SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 0-26154
EXOGEN, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3208468
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 Constitution Avenue
P.O. Box 6860, Piscataway, NJ 08855
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (908) 981-0990
N/A
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check [X] whether the registrant (1) has filed all reports required
to be filed by Sections 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 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 Common Stock, par
value $0.0001 per share: 9,909,192 shares outstanding at July 31, 1996.
<PAGE>
EXOGEN, INC.
Quarterly Report on Form 10-Q
June 30, 1996
Table of Contents
PART I--Financial Information
Item 1--Financial Statements:
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Item 2--Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II--Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
<TABLE>
<CAPTION>
EXOGEN, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
June 30, September 30,
1996 1995
-------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ........................................ $ 8,733 $ 22,176
Short-term investments ........................................... 8,197 6,704
Accounts receivable, net ......................................... 2,594 871
Inventories ...................................................... 1,517 1,553
Other current assets ............................................. 461 278
-------- --------
Total current assets ................................ 21,502 31,582
Furniture, fixtures and equipment, net ............................... 1,006 888
Long-term investments ................................................ 5,605 2,181
Other assets ......................................................... 200 235
-------- --------
Total assets ........................................ $ 28,313 $ 34,886
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................................. $ 785 $ 523
Accrued liabilities .............................................. 1,245 990
Capital lease obligations ........................................ 16 15
-------- --------
Total current liabilities ........................... 2,046 1,528
Capital lease obligations ............................................ 4 16
-------- --------
Total liabilities ................................... 2,050 1,544
======== ========
Commitments and contingencies (Note 2)
Stockholders' equity:
Preferred Stock, $0.0001 par value; 3,000,000 shares
authorized at June 30, 1996 and September 30, 1995;
no shares issued or outstanding ............................. -- --
Common Stock, $0.0001 par value; 27,000,000 shares
authorized at June 30, 1996 and September 30, 1995;
9,882,095 shares issued and outstanding at June 30, 1996 and
9,850,259 shares issued and outstanding at September 30, 1995 1 1
Additional paid-in capital ....................................... 46,079 45,938
Cumulative translation adjustment ................................ (10) (11)
Accumulated deficit .............................................. (19,807) (12,586)
-------- --------
Total stockholders' equity .......................... 26,263 33,342
-------- --------
Total liabilities and stockholders' equity .......... $ 28,313 $ 34,886
======== ========
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
EXOGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------------- -------------------------
1996 1995 1996 1995
-------- -------- -------- --------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Product sales ............................................. $ 1,816 $ 542 $ 4,164 $ 1,159
Revenues from development agreements ...................... -- -- 800 --
-------- -------- -------- --------
Total revenues ...................................... 1,816 542 4,964 1,159
-------- -------- -------- --------
Operating costs and expenses:
Cost of product sales ..................................... 1,071 318 2,443 716
Research and development .................................. 998 607 2,999 1,773
Selling, general, and administrative ...................... 2,859 1,346 7,714 3,509
-------- -------- -------- --------
Total operating costs and expenses .................. 4,928 2,271 13,156 5,998
-------- -------- -------- --------
Operating loss ............................................ (3,112) (1,729) (8,192) (4,839)
Other income (expense):
Interest income, net ...................................... 334 60 1,146 218
Other expense, net ........................................ (19) (4) (175) (22)
-------- -------- -------- --------
Total other income, net ............................. 315 56 971 196
-------- -------- -------- --------
Net loss .................................................. $ (2,797) $ (1,673) $ (7,221) $ (4,643)
======== ======== ======== ========
Net loss per share.............................................. $ (0.28) $ (1.21) $ (0.73)
======== ======== ========
Weighted average shares outstanding............................. 9,881 1,385 9,866
Pro forma net loss per share.................................... $ (0.89)
========
Pro forma weighted average shares outstanding................... 5,225
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
EXOGEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
June 30,
--------------------
1996 1995
-------- --------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss ................................................ $ (7,221) $ (4,643)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ...................... 271 132
Amortization of net discount on short- and long-term
investments ................................... (219) (70)
Other adjustments .................................. 15 60
Decrease (increase) in assets:
Accounts receivable ................................ (1,724) (580)
Interest receivable ................................ (223) (20)
Inventories ........................................ 35 (689)
Other current assets ............................... 22 (128)
Deferred offering costs ............................ -- (400)
Other assets ....................................... 28 (182)
Increase (decrease) in liabilities:
Accounts payable ................................... 263 323
Accrued liabilities ................................ 255 (114)
Notes payable ...................................... -- (380)
-------- --------
Net cash used in operating activities ......... (8,498) (6,691)
-------- --------
Cash flows from investing activities:
Purchase of short- and long-term investments ............ (19,673) (7,444)
Proceeds from sale of short- and long-term
investments ........................................... 14,976 7,500
Purchase of furniture, fixtures and equipment ........... (381) (739)
Other investing activities .............................. -- (4)
-------- --------
Net cash used in investing activities ......... (5,078) (687)
-------- --------
(Continued)
<PAGE>
<CAPTION>
EXOGEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS -- Continued
(in thousands)
Nine Months Ended
June 30,
--------------------
1996 1995
-------- --------
(Unaudited)
<S> <C> <C>
Cash flows from financing activities:
Proceeds from Preferred Stock issuances ................. -- 11,379
Proceeds from exercise of stock options ................. 37 --
Proceeds from sale of Common Stock ...................... 104 --
Principal payments under capital leases ................. (11) (11)
-------- --------
Net cash provided by financing activities ..... 130 11,368
-------- --------
Effect of exchange rate changes on cash and cash equivalents . 3 --
-------- --------
Net (decrease) increase in cash and cash equivalents ......... (13,443) 3,990
Cash and cash equivalents, beginning of period ............... 22,176 640
-------- --------
Cash and cash equivalents, end of period ..................... $ 8,733 $ 4,630
======== ========
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
<PAGE>
EXOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
reflect all adjustments (including normal recurring adjustments) that
management considers necessary to present fairly the Company's
financial position as of June 30, 1996; the results of operations for
the three and nine months ended June 30, 1996 and 1995; and the cash
flows for the nine months then ended. The results of operations for the
respective interim periods are not necessarily indicative of the
results to be expected for the full year. The unaudited condensed
consolidated financial statements, which include the financial
position, results of operations, and cash flows for Exogen, Inc. and
its wholly owned subsidiary, Exogen (Europe) GmbH, should be read in
conjunction with the audited consolidated financial statements for the
year ended September 30, 1995 included in the Company's Annual Report
on Form 10-K.
2. COMMITMENTS AND CONTINGENCIES
The Company is subject to claims and litigation in the ordinary course
of business. In management's opinion, such claims are not material to
the Company's financial position, its results of operations, or its
cash flows. In March 1996, the Company settled a legal action brought
against the Company on March 15, 1995 by a former sales representative
of the Company. The settlement was recorded in Other expense, net.
3. NET LOSS PER COMMON SHARE
Net loss per share for the three and nine months ended June 30, 1996
and for the three months ended June 30, 1995 is calculated according to
Accounting Principles Board Opinion No. 15 ("APB 15"), "Earnings per
Share," and is based on the weighted average shares outstanding.
Options have been excluded because they are antidilutive. Loss per
share data for the nine months ended June 30, 1995 as calculated
according to APB 15 have not been presented as such information is not
meaningful.
For the nine months ended June 30, 1995, net loss per share is
calculated on a pro forma basis pursuant to Securities and Exchange
Commission ("SEC") requirements. The weighted average shares
outstanding is based upon (a) APB 15 (as described above) for April
1995 through June 1995, which excludes the Preferred Stock and options
as they are antidilutive, and (b) SEC Staff Accounting Bulletin No. 83
for October 1994 through March 1995, which includes Preferred Stock as
though those shares had been converted into Common Stock on their
respective original issue dates and outstanding options issued during
the 12 months preceding the Initial Public Offering ("IPO") at prices
below the IPO price.
