalents end
of period $ 746,795 $ 617,842
========== ==========
<FN>
Accompanying Notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
UROPLASTY, INC, and Subsidiairies
FOOTNOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The financial statements included in this Form 10-QSB have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. 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, although management believes
the disclosures are adequate to make the information presented not misleading.
The results of operations for any interim period are not necessarily
indicative of results for a full year. These statements should be read in
conjunction with the financial statements and related notes included in the
Company's Annual Report on Form 10-KSB for the year ended March 31,1996.
The financial statements presented herein as of December 31, 1996 and for
the three/nine months ended December 31, 1996 and 1995 reflect, in the
opinion of management, all material adjustments consisting only of normal
recurring adjustments necessary for a fair presentation of the financial
position, results of operations and cash flows for the interim periods.
(2) Subsequent Event
None.
<PAGE>
UROPLASTY, INC, and Subsidiairies
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Set forth below is management's discussion and analysis of financial
condition and results of operations for the nine months and quarters ended
December 31, 1996 and 1995.
Liquidity and Capital Resources
As of December 31, 1996 the Company had approximately $746,000 cash and cash
equivalents. Sales on a monthly basis are around break even level.
Management believes that the success being experienced with the
Macroplastique product will continue to have an increasing effect on the
monthly sales level, however, in the event sales do not increase, management
believes that operating expenses can be reduced in order to limit excessive
use of its cash resources without significantly impairing its ability to
develop the Macroplastique Implant market, which obviously would be slowed
under such circumstances.
There is currently no financing arrangement in place for Uroplasty's working
capital needs, and the Company has no material unused sources of liquidity
other than its cash reserves and its account receivable balances and
inventory. There exits no material capital equipment purchase commitments
nor are there any known material trends indicated for the Company's capital
resources and the effects on them.
Management of the Company believes that there are financing opportunities
available with potential corporate partners with vastly greater capital
resources than itself where certain services or equipment relating to the
sales and marketing of the Macroplastique products could be provided to the
Company to assist in the acceleration of market penetration and increase
sales. Management believes that the development of the market for
Macroplastique in various sales territories outside the United States has
progressed to the stage where such arrangements could provide significant
advantages for Macroplastique over competing products at this time, and
management is currently considering the cost benefit of exploiting these
types of capital resources.
Results of Operations
During the nine months ended December 31, 1996, net revenue was $2,415,923
compared to $1,667,941 during the nine months ended December 31, 1995 and
S906,250 respectively $553,252 for the three months ended December 31, 1996
and 1995. This increase of $747,982 (45%) for the nine months ended and
$352,998 (64%) for the three months ended is the result of substantially
higher sales of the Macroplastique Implant products. During the nine months
period Macroplastique sales were $2,079,667, compared to $1,209,458 same
period last year; so an increase of $870,209 (72%). Sales of Macroplastique
is now 86% of total sales.
The Company was successful in reducing both cost of revenue and selling,
general and administrative expenses in 1996 by reducing its corporate
structure and expanding its network of experienced distributors. These
changes have had the effect of reducing per unit sales prices while at the
same time increasing unit sales and market penetration. Management
anticipates that the investments made in the distribution network will
further continue to result in dollar and unit sales increases on a
profitable basis.
For the nine months ended December 31, 1996 a net income totaled of $160,314;
this includes an exchange loss of $113,251, respectively $91,021 net income
and $26,181 exchange loss for the three months ended. The operating gain
for the nine months ended December 31, 1996 was $239,547, compared to
$496,237 operating loss same period last year.
Management believes there will be upward pressure on selling, general and
administrative expenses as efforts continue on increasing awareness and
acceptance for Macroplastique Implants, and that alternative sources of
financing other than cash generated by product sales will be necessary upon
approval of an Investigational Devise Exemption application by the Food and
Drug Administration.
The Company sells Macroplastique Implants and its related ancillary
products plus two other implantable medical products: Bioplastique Implants
for use in augmenting soft tissue in plastic surgery applications; and
Chondroplast Implants, a bovine cartilage material implanted in plastic
surgery applications. Management's current objectives are to focus on
growth in sales and market penetration of the Macroplastique Implant line
of products.
<PAGE>
In June 1996 the Company obtained the Conformite Europeene (CE) mark
approval on its Macroplastique and Bioplastique products.
<PAGE>
UROPLASTY, INC, and Subsidiairies
PART II - OTHER INFORMATION
Except for the following none of the items contained in PART II of
Form 10-QSB are applicable to the Company for the quarter ended
December 31, 1996.
ITEM 5. OTHER INFORMATION
In August, 1996, the registrant sold 100,000 shares of its common stock at
a price of $1.00 per share, to a European investor. In the same month another
30,000 shares at a price of $1.00 per share, were sold to a supplier in
payment of an outstanding invoice of US$ 30,000. That same supplier exercised
an option granted in 1995 to acquire 30,000 shares at $0.50 per share.
Hence, the number of shares outstanding as of December 31, 1996 was greater
by 160,000 than at the beginning of the fiscal year.
<PAGE>
UROPLASTY, INC, and Subsidiairies
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
UROPLASTY, INC
Dated: February 12, 1997 By /s/ DANIEL G. HOLMAN
Daniel G. Holman
Chairman, President and CEO
(Principal Executive and Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Mar-31-1997
<PERIOD-START> Apr-01-1996
<PERIOD-END> Dec-31-1996
<CASH> 746,795
<SECURITIES> 0
<RECEIVABLES> 498,231
<ALLOWANCES> 0
<INVENTORY> 377,227
<CURRENT-ASSETS> 1,708,920
<PP&E> 556,868
<DEPRECIATION> 402,737
<TOTAL-ASSETS> 1,949,426
<CURRENT-LIABILITIES> 393,881
<BONDS> 0
<COMMON> 36,325
0
0
<OTHER-SE> 1,103,540
<TOTAL-LIABILITY-AND-EQUITY> 1,949,426
<SALES> 2,415,923
<TOTAL-REVENUES> 2,415,923
<CGS> 571,356
<TOTAL-COSTS> 571,356
<OTHER-EXPENSES> 1,605,020
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (27,749)
<INCOME-PRETAX> 160,314
<INCOME-TAX> 0
<INCOME-CONTINUING> 160,314
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 160,314
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
