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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 10-Q
_______________
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2000
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transaction period from ____________ to _______________
Commission File Number 0-28414
_______________
UROLOGIX, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1697237
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14405 21st Avenue North, Minneapolis, MN 55447
(Address of principal executive offices)
Registrant's telephone number, including area code: (763) 475-1400
_______________
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [x] No [_]
As of February 2, 2001 the Company had outstanding 13,072,568 shares of common
stock, $.01 par value.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Urologix, Inc.
Condensed Balance Sheets
(In thousands except share and per share data)
December 31, 2000 June 30, 2000
- ------------------------------------------------------------------------------
Assets (unaudited) (*)
Current assets:
Cash and cash equivalents $ 158 $ 459
Available-for-sale securities 13,081 23,139
Accounts receivable, net 2,061 1,027
Inventories, net 2,213 1,454
Prepaids and other current assets 922 238
- ------------------------------------------------------------------------------
Total current assets 18,435 26,317
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Property and equipment:
Machinery, equipment and furniture 6,486 5,259
Less - accumulated depreciation (3,873) (3,580)
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Property and equipment, net 2,613 1,679
Deposits and other assets 3,085 3,960
Goodwill and other intangible assets, net 20,952 -
- ------------------------------------------------------------------------------
$ 45,085 $ 31,956
==============================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,239 $ 1,084
Accrued liabilities 1,486 1,488
Current portion of long-term lease obligation 379 -
Deferred income 2,509 614
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Total current liabilities 5,613 3,186
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Long-term liabilities:
Long-term debt 575 -
Long-term lease obligation 1,084 -
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Total long-term liabilities 1,659 -
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Shareholders' equity
Common stock, $.01 par value, 25,000,000 shares
authorized; 13,028,631 and 11,428,937 shares
issued and outstanding 130 116
Additional paid-in capital 103,638 91,583
Accumulated deficit (65,961) (62,894)
Accumulated other comprehensive loss 6 (35)
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Total shareholders' equity 37,813 28,770
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$ 45,085 $ 31,956
==============================================================================
* The Balance Sheet at June 30, 2000 has been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
The accompanying notes to financial statements are an integral part of these
statements.
1
Urologix, Inc.
Condensed Statements of Operations
(In thousands, except for per share data)
(Unaudited)
Three Months Ended December 31, Six Months Ended December 31,
----------------------------------------- ------------------------------------
2000 1999 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Sales $ 3,202 $ 1,921 $ 5,137 $ 3,832
Cost Of goods sold 1,205 1,112 2,043 2,265
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Gross profit 1,997 809 3,094 1,567
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Costs and expenses:
Selling, general and administrative 2,587 2,048 4,881 4,151
Research and development 815 932 1,454 1,992
Amortization of intangible assets 358 - 358 -
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Total costs and expenses 3,760 2,980 6,693 6,143
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Operating loss (1,763) (2,171) (3,599) (4,576)
Interest income, net 156 358 532 732
- ---------------------------------------------------------------------------------------------------------------------------------
Net loss $ (1,607) $ (1,813) $ (3,067) $ (3,844)
=================================================================================================================================
=================================================================================================================================
Basic and diluted net loss per
common share $ (0.12) $ (0.16) $ (0.25) $ (0.33)
=================================================================================================================================
Basic and diluted weighted average
number of common shares
outstanding 13,021 11,495 12,325 11,485
The accompanying notes to financial statements are an integral part of these
statements.
2
Urologix, Inc.
Condensed Statements of Cash Flows
(In Thousands)
(Unaudited)
Six Months Ended
December 31,
-------------------------------------------------
2000 1999
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Operating Activities:
Net loss ($3,067) ($3,844)
Adjustments to reconcile net loss to net cash used
for operating activities -
Depreciation and amortization 777 878
Change in operating items:
Accounts receivable 22 (1)
Inventories 91 1,200
Prepaids and other current assets 1,101 (44)
Accounts payable, accrued liabilities and deferred income (1,307) (1,049)
- -------------------------------------------------------------------------------------------------------
Net cash used for operating activities (2,383) (2,860)
- -------------------------------------------------------------------------------------------------------
Investing Activities:
Purchases of property and equipment, net (513) (428)
Proceeds from sale of securities, net 10,098 2,744
Cash paid for acquisitions, net of cash acquired (7,578) -
- -------------------------------------------------------------------------------------------------------
Net cash provided by investing activities 2,007 2,316
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Financing Activities:
Payments of long-term debt (83) -
Proceeds from exercise of stock options 158 98
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Net cash provided by financing activities 75 98
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Net decrease in cash and cash equivalents (301) (446)
Cash and Cash Equivalents:
Beginning of period 459 658
- -------------------------------------------------------------------------------------------------------
End of Period $ 158 $ 212
=======================================================================================================
The accompanying notes to financial statements are an integral part of these
statements.
