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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
[x]
Act of 1934
For the quarterly period ended March 31, 1998.
[_] 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
0-20819
THERMATRIX INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2958515
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
101 METRO DRIVE, SUITE 248
SAN JOSE, CALIFORNIA 95110
(Address of principal executive offices)
(408) 453-0490
(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 requirements for at least the past 90 days:
Yes X No ___________
---------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
Class Outstanding at April 20, 1998
----- -----------------------------
Common stock, $.001 par value 7,641,842
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THERMATRIX INC.
This report 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. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth under "Certain Business Considerations" in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and elsewhere in, or incorporated by reference into, this report.
TABLE OF CONTENTS
<TABLE>
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PART I. FINANCIAL INFORMATION PAGE
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Item 1. Financial Statements................................................... 3
Condensed Consolidated Balance Sheets.................................. 3
Condensed Consolidated Statements of Operations........................ 4
Condensed Consolidated Statements of Cash Flows........................ 5
Notes to Condensed Consolidated Financial Statements................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.......................................................... 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...................................................... 14
Item 2. Changes in Securities.................................................. 14
Item 3. Defaults Upon Senior Securities........................................ 14
Item 4. Submission of Matters to a Vote of Security Holders.................... 14
Item 5. Other Information...................................................... 14
Item 6. Exhibits and Reports on Form 8-K....................................... 15
SIGNATURE.............................................................. 16
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THERMATRIX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------------ ----------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash & cash equivalents $ 6,822 $ 3,990
Short-term investments 1,035 3,587
Accounts receivable, net 3,420 3,520
Costs of uncompleted contracts, net 271 547
Prepaid expenses and other current assets 234 250
------------------ ----------------
Total current assets 11,782 11,894
PROPERTY AND EQUIPMENT
Machinery and equipment 790 857
Demonstration equipment 510 506
Furniture and fixtures 417 322
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1,717 1,685
Less - Accumulated depreciation and amortization (914) (749)
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Net property and equipment 803 936
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PATENTS AND OTHER ASSETS, net 1,146 1,157
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$ 13,731 $ 13,987
================== ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,532 $ 1,055
Accrued liabilities 909 802
Billings on uncompleted contracts in excess of costs 549 181
------------------ ----------------
Total current liabilities 2,990 2,038
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value 8 8
Additional paid-in capital 48,657 48,644
Accumulated other comprehensive income 20 -
Accumulated deficit (37,944) (36,703)
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Total stockholders' equity 10,741 11,949
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$ 13,731 $ 13,987
================== ================
</TABLE>
3
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THERMATRIX INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-----------------------
1998 1997
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<S> <C> <C>
REVENUES $ 2,882 $ 1,084
COST OF REVENUES 2,527 1,406
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Gross Margin 355 (322)
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OPERATING EXPENSES
Research and development 255 183
Selling, general and administrative 1,430 1,644
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Total operating expenses 1,685 1,827
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Loss from operations (1,330) (2,149)
INTEREST INCOME, NET 105 213
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Net loss before income taxes (1,225) (1,936)
PROVISION FOR INCOME TAXES (16) (16)
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Net loss $(1,241) $(1,952)
======= =======
BASIC NET LOSS PER SHARE $(0.16) $(0.26)
======= =======
BASIC WEIGHTED AVERAGE
COMMON SHARES 7,636 7,470
======= =======
</TABLE>
4
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THERMATRIX INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------
MARCH 31, MARCH 31,
1998 1997
---------------- ----------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(1,241) $(1,952)
Adjustments to reconcile net loss to net cash used in
operating activities -
Depreciation and amortization 207 68
Provision for doubtful accounts 60 15
Changes in assets and liabilities -
Accounts receivable 40 2,218
Costs of uncompleted contracts 281 (92)
Prepaid expenses and other 16 26
Accounts payable 477 (1,085)
Accrued liabilities 106 (193)
Billings in excess of costs 367 89
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Net cash provided by (used in) operating activities 313 (906)
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of short-term investments 2,552 66
Purchases of property and equipment (32) (90)
Increase in patents and other assets (31) (85)
---------------- ----------------
Net cash provided (used) by investing activities 2,489 (109)
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock 13 23
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Net cash provided by financing activities 13 23
---------------- ----------------
INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS 2,815 (992)
CUMULATIVE EFFECT OF FOREIGN EXCHANGE RATES ON CASH
17 -
CASH & CASH EQUIVALENTS BEGINNING OF PERIOD 3,990 4,781
---------------- ----------------
CASH & CASH EQUIVALENTS END OF PERIOD $ 6,822 $ 3,789
================ ================
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest 10 3
Cash paid for income taxes 36 24
</TABLE>
5
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THERMATRIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary. The condensed
consolidated financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. These condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1997.