<PAGE>
4. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
------ ------
(in thousands)
<S> <C> <C>
Finished goods ............................. $1,202 $1,258
Parts and components ....................... 315 295
------ ------
$1,517 $1,553
====== ======
</TABLE>
5. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Nine Months Ended June 30,
--------------------------
1996 1995
---- ----
(in thousands)
<S> <C> <C>
Interest paid ........................................ $ 6 $312
Capital lease obligations incurred ................... -- 22
Noncash amortization of Preferred Stock
issuance costs .................................... -- 35
</TABLE>
<PAGE>
EXOGEN, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion of significant factors that affected
the Company's interim financial condition and results of operations. This should
be read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations included in the Company's Annual Report on
Form 10-K for the year ended September 30, 1995.
This Report on Form 10-Q contains certain statements of a forward-looking nature
relating to future events or the future financial performance of the Company.
Such statements are only predictions, and the actual events or results may
differ materially from the results discussed in the forward-looking statements.
Factors that could cause or contribute to such differences include those
discussed below as well as those discussed in other filings made by the Company
with the Securities and Exchange Commission.
Results of Operations
Nine Months Ended June 30, 1996 and June 30, 1995
The Company's product sales are generated entirely from sales of the Company's
Sonic Accelerated Fracture Healing System ("SAFHS") 2A device. For the nine
months ended June 30, 1996, product sales were $4.2 million as compared with
$1.2 million for the nine months ended June 30,1995, which was the period in
which the Company first recorded sales.
For the nine months ended June 30, 1996, the Company recorded revenues of
$800,000 related to development agreements in Japan. No such revenues were
reported for the nine months ended June 30, 1995. The development agreements
with Teijin Limited cover two of the Company's technologies, the SAFHS device
and the mechanical-stress technology. The SAFHS agreement provides for milestone
payments to the Company for Teijin's development of the product for launch in
Japan. The Company will manufacture and supply SAFHS devices to Teijin for
clinical trials and subsequent sales in Japan. Teijin will be responsible for
complying with the regulatory requirements and marketing and distributing the
SAFHS device in Japan. The mechanical-stress agreement provides for milestone
payments to the Company that will support, in part, the Company's clinical
trials in the United States in exchange for a first option in favor of Teijin to
negotiate a development and distribution agreement for this device for the
Japanese market.
Cost of product sales was $2.4 million for the nine months ended June 30, 1996,
compared with $716,000 for the same period of the prior year. Excluding revenues
related to development agreements, gross profit for the nine months ended June
30, 1996 was $1.7 million (or 41.3% as a percentage of product sales), compared
with $443,000 (or 38.2%) for the nine months ended June 30, 1995. This $1.3
million increase in gross profit was principally due to the increase in product
volume.
<PAGE>
The Company's research and development expenses for the nine months ended June
30, 1996 increased to $3.0 million from $1.8 million for the nine months ended
June 30, 1995. The increase of $1.2 million (or 69%) was primarily due to
expanded efforts in designing and building the mechanical-stress device for
clinical studies, additional research projects, increased staff, and the cost of
SAFHS devices shipped in connection with certain clinical prescriptions for
which reimbursement is currently not available.
The Company's selling, general, and administrative expenses for the nine months
ended June 30, 1996 increased to $7.7 million from $3.5 million for the nine
months ended June 30, 1995. The $4.2 million (or 120%) increase resulted from
expanded sales and marketing efforts, including commissions on sales, related to
the SAFHS 2A; expansion of the administrative staff and increased reimbursement
activities; increased expenses, including rent, telephone, and depreciation, of
the Company's new facilities in Piscataway, New Jersey; establishment and
expansion of a market presence in Europe through the Company's German
subsidiary; and increased legal fees related to litigation.
Net interest income for the nine months ended June 30, 1996 increased to $1.1
million from $218,000 for the nine months ended June 30, 1995, principally
because of interest earned on the proceeds from the Company's Initial Public
Offering in July 1995. Other expense, net for the nine months ended June 30,
1996 increased to $175,000 from $22,000 for the nine months ended June 30, 1995.
This increase was principally due to the settlement of a legal action by the
Company in the quarter ended March 31, 1996.
The Company incurred a net loss of $7.2 million, or $0.73 per share (per share
data based upon weighted average shares outstanding of 9,866,000, which exclude
options because they are antidilutive), for the nine months ended June 30, 1996,
compared with a net loss of $4.6 million, or $0.89 per share (per share data
based upon pro forma weighted average shares outstanding of 5,225,000), for the
nine months ended June 30, 1995 (see Note 3 to the Consolidated Financial
Statements for a discussion of the calculation of per share data). The increase
of $2.6 million (or 56%) in net loss was caused principally by the factors
discussed above.
Three Months Ended June 30, 1996 and June 30, 1995
For the three months ended June 30, 1996, product sales, which were generated
entirely from sales of the SAFHS 2A, were $1.8 million as compared with $542,000
for the three months ended June 30,1995, which was only the third quarter in
which the Company recorded sales. Product sales for the three months ended June
30, 1996 included the first full quarter of sales of the SAFHS device in Europe.
Cost of product sales was $1.1 million for the three months ended June 30, 1996,
compared with $318,000 for the same period of the prior year. Gross profit for
the three months ended June 30, 1996 was $745,000 (or 41.0% as a percentage of
product sales), compared with $224,000 (or 41.3%) for the three months ended
June 30, 1995. This $521,000 increase in gross profit was principally due to the
increase in product volume.
The Company's research and development expenses for the three months ended June
30, 1996 increased to $998,000 from $607,000 for the three months ended June 30,
1995. The increase of $391,000 (or 64%) was primarily due to additional research
projects, expanded efforts in designing and building the mechanical-stress
device for clinical studies, increased staff, and the cost of SAFHS devices
shipped in connection with certain clinical prescriptions for which
reimbursement is currently not available.
<PAGE>
The Company's selling, general, and administrative expenses for the three months
ended June 30, 1996 increased to $2.9 million from $1.3 million for the three
months ended June 30, 1995. The $1.5 million (or 112%) increase resulted from
expanded sales and marketing efforts, including commissions on sales, related to
the SAFHS 2A; expansion of the administrative staff and increased reimbursement
activities; establishment and expansion of a market presence in Europe through
the Company's German subsidiary; and increased expenses, including rent,
telephone, and depreciation, of the Company's new facilities in Piscataway, New
Jersey.
Net interest income for the three months ended June 30, 1996 increased to
$334,000 from $60,000 for the three months ended June 30, 1995, principally
because of interest earned on the proceeds from the Company's Initial Public
Offering in July 1995. Other expense, net for the three months ended June 30,
1996 increased to $19,000 from $4,000 for the three months ended June 30, 1995.
The Company incurred a net loss of $2.8 million, or $0.28 per share (per share
data based upon weighted average shares outstanding of 9,881,000, which exclude
options because they are antidilutive), for the three months ended June 30,
1996, compared with a net loss of $1.7 million, or $1.21 per share (per share
data based upon weighted average shares outstanding of 1,385,000), for the three
months ended June 30, 1995 (see Note 3 to the Consolidated Financial Statements
for a discussion of the calculation of per share data). The increase of $1.1
million (or 67%) in net loss was caused principally by the factors discussed
above.
Liquidity and Capital Resources
Since inception, the Company's expenses have significantly exceeded its
revenues, resulting in an accumulated deficit of $19.8 million at June 30, 1996.
