SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 0-25406
TECHNICAL CHEMICALS AND PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Florida 65-0308922
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3341 S.W. 15th Street, Pompano Beach, Florida 33069
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (954) 979-0400
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 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. YES x NO___
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
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Class Outstanding As Of July 31, 1997
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Common Stock $ .001 par value 10,005,036
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Transitional Small Business Disclosure Format (check one):
YES NO x
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PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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TECHNICAL CHEMICALS AND PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 1997 December 31, 1996
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(Unaudited) *(Audited)
ASSETS
Current assets:
Cash and cash equivalents $ 904,533 $ 1,607,311
Accounts receivable, net of allowance
for doubtful accounts of $18,165 at
6/30/97 and 12/31/96 1,793,412 2,177,700
Investments available for sale 10,605,257 11,693,143
Inventory 1,446,351 1,039,390
Other 656,701 490,415
Total current assets 15,406,254 17,007,959
Property and equipment net of accumulated depreciation
of $828,860 at 6/30/97 and $565,777 at 12/31/96 2,576,271 2,708,481
Patents and trademarks, net of accumulated
amortization
of $1,612,980 at 6/30/97 and $1,120,786 at 12/31/96 13,320,739 13,887,357
Goodwill, net of accumulated amortization
of $257,393 at 6/30/97 and $165,985 at 12/31/96 2,319,327 2,327,975
Other assets 2,567,390 1,594,268
Total assets $ 36,189,981 $ 37,526,040
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,557,602 $ 1,458,101
Accrued expenses 515,145 201,667
Total current liabilities 2,072,747 1,659,768
Long-term debt 170,934 171,651
Shareholder' equity:
Common stock, $.001 par value, 25,000,000 shares
authorized; 10,005,036 and 9,938,634 shares issued
and outstanding at 6/30/97 and 12/31/96 10,005 9,939
Additional paid-in capital 39,780,795 39,608,217
Accumulated deficit (5,844,500) (3,923,535)
Total shareholders' equity 33,946,300 35,694,621
Total liabilities and shareholders' equity $ 36,189,981 $ 37,526,040
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*Note: The Balance Sheet at December 31, 1996 has been derived from the
audited financial statements at that date.
See accompanying notes to the condensed consolidated financial statements.
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TECHNICAL CHEMICALS AND PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30 Six Months Ended June 30
1997 1996 1997 1996
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Revenue
Product sales $ 1,569,492 $ 1,186,332 $ 2,808,595 $ 2,647,638
Contract fees and services 160,000 270,000 210,000 640,000
Total revenue 1,729,492 1,456,332 3,018,595 3,287,638
Returns and allowances (10,312) (6,685) (19,744) (72,945)
Net revenue 1,719,180 1,449,647 2,998,851 3,214,693
Cost of sales 945,653 745,652 1,574,222 1,646,749
Gross profit 773,527 703,995 1,424,629 1,567,944
Operating expenses:
Selling, general and
administrative 1,473,943 816,136 2,762,963 1,619,364
Research and development 597,659 449,912 1,149,177 976,770
Depreciation and amortization 437,910 369,425 847,295 737,212
Loss from operations (1,735,985) (931,478) (3,334,806) (1,765,402)
Other income (expense):
Interest income 120,977 49,100 492,311 94,301
Interest expense (4,568) (72,440) (6,856) (202,780)
Loss before income tax benefit (1,619,576) (954,818) (2,849,351) (1,873,881)
Income tax benefit 599,243 343,735 1,054,259 674,597
Net loss $ (1,020,333) $ (611,083) $ (1,795,092) $ (1,199,284)
Net loss per share $ (0.10) $ (0.07) $ (0.18) $ (0.14)
Weighted average number of
common shares outstanding 9,984,471 9,323,759 9,973,798 8,720,820
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See accompanying notes to the condensed consolidated financial statements.
