FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File Number 0-23666
TRIPOS, INC.
(Exact Name of Registrant as Specified in its Charter)
Utah 43-1454986
(State or Other Jurisdiction of (I.R.S.Employer
Incorporation or Organization) Identification No.)
1699 South Hanley Road
St. Louis, Missouri 63144
(Address of Principal Executive Offices and Zip Code)
(314) 647-1099
(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 for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirement for the past 90 days.
Yes X No
Number of shares outstanding of the issuer's Common Stock, par
value $.01 per share, as of September 30, 1996: 2,952,165 shares.
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION, Item 1. Financial Page
Statements (Unaudited)
Consolidated Balance Sheets at
September 30, 1996 and December 31, 1995 3
Consolidated Statements of Operations
for Three and Nine Months Ended September 30, 1996
and September 30, 1995 4
Consolidated Statements of Cash Flows for Nine Months
Ended September 30, 1996 and September 30, 1995 5
Notes to Consolidated Financial Statements 6
PART I FINANCIAL INFORMATION, Item 2. Management's
Discussion and Analysis of Financial Condition and Results
of Operations 7
PART II OTHER INFORMATION 10
SIGNATURES 11
EXHIBITS INDEX 12
Exhibit 10.1 Credit Agreement-Line of Credit 13
Exhibit 10.1 Credit Agreement-Line of Credit 20
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Sep 30, Dec 31,
1996 1995
ASSETS
Current Assets:
Cash and cash $3,725 $3,955
equivalents
Investments 3,432 3,179
Accounts 7,600 7,357
receivable
Prepaid expenses 725 469
Deferred income taxes 310 610
Total current assets $15,792 $15,570
Property and equipment,less accumulated
depreciation 1,107 1,191
Capitalized development costs, less
accumulated amortization 3,107 2,265
Other, net 265 33
Total assets $20,271 $19,059
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 731 $ 1,120
Accrued expenses 3,128 2,490
Deferred revenue 3,038 3,322
Total current liabilities 6,897 6,932
Deferred income taxes 800 805
Shareholders' equity:
Common stock 30 29
Additional paid-in capital 14,673 14,237
Accumulated deficit (2,473) (3,334)
Cumulative translation adjustment 344 390
Total shareholders' equity 12,574 11,322
Total liabilities and
shareholders' equity $20,271 $19,059
See accompanying notes.
Item 1. Financial Statements (continued)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Nine Months Ended
Ended
Sep 30, Sep 30, Sep 30, Sep 30,
1996 1995 1996 1995
Net sales:
Software licenses $ 2,218 $ 2,341 $ 6,438 $ 6,346
Support 1,708 1,668 4,928 4,791
Accelerated discovery 3,141 593 4,979 593
Hardware 486 728 2,814 2,605
Total net sales 7,553 5,330 19,159 14,335
Operating costs and expenses:
Cost of sales 2,344 1,558 6,482 4,015
Sales and marketing 2,741 2,600 7,732 7,320
Research and development 851 898 2,472 2,657
General and administrative 726 332 1,484 1,105
Total costs and expenses 6,662 5,388 18,170 15,097
Income (loss) from 891 (58) 989 (762)
operations
Other income, net 47 122 174 383
Income (loss) before income 938 64 1,163 (379)
taxes
Income tax expense (benefit) 250 32 302 (111)
Net income (loss) $ 688 $ 32 $ 861 $ (268)
Fully diluted earnings (loss)
per common and common equivalent share
$ 0.21 $ 0.01 $ 0.26 $ (0.09)
Weighted average number of
common and common equivalent
shares 3,305 2,923 3,265 2,857
See accompanying notes.