Until July 1995, the Company had funded its operations primarily through the
private placement of equity securities aggregating $17.6 million. On July 25,
1995, the Company completed its Initial Public Offering of 2,500,000 shares of
Common Stock at a purchase price of $11.00 per share, for aggregate net proceeds
of approximately $24.7 million. On August 15, 1995, the underwriters of the
Initial Public Offering purchased an additional 375,000 shares of Common Stock,
pursuant to the over-allotment option, for aggregate net proceeds of
approximately $3.8 million.
For the nine months ended June 30, 1996, the Company used net cash of $8.5
million for operating activities, primarily for continued commercial marketing
of the SAFHS 2A; research and development; and an increase of $1.7 million in
accounts receivable. The Company's capital expenditures for the nine months
ended June 30, 1996 were $381,000. The Company estimates that equipment and
furnishings to establish in-house manufacturing capabilities and expand
administrative support activities will require capital expenditures of
approximately $600,000 during fiscal 1996 and approximately $1 million during
fiscal 1997.
The Company plans to finance its capital needs principally from existing capital
resources and, when economically prudent, debt financing. The Company believes
this financing strategy will be sufficient to fund operations through fiscal
1997. The Company currently has no commitments for any credit facilities such as
revolving credit agreements or lines of credit that could provide additional
working capital. Additional funding may not be available when needed or on terms
acceptable to the Company, which would have a material adverse effect on the
Company's business, financial condition, results of operations, and cash flows.
<PAGE>
The Company's future business, financial condition, results of operations, cash
flows, and long-term capital requirements depend upon the Company's ability to
successfully develop, market, and manufacture its SAFHS device and its
mechanical-stress device. Inherent in this process are a number of factors that
the Company must carefully manage to be successful. Some factors are (a) gaining
acceptance by the medical community of the use of ultrasound technology as a
safe and effective method of treating fresh fractures and the use of the
Company's SAFHS device by physicians for treatment of these fractures, (b)
obtaining adequate reimbursement from third-party payors such as government
entities, managed care organizations, and private insurance plans, (c)
successfully commercializing the SAFHS device for its approved indications and
developing and obtaining regulatory approval of SAFHS devices to treat
additional types of fractures, (d) successfully introducing and marketing the
Company's products internationally, (e) establishing manufacturing capability,
(f) successfully managing the transition to a larger-scale commercial
enterprise, (g) competing effectively with other developers of medical devices
and therapies that treat conditions addressed by the Company's products, (h)
successfully developing the mechanical-stress device, (i) expanding the direct
sales force to support the Company's network of independent sales
representatives, (j) protecting the Company's proprietary rights, and (k)
avoiding infringement claims by third parties. No assurance can be given that
the Company will be able to manage such factors successfully. The failure to
manage such factors successfully could have a material adverse effect on the
Company's business, financial condition, results of operations, and cash flows.
<PAGE>
PART II -- OTHER INFORMATION
ITEM 1. Legal Proceedings
On April 4, 1995, a former consultant to Interpore
Orthopaedics, Inc. ("Interpore"), the company from which
Exogen purchased certain SAFHS ultrasound assets, filed a
complaint against Interpore and Exogen in the United States
District Court for the Southern District of New York, claiming
the right, pursuant to the terms of a consulting agreement
between such consultant and the predecessor company to
Interpore, to certain royalties, not exceeding 1.25% of the
net revenues generated from the sale of SAFHS devices. On June
5, 1995, Exogen answered the complaint, denied that it has any
liability to the consultant, and asserted a number of specific
defenses. On the same day, Interpore did the same, and also
asserted cross-claims against Exogen, claiming that any
royalties found to be due to the consultant should be paid by
Exogen and that Exogen should be liable for Interpore's
attorneys' fees and other costs incurred in the litigation. On
July 7, 1995, Exogen answered Interpore's cross-claims, denied
that it has any liability to the consultant or to Interpore,
asserted a number of specific defenses to Interpore's claims,
and asserted cross-claims against Interpore that any royalties
found to be due to the consultant should be paid by Interpore
and that Interpore be liable for Exogen's attorneys' fees and
other costs incurred in the litigation. Exogen and Interpore
since have agreed that (a) Exogen's counsel will assume the
status of lead defense counsel in the litigation; (b) any
adverse judgment entered in the litigation will be entered
against Exogen and Interpore jointly and severally; and (c)
Exogen will indemnify Interpore for any payments that are
required to be made to the consultant as a result of the
litigation, and Exogen and Interpore thereafter will resolve
separately their respective liabilities. As a result of the
foregoing, in March 1996 Exogen and Interpore dismissed their
claims against each other in this litigation, without
prejudice to their right to resolve them, if necessary, as
described above. The Company does not believe that the
consultant's claims have merit, and together with Interpore,
is vigorously defending this action. All parties are currently
engaged in the discovery process. There can be no assurance,
however, that the consultant's claims will not be upheld.
