Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
x
|
Item 1.
|
Business.
|
|
·
|
Hemagen has engaged several PhD level personnel to improve and bolster its manufacturing and product development capabilities.
|
|
·
|
The Company looked for opportunities to consolidate operations into more efficient space, and continues to seek out and implement cost reductions.
|
|
·
|
Hemagen completed improvements to certain of its autoimmune IFA product offerings.
|
|
·
|
The Company is working on bringing various processes in house that were previously outsourced.
|
|
·
|
Hemagen is evaluating several new technology innovations that it currently negotiating.
|
|
Analyst
â
System Products
|
Herpes simplex
1 & 2 Infections
|
Chagas Disease
|
Varicella Zoster Infections (Chicken Pox & Shingles)
|
SLE (Lupus)
|
Dermatomyositis
|
Mixed Connective Tissue Disease
|
Polymyositis
|
Sjögren's Syndrome
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Rheumatoid Arthritis
|
Scleroderma (Systemic Sclerosis)
|
Chagas' Disease
|
·
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Developing and enhancing its IFA kits.
|
·
|
Complimenting the Analyst® product offering, including evaluating new products.
|
Risk Factors.
|
Unresolved Staff Comments.
|
Properties.
|
Legal Proceedings.
|
Mine Safety Disclosures.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
Fiscal 2012
|
High
|
Low
|
First Quarter……………………………………………………...
|
$0.03
|
$0.02
|
Second Quarter…………………….…………………………...
|
$0.04
|
$0.02
|
Third Quarter……………………….…………………………...
|
$0.04
|
$0.03
|
Fourth Quarter……………………..…………………………...
|
$0.04
|
$0.02
|
Fiscal 2011
|
||
First Quarter………………………..…………………………...
|
$0.07
|
$0.04
|
Second Quarter…………………….…………………………...
|
$0.08
|
$0.06
|
Third Quarter……………………….…………………………...
|
$0.08
|
$0.04
|
Fourth Quarter……………………..…………………………...
|
$0.04
|
$0.03
|
Period
|
(
a
)
Total Number of Shares Purchased
|
(b)
Average
Price Paid per Share
|
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2)
|
July 1-31, 2012
|
-
|
-
|
-
|
-
|
August 1-30, 2012
|
-
|
-
|
-
|
-
|
September 1-30, 2012
|
-
|
-
|
-
|
-
|
Total
|
-
|
-
|
-
|
-
|
|
(1)
|
Represents shares of the Company’s Common Stock purchased pursuant to the Company’s Employee Stock Ownership Plan (ESOP) that was established October 1, 2003 with no expiration. The purpose of the plan is not to repurchase, but rather it is an employee benefit plan.
|
|
(2)
|
There is no maximum number of shares that may be purchases under the Company’s Employee Stock Ownership Plan
|
Selected Financial Data.
|
Management's Discussion and Analysis or Plan of Operation.
|
Item 7A. |
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 8.
|
Financial Statements.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Disclosure Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Dr. Alan S. Cohen
Director Since 1993
Term Expires 2013
Age: 86
|
Dr. Cohen has served as a Director of Hemagen since its inception. Dr. Cohen has been a Professor of Medicine at Boston University School of Medicine since 1968 and a Professor of Pharmacology since 1974. He is currently Distinguished Professor of Medicine (E). Dr. Cohen is Editor-in-Chief of AMYLOID. The Journal of Protein Folding Disorders. Dr. Cohen served as the Director of the Arthritis Center of Boston University from 1976 to 1994. From 1973 to 1992, Dr. Cohen served as Chief of Medicine of Boston City Hospital. Dr. Cohen is a past president of the American College of Rheumatology. Dr. Cohen received his Bachelor of Arts degree from Harvard College and his M.D. degree from the Boston University School of Medicine. Dr. Cohen’s extensive experience in the medical field, both as a practicing rheumatologist and in academic medicine and pharmacology, make him extremely knowledgeable about how the Company’s operations and products relate to the views of, and recent developments in the medical community, and render him a valuable member of the Company’s Board.
|
William P. Hales
Director since 1999
Term Expires 2014
Age: 50
|
William P. Hales has been a Director of Hemagen and its President since October 1, 1999, and has served as Hemagen’s CEO since 2002. Mr. Hales has been the Chairman of the Board of Directors since February 2004. From 1991 to 1999 Mr. Hales was employed by several brokerage and investment banking firms. Prior to that, Mr. Hales spent six years in public accounting with Ernst & Whinney and Coopers & Lybrand advising clients on both audit and management consulting. Mr. Hales’ long-time service as the principal executive officer of the Company provides him with a unique perspective as the Company’s overall business strategy given its operating history and its future goals and objectives, which, through his position on the Board, he is able to communicate with the other Directors.
