UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported) August 11,
2010
|
Bacterin
International Holdings, Inc.
|
|
(Exact
Name of Registrant as Specified in Its Charter)
|
|
Delaware
|
|
(State
or Other Jurisdiction of
Incorporation)
|
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333-158426
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20-5313323
|
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(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
600
Cruiser Lane
Belgrade,
Montana
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59714
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(406)
388-0480
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(Registrant’s
Telephone Number, Including Area Code)
|
|
(Former
Name or Former Address, if Changed Since Last
Report)
|
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of
Operations and Financial Condition.
We are
furnishing this Item 2.02 in connection with the disclosure of information,
in the form of the textual information from a press release released on August
11, 2010 entitled “Bacterin International Holdings, Inc. Reports Second Quarter
2010 Financial Results” and filed as Exhibit 99.1 hereto.
The
information in this Item 2.02 (including Exhibit 99.1 hereto) is
furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for
the purpose of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liabilities of that section.
We do not
have, and expressly disclaim, any obligation to release publicly any updates or
any changes in our expectations or any change in events, conditions, or
circumstances on which any forward-looking statement is based.
The text
included with this report is available on our website located at www.bacterin.com, although we
reserve the right to discontinue that availability at any time.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits.
|
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99.1
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Press
Release dated August 11, 2010, entitled “Bacterin International Holdings,
Inc. Reports Second Quarter 2010 Financial
Results”.
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SIGNATURE
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 hereunto
duly authorized.
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Dated: August
11, 2010
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BACTERIN
INTERNATIONAL HOLDINGS, INC.
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By: /s/
Guy S.
Cook
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|
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Name:
Guy S. Cook
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|
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Title: President
and Chief Executive
Officer
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EXHIBIT
INDEX
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99.1
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Press
Release from Bacterin International Holdings, Inc., dated August 11, 2010,
entitled “Bacterin International Holdings, Inc. Reports Second Quarter
2010 Financial
Results.”
|
EXHIBIT
99.1
Bacterin
International Holdings, Inc. Reports Second Quarter 2010
Financial
Results
Bacterin
achieves 86 percent year-over-year second quarter revenue increase
BELGRADE,
MT, August 11, 2010 – Bacterin International Holdings, Inc. (“Bacterin” or the
“Company”) (OTCBB: BIHI), a developer of anti-infective coatings for medical
applications and revolutionary bone graft material, today reported financial
results for its second quarter ended June 30, 2010. Year to date, the
Company has built a direct sales force, passed rigorous testing standards for
approval to market products into over 6,000 medical facilities, and introduced
several new products, thereby completing the shift from a development stage
company to a growth stage company in full commercialization mode. In
addition, between May and July 2010, the Company completed a reverse merger into
a public shell, closed a $9.2 million financing and added executive management
talent, including three independent members to its Board of
Directors.
Bacterin
reported second quarter 2010 revenues of $3.2 million, an 86 percent increase
from the prior year second quarter revenues of $1.7 million and a 17 percent
increase compared to revenues of $2.7 million in the first quarter of
2010. The Company’s revenue growth reflected the impact of a direct
sales force effort and increasing interest from a broader group of current and
new customers in its innovative products. As of June 30, 2010, the
Company’s sales force totaled 21 biologics sales representatives, which has
subsequently grown to 35 as of August 1, 2010. Bacterin
anticipates further revenue increases in the third and fourth quarters and
targets a total sales force of 52 sales representatives by year
end.
The
Company reported a net loss of $(2.0) million or $(0.07) per basic share for the
second quarter of 2010, which includes approximately $544,000 of expenses
associated with its reverse merger into a public shell and concurrent capital
raise. This compares to $(668,000) or $(0.03) per basic share for the second
quarter 2009 and a net loss of $(1.6) million or $(0.06) per basic share for the
first quarter 2010.
For the
three months ended June 30, 2010, Bacterin’s gross profit on revenue totaled
$2.7 million, yielding a gross margin of 83.7 percent, compared to 89.9 percent
for the three months ended June 30, 2009 and 77.9 percent for the first quarter
of 2010. The slightly lower gross margins in 2010 were the result of
increased costs associated with a product mix shift.
Operating
expenses during the second quarter of 2010 totaled $4.0 million, an increase of
approximately $1.9 million (90%) over the second quarter of 2009 and an increase
of approximately $804,000 (25%) over the first quarter of 2010. A
significant portion of that increase was attributed to costs associated with the
implementation of a direct sales force as well as an increase in the
compensation expense associated with stock options granted to new
employees. General and administrative costs also increased due to an
increase in insurance coverage and a non recurring legal and professional fee of
$544,000 associated with the Company’s reverse merger into a public shell and
simultaneous financing.
Interest
expense increased in the second quarter of 2010, totaling $782,000 compared to
$105,000 in the second quarter of 2009 and $626,000 in the first quarter of
2010. The shift in quarterly interest expense is attributed to the
creation and subsequent conversion of short term convertible debt
instruments.
For the
six months ended June 30, 2010, Bacterin reported revenues of $5.9 million, a 56
percent increase compared to the same period in 2009. Net loss totaled $(3.7)
million or $ (0.13) per basic share, which included approximately $982,000 in
costs associated with the reverse merger and concurrent capital raise, compared
to $(652,000) or $(0.03) per basic share for the same period in
2009.
