<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One) FORM 10-QSB
[X] Quarterly report under section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended June 30, 2000
-------------------------------------------------
[ ] Transition report under section 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from ______________________ to ______________________
Commission file number 000-26434
---------------------------------------------------------
Kyzen Corporation
--------------------------------------------------------------------------------
(Exact Name of the Small Business Issuer as
Specified in Its Charter)
Tennessee 87-0475115
------------------------------------- -----------------------------
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
430 Harding Industrial Drive, Nashville, TN 37211
-----------------------------------------------------------
(Address of Principal Executive Offices)
(615) 831-0888
--------------
(Issuer's Telephone Number, Including Area Code)
--------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
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 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.
[X] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. [ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
4,777,787 shares of Common Stock, $0.01 par value per share, outstanding
as of August 3, 2000
--------------------------------------------------------------------------------
Transitional Small Business Disclosure Format (Check one): [ ] Yes [X] No
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I Financial Information
Item 1. Financial Statements:
Balance Sheet as of June 30, 2000 (unaudited) and
December 31, 1999 (audited) 3
Statement of Operations for the three and six
months ended June 30, 2000 (unaudited) and
1999 (unaudited) 4
Statement of Cash Flows for the six months ended
June 30, 2000 (unaudited) and 1999 (unaudited) 5
Notes to Unaudited 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 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
</TABLE>
Page 2 of 15
<PAGE> 3
KYZEN CORPORATION
--------------------------------------------------------------------------------
BALANCE SHEET
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31,
2000 1999
----------- ------------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 587,369 $ 589,039
Accounts receivable, net of allowance for doubtful
accounts of $11,335 in 2000 and $9,345 in 1999 886,857 650,639
Inventory 446,918 445,438
Other current assets 81,631 69,605
----------- -----------
Total current assets 2,002,775 1,754,721
Property and equipment, net 594,506 673,545
Patents, net 225,769 210,040
----------- -----------
Total assets $ 2,823,050 $ 2,638,306
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 605,457 $ 505,832
Accounts payable to related parties 10,548 1,460
----------- -----------
Total current liabilities 616,005 507,292
----------- -----------
Total liabilities 616,005 507,292
----------- -----------
Shareholders' equity:
Preferred Stock, $0.01 par value per share,
10,000,000 shares authorized, no shares
issued or outstanding at June 30, 2000
or December 31, 1999; 100,000 of which
have been designated Series A Junior
Participating Preferred Stock -- --
Common Stock, $0.01 par value per share,
40,000,000 shares authorized, 4,777,787
and 5,100,014 shares issued and outstanding
at June 30, 2000 and December 31, 1999 47,778 51,001
Additional paid-in capital 5,302,717 5,299,494
Treasury stock, at cost (313) (313)
Accumulated deficit (3,143,137) (3,219,168)
----------- -----------
Total shareholders' equity 2,207,045 2,131,014
----------- -----------
Total liabilities and shareholders' equity $ 2,823,050 $ 2,638,306
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
Page 3 of 15
<PAGE> 4
KYZEN CORPORATION
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999 2000 1999
--------- ---------- ---------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net sales $ 1,567,744 $ 1,426,217 $3,258,664 $ 3,030,311
Cost of sales 757,835 601,296 1,525,597 1,274,667
----------- ----------- ---------- -----------
Gross profit 809,909 824,921 1,733,067 1,755,644
Operating costs and expenses:
Selling, marketing, general and
administrative expenses 723,298 848,515 1,474,310 1,615,929
Research and development expenses 92,128 99,830 193,988 203,595
----------- ----------- ---------- -----------
Total operating expenses 815,426 948,345 1,668,298 1,819,524
----------- ----------- ---------- -----------
Operating income (loss) (5,517) (123,424) 64,769 (63,880)
Other income (expense) 7,875 5,180 11,262 (77,226)
----------- ----------- ---------- -----------
Net income (loss) $ 2,358 $ (118,244) $ 76,031 $ (141,106)
=========== =========== ========== ===========
Earnings per share - basic $ 0.00 $ (0.02) $ 0.02 $ (0.03)
=========== =========== ========== ===========
Earnings per share - diluted $ 0.00 $ (0.02) $ 0.02 $ (0.03)
=========== =========== ========== ===========
Weighted average shares
outstanding - basic 4,797,262 5,006,681 4,797,262 5,006,681
Weighted average shares
