<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 SEPTEMBER 30, 1997
------------------
Commission File Number: 0-28278
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AUTONOMOUS TECHNOLOGIES CORPORATION
------------------------------------------------------
(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
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(407) 384-1600
----------------------------------------------------
(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 October 31, 1997, there were 9,966,443 shares of the registrant's $.01 par
value Common Stock outstanding.
<PAGE>
AUTONOMOUS TECHNOLOGIES CORPORATION
(A Development Stage Company)
Index to Form 10-Q
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of September 30, 1997, and December 31, 1996 3
Statements of Operations for the three months ended September 30, 1997 and 1996,
for the nine months ended September 30, 1997 and 1996, and for the cumulative
period from inception to September 30, 1997 4
Statements of Cash Flows for the nine months ended September 30, 1997 and 1996,
and for the cumulative period from inception to September 30, 1997 5
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
</TABLE>
<PAGE>
AUTONOMOUS TECHNOLOGIES CORPORATION
-----------------------------------
(A Development Stage Company)
BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
ASSETS ------------------ ----------------
------ (Unaudited)
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 506,448 $ 2,980,036
Investments (note 1) 10,545,516 9,263,754
Restricted investment 111,045 162,000
Inventories (note 1) 1,676,062 262,607
Prepaid expenses and other assets 277,804 63,018
------------ ------------
Total current assets 13,116,875 12,731,415
PROPERTY AND EQUIPMENT, net 1,326,701 435,555
ADVANCE LICENSING FEES 749,120 750,000
OTHER ASSETS 320,196 209,279
------------ ------------
Total assets $ 15,512,892 $ 14,144,249
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 474,377 $ 834,785
Accrued expenses 1,125,019 422,254
Note payable 111,045 151,299
Current portion of obligation under capital leases 93,927 55,130
------------ ------------
Total current liabilities 1,804,368 1,463,468
OBLIGATION UNDER CAPITAL LEASES, less current portion 208,914 122,133
OBLIGATION UNDER STRATEGIC ALLIANCE AGREEMENT 1,425,000 975,000
------------ ------------
Total liabilities 3,438,282 2,560,601
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock $.01 par value 25,000,000 and 15,000,000 shares
authorized at September 30, 1997 and December 31, 1996,
respectively; 9,908,197 and 6,763,187 shares issued and
outstanding at September 30, 1997 and December 31, 1996,
respectively 99,082 67,632
Additional paid--in capital 37,610,521 28,784,708
Deficit accumulated during the development stage (25,634,993) (17,268,692)
------------ ------------
Total stockholders' equity 12,074,610 11,583,648
------------ ------------
$ 15,512,892 $ 14,144,249
============ ============
</TABLE>
The accompanying notes are an integral part of these balance sheets.
-3-
<PAGE>
AUTONOMOUS TECHNOLOGIES CORPORATION
-----------------------------------
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------- ---------------------------
Cumulative
from Inception
(July 23, 1985)
Sept. 30, Sept. 30, Sept. 30, Sept. 30, to Sept. 30,
1997 1996 1997 1996 1997
---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
REVENUES FROM LADARVision System $ 11,000 $ - $ 11,000 $ - $ 11,000
REVENUES FROM RESEARCH GRANTS - - - - 3,450,517
OPERATING EXPENSES:
Costs of revenues- LADARVision 35,528 - 35,528 - 35,528
System
Costs of revenues- research grants - - - - 3,465,596
Clinical trials 715,348 477,282 2,158,449 1,153,525 5,048,326
Research and development 706,637 1,457,410 2,375,933 2,661,391 9,729,691
Selling and marketing 415,244 281,158 1,029,840 788,839 2,991,772
General and administrative 617,542 457,242 1,746,226 1,196,489 5,772,876
Other expenses 366,444 431,468 1,453,311 731,468 3,112,184
---------- ---------- ---------- ---------- -----------
OPERATING LOSS 2,845,743 3,104,560 8,788,287 6,531,712 26,694,456
OTHER INCOME (EXPENSE):
Interest income 182,850 224,693 453,260 379,152 1,159,579
Interest expense (14,236) (11,513) (31,274) (16,737) (95,344)
---------- ---------- ---------- ---------- -----------
LOSS BEFORE INCOME TAXES 2,677,129 2,891,380 8,366,301 6,169,297 25,630,221
INCOME TAXES - - - - (4,772)
---------- ---------- ---------- ---------- -----------
NET LOSS $2,677,129 $2,891,380 $8,366,301 $6,169,297 $25,634,993
========== ========== ========== ========== ===========
LOSS PER SHARE:
Net loss per share $(0.27) $(0.43) $(1.06) $(1.19)
========== ========== ========== ==========
Weighted average common and common
equivalent shares used in
computing net loss per share 9,898,367 6,749,950 7,884,019 5,164,668
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
-4-
<PAGE>
AUTONOMOUS TECHNOLOGIES CORPORATION
------------------------------------
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
------------------------
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
-------------------------------- From Inception
Sept. 30, Sept. 30, (July 23, 1985) to
1997 1996 Sept. 30, 1997
-------------------------------- ------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(8,366,301) $ (6,169,297) $(25,634,993)
Adjustments to reconcile net loss to
net cash used in operating activities:
In-kind services provided by
shareholder 368,069 312,636 1,037,953
Compensation expense related to
employee stock options 374,106 169,978 973,622
Compensation expense related to
common stock placed in escrow for
future services 37,567 - 61,617
Convertible preferred stock issued
for services - - 162,500
Loss on disposal of property and equipment - - 85,167
Depreciation and amortization 203,305 113,265 582,110
Changes in assets and liabilities:
(Increase) in inventories (1,413,455) - (1,676,062)
(Increase) in prepaid expenses
and other assets (325,703) (164,728) (568,000)
(Increase) decrease in advance licensing fees 880 (750,000) (749,120)