|
Edward T. Lutz
Director since 2004
Term Expires 2013
Age: 66
|
Mr. Lutz has been the President and CEO of Lutz Advisors, Inc. since 2001. Prior to that Mr. Lutz served Tucker Anthony Sutro Capital Markets within the Investment Banking Group focusing on the bank and thrift industry. He has over thirty-five years experience in bank regulation, mergers and acquisitions of troubled financial institutions, strategic planning and structuring financial transactions. Over the last 13 years he has specialized in investment banking and consulting to bank and thrift institutions. Mr. Lutz was a member of the board of directors of Union State Bank (NYSE) and U.S.B. Holding Bank which as sold to KeyBank in 2008. Mr. Lutz earned his B.A. in Economics from Hofsta University and his M.B.A in Finance from American University. As a result of Mr. Lutz’s prior experience serving on the boards of directors of multiple U.S. public companies and his financial expertise, he provides the Board with important guidance with respect to the complex financial and governance issues facing the Company as a result of being a public-traded company. Since October 2008, Mr. Lutz has been Vice Chairman and Director of Greater Hudson Bank, NA, a community bank located in Middletown, New York. He also serves as Chairman of that bank’s Audit Committee.
|
Name
|
Age
|
Position
|
William P. Hales
|
50
|
Chairman of the Board, President and Chief Executive Officer
|
Catherine M. Davidson (a)
|
47
|
Controller, Principal Financial and Accounting Officer
|
Executive Compensation
|
Name and
Principal
Position
(a)
|
Year
(b)
|
Salary
($)
(c)
|
Bonus
($)
(d)
|
Stock
Awards
($)
(e)
|
Option
Awards
($)
(f)
|
Non-Equity
Incentive Plan
Compensation
($)
(g)
|
Nonqualified
Deferred
Compensation
Earnings
($)
(h)
|
All Other
Compensation
($)
(i)
|
Total
($)
(j)
|
|||||||||||
William P. Hales
|
2012
2011
|
148,781
172,500
|
—
—
|
—
—
|
317
--
|
—
—
|
—
—
|
43,250
43,774
|
(1)
(2)
|
192,348
216,274
|
||||||||||
Catherine M. Davidson
|
2012
2011
|
109,729
115,000
|
—
—
|
—
—
|
317
—
|
—
—
|
|
751
1,183
|
(3)
(4)
|
110,797
116,183
|
(1)
|
Represents $31,924 in provision for housing, $10,200 for a car allowance and an estimated $1,126 for the Company’s contributions in the Employee Stock Ownership Plan for the plan year ending September 2012.
|
(2)
|
Represents $31,800 in provision for housing, $10,200 for a car allowance and $1,774 for the Company’s contributions in the Employee Stock Ownership Plan for the plan year ending September 2011.
|
(3)
|
Represents Company’s estimated contributions in the Employee Stock Ownership plan for plan year ending September 2012.
|
(4)
|
Represents Company’s contributions in the Employee Stock Ownership plan for plan year ending September 2011.