Item 1. Financial Statements (continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Nine Months Ended
Sep 30, Sep 30,
1996 1995
Cash flows from operating activities
Net income (loss) $ 861 $ (268)
Adjustments to reconcile net income(loss)
to net cash provided by operating activities:
Depreciation of property and equipment 499 735
Amortization of capitalized development costs 2,220 524
Deferred income taxes 295 338
Change in operating assets and liabilities:
Accounts receivable (338) 2,126
Prepaid expenses and other assets (250) 202
Accounts payable and accrued expenses 328 (2,699)
Deferred revenue (256) (104)
Net cash provided by operating activities 3,359 854
Cash flows from investing activities:
Net purchases, sales, and maturities
of investments (253) 4,719
Purchases of property and equipment (434) (570)
Capitalized development costs (3,016) (1,787)
Other (265) 0
Net cash used in investing activities (3,968) 2,362
Cash flows from financing activities:
Stock issuance pursuant to stock plans 456 49
Net cash provided by financing activities 456 49
Effect of foreign exchange rate changes on
cash and cash equivalents (77) 58
Net increase (decrease) in cash and (230) 3,323
cash equivalents
Cash and cash equivalents at beginning
of period 3,955 1,932
Cash and cash equivalents at end
of period $ 3,725 $ 5,255
See accompanying notes.
Item 1. Financial Statements (continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Summary of significant accounting policies
(a) Organization
Tripos, Inc. (the "Company") delivers science, tools and
analysis services that advance customers' creativity and
productivity in pharmaceutical, agrochemical, biotechnology and
related research industries worldwide. The Company is also a value-
added reseller of third party hardware products required to operate
its software products. A substantial portion of the Company's
business is conducted with pharmaceutical companies, however, the
Company is not economically dependent on any customer on an ongoing
basis.
(b) Basis of Presentation
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and 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
normal recurring adjustments necessary for a fair presentation of
such financial statements have been included. Operating results
for the three and nine month periods ended September 30, 1996 are
not necessarily indicative of the results that may be expected for
the year ended December 31, 1996.
(2) Income taxes
The provision for income taxes is computed using the liability
method. The difference between financial statement and taxable
income results primarily from the use of different methods of
computing capitalized development costs, accrued vacation and
customer deposits. The difference between the Company's effective
tax rate and the statutory rate is primarily the result of
recognizing the benefit of certain tax carryforwards for which no
previous benefit had been recognized.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Overview
The Company's quarterly operating results can vary
significantly depending upon such factors as the capital
expenditure budgets of its customers, lengthy sales cycles, market
acceptance of new products and enhanced versions of existing
products, the timing of new product introductions by the Company
and other vendors, changes in pricing policies by the Company and
other vendors, and changes in general economic and competitive
conditions. In addition, a substantial portion of the Company's
revenues for each quarter is attributable to a limited number of
orders and tends to be realized towards the end of each quarter.
Thus, even short delays or deferrals of sales near the end of a
quarter can cause quarterly results to fluctuate substantially.
The Company typically experiences greater gross margins on software
licenses, consulting, and compound sales than on sales of hardware.
The Company's profitability depends in part on the mix of its
revenue components and not necessarily on total revenues.
Results of Operations
Net sales for the third quarter of 1996 were $7.6 million
compared with $5.3 million for the third quarter of 1995. The
overall increase in net sales for the quarter was attributed to a
significant increase in accelerated discovery services sales,
principally chemical compound sales. Net sales for the first nine
months of 1996 were $19.2 million compared to $14.3 million for the
same period in 1995. Sales increases were achieved in software
licenses, support, hardware and accelerated discovery services, for
the nine month period. Accelerated discovery services is a new
product line, consisting of diverse compound libraries and
consulting services, which was introduced in the third quarter of
1995.
For the three months ended September 30, 1996, software
licenses sales decreased 5.2% to $2.2 million. The decrease is due
to several large orders in the third quarter of 1995 which was an
unusual deviation from historical third quarter sales. 1996 third
quarter software revenues are more representative of those
historical trends. For the first nine months of 1996, software
license sales increased 1.4% to $6.4 million compared to the same
period for 1995. Support revenues for the third quarter of 1996
increased 2.4% to $1.7 million from the same period in 1995.
Support sales increased 2.8% to $4.9 million for the nine month
period ending September 30, 1996. Accelerated discovery services
sales, primarily diverse compound libraries, amounted to $3.1
million in the third quarter of 1996 and $5.0 million for the nine
months year-to-date compared to $0.6 million for the three and nine
month periods in 1995. The collaboration with Panlabs, Inc. to
design and manufacture chemical compounds was initiated late in the
second quarter of 1995 with the first sales in the third quarter
and continues to meet expectations. Hardware sales decreased by
33.3% to $0.5 million for the third quarter 1996. For the first
nine months of 1996, hardware sales increased 8.0% to $2.8 million
compared to 1995. Sales to existing customers represent 83% of
total revenues for the nine month period. For the same period,
sales of new products represent 34% of software license and
discovery service sales.