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TECHNICAL CHEMICALS AND PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30
1997 1996
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OPERATING ACTIVITIES:
Net loss $ (1,795,092) $ (1,199,284)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 847,295 737,212
Deferred income taxes (1,054,259) (674,597)
Changes in operating assets and liabilities:
Accounts receivable 384,288 (292,195)
Inventory (406,961) (429,656)
Accounts payable and accrued expenses 412,979 122,252
Other (85,866) (71,461)
Net cash used in operating activities (1,697,616) (1,807,729)
INVESTING ACTIVITIES:
Purchase of property and equipment (131,483) (146,761)
Investments in patents and trademarks (8,336) --
Proceeds from sale of investments 962,013 --
Decrease in other assets -- (287,643)
Purchase of investments -- (13,154,612)
Net cash provided (used) by investing activities 822,194 (13,589,016)
FINANCING ACTIVITIES:
Net proceeds from issuance of common stock -- 21,395,703
Proceeds from stock options exercised 172,644 --
Payments on notes payable -- (5,188,888)
Payments on notes payable to related parties (75,336)
Net cash provided by financing activities 172,644 16,131,479
Net (decrease) increasein cash and cash equivalents (702,778) 734,734
Cash and cash equivalents at beginning of period 1,607,311 666,486
Cash and cash equivalents at end of period $ 904,533 $ 1,401,220
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See accompanying notes to the condensed consolidated financial statements.
</FN>
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TECHNICAL CHEMICALS AND PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements (the
"Financial Statements") of Technical Chemicals and Products, Inc. and
Subsidiaries (the "Company" or "TCPI") are unaudited, and in the opinion of
management, include all normal and recurring adjustments which are necessary for
a fair presentation. Accordingly, the Financial Statements should be read in
conjunction with more complete disclosures contained in the Company's audited
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996. The results of operations for
interim periods are not necessarily indicative of the results of operations for
the entire year.
RECLASSIFICATIONS
Certain amounts in the 1996 condensed consolidated financial statements
have been reclassified to conform to the current period's presentation.
INCOME TAXES
The Company accounts for income taxes under SFAS No. 109, "Accounting for
Income Taxes". Deferred income tax assets and liabilities are determined based
on differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.
INVENTORIES
Inventories, consisting of raw materials and finished goods, are valued at
the lower of cost (computed on the first-in, first-out method) or market.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. Depreciation is computed using
the straight-line method over the estimated useful lives of the assets. The cost
of maintenance and repairs are charged to operations as incurred. Significant
renewals and betterments are capitalized or depreciated over their estimated
useful lives.
INTANGIBLE ASSETS
Purchased patents and trademarks are amortized using the straight-line
method over a composite life of 15 years based on the shorter of their legal
life or estimated useful life of the individual patents and trademarks, which
range from 11 to 17 years. Goodwill is amortized using the straight-line method
over 15 years. The realizability of patents, trademarks and goodwill is
evaluated periodically as events or circumstances indicate a possible inability
to recover their carrying amount. At this time, the Company believes that no
significant impairment of these intangible assets has occurred and that no
reduction of the estimated useful lives is warranted.
This Quarterly Report on Form 10-Q, including the information incorporated
by reference herein, includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Act of 1934, as amended, and is subject to the safe-harbor created by
such sections. The Company's actual results may differ significantly from the
results discussed in such forward-looking statements. See Item 2 "Management's
Discussion And Analysis of Financial Condition And Results Of Operations" for
further information relating to forward-looking statements.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
STRATEGIC DIRECTION
The Company is in the midst of completing a transition. TCPI was formerly a
developmental company that manufactured and sold a narrow range of medical
diagnostic products and specialty chemicals on an OEM basis. TCPI is now
approaching its goal of being a manufacturer and marketer of a wide range of
internally-developed medical diagnostic products. Distribution of these products
is through OEM relationships with major U.S. and international pharmaceutical
companies, and through a U.S. and foreign independent broker network for sales
of its private-label products and HealthCheckTM brand to drug stores,
supermarket chains and retailers. Year to date, TCPI, its Pharmetrix Division
and Health-Mark Diagnostics subsidiary have engaged in the following activities:
- - TD Glucose and Other Products
TCPI continues to commit significant resources to the completion of the
development of its innovative, first-generation, non-invasive transdermal
glucose monitoring system. In June 1997, the Company announced the involvement
of SmithKline Beecham in becoming its worldwide marketing partner for this
important product. The companies entered into an exclusive agreement that grants
SmithKline Beecham a six month period in which to further evaluate the TD
Glucose Monitoring System technology and negotiate a definitive licensing
agreement. SmithKline Beecham will also use this period to conduct its due
diligence and perform market studies. Terms of the contract include an up-front
payment to TCPI as well as the mutual exchange of technical and marketing
information related to this product. In addition, the Company expects to enter
clinical trials of its TD Glucose Monitoring System in the third quarter of this
year and make a corresponding 510(k) filing to the FDA later this year.
