SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from ________________ to _________________
Commission file number: 33-26467-D
CELL ROBOTICS INTERNATIONAL, INC.
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(Exact Name of small business issuer as Specified in its Charter)
Colorado 84-1153295
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(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification number
2715 Broadbent Parkway N.E., Albuquerque, New Mexico 87107
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(Address of Principal Offices) (Zip Code)
Registrant's telephone number, including area code: (505) 343-1131
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the last 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 [ ]
As of May 19, 1997, 5,013,414 shares of Common Stock of the Registrant were
outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [ X ]
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet at March 31, 1997 (unaudited) and
December 31, 1996 (audited).
Consolidated Statement of Operations for the Three Months
Ended March 31, 1997 and March 31, 1996 (unaudited).
Consolidated Statement of Cash Flows for the Three Months
Ended March 31, 1997 and March 31, 1996 (unaudited).
Notes to Unaudited Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Conditions
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
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The interim unaudited financial statements have been prepared by Cell
Robotics International, Inc. ("Cell" or the "Company") and, in the opinion of
management, reflect all material adjustments which are necessary to a fair
presentation of the financial position, results of operations and cash flows
for the interim periods presented. Such adjustments consisted only of normal
recurring items. Certain information and footnote disclosure made in the
Company's last annual report on Form 10-KSB have been condensed or omitted for
the interim statements. These statements should be read in conjunction with
the financial statements and notes thereto included in the Company's Form 10-
KSB for the year ended December 31, 1996. The results of the interim periods
are not necessarily indicative of results which may be expected for any other
interim period or for the full years.
CELL ROBOTICS INTERNATIONAL, INC.
BALANCE SHEETS
AS OF AS OF
3-31-97 12-31-96
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(UNAUDITED)
ASSETS:
Current assets:
Cash and cash equivalents $ 1,115,964 $ 1,724,671
Accounts receivable, net of
allowance for doubtful
accounts of $1,841 266,033 69,845
Inventory 337,133 408,173
Other 60,546 19,121
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Total current assets 1,779,676 2,221,810
Property and equipment, net 236,015 256,635
Other assets, net 85,903 92,507
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$ 2,101,594 $ 2,570,952
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 151,916 $ 160,824
Payroll related liabilities 107,135 128,932
Royalties payable 74,375 42,029
Other current liabilities 30,876 31,937
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Total current liabilities 364,302 363,722
Stockholders equity:
Preferred stock, $.04 par value,
Authorized 2,500,000 shares,
no shares issued and outstanding
in 1997 and 1996 0 0
Common stock, $.004 par value,
Authorized 12,500,000 shares,
5,013,414 and 5,003,414 shares
issued and outstanding at
March 31, 1997 and December 31,
1996, respectively 20,054 20,014
Additional paid in capitaL 13,345,131 13,327,672
Accumulated deficit (11,627,895) (11,140,456)
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Total stockholders' equity 1,737,291 2,207,230
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$ 2,101,594 $ 2,570,952
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See accompanying notes to financial statements.
CELL ROBOTICS INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
UNAUDITED
Three months ended
March 31, 1997 March 31, 1996
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Product Sales $ 256,518 $ 58,624
Research and development grants 0 69,190
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Total revenues 256,518 127,814
Cost of goods sold (172,450) (53,904)
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Gross profit 84,068 73,910
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Operating expenses:
Salaries 209,966 132,636
Payroll taxes and benefits 35,859 19,765
Rent and utilities 32,814 28,497
Travel 23,281 11,598
Depreciation and amortization 27,751 24,828
Professional fees 61,330 47,558
Other operating expenses 203,224 175,417
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Total operating expenses 594,225 440,299
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Loss from operations $ (510,157) $ (366,389)
Other income (deductions):
Rental income 7,200 5,850
Interest income 15,954 10,520
Interest expense (436) (595)
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Total other 22,718 15,775
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Net Loss $ (487,439) $ (350,614)
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Net Loss per common share (0.10) (0.09)
Weighted average shares outstanding 5,004,747 3,833,222
========= =========
See accompanying notes to financial statements.