As of
June 30, 2010, the Company reported cash and equivalents balance of $3.1
million, accounts receivable of $2.0 million and an inventory balance of $5.9
million. On June 30, 2010 Bacterin raised approximately $7.5 million
through an initial close of a private placement of equity securities, which
included approximately $4.0 million of new capital and the conversion of $3.5
million of short term convertible debt. On July 30, 2010, the Company
closed the capital raise with approximately $1.7 million in additional equity
capital. At June 30, 2010 the Company had convertible notes
outstanding of approximately $1.85 million in principal amount, which it intends
to pay off prior to September 30, 2010.
As of
June 30, 2010, Bacterin had approximately 34.4 million shares of common stock
outstanding and fully diluted shares of 45.0 million (inclusive of all options,
warrants and convertible debt). As a result of the July 30, 2010
close of the Company’s private placement, its common stock outstanding totaled
35.7 million shares with fully diluted shares totaling 46.7
million.
“During
this second quarter, Bacterin reported record revenues and achieved gross
margins above 80 percent while dedicating a great deal of executive management
time and other Company resources on completing a reverse merger into a public
entity and simultaneous equity raise. These achievements demonstrates
the strong organization skills, dedication and depth of talent within our entire
staff,” commented Guy Cook, the Company’s President and CEO.
“We
look forward to aggressively marketing Bacterin’s products in a healthcare
environment that is growing increasingly cost conscious in light of the recent
healthcare changes. Our proprietary products uniquely provide
solutions to several of the industry’s chronic, high cost
problems. Our cost-effective products coupled with a significant
increase in the number of expertly trained members of our biologics sales force
gives us high confidence that Bacterin will achieve profitable revenue growth as
we exit this year from just our core Osteosponge product line
alone. However, the strides we are making in next generation products
and complementary future product launches, as well as the significant commercial
developments within our antimicrobial coatings division suggests, that our
growth rate will accelerate for the foreseeable future.”
Conference
Call Details:
|
Date/Time:
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Thursday,
August 12, 2010—10:00 a.m. (ET)
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Telephone
Number:
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866-804-6925
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International
Dial-In Number:
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857-350-1671
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Participant
Pass code:
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65868515
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Internet
Access:
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www.bacterin.com
or www.earnings.com
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It is
recommended that participants phone-in at least 5 minutes before the call is
scheduled to begin. A replay of the conference call in its entirety
will be available approximately one hour after its completion by dialing
888-286-8010 (U.S.), 617-801-6888 (International) and entering the pass code
11896393 and on the Internet at www.earnings.com.
Investor
Contact:
Yvonne L.
Zappulla
Managing
Director
Grannus
Financial Advisors, Inc.
212-681-4108
Yvonne@GrannusFinancial.com
or
John
Gandolfo
Chief
Financial Officer
Bacterin
International Holdings, Inc.
406-388-0480
Jgandolfo@bacterin.com
About
Bacterin International Holdings, Inc.
Bacterin
International Holdings, Inc. (“the “Company” or “Bacterin”)
develops, manufactures and markets biologics products to domestic and
international markets. Bacterin’s proprietary methods optimize the
growth factors in human allografts to create the ideal stem cell scaffold and
promote bone and other tissue growth. These products are used in a
variety of applications including enhancing fusion in spine surgery, relief of
back pain with a facet joint stabilization, promotion of bone growth in foot and
ankle surgery, promotion of skull healing following neurosurgery and cartilage
regeneration in knee and other joint surgeries.
Bacterin’s
Medical Device division develops anti-microbial coatings based upon proprietary
coating technologies. Bacterin develops, employs, and licenses bioactive
coatings for various medical device applications. Bacterin’s
strategic coating initiatives include antimicrobial coatings designed to inhibit
biofilm formation and microbial contamination on medical devices drug delivery,
local (as opposed to systemic) pain management, and anti-thrombotic factors for
medical device applications. Headquartered in Belgrade, Montana,
Bacterin operates a 32,000 square foot., state-of-the-art, fully compliant and
FDA registered facility, equipped with five "Class 100" clean
rooms. For further information please visit
www.bacterin.com
This
news release contains certain disclosures that may be deemed forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 that are subject to significant risks and uncertainties. Forward-looking
statements include statements that are predictive in nature, that depend upon or
refer to future events or conditions, or that include words such as "continue,"
"efforts," "expects," "anticipates," "intends," "plans," "believes,"
"estimates," "projects," "forecasts," "strategy," "will," "goal," "target,"
"prospects," "potential," "optimistic," "confident," "likely," "probable" or
similar expressions or the negative thereof. These forward-looking statements
are based on current expectations or beliefs and include, but are not limited
to, statements about the Company’s earnings release and its expectations based
on the results of second quarter of 2010, including reductions in expenses and
increases in revenues due to among other things, the anticipated growth of its
sales force. Statements of historical fact also may be deemed to be
forward-looking statements. We caution that these statements by their nature
involve risks and uncertainties, and actual results may differ materially
depending on a variety of important factors, including, among others: the
Company's ability to meet its obligations under existing and anticipated
contractual obligations; the Company's ability to develop, market, sell and
distribute desirable applications, products and services and to protect its
intellectual property; the ability and willingness of third-party manufacturers
to timely and cost-effectively fulfill orders from the Company; the ability of
the Company's customers to pay and the timeliness of such payments, particularly
during recessionary periods; the Company's ability to obtain financing as and
when needed; changes in consumer demands and preferences; the Company's ability
to attract and retain management and employees with appropriate skills and
expertise; the impact of changes in market, legal and regulatory conditions and
in the applicable business environment, including actions of competitors; and
other factors. The Company undertakes no obligation to release publicly any
revisions to any forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events,
except as required by law.
*** Financial Statements
Follow ***
BACTERIN
INTERNