<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
For the quarterly period ended JUNE 30, 1997
-------------------------------------------------
Commission File Number: 0-28278
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AUTONOMOUS TECHNOLOGIES CORPORATION
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(Exact name of registrant as specified in its charter)
FLORIDA 59-2554729
- ------------------------------------ ------------------------------------
(State or other Jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2800 DISCOVERY DRIVE, ORLANDO, FLORIDA 32826
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(Address of principal executive offices) (Zip Code)
(407) 384-1600
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(Registrant'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 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
On July 31, 1997, there were 9,892,303 shares of the registrant's $.01 par
value Common Stock outstanding.
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AUTONOMOUS TECHNOLOGIES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Index to Form 10-Q
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of June 30, 1997, and December 31, 1996 3
Statements of Operations for the three months ended June 30, 1997 and
1996, for the six months ended June 30, 1997 and 1996, and for the
cumulative period from inception to June 30, 1997 4
Statements of Cash Flows for the six months ended June 30, 1997 and 1996,
and for the cumulative period from inception to June 30, 1997 5
Notes to 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 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 15
</TABLE>
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AUTONOMOUS TECHNOLOGIES CORPORATION
(A Development Stage Company)
BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1997 1996
------ ---- ----
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 4,659,059 $ 2,980,036
Investments (note 1) 5,605,448 9,263,754
Restricted investment 136,717 162,000
Inventories (note 1) 788,892 262,607
Prepaid expenses and other assets 370,316 63,018
---------------- ---------------
Total current assets 11,560,432 12,731,415
PROPERTY AND EQUIPMENT, net 854,279 435,555
ADVANCE LICENSING FEES 750,000 750,000
OTHER ASSETS 124,632 209,279
----------------- ---------------
Total assets $13,289,343 $14,144,249
================= ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 302,059 $ 834,785
Accrued expenses 870,029 422,254
Note payable 109,330 151,299
Current portion of obligation under capital leases 70,570 55,130
----------------- ---------------
Total current liabilities 1,351,988 1,463,468
OBLIGATION UNDER CAPITAL LEASES, less current portion 227,585 122,133
OBLIGATION UNDER STRATEGIC ALLIANCE AGREEMENT 1,275,000 975,000
----------------- ---------------
Total liabilities 2,854,573 2,560,601
----------------- ---------------
STOCKHOLDERS' EQUITY:
Common stock $.01 par value 25,000,000 and 15,000,000 shares
authorized at June 30, 1997 and December 31, 1996,
respectively; 9,892,303 and 6,763,187 shares issued and
outstanding at June 30, 1997 and December 31, 1996,
respectively 98,923 67,632
Additional paid--in capital 37,418,710 28,784,708
Deficit accumulated during the development stage (22,957,864) (17,268,692)
Subscriptions receivable (note 2) (4,124,999) -
----------------- ---------------
Total stockholders' equity 10,434,770 11,583,648
----------------- ---------------
$13,289,343 $14,144,249
================= ===============
</TABLE>
The accompanying notes are an integral part of these balance sheets.
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<PAGE>
AUTONOMOUS TECHNOLOGIES CORPORATION
-----------------------------------
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------- ---------------------------
Cumulative
from Inception
(July 23,
1985) to June
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996 30, 1997
------------- ------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
REVENUES FROM RESEARCH GRANTS $ - $ - $ - $ - $ 3,450,517
OPERATING EXPENSES:
Costs of revenues - research grants - - - - 3,465,596
Clinical trials 853,820 480,971 1,443,102 676,243 4,332,978
Research and development 895,249 746,231 1,669,298 1,203,981 9,023,054
Selling and marketing 318,554 326,876 614,595 507,681 2,576,528
General and administrative 618,863 357,378 1,128,685 739,247 5,155,334
Other expenses 509,982 150,000 1,086,866 300,000 2,745,740
------------- ------------- ------------- -------------- ---------------
OPERATING LOSS 3,196,468 2,061,456 5,942,546 3,427,152 23,848,713
OTHER INCOME (EXPENSE):
Interest income 114,417 142,702 271,226 154,459 976,729
Interest expense (9,281) (4,566) (17,852) (5,224) (81,108)
------------- ------------- ------------- -------------- ---------------
LOSS BEFORE INCOME TAXES 3,091,332 1,923,320 5,689,172 3,277,917 22,953,092
INCOME TAXES - - - - (4,772)
------------- ------------- ------------- -------------- ---------------
NET LOSS $3,091,332 $1,923,320 $5,689,172 $3,277,917 $22,957,864
============= ============= ============= ============== ===============
LOSS PER SHARE:
Net loss per share $ (0.45) $ (0.39) (0.83) $ (0.77)
============= ============= ============= ==============
Weighted average common and common
equivalent shares used in computing
net loss per share 6,888,689 4,985,331 6,860,152 4,229,836
============= ============= ============= ==============
</TABLE>
The accompanying notes are an integral part of these statements.