|
Option Awards
|
Stock Awards
|
|||||||||||||||||
Name
(a)
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(b)
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(c)
|
Equity
Incentive
Plan
Awards
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
(d)
|
Option
Exercise
Price
($)
(e)
|
Option
Expiration
Date
(f)
|
Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)
(g)
|
Market
Value
of
Shares
or Units
of Stock
That
Have
Not
Vested
($)
(h)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
(i)
|
Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)
(j)
|
|||||||||
William P. Hales
|
250,000
|
—
|
—
|
.20
|
10/25/2015
|
—
|
—
|
—
|
—
|
|||||||||
406,208
|
—
|
—
|
.19
|
03/04/2019
|
—
|
—
|
—
|
—
|
||||||||||
1,223,334
|
616,666(1)
|
—
|
.11
|
05/27/2020
|
—
|
—
|
—
|
—
|
||||||||||
85,000
|
—
|
—
|
.07
|
05/27/2020
|
—
|
—
|
—
|
—
|
||||||||||
1,000
|
—
|
|
—
|
.05
|
04/30/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
05/15/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
05/30/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
06/15/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
06/29/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
07/15/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
07/30/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
08/15/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
08/30/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
09/15/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
09/30/2022
|
—
|
—
|
—
|
—
|
|||||||||
Catherine M. Davidson
|
10,000
|
—
|
|
—
|
.19
|
01/10/2013
|
—
|
—
|
—
|
—
|
||||||||
1,000
|
—
|
|
—
|
.05
|
04/30/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
05/15/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
05/30/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
06/15/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
06/29/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
07/15/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
07/30/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
08/15/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
08/30/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
09/15/2022
|
—
|
—
|
—
|
—
|
|||||||||
1,000
|
—
|
|
—
|
.05
|
09/30/2022
|
—
|
—
|
—
|
—
|
# Options
|
Vesting Date
|
616,666
|
05/27/2013
|
Name
(a)
|
Fees Earned or Paid in Cash
($)
(b)
|
Stock Awards
($)
(c)
|
Option Awards ($)
(d)
|
Non-Equity Incentive Plan Compensation
($)
(e)
|
Nonqualified Deferred Compensation Earnings
($)
(f)
|
All Other Compensation
($)
(g)
|
Total
($)
(h)
|
Alan Cohen
|
10,000
|
300
|
-
|
-
|
-
|
-
|
10,300
|
Edward Lutz
|
10,000
|
300
|
-
|
-
|
-
|
-
|
10,300
|
Name
|
# Shares Common Stock
|
# Options
|
Alan S. Cohen
|
353,665
|
90,000
|
Edward T. Lutz
|
194,026
|
80,000
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.
|
Name and Address of Beneficial Owner
|
Amount and Nature of Beneficial Owner
|
Percent of Class
|
|
William P. Hales
President & CEO, Director
9033 Red Branch Rd.
Columbia, MD 21045
|
10,866,359
|
(1)
|
43.4%
|
Jonathan E. Rothschild
1061-B Shary Circle
Concord, CA 94518
|
1,133,021
|
(2)
|
7.3%
|
Dr. Alan Cohen
Director
99 Florence Street
Bldg. 60, Unit4A
Chestnut Hill, MA 02467
|
443,665
|
(3)
|
2.8%
|
Edward T. Lutz
Director
6 West Sanders St.
Greenlawn, NY 11740
|
274,026
|
(4)
|
1.8%
|
Catherine M. Davidson
Controller, Principal Financial and Accounting Officer
9033 Red Branch Road
Columbia, MD 21045
|
128,103
|
(5)
|
0.8%
|
All Directors and Executive Officers as a Group (4 persons)
|
11,712,153
|
46.5%
|
(1)
|
Share ownership includes 1,990,542 shares issuable upon the exercise of options within 60 days, senior subordinated secured notes convertible into 2,527,000 shares of common stock within 60 days, warrants for 5,000,000 shares of common stock exercisable within 60 days and 199,267 shares in the employee ESOP plan as of the plan year ending September 30, 2011.
|
(2)
|
Information based upon Schedule 13G filed by Mr. Rothschild on January 20, 2005.
|
(3)
|
Includes 90,000 shares issuable upon the exercise of options within 60 days.
|
(4)
|
Includes 80,000 shares issuable upon the exercise of options within 60 days.
|
(5)
|
Share ownership includes 21,000 shares issuable upon the exercise of options within 60 days and 107,103 shares in the employee ESOP plan as of the plan year ending September 30, 2011.
|
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
Equity compensation plans approved by security holders
|
3,091,208
(1)
|
$0.14
|
354,792
(2)
|
Equity compensation plans not approved by security holders
|
-----
|
-----
|
-----
|
Total
|
3,091,208
(1)
|
$0.14
|
354,792
(2)
|
1.
|
Amount includes 386,000 options for the purchase of common stock pursuant to the Company’s 2001 Stock Option Plan approved by the shareholders on February 27, 2001, 60,000 options for the purchase of common stock pursuant to the Company’s 2000 Directors’ Stock Option Plan approved by the shareholders on April 25, 2000, and 2,645,208 options for purchases of common stock pursuant to the Company’s 2007 Stock Option Plan approved by the shareholders on April 24, 2007 that have been issued as of September 30, 2011.
|
2.