Net sales for the Company's activities outside North America
represented approximately 50.7% for the first nine months of 1996
compared to 49.0% for the same period in 1995. Net sales in Europe
increased 35.6% for the first nine months of 1996 compared to 1995
and accounted for 39.8% and 39.2% of net sales for the nine month
periods in 1996 and 1995, respectively. Net sales in the Pacific
Rim, principally Japan and South Korea, increased 49.5% compared to
the first nine months of 1995 and accounted for 10.9% and 9.7% of
net sales for the respective periods.
Cost of sales for the quarter ending September 30, 1996
increased 50.5% to $2.3 million and increased 61.5% to $6.5 million
for the nine month period in 1996. These increases were due to the
increased diverse compound library sales and narrower margins on
hardware sales. Cost of sales as a percent of net sales was 31.0%
and 33.8% for the three and nine month periods in 1996, and 29.2%
and 28.0% for the three and nine month periods in 1995,
respectively.
Gross profit margin percentage for the third quarter of 1996
declined to 69.0% from 70.8% in 1995. For the first nine months of
1996, gross margin percentage decreased to 66.2% from 72.0% for the
same period in 1995. The decrease is attributable to a change in
the sales mix in that lower margin revenue sources, specifically
hardware and chemical compound sales, represent a higher percentage
of total net sales in 1996 compared to 1995.
Sales and marketing expenses increased 5.5% to $2.7 million
for the three month period in 1996 and 5.6% to $7.7 million for the
nine months period. Sales and marketing expenses as a percentage
of net sales were 36.3% and 40.4% for the three and nine month
periods in 1996 as compared to 48.8% and 51.1% for the same periods
in 1995. The decrease in the percent to sales, for the three and
nine month periods of 1996, is a function of increased sales in all
categories along with improved efficiencies among the sales and
marketing staff.
Research and development costs, including the costs that were
capitalized, were $1.6 million and $2.1 million for the three month
periods in 1996 and 1995, $5.5 million and $4.4 million for the
nine month periods, respectively and represented 21.4%, 38.6%,
28.7% and 31.0% of net sales. Research and development expenses,
net of capitalized development costs, represented 11.3% and 16.9%
of net sales for the three month periods in 1996 and 1995, and
12.9% and 18.5% of net sales for the nine month periods ending
September 30, 1996 and 1995, respectively. The decrease as a
percentage of net sales for the period is due to reductions in
development staff resulting from the discontinuation of Unison and
the higher sales for the periods in 1996. The Company anticipates
that its investments in new product research will remain at
comparable levels as Tripos continues development in web-based
tools, desktop, database, diverse compound libraries and
combinatorial chemistry markets.
General and administrative expenses increased to $0.7 million
for the third quarter of 1996 compared to $0.3 million in 1995, and
represent 9.6% and 6.2% of net sales for the respective periods.
The increase in G&A for the third quarter 1996 compared to 1995 is
primarily due to the accrual of the Company's bonus for achieving
the qualifying threshold of operating income and an increase in the
bad debt provision. For the nine month period, G & A expenses were
$1.5 million and $1.1 million in 1996 and 1995, respectively. G&A
year-to-date percent to net sales was unchanged at 7.7% in 1996
compared to 1995
Other income decreased from of $122,000 for the third quarter
in 1995 to $47,000 for the comparable period in 1996. For the
first nine months of 1996, other income was $174,000 compared to
$383,000 in 1995. This change was due to an increase in foreign
currency translation losses, a slight decline in interest income on
investments, and the recognition of the Company's equity percentage
interest in the losses of Phase-1 Molecular Toxicology, Inc.
Income tax expense was $302,000 for the nine month period in
1996 which represents an effective tax rate of 26%. The rate is
the Company's anticipated effective rate for the year ending
December 31, 1996 and reflects the recognition of the benefit of
certain tax carryforwards for which no previous benefit had been
recognized.