The unaudited condensed consolidated financial statements included herein
reflect all adjustments (which include only normal, recurring adjustments) which
are, in the opinion of management, necessary to state fairly the results for the
three months ended March 31, 1998. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
The results for the three months ended March 31, 1998 are not necessarily
indicative of the results expected for the full fiscal year.
2. BASIC NET LOSS PER SHARE
Basic net loss per share is computed using the weighted average number of shares
of common stock outstanding. No diluted loss per share information has been
presented in the accompanying statements of operations since potential common
shares from conversion of convertible preferred stock, stock options and
warrants are antidilutive.
3. SHORT-TERM INVESTMENTS
In accordance with the Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," the Company
has classified all marketable debt securities as held-to-maturity and has
accounted for these investments at amortized cost. Short-term investments are
marketable securities with original maturities greater than three months and
less than one year. As of March 31, 1998, short-term investments consist
principally of corporate bonds and notes, certificates of deposit and commercial
paper.
4. COMPREHENSIVE INCOME
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130 (SFAS
130), "Reporting Comprehensive Income," which establishes standards for
reporting and display of comprehensive income and its components (revenue,
expenses, gains and losses) in a full set of general-purpose financial
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statements. The following table reconciles comprehensive income under the
provisions of SFAS 130 for the three months ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>
For the Three Months Ended March 31
1998 1997
------------------------------------
<S> <C> <C>
Net Loss $ (1,241) $ (1,952)
Other Comprehensive Loss, net of tax
Unrealized Currency Gain $ 20 $ -
----------- -----------
Comprehensive Loss $ (1,221) $ (1,952)
=========== ===========
</TABLE>
7
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THERMATRIX INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion contains forward-looking information that involves
known and unknown risks and uncertainties which may cause the Company's actual
results in future periods to differ materially from those indicated herein as a
result of certain factors, including those set forth under "Certain Business
Considerations."
The following discussion should be read in conjunction with the unaudited
condensed consolidated financial statements and the notes thereto included in
Item 1 of this Quarterly Report and the audited consolidated financial
statements and notes thereto and Management's Discussion and Analysis of
Financial Condition and Results of Operations for the year ended December 31,
1997, contained in the Company's Annual Report on Form 10-K.
GENERAL
- -------
Thermatrix Inc. is a global industrial technology company engaged in the
development, manufacture and sale of industrial process equipment for the
destruction of volatile organic compounds and hazardous air pollutants
(collectively "VOCs"). The core component of the Company's technology is its
proprietary flameless thermal oxidizer ("FTO"). The Company's products also
include PADRE/(R)/, a proprietary technology used to capture and recover very
low concentration VOCs from low-to-medium flow vapor streams. The Company also
distributes and sells B.O.S.S., a proprietary Boiler Oxidation Steam System that
destroys VOCs and produces steam for process applications, and other thermal
oxidizers for treatment of VOCs through its exclusive marketing agreement with
White Horse Technologies, Inc.
The Company derives its revenues primarily from contracts to design, develop,
manufacture and install systems for the treatment of VOCs. The Company uses the
percentage-of-completion method of accounting to recognize contract revenues.
Losses on contracts are charged to cost of revenues as soon as such losses
become known.
