<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For Quarterly Period Ended September 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Commission File Number: 0-26804
PLANET POLYMER TECHNOLOGIES, INC.
------------------------------------------------------------------------
(Exact name of small business issuer as specified in its character)
CALIFORNIA 33-0502606
------------------------------------------------------------------------
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
9985 Businesspark Ave., Suite A, San Diego, California 92131
------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(619) 549-5130
------------------------------------------------------------------------
(Issuer'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.
[X] YES [ ] NO
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Class Outstanding at October 20, 1997
----- -------------------------------
Common Stock, no par value 5,271,269
<PAGE> 2
PLANET POLYMER TECHNOLOGIES, INC.
FORM 10-QSB QUARTERLY REPORT
QUARTER ENDED SEPTEMBER 30, 1997
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
PART I - FINANCIAL INFORMATION
Item 1 Consolidated Balance Sheet (Unaudited)
September 30, 1997 2
Consolidated Statements of Operations (Unaudited)
Three Months Ended September 30, 1997 and 1996 3
Consolidated Statements of Operations (Unaudited)
Nine Months Ended September 30, 1997 and 1996 4
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 1997 and 1996 5
Consolidated Statement of Shareholders' Equity (Unaudited)
Nine Months Ended September 30, 1997 6
Notes to Unaudited Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II - OTHER INFORMATION
Item 1 Legal Proceedings 13
Item 2 Changes in Securities and Use of Proceeds 13
Item 3 Defaults upon Senior Securities 16
Item 4 Submission of Matters to a Vote of Security Holders 16
Item 5 Other Information 16
Item 6 Exhibits and Reports on Form 8K 17
SIGNATURES 18
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
PLANET POLYMER TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,042,981
Accounts receivable 474,842
Inventories 345,119
Prepaid expenses and other receivables 68,259
Deferred income taxes 13,913
------------
Total current assets 2,945,114
Property and equipment, net 844,341
Goodwill, net 584,020
Patents and other, net 334,364
------------
Total assets $ 4,707,839
============
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 375,901
Notes payable 260,545
------------
Total current liabilities 636,446
Other liabilities 300,000
Deferred income taxes 14,334
------------
Total liabilities 950,780
------------
Shareholders' equity:
Undesignated Preferred Stock, no par value
Authorized shares - 4,250,000
No shares outstanding --
Series A Convertible Preferred Stock, no par value
Authorized shares - 750,000
Issued and outstanding - 500,000 820,000
Common Stock, no par value
Authorized shares - 20,000,000
Issued and outstanding - 5,271,269 10,791,024
Accumulated deficit (7,853,965)
------------
Total shareholders' equity 3,757,059
------------
Total liabilities and shareholders' equity $ 4,707,839
============
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
2
<PAGE> 4
PLANET POLYMER TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1997 1996
------------ -------------
<S> <C> <C>
Development revenue $ 12,598 $ 32,286
Product sales 709,514 844,637
----------- -----------
Total revenue 722,112 876,923
Cost of sales 526,382 513,302
----------- -----------
195,730 363,621
----------- -----------
Operating expenses:
General and administrative 254,195 230,266
Marketing 58,384 274,610
Research and development 121,713 167,911
----------- -----------
Total operating expenses 434,292 672,787
----------- -----------
Loss from operations (238,562) (309,166)
Other income, net 8,683 13,375
----------- -----------
Loss before income taxes (229,879) (295,791)
Income taxes 20,000 -
----------- -----------
Net loss $ (249,879) $ (295,791)
=========== ===========
Net loss per share $ (0.05) $ (0.06)
=========== ===========
Shares used in per share computations 5,271,269 5,260,664
=========== ===========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
3
<PAGE> 5
PLANET POLYMER TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------
1997 1996
------------ -------------
<S> <C> <C>
Development revenue $ 95,804 $ 158,236
Product sales 2,449,771 2,367,559