outstanding - diluted 4,801,242 5,006,681 4,798,623 5,006,681
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
Page 4 of 15
<PAGE> 5
KYZEN CORPORATION
--------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
2000 1999
---------- ---------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 76,031 $(141,106)
Adjustments to reconcile net income (loss) to net cash used by
operating activities:
Depreciation and amortization 138,584 141,804
Non-cash stock compensation charge -- 20,129
Decrease (increase) in accounts receivable (236,218) 74,975
Increase in inventory (1,480) (30,962)
Decrease (increase) in other current assets (12,026) 9,383
Decrease in interest receivable from related parties -- 80,728
Increase (decrease) in accounts payable and accrued expenses 108,713 (51,813)
--------- ---------
Net cash provided (used) by operating activities 73,604 103,138
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (50,551) (55,994)
Purchase of patent rights and related expenditures (24,723) (27,430)
--------- ---------
Net cash used by investing activities (75,274) (83,424)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long term debt -- (593)
--------- ---------
Net cash used by financing activities -- (593)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,670) 19,121
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 589,039 523,915
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 587,369 $ 543,036
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
Page 5 of 15
<PAGE> 6
KYZEN CORPORATION
--------------------------------------------------------------------------------
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 BASIS OF PRESENTATION
BACKGROUND
Kyzen(R) Corporation ("Kyzen" or the "Company") was formed to develop
environmentally safer chemical solutions to replace ozone-depleting solvents.
The Company manufactures and markets chemical solutions and processes used in
high-technology cleaning applications, including electronic assemblies and
precision metal and plastic components where precision cleaning processes are
required. The Company also manufactures peripheral equipment such as process
control systems and chemical handling systems that enhance the use by customers
of the Company's chemical solutions. Sales of such equipment totaled less than
6% of net sales in the six months ended June 30, 2000. Typically these products
are sold as separate items and are integrated into a cleaning process by the
customer or by the Company as part of a contract service. The Company's
operations are located in Nashville, Tennessee and Manchester, New Hampshire.
The Company's operations are conducted within one reportable segment. Sales to
customers outside the United States totaled $238,061 or 15% of net sales in the
three months ended June 30, 2000, and $189,371 or 13% of net sales in the three
months ended June 30, 1999. For the six months ended June 30, 2000, net sales to
customers outside the United States totaled $616,977 or 19% compared to $370,888
or 12% of net sales for the six months ended June 30, 1999. One customer
accounted for 13% of net foreign sales during the first quarter of 2000. No
other customer accounted for more than 10% of net sales for the periods
presented.
INTERIM FINANCIAL STATEMENTS
The interim balance sheet at June 30, 2000 and the interim statements of
operations and of cash flows for the three and six months ended June 30, 2000
and 1999 are unaudited, and certain information and footnote disclosure related
thereto, normally included in the financial statements prepared in accordance
with generally accepted accounting principles, have been omitted, although
management believes that the disclosures herein are adequate to make information
presented not misleading. In the opinion of management, the unaudited interim
financial statements were prepared following the same policies and procedures
used in the preparation of the audited financial statements and all adjustments,
consisting only of normal recurring adjustments to fairly present the financial
position, results of operations and cash flows with respect to the interim
financial statements, have been included. These statements should be read in
conjunction with the Company's financial statements for the year ended December
31, 1999, which are included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1999. The results of operations for the interim
periods are not necessarily indicative of the results for the entire year.
EARNINGS PER SHARE
In accordance with the provisions of Statement of Financial Accounting Standards
No. 128, "Earnings per Share" ("SFAS No. 128"), the Company calculates basic
earnings per share as income available to common shareholders divided by the
weighted average number of shares outstanding during the year. Diluted earnings
per share is calculated using the "if converted method" for convertible
securities and the treasury stock method for options and warrants as prescribed
by Accounting Principles Board Opinion No. 15. SFAS No. 128 has been applied to
the periods presented.
