UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 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: 4,170,525 on
November 10, 1997
Transitional Small Business Disclosure Format
YES [ ] NO [X]
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
This Amended 10QSB is being filed to restate the financial statements in
Item 1.
ITEM 1. FINANCIAL STATEMENTS
UROPLASTY, INC. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30, 1997 March 31, 1997
_________________ ______________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 1,015,212 $ 814,603
Accounts receivable trade 531,767 502,744
Inventories 289,278 387,373
Prepaid expenses 147,593 105,625
_________ _________
Total Current Assets 1,983,850 1,810,345
--------- ---------
Property, Plant and Equipment 445,614 241,075
Less accumulated depreciation
and amortization (151,113) (92,745)
_________ _________
294,501 148,330
--------- ---------
Intangible assets, net of
accumulated amortization 88,210 80,030
_________ _________
TOTAL ASSETS $ 2,366,561 $ 2,038,705
========= =========
</TABLE>
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<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Accounts payable $ 289,524 $ 160,811
Unearned income 2,703
Accrued liabilities
Compensation and payroll taxes 70,737 62,364
Royalties 11,600 12,400
Income tax 44,996 0
Other 26,924 127,766
Current maturities - long termt debt $ 11,130 $ 36,954
_________ _________
Total Current Liabilities 457,614 400,295
--------- ---------
Long Term Debt, less current maturities 14,353 407,994
Total Liabilities 471,967 808,289
--------- ---------
Shareholders' equity
Common stock $.01 par value;
Authorized 20,000,000 shares
Issued and outstanding -
4,170,525 shares 41,705 36,495
Additional paid in capital 2,412,309 1,963,560
Accumulated deficit (431,879) (664,470)
Cumulative translation adjustment (122,541) (100,169)
Note receivable (5,000) (5,000)
__________ __________
Total Shareholders' Equity 1,894,594 1,230,416
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' __________ __________
EQUITY $ 2,366,561 $ 2,038,705
========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
UROPLASTY, INC. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three months ended
September 30
1997 1996
__________ __________
<S> <C> <C>
Net sales $ 917,364 $ 690,753
Cost of goods sold 222,626 162,762
__________ __________
Gross profit 694,738 527,991
Operating expenses:
General and administrative 268,173 183,158
Research and development 158,952 125,795
Selling and marketing 228,985 237,195
__________ __________
656,110 546,148
---------- ----------
Operating profit 38,628 (18,157)
Other income (expense)
Interest income 1,975 200
Interest expense (714) (9,402)
Foreign currency exchange loss (33,293) (14,721)
Other 0 60,175
---------- ----------
(32,032) 36,252
Income pretax 6,596 18,095
Income tax expense 12,697 0
__________ __________
Net (loss) income $ (6,101) $ 18,095
========== ==========
Primary income per common share
and common share equivalent $.00 $.005
Fully diluted income per common
share and common share equivalent $.00 $.005
Weighted average common shares and common
share equivalent outstanding:
Primary 4,140,710 3,700,891
Fully diluted 4,178,028 3,700,891
Six months ended
September 30
1997 1996
__________ __________
<S> <C> <C>
Net sales $ 2,066,603 $ 1,509,673
Cost of goods sold 459,249 340,063
__________ __________
Gross profit 1,607,354 1,169,610
Operating expenses:
General and administrative 475,067 364,500
Research and development 293,180 242,544
Selling and marketing 446,144 448,200
__________ __________
1,214,391 1,055,244
---------- ----------
Operating profit 392,963 114,366
Other income (expense)
Interest income 3,142 533
Interest expense (9,471) (18,711)
Foreign currency exchange loss (104,388) (87,070)
Other 0 60,175
---------- ----------
(110,717) (45,073)
Income pretax 282,246 69,293
Income tax expense 49,655 0
__________ __________
Net income $ 232,591 $ 69,293
========== ==========
Primary income per common share
and common share equivalent $.06 $.02
Fully diluted income per common
share and common share equivalent $.06 $.02
Weighted average common shares and common
share equivalent outstanding:
Primary 4,091,247 3,700,891
Fully diluted 4,178,028 3,700,891
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
UROPLASTY, INC. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Six months ended
September 30
1997 1996
__________ __________
<S> <C> <C>
Cash flows from operating activities:
Net income $ 232,591 $ 69,293
Adjustments to reconcile net income
to net cash provided by:
Depreciation and amortization 67,944 33,228
Loss (gain) on disposal of assets 0 0
Changes in operating assets and
liabilities
Accounts receivable (29,023) (102,257)
Inventories 98,095 (135,609)
Prepaid expenses (41,968) (6,819)
Accounts payable 128,713 48,040
Unearned income 2,703 0
Accrued liabilities (16,082) (137,599)