3
Urologix, Inc.
Notes to Condensed Financial Statements
December 31, 2000
(Unaudited)
1. Basis of presentation
The accompanying unaudited condensed financial statements of Urologix, Inc.
(the "Company" or "Urologix") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions for Form 10-Q and Article 10 of Regulation S-X. The balance sheet
as of December 31, 2000, the statements of operations for the six months ended
December 31, 2000 and 1999, and the statements of cash flows for the six months
ended December 31, 2000 and 1999, are unaudited but include all adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation
of the financial position at such dates and the operating results and cash flows
for those periods. Certain information normally included in financial statements
and related footnotes prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission. The accompanying financial statements
should be read in conjunction with the financial statements and notes included
in Urologix' annual report on Form 10-K for the year ended June 30, 2000, filed
with the Securities and Exchange Commission.
Results for any interim period shown in this report are not necessarily
indicative of results to be expected for any other interim period or for the
entire year.
2. Acquisition of certain assets from EDAP
On October 1, 2000, Urologix purchased the Transurethral Microwave
Thermotherapy (TUMT(R)) product line and related patents and technologies from
EDAP TMS S.A., a French corporation, EDAP Technomed Medical Systems S.A., a
French corporation and EDAP Technomed Inc., a Delaware corporation (collectively
"EDAP"). Urologix paid total consideration of $7,988,000 in cash, issued
1,365,000 shares of common stock and a five-year warrant to purchase 327,466
shares of Urologix common stock at a price of $7.725 per share. Urologix also
agreed to assume approximately $1.5 million in lease obligations related to
equipment located at customer sites and issued a promissory note to pay EDAP
$575,000 plus accrued interest on December 30, 2003.
The Company's acquisition of the TUMT product line was accounted for using
the purchase method. The purchase price was allocated to the acquired assets and
assumed liabilities based on the determination of the fair value of the assets
purchased and liabilities assumed. Amounts assigned to intangible assets include
$7.5 million for developed technologies, which will be amortized over 15 years,
$2.3 million for purchased customer base, which will be amortized over 14 years,
and $1.2 million for trademarks, which will be amortized over 15 years. The
purchase price and related acquisition costs exceeded the preliminary values
assigned to the net assets by approximately $10.2 million, which was allocated
to goodwill and will be amortized over 15 years. The financial statements
include the preliminary allocation of purchase price, pending final
determination of certain acquired balances which are subject to adjustment when
additional information concerning valuations is finalized.
4
Urologix, Inc.
Notes to Condensed Financial Statements
December 31, 2000
(Unaudited)
The acquisition was accounted for using the purchase method, accordingly
the statements of operations do not include the operating results of the
acquisition prior to October 1, 2000. The following unaudited pro forma
condensed results of operations for the periods ended December 31, 2000 and 1999
have been prepared as if the transaction occurred on July 1, 2000 and 1999,
respectively, (in thousands, except per share data):
Six Months Ended December 31,
2000 1999
- --------------------------------------------------------------------------
Revenues $ 7,899 $ 6,821
Operating loss (5,731) (7,356)
Net loss (5,487) (6,947)
Net loss per share ($0.42) ($0.54)
These unaudited proforma results have been prepared for comparative
purposes only and do not purport to be indicative of the results of operations
which would have actually resulted had the combinations been in effect on July
1, 2000, or 1999, or of future results of operations.