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.
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Second Amended and Restated Certificate of Incorporation of
the Company. Incorporated by reference to Exhibit 3.1 to the
Company's Form 10-Q for the third quarter ended June 30,
1995.
3.2 Amended and Restated Bylaws of the Company. Incorporated by
reference to Exhibit 3.3 to the Company's Form S-1
Registration Statement (Registration No. 33-92740).
4.1 See Exhibits 3.1 and 3.2 for provisions of the Certificate
of Incorporation and Bylaws of the Company defining rights
of holders of Common Stock of the Company.
10.1 Amended and Restated Investors' Rights Agreement dated as of
November 14, 1994 among the Company, the investors listed on
Schedule A thereto, and the individuals listed on Schedule B
thereto. Incorporated by reference to Exhibit 10.1 to the
Company's Form S-1 Registration Statement (Registration No.
33-92740).
10.2 Asset Purchase Agreement dated as of March 1, 1993 among
Applied Epigenetics, Inc. ("AEI"), Interpore International,
Inc., and Interpore Orthopaedics, Inc. Incorporated by
reference to Exhibit 10.2 to the Company's Form S-1
Registration Statement (Registration No. 33-92740).
10.3 Employment Agreement dated January 15, 1994 between the
Company and Patrick A. McBrayer. Incorporated by reference
to Exhibit 10.3 to the Company's Form S-1 Registration
Statement (Registration No. 33-92740).
10.4 Employment Agreement dated February 3, 1994 between the
Company and John Bohan. Incorporated by reference to Exhibit
10.4 to the Company's Form S-1 Registration Statement
(Registration No. 33-92740).
10.5 Form of Consulting Agreements between the Company and each
of Drs. McLeod and Rubin, as amended. Incorporated by
reference to Exhibit 10.5 to the Company's Form S-1
Registration Statement (Registration No. 33-92740).
10.6 Form of Stock Restriction Agreement between the Company and
each of Drs. McLeod and Rubin and Messrs. Reisner, Ryaby,
Talish, McBrayer, and Bohan. Incorporated by reference to
Exhibit 10.6 to the Company's Form S-1 Registration
Statement (Registration No. 33-92740).
10.7 Form of Stock Purchase Agreement between the Company and
each of Messrs. Reisner, Ryaby, and Talish. Incorporated by
reference to Exhibit 10.7 to the Company's Form S-1
Registration Statement (Registration No. 33-92740).
10.8+ Manufacturing Agreement dated January 20, 1994 between the
Company and Hi- Tronics Designs, Inc. Incorporated by
reference to Exhibit 10.8 to the Company's Form S-1
Registration Statement (Registration No. 33-92740).
10.9 Form of 1993 Stock Option Plan Option Agreement.
Incorporated by reference to Exhibit 10.9 to the Company's
Form S-1 Registration Statement (Registration No. 33-92740).
10.10 1995 Stock Option / Stock Issuance Plan. Incorporated by
reference to Exhibit 10.10 to the Company's Form S-1
Registration Statement (Registration No. 33- 92740).
10.11 Employee Stock Purchase Plan. Incorporated by reference to
Exhibit 10.12 to the Company's Form S-1 Registration
Statement (Registration No. 33-92740).