SFAS No. 128 requires the Company to disclose a reconciliation of the numerators
and denominators used in basic and diluted earnings per share. Basic earnings
per share have been computed by dividing net income (loss) by the weighted
average number of shares outstanding. Diluted earnings per share have been
computed by dividing net income (loss) by the weighted average number of shares
outstanding, including the dilutive effects of common stock options using the
treasury stock method which resulted in an additional 23,455 shares outstanding
in 2000. Because the Company incurred a net loss in 1999, the effect of common
stock options was not included in the computation of diluted earnings per share
in 1999 as such effect was anti-dilutive.
Page 6 of 15
<PAGE> 7
KYZEN CORPORATION
--------------------------------------------------------------------------------
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 2 INVENTORY
The following table details the components of inventory:
<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31, 1999
------------- -----------------
(unaudited)
<S> <C> <C>
Raw Materials $ 296,849 $ 294,042
Work in process 1,705 1,705
Finished goods 148,363 149,691
---------- ----------
Total Inventory $ 446,917 $ 445,438
========== ==========
</TABLE>
NOTE 3 SHAREHOLDER RIGHTS PLAN
In January 1999, the Board of Directors of the Company adopted a Shareholder
Rights Plan (the "Plan"). Under the terms of the Plan, the Company declared a
dividend of preferred stock purchase rights (the "Rights") which generally
become exercisable upon the earlier of ten days following a public announcement
that a person or group has acquired 15% or more of the Company's Common Stock or
ten days following the announcement of a tender offer which would result in a
person or group acquiring 15% or more of the Company's Common Stock. The Rights
entitle the registered holder of one share of Common Stock to purchase from the
Company one one-hundredth of a share of $0.01 par value Series A Junior
Participating Preferred Stock of the Company at a purchase price of $5.00 per
right (the "Purchase Price"), subject to certain adjustments. The Rights expire
at the close of business on January 15, 2009 unless earlier redeemed or extended
by the Company.
Under certain circumstances, the Plan allows each holder of Common Stock, other
than the acquiring person or group, to receive upon exercise, the number of
shares of Common Stock having a value equal to two times the Purchase Price.
NOTE 4 INCOME TAXES
No provision for income taxes has been included due to the availability of net
operating loss carry-forwards sufficient to cover the earnings for the first six
months of 2000.
Page 7 of 15
<PAGE> 8
KYZEN CORPORATION
--------------------------------------------------------------------------------
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
COMPARISON OF QUARTERS ENDED JUNE 30, 2000 AND JUNE 30, 1999
Net sales for the quarter ended June 30, 2000 from all business sources
increased approximately 10% or $141,527 to $1,567,744 as compared to $1,426,217
for the quarter ended June 30, 1999. This increase is attributable to balanced
growth in sales of both Equipment, Product and Peripherals (EP&P) and base
chemical products reflecting continued growth and market penetration through new
product innovations.
Gross profit for the quarter ended June 30, 2000 decreased 2% or $15,012 to
$809,909 as compared to $824,921 in the second quarter of 1999. This decrease is
attributable to changes in our sales mix including more products with lower than
normal profit margins.
Selling, marketing, general and administrative expenses for the quarter ended
June 30, 2000 decreased 15% or $125,217 to $732,298 as compared to $848,515 for
the quarter ended June 30, 1999. This decrease reflects the continued attention
of management to increasing the efficiency of administrative operations such as
using in-house production equipment to produce many of our standard product
brochures, the Company's annual report to shareholders, and the absence of
certain corporate expenses associated with the 1999 re-domestication of the
Company to Tennessee. In addition, during the second quarter of 1999, the
Company recorded a non-cash charge of $20,129 for the value of options granted
to non-employee directors. There were no charges of this nature during the
second quarter of 2000.