----------- -----------
Total revenue 2,545,575 2,525,795
Cost of sales 1,762,374 1,484,437
----------- -----------
783,201 1,041,358
----------- -----------
Operating expenses:
General and administrative 823,065 1,389,893
Marketing 252,501 910,802
Research and development 382,139 606,172
----------- -----------
Total operating expenses 1,457,705 2,906,867
----------- -----------
Loss from operations (674,504) (1,865,509)
Other income, net 39,333 63,025
----------- -----------
Loss before income taxes (635,171) (1,802,484)
Income taxes 49,094 -
----------- -----------
Net loss $ (684,265) $(1,802,484)
=========== ===========
Net loss per share $ (0.13) $ (0.34)
=========== ===========
Shares used in per share computations 5,271,269 5,260,664
=========== ===========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
4
<PAGE> 6
PLANET POLYMER TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (684,265) $(1,802,484)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization 128,404 173,689
Compensation expense - non cash (60,555) 478,491
Gain on disposal of assets (56) -
Change in assets and liabilities, net of effects of acquisition:
Accounts receivable 196,924 (147,497)
Inventories 24,454 (56,003)
Prepaid expenses and other assets (4,825) 38,077
Accounts payable and accrued expenses 5,943 (454,464)
----------- -----------
Net cash used by operating activities (393,976) (1,770,191)
----------- -----------
Cash flow from investing activities:
Purchases of property and equipment (15,893) (95,891)
Proceeds from the sale of property and equipment 4,140 -
Cost of patents, licenses and trademarks (18,177) (47,367)
Acquisition of subsidiary, net of cash acquired - (803,945)
Sales of investments, net - 304,144
----------- -----------
Net cash used by investing activities (29,930) (643,059)
----------- -----------
Cash flow from financing activities:
Proceeds for preferred stock and warrants, net 897,500 -
Payments on note payable - (20,834)
Payments on short-term borrowings (71,005) (65,274)
----------- -----------
Net cash provided (used) by financing activities 826,495 (86,108)
----------- -----------
Net increase (decrease) in cash and cash equivalents 402,589 (2,499,358)
Cash and cash equivalents at beginning of period 1,640,392 3,257,471
----------- -----------
Cash and cash equivalents at end of period $ 2,042,981 $ 758,113
=========== ===========
Supplemental disclosure of non-cash activity:
Stock options granted to a consultant $ 2,816 $ 478,491
Restricted Common Stock issued in connection with acquisition - 508,069
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
5
<PAGE> 7
PLANET POLYMER TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Preferred Stock Common Stock
--------------------------- --------------------------- Accumulated
Shares Amount Shares Amount Deficit Total
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996 - $ - 5,271,269 $ 10,774,079 $ (7,169,700) $ 3,604,379
Revision of Common Stock issuance
estimate - - - (63,371) (63,371)
Issuance of Warrants 77,500 77,500
Fair market value of stock options
granted to an outside consultant 2,816 2,816
Issuance of Series A Convertible
Preferred Stock, net 500,000 820,000 820,000
Net loss for the nine months ended
September 30, 1997 - - - - (684,265) (684,265)
------------ ------------ ------------ ------------ ------------ ------------
Balance at September 30, 1997 500,000 $ 820,000 5,271,269 $ 10,791,024 $ (7,853,965) $ 3,757,059
============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
6
<PAGE> 8
PLANET POLYMER TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited financial statements of Planet Polymer
Technologies, Inc. (the "Company" or "Planet") have been prepared in accordance
with the interim reporting requirements of Form 10-QSB, pursuant to the rules
and regulations of the Securities and Exchange Commission. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of only normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the three and nine month periods ended September
30, 1997 are not necessarily indicative of results that may be expected for the
year ending December 31, 1997. For additional information, refer to the
Company's financial statements and notes thereto for the year ended December 31,
1996 contained in the Company's Form 10-KSB for the fiscal year ended December
31, 1996.