|
Amount represents options for the purchase of common stock approved by the shareholders pursuant to the Company’s 2007 Stock Option plan that have not been issued as of September 30, 2012.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
2012 | 2011 | |||||||
Audit fees and SAS 100 quarterly review fees | $ | 62,925 | $ | 52,493 | ||||
Audit – related fees | 750 | -- | ||||||
Tax fees | $ | 7,000 | (a) | $ | 6,500 | (a) | ||
All other fees | -- | -- | ||||||
$ | 70,675 | $ | 58,993 |
(a)
|
The Audit Committee believes the provision of these services is compatible with maintaining the principal accountant’s independence.
|
Exhibits and Financial Statement Schedules.
|
(a)(1) and (2)
Financial Statements and Schedules
|
Page
|
Management’s Report on Internal Control Over Financial Reporting
|
F-2
|
Report of Independent Registered Public Accounting Firm
|
F-3
|
Consolidated Balance Sheets at September 30, 2012 and 2011
|
F-4
|
Consolidated Statements of Operations and Comprehensive Income for the years ended September 30, 2012, and 2011
|
F-6
|
Consolidated Statements of Changes in Stockholders' Deficit for the years ended
|
|
September 30, 2012 and 2011
|
F-7
|
Consolidated Statements of Cash Flows for the years ended September 30, 2012 and 2011
|
F-8
|
Notes to Consolidated Financial Statements
|
F-9
|
Exhibit No.
|
Description of Exhibit
|
3.1
|
Restated Certificate of Incorporation (Incorporated by reference to Hemagen’s Form 8-K filed with the Commission on May 28, 2010.)
|
3.2
|
Amended and Restated Bylaws (Incorporated by reference to Hemagen’s Form 8-K filed with the Commission on March 29, 2010.)
|
4.1
|
Specimen Stock Certificate (Incorporated by reference to Registration Statement on Form 8-A filed with the Commission on February 10, 1999)
|
10.1
|
Description of the Lease for office space of HDC in Sao Paulo, Brazil (Incorporated by reference to Hemagen’s Form 10-KSB for the fiscal year ended September 30, 2005)
|
10.2
|
Form of 8% Senior Subordinated Secured Convertible Note due September 30, 2014 (Hemagen’s Schedule T-O filed with the Commission on September 1, 2009)
|
10.4
|
Second Restructuring Agreement between the Company and Dade Behring, Inc. dated November 9, 2000 (Incorporated by reference to Hemagen’s Form 10-KSB for the fiscal year ended September 30, 2001)
|
10.5*
|
2000 Directors’ Stock Option Plan (Incorporated by reference to Hemagen’s 10-KSB for the year ended September 30, 2008)
|
10.6*
|
2001 Stock Option Plan (Incorporated by reference to Hemagen’s Definitive Proxy Statement filed with the Commission on January 29, 2001)
|
10.7
|
Line of Credit Financing Agreement between Hemagen Diagnostics, Inc. and Reagents Applications, Inc. and Bay National Bank dated September 26, 2002 (Incorporated by reference to Hemagen’s Form 10-KSB for the fiscal year ended September 30, 2002)
|
10.8*
|
Directors Rule 10b5-1 Stock Purchase Plan (Incorporated by reference to Hemagen’s Form 10-KSB for the fiscal year ended September 30, 2003)
|
10.9*
|
Hemagen Employee Stock Ownership Plan (Incorporated by reference to Hemagen’s Form 10-KSB for the year ended September 30, 2004)
|
10.10*
|
Trust Agreement for the Hemagen Employee Stock Ownership Plan (Incorporated by reference to Hemagen’s Form 10-KSB for the year ended September 30, 2004)
|
10.12*
|
2007 Stock Incentive Plan (Incorporated by reference to Hemagen’s Definitive Proxy Statement filed with the Commission on March 21, 2007)
|
10.17*
|
Executive Employment Agreement between Hemagen Diagnostics, Inc. and William P. Hales effective as of May 27, 2010 (Incorporated by reference to Hemagen’s Form 8-K filed with the Commission on May 28, 2010.)
|
10.18
|
Tenth Modification to Loan and Security Agreement between the Company and TiFunding LLC (Filed herewith)
|
10.19
|
Eighth Allonge to Promissory Note executed by the Company in favor of TiFunding LLC (Filed herewith)
|
10.20
|
Warrant to Purchase Shares of Common Stock issued to TiFunding LLC (Incorporated by reference to Hemagen’s Form 10-Q for the quarterly period ended December 31, 2010.)