Research and development expenses for the quarter ended June 30, 2000 decreased
8% or $7,702 to $92,128 from $99,830 for the quarter ended June 30, 1999. This
decrease resulted from reduced purchases of experimental materials and supplies
and the allocation of personnel resources during the quarter.
Operating loss for the quarter ended June 30, 2000 decreased 96% or $117,907 to
a loss of $5,517 from a loss of $123,424 for the quarter ended June 30, 1999.
This change is the culmination of both increased sales and lower administrative
expenses during the second quarter of 2000 as compared to the same period in
1999.
Other income for the quarter ended June 30, 2000 was $7,875 compared to other
income for the quarter ended June 30, 1999 of $5,180. The 59% increase reflects
higher interest income from cash reserves.
Net income for the quarter ended June 30, 2000 increased by $120,602 to $2,358
from a loss of $118,244 for the quarter ended June 30, 1999. This increase is
the result the net effect of higher sales revenue generation by both in-house
personnel and outside sales representatives and the control of administrative
spending.
COMPARISON OF SIX MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999
Net sales for the six months ended June 30, 2000 increased approximately 8% or
$228,353 to $3,258,664 from sales of $3,030,311 for the six months ended June
30, 1999. This increase reflects balanced growth in chemical and EP&P sales.
International sales for the six-month period ended June 30, 2000 increased
$246,090 or approximately 66% compared to the same period in 1999. This increase
is the result of increased demand for the Company's products from existing
customers as well as new customer growth.
Gross profit for the six months ended June 30, 2000 decreased 1% or $22,577 to
$1,733,067, as compared to $1,755,644 in the six months ended June 30, 1999.
This decrease is attributable to increased sales of more products with lower
profit margins.
Selling, marketing, general and administrative expenses for the six months ended
June 30, 2000 decreased 9% or $141,619 to $1,474,310 as compared to $1,615,929
for the six months ended June 30, 1999. This decrease reflects management's
decision to use in house production equipment to produce many of the Company's
standard product brochures and the Company's annual report to shareholders and
the absence of certain expenses associated with the redomestication of the
Company to Tennessee. In addition, during the second quarter of 1999, the
Company recorded a non-cash charge of $20,129 for the value of options granted
to non-employee directors. There were no charges of this nature during the first
six months of 2000.
Page 8 of 15
<PAGE> 9
KYZEN CORPORATION
--------------------------------------------------------------------------------
PART I (CONT.)
Research and development expenses for the six months ended June 30, 2000
decreased 5% or $9,607 to $193,988 from $203,595 for the six months ended June
30, 1999. This decrease resulted from reduced purchases of experimental
materials and supplies in the six months ended June 30, 2000 and the allocation
of personnel resources during the quarter.
Operating income for the six months ended June 30, 2000 increased 201% or
$128,649 from a loss of $63,880 for the six months ended June 30, 1999. This
increase is due to increased sales of both chemical and equipment products and
the continued focus on lowering administrative costs.
Other income for the six months ended June 30, 2000 increased 115% or $88,488
from an expense of $77,226 for the six months ended June 30, 1999. During the
first six months ended June 30, 1999 the Company recorded a non-cash charge of
approximately $87,181 due to collectibility concerns on a note receivable from
certain former employees and a reduction in interest on notes receivable from
former employees. This was a one-time charge did not occur in 2000.
Net income for the six months ended June 30, 2000 increased 154% or $217,137 for
a total of $76,031 from a loss of $141,106, for the six months ended June 30,
1999. This increase is due to increased revenue and the control of
administrative spending by more efficient use of personnel, and the lack of any
non-recurring charges during the six months ended June 30, 2000.