(Decrease)increase in accounts payable (360,408) 106,079 474,377
Increase in accrued expenses 702,765 168,694 1,125,019
Increase in obligation under
strategic alliance agreement 450,000 450,000 1,425,000
----------- ------------ ------------
Net cash used in operating activities (8,329,175) (5,763,373) (22,700,810)
----------- ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (898,205) (268,251) (1,608,899)
Restricted cash investment (made) proceeds therefrom 50,955 (162,000) (111,045)
Investments made (9,644,170) (14,144,080) (23,788,250)
Investment proceeds 8,362,408 1,500,000 13,242,734
----------- ------------ ------------
Net cash used in investing activities (2,129,012) (13,074,331) (12,265,460)
----------- ------------ ------------
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 8,014,996 17,893,000 25,995,496
Proceeds from exercise of stock options and warrants 62,525 - 70,707
Proceeds from note payable - 162,000 151,299
Payment of obligations under capital
leases and note payable (92,922) (28,131) (122,492)
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>
-5-
<PAGE>
AUTONOMOUS TECHNOLOGIES CORPORATION
-----------------------------------
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
------------------------
(Unaudited)
Continued
<TABLE>
<S> <C> <C> <C>
Other, net - 1,873 (30,000)
----------- ----------- -----------
Net cash provided by financing
activities 7,984,599 20,210,242 35,472,718
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH (2,473,588) 1,372,538 506,448
CASH, beginning of period 2,980,036 492,326 -
----------- ----------- -----------
CASH, end of period $ 506,448 $ 1,864,864 $ 506,448
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Noncash transactions -
Equipment acquired under
capital leases $ 178,246 $ 178,518 $ 385,079
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 $ 27,277 $ 16,737 $ 86,595
</TABLE>
The accompanying notes are an integral part of these statements.
-6-
<PAGE>
AUTONOMOUS TECHNOLOGIES CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 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 nine
month periods ended September 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" or
"Autonomous") 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 September 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 September 30, 1997, the Company's components
and purchased sub-assemblies inventory was $958,075 and work-in-progress
LADARVision(R) Systems (formerly known as T-PRK Systems) totaled $717,987.
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 2. below.
2. 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.
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.
-7-
<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 September 30, 1997, had an
accumulated deficit of approximately $25.6 million. To date, the Company has had
significant revenues relating only to research grants, which is an endeavor no
longer pursued by the Company. Despite the fact that LADARVision System
placements have begun outside the U.S., 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 LADARVision System, development of algorithms for
additional surgical indications such as hyperopia and the development of
complementary technologies such as the Company's CustomCornea 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 LADARVision 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.
-8-
<PAGE>
RESULTS OF OPERATIONS
Operating Expenses
- ------------------
Clinical trials expenses were $715,348 and $477,282 in the quarters ended
September 30, 1997 and 1996, respectively. Clinical trials expenses were
$2,158,449 and $1,153,525 in the nine months ended September 30, 1997 and 1996,
respectively. These expenses increased 50% and 87% in the quarter and nine
months, respectively, due to the Company's substantial commitment of resources
to open new clinical protocols for expanded indications (higher myopia,
hyperopia and LASIK) and the patient follow-up work and data analysis in order
to collect and prepare data to support its Pre-Market Approval submission for
myopia, which was accepted for review by the FDA in October. In its Phase III
clinical trials for myopia, astigmatism and hyperopia to date, the Company has
paid the operating costs of the LADARVision Systems at the clinical sites, made
contributory payments toward patient recruitment and treatment, supplied Company
staff to assist with operations, and retained clinical consulting services to
assist with the collection and analysis of data and the preparation of FDA
filings. The Company's CustomCornea research program is expected to mature to
clinical trial level in the future and, as a result of these continuing trials,
clinical trials expenses will continue without significant reductions. 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 $706,637 and $1,457,410 in the quarters
ended September 30, 1997 and 1996, respectively. Research and development
expenses were $2,375,933 and $2,661,391 in the nine months ended September 30,
1997 and 1996, respectively. In the most recent quarterly comparison, this was a
decrease of 52%, and in the nine month period a decrease of 11%. The 52%
decrease in reported research and development costs for the quarter is almost
wholly reflective of the Company's commercial production status. During 1997,
the Company has been preparing commercial production capability. The cost of
the production organization was charged to expense as a period cost, and grouped
as a research and development expense, until mid-year. At that time, the
Company's commercial production efforts started with the assembly and testing of
non-clinical site Systems. As a result, beginning in the third quarter, a
portion of the cost of the production organization was capitalized as inventory
as a cost of assembling the LADARVision Systems. As the Company places
commercial units in the field under its procedure fee approach (vs. outright
sale of the unit), such production organization costs that are embedded in the