CELL ROBOTICS INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
UNAUDITED
Three months ended
March 31, 1997 March 31, 1996
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (487,439) $ (350,614)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 32,473 24,828
Decrease (Increase) in accounts
receivable (196,188) 215,398
Increase in inventory 71,040 (147,124)
Increase in other current assets (41,425) (1,696)
Increase (Decrease) in accounts
payable and accrued expenses 580 5,541
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Net cash used by operating
activities (620,959) (253,667)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (5,248) (26,122)
Cash paid for the development or
purchase of intangible
assets 0 (27,574)
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Net cash used by investing
activities (5,248) (53,696)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 17,500 0
Release of formerly restricted
proceeds from a previous sale
of common stock 0 425,000
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Net cash provided by financing
activities 17,500 425,000
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NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (608,707) 117,637
Cash and cash equivalents:
Beginning of period 1,724,671 739,952
End of period $ 1,115,964 $ 857,589
============ ============
SUPPLEMENTAL INFORMATION:
Fair market value of common stock
issued for the acquisition of
intangible assets 0 41,561
Interest paid 436 595
See accompanying notes to financial statements.
CELL ROBOTICS INTERNATIONAL, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 1997
(1) PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS
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These unaudited financial statements have been prepared in accordance
with the rules of the Securities and Exchange Commission and, therefore, do
not include all information and footnotes otherwise necessary for a fair
presentation of financial position, results of operations and cash flows, in
conformity with generally accepted accounting principles. However, the
information furnished, in the opinion of management, reflects all adjustments
necessary to present fairly the financial position, results of operations and
cash flows on a consistent basis. The results of operations are not
necessarily indicative of results which may be expected for any other interim
period or for the year as a whole.
(2) PURCHASE OF CERTAIN INTANGIBLE ASSETS
-------------------------------------
On January 9, 1996, the Company entered into a Purchase Agreement
("Agreement") with Tecnal Products, Inc. ("Tecnal"). The Agreement provides
for the acquisition of certain technological assets, primarily the rights
under two patents and a patent application. These patents and patent
application relate to an innovative laser design, and a medical device
incorporating this laser design. In exchange for these technological assets,
the company issued to Tecnal, and its shareholders, an aggregate of 17,500
shares of the Company's common stock, made cash payments on behalf of Tecnal
in the amount of $14,800, and granted a one percent (1%) royalty on future
sales of products incorporating the acquired technology, with a lifetime
maximum of $20,000.
(3) RECLASSIFICATION
----------------
Certain 1996 amounts have been reclassified to conform with the 1996
presentation.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF CELL ROBOTICS INTERNATIONAL, INC.
The following discussion and analysis should be read in conjunction with
the Financial Statements and Notes thereto appearing elsewhere in this report.
LIQUIDITY AND CAPITAL RESOURCES - MARCH 31, 1997 (UNAUDITED) COMPARED TO
DECEMBER 31, 1996
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The Company's liquidity and capital resources were diminished during the
three month period ending March 31, 1997, due primarily to the Company's
ongoing operating losses.
The Company's current ratio at December 31, 1996, was 6.1:1, compared to
a current ratio of 4.9:1 on March 31, 1997. This decrease in liquidity is
primarily due to the erosion of the Company's assets, and in particular its
current assets. Specifically, total assets decreased from $2,570,952 at
December 31, 1996 to $2,101,594 at March 31, 1997, a decrease of $469,358, or
18.3%. Of this decrease, current assets accounted for $442,134, or 94.2%.
The decrease in the Company's current assets of $442,134, or 19.9%, was
the result of a large decrease in cash, slightly offset by an increase in
accounts receivable. Cash and cash equivalents decreased $608,707, or 35.3%.