FORWARD-LOOKING STATEMENTS
Management has included in this report certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. When used,
statements which are not historical in nature, including the words "anticipate,"
"estimate," "should," "expect," "believe," "intend" and similar expressions are
intended to identify forward-looking statements. Such statements are, by their
nature, subject to certain risks and uncertainties. Among the factors that could
cause actual results to differ materially from those projected are the
following: business conditions and the general economy as they affect interest
rates; business conditions as they affect manufacturers of chemical raw
materials; the federal, state and local regulatory environment; changes in the
import and export rules, regulations and tariffs as they apply to countries
where the Company conducts its business; the ability of the Company to obtain
financing or equity capital with favorable terms and conditions; the
availability of new expansion and acquisition opportunities; changes in the
financial condition or corporate strategy of the Company's primary customers;
and the ability of the Company to develop new competitive product lines. Actual
results, events and performance may differ materially from those projected.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to release publicly the results of any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
Page 9 of 15
<PAGE> 10
KYZEN CORPORATION
--------------------------------------------------------------------------------
PART I (CONT.)
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary source of funds has been cash flows from operations. The
Company's primary uses of funds are the funding of research and development of
new product lines, purchase of capital equipment, pursuit of patents and sales
and marketing activities.
As of June 30, 2000, the Company had working capital of $1,386,770 compared to
$1,247,429 as of December 31, 1999, representing an increase of $139,341 or 11%
from December 31, 1999. This increase is due to positive cash flows from
operations, increased accounts receivable balances and increases in other
current assets, which were offset by increases in accounts payable balances.
Cash provided by operations of $73,604 in the six months ended June 30, 2000
represented a $29,534 or 29% decrease over cash provided by operations of
$103,138 during the six months ended June 30, 1999. This change is the result of
higher net income and higher inventory and accounts payable levels, offset by
decreased depreciation expense, the absence of one time charges such as the
non-cash charge and the write off of interest receivable, and higher accounts
receivable and other current asset levels.
Cash used by investing activities of $75,274 in the six months ended June 30,
2000 represented a decrease of $8,150 or 10% from cash used by investing
activities during the six months ended June 30, 1999 of $83,424. This change is
the result of lower levels of fixed asset purchases and lower patent
applications expenses.
The Company used no cash for financing activities in the six months ended June
30, 2000 and used $593 during the six months ended June 30, 1999 for the payment
of the balance due under a long-term debt agreement for office equipment.
The Company anticipates, based on currently proposed plans and assumptions
relating to its operations and expansion plans, that its current cash balances
together with projected cash flow from operations will be sufficient to satisfy
its contemplated cash requirements at least through December 31, 2000. The
Company's cash requirements for the remainder of 2000 and beyond will depend
primarily upon the level of sales of chemical products, product development,
sales and marketing expenditures, timing of any acquisitions, timing of
expansion plans and capital expenditures. In the event the Company's plans
change, or its assumptions change or prove to be inaccurate (due to
unanticipated expenses, delays, or otherwise), the Company could be required to
seek additional financing from public or private debt and equity markets prior
to such time. There can be no assurance, however, that these sources will be
available to the Company on favorable terms, and unfavorable markets could limit
the Company's ability to obtain additional financing. Further, there can be no
assurance that the Company could obtain a credit facility, if needed, or that,
if obtained, it will be on favorable terms. Failure to obtain financing on terms
favorable to the Company could have a material adverse effect on the Company's
financial condition and results of operations. Additionally, the Company plans
to continue to investigate potential acquisition candidates that are consistent
with the Company's growth strategies, which would create additional financing
needs for the Company.
INTERNATIONAL TRADE DEVELOPMENTS
In 1998, manufacturers in the Peoples Republic of China became significant
suppliers to the Company. In 1999, the Company imported approximately 35% of its
raw material from foreign sources, the largest being China. The Company expects
to continue to import about the same amount of raw material from foreign sources
in 2000. President Clinton has submitted legislation to Congress to extend
Permanent Normal Trade Relations (PNTR) status to the Peoples Republic of China.
The Company believes the enactment of this legislation could mitigate some of
the potential risk of importing materials from China. If the proposed
legislation is not enacted, the Company will continue to obtain a large portion
of these raw materials domestically and has contingency plans if Chinese sources
are no longer able to provide them.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998, FASB issued SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities." SFAS No. 133 establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities. The Company has adopted
the provisions of SFAS No. 133 effective January 1, 2000. As the Company has not
engaged, and does not plan to engage in derivative or hedging activities, the
adoption of SFAS No. 133 has not had a material impact on the Company's
financial condition or results of operations.