In 1997, the Company experienced a shift in market demand for its products. The
United States VOC market declined, reflecting, the Company believes, low capital
expenditures in new process facilities. However, the Company experienced an
increase in demand for its products overseas, primarily due to the continued
globalization of the chemical and pharmaceutical industries, increased adoption
of ISO 14000 standards, and capital expenditures by overseas companies. In
1997, the Company responded to this shift by reducing its United States sales
and operating staff and increasing its presence overseas. The Company increased
its own staff in Europe and has also added engineering and manufacturing
partners in Asia.
In addition to its primary focus on the industrial VOC emission control market,
the Company is currently working with strategic partners to evaluate the
feasibility of applying the Company's technology to treat emissions from diesel
engines. The strategic partners generally share some, but not all, of the
evaluation costs. Expenses incurred by the Company, primarily labor and
equipment operation costs, are generally recorded as research and development
expenses. In addition, the Company may provide an evaluation system as part of
a joint development program. The capital cost of the evaluation system is
amortized over the estimated useful life of the evaluation system. The Company
is currently engaged in a joint development agreement with Lucas Diesel Systems
and continues to test a prototype system to treat the emissions from diesel
engines. The test program is on schedule for completion in the second quarter
of
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fiscal 1998. In 1997, expenses incurred by the Company for these recent
development programs were not material. However, due to the positive preliminary
test results in the diesel emissions program, the Company anticipates that more
extensive development and engineering will be needed in order to commercialize
its technology for such use. There can be no assurance as to the outcome of such
evaluation programs or, if initiated, the outcome of any such applications
development and engineering effort.
RESULTS OF OPERATIONS
- ---------------------
Revenues were $2.9 million for the three months ended March 31, 1998, up from
$1.1 million for the three months ended March 31, 1997. The increase in
revenues was primarily attributable to sales of large FTO systems to customers
overseas, primarily in the United Kingdom, and the closeout of certain projects
from prior years. Significant customers accounted for 34%, 19% and 16%,
respectively, of revenues in the three months ended March 31, 1998. Revenues
from international customers for the three months ended March 31, 1998 were 56%
compared to 28% of revenues for the three months ended March 31, 1997.
The Company had a gross margin contribution of $355,000 in the three months
ended March 31, 1998, compared to gross margin loss of $322,000 in the three
months ended March 31, 1997. The increase in gross margin was primarily
attributable to higher revenues, which were sufficient to absorb the fixed and
semi-fixed costs of engineering and operations in the United States and Europe,
and to a lesser extent, reductions in costs from repeat sales of systems for
established applications.
Research and development expenses increased from $183,000 in the three months
ended March 31, 1997 to $255,000 in the three months ended March 31, 1998. The
increase in research and development expenses is primarily attributable to
expenditures on the development of a prototype of a new FTO configuration.
Selling, general and administrative expenses decreased from $1.6 million in the
three months ended March 31, 1997 to $1.4 million in the three months ended
March 31, 1998. The decrease in selling, general and administrative expenses
reflects reduced staffing and related costs, lower sales commissions, and a
decrease in travel expenses, partially offset by higher consulting and legal
fees.
Net interest income of $105,000 for the three months ended March 31, 1998
primarily results from the investment of the net proceeds from the Company's
initial public offering completed in June 1996.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Total cash and short-term investments were $7.9 million at March 31, 1998, up
from $7.6 million at December 31, 1997. This increase was primarily due to
collection of accounts receivable. Net cash provided by operating activities
was $313,000 in the three months ended March 31, 1998, compared to $906,000 used
in operating activities during the three months ended March 31, 1997. This
change is primarily a result of lower operating losses, improved accounts
receivable management, and an increase in accounts payable and accrued
liabilities.