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AUTONOMOUS TECHNOLOGIES CORPORATION
-----------------------------------
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
------------------------
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
--------------------------------- From Inception
(July 23, 1985) to
June 30, 1997 June 30, 1996 June 30, 1997
---------------- ------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (5,689,172) $ (3,277,917) $ (22,957,864)
Adjustments to reconcile net loss to
net cash used in operating activities:
In-kind services provided by
shareholder 243,066 198,136 912,950
Compensation expense related to
employee stock options 133,832 121,069 648,769
Compensation expense related to
common stock placed in escrow for
future services 37,567 - 239,263
Convertible preferred stock issued
for services - - 162,500
Loss on disposal of property and equipment - - 85,167
Depreciation and amortization 116,179 25,808 494,985
Changes in assets and liabilities:
(Increase) in inventories (526,285) - (788,892)
(Increase) in prepaid expenses
and other assets (222,651) (161,382) (464,948)
Increase in advance licensing fees - (750,000) (750,000)
(Decrease)increase in accounts payable (532,725) (4,550) 302,059
Increase in accrued expenses 623,706 88,289 1,045,960
Increase in obligation under
strategic alliance agreement 300,000 300,000 1,275,000
----------- ----------- ------------
Net cash used in operating activities (5,516,483) (3,460,547) (19,795,051)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (402,798) (157,223) (1,113,492)
Restricted cash investment made or proceeds therefrom 25,283 - (136,717)
Investments made (2,261,274) (13,084,713) (16,405,354)
Investment proceeds 5,919,580 - 10,799,906
----------- ----------- ------------
Net cash provided by (used in) investing activities 3,280,791 (13,241,936) (6,855,657)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of
convertible preferred stock - 2,181,500 6,002,708
Proceeds from issuance of common
stock, net of issuance costs 3,889,997 17,893,000 21,777,430
Proceeds from exercise of stock options and warrants 58,186 - 66,368
Proceeds from note payable - - 151,299
Payment of obligations under capital
leases and note payable (33,468) (11,870) (63,038)
Advance from shareholder - - 1,000,000
Proceeds from issuance of convertible
note payable - - 2,405,000
Proceeds from long-term debt - - 200,000
Repayment of long-term debt - - (200,000)
</TABLE>
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AUTONOMOUS TECHNOLOGIES CORPORATION
-----------------------------------
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
------------------------
(Unaudited)
Continued
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Other, net - - (30,000)
---------- ---------- ----------
Net cash provided by financing
activities 3,914,715 20,064,503 31,309,767
---------- ---------- ----------
NET INCREASE IN CASH 1,679,023 3,362,020 4,659,059
CASH, beginning of period 2,980,036 492,326 -
---------- ---------- ----------
CASH, end of period $4,659,059 $3,854,346 $ 4,659,059
========== ========== =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Noncash transactions -
Equipment acquired under
capital leases $ 154,009 $ 178,518 $ 360,842
Stockholder advance converted to common stock - $1,000,000 $ 1,000,000
Convertible note converted to common stock - $2,405,000 $ 2,405,000
Cash transactions -
Interest paid $ 17,853 $ 5,224 $ 77,171
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE>
AUTONOMOUS TECHNOLOGIES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited interim financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in accordance with the instructions to Form 10-Q and Article 10
of Regulation S-X. 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 normal recurring accruals and adjustments) considered necessary for a fair
presentation have been included. Operating results for the three month or six
month periods ended June 30, 1997, are not necessarily indicative of the results
that may be expected for the year ended December 31, 1997. For further
information, refer to the Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Financial Statements and Footnotes
thereto included in the Autonomous Technologies Corporation ("Company") Annual
Report on Form 10-K as filed with the Securities and Exchange Commission ("SEC")
on March 21, 1997.
The Company's investments consist of U.S. Treasury and Agency securities with
maturities beyond three months at the time of purchase. These investments are
being accounted for as "available-for-sale securities" under Statement of
Financial Accounting Standards No. 115. At June 30, 1997, the investments are
stated at amounts which approximate quoted market value.