cost of the Systems will be capitalized and depreciated against procedure fee
revenues. Henceforth, research and development will contain costs incurred by
the Company's research and product development/product improvement efforts. The
same phenomenon accounts for the 11% decrease in the comparative nine month
periods. It is uncertain whether continued investment in applied research and
product 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 $415,244 and $281,158 in the quarters ended
September 30, 1997 and 1996, respectively. Selling and marketing expenses were
$1,029,840 and $788,839 in the nine months ended September 30, 1997 and 1996,
respectively. This increase of 48% in the most recent quarterly comparison and
31% in the nine month comparison is due to marketing staffing being increased as
the Company's marketing and promotional efforts and activities increase
coincident with the commercial introduction of the LADARVision System outside
the U.S. 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 $617,542 and $457,242 in the quarters
ended September 30, 1997 and 1996, respectively. General and administrative
expenses were $1,746,226 and $1,196,489 in the
-9-
<PAGE>
nine months ended September 30, 1997 and 1996, respectively. These increases of
35% and 46% in the quarter and nine 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. Moving
expenses and expenses related to it's new facility in Orlando have also
increased in the 1997 periods as compared to 1996. It is anticipated that
general and administrative expenses will increase at a slower rate, if at all,
in the near future.
Other expenses were $366,444 and $431,468 in the quarters ended September 30,
1997 and 1996, respectively. Other expenses were $1,453,311 and $731,468 in
the nine months ended September 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 first and
second quarters of 1997 to over $100,000 per month. In the third quarter,
as the remaining suit is in a pre-discovery stage, the legal expenses were
somewhat reduced. The Company is still pursuing, as the plaintiff, one
remaining case in the U.S. and expects, as activity in that suit
progresses, to incur at least $100,000 per month of legal expenses
indefinitely into the future 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 LADARVision 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 $182,850 and $224,693 in the quarters ended September 30,
1997 and 1996, respectively. Interest income was $453,260 and $379,152 for the
nine months ended September 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, and averaged a cash
and investments balance of approximately $15.4 million for the 1996 quarter. In
the 1997 quarter, the Company's cash and investments balance averaged
approximately $12.3 million. The increase in interest income in the first nine
months 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 $10.8 million in the first
nine months of 1997 and $9.5 million in the comparable period of 1996. Available
interest rates on the short-term instruments the Company has invested in during
these periods have been little changed.
Interest expense was $14,236 and $11,513 in the quarters ended September 30,
1997 and 1996, respectively. Interest expense was $31,274 and $16,737 in the
nine months ended September 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 and, in mid-1997, for systems
furniture for the Company's new facility.
-10-
<PAGE>
Interest income will decline in the next two quarters due to use of cash
resources to fund operations. Interest expense will increase 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 decreased to $2,845,743, or by 8%, in the quarter ended September 30, 1997,
from $3,104,560 in the quarter ended September 30, 1996. The Company's net loss
decreased to $2,677,129 or by 7%, in the quarter ended September 30, 1997, from
$2,891,380 in the quarter ended September 30, 1996. Due to the aforementioned
beginning of capitalization of the costs of the production organization, it
should be noted, by reference to the accompanying Statement of Cash Flows, that
cash outflows have not been reduced as a result of this decrease in net loss for
the periods discussed
For the nine month periods ended September 30th, the Company's operating loss
increased to $8,788,287, or by 35%, in 1997 from $6,531,712 in 1996. The net
loss increased to $8,366,301, or by 36%, in 1997 from $6,169,297 in 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash, cash equivalents and available-for-sale investments were
$11,051,964 at September 30, 1997 and $12,243,790 at December 31, 1996. This net
decrease in cash and investments during the first nine months of 1997 of $1.2
million is comprised of $8.0 million of net proceeds from a private common stock
offering in June 1997 and the use of approximately $9.2 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
LADARVision 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 $11 million at September 30, 1997,
will be sufficient to fund operations and continued development into 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".
-11-
<PAGE>
PART II -- OTHER INFORMATION AUTONOMOUS TECHNOLOGIES CORPORATION
-----------------------------------
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Reports on Form 8-K
None.
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit Page
27 Financial Data Schedule (for SEC use only). 14
-12-
<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
November 8, 1997
By: /s/ Monty K. Allen
-------------------------------------
Monty K. Allen
Vice President and Chief Financial Officer
(Principal Financial Officer and Chief Accounting Officer)
-13-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 506,448
<SECURITIES> 10,545,516
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 1,676,062
<CURRENT-ASSETS> 13,116,875
<PP&E> 1,851,005
<DEPRECIATION> 524,304
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0
0
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</TABLE>