Liquidity, Capital Resources and Capital Commitments
For the nine month period ending September 30, 1996, net cash
provided by operations was $3.4 million as a result of a decrease
in working capital of $0.5 million and increases in net income,
depreciation, and amortization of $0.9 million, $0.5 million, and
$2.2 million, respectively. Largest among these is amortization of
which $1.9 million is attributable to the cost of manufacturing the
compound library. For the same period in 1995, net cash provided
by operations was $0.9 million primarily due to an increase in
depreciation and amortization of $1.3 million and a decrease in
working capital of $0.5 million.
Investments of $0.4 million in property and equipment, $0.3
million in marketable securities, $0.3 million in an equity
position in Phase-1 Molecular Toxicology, Inc. and $3.0 million in
capitalized development costs, resulted in a use of cash of
approximately $4.0 million in the first three quarters of 1996.
The Company believes that current working capital, together
with cash from operations, will be adequate to fund short-term
liquidity requirements including investment in research and
development, capital purchases and any other commitments in the
upcoming year. The Company may seek to obtain additional financing
at any time in connection with the Company's product development
efforts and its efforts to penetrate existing and new markets for
its products, depending upon the associated working capital
requirements.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any material litigation
and is not aware of any threatened material litigation.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits
10.1 Credit Agreement-Line of Credit, dated as of
September 12, 1996, between Tripos, Inc. and The
Boatmen's National Bank of St. Louis
11.1 Calculation of Per Share Earnings
27 Financial Data Schedule
(b) The following reports on Form 8-K were filed
during the period from June 30, 1996 to
September 30, 1996.
None.
TRIPOS, INC.
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 hereunto duly authorized.
TRIPOS, INC.
Date: November 5, 1996 John P. McAlister
John P. McAlister
President and
Chief Executive Officer
Date: November 5, 1996 Colleen A. Martin
Colleen A. Martin
Chief Financial Officer, Secretary
Exhibit Index
Exhibit No. Description
10.1 Credit Agreement-Line of Credit, dated as of
September 12, 1996, between Tripos, Inc. and The
Boatmen's National Bank of St. Louis
11.1 Calculation of Per Share Earnings
27 Financial Data Schedule
Exhibit 10.1
CREDIT AGREEMENT-LINE OF CREDIT
THIS AGREEMENT made and entered into as of this 12th day of
September, 1996, by and between Tripos, Inc., a Utah corporation
(hereinafter called "Borrower"), and THE BOATMEN'S NATIONAL BANK
OF ST. LOUIS (hereinafter called "Bank").
WITNESSETH THAT:
WHEREAS, Borrower desires to borrow from Bank, in one or
more advances, an aggregate sum not to exceed two million five
hundred thousand dollars ($2,500,000.00) (hereinafter called the
"Credit"); and
WHEREAS, Bank is willing to lend said sum, or such lesser
amount as may be desired by Borrower, to Borrower, subject to the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto hereby
agree as follows:
1
TERMS OF CREDIT
.1 The proceeds of the Credit shall be available to
Borrower at such times as Borrower may request, so long as no
Event of Default as hereinafter defined shall have occurred. Any
unused portion of the Credit shall remain subject to withdrawal
until June 30, 1997.
.2 The Credit shall be evidenced by a note in
substantially the form attached hereto and marked Exhibit "A"
(hereinafter called the "Note"). The Note shall be payable on
June 30, 1997 and shall be on the terms and conditions set forth
therein.
.3 Borrower has the right at any time to prepay all or
any part of the outstanding principal balance of the Note. Any
such prepayment shall increase the unused portion of the Credit
available for borrowing until maturity of the Note, whether by
acceleration or otherwise.
Within 15 business days after the end of each month, as
long as there exists an outstanding balance on the Note, Borrower
shall deliver to Bank a Certificate of Covenant Compliance in
substantially the form attached hereto and marked Exhibit "B",
each signed by an officer of Borrower. If the Certificate of
Covenant Compliance has not been submitted for 30 days, Borrower
will provide same at the time of Borrower's request for an
advance or upon request by Bank.
2
REPRESENTATIONS AND WARRANTIES
Borrower expressly represents and warrants that:
.1 It is a corporation duly organized and validly
existing and in good standing under the laws of the State of
Utah.
.2 It has corporate power and authority to own its
property and to carry on its business as now being conducted, and
it is duly qualified to do business and is in good standing in
every jurisdiction in which the nature of its business is
conducted or its ownership of property is such as to require such
qualification.