The Company has a $4.0 million accounts receivable line of credit with a
$2,000,000 letter of credit sub-limit. The committed line will bear interest at
the prime interest rate plus 0.50% and will be subject to certain financial and
non-financial covenants. There are no interest-bearing borrowings outstanding
under the line of credit as of March 31, 1998. The Company has a stand-by
letter of credit issued under the sub-facility in the amount of $280,000. The
Company anticipates satisfying its remaining 1998 cash
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requirements from, among other things, (i) its cash and short-term investments,
(ii) increased revenues and positive gross margin, (iii) the timely collection
of accounts receivable, and (iv) the line of credit facility. These strategies
are dependent on the Company's ability to continue to meet its forecasts,
including developing increased sales and generating positive gross margins
therefrom, the timely collection of amounts due to the Company and compliance
with the line of credit agreement covenants. The Company believes that its
existing cash and short-term investments and line of credit facility will
provide sufficient liquidity for it to meet its obligations throughout 1998.
CERTAIN BUSINESS CONSIDERATIONS
- -------------------------------
The Company's business is subject to the following risks and uncertainties, in
addition to those described elsewhere.
Operating Losses and Accumulated Deficit; Uncertainty of Future Profitability.
The Company had a net loss of approximately $9.6 million in 1997 and $1.2
million for the three months ended March 31, 1998, and had accumulated deficit
of approximately $37.9 million at March 31, 1998. The Company does not expect
to be profitable unless and until sales of its systems generate sufficient
revenues with an appropriate gross margin to fund its operations. In the event
the Company does not achieve such revenues or margins, the Company may require
additional financing to fund its operations in the future. There can be no
assurance that such financing will be available or, if available, that it will
be on favorable terms.
Ability to Compete Against Lower Cost Technologies. To date, FTO systems have
been installed in a small segment of a number of industries. There can be no
assurance that the Company's FTO technology will receive broad market acceptance
as an economically and environmentally acceptable means of destroying VOCs. The
Company's ability to compete will depend upon the Company's ability to persuade
potential customers to adopt its FTO technology in place of certain, more
established, competing technologies, including flame-based destruction and
carbon adsorption systems. The failure of the Company to persuade a significant
number of potential customers to adopt its FTO technology would have a material
adverse effect on the growth of the Company's business, results of operations
and financial condition.
Sensitivity to Major Projects. In 1997, two projects accounted for 38% of the
Company's revenues. In 1996, three projects accounted for 38% of the Company's
revenues and in 1995, two projects accounted for 59% of the Company's revenues.
Although the Company is expanding the number of its customers and installations,
the average size and dollar volume of each installation has been increasing. The
Company anticipates the size of turnkey projects in 1998 will range from $1
million to $4 million, up from an average of $850,000 in 1996. As a result, the
Company's results of operations are likely to continue to be dependent on major
projects. Such a reliance on major orders is likely to lead to fluctuations in,
and to reduce the predictability of, quarterly results.
Larger projects also pose other challenges. The sales cycle for larger projects
tends to be longer than for smaller projects, and, when orders are received,
projects may be delayed by factors outside the Company's control, including
customer budget decisions, design changes and delays in obtaining permits.
Orders for large systems often have tight delivery schedules and the customer
will often attempt to negotiate penalties for late delivery and/or the ability
to assess liquidated damages for lost production if the delivery schedule is not
met. Also, because the dollar volumes are larger, the costs of providing
warranty services could increase. The Company's business, results of operations
and financial condition could be materially adversely affected if the Company
were to fail to obtain major project orders, if such
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orders were delayed, if installations of such systems were delayed, or if such
installations encountered operating, warranty or other problems.
Management of Growth. Although it relies on subcontractors to fabricate
subassemblies and to assemble and install completed systems, the Company uses
its own employees to design, test and commission systems. The Company seeks to
maintain engineering and design staffing levels adequate for current and near-
term demand. During periods of rapid growth, such as that experienced by the
Company during 1996, the Company's engineering and design personnel generally
operate at full capacity. As a result, future growth, if any, is limited by the
Company's ability to recruit and train additional engineering, design and
project management personnel and by the ability and performance of the
individual employees in managing more and larger projects. Furthermore, any
failure to maintain quality or to meet customer installation schedules could
damage relationships with important customers, damage the Company's reputation
generally and result in contractual liabilities. There can be no assurance that
the Company will be able to effectively manage an expansion of its operations or
that the Company's systems or controls will be adequate to support the Company's
operations if expansion occurs. In such event, any failure to manage growth
effectively could have a material adverse effect on the Company's business,
results of operations and financial condition.