<PAGE>
10.12 Lease Agreement dated December 13, 1994 by and between the
Company and Siemens Medical Systems, Inc. Incorporated by
reference to Exhibit 10.13 to the Company's Form S-1
Registration Statement (Registration No. 33-92740).
10.13 License Agreement dated March 26, 1992 between AEI and Drs.
McLeod and Rubin. Incorporated by reference to Exhibit 10.14
to the Company's Form S-1 Registration Statement
(Registration No. 33-92740).
10.14 SAFHS Agreement dated November 30, 1995 between the Company
and Teijin Limited. Incorporated by reference to Exhibit
10.14 to the Company's Form 10-K for the year ended
September 30, 1995.
10.15+ Mechanical-Stress Agreement dated November 30, 1995 between
the Company and Teijin Limited. Incorporated by reference to
Exhibit 10.15 to the Company's Form 10-K for the year ended
September 30, 1995.
11.1* Statement regarding Calculation of Shares Used in Computing
Net Loss Per Share.
27* Financial Data Schedule.
-------------
* Filed herewith.
+ Confidential treatment granted.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
for which this report is filed.
<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.
EXOGEN, INC.
-----------------------------------------------
(Registrant)
August 5, 1996 By: /s/Patrick A. McBrayer
-----------------------------------------------
Patrick A. McBrayer, President and
Chief Executive Officer
August 5, 1996 By: /s/Richard H. Reisner
-----------------------------------------------
Richard H. Reisner, Vice President and
Chief Financial Officer (Principal Financial
and Accounting Officer)
<PAGE>
EXOGEN, INC.
EXHIBIT INDEX
Number Description
- ------ -----------
3.1 Second Amended and Restated Certificate of Incorporation of the
Company. Incorporated by reference to Exhibit 3.1 to the Company's
Form 10-Q for the third quarter ended June 30, 1995.
3.2 Amended and Restated Bylaws of the Company. Incorporated by
reference to Exhibit 3.3 to the Company's Form S-1 Registration
Statement (Registration No. 33-92740).
4.1 See Exhibits 3.1 and 3.2 for provisions of the Certificate of
Incorporation and Bylaws of the Company defining rights of holders
of Common Stock of the Company.
10.1 Amended and Restated Investors' Rights Agreement dated as of
November 14, 1994 among the Company, the investors listed on
Schedule A thereto, and the individuals listed on Schedule B
thereto. Incorporated by reference to Exhibit 10.1 to the Company's
Form S-1 Registration Statement (Registration No. 33-92740).
10.2 Asset Purchase Agreement dated as of March 1, 1993 among Applied
Epigenetics, Inc. ("AEI"), Interpore International, Inc. and
Interpore Orthopaedics, Inc. Incorporated by reference to Exhibit
10.2 to the Company's Form S-1 Registration Statement (Registration
No. 33-92740).
10.3 Employment Agreement dated January 15, 1994 between the Company and
Patrick A. McBrayer. Incorporated by reference to Exhibit 10.3 to
the Company's Form S-1 Registration Statement (Registration No.
33-92740).
10.4 Employment Agreement dated February 3, 1994 between the Company and
John Bohan. Incorporated by reference to Exhibit 10.4 to the
Company's Form S-1 Registration Statement (Registration No.
33-92740).
10.5 Form of Consulting Agreements between the Company and each of Drs.
McLeod and Rubin, as amended. Incorporated by reference to Exhibit
10.5 to the Company's Form S-1 Registration Statement (Registration
No. 33-92740).
10.6 Form of Stock Restriction Agreement between the Company and each of
Drs. McLeod and Rubin and Messrs. Reisner, Ryaby, Talish, McBrayer,
and Bohan. Incorporated by reference to Exhibit 10.6 to the
Company's Form S-1 Registration Statement (Registration No. 33-
92740).