Inventories are stated at the lower of cost or market. Cost is determined on the
first-in, first-out method. At June 30, 1997, the Company's components and
purchased sub-assemblies inventory was $480,697 and work-in-progress T-PRK
Systems totaled $308,195.
Fully diluted loss per common and common equivalent share is not presented due
to the anti-dilutive effect (i.e. the effect of reducing loss per share) of the
Company's stock options and warrants in accordance with Accounting Principles
Board Opinion No. 15 ("APB No. 15"). See Note 3. below.
2. SALE OF COMMON STOCK
On June 30, 1997, the Company closed on a transaction for the private sale of
3,000,000 shares of Common Stock at $3.00 per share. The Company prepared and
filed a resale registration statement on such shares with the SEC, which
declared the filing effective on June 30, 1997. The Company received a portion
of the proceeds of the offering on June 30, 1997 and received the balance on
July 1, 1997. The portion of the proceeds that was received on July 1, 1997 is
carried in the accompanying balance sheet at June 30, 1997 as subscriptions
receivable and is presented net against stockholders' equity. The Company's net
cash proceeds from the offering, after agent's commission and offering expenses
was approximately $8,015,000.
3. NEWLY ISSUED ACCOUNTING STANDARD - EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No. 128").
SFAS No. 128 establishes new standards for computing and presenting earnings per
share ("EPS"). Specifically, SFAS No. 128 replaces the presentation of primary
EPS with a presentation of basic EPS, requires dual presentation of basic and
diluted EPS on the face of the income statement for all entities with complex
capital structures and requires a reconciliation of the numerator and
denominator of the diluted EPS computation. SFAS No. 128 is effective for
financial statements issued for periods ending after December 15, 1997; earlier
application is not permitted.
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<PAGE>
The Company's basic EPS, in accordance with SFAS No. 128, would be the same as
the Company's presentation of loss per common and common equivalent share on the
face of the accompanying statements of operations. Similar to the requirements
of APB No. 15, SFAS No. 128 does not require presentation of diluted EPS in
instances where the entity is operating at a loss and the result of the diluted
EPS calculation is to reduce net loss per share. As a result, pro-forma
disclosures of diluted EPS are not required.
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<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Actual results could differ materially from
those projected in the forward-looking statements as a result of a number of
important factors. For a discussion of important factors that could affect the
Company's results, please refer to the Overview section and financial statement
line item discussions set forth below.
The following discussion should be read in conjunction with the unaudited
financial statements and notes thereto included in Part I -- Item 1 of this
Quarterly Report; and in conjunction with the audited financial statements and
notes thereto and Management's Discussion and Analysis of Financial Condition
and Results of Operations contained in the Company's Annual Report on Form 10-K
filed with the SEC on March 21, 1997.
OVERVIEW
Autonomous, a Florida corporation formed in 1985, has been engaged since 1993 in
the design and development of the next generation of excimer laser instruments
for laser vision correction ("LVC") to reduce or eliminate a person's dependence
on eyeglasses or contact lenses. The Company's technology combines eye tracking
with a narrow beam excimer laser to treat common refractive vision disorders
such as myopia (nearsightedness), hyperopia (farsightedness) and astigmatism
(blurred vision). The Company's objective is to improve refractive surgical
outcomes for these conditions over those achieved by earlier LVC systems.
Vision correction is one of the largest medical markets, with over 136 million
people in the United States using eyeglasses or contact lenses. Within this
group, approximately 60 million people are myopic. Industry sources estimate
that Americans spend approximately $13 billion on eyeglasses, contact lenses and
other vision correction products and services each year.
The Company is a development stage enterprise. Since inception, the Company has
experienced significant operating losses, and, as of June 30, 1997, had an
accumulated deficit of approximately $23.0 million. To date, the Company has had
revenues relating only to research grants, which is an endeavor no longer
pursued by the Company. The Company anticipates that its operating losses will
continue for the foreseeable future because it plans to expend substantial
resources in funding clinical trials, sales and marketing activities, commercial
manufacturing, and research and development. Additionally, the Company is
funding, and expects to continue to fund, a legal action against a patent
pooling partnership that operates in the U.S. LVC industry. The Company expects
that research and development expenses will remain at relatively high levels for
the foreseeable future due to continued development of the Company's T-PRK(R)
System, development of algorithms for additional surgical indications such as
hyperopia and the development of complementary technologies such as the
Company's CustomCornea(TM) project. Additionally, it expects that both clinical
trial costs, and sales and marketing costs will escalate as those programs
expand to meet the Company's business goals. The foregoing forward looking
statements could be affected by certain risks and uncertainties, including: the
ability to complete research and development projects (and register their
capabilities with the FDA) that the Company judges to be necessary to be a
viable competitor in the future LVC marketplace; the ongoing results from past
and future clinical trials; the foreign, and subsequently U.S., market
acceptance of the T-PRK System; and the ability of the Company to ramp up
production to adequate levels to meet demand and generate net revenues to cover
the overhead of the business.