Page 10 of 15
<PAGE> 11
KYZEN CORPORATION
--------------------------------------------------------------------------------
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 27, 2000, the Company held its Annual Meeting of Shareholders' with the
following results:
Proposal 1 - Election of Directors
<TABLE>
<CAPTION>
For Against Withheld
-----------------------------------------
<S> <C> <C> <C>
Thomas M. Forsythe 3,261,888 32,896 -0-
James R. Gordon 3,264,281 30,503 -0-
</TABLE>
Kyle J. Doyel, Janet Korte Baker, Michael L, Bixenman and John A Davis III
continued as directors.
Footnote: Larry A. Lofgreen resigned as a director of the Company to pursue
other interests. In 2000, the Board of Directors plans to fill the vacancy
created by Mr. Lofgreen's departure.
ITEM 5. OTHER INFORMATION
In May 2000, the Company exercised the option to extend the lease agreement for
the Manchester, New Hampshire facility, extending the agreement to May 31, 2002.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
Exhibit 3.1 Registrant's Amended and Restated Charter (6)
Exhibit 3.2 Amended Bylaws of Registrant (6)
Exhibit 4.1 Warrant and Registration Rights Agreement by and among Kyzen
Corporation, Paulson Investment Company, Inc., Nutmeg
Securities, Ltd. and LaJolla Securities dated August
3, 1995 (1)
Exhibit 4.5 Specimen of Common Stock Certificate (7)
Exhibit 4.6 Specimen of Warrant Certificate (7)
Exhibit 10.1 Lease Agreement, dated June 11, 1993, between Harding
Business Park, a partnership, and Registrant for Registrant's
headquarters and chemical manufacturing facilities (1)
Exhibit 10.3 Employee Agreements dated January 1, 1994 with officers
and key employees of Registrant (1)
(a) Kyle J. Doyel*
(b) Michael L. Bixenman*
(c) Thomas M. Forsythe*
Exhibit 10.4 1994 Employee Stock Option Plan* and forms of Stock Option
Grant, Acceptance and Exercise Notice and Agreement (1)
Exhibit 10.5 First Amendment to the 1994 Employee Stock Option Plan* (1)
Exhibit 10.6 Loan Agreements and 5% Promissory Notes between officers
and key employees and Registrant: (1)
(a) Kyle J. Doyel*
(b) Michael L. Bixenman*
(c) James J. Andrus*
(d) Benjamin D. Wolfley*
</TABLE>
Page 11 of 15
<PAGE> 12
<TABLE>
<C> <C>
(e) Thomas M. Forsythe*
Exhibit 10.7 Purchase Agreement, dated May 1, 1990 between Bix
Manufacturing Company, Inc. and Registrant (1)
Exhibit 10.8 Technology Exchange Agreement, dated December 17, 1993
between Bix Manufacturing Company, Inc. and Registrant (1)
Exhibit 10.20 Warrant Agreement between Kyzen Corporation and American
Stock Transfer & Trust Company (1)
Exhibit 10.21 Reassignment of Patents to Bix Manufacturing Company, Inc. (1)
Exhibit 10.24 Lease Agreement, dated April 25, 1995 between
Five-Forty North Associates, a partnership, and the
Registrant for Registrant's offices, demonstration
facility, and equipment manufacturing facilities (2)
Exhibit 10.25 Amended Lease Agreement, dated December 30, 1997, between
Five-Forty North Associates, a partnership, and the Registrant
for Registrant's offices, demonstration facility, and equipment
manufacturing facilities (2)
Exhibit 10.29 Amended Lease Agreement, dated April 1, 1998, between Harding
Business Park, a partnership, and the Registrant for the
Registrant's Nashville, TN headquarters and chemical
manufacturing facilities (3)
Exhibit 10.30 Rights Agreement, dated January 15, 1999, between Kyzen
Corporation and American Stock Transfer & Trust (4)
Exhibit 10.31 Form of Amendment No. 1 to Employment Agreements with
certain officers of the Company: (5)
(a) Kyle J. Doyel*
(b) Michael L. Bixenman*
(c) Thomas M. Forsythe*
Exhibit 10.32 Consulting Agreement with Redstone Securities (8)
Exhibit 27 Financial Data Schedule (for SEC use only)
</TABLE>
* Indicates a management contract or compensation plan or
arrangement.