3. Supplemental cash-flow information
Selected cash payments and non-cash activities were as follows (in
thousands):
Six Months Ended December 31,
2000 1999
- ---------------------------------------------------------------------------
Cash paid during the year for interest $ 87 $ 1
Non-cash investing activities:
Equity capital issued for acquisition 11,911 -
Details of acquisition:
Fair value of assets acquired 25,376 -
Liabilities assumed (4,902) -
Issuance of Debt (575) -
Stock issued (11,911) -
- ---------------------------------------------------------------------------
Cash paid 7,988 -
Less cash acquired (410) -
- ---------------------------------------------------------------------------
Net cash paid for acquisition $ 7,578 $ -
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4. Basic and diluted net loss per share
Basic and diluted net loss per common share was computed by dividing the
net loss by the weighted average number of shares of common stock outstanding
during the periods presented. The impact of common stock equivalents has been
excluded from the computation of weighted average common shares outstanding, as
the effect would be antidilutive.
5
Urologix, Inc.
Notes to Condensed Financial Statements
December 31, 2000
(Unaudited)
5. Revenue recognition
Revenue from product sales is recognized at the time of shipment, net of
estimated returns, which are also provided for at the time of shipment. Deferred
revenue for warranty service contracts is recognized over the contract period.
Revenue from equipment rental through the Company's per procedure fee program is
recognized at the time of equipment use.
6. Inventories
Inventories consisted of the following as of (in thousands):
December 31, 2000 June 30, 2000
- -----------------------------------------------------------------------------
Raw materials $ 702 $ 444
Work in process 289 210
Finished goods 1,222 800
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$ 2,213 $ 1,454
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7. Deferred Income
Deferred income consisted of the following as of (in thousands):
December 31, 2000 June 30, 2000
- -----------------------------------------------------------------------------
Deferred royalty income $ 1,906 $ -
Other deferred income 603 614
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$ 2,509 $ 614
=============================================================================
Deferred royalty income consists of a pre-paid non-exclusive license EDAP
previously granted to a third party for the use of technologies acquired by the
Company through the acquisition of EDAP's Transurethral Microwave Thermotherapy
(TUMT(R)) product line. Deferred royalty income will be recognized based on
sales in future years of products incorporating the licensed technologies.
Deferred royalty income is recognized as the greater of amounts due based on
actual sales or based on amortization of the license fee over the remaining
license period.
Other deferred income relates to prepayments made to the Company under an
International Distribution agreement and on warranty service contracts. Deferred
revenue for the International Distribution Agreement and the warranty service
contracts is recognized over the contract period.
6
Urologix, Inc.
Notes to Condensed Financial Statements
December 31, 2000
(Unaudited)
8. Long-Term Debt
Long term debt consisted of the
following as of (in thousands):
December 31, 2000 June 30, 2000
- ------------------------------------------------------------------------------
Long-term debt $ 575 $ -
Long-term lease obligation 1,463 -
------------------------------------
Less current portion (379) -
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Total long-term debt $ 1,659 $ -
- ------------------------------------------------------------------------------
The long-term lease obligation was acquired by the Company through the
acquisition of EDAP's TUMT product line and will be repaid in 40 monthly
installments of $53,643. The term debt is a $575,000 promissory note that was
issued to EDAP at the time of the acquisition and accrues interest at an annual
rate of 6.31%. Both the principal and accrued interest are due on December 30,
2003.
9. Comprehensive Loss
Comprehensive loss includes all changes in equity during a period except
those resulting from investments by and distributions to shareholders. For the
Company, comprehensive loss represents net loss adjusted for unrealized gains
(losses) on available-for-sale securities.
(In thousands) Six Months Ended December 31,
2000 1999
- ------------------------------------------------------------------------------
Net loss $ (3,067) $ (3,844)
Change in net unrealized gains (losses) on
available-for-sale securities 41 (39)
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Comprehensive loss $ (3,026) $ (3,883)
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7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following is a discussion and analysis of the Urologix' consolidated
financial condition and results of operations for the three and six months ended
December 31, 2000 and 1999. This section should be read in conjunction with the
condensed financial statements and related notes in Item 1 of this report and
Urologix' Annual Report on Form 10-K for the year ended June 30, 2000, which has
been filed with the Securities and Exchange Commission.