2. Recent Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued Statement
No. 130, Reporting Comprehensive Income ("SFAS 130"), and Statement No. 131,
Disclosures about Segments of an Enterprise and Related Information ("SFAS
131"). These accounting standards are effective for fiscal years beginning after
December 15, 1997. SFAS 130 establishes new standards for reporting and
displaying comprehensive income and its components, SFAS 131 requires disclosure
of certain information regarding operating segments, products and services,
geographic areas of operation and major customers. Adoption of these Statements
is expected to have no impact on the Company's consolidated financial position,
results of operations, or cash flows.
3. Series A Convertible Preferred Stock
On September 24, 1997, the Company issued to one investor (the
"Investor") 500,000 shares of its Series A Convertible Preferred Stock ("Series
A Preferred") at $1.85 per share. The holders of the Series A Preferred are
entitled to receive quarterly dividends at an annual rate of 6% payable in
shares of Common Stock. Each share of Series A Preferred is convertible at the
option of the holder into shares of Common Stock of the Company. The conversion
rate of the Series A Preferred is initially one-to-one, subject to adjustment
upon certain events. In addition, the Company issued to the Investor, for
$75,000, a warrant (the "Warrant") to purchase up to 375,000 shares of the
Company's Common Stock.
Pursuant to the Securities Purchase Agreement between the Company and
the Investor, (the "Securities Purchase Agreement"), the SEC must declare
effective, by February 6, 1998, a Registration Statement filed by the Company
registering the shares of Common Stock issuable upon conversion of the Series A
Preferred and exercise of the Warrant. In the event the SEC fails to declare the
Registration Statement effective, the Company must deliver to the Investor
certificates for Common Stock equal to 5% of the Conversion Shares, as defined
in the Securities Purchase Agreement. Additionally, the Company must deliver to
the Investor certificates for Common Stock equal to 5% of the Conversion Shares
for each additional 30-day period in which the Registration Statement has not
been declared effective.
As partial consideration for services rendered in connection with the
sale of the Series A Preferred and the Warrant to the Investor, the Company
issued, for $2,500, a five year warrant to purchase up to 50,000 shares of the
Company's Common Stock.
7
<PAGE> 9
PLANET POLYMER TECHNOLOGIES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS - (CONTINUED)
4. Stock Option Plan
On May 22, 1997, the Company's Board of Directors granted non-statutory
stock options to purchase 10,000 shares of Common Stock at an exercise price of
$3.00 per share to an outside consultant of the Company. These options vest
monthly over one-year and expire on May 22, 2007. In connection with this
transaction, the Company recorded a charge to income, for the nine months ended
September 30, 1997, of approximately $2,816, based on the Black-Scholes option
pricing model. As of September 30, 1997, none of these options have been
exercised.
On September 30, 1997, a previously granted incentive stock option to
purchase 5,000 shares of Common Stock was terminated in accordance with its
terms.
8
<PAGE> 10
PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
PLANET POLYMER TECHNOLOGIES, INC.
Except for the historical information contained herein, the discussions in this
report contain forward looking statements that involve certain risks and
uncertainties. The Company's actual results could differ materially from those
discussed in this report. Factors that could cause or contribute to such
differences include, but are not limited to, the development of new products,
market acceptance of new products, general economic conditions and the
availability of additional financing, as well as those discussed in the
Company's Form 10-KSB for the fiscal year ended December 31, 1996 in "Item 1 -
Description of Business," including the section therein entitled "Risk Factors,"
and "Item 6 - Management's Discussion and Analysis of Financial Condition and
Results of Operations."
OVERVIEW
Planet Polymer Technologies, Inc. (the "Company" or "Planet") emerged
from the development stage as a result of its acquisition of Deltco of
Wisconsin, Inc., a Wisconsin corporation ("Deltco"), effective January 1, 1996.