.3 It has full corporate power and authority to execute
this Agreement and the Note and any other agreements and
documents referred to herein (the "Documents"), and that the
execution and delivery of the Documents by the officers of
Borrower who are executing and delivering the same have been duly
and lawfully authorized and that all corporate acts and
proceedings necessary or proper in the premises have been duly
done, performed and taken, and the Documents constitute the
legal, valid and binding obligations of Borrower enforceable in
accordance with their respective terms, except as the enforceabil
ity thereof may be limited by applicable bankruptcy, insolvency
or other similar laws affecting creditors' rights generally.
.4 The execution and delivery of the Documents and the
compliance by Borrower with their terms and conditions, will not
violate the Articles of Incorporation or By-Laws of Borrower.
.5 The execution and delivery of the Documents and the
compliance by Borrower with their terms and conditions will not
violate any contract to which Borrower is a party, and will not
violate any law, regulation, rule or order of any governmental
body or agency.
.6 It has good title to its property and assets, free and
clear of all mortgages, liens and encumbrances.
.7 It has filed all tax returns required to be filed with
the United States or any state or political subdivision thereof
or other taxing authority to which it is known to be subject, and
has paid all taxes, interest and penalties which have become due
pursuant to said returns and provided adequate reserves for the
payment of taxes which have not become due.
.8 There are no suits or administrative proceedings
pending or, to the knowledge of Borrower, threatened against or
affecting Borrower which might have a material adverse effect
upon the financial condition or business of Borrower.
3
AFFIRMATIVE COVENANTS
So long as Bank is obligated to lend hereunder or any part of the
Credit remains outstanding, Borrower covenants and agrees that it
will:
.1 Furnish to Bank within 120 days after the close of
each fiscal year, balance sheets and income statements for such
fiscal year, audited by a certified public accountant
satisfactory to Bank.
.2 Furnish to Bank within 45 days after the close of each
fiscal quarter, company prepared financial statements certified
by Borrower's chief financial officer. or other designated
corporate officer.
.3 Furnish to Bank other financial and operating
information, and permit representatives of Bank to examine its
books and records, all as may be reasonably requested by Bank
from time to time.
.4 Maintain a ratio of total debt to tangible net worth
(total debt divided by tangible net worth) of not more than
1.25:1 determined in accordance with generally accepted
accounting principles consistently applied ("GAAP").
.5 Maintain a tangible net worth of at least $8,250,000
determined in accordance with GAAP.
.6 Maintain a current ratio (current assets divided by
current liabilities) of 1.75 :1 determined in accordance with
GAAP.
.7 Maintain a minimum trailing twelve months earnings
before interest, taxes, depreciation, and amortization of
$2,750,000.00 determined in accordance with GAAP.
.8 Keep insured all property owned by it of a character
usually insured by businesses similar to Borrower with
responsible companies in such amounts and against such risks as
is usually carried by owners of similar businesses and property
in the same general area in which Borrower operates, including
fire and casualty insurance. Borrower should provide certificate
of coverage within 30 days of agreement anniversary.
.9 Pay and discharge when due all taxes and claims which
might result in a lien, unless the same is being contested in
good faith by Borrower in proper proceedings and for which a
sufficient reserve has been established.
.10 Cause to be done all things necessary to preserve and
keep in full force and effect the corporate existence of
Borrower, and comply with and cause to be complied with all laws,
ordinances and regulations applicable to Borrower, including
ERISA, if Borrower has a pension and/or profit sharing plan.
OTHER: NONE
4
NEGATIVE COVENANTS
So long as Bank is obligated to lend hereunder or any part of the
Credit remains outstanding, Borrower covenants and agrees that it
will not:
.1 Create or incur any indebtedness except (i) to Bank,
(ii) to trade creditors in the ordinary courses of business, or
(iii) indebtedness outstanding as the date here of and disclosed
in writing to Bank. Bank reserves option, upon written notice
from borrower, to amend this section in writing.
.2 Mortgage, pledge or otherwise encumber or permit any
lien to be placed upon or against any assets now owned or
hereinafter acquired, except as existing at the date hereof and
disclosed in writing to Bank.
.3 Purchase, retire or redeem any shares of its capital
stock, or declare or pay dividends on its capital stock in excess
of $300,000 in the first year of this agreement, not to exceed an
annual increase of 3% per year thereafter..