This was a result of net cash used in unprofitable operations. Accounts
receivable increased $196,188, or 280.9%, resulting from increased sales
during the quarter. Also resulting from the quarter's increased sales was a
decrease in inventory of $71,040, or 17.4%. Other current assets also
increased, from $19,121 to $60,546, an increase of 216.6%. This increase
reflects pre-payment of a purchase commitment made to a supplier of a
particular inventory component.
Property and equipment, net, decreased $20,620, or 8.0%, as a result of
depreciation, slightly offset by new fixed asset purchases of $5,248. Other
assets decreased slightly from $92,507 to $85,903, or 7.1%.
During the three month period ending March 31, 1997, the Company's total
liabilities did not materially change. A moderate increase in royalties
payable was substantially offset by decreases in accounts payable and payroll
related liabilities. The Company did not have any long term liabilities at
December 31, 1996 or March 31, 1997.
The Company's working capital decreased from $1,858,088 at December 31,
1996 to $1,415,374 at March 31, 1997, a decrease of $442,714, or 23.8%. This
decrease was due almost exclusively to the effect of the Company's operating
loss incurred during the same three month period.
Other than the foregoing, management knows of no other trend, or other
demands, commitments, events or uncertainties that will result in, or that are
reasonably likely to result in, a material impact on the liquidity and capital
resources of the Company.
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1997 (UNAUDITED) COMPARED
TO THE THREE MONTHS ENDED MARCH 31, 1996 (UNAUDITED)
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Revenues from the sale of products during the three months ended March
31, 1997, were $256,518, as compared to $58,624 during the comparable period
in 1996. This represents an increase of 337.6%. The Company did not
recognize any revenue from research and development grants during the three
months ended March 31, 1997. The gross margin realized on product sales
during this period also improved from 8.1% in the 1996, to 32.8% during the
three (3) month period ended March 31, 1997. Although the Company's revenues
and margins greatly increased during the three months ending March 31, 1997 as
compared to 1996, the Company also realized an increase in its loss from
operations, and net loss.
The Company's loss from operations incurred during the three months ended
March 31, 1997, was $(510,157), as compared to an operating loss of $(366,389)
incurred during the same period in 1996. Contributing to the Company's
operating loss was an increase in total operating expenses of $153,926, or
35.0%, from $440,299 to $594,225. Salaries and other operating expenses
accounted for the majority of this increase. Salaries increased $77,330, or
53.3%, from $132,636 to $209,966, reflecting the addition of personnel. Other
operating expenses increased $27,807, or 15.9%, to $203,224 from $175,417.
This increase is primarily the result of expenses related to the development
of the Company's new, laser-based, medical devices which the Company is
targeting to introduce in 1997. In addition to increases in salaries and
other operating expenses, moderate increases were incurred in payroll taxes
and benefits, rent and utilities, travel, depreciation and amortization, and
professional fees.
During the three months ended March 31, other income and expenses
increased from a $15,775 net contribution to income during the period in 1996,
to a $22,718 net contribution to income during the period in 1997. A moderate
increase in interest expense was primarily responsible for the change.
As a result of the foregoing, the Company's net loss for the three months
ended March 31, 1997 was $(487,439), as compared to a net loss of $(350,614)
incurred during the comparable period of 1996. On a per share basis, this
amounts to a $(0.10) loss per weighted average outstanding share during the
first quarter 1997, compared to a $(0.09) loss per weighted average
outstanding share during the first quarter of 1996. Primarily as a result of
the exercise of the Company's Class A Common Stock Purchase Warrants during
1996, the weighted average common shares outstanding increased from 3,833,222
at March 31, 1996 to 5,004,747 at March 31, 1997.
Other than the foregoing, management knows of no trends, or other
demands, commitments, events or uncertainties that will result in, or are
reasonably likely to result in, a material impact on the Company's results of
operations.
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.
CELL ROBOTICS INTERNATIONAL, INC.
Dated: May 20, 1997 By: /s/ Ronald K. Lohrding
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Ronald K. Lohrding, President
Dated: May 20, 1997 By: /s/ Craig T. Rogers
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Craig T. Rogers
Chief Financial Officer