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<PAGE>
RESULTS OF OPERATIONS
Operating Expenses
Clinical trials expenses were $853,820 and $480,971 in the quarters ended June
30, 1997 and 1996, respectively. Clinical trials expenses were $1,443,102 and
$676, 243 in the six months ended June 30, 1997 and 1996, respectively. These
expenses increased 78% and 113% in the quarter and six months, respectively, due
to the Company's substantial commitment of resources to complete its Phase III
patient entry by April 1997 and the subsequent follow-up work at the clinic
level in order to collect data to support its Pre-market Approval submission
later in 1997. The Company first began its U.S. clinical trials program for low
and moderate myopia and astigmatism in mid-March 1996. In its Phase III clinical
trials, the Company pays the operating costs of the T-PRK Systems at the
clinical sites, makes contributory payments toward patient recruitment and
treatment, supplies Company staff to assist with operations, and retains
clinical consulting services to assist with the collection and analysis of data
and the preparation of FDA filings. As the Company adds additional staff during
the balance of 1997 and progresses through additional clinical trials for
hyperopia, LASIK and additional myopic indications, clinical trials expenses
will continue to increase. There is no certainty that the conduct or results of
the current or future clinical trials will result in FDA approvals for any of
the surgical indications sought.
Research and development expenses were $895,249 and $746,231 in the quarters
ended June 30, 1997 and 1996, respectively. Research and development expenses
were $1,669,298 and $1,203,981 in the six months ended June 30, 1997 and 1996,
respectively. These increases of 20% and 39% in the quarter and six months,
respectively, are due to the fact that research and development staffing has
been increased since the 1996 first quarter, primarily to add systems
integration and software engineers for continued T-PRK System improvements and
to add scientists to conduct the Company's CustomCornea research project. While
the Company's research efforts to date have been productive in creating and
building the T-PRK System, it is uncertain whether continued investment in
research and development will be as productive as it has been in the past, if at
all. Further, it is uncertain whether the Company's CustomCornea project will
produce a viable commercial product or procedure, or whether such product or
procedure will be approved by the FDA.
Selling and marketing expenses were $318,554 and $326,876 in the quarters ended
June 30, 1997 and 1996, respectively. Selling and marketing expenses were
$614,595 and $507,681 in the six months ended June 30, 1997 and 1996,
respectively. This decrease of 3% in the most recent quarterly comparison is
due to the fact that a continuing accrual of compensation expense for stock
compensation for a CIBA officer declined due primarily to stock price
performance, offset by a Board-approved amendment to that agreement whereby the
remaining variable shares thereunder have vested and are due fully to the
individual upon his employment in June 1998 by the Company under the terms of
the CIBA in-kind services agreement and the agreement with the individual. The
increase of 21% in the comparative six month periods is due primarily to the
Company's incurrence of increased costs for travel of personnel to procure the
initial foreign placement contracts for the T-PRK System overseas. The Company
expects sales and marketing expenses to be among the fastest growing expenses in
the immediate future as the Company's manufacturing capabilities are improved to
support the placement of commercial systems in the balance of 1997 and into
1998. It is uncertain whether the Company's pricing structure and product
offering will be accepted by the LVC marketplace.
General and administrative expenses were $618,863 and $357,378 in the quarters
ended June 30, 1997 and 1996, respectively. General and administrative expenses
were $1,128,685 and $739,247 in the six months ended June 30, 1997 and 1996,
respectively. These increases of 73% and 53% in the quarter and six months,
respectively, are due to increased overall Company staffing, which in turn
requires increased infrastructure to support in accounting and human resources.
The Company also added, post-IPO, an investor relations function in the general
and administrative area. It is anticipated that general and
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<PAGE>
administrative expenses will continue to increase, but at a slower rate than the
operating expenses discussed in the foregoing three paragraphs.
Other expenses were $509,982 and $150,000 in the quarters ended June 30, 1997
and 1996, respectively. Other expenses were $1,086,866 and $300,000 in the six
months ended June 30, 1997 and 1996, respectively. There are two major
components of this expense category:
1) An accrual which is being made for shares that may be issuable to CIBA
Vision in May 1999 under the terms of the 1995 Strategic Alliance Agreement.