.4 Make capital expenditures, excluding capitalized
development costs, during any fiscal year in an aggregate amount
(determined on a non-cumulative basis) in excess of $2,500,000.
.5 Merge or consolidate with or into any other entity, or
sell, lease or otherwise dispose of all or a substantial part of
its properties and assets, except for the sale of its inventory
in the ordinary course of Borrower's business.
.6 Make any loans or advances to others, or guaranty or
otherwise become, directly or indirectly, liable for or upon the
obligations of others, in excess of $1,000,000, other than in the
ordinary course of business.
OTHER: NONE
5
EVENTS OF DEFAULT
Each of the following shall severally be considered an "Event of
Default" for purposes of this Agreement:
.1 Failure to pay any installment of principal or interest
on the Note issued hereunder with in 3 calendar days when due,
whether by acceleration or otherwise.
.2 If any fact or warranty made in this Agreement or in
any other of the Documents should prove to be untrue in any
material respect, as of the date made.
.3 Default by Borrower in the performance or observance of
any other covenant, term or agreement contained in this Agreement
or in any other of the Documents.
.4 Occurrence of any event or condition which constitutes,
or upon the lapse of time or the giving of notice, or both, would
constitute, a default or an event of default under any other
agreement or evidence of indebtedness relating to any obligation
of Borrower for borrowed money, or failure by Borrower to pay
under any obligation for borrowed money to which it is a party or
which is binding upon it.
.5 Occurrence of any of the following:
(i) Adjudication by a court of competent jurisdiction
that Borrower is bankrupt or insolvent or the appointment of a
receiver for Borrower or for all or a substantial part of its
property;
(ii) Filing by Borrower (or by any of its creditors, it
not dismissed with 60 days) of a petition under the provisions
of the Bankruptcy Code as now enacted or hereafter amended;
(iii) Making by Borrower of a general assignment for
the benefit of creditors or an admission in writing by Borrower
of inability to pay indebtedness.
.6 If any judgment against Borrower or any attachment or
other levy against any of its property for an amount in excess of
$100,000 remains unpaid, unstayed on appeal, undischarged,
unbonded or undismissed for more than 30 days.
.7 Any Reportable Event that Bank determines in good faith
would constitute grounds for the termination of any Plan or for
the appointment by the appropriate United States District Court
of a trustee to administer any Plan shall have occurred and shall
continue for 30 days after written notice to such effect shall
have been given to Borrower by Bank, or any Plan shall be
terminated for such reason, or a trustee shall be appointed by an
appropriate United States District Court to administer any Plan,
or the Pension Benefit Guaranty Corporation shall institute
proceedings to terminate any plan or to appoint a trustee to
administer any Plan.
.8 Any substantial change in the management of Borrower.
.9 If the Bank for reasonable cause of any nature deems
itself to be insecure.
OTHER: NONE
6
RIGHTS AND REMEDIES IN THE EVENT OF DEFAULT
.1 Upon the occurrence of and during an Event of Default,
Bank may declare all of the indebtedness outstanding hereunder
immediately due and payable without demand or notice of any kind,
the same being hereby expressly waived, and such indebtedness
shall thereupon be and become immediately due and payable and the
obligation of Bank to make additional advances shall cease.
Further, notwithstanding the cure period noted in Section 5.1
above, Bank shall have no obligation to advance any further funds
under the credit during any such cure period.
.2 No failure on the part of Bank to exercise, and no
delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Bank
of any right hereunder preclude any other or further exercise
thereof, or the exercise of any other right. Each and every
right granted to Bank hereunder or under any document delivered
hereunder or in connection therewith or allowed to it at law or
in equity shall be deemed cumulative and may be exercised from
time to time.
.3 It is agreed by Borrower that any Event of Default will
constitute an event of default under all other agreements and
evidences of indebtedness between Borrower and the Bank whether
now existing or hereafter executed and whether or not such is an
event of default specified therein.
7
MISCELLANEOUS
.1 No modification or waiver of any provision of this
Agreement, nor consent to any departure by Borrower herefrom,
shall be effective unless the same shall be in writing signed by
an authorized officer of Bank, and then only in the specific
instance and for the purpose for which given. No notice to or
demand on Borrower in any case shall entitle Borrower to any
other or further notice or demand in similar or other
circumstances.