(1) Filed as an exhibit to the Company's Registration Statement on
Form SB-2 (No. 33-91854-A) previously filed pursuant to the
Securities Act of 1933 and hereby incorporated by reference.
(2) Filed as an exhibit to the Company's annual report on Form
10-KSB for the year ended December 31, 1997, previously filed
pursuant to the Securities Exchange Act of 1934 and hereby
incorporated by reference.
(3) Filed as an exhibit to the Company's quarterly report on Form
10-QSB for the quarter ended March 31, 1998, previously filed
pursuant to the Securities Exchange Act of 1934 and hereby
incorporated by reference.
(4) Filed as an exhibit to the Company's filing on Form 8-A dated
January 15, 1999 previously filed pursuant to the Securities
Exchange Act of 1934 and hereby incorporated by reference.
(5) Filed as an exhibit to the Company's quarterly report on Form
10-QSB for the quarter ended June 30, 1999, previously filed
pursuant to the Securities Exchange Act of 1934 and hereby
incorporated by reference.
(6) Filed as an exhibit to the Company's Registration Statement on
Form S-3 (No. 333-82021) dated June 30, 1999, previously filed
pursuant to the Securities Act of 1933 and hereby incorporated
by reference.
(7) Filed as an exhibit to the Company's Registration Statement on
Form S-3\A (No. 333-82021) dated August 2, 1999, previously
filed pursuant to the Securities Act of 1933 and hereby
incorporated by reference.
(8) Filed as an exhibit to the Company's annual report on Form
10-KSB for the year ended December 31, 1999, previously filed
pursuant to the Securities Exchange Act of 1934 and hereby
incorporated by reference.
(b) Reports on Form 8-K
None.
Page 12 of 15
<PAGE> 13
KYZEN CORPORATION
--------------------------------------------------------------------------------
PART II (CONT.)
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
KYZEN CORPORATION
--------------------------------------------------------------------------------
(Registrant)
Date August 14, 2000 /s/ Kyle J. Doyel
----------------------- ---------------------------------------
(Signature)
Kyle J. Doyel
President and Chief Executive Officer
Date August 14, 2000 /s/ Thomas M. Forsythe
----------------------- ---------------------------------------
(Signature)
Thomas M. Forsythe
Treasurer and Chief Accounting Officer
Page 13 of 15
<PAGE> 14
KYZEN CORPORATION
--------------------------------------------------------------------------------
EXHIBITS
EXHIBIT INDEX AND EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
Exhibit 3.1 Registrant's Amended and Restated Charter (6)
Exhibit 3.2 Amended Bylaws of Registrant (6)
Exhibit 4.1 Warrant and Registration Rights Agreement by and among Kyzen
Corporation, Paulson Investment Company, Inc., Nutmeg
Securities, Ltd. and LaJolla Securities dated August
3, 1995 (1)
Exhibit 4.5 Specimen of Common Stock Certificate (7)
Exhibit 4.6 Specimen of Warrant Certificate (7)
Exhibit 10.1 Lease Agreement, dated June 11, 1993, between Harding
Business Park, a partnership, and Registrant for Registrant's
headquarters and chemical manufacturing facilities (1)
Exhibit 10.3 Employee Agreements dated January 1, 1994 with officers
and key employees of Registrant (1)
(d) Kyle J. Doyel*
(e) Michael L. Bixenman*
(f) Thomas M. Forsythe*
Exhibit 10.4 1994 Employee Stock Option Plan* and forms of Stock Option
Grant, Acceptance and Exercise Notice and Agreement (1)
Exhibit 10.5 First Amendment to the 1994 Employee Stock Option Plan* (1)
Exhibit 10.6 Loan Agreements and 5% Promissory Notes between officers