Risks Associated with International Operations and Sales. In 1997, sales to
international customers in Europe and Asia increased to 35%, up from 14% in
1996. The Company plans to increase its revenues, in part, through an expansion
of its overseas operations. Expansion internationally encompasses the need to
provide an infrastructure for operations, sales and administration. The
Company's overseas growth has placed, and could continue to place, a significant
strain on its managerial, operational and financial resources. There can be no
assurance that the Company will be able to attract, hire and train personnel or
to continue to develop the infrastructure needed on a timely basis which may
have an adverse impact on the Company's business, results of operations and
financial condition.
Additionally, the Company's business, results of operations and financial
condition may be materially adversely affected by fluctuations in currency
exchange rates and duty rates, and therefore its ability to maintain or increase
prices due to competition. The Company denominates international sales in either
United States dollars or local currencies. Sales in Europe have been primarily
denominated in pounds sterling. Since some expenses in connection with
international contracts are often incurred in United States dollars, there can
be a short-term exchange risk created. If the Company has significant
international sales in the future denominated in foreign currencies, the Company
may purchase hedging instruments to mitigate the exchange risk on these
contracts.
Risks Associated with Fixed Price Contracts. A majority of the Company's
contracts are performed using "fixed-price" rather than "cost-plus" terms. Under
fixed-price terms, the Company quotes firm prices to its customers and bears the
full risk of cost overruns caused by estimates that differ from actual costs
incurred or manufacturing delays during the course of the contract. Some costs,
including component costs, are beyond the Company's control and may be difficult
to predict. If manufacturing or installation costs for a particular project
exceed anticipated levels, gross margins would be materially adversely affected,
and the Company could experience losses. In addition, the manufacturing process
may be subject to significant change orders. However, in some cases the cost of
these change orders may not be negotiated until after the system is installed.
The failure of the Company to recover the full cost of these change orders could
materially adversely affect gross margins and also cause the Company to
experience losses.
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Dependence on Key Personnel. The Company's success depends to a significant
extent upon its executive officers and key engineering, sales, marketing,
financial and technical personnel, both in the United States and overseas.
Employees may voluntarily terminate their employment with the Company at any
time, and none of the Company's employees is subject to any term employment
contract with the Company. The Company has limited personnel resources available
to address the different activities in its business. The loss of the services of
one or more of the Company's key employees could have a material adverse effect
on the Company's business, results of operations and financial condition.
The Company also believes that its future success will depend in large part upon
its ability to attract and retain additional highly skilled personnel,
particularly design and process engineers. Because of the technical
sophistication of the Company's systems and the sophisticated engineering
software utilized by the Company, design and process engineers who join the
Company generally are required to have advanced technical knowledge and
significant training to perform efficiently and productively. The availability
of such personnel is limited, and the Company has at times experienced
difficulty in locating new employees with the requisite level of expertise and
experience. In addition, the Company believes its ability to manage the
anticipated increase in customer orders for the Company's products in Europe
will depend in a large part on its success in attracting and retaining skilled
engineers or project managers in Europe. There can be no assurance that the
Company will be successful in retaining its existing key personnel or in
attracting and retaining the personnel it requires in the future.
The Company maintains key employee life insurance on the life of its Chairman,
President and Chief Executive Officer, John T. Schofield, in the amount of
$2,000,000. There can be no assurance that such amount will be sufficient to
compensate the Company for the loss of the services of such individual.