The visual-read system for Total cholesterol has entered the
over-the-counter market in the U.S. as part of the HealthCheck product line. The
Company's HDL visual cholesterol test is expected to begin clinical trials later
this year. The Company's meter-read cholesterol monitoring system for Total and
HDL cholesterol (intended for the professional marketplace and capable of
delivering clinical laboratory accuracy) has been developed and is scheduled for
clinical trials late this year.
The Company is in various stages of completing the development of, and
completing the FDA and foreign clearance processes for products including
infectious disease detection, drugs of abuse screening, cancer screening and
other medical diagnostic testing.
In January 1997, the Company entered into a multi-phase agreement with
Taiho Pharmaceutical Co., Ltd. to develop a rapid, one-step whole blood antigen
diagnostic test to monitor the effectiveness of Taiho's new anti-cancer drug.
The Company expects to receive milestone payments from Taiho over the next 12-18
months as each phase of development is completed. TCPI also retains exclusive
manufacturing rights to the product. Phase I of this three-phase project is
already underway.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
STRATEGIC DIRECTION (continued)
- - Marketing and Distribution
- HealthCheck
During the first quarter of 1997, the Company launched its HealthCheck
brand of over-the-counter diagnostic products. The line consists of 14 accurate
and easy to use at-home products for cholesterol, diabetes, urinary tract
infection, pregnancy, ovulation, skin cancer and deteriorating vision, as well
as a series of health journals specifically designed for women, men, seniors,
children and pregnant women.
In August 1997, the Company further expanded the national roll-out of its
HealthCheck products by: a) establishing programs with several major wholesale
drug distributors, including McKesson Corp., AmeriSource, Bindley Western,
Neuman Distributors and KinRay; b) adding independent pharmacies, Genovese and
Longs drug stores and the Kroger supermarket chain to its roster of outlets
carrying the brand; and c) processing re-orders following earlier initial
purchases by major drug chains Walgreen Drug Stores and Eckerd Corp.
In March 1997, Eckerd placed its initial order for 6,000 units of each of
the HealthCheck test kits for diabetes and cholesterol. In May 1997, Walgreens
placed its initial order for the HealthCheck cholesterol, diabetes and urinary
tract infection products to provide for more than four units of each in every
Walgreens store in its chain. In addition, the 100-store discount retail chain
operated by Michigan-based Meijer, Inc. placed an initial order for 58 dozen of
the HealthCheck urinary tract infection product.
- - Latin American Marketing Partner
In March 1997, TCPI announced an exclusive marketing agreement with
Boehringer Mannheim to distribute more than $50 million of the Company's new
diagnostic products for infectious diseases, drugs of abuse and cancer screens
throughout South and Central America, Mexico and certain Caribbean nations over
the next 10 years. These products are presently in the registration process in
various countries. The acquisition of Boehringer Mannheim's parent company by
LaRoche Holding AG of Basel, Switzerland should also provide the potential for
increased expansion and distribution outlets of these products in the coming
year.
- - U.S. Broker Network
TCPI established an independent network of brokers for selling the
Company's private label and HealthCheck brands throughout the U.S.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
STRATEGIC DIRECTION (continued)
- - Research and Development
- Pharmetrix
The Company is continuing development of several products at its Menlo
Park, California based Pharmetrix Division and is actively working on the
commercialization of several products by completing the development, and
planning for manufacturing, marketing and distribution. In addition, Pharmetrix
has been asked to prepare feasibility studies on behalf of several clients to
evaluate the applicability of its drug delivery technology with various
compounds.
In July 1997, the Company announced continued progress in strengthening of
its Pharmetrix Division with the addition of Frank Kochinke, Ph.D. as Vice
President of Research. The Company continues with plans to commercialize various
transdermal products currently in its development portfolio. Dr. Kochinke has
numerous accomplishments from his 20 years of industrial and academic experience
in transdermal drug delivery and membrane permeation technology. He has more
than 25 scientific publications to his credit and holds seven U.S. patents
related to transdermal drug delivery systems and manufacturing, with two
additional patents applications pending.