|
14
|
Code of Ethics Policy (Incorporated by reference to Hemagen’s Form 10-KSB for the fiscal year ended September 30, 2003)
|
Exhibit No.
|
Description of Exhibit
|
23.1
|
Consent of Stegman and Company (Filed herewith)
|
31.1
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) (Filed herewith)
|
31.2
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) (Filed herewith)
|
32.1
|
Section 1350 Certification of Chief Executive Officer (Filed herewith)
|
32.2
|
Section 1350 Certification of Chief Financial Officer (Filed herewith)
|
101.INS
|
XBRL Instance
|
101.XSD
|
XBRL Schema
|
101.CAL
|
XBRL Calculation
|
101.DEF
|
XBRL Definition
|
101.LAB
|
XBRL Label
|
101.PRE
|
XBRL Presentation
|
Date: December 28, 2012
|
HEMAGEN DIAGNOSTICS, INC.
By:
/
s/ William P. Hales
William P. Hales, Chairman of the Board,
President & Chief Executive Officer
|
Name
|
Capacity
|
Date
|
/s/ William P. Hales
William P. Hales
|
Chairman of the Board, President and Chief Executive Officer
|
December 28, 2012
|
/s/ Alan S. Cohen
Alan S. Cohen
|
Director
|
December 28 2012
|
/s/ Edward T. Lutz
Edward T. Lutz
|
Director
|
December 28, 2012
|
/s/ Catherine M. Davidson
Catherine M. Davidson
|
Principal Financial Officer and Principal Accounting Officer
|
December 28, 2012
|
/s/ William P. Hales
|
William P. Hales
|
President and Chief Executive Officer
|
December 28, 2012
|
/s/ Catherine M. Davidson
|
Catherine M. Davidson
|
Principal Financial Officer
|
December 28, 2012
|
ASSETS
|
2012
|
2011
|
||||||
CURRENT ASSETS:
|
||||||||
Cash
|
$ | 66,287 | $ | 213,611 | ||||
Accounts Receivable, less allowance for doubtful accounts of $53,846 and $67,286 at September 30, 2012 and 2011, respectively
|
587,521 | 580,240 | ||||||
Inventories, net
|
1,363,052 | 1,460,780 | ||||||
Current Portion of Note Receivable
|
- | 35,000 | ||||||
Prepaid expenses and other current assets
|
77,886 | 159,493 | ||||||
Total current assets
|
2,094,746 | 2,449,124 | ||||||
PROPERTY AND EQUIPMENT;
net of accumulated
depreciation and amortization of $6,509,120 and
$6,431,680 at September 30, 2012 and 2011,
respectively
|
282,307 | 386,520 | ||||||
|
||||||||
OTHER ASSETS
:
|
||||||||
Other Assets
|
65,691 | 52,658 | ||||||
Total other assets
|
65,691 | 52,658 | ||||||
Total Assets
|
$ | 2,442,744 | $ | 2,888,302 |
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
2012
|
2011
|
||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable and accrued liabilities
|
$ | 951,840 | $ | 818,875 | ||||
Revolving line of credit
|
976,868 | 669,413 | ||||||
Deferred revenue
|
20,979 | 37,226 | ||||||
Total current liabilities
|
1,949,687 | 1,525,514 | ||||||
LONG-TERM LIABILITIES
:
|
||||||||
Senior subordinated secured convertible notes
|
4,049,858 | 4,049,858 | ||||||
Total Long-Term Liabilities
|
4,049,858 | 4,049,858 | ||||||
Total liabilities
|
5,999,545 | 5,575,372 | ||||||
STOCKHOLDERS’ DEFICIT
|
||||||||
Preferred stock, $0.01 par value - 1,000,000 shares
|
||||||||
authorized; none issued | -- | -- | ||||||
Common stock, $0.01 par value – 45,000,000 shares
|
||||||||
authorized; 15,600,281 and 15,585,281 shares issued and
|
||||||||
outstanding at September 30, 2012 and 2011, respectively
|
156,002 | 155,852 | ||||||
Additional paid-in capital | 23,133,611 | 23,038,217 | ||||||
Accumulated deficit | (26,678,231 | ) | (25,770,916 | ) | ||||
Less treasury stock at cost; 100,000 shares at
|
||||||||