.2 In case any one or more of the provisions contained in
this Agreement, the Note, or any other instrument or document
delivered hereunder, shall be invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in
any way be affected or impaired thereby.
.3 This Agreement, the Note, and all other Documents shall
be deemed contracts under the laws of Missouri and for all
purposes shall be construed in accordance with the laws of
Missouri. Exercise of any right or remedy in the event of
default shall likewise be governed by the laws of Missouri.
.4 Until written notice to the contrary is actually
received by either party, any notice required to be sent
hereunder shall be sent by certified mail, return receipt
requested as follows:
To Borrower: Tripos, Inc.
Attention:: John Yingling
1699 S. Hanley Road
St. Louis, MO 63144
To Bank: THE BOATMEN'S NATIONAL BANK OF ST.
LOUIS
Attention:: David W. Scobee
One Boatmen's Plaza
St. Louis, MO 63166
.5 Statutory Notice. The following notice is given
pursuant to Section 432.045 of the Missouri Revised Statutes;
nothing contained in such notice shall be deemed to limit or
modify the terms of the Documents:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO
EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU
(BORROWER) AND US (BANK) FROM MISUNDERSTANDING OR DISAPPOINTMENT,
ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN
THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF
THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of
the day and year first above written.
Tripos, Inc.
By: Colleen A. McDonnell
Colleen A. McDonnell
Vice President, Chief Financial Officer
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
By: David W. Scobee
David W. Scobee, Vice President
EXHIBIT "B"
CERTIFICATE OF COVENANT COMPLIANCE
To fulfill the requirements of the Credit Agreement dated as
_____________;
between _______________ and THE BOATMEN'S NATIONAL BANK OF ST.
LOUIS, the undersigned hereby certifies that, as of the close of
business on ______,____, the following computations are true and
correct:
Required per Credit Agreement
Actual
Debt to tangible net worth (Section 3.4) 1.25:1
Minimum tangible net worth (Section 3.5) $ $8,250,000
Minimum trailing twelve months EBITDA $2,750,000
(Section 3.7)
Minimum current ratio (Section 3.6) 1.75:1
Other
No default as specified in said Credit Agreement, and no event
which with the lapse of time or the giving of notice, or both,
would become a default, has occurred or is continuing.
NAME OF BORROWER
By:
Name and Title Date
For Bank Use Only
Received & Reviewed
By:
Bank Officer Date
Exhibit 11.1
Tripos, Inc.
Calculation of Per Share Earnings
Three Months Ended Nine Months Ended
(in thousands except Sep 30, Sep 30, Sep 30, Sep 30,
earnings per share) 1996 1995 1996 1995
Net income (loss) $ 688 $ 32 $ 861 $ (268)
Primary earnings per share
Weighted average common
equivalent shares * 3,182 2,923 3,117 2,857
Primary earnings per share $ 0.22 $ 0.01 $ 0.28 $ (0.09)
Fully diluted earnings per share
Weighted average common
equivalent shares * 3,305 2,923 3,265 2,857
Fully diluted earnings per $ 0.21 $ 0.01 $ 0.26 $ (0.09)
share
* Weighted average common equivalent shares include an assumed
exercise of stock options with the resulting share quantity
reduced by the number of shares that could have been repurchased
with the proceeds of the exercise.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 3725
<SECURITIES> 3432
<RECEIVABLES> 7700
<ALLOWANCES> 100
<INVENTORY> 54
<CURRENT-ASSETS> 15792
<PP&E> 6141
<DEPRECIATION> 5034
<TOTAL-ASSETS> 20271
<CURRENT-LIABILITIES> 6897
<BONDS> 0
0
0
<COMMON> 30
<OTHER-SE> 12544
<TOTAL-LIABILITY-AND-EQUITY> 20271
<SALES> 19159
<TOTAL-REVENUES> 19159
<CGS> 6482
<TOTAL-COSTS> 6482
<OTHER-EXPENSES> 11688
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (288)
<INCOME-PRETAX> 1163
<INCOME-TAX> 302
<INCOME-CONTINUING> 861
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 861
<EPS-PRIMARY> .28
<EPS-DILUTED> .26
</TABLE>