Prior to this acquisition, substantially all of the Company's resources had been
devoted to the development and commercialization of its seven Enviroplastic
technologies and products.
Deltco is a manufacturer and reprocessor of thermoplastic scrap resins
located in Ashland, Wisconsin. The Company maintains Deltco as a wholly-owned
subsidiary, and uses its plant, equipment and other physical property in the
manner in which it was used prior to the acquisition. The Company continues to
focus on commercializing its Enviroplastic technologies and growing Deltco's
manufacturing business.
During the first nine months of 1997, the Company actively sought to
reduce costs such that general and administrative and marketing expenses
decreased. However, notwithstanding such decrease in research and development
expenses during the first nine months of 1997, the Company expects that research
and development expenses may increase significantly in the future as the
Company's products are commercialized and continued efforts are focused on
Deltco's resins.
Planet has incurred operating losses since inception and had an
accumulated deficit at September 30, 1997 of approximately $7.9 million. The
Company expects to incur additional losses for the foreseeable future.
RESULTS OF OPERATIONS
Revenue
The Company's revenues decreased from approximately $877,000 for the
three months ended September 30, 1996 to approximately $722,000 for the three
months ended September 30, 1997. This decrease was primarily attributable to
decreased sales volume at Deltco due to a softening in the polypropylene market
and decreased research and development revenue at Planet. This decrease in
research and development revenue at Planet was partially the result of the
temporary diversion of management resources from sales to financing activities.
9
<PAGE> 11
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
PLANET POLYMER TECHNOLOGIES, INC.
RESULTS OF OPERATIONS, CONTINUED
Revenues remained relatively constant at approximately $2,546,000 for
the nine months ended September 30, 1997 compared to approximately $2,526,000
for the nine months ended September 30, 1996.
Planet continued to focus on internally-funded, rather than
customer-funded, product development during the first nine months of 1997. The
Company will continue to participate in customer-funded development when
appropriate, but believes internally-funded development is advantageous as to
certain technologies and applications.
Cost of Sales
Cost of sales increased from approximately $513,000 for the three months
ended September 30, 1996 to approximately $526,000 for the three months ended
September 30, 1997. The increase was primarily attributable to increases in the
cost of raw materials, increases in personnel costs and write-offs of obsolete
inventory at Deltco. Raw material cost increases, which have resulted from
seasonal price fluctuations in the polypropylene market and price increases from
Deltco's preferred supplier of scrap plastic in connection with a recent request
for bid, are expected to continue for the foreseeable future.
Cost of sales increased from approximately $1,484,000 for the nine
months ended September 30, 1996 to approximately $1,762,000 for the nine months
ended September 30, 1997. The increase was primarily attributable to higher
sales at Deltco at lower margins. These lower margins were the result of
increases in the cost of raw materials and increases in personnel costs.
General and Administrative Expenses
General and administrative expenses increased from approximately
$230,000 for the three months ended September 30, 1996 to approximately $254,000
for the three months ended September 30, 1997. This increase was primarily
attributable to increased costs of outside services.
General and administrative expenses decreased from approximately
$1,390,000 for the nine months ended September 30, 1996 to approximately
$823,000 for the nine months ended September 30, 1997. This was primarily
attributable to a $478,000 one time, non-cash compensation expense, recorded
during the first quarter of 1996, for the fair value of options granted to an
outside consultant. The Company also incurred certain costs associated with the
acquisition of Deltco during 1996.
Marketing Expenses
Marketing expenses decreased from approximately $275,000 for the three
months ended September 30, 1996 to approximately $58,000 for the three months
ended September 30, 1997 and from approximately $911,000 for the nine months
ended September 30, 1996 to approximately $253,000 for the nine months ended
September 30, 1997. These decreases were primarily due to reductions in sales
and marketing personnel, the reduction of outside services and the reduction in
international travel expenditures offset by increased marketing efforts in North
America. In addition, during the three months ended June 30, 1997, the December
31, 1996 estimated non-cash incentive compensation expense for the fair value of
stock granted to the president of Deltco was revised downward by $63,000.
