Washington, D.C.  20549

 

 

FORM 10-Q

 

 

Commission file number 0-32501

 

 

MacroPore Biosurgery, Inc.

(Exact name of registrant as specified in its charter.)

 

 

Registrant’s telephone number, including area code:  (858) 458-0900

 

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 ý  NO o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    YES o    NO  ý

 

As of October 17, 2003, there were 14,745,599 shares of MacroPore Biosurgery, Inc. common stock outstanding.

 

 

MACROPORE BIOSURGERY, INC.

 

INDEX

 

PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Independent Accountants’ Review Report
		Consolidated Condensed Balance Sheets as of September 30, 2003 (unaudited) and December 31, 2002
		Consolidated Condensed Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2003 and 2002 (unaudited)
		Consolidated Condensed Statements of Cash Flows for the nine months ended September 30, 2003 and 2002 (unaudited)
		Notes to Consolidated Condensed Financial Statements (unaudited)
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3.	Quantitative and Qualitative Disclosures about Market Risks
	Item 4.	Controls and Procedures
PART II	OTHER INFORMATION
	Item 1.	Legal Proceedings
	Item 2.	Changes in Securities and Use of Proceeds
	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

 

i

 

PART I                                                       FINANCIAL INFORMATION

 

Item 1.           Financial Statements

 

Independent Accountants’ Review Report

 

The Board of Directors and Shareholders

MacroPore Biosurgery, Inc.:

 

We have reviewed the accompanying consolidated condensed balance sheet of MacroPore Biosurgery, Inc. and subsidiaries as of September 30, 2003, and the related consolidated condensed statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2003 and 2002, and the consolidated condensed statements of cash flows for the nine months ended September 30, 2003 and 2002.  These condensed consolidated financial statements are the responsibility of the Company’s management.

 

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants.  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.

 

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated condensed financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

 

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of MacroPore Biosurgery, Inc. and subsidiaries as of December 31, 2002, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated March 7, 2003, we expressed an unqualified opinion on those consolidated financial statements.  In our opinion, the information set forth in the accompanying consolidated condensed balance sheet as of December 31, 2002, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

 

	/s/ KPMG LLP
San Diego, California
October 24, 2003

 

1

 

MACROPORE BIOSURGERY, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

 

		September 30, 2003			December 31, 2002
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	2,349,000		$	5,108,000
Short-term investments, available-for-sale		14,540,000			19,875,000
Accounts receivable, net of allowance for doubtful accounts of $62,000 and $50,000 in 2003 and 2002, respectively		2,823,000			1,238,000
Inventories		987,000			1,150,000
Other current assets		654,000			843,000
Total current assets		21,353,000			28,214,000
Property and equipment, net		3,680,000			3,626,000
Other assets		133,000			562,000
Goodwill and intangibles, net		7,086,000			6,917,000
Total assets		$	32,252,000		$	39,319,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses		$	3,645,000		$	2,521,000
Current portion of long-term obligations		566,000			410,000
Total current liabilities		4,211,000			2,931,000
Deferred gain on sale of assets, related party		8,243,000			9,623,000
Long-term obligations, less current portion		829,000			770,000
Total liabilities		13,283,000			13,324,000
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; -0- shares issued and outstanding in 2003 and 2002		—			—
Common stock, $0.001 par value; 95,000,000 shares authorized; 16,777,581 and 16,646,664 shares issued and 14,745,599 and 14,527,681 shares outstanding in 2003 and 2002, respectively		17,000			17,000
Additional paid-in capital		74,793,000			74,730,000
Unearned compensation		(216,000		)	(1,057,000		)
Accumulated deficit		(48,240,000		)	(40,102,000		)
Treasury stock, at cost		(7,448,000		)	(7,752,000		)
Accumulated other comprehensive income		63,000			159,000
Total stockholders’ equity		18,969,000			25,995,000
Total liabilities and stockholders’ equity		$	32,252,000		$	39,319,000

 

SEE NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

 

2

 

MACROPORE BIOSURGERY, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

 

		For the Three Months Ended September 30,						For the Nine Months Ended September 30,
		2003			2002			2003			2002
Revenues:
Revenues from related party		$	4,230,000		$	3,073,000		$	8,421,000		$	6,870,000
Revenues from third parties		265,000			229,000			906,000			249,000
		4,495,000			3,302,000			9,327,000			7,119,000
Cost of revenues:
Cost of revenues (including stock based compensation expense of $3,000 and $4,000 for the three months ended September 30, 2003 and 2002, respectively; $9,000 and $11,000 for the nine months ended September 30, 2003 and 2002, respectively)		1,438,000