September 30, 2012 and 2011 | (89,636 | ) | (89,636 | ) | ||||
Accumulated other comprehensive (loss) income - | ||||||||
currency translation (loss) income | (78,547 | ) | (20,587 | ) | ||||
Total stockholders’ deficit
|
(3,556,801 | ) | (2,687,070 | ) | ||||
Total liabilities and stockholders’ deficit
|
$ | 2,442,744 | $ | 2,888,302 |
2012
|
2011
|
|||||||
Net sales
|
$ | 4,042,094 | $ | 5,141,226 | ||||
Cost of sales
|
2,428,649 | 3,180,429 | ||||||
Gross Profit
|
1,613,445 | 1,960,797 | ||||||
Operating Expenses:
|
||||||||
Selling, general and administrative
|
2,006,712 | 2,428,511 | ||||||
Research and development
|
44,647 | 5,003 | ||||||
Total operating expenses
|
2,051,359 | 2,433,514 | ||||||
Total operating loss
|
(437,914 | ) | (472,717 | ) | ||||
Other income (expense)
|
||||||||
Interest expense, (net)
|
(469,174 | ) | (406,563 | ) | ||||
Gain (loss) on Sale of Assets
|
(1,261 | ) | 2,800 | |||||
Other income
|
1,034 | 135 | ||||||
Total other expense
|
(469,401 | ) | (403,628 | ) | ||||
Net loss, before income taxes
|
(907,315 | ) | (876,345 | ) | ||||
Income tax expense (benefit)
|
- | (4,131 | ) | |||||
Net loss
|
(907,315 | ) | (880,476 | ) | ||||
Other comprehensive loss, net of tax:
|
||||||||
Foreign currency translation adjustment
|
(57,960 | ) | (38,501 | ) | ||||
Other comprehensive loss
|
(57,960 | ) | (38,501 | ) | ||||
Comprehensive loss
|
$ | (965,275 | ) | $ | (918,977 | ) | ||
Net loss per share – Basic
|
$ | (0.06 | ) | $ | (0.06 | ) | ||
Net loss per share – Diluted
|
$ | (0.06 | ) | $ | (0.06 | ) | ||
Weighted average common shares used in the calculation
of net loss per share – Basic and Diluted
|
15,496,237 | 15,476,486 |
Common Stock
|
Additional
|
Accumulated
|
Accumulated Other
|
Treasury Stock
|
Total Stockholders’
|
|||||||||||||||||||||||||||
Shares | Par Value | Paid in Capital |
Deficit
|
Comprehensive Loss | Shares | Cost |
Deficit
|
|||||||||||||||||||||||||
Balance as of October 1, 2010
|
15,565,281 | $ | 155,652 | $ | 22,959,539 | $ | (24,890,440 | ) | $ | 17,914 | (100,000 | ) | $ | (89,636 | ) | $ | (1,846,971 | ) | ||||||||||||||
Net Loss
|
(880,476 | ) | (880,476 | ) | ||||||||||||||||||||||||||||
Foreign Exchange translation adjustment
|
(38,501 | ) | (38,501 | ) | ||||||||||||||||||||||||||||
Stock Based Compensation
|
45,999 | 45,999 | ||||||||||||||||||||||||||||||
Amortization of interest expense - warrants
|
31,879 | 31,879 | ||||||||||||||||||||||||||||||
Shares issued for compensation
|
20,000 | 200 | 800 | 1,000 | ||||||||||||||||||||||||||||
Balance at September 30, 2011
|
15,585,281 | $ | 155,852 | $ | 23,038,217 | $ | (25,770,916 | ) | $ | (20,587 | ) | (100,000 | ) | $ | (89,636 | ) | $ | (2,687,070 | ) | |||||||||||||
Net Loss
|
(907,315 | ) | (907,315 | ) | ||||||||||||||||||||||||||||
Foreign Exchange translation adjustment
|
(57,960 | ) | (57,960 | ) | ||||||||||||||||||||||||||||
Stock Based Compensation
|
47,326 | 47,326 | ||||||||||||||||||||||||||||||
Amortization of interest expense - warrants
|
47,818 | 47,818 | ||||||||||||||||||||||||||||||
Shares issued for compensation
|
15,000 | 150 | 250 | 400 | ||||||||||||||||||||||||||||
Balance at September 30, 2012
|
15,600,281 | $ | 156,002 | $ | 23,133,611 | $ | (26,678,231 | ) | $ | (78,547 | ) | (100,000 | ) | $ | (89,636 | ) | $ | (3,556,801 | ) |
CONSOLIDATED STATEMENTS OF CASH FLOW
For The Years Ended September 30, 2012 and 2011
|
||||||||
2012
|