- - Manufacturing Scale-up
Over the past six months, the Company's facilities located in Florida have
been expanded to accommodate full-scale manufacturing of medical diagnostic
products. This expansion has included:
- acquisition of major production equipment for manufacturing of the
products
- re-tooling and refurbishing of equipment to significantly increase its
capacity
- purchase of custom high-speed packaging equipment
- expansion of production and warehouse facilities to accommodate the
in-house manufacturing program
- additions to the Florida research and development facilities and
professional staff to increase product development capabilities --
including the addition of Jeffrey Bolts, Ph.D. as Director of
Quality Assurance
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
BACKGROUND
Technical Chemicals and Products, Inc. is a designer, developer,
manufacturer and marketer of a wide-range of medical diagnostic products for use
at home, in physician offices, and other locations. TCPI is also involved in the
research and development of its TD Glucose Monitoring System -- an innovative
first generation non-invasive glucose testing system for diabetics. In addition,
through its Pharmetrix Division located in Menlo Park, California, the Company
is also focused on the research and development and commercialization of
transdermal and dermal drug delivery systems and skin permeation enhancers. TCPI
is also a manufacturer of high purity specialty biochemicals.
TCPI's roots date back more than 28 years during which time the Company or
its founder have developed over 330 FDA cleared medical diagnostic and drug
products (including those related to the Company's patented membrane-based
technology) and manufactured OEM products for leading drug and diagnostic
companies. The Company holds 19 US and 27 foreign patents, and has four pending
patent applications in the US and 38 foreign patent applications pending.
TCPI manufactures and markets more than 47 patented membrane-based
diagnostic tests in the United States and internationally, 26 of which have
received 510(k) clearance from the FDA. The Company's products include tests and
screens for pregnancy, ovulation timing, cholesterol levels, blood glucose
levels, infectious diseases, drugs of abuse and certain types of cancer. In
addition, the Company has over 20 other diagnostic and transdermal drug delivery
products in various stages of development and governmental approval. TCPI
markets its products in the OEM marketplace, under its proprietary HealthCheck
and PDQ brand names, and distributes approximately 53 private label products to
leading drug, discount and supermarket chains.
In order to support anticipated growth and new product development, the
company expects to incur significantly increased operating expenses and capital
expenditures in the future and, as such, the Company believes that its results
of operations in prior periods may not be indicative of results in future
periods. The Company expects to incur significant expenses in 1997, primarily as
a result of: (i) the increased research and development associated with its
non-invasive transdermal glucose monitoring system (the "TD Glucose System") and
various transdermal drug delivery products and skin permeation enhancers; (ii)
the expansion of direct distribution of medical diagnostic products related to
the national roll-out of the Company's HealthCheckTM brand and its private label
business; (iii) the introduction of the Company's cholesterol monitoring system
which can be used by physicians, laboratories and patients at home (the "One
Step CholestoChek System"); and (iv) the hiring of additional personnel and
other costs associated with expansion of the Company's manufacturing facilities.
In addition, the Company anticipates expenditures in 1997 as a result of the
purchase of additional production equipment.
For a complete description of the Company's products and business, see Part
I, Item 1 of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Due to the timing of the FDA clearance process and the expenses incurred in
the manufacturing scale-up for the Company's products, the Company's results of
operations vary from quarter to quarter.
NET REVENUE. Net revenue for the three months ended June 30, 1997,
increased by more than 18% to $1,719,180 from $1,449,647 in the same quarter a
year ago. The increase was primarily due to higher product sales in the family
planning group. Net revenue for the six month period was $2,998,851, a decline
of $215,842 from the same period last year. Product sales of the Company's
private label family planning group by its wholly-owned subsidiary, Health-Mark
Diagnostics, L.L.C., increased 32% over the similar six month period of a year
earlier. In addition, the successful launch of the HealthCheck line of
over-the-counter products contributed to the product sales increase in the six
month period over the same period last year. These increases were offset by a
decline in contract fees and services from the Pharmetrix Division.
During the second quarter, the Company's operations continued to reflect
the manufacturing scale-up and build-up of inventory for the ongoing national
roll-out of its HealthCheck brand of over-the-counter diagnostic products as
well as scale-up of manufacturing for the more than 20 new diagnostic testing
products for infectious diseases, drugs of abuse and certain types of cancer
which are planned for distribution worldwide.
GROSS PROFIT. Gross profit as a percent of net sales decreased to 45% in
the second quarter from 48.6% in the same period last year due to the
manufacturing scale-up of new products and a slight shift in product mix. The
Company experienced a small decrease in gross profit for the current six month
period to 47.5% as compared to the year ago period of 48.8% as a result of the
manufacturing scale-up of new products.