The shares are to be issued unless certain requirements, relating to the
accumulated 6% commission on revenues the Company will pay to CIBA Vision,
are satisfied. The Company anticipates that the shares will be issued in May
1999.
2) Legal expenses that relate to the Company's pursuit, beginning in the latter
half of 1996, of two legal actions and the defense of another, all having to
do with alleged infringement, unenforceability and invalidity of certain LVC
patents held in various jurisdictions by other participants in the LVC
industry. At the end of the first quarter of 1997, the Company was able to
reach a settlement in two of those three cases whereby the Company received
a license to utilize certain patents outside the U.S. As a result of these
settlement negotiations, legal expenses increased in the 1997 periods to
over $100,000 per month. The Company is still pursuing, as the plaintiff,
one case in the U.S. and expects to incur approximately $100,000 per month
of legal expenses indefinitely in connection with this action. There can be
no assurance that the continued pursuit of this remaining case will result
in any change in commercial terms for the Company's T-PRK System in the U.S.
Further, there can be no assurances that other legal matters will not be
opened that the Company cannot presently foresee.
Interest income and interest expense
Interest income was $114,417 and $142,702 in the quarters ended June 30, 1997
and 1996, respectively. Interest income was $271,226 and $154,459 for the six
months ended June 30, 1997 and 1996, respectively. The decrease in the
comparative quarters was due to lower average cash and investment balances in
the 1997 quarter as compared to the 1996 quarter. The Company received its
initial public offering proceeds in mid-second quarter 1996, resulting in an
average cash and investments balance of approximately $11.8 million for the
quarter. In the 1997 quarter, the Company's cash and investments balance
averaged approximately $7.3 million. The increase in interest income in the
first half of 1997 over the comparative 1996 period is due to the Company's
higher average cash and investment balances in the 1997 period. Again, caused
by the timing of the Company's initial public offering proceeds in mid second
quarter 1996, the average cash and investment balances were $8.7 million in the
first half of 1997 and $6.6 million in the first half of 1996. Available
interest rates on balances increased slightly in 1997 over 1996.
Interest expense was $9,281 and $4,566 in the quarters ended June 30, 1997 and
1996, respectively. Interest expense was $17,852 and $5,224 in the six months
ended June 30, 1997 and 1996, respectively. This increase in interest expense
was due to the incurrence, primarily in mid to late 1996, of capital lease
obligations for engineering systems.
As a result of the Company's recent private placement offering whereby cash and
investment balances have been increased by approximately $8 million, interest
income will increase in the third quarter of 1997 and then begin to decline due
to use of such cash resources to fund operations. Interest expense will
increase after the 1997 second quarter due to the Company's new capital leases
relating to furniture and telecommunications equipment for its new facility.
Operating and Net Losses
The net effect of the foregoing expense items was that the Company's operating
loss increased to $3,196,468, or by 55%, in the quarter ended June 30, 1997,
from $2,061,456 in the quarter ended June 30, 1996. The Company's net loss
increased to $3,091,332 or by 61%, in the quarter ended June 30, 1997, from
$1,923,320 in the quarter ended June 30, 1996.
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<PAGE>
For the six month periods ended June 30th, the Company's operating loss
increased to $5,942,546, or by 73%, in 1997 from $3,427,152 in 1996. The net
loss increased to $5,689,172, or by 74%, in 1997 from $3,277,917 in 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash, cash equivalents and available-for-sale investments were
$10,264,507 at June 30, 1997 ($14,389,506 at July 1, 1997 upon the collection of
subscriptions receivable in connection with the Company's private placement of
common stock that closed on June 30, 1997) and $12,243,790 at December 31, 1996.
Including the aforementioned July 1st collection, this net increase in cash and
investments during the first six months of 1997 of $2.1 million is comprised of
$8.0 million of net proceeds from the offering and the use of approximately $5.9
million, net, in operations and capital expenditures.
As the Company continues to conduct clinical investigations, more fully develop
a sales and marketing capability, and commence commercial production of its T-
PRK System, it is expected that additional losses will be incurred that will
require substantial funding by equity or debt placements. The Company believes
that its cash resources in excess of $14 million at July 1, 1997, will be
sufficient to fund operations and continued development through the middle of
1998. Should the Company raise adequate funds in 1998 to fund operations for a
reasonable period thereafter, it may be on terms that cause substantial dilution
for current stockholders.