10
<PAGE> 12
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
PLANET POLYMER TECHNOLOGIES, INC.
RESULTS OF OPERATIONS, CONTINUED
Research and Development Expenses
Research and development expenses decreased from approximately $168,000
for the three months ended September 30, 1996 to approximately $122,000 for the
three months ended September 30, 1997 and from approximately $606,000 for the
nine months ended September 30, 1996 to approximately $382,000 for the nine
months ended September 30, 1997. These decreases were due primarily to lower
research and development costs as a result of lower research and development
revenue at Planet, the decreased use of outside resin processors, and a
reduction in pilot plant operations staff, offset by an additional scientist for
a portion of the three months ended September 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, Planet has financed its operations primarily
through the sale of equity securities and revenue from customer development
agreements. The Company has raised approximately $4 million (net of issuance
costs) from the private sale of Common Stock. In September 1995, the Company
completed its initial public offering ("IPO") in which it sold an aggregate of
1,150,000 shares of Common Stock and received net proceeds of approximately $5.6
million.
In January 1996, the Company used $1,125,000 in cash and issued 96,775
shares of restricted Common Stock valued at approximately $508,000 to acquire
Deltco in a purchase transaction. In connection with the purchase, the Company
now has one outstanding debt agreement related to a Small Business
Administration loan collateralized by substantially all assets at Deltco. As of
September 30, 1997 the loan balance was approximately $203,000. The Company has
no material commitments for capital expenditures.
In September 1997, the Company issued 500,000 shares of Series A
Convertible Preferred Stock and warrants to purchase Common Stock for an
aggregate purchase price of approximately $898,000, net of issuance costs.
The Company used approximately $394,000 for operations for the nine
months ended September 30, 1997. Such funds were used for research and
development activities, marketing efforts and administrative support.
The Company used approximately $30,000 for investing activities for the
nine months ended September 30, 1997. Such funds were used for the preparation
and filing of patents and for the purchase of equipment at Deltco.
Net cash provided by financing activities of approximately $826,000
resulted from proceeds from the issuance of Series A Convertible Preferred Stock
and warrants for an aggregate purchase price of approximately $898,000,
partially offset by approximately $71,000 used for the repayment of debt for the
nine months ended September 30, 1997.
11
<PAGE> 13
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
PLANET POLYMER TECHNOLOGIES, INC.
LIQUIDITY AND CAPITAL RESOURCES, CONTINUED
The Company believes that its existing sources of liquidity and
anticipated revenue, including revenues generated from Deltco, will satisfy the
Company's projected working capital and other cash requirements for at least the
next 12 months. There can be no assurance, however, that changes in the
Company's plans or other events affecting the Company's operating expenses will
not result in the expenditure of such resources before such time. The Company
expects that it will need to raise substantial additional funds to establish
large-scale manufacturing capabilities. The Company intends to seek additional
funding from existing and potential customers or through public or private
equity or debt financing. There can be no assurance that additional financing
will be available on acceptable terms, or at all.
12
<PAGE> 14
PART II - OTHER INFORMATION
PLANET POLYMER TECHNOLOGIES, INC.
Item 1 - Legal Proceedings:
None
Item 2 - Changes in Securities and Use of Proceeds:
(b) In September 1997, the Board of Directors of the Company, in accordance
with the Company's Articles of Incorporation, by resolution designated
750,000 shares of Preferred Stock as Series A Convertible Preferred
Stock and established the rights, preferences and privileges of such
Series A Convertible Preferred Stock (the "Series A Preferred"). The
following is a summary of the rights, preferences and privileges of the
Series A Preferred.
The holders of Series A Preferred are entitled to one vote for each
share held of record on all matters submitted to a vote of the
shareholders.