10.7 Form of Stock Purchase Agreement between the Company and each of
Messrs. Reisner, Ryaby, and Talish. Incorporated by reference to
Exhibit 10.7 to the Company's Form S-1 Registration Statement
(Registration No. 33-92740).
10.8+ Manufacturing Agreement dated January 20, 1994 between the Company
and Hi-Tronics Designs, Inc. Incorporated by reference to Exhibit
10.8 to the Company's Form S-1 Registration Statement (Registration
No. 33-92740).
10.9 Form of 1993 Stock Option Plan Option Agreement. Incorporated by
reference to Exhibit 10.9 to the Company's Form S-1 Registration
Statement (Registration No. 33-92740).
10.10 1995 Stock Option / Stock Issuance Plan. Incorporated by reference
to Exhibit 10.10 to the Company's Form S-1 Registration Statement
(Registration No. 33-92740).
<PAGE>
EXOGEN, INC.
EXHIBIT INDEX (continued)
Number Description
- ------ -----------
10.11 Employee Stock Purchase Plan. Incorporated by reference to Exhibit
10.12 to the Company's Form S-1 Registration Statement
(Registration No. 33-92740).
10.12 Lease Agreement dated December 13, 1994 by and between the Company
and Siemens Medical Systems, Inc. Incorporated by reference to
Exhibit 10.13 to the Company's Form S-1 Registration Statement
(Registration No. 33-92740).
10.13 License Agreement dated March 26, 1992 between AEI and Drs. McLeod
and Rubin. Incorporated by reference to Exhibit 10.14 to the
Company's Form S-1 Registration Statement (Registration No.
33-92740).
10.14 SAFHS Agreement dated November 30, 1995 between the Company and
Teijin Limited. Incorporated by reference to Exhibit 10.14 to the
Company's Form 10-K for the year ended September 30, 1995.
10.15+ Mechanical-Stress Agreement dated November 30, 1995 between the
Company and Teijin Limited. Incorporated by reference to Exhibit
10.15 to the Company's Form 10-K for the year ended September 30,
1995.
11.1* Statement regarding Calculation of Shares Used in Computing Net
Loss Per Share.
27* Financial Data Schedule.
------------------
* Filed herewith.
+ Confidential treatment granted.
Exhibit 11.1
EXOGEN, INC.
EARNINGS PER SHARE
CALCULATION OF SHARES USED IN COMPUTING
NET LOSS PER SHARE
(in thousands, except per share data)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ ------------------
1996 1995 1996 1995
------- ------- ------- -------
Net loss ........................... $(2,797) $(1,673) $(7,221) $(4,643)
Net loss per share
- ------------------
Weighted average shares outstanding:
Common Stock ....................... 9,881 1,385 9,866
------- ------- -------
Total .......................... 9,881 1,385 9,866
======= ======= =======
Net loss per share ................. $ (0.28) $ (1.21) $ (0.73)
======= ======= =======
Pro forma net loss per share
- ----------------------------
Weighted average shares outstanding:
Common Stock........................ 1,385
Redeemable Preferred Stock:
Series A........................ 2,500
Series B........................ 1,227
Options............................. 113
-------
Total........................... 5,225
=======
Pro forma net loss per share........ $ (0.89)
=======
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 8,733
<SECURITIES> 8,197
<RECEIVABLES> 2,934
<ALLOWANCES> 340
<INVENTORY> 1,517
<CURRENT-ASSETS> 21,502
<PP&E> 1,462
<DEPRECIATION> 456
<TOTAL-ASSETS> 28,313
<CURRENT-LIABILITIES> 2,046
<BONDS> 4
0
0
<COMMON> 1
<OTHER-SE> 26,262
<TOTAL-LIABILITY-AND-EQUITY> 28,313
<SALES> 4,164
<TOTAL-REVENUES> 4,964
<CGS> 2,443
<TOTAL-COSTS> 2,443
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6
<INCOME-PRETAX> (7,221)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,221)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,221)
<EPS-PRIMARY> (0.73)
<EPS-DILUTED> 0
</TABLE>