Cautionary Statement Regarding Forward-Looking Statements
This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains, in addition to historical information, forward-
looking statements that are based on the Company's current expectations,
beliefs, intentions or future strategies. These statements are subject to risks
and uncertainties that could cause actual results to differ materially from the
statements, including the extent to which the physicians performing microwave
thermotherapy procedures are able to obtain third-party reimbursement, changes
in the reimbursement environment, market acceptance and the rate of adoption of
microwave thermotherapy for the treatment of BPH by the medical community, the
ability of the Company's key suppliers to provide product, the ability to
integrate the recently acquired Prostatron product line into the Company's
operations, the impact of competitive treatments, products and pricing, and the
effectiveness of the Company's sales and marketing organization. The Company
does not undertake responsibility to update such forward-looking statements to
reflect events that arise after the date of this report. A detailed discussion
of risks and uncertainties may be found in the Company's Annual Report on Form
10-K for the year ended June 30, 2000.
OVERVIEW
Urologix, Inc., based in Minneapolis, develops, manufactures and markets
minimally invasive medical products for the treatment of urological disorders.
The Company has developed and offers non-surgical, anesthesia-free,
catheter-based therapies that use a proprietary cooled microwave technology for
the treatment of benign prostatic hyperplasia (BPH), a disease that dramatically
affects more than 23 million men worldwide by causing adverse changes in urinary
voiding patterns. Urologix markets its products under the Targis(TM) and
Prostatron(R) names. Both systems utilize Cooled ThermoTherapy(TM), a targeted
microwave energy combined with a unique cooling mechanism that protects healthy
tissue and enhances patient comfort while providing safe, effective, lasting
relief from the symptoms of BPH. Cooled ThermoTherapy can be performed without
anesthesia or intravenous sedation and, as a result, can be performed in a
physician's office or an outpatient clinic. The Company believes Cooled
ThermoTherapy provides an efficacious, safe and cost effective solution for BPH
that provides results superior to medication without the complications and side
effects inherent in surgical procedures, and as such, is well positioned to
address the needs of physicians, patients and payors.
The Company believes that third-party reimbursement will be essential to
acceptance of the Cooled ThermoTherapy procedure, and that clinical efficacy,
overall cost effectiveness and physician advocacy will be keys to obtaining such
reimbursement. The Company estimates that 60% to 80% of patients who receive
treatment in the United States will be eligible for Medicare coverage. The
remaining patients will either be covered by private insurers, including
traditional indemnity health insurers and managed care organizations, or be
private-paying patients. As a result, Medicare reimbursement is particularly
critical for widespread market acceptance in the United States.
The rate of Medicare reimbursement for Cooled ThermoTherapy is dependent on
the site of service. Through July 31, 2000, Medicare had reimbursed hospitals on
a reasonable cost basis for each Cooled ThermoTherapy procedure performed. Under
the reasonable cost basis of reimbursement, Medicare reimbursed all reasonable
costs the hospital incurred in conducting the procedures. Effective August 1,
2000, the United States Health Care Finance Administration ("HCFA"), which
administers
8
Medicare, replaced the reasonable cost basis of reimbursement for outpatient
hospital-based procedures, with a new fixed rate or "prospective payment
system". Under this new method of reimbursement, a hospital receives a fixed
reimbursement for each procedure performed in its facility.
On November 1, 2000, HCFA published Medicare payment rates for Cooled
ThermoTherapy procedures performed in a physician's office. The change is a
significant milestone for the Company, as it marks the first time patients will
be covered directly by Medicare for in-office procedures. Reimbursement for
office-based Cooled ThermoTherapy procedures became available January 1, 2001.
With the recent changes in reimbursement rates and site of care for which
Medicare will reimburse procedures, Urologix is in a period of transition. The
Company will continue to support the hospital-based business while making the
preparations necessary to service and accelerate the volume of business in
urologists' offices. The Company's strategy will continue to focus on
generating physician access to and awareness of Cooled ThermoTherapy while
creating patient demand by providing education on the benefits of the treatment.
The Company will continue to market its products through a direct sales
force in the United States and utilize a network of distributors
internationally.