SELLING, GENERAL & ADMINISTRATIVE. Selling, general & administrative
expenses increased $657,807 for the quarter and $1,143,599 for the six month
period as compared to the same periods last year due to: (a) the planned hiring
of additional operating personnel for the scale-up of in-house manufacturing,
(b) higher marketing expenses and sales commissions related to the sales growth
in Health-Mark Diagnostics, L.L.C. products, and (c) an increase in expenses
related to facility expansion.
RESEARCH AND DEVELOPMENT. Research and development expenses increased 33%
in the second quarter and 18% in the first six months primarily as a result of
ongoing development of the Company's non-invasive glucose monitoring system, new
products targeted for Latin America and transdermal drug delivery systems being
developed at the Company's Pharmetrix Division.
INTEREST INCOME/INTEREST EXPENSE. Interest income for the second quarter
increased $71,877 and $398,010 for the six month period as compared to the prior
year periods due to investment of the proceeds from the Company's secondary
public offering completed in April 1996. Significantly lower interest expense
reflected the payoff of a promissory note related to the Pharmetrix acquisition.
NET LOSS. The Company incurred a second quarter net loss of $1,020,333 as
compared to a net loss of $611,083 in the second quarter of 1996, and had a net
loss of $1,795,092 for the first six month period of 1997 as compared to a net
loss of $1,199,284 in the first six months of 1996. This was primarily due to
the manufacturing scale-up of various products and the continued investment in
people, marketing and facility expansion.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company had cash and investments of $11,509,790 at June 30, 1997.
Working capital at the end of the second quarter was $13,333,507. The Company
expects to continue to draw upon its working capital to purchase production
equipment, develop and manufacture the TD Glucose System, engage in research and
development related to transdermal drug delivery, develop new diagnostic
products, conduct clinical trials and continued investment in facility
expansion.
LIQUIDITY AND CAPITAL RESOURCES
The Company believes that its existing cash balances and investment
balances will be sufficient to fund the Company's cash requirements for at least
the next twenty-four months. This estimate is based on certain assumptions,
including assumptions concerning reasonable growth and revenues, and there can
be no assurance that such assumptions will prove to be accurate or that
unbudgeted costs will not be incurred. The Company's future working capital and
capital expenditure requirements may vary materially from those now planned
depending on numerous factors, including additional manufacturing scale-up for
the Company's current and future products, possible future acquisitions, the
focus and direction of the Company's research and development programs,
competitive and technological advances, future relationships with corporate
marketing partners, the FDA regulatory process and the Company's marketing and
distribution strategy. If the Company's growth exceeds its plans, additional
working capital may be needed.
Statements regarding future products, future prospects, business plans and
strategies, future revenues and revenue sources, future liquidity and capital
resources, health care market directions, future acceptance of the Company's
products, possible growth in markets for at-home diagnostic testing, as well as
other statements contained in this report that address activities, events or
developments that the Company expects, believes or anticipates will or may occur
in the future, and similar statements are forward looking statements. These
statements are based upon assumptions and analyses made by the Company in light
of current conditions, future developments and other factors the Company
believes are appropriate in the circumstances, or information obtained from
third parties and are subject to a number of assumptions, risks and
uncertainties. Readers are cautioned that forward-looking statements are not
guarantees of future performance and that actual results might differ materially
from those suggested or projected in the forward-looking statements. Some of the
factors that may cause actual future events to differ from those predicted or
assumed include: future advances in technologies and medicine; the uncertainties
of health care reform; risks related to the early stage of the Company's
existence and its products' development; the Company's ability to execute on its
business plans; the Company's dependence on outside parties such as its key
customers and alliance partners; competition from major pharmaceutical, medical
and diagnostic companies; risks and expense of government regulation and affects
of changes in regulation; the limited experience of the Company in manufacturing
and marketing products; uncertainties connected with product liability exposure
and insurance; risks associated with growth and expansion; risks associated with
obtaining patents and other protections on intellectual property; acceptance of
the Company's new products in the professional and over-the-counter
marketplaces; uncertainties in availability of expansion capital in the future
and other risks associated with capital markets.
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PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Exhibit Description
Number
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3.1 * Articles of Incorporation of the Company, as amended.
3.2 * By-laws of the Company.