- ------------------------------------------------------------------------
Net cash provided by (used in)
operating activities 442,973 (231,723)
- ------------------------------------------------------------------------
Cash flows from investing activities:
Payments for property, plant and equipm. (204,539) (67,629)
Payments relating to intangible assets (17,756) (9,920)
Proceeds from sale of intangible asset 0 0
- ------------------------------------------------------------------------
Net cash (used in) investing activities (222,295) (77,549)
- ------------------------------------------------------------------------
Cash flows from financing activities:
Repayment of long-term obligations (451,656) (8,486)
Proceeds from issuance of notes payable 0 32,819
Net proceeds from issuance of stock 453,959 130,000
Payments received on note receivable 0 14,691
- ------------------------------------------------------------------------
Net cash provided by
financing activities 2,303 169,024
- ------------------------------------------------------------------------
Exchange rate changes (22,372) 71,112
- ------------------------------------------------------------------------
Net increase (decrease)in cash and
cash equivalents 200,609 (69,136)
Cash and cash equivalents at beginning
of period 814,603 718,630
- ------------------------------------------------------------------------
Cash and cash equivalents at end
of period $ 1,015,212 $ 649,494
- ------------------------------------------------------------------------
<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 September 30, 1997 and for
the three/six months ended September 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) Adjustments to financial statements
For the quarter ended September 30, 1997, a foreign currency translation
loss totaling $61,074 or $0.01 per diluted share was recorded as a
translation adjustment within shareholders' equity rather than as an
exchange loss in the statement of operations. This restatement involved a
non-operating charge associated with foreign currency exchange rate risk
and did not impact total shareholders' equity.
(3) 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 six months and quarters ended
September 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 September 30,
1997, the Company had approximately $1,015,000 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.
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 six months ended september 30, 1997, net sales were
$2,066,603 compared to $1,509,673 during the six months ended september 30,
1996 and $917,364 and $690,753 for the three months ended September 30,
1997 and 1996 respectively. This increase of $556,930 (37%) for the six
months ended and $226,611 (33%) for the three months ended is the result of
substantially higher sales of the Macroplastique Implant products as a
result of increased market penetration by existing distribution outlets.
Sales of Macroplastique is now 90% 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 (15%) of the operating expenses from $1,055,244
for the six months ended fiscal 1997 to $1,214,391 for the six months ended
fiscal 1998.
The income tax expense of $49,655 is the result of an expensed tax
liability on the profit realized in the six months ended fiscal 1998 by two
foreign subsidiaries. This profit cannot be compensated with the Companies net
operating loss (NOL) carry forward.
For the three months ended September 30, 1997 the Company had a net
loss of $6,101, compared to net income of $18,095 for the three months ended
September 30, 1996.
The operating profit for the three months ended September 30, 1997 was
$38,628, compared to a $18,157 operating loss in the same period last year.
For the six months ended September 30, 1997 the Company had net income of
$232,591, compared to net income of $69,293 for the six months ended
September 30, 1996. The operating profit for the six months ended
September 30, 1997 was $392,963, compared to $114,366 in the 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
September 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.
<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: May 5, 1998 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> 6-MOS
<FISCAL-YEAR-END> Mar-31-1998
<PERIOD-START> Apr-01-1997
<PERIOD-END> Sep-30-1997
<CASH> 1,015,212
<SECURITIES> 0
<RECEIVABLES> 531,767
<ALLOWANCES> 0
<INVENTORY> 289,278
<CURRENT-ASSETS> 1,983,850
<PP&E> 294,501
<DEPRECIATION> 151,113
<TOTAL-ASSETS> 2,366,561
<CURRENT-LIABILITIES> 457,614
<BONDS> 0
<COMMON> 41,705
0
0
<OTHER-SE> 1,852,889
<TOTAL-LIABILITY-AND-EQUITY> 2,366,561
<SALES> 2,066,603
<TOTAL-REVENUES> 2,066,603
<CGS> 459,249
<TOTAL-COSTS> 459,249
<OTHER-EXPENSES> 1,214,391
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (9,471)
<INCOME-PRETAX> 282,246
<INCOME-TAX> 49,655
<INCOME-CONTINUING> 232,591
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 232,591
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