and key employees and Registrant: (1)
(f) Kyle J. Doyel*
(g) Michael L. Bixenman*
(h) James J. Andrus*
(i) Benjamin D. Wolfley*
(j) Thomas M. Forsythe*
Exhibit 10.7 Purchase Agreement, dated May 1, 1990 between Bix
Manufacturing Company, Inc. and Registrant (1)
Exhibit 10.8 Technology Exchange Agreement, dated December 17, 1993
between Bix Manufacturing Company, Inc. and Registrant (1)
Exhibit 10.20 Warrant Agreement between Kyzen Corporation and American
Stock Transfer & Trust Company (1)
Exhibit 10.21 Reassignment of Patents to Bix Manufacturing Company, Inc. (1)
Exhibit 10.24 Lease Agreement, dated April 25, 1995 between Five-Forty
North Associates, a partnership, and the Registrant for
Registrant's offices, demonstration facility, and
equipment manufacturing facilities (2)
Exhibit 10.25 Amended Lease Agreement, dated December 30, 1997,
between Five-Forty North Associates, a partnership, and
the Registrant for Registrant's offices, demonstration
facility, and equipment manufacturing facilities (2)
Exhibit 10.29 Amended Lease Agreement, dated April 1, 1998, between
Harding Business Park, a partnership, and the Registrant
for the Registrant's Nashville, TN headquarters and
chemical manufacturing facilities (3)
Exhibit 10.30 Rights Agreement, dated January 15, 1999, between Kyzen
Corporation and American Stock Transfer & Trust (4)
Exhibit 10.31 Form of Amendment No. 1 to Employment Agreements with
certain officers of the Company: (5)
(d) Kyle J. Doyel*
(e) Michael L. Bixenman*
(f) Thomas M. Forsythe*
Exhibit 10.32 Consulting Agreement with Redstone Securities (8)
Exhibit 27 Financial Data Schedule (for SEC use only)
</TABLE>
* Indicates a management contract or compensation plan or
arrangement.
Page 14 of 15
<PAGE> 15
KYZEN CORPORATION
--------------------------------------------------------------------------------
EXHIBITS (CONT.)
(1) Filed as an exhibit to the Company's Registration Statement on Form
SB-2 (No. 33-91854-A) previously filed pursuant to the Securities
Act of 1933 and hereby incorporated by reference.
(2) Filed as an exhibit to the Company's annual report on Form 10-KSB
for the year ended December 31, 1997, previously filed pursuant to
the Securities Exchange Act of 1934 and hereby incorporated by
reference.
(3) Filed as an exhibit to the Company's quarterly report on Form 10-QSB
for the quarter ended March 31, 1998, previously filed pursuant to
the Securities Exchange Act of 1934 and hereby incorporated by
reference.
(4) Filed as an exhibit to the Company's filing on Form 8-A dated
January 15, 1999 previously filed pursuant to the Securities
Exchange Act of 1934 and hereby incorporated by reference.
(5) Filed as an exhibit to the Company's quarterly report on Form 10-QSB
for the quarter ended June 30, 1999, previously filed pursuant to
the Securities Exchange Act of 1934 and hereby incorporated by
reference.
(6) Filed as an exhibit to the Company's Registration Statement on Form
S-3 (No. 333-82021) dated June 30, 1999, previously filed pursuant
to the Securities Act of 1933 and hereby incorporated by reference.
(7) Filed as an exhibit to the Company's Registration Statement on Form
S-3\A (No. 333-82021) dated August 2, 1999, previously filed
pursuant to the Securities Act of 1933 and hereby incorporated by
reference.
(8) Filed as an exhibit to the Company's annual report on Form 10-KSB
for the year ended December 31, 1999, previously filed pursuant to
the Securities Exchange Act of 1934 and hereby incorporated by
reference.
Page 15 of 15