RESULTS OF OPERATIONS
Sales increased to $3.2 million and $5.1 million for the three and six-
month periods ended December 31, 2000, from $1.9 million and $3.8 million during
the same periods in the prior fiscal year. The increase in sales in both
periods is primarily attributable to sales of Prostatron products acquired from
EDAP on October 1, 2000.
Domestic sales for the three and six months ended December 31, 2000,
increased 48% and 24% respectively from the same period in the prior fiscal year
primarily as a result of a significant increase in sales of disposable procedure
kits. The increased sales of disposable procedure kits in both periods is
primarily attributable to the increased volume generated by the acquisition of
the TUMT product line from EDAP and increased acceptance of Cooled
ThermoTherapy. Strong growth in disposable sales was offset slightly by
decreased equipment sales in the three and six months ended December 31, 2000
compared to the same period in the prior fiscal year. The decreased equipment
sale is a result of the Company's continued use of "per procedure" rental
programs to generate rapid acceptance and adoption of Cooled ThermoTherapy. The
per procedure rental program is designed to allow hospitals or physicians to
obtain easy access to Cooled ThermoTherapy for a period up to 90 days without
having a large capital commitment. At the end of the 90-day trial period, the
physician or hospital has the option to purchase the unit, extend the trial or
transition to a mobile service provider.
International sales for the three and six months ended December 31, 2000
increased 642% and 381% respectively from the same periods a year ago. The sales
increases in both periods were primarily attributable to sales of Prostatron
products acquired from EDAP.
Cost of goods sold increased to $1.2 million during the three months ended
December 31, 2000 compared to $1.1 million for the same period in fiscal 2000.
This increase resulted from higher sales volume. Gross profit as a percentage
of sales increased to 62% from 42% in the same period in the prior fiscal year
due primarily to manufacturing process improvements, decreased raw-material
costs, and the elimination of royalties previously paid to EDAP.
Cost of goods sold decreased to $2.0 million from $2.3 million during the
six months ended December 31, 2000, and 1999, respectively. Gross profit as a
percentage of sales increased to 60% from 41% in the same period in the prior
fiscal year due primarily to manufacturing efficiencies achieved through
increased volume and process improvements, decreased raw-material costs, and the
elimination of royalties previously paid to EDAP.
9
Selling, general and administrative expenses increased to $2.6 million and
$4.9 million from $2.0 million and $4.2 million for the three and six-month
periods ended December 31, 2000, and 1999, respectively. The increased expenses
are primarily attributable to the expansion of the Company's direct sales force,
investments in customer training, advertising, and expenditures related to the
integration of the acquired Prostatron products. The Company expects sales and
marketing expenses to continue to increase as the Company intensifies its
efforts to generate awareness and acceptance of Cooled ThermoTherapy.
Research and development expenses include expenditures for product
development, regulatory compliance and clinical studies. Research and
development expenses decreased to $815,000 and $1.5 million for the three and
six-month periods ended December 31, 2000, from $932,000 and $2.0 million during
the same periods in the prior fiscal year. The decrease in research and
development expenses has resulted from reductions in staffing and reduced
clinical study expenses due to more focused product development investments.
Amortization of intangible assets was $358,000 for the three and six-month
periods ended December 31, 2000. The amortization of intangible assets is a
result of the purchase of the Prostatron product line from EDAP.
Net interest income decreased to $156,000 and $532,000 for the three and
six-month periods ended December 31, 2000 from $358,000 and $732,000 during the
same periods of the prior fiscal year. The decrease is primarily attributable
to lower interest income due to lower cash and investment balances as well as
higher interest expenses resulting from the debt issued and assumed in the
product line acquisition from EDAP.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception through sales of
equity securities and, to a lesser extent, sales of product. As of December 31,
2000, the Company had total cash, cash equivalents and available-for-sale
securities of $13.2 million and working capital of $12.8 million.
During the six months ended December 31, 2000, the Company used $2.4
million in operating activities, primarily as a result of the Company's net
loss. The Company generated $2.0 million in investing activities, which
consisted of the sale of $10.1 million of investment securities offset by a $7.6
million investment in a business acquisition and a $513,000 investment in
property, plant, and equipment. The Company is financing its fiscal 2001
operating and investing activities primarily through funds received in a
November 1997 secondary offering that raised net proceeds of $31.5 million.
