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 June 30, 1997
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: 4,145,525 on
August 5, 1997
Transitional Small Business Disclosure Format
YES [ ] NO [X]
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UROPLASTY, INC. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
June 30, 1997 March 31, 1997
_________________ ______________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 919,194 $ 814,603
Accounts receivable trade 732,106 502,744
Inventories 368,485 387,373
Prepaid expenses 94,762 105,625
_________ _________
Total Current Assets 2,114,547 1,810,345
--------- ---------
Property, Plant and Equipment 299,688 241,075
Less accumulated depreciation
and amortization (134,874) (92,745)
_________ _________
164,814 148,330
--------- ---------
Intangible assets, net of
accumulated amortization 83,633 80,030
_________ _________
TOTAL ASSETS $ 2,362,994 $ 2,038,705
========= =========
</TABLE>
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<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Accounts payable $ 266,860 $ 160,811
Accrued liabilities
Compensation and payroll taxes 56,056 62,364
Royalties 20,100 12,400
Income tax 36,548 0
Other 52,524 127,766
Current maturities - long termt debt $ 41,265 $ 36,954
_________ _________
Total Current Liabilities 473,353 400,295
--------- ---------
Long Term Debt, less current maturities 425,793 407,994
Total Liabilities 899,146 808,289
--------- ---------
Shareholders' equity
Common stock $.01 par value;
Authorized 20,000,000 shares
Issued and outstanding -
3,649,525 shares 36,495 36,495
Additional paid in capital 1,963,560 1,963,560
Accumulated deficit (354,226) (592,918)
Cumulative translation adjustment (176,981) (171,721)
Note receivable (5,000) (5,000)
__________ __________
Total Shareholders' Equity 1,463,848 1,230,416
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' __________ __________
EQUITY $ 2,362,994 $ 2,038,705
========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
UROPLASTY, INC. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three months ended
June 30
1997 1996
__________ __________
<S> <C> <C>
Net sales $ 1,149,239 $ 818,920
Cost of goods sold 236,623 177,301
__________ __________
Gross profit 912,616 641,619
Operating expenses:
General and administrative 206,894 181,341
Research and development 134,228 116,749
Selling and marketing 217,159 211,006
__________ __________
558,281 509,096
---------- ----------
Operating profit 354,335 132,523
Other income (expense)
Interest income 1,167 333
Interest expense (8,757) (9,309)
Foreign currency exchange loss (71,095) (72,349)
Other 0 0
---------- ----------
(78,685) (81,325)
Income pretax 275,650 51,198
Income tax expense 36,958 0
__________ __________
Net income $ 238,692 $ 51,198
========== ==========
Primary income per common share
and common share equivalent $.06 $.01
Fully diluted income per common
share and common share equivalent $.06 $.01
Weighted average common shares and common
share equivalent outstanding:
Primary 3,916,073 3,689,225
Fully diluted 3,916,073 3,689,255
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
UROPLASTY, INC. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three months ended
June 30
1997 1996
__________ __________
<S> <C> <C>
Cash flows from operating activities:
Net income $ 238,692 $ 51,198
Adjustments to reconcile net income
to net cash provided by:
Depreciation and amortization 46,628 13,647
Loss (gain) on disposal of assets 0 0
Changes in operating assets and
liabilities
Accounts receivable (229,362) (138,117)
Inventories 18,888 (61,908)
Prepaid expenses 10,863 (47,883)
Accounts payable 106,049 3,751
Accrued liabilities (5,110) (30,882)
- ------------------------------------------------------------------------
Net cash provided by (used in)
operating activities 186,648 (210,194)
- ------------------------------------------------------------------------
Cash flows from investing activities:
Payments for property, plant and equipm. (58,613) (49,323)
Payments relating to intangible assets (8,103) (1,775)
Proceeds from sale of intangible asset 0 0
- ------------------------------------------------------------------------
Net cash (used in) investing activities (66,716) (51,098)
- ------------------------------------------------------------------------
Cash flows from financing activities:
Repayment of long-term obligations (10,081) (7,291)
Proceeds from issuance of notes payable 0 32,819
Net proceeds from issuance of stock 0 0
Payments received on note receivable 0 14,692
- ------------------------------------------------------------------------
Net cash (used in) provided by
financing activities (10,081) 40,220
- ------------------------------------------------------------------------
Exchange rate changes (5,260) 72,272
- ------------------------------------------------------------------------
Net increase (decrease)in cash and
cash equivalents 104,591 (148,800)
Cash and cash equivalents at beginning
of period 814,603 718,630
- ------------------------------------------------------------------------
Cash and cash equivalents at end
of period $ 919,194 $ 569,830
- ------------------------------------------------------------------------
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
UROPLASTY, INC. and Subsidiaries
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, 1997.
The financial statements presented herein as of June 30, 1997 and for
the three months ended June 30, 1997 and 1996 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 Subsidiaries
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 three months and quarters ended
June 30, 1997 and 1996.