Fluctuations in Quarterly Operating Results. The Company's quarterly revenues
and operating results have varied significantly in the past and may fluctuate
significantly in the future as a result of a variety of factors, many of which
are outside the Company's control. Such factors include the size and timing of
individual orders, the timing and amount of project change orders, customer
delays, order cancellations, general economic and industry conditions, the
amount of first-time engineering needed, the introduction of new products or
services by the Company or its competitors or the introduction of the Company's
products to new markets, changes in the levels of operating expenses, including
development costs, and the amount and timing of other costs relating to the
expansion of the Company's operations.
Furthermore, the purchase of the Company's products, particularly for major
projects, may involve a significant commitment of capital, with the attendant
delays frequently associated with large capital expenditures and authorization
procedures within its customers' organization. For these and other reasons, the
sales cycle for the Company's products can be lengthy (up to two years) and
subject to a number of significant risks over which the Company has little or no
control, including customer budgetary constraints. The Company historically has
operated with little backlog because most customer orders are placed with
relatively short lead times, usually from four to thirty weeks. Variations in
the timing of recognition of specific revenues due to changes in project scope
and timing may adversely and disproportionately affect the Company's operating
results for a quarter because the Company establishes its expenditure levels on
the basis of expected future revenues, and a significant portion of the
Company's expenses do not vary with current revenues.
Risks Associated With the Diesel Engine Emission Control Development Program.
The engineering challenges involved in treating diesel emissions are different
in a number of respects from the conditions in which the Thermatrix system has
been used in the past, and there can be no assurance that the Thermatrix
technology will prove successful in this development area. Moreover, the
Company's
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extensive database of test results that it uses to design systems for industrial
installations may not be relevant to diesel engine emission control. Although
pilot test results to date have been positive, the Company will need to engage
in extensive and costly applications development and engineering in order to
commercialize its system for such use, and there can be no assurance as to the
success of any such effort.
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PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company has been, or may become, involved in litigation
proceedings incidental to the conduct of its business. The Company does not
believe that any such proceedings presently pending will have a material adverse
effect on the Company's financial position or its results of operations.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
3.3 Restated Certificate of Incorporation of Registrant.(**)
3.4 Amended and Restated Bylaws of Registrant.(*)
4.2 Amended and Restated Investor Rights Agreement.(*)
10.1 Form of Indemnification Agreement between the Registrant and
each of its directors and executive officers.(*)
10.2 1987 Incentive Stock Plan, as amended and related agreements.(*)
10.3 1996 Stock Plan and form of Stock Option Agreement
thereunder.(*)
10.4 Employee Stock Purchase Plan and forms of agreement
thereunder.(*)
10.5 1996 Director Option Plan and form of Director Stock Option
Agreement thereunder.(*)
10.6 Asset Purchase Agreement between the registrant and Purus, Inc.
dated January 4, 1996.(*)
10.7 Lease dated June 12,1995 between the Registrant and Spieker
Properties, L.P., as amended.(*)
10.8 Lease dated June 24, 1995 between the Registrant and American
General Life Insurance Company.(*)
10.11 Amended and Restated Loan and Security Agreement between the
Registrant and Venture Banking Group, a Division of Cupertino
National Bank, dated January 21, 1998.(***)
10.12 1996 Stock Plan: UK Rules for Employees.(***)
10.13 First Amendment to the Amended and Restated Loan and Security
Agreement between Registrant and Venture Banking Group, a
Division of Cupertino National Bank.(***)
27.1 Financial Data Schedule.
__________
(*) Incorporated by reference to exhibits filed with the Registrant's
Registration Statement on Form S-1 (No. 333-4370) which became
effective June 19, 1996.
(**) Incorporated by reference to exhibits filed with the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1997.
(***) Incorporated by reference to exhibits field with the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1997.
(b) Reports on Form 8-K
None
TRADEMARK ACKNOWLEDGMENTS
. Thermatrix and PADRE are registered trademarks of the Company.
. B.O.S.S. is a registered trademark of White Horse Technologies, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THERMATRIX INC.
Date: May 14, 1998 By: /s/ Barbara E. Krimsky
-------------------------------------------
Barbara E. Krimsky
Vice President - Finance & Administration,
Acting Chief Financial Officer
(Principal Financial and Accounting Officer)
16
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