The Company's common stock is quoted on NASDAQ under the symbol "ATCI".
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PART II -- OTHER INFORMATION AUTONOMOUS TECHNOLOGIES CORPORATION
-----------------------------------
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
On July 1, 1997, the Company completed the sale of 3,000,000 shares of Common
Stock for $3.00 per share to accredited investors pursuant to the registration
exemption in Regulation D of the Securities Act of 1933 for a cash total of
$9,000,000, less commissions and expenses of the offering. EVEREN Securities,
Inc., acting as the placement agent for this private offering received
commissions totaling $540,000. A resale registration statement pertaining to
these shares was declared effective on June 30, 1997 by the Securities and
Exchange Commission.
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company held its Annual Meeting of Stockholders on June 12, 1997 at its
main office at 2800 Discovery Drive, Orlando, Florida 32826 at 9:00 a.m.
Eastern Daylight Time. At the meeting, in person or by proxy, a total of
5,966,037 shares of common stock were represented, or 86.6% of the shares
eligible to vote.
(b) At the Annual Meeting, the following directors were re-elected for a one
year term with the following vote tabulation:
<TABLE>
<CAPTION>
Abstentions
Name Votes for Votes against Votes withheld /non-votes
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mr. Randy Frey 5,934,085 0 31,952 0
Dr. Richard C. Capozza 5,934,085 0 31,952 0
Mr. G. Richard Downes 5,934,085 0 31,952 0
Mr. G. Arthur Herbert 5,934,085 0 31,952 0
Mr. Stanley Ruffett 5,933,885 0 32,152 0
Mr. Timothy Barabe 5,933,885 0 32,952 0
Dr. Richard H. Keates 5,934,085 0 31,952 0
</TABLE>
(c) At the Annual Meeting, an amendment to the Company's Third Amended and
Restated Articles of Incorporation was approved that increased the
authorized number of shares of Common Stock of the Company from 15,000,000
to 25,000,000. There were 5,046,263 shares voted for the amendment; 914,674
shares voted against the amendment; and 5,100 shares abstained from voting
on the amendment.
(d) At the Annual Meeting, a proposal to amend the Company's 1995 Stock Option
Plan to increase the number of shares available for grant from 1,050,000 to
1,750,000 was approved. There were 4,037,868 shares voted for the proposal;
1,199,094 shares voted against the proposal; and 730,815 abstentions and
broker non-votes regarding the proposal.
(e) At the Annual Meeting, an amendment to the Company's Articles of
Incorporation was approved that prohibits the use of written consents unless
the use thereof is approved in advance by the Board of Directors. There were
4,788,790 shares voted for the proposal; 459,522 shares voted against the
proposal; and 719,465 abstentions and broker non-votes regarding the
proposal.
-13-
<PAGE>
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Report on Form 8-K filed June 24, 1997. The Company filed this 8-K to
report that on June 17, 1997 the Company had entered into agreements with
accredited investors for the purchase of 3,000,000 shares of common stock at
$3.00 per share. Included with the filing was the Company's press release in
the matter.
(b) Report on Form 8-K filed July 2, 1997. The Company filed this 8-K to report
that the filing of its amendments to its Articles of Incorporation had occurred
with the Office of the Secretary of State in Florida. The amendment relates to
three matters that had been approved by shareholder proxy vote at the Company's
June 12, 1997 Annual Meeting of Stockholders. The first, amending Article IV,
is the increase in authorized common shares of the Company from 15,000,000 to
25,000,000. The second, amending Article XI, provides that any action to be
taken by written consent in lieu of an annual or special meeting of the
stockholders is prohibited unless the use of written consents is approved in
advance by the Board. The third, amending Article XIII, provides that an
affirmative vote of the holders of not less than two-thirds of the outstanding
voting shares is required to amend such a prohibition of the use of written
consents by the stockholders. Included with the filing was the Company's newly
amended Third Amended and Restated Articles of Incorporation.
The July 2, 1997 8-K also indicated that the Company had closed a private
placement of 3,000,000 shares of the Common Stock of the Company at $3.00 per
share. Included with the filing was the Company's press release in the matter.
Exhibit 27 - Financial Data Schedule (for SEC use only).
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AUTONOMOUS TECHNOLOGIES CORPORATION
August 8, 1997
By: /s/ Monty K. Allen
-------------------------------------
Monty K. Allen
Vice President and Chief Financial Officer
(Principal Financial Officer and Chief Accounting Officer)
-15-
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