The Company expects to continue to incur additional losses and will use its
working capital as it incurs substantial expenses related to marketing and
research and development activities. In addition, the Company will continue to
rent control units to customers on a per procedure basis. Depending on the
growth of this program, the Company may use substantial capital to finance the
units rented by customers.
As discussed in Part I of this report, on October 1, 2000, the Company paid
$7,988,000 in cash to EDAP TMS S.A. ("EDAP") in connection with the acquisition
of EDAP's TUMT product line, related patents and technologies. This acquisition
was funded through existing cash balances and the issuance of common stock and
warrants to purchase common stock.
As part of the acquisition, Urologix agreed to assume approximately $1.5
million dollars in lease obligations related to control units located at
customer sites within the U.S. This obligation will be paid over 40 months in
monthly installments of $53,643. Additionally, Urologix issued a promissory
note to pay EDAP $575,000 plus interest on December 30, 2003.
10
The Company believes that existing cash, cash equivalents and available-
for-sale securities will be sufficient to fund its operations for at least the
next 12 months. However, there can be no assurance that the Company will not
require additional financing in the future or that any additional financing will
be available to the Company on satisfactory terms, if at all.
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK
The fair value of the Company's investment portfolio at December 31, 2000
approximated carrying value. Increases and decreases in prevailing interest
rates generally translate into decrease and increases in the fair value of these
instruments. Also, fair values of interest rate sensitive instruments may be
affected by the credit worthiness of the issuer, prepayment options, relative
values of alternative instruments, the liquidity of the instrument and other
general market conditions.
Market risk was estimated as the potential decrease in fair value resulting
from a hypothetical 10% increase in interest rates for the issues contained in
the investment portfolio and was not materially different from the year-end
carrying value.
11
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
As discussed below under item 5, On October 1, 2000, Urologix entered
into and closed an Asset Purchase Agreement with EDAP (as defined below) and
issued 1,365,000 shares of Urologix common stock and a five-year warrant to
purchase 327,466 shares of Urologix common stock at a price of $7.725 per share.
Urologix also agreed to assume approximately $1.5 million in lease obligations
related to equipment located at customer sites and issued a promissory note to
pay EDAP $575,000 on December 30, 2003. Urologix believes that the issuance of
the securities in this transaction was exempt under Section 4(2) of the
Securities Act of 1933 as a transaction not involving a public offering.
ITEM 5. OTHER INFORMATION
On October 1, 2000, Urologix entered into and closed an Asset Purchase
Agreement with EDAP TMS S.A., a French corporation, Technomed Medical Systems
S.A., a French corporation and EDAP Technomed Inc., a Delaware corporation
(collectively "EDAP"). Under the terms of the Asset Purchase Agreement,
Urologix acquired EDAP's Transurethral Microwave Thermotherapy (TUMT) product
line, related patents and technologies (the "Acquired Assets"). Under the Asset
Purchase Agreement and related documents, Urologix paid total consideration of
$7,988,000 in cash, issued 1,365,000 shares of Urologix common stock and a five-
year warrant to purchase 327,466 shares of Urologix common stock at a price of
$7.725 per share. Urologix also agreed to assume approximately $1.5 million in
lease obligations related to equipment located at customer sites and issued a
promissory note to pay EDAP $575,000 on December 30, 2003.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) Reports on Form 8-K
On October 11, 2000, Urologix filed an 8-K dated October 1, 2000 reporting
in Item 2, Acquisition or Disposition of Assets, the EDAP transaction
reported in Item 5 of this Form 10-Q.
On November 22, 2000, Urologix filed Amendment No 1 to the Form 8-K dated
October 1, 2000, including Item 7, Financial Statements and Exhibits, the
required historical and pro forma financial statements related to the
acquisition.
12
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.
Date February 13, 2001
Urologix, Inc.
- --------------
(Registrant)
/s/ Michael M. Selzer, Jr.
- --------------------------
Michael M. Selzer, Jr.
President and Chief Executive Officer
(Duly Authorized Officer)
/s/ Christopher R. Geyen
- ------------------------
Christopher R. Geyen
Vice President and Chief Financial Officer
(Principal Financial Officer)
13