Holders of Series A Preferred are entitled to receive, quarterly, such
number of shares of Common Stock (or, if the Company is unable to
distribute shares of Common Stock, cash) equal to (a) one and one-half
percent (1.5%) multiplied by the liquidation preference of the Series A
Preferred, divided by (b) the average closing bid price of the
Company's Common Stock on the Nasdaq SmallCap Market over a period of 5
consecutive trading days prior to the dividend distribution date.
In the event of a liquidation, dissolution or winding up of the
Company, the holders of Series A Preferred will be entitled to receive,
after payment of liabilities and prior to and in preference to any
payment to the holders of Common Stock, an amount equal to $2.00 per
share of Series A Preferred then outstanding, plus any accrued but
unpaid dividends thereon. After payment of the preferential amounts set
forth in the previous sentence, any remaining assets shall be
distributed ratably among the holders of Common Stock.
Holders of Series A Preferred have the right to convert their shares of
Series A Preferred into shares of Common Stock at any time after
the 90th day following the first issuance of Series A Preferred (the
"Issue Date"). The rate of such conversion shall initially be 1:1,
subject to certain antidilution adjustments. The Series A Preferred
shall be automatically converted into shares of Common Stock upon the
occurrence of certain events. Outstanding shares of Series A Preferred
may also be redeemed at the option of Company under certain
circumstances. The holders of Series A Preferred have no preemptive
rights. There are no sinking fund provisions applicable to the Series A
Preferred.
(c) On September 24, 1997, the Company issued 500,000 shares of Series A
Convertible Preferred Stock to Special Situations Private Equity Fund,
L.P. ("Special Situations") for an purchase price of $925,000.
Paragraph (b) above summarizes the conversion rights of the Series A
Convertible Preferred Stock.
On September 24, 1997, the Company also issued a warrant to purchase up
to 375,000 shares of Common Stock, at an exercise price of $2.75 per
share, to Special Situations for a purchase price of $75,000.
The Company issued the foregoing securities in reliance upon the
exemption from registration provided by Rule 506 promulgated under the
Securities Act of 1933, as amended.
13
<PAGE> 15
PLANET POLYMER TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
<S> <C>
(f)
(1) Indicate the effective date of the registration statement for which this form is filed.
August 2, 1995
Provide the SEC file number assigned to the registration statement.
2-91984-LA
(2) Has the offering commenced?
Yes
Date the offering commenced.
August 2, 1995
(3) Did the offering terminate before any securities were sold?
No
(4) Has the offering terminated?
Yes
Did the offering terminate prior to the sale of all securities registered?
No
(5) Furnish the name(s) of the managing underwriter(s).
Meridian Capital Group, Inc.
Hagerty, Stewart & Associates, Inc.
Title of Security
</TABLE>
<TABLE>
<CAPTION>
For the account of the issuer
----------------------------------------------------------------------
Title of Amount Aggregate Amount Aggregate
Security Registered price of sold offering
offering price of
amount amount sold
registered
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 1,150,000 $6,900,000 1,150,000 $6,900,000
----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------
For the account(s) of any selling security
holder(s)
----------------------------------------------------------------------
Title of Amount Aggregate Amount Aggregate
Security Registered price of sold offering
offering price of
amount amount sold
registered
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock N/A N/A N/A N/A
----------------------------------------------------------------------
</TABLE>
14
<PAGE> 16
PLANET POLYMER TECHNOLOGIES, INC.
Amount of expenses
Direct or indirect Direct or indirect
payments to directors, payments to others
officers, general partners
of the issuer or their
associates; to persons
owning ten percent or more
of any class of equity
securities of the issuer;
and to affiliates of the
issuer
<TABLE>
----------------------------------------------------------------------
<S> <C> <C>
Underwriting
discounts and $ 483,000
commissions
----------------------------------------------------------------------
Finders' Fees
----------------------------------------------------------------------
Expenses
paid to or for 209,500
underwriters
----------------------------------------------------------------------
Other
expenses 570,900
----------------------------------------------------------------------
Total
Expenses $ 1,263,400
----------------------------------------------------------------------
</TABLE>
The net offering proceeds to the issuer after deducting the total
expenses above were $5,636,600
15
<PAGE> 17
PLANET POLYMER TECHNOLOGIES, INC.