2011
|
|||||||
Cash flows from operating activities
|
||||||||
Net (loss) income
|
$ | (907,315 | ) | $ | (880,476 | ) | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
164,250 | 185,814 | ||||||
Non-cash interest expense - warrants
|
47,818 | 31,879 | ||||||
Stock based compensation
|
47,326 | 45,999 | ||||||
Shares issued for compensation
|
400 | 1,000 | ||||||
Bad debt expense
|
(212 | ) | 11,112 | |||||
Gain on the sale of assets
|
1,261 | (2,800 | ) | |||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(7,069 | ) | 78,540 | |||||
Inventories
|
109,562 | (74,463 | ) | |||||
Prepaid expenses and other assets
|
68,574 | 180,633 | ||||||
Accounts payable and accrued liabilities
|
132,965 | 75,705 | ||||||
Deferred revenue
|
(16,247 | ) | 9,889 | |||||
Net cash used by operating activities
|
(358,687 | ) | (337,168 | ) | ||||
Cash flows from investing activities
|
||||||||
Purchase of property and equipment
|
(91,037 | ) | (56,414 | ) | ||||
Proceeds from the sale of assets
|
2,800 | |||||||
Payments received on Note Receivable
|
35,000 | 210,000 | ||||||
Net cash (used) provided by investing activities
|
(56,037 | ) | 156,386 | |||||
Cash flows from financing activities
|
||||||||
Net borrowings on revolving line of credit
|
307,455 | 271,413 | ||||||
Net cash provided by financing activities
|
307,455 | 271,413 | ||||||
Effect of exchange rates on cash
|
(40,055 | ) | (28,763 | ) | ||||
Net change in cash
|
(147,324 | ) | 61,868 | |||||
Cash, beginning of year
|
213,611 | 151,743 | ||||||
Cash, end of year
|
$ | 66,287 | $ | 213,611 |
Inventories at September 30, consist of the following:
|
||||||||
2012
|
2011
|
|||||||
Raw materials
|
$ | 1,086,129 | $ | 1,039,604 | ||||
Work-in-process
|
63,121 | 48,049 | ||||||
Finished goods
|
778,086 | 914,285 | ||||||
1,927,336 | 2,001,938 | |||||||
Less reserves (obsolesce and dating),
|
(564,284 | ) | (541,158 | ) | ||||
Inventories, net
|
$ | 1,363,052 | $ | 1,460,780 |
2012
|
2011
|
|||||||
Accounts payable – trade
|
$ | 368,775 | $ | 415,221 | ||||
Accrued professional fees
|
32,300 | 20,150 | ||||||
Accrued vacation | 85,178 | 81,883 | ||||||
Accrued taxes | 64,959 | 64,636 | ||||||
Accrued interest
|
198,949 | 36,511 | ||||||
Accrued other
|
201,679 | 200,474 | ||||||
Accounts payable and accrued liabilities
|
$ | 951,840 | $ | 818,875 | ||||
2012
|
2011
|
|||||||
Dividend yield
|
-- | -- | ||||||
Expected volatility
|
131.48% - 134.20 | % | 129.73% - 137.95 | % | ||||
Risk-free interest rate
|
1.52% - 1.97 | % | 1.47% - 3.48 | % | ||||
Expected life in years
|
10 | 5 - 10 |
Shares
|
Weighted-Average Exercise Price
|
Weighted-
Average
Life in years
|
||||||||||
Balance, October 1, 2010
|
2,932,208 | $ | 0.15 | 7.56 | ||||||||
Granted
|
230,000 | 0.10 | 5.26 | |||||||||
Exercised
|
- | - | - | |||||||||
Cancelled or expired
|
(20,000 | ) | $ | 0.17 | 1.78 | |||||||
Balance, September 30, 2011
|
3,142,208 | $ | 0.14 | 7.43 | ||||||||
Granted
|
54,000 | $ | 0.07 | 9.49 | ||||||||
Exercised
|
- | - | - | |||||||||
Cancelled or expired
|
(105,000 | ) | $ | 0.32 | - | |||||||
Balance, September 30, 2012
|
3,091,208 | $ | 0.14 | 6.67 | ||||||||
Exercisable, September 30, 2012
|
2,344,542 | $ | 0.15 | 6.51 |
Warrants
|
Average Weighted Exercise Price
|
Weighted Average Life (in years)
|
||||||||||
Warrants Outstanding – October 1, 2010
|
-- | |||||||||||
Granted
|
5,000,000 | .20 | 5.00 | |||||||||
Exercised
|