Liquidity and Capital Resources
Uroplasty and its wholly-owned subsidiaries' capital resources are
derived from existing sales of the Company's products. As of June 30, 1997,
the Company had approximately $919,000 in cash and cash equivalents.
Management believes the success being experienced with Macroplastique
Implants(R) 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 the 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 Registrant has no material unused sources of
liquidity other than its cash reserves and its accounts receivable balances
and inventory. The company is establishing a new manufacturing facility in
the Netherlands. Management's intention is to finance its capital equipment
needs with lease financing.
Management believes there are equity financing opportunities
available from a number of sources. Management believes the development
of the market for Macroplastique in various sales territories outside the
United States and the completion of an IDE and subsequent PMA for introduction
of Macroplastique into the US market would proceed more rapidly with an
increase in capital. The Company is currently considering the cost benefit of
new equity financing.
Financing other than cash generated by product sales
will be necessary to pursue an Investigational Device Exemption (IDE)
application and Premarket Approval Application (PMA) for Macroplastique with
the United States Food and Drug Administration (FDA).
Results of Operations.
During the three months ended June 30, 1997, net sales was
$1,149,239 compared to $818,920 during the three months ended June 30, 1996.
This increase of $330,319 (40%) for the three months ended is the result of
substantially higher sales of the Macroplastique Implant products as a
result from increased market penetration by existing distribution outlets.
Sales of Macroplastique is now 91% of total sales.
It is expected that Macroplastique sales will continue to grow
through further market penetration by existing distribution outlets,
expansion of its distribution network and the introduction of innovations
in Macroplastique implantation for fiscal 1998.
Management believes there will be upward pressure on selling,
general and administrative expenses as efforts continue to increase awareness
and acceptance of Macroplastique. Additionally, management anticipates
increased funds for research and development projects for fiscal 1998.
There was a moderate increase (9.6%)of the operating expenses from $509,096
for the first quarter fiscal 1997 to $558,281 for the first quarter fiscal
1998.
The income tax expense of $36,958 is the result of an expensed tax
liability on the profit made in the first quarter of fiscal 1998 by a foreign
subsidiary. This profit cannot be compensated with the Companies net operating
loss (NOL) carry forward.
For the three months ended June 30, 1997 a net income totaled of
$238,692; this includes an exchange loss of $71,095, respectively $51,198
net income and $72,349 exchange loss for the three months ended June 30, 1996.
The operating profit for the three months ended June 30, 1997 was $354,335,
compared to $132,523 same period last year.
The Registrant sells Macroplastique and its related ancillary
products, and Bioplastique(TM)Implants for use in augmenting other soft
tissues. Management's current objectives are to focus on growth in sales and
market penetration of the Macroplastique Implant line for incontinence and
Vesicoureteric reflux treatment.
<PAGE>
UROPLASTY, INC. and Subsidiaries
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
June 30, 1997.
ITEM 5. OTHER INFORMATION
On July 11, 1997, the Registrant's second largest shareholder, the
Bioplasty Product Claimants Trust (the "Trust"), which prior to such date
owned 640,000 shares, or 17.5% of the Registrant's outstanding shares of
common stock, sold such shares to a group of investors (the "Investors").
In connection with such transaction, the Trust sold to the Investors its
interest in that certain Promissory Note, dated March 30, 1994, which, at
March 31, 1997, had a principal balance outstanding of $496,000.
Concurrently with the sale of the 640,000 shares to the Investors,
the Registrant agreed to convert and did convert the Note into 496,000 shares
of Common Stock, at a conversion ratio of $1.00 per share.
The Investors consisted of 34 individuals, retirement accounts and
corporations located primarily in the Minneapolis/St. Paul, Minnesota area.
Except for 36,480 shares sold by the Trust under Rule 144, each of the stock
certificates representing shares delivered to the Investors bore a restrictive
legend and was made subject to a Stop Transfer Order.
As a result of this transaction, the Company will have 4,145,525
shares of common stock outstanding.
<PAGE>
UROPLASTY, INC. and Subsidiaries
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: August 5, 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> 3-MOS
<FISCAL-YEAR-END> Mar-31-1998
<PERIOD-START> Apr-01-1997
<PERIOD-END> Jun-30-1997
<CASH> 919,194
<SECURITIES> 0
<RECEIVABLES> 732,106
<ALLOWANCES> 0
<INVENTORY> 368,485
<CURRENT-ASSETS> 2,114,547
<PP&E> 299,688
<DEPRECIATION> 134,874
<TOTAL-ASSETS> 2,362,994
<CURRENT-LIABILITIES> 473,353
<BONDS> 0
<COMMON> 36,495
0
0
<OTHER-SE> 1,427,353
<TOTAL-LIABILITY-AND-EQUITY> 2,362,994
<SALES> 1,149,239
<TOTAL-REVENUES> 1,149,239
<CGS> 236,623
<TOTAL-COSTS> 236,623
<OTHER-EXPENSES> 558,281
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (8,757)
<INCOME-PRETAX> 275,650
<INCOME-TAX> 36,958
<INCOME-CONTINUING> 238,692
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 238,692
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