3.3 **** Amended and Restated Articles of Incorporation of the Company.
3.4 **** Amended and Restated Bylaws of the Company.
4.1 **** See Exhibits 3.3 and 3.4 for provisions of the Amended and Restated Articles of Incorporation and
the Amended and Restated Bylaws of the Company defining the rights of holders of Common Stock of
the Company .
4.2 ** Form of Common Stock Certificate of the Company.
10.1 **** Employment Agreement between Jack L. Aronowitz and the Company dated December 31, 1992, as amended.
10.2 **** Amended and Restated 1992 Incentive Stock Option Plan.
10.3 **** Cancellation and Exclusive License Agreement between Jack Aronowitz and the Company dated January
31, 1996.
10.4 **** Employment Agreement between John Pippert and the Company dated January 31, 1996.
10.6 * Lease-Pompano Beach, Florida.
10.6.1 **** Business Lease Extension-Pompano Beach, Florida.
10.6.2 **** Main Lease-Menlo Park, California; Sublease-Menlo Park.
10.6.3 **** Assignment and Assumption of Sublease and Landlord's Consent Thereto between Menlo Business Park,
Patrician Associates, Inc., Flora, Inc., Pharma Patch PLC and Technical Chemicals and Products,
Inc. dated November 15, 1995.
10.7 * Health-Mark Diagnostics, Inc. Shareholders Agreement dated March 7, 1994.
10.9 * Letter Agreement with John Faro (for stock options) dated August 12, 1994.
10.10 ** Warrant Agreement between the Company and Jack L. Aronowitz.
10.11 **** Supplemental Agreement by and between Pharma Patch Public Limited Company and PP Holdings, Inc.
dated January 16, 1996.
10.12 **** Stock Option Agreement with John Pippert.
10.13 * Agreement between Company and Equity Communications dated January 6, 1995.
10.14 **** Letter Agreement between the Company and Redstone Securities, Inc. dated January 15, 1996.
10.15 **** Letter Agreement between the Company and Ira Weingarten dated January 15, 1996.
10.16 **** Letter Agreement with Flora, Inc. dated February 5, 1996.
10.17 ***** Employment Agreement between the Company and Martin Gurkin dated January, 1996.
10.18 ***** Stock Option Agreement with Martin Gurkin dated November, 1996.
27 Filed Financial Data Schedule (EDGAR Filing)
Herewith
99.1 * Licenses, Permits and Approvals-Federal.
99.2 * Licenses, Permits and Approvals-State.
99.3 * Licenses, Permits and Approvals-County.
99.4 * FDA Product List.
99.5 * United States Patents.
99.7 ***** Pharmetrix Division of TCPI Patents.
99.8 ***** Pharmetrix Division of TCPI Licenses, Permits and Approvals.
99.6 * Canadian Patents.
* Incorporated by reference to exhibit of the same number in Registration Statement on Form SB-2
filed on October 28, 1994 (No. 33-85756).
** Incorporated by reference to exhibit of the same number in Amendent No. 4 to the Registration
Statement on Form S-1 filed April 23, 1996 (No. 333-1272).
*** Incorporated by reference to exhibit of the same number in Amendment No. 1 to Registration
Statement on Form SB-2 filed on January 13, 1995 (No. 33-85756).
**** Incorporated by reference to exhibit of same number filed in the Company's Registration Statement
on Form S-1 on February 12, 1996 (No. 333-1272).
<FN>
(b) Reports On Form 8-K
No reports on Form 8-K were filed during the quarter for which this report is being filed.
</FN>
</TABLE>
<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.
TECHNICAL CHEMICALS AND PRODUCTS, INC.
Date: August 14, 1997 By: /SIGNED/
Stuart R. Streger
Vice President and
Chief Financial Officer
(Duly authorized officer and
principal accounting officer)
<PAGE>
<TABLE>
<CAPTION>
Exhibit Index to Exhibits
Number
- -------
<S> <C> <C>
3.1 * Articles of Incorporation of the Company, as amended.
3.2 * By-laws of the Company.
3.3 **** Amended and Restated Articles of Incorporation of the Company.
3.4 **** Amended and Restated Bylaws of the Company.
4.1 **** See Exhibits 3.3 and 3.4 for provisions of the Amended and Restated Articles of Incorporation and
the Amended and Restated Bylaws of the Company defining the rights of holders of Common Stock of the
Company.