Direct or indirect Direct or indirect
payments to directors, payments to others
officers, general partners
of the issuer or their
associates; to persons
owning ten percent or more
of any class of equity
securities of the issuer;
and to affiliates of the
issuer
<TABLE>
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Purchase and installation of
machinery and equipment 11,000 87,269
- ---------------------------------------------------------------------------------------
Acquisition of other
business(es) 1,137,976
- ---------------------------------------------------------------------------------------
Working Capital 3,086,496
- ---------------------------------------------------------------------------------------
Other purposes (specify)
- ---------------------------------------------------------------------------------------
Director Fees 110,000
- ---------------------------------------------------------------------------------------
Payments for Patents & Trademarks 200,000 70,313
- ---------------------------------------------------------------------------------------
Payments for Royalties 50,000
- ---------------------------------------------------------------------------------------
Payments for consulting & marketing
fees & expenses reimbursed in
connection therewith 871,110
- ---------------------------------------------------------------------------------------
Payments for Accounting Services 12,436
- ---------------------------------------------------------------------------------------
</TABLE>
Item 3 - Defaults upon Senior Securities:
None
Item 4 - Submission of Matters to a Vote of Security Holders.
None
Item 5 - Other Information:
None
16
<PAGE> 18
PLANET POLYMER TECHNOLOGIES, INC.
Item 6 - Exhibits and Reports on Form 8-K:
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
3.1(1) Amended and Restated Certificate of
Determination of Preferences of Series A
Convertible Preferred Stock
10.1(1) Securities Purchase Agreement, dated as of
September 19, 1997, between the Registrant and
Special Situations Private Equity Fund, L.P.
10.2(1) Warrant to Purchase Common Stock, dated
September 24, 1997, issued by the Registrant to
Special Situations Private Equity Fund, L.P.
27.1 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K:
None
- ---------------------
(1) Previously filed as an exhibit to the Registration Statement on Form S-3
(File No. 333-39845) filed on November 7, 1997 and incorporated herein by
reference.
17
<PAGE> 19
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: November 12, 1997 Planet Polymer Technologies, Inc.
/S/ ROBERT J. PETCAVICH
_______________________________________________
Robert J. Petcavich
President, Chief Executive Officer and Director
(On behalf of Registrant and as Registrant's
Principal Financial and Accounting Officer)
18
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED SEPTEMBER 30, 1997 BALANCE SHEET AND STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH STATEMENTS AS FILED IN THE COMPANY'S FORM 10-QSB FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,042,981
<SECURITIES> 0
<RECEIVABLES> 484,842
<ALLOWANCES> (10,000)
<INVENTORY> 345,119
<CURRENT-ASSETS> 2,945,114
<PP&E> 1,646,161
<DEPRECIATION> (801,820)
<TOTAL-ASSETS> 4,707,839
<CURRENT-LIABILITIES> 636,446
<BONDS> 0
0
820,000
<COMMON> 10,791,024
<OTHER-SE> (7,853,965)
<TOTAL-LIABILITY-AND-EQUITY> 4,707,839
<SALES> 2,545,575
<TOTAL-REVENUES> 2,545,575
<CGS> 1,762,374
<TOTAL-COSTS> 1,762,374
<OTHER-EXPENSES> 1,457,705
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,182
<INCOME-PRETAX> (635,171)
<INCOME-TAX> 49,094
<INCOME-CONTINUING> (684,265)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (684,265)
<EPS-PRIMARY> (0.13)
<EPS-DILUTED> (0.13)
</TABLE>