-- | |||||||||||
Forfeited, cancelled or expired
|
-- | |||||||||||
Warrants Outstanding – September 30, 2011
|
5,000,000 | .20 | 4.36 | |||||||||
Granted
|
-- | $ | -- | |||||||||
Exercised
|
-- | -- | -- | |||||||||
Forfeited, cancelled or expired
|
-- | -- | -- | |||||||||
Warrants outstanding – September 30, 2012
|
5,000,000 | $ | .20 | 3.36 | ||||||||
Warrants exercisable – September 30, 2012
|
5,000,000 | $ | .20 | 3.36 |
Years ended September 30,
|
2012
|
2011
|
||||||
Domestic
|
$ | (437,685 | ) | $ | (666,931 | ) | ||
Foreign
|
(469,630 | ) | (209,414 | ) | ||||
Net loss before income taxes
|
$ | (907,315 | ) | $ | (876,345 | ) |
Years ended September 30,
|
2012
|
2011
|
||||||
Federal tax at statutory rate
|
34 | % | 34 | % | ||||
Valuation allowance
|
(34 | )% | (34 | )% | ||||
Current tax expense on international operations
|
-- | 24 | % | |||||
0 | % | 24 | % |
2012
|
2011
|
|||||||
Net operating loss carry forwards
|
$ | 8,074,000 | $ | 7,717,000 | ||||
Inventory reserve
|
226,000 | 216,000 | ||||||
Accounts receivable reserve
|
4,000 | 8,000 | ||||||
Other
|
106,000 | 82,000 | ||||||
Total deferred tax assets
|
8,410,000 | 8,023.000 | ||||||
Basis difference in fixed assets
|
(24,000 | ) | (43,000 | ) | ||||
Net deferred tax assets
|
8,386,000 | 7,980,000 | ||||||
Valuation allowance
|
(8,386,000 | ) | (7,980,000 | ) | ||||
Total reported deferred tax assets
|
$ | -- | $ | -- | ||||
United States*
|
Brazil
|
Consolidated
|
||||||||||
September 30, 2012:
|
||||||||||||
Revenues
|
$ | 2,509,029 | $ | 1,533,065 | $ | 4,042,094 | ||||||
Long-lived assets
|
180,109 | 167,889 | 347,998 | |||||||||
September 30, 2011:
|
||||||||||||
Revenues
|
$ | 2,750,948 | $ | 2,390,278 | $ | 5,141,226 | ||||||
Long-lived assets
|
175,697 | 263,481 | 439,178 |
2013
|
$ | 58,236 | ||
2014
|
$ | 56,896 | ||
2015
|
$ | 28,094 |
Twelve Months Ended
September 30,
|
||||||||
2012
|
2011
|
|||||||
Numerator:
|
||||||||
Net loss
|
$ | (907,315 | ) | $ | (880,476 | ) | ||
De Denominator:
|
||||||||
Weighted-average shares outstanding
|
15,496,237 | 15,476,486 | ||||||
Effect of dilutive shares
|
-- | -- | ||||||
Denominator for diluted earnings per share
|
15,496,237 | 15,476,486 | ||||||
Basic Earnings per share
|
$ | (0.06 | ) | $ | (0.06 | ) | ||
Diluted Earnings per share
|
$ | (0.06 | ) | $ | (0.06 | ) |
Twelve Months Ended
September 30,
|
||||||||
2012
|
2011
|
|||||||
Convertible Notes
|
11,571,022 | 11,571,022 | ||||||
Warrants
|
5,000,000 | 5,000,000 | ||||||
Options to purchase common stock
|
3,091,208 | 3,142,208 | ||||||
Total antidilutive instruments
|
19,662,230 | 19,713,230 | ||||||
1.
|
I have reviewed this annual report on Form 10-K of Hemagen Diagnostics, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: December 28, 2012
|
/s/ William P. Hales
William P. Hales
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Hemagen Diagnostics, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f))for the registrant and we have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: December 28, 2012
|
/s/ Catherine M. Davidson
Catherine M. Davidson
Principal Financial Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: December 28, 2012
|
/s/ William P. Hales
William P. Hales
President and Chief Executive Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
|
Date: December 28, 2012
|
/s/ Catherine M. Davidson
Catherine M. Davidson
Principal Financial Officer
|