4.2 ** Form of Common Stock Certificate of the Company.
10.1 **** Employment Agreement between Jack L. Aronowitz and the Company dated December 31, 1992, as amended.
10.2 **** Amended and Restated 1992 Incentive Stock Option Plan.
10.3 **** Cancellation and Exclusive License Agreement between Jack Aronowitz and the Company dated January 31,
1996.
10.4 **** Employment Agreement between John Pippert and the Company dated January 31, 1996.
10.6 * Lease-Pompano Beach, Florida.
10.6.1 **** Business Lease Extension-Pompano Beach, Florida.
10.6.2 **** Main Lease-Menlo Park, California; Sublease-Menlo Park.
10.6.3 **** Assignment and Assumption of Sublease and Landlord's Consent Thereto between Menlo Business Park,
Patrician Associates, Inc., Flora, Inc., Pharma Patch PLC and Technical Chemicals and Products, Inc.
dated November 15, 1995.
10.7 * Health-Mark Diagnostics, Inc. Shareholders Agreement dated March 7, 1994.
10.9 * Letter Agreement with John Faro (for stock options) dated August 12, 1994.
10.10 ** Warrant Agreement between the Company and Jack L. Aronowitz.
10.11 **** Supplemental Agreement by and between Pharma Patch Public Limited Company and PP Holdings, Inc. dated
January 16, 1996.
10.12 **** Stock Option Agreement with John Pippert.
10.13 * Agreement between Company and Equity Communications dated January 6, 1995.
10.14 **** Letter Agreement between the Company and Redstone Securities, Inc. dated January 15, 1996.
10.15 **** Letter Agreement between the Company and Ira Weingarten dated January 15, 1996.
10.16 **** Letter Agreement with Flora, Inc. dated February 5, 1996.
10.17 ***** Employment Agreement between the Company and Martin Gurkin dated January, 1996.
10.18 ***** Stock Option Agreement with Martin Gurkin dated November, 1996.
27 Filed Financial Data Schedule (EDGAR Filing)
Herewith
99.1 * Licenses, Permits and Approvals-Federal.
99.2 * Licenses, Permits and Approvals-State.
99.3 * Licenses, Permits and Approvals-County.
99.4 * FDA Product List.
99.5 * United States Patents.
99.7 ***** Pharmetrix Division of TCPI Patents.
99.8 ***** Pharmetrix Division of TCPI Licenses, Permits and Approvals.
99.6 * Canadian Patents.
* Incorporated by reference to exhibit of the same number in Registration Statement on Form SB-2 filed
on October 28, 1994 (No. 33-85756).
** Incorporated by reference to exhibit of the same number in Amendent No. 4 to the Registration
Statement on Form S-1 filed April 23, 1996 (No. 333-1272).
*** Incorporated by reference to exhibit of the same number in Amendment No. 1 to Registration Statement
on Form SB-2 filed on January 13, 1995 (No. 33-85756).
**** Incorporated by reference to exhibit of same number filed in the Company's Registration Statement on
Form S-1 on February 12, 1996 (No. 333-1272).
***** Incorporated by reference to exhibit of the same number filed in Amendment No. 2 to the Company's
Registration Statement on Form S-1 on March 20, 1996.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(The Company's Quarterly Report on Form 10-Q for the Period Ending
June 30, 1997)
</LEGEND>
<CIK> 0000924921
<NAME> STU STREGER
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 904,533
<SECURITIES> 10,605,257
<RECEIVABLES> 1,811,577
<ALLOWANCES> 18,165
<INVENTORY> 1,446,351
<CURRENT-ASSETS> 15,406,254
<PP&E> 3,405,131
<DEPRECIATION> 828,860
<TOTAL-ASSETS> 36,189,981
<CURRENT-LIABILITIES> 2,072,747
<BONDS> 170,934
0
0
<COMMON> 10,005
<OTHER-SE> 33,936,295
<TOTAL-LIABILITY-AND-EQUITY> 36,189,981
<SALES> 2,998,851
<TOTAL-REVENUES> 3,018,595
<CGS> 1,574,222
<TOTAL-COSTS> 1,574,222
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,856
<INCOME-PRETAX> (2,849,351)
<INCOME-TAX> (1,054,259)
<INCOME-CONTINUING> (1,795,092)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,795,092)
<EPS-PRIMARY> (0.18)
<EPS-DILUTED> (0.18)
</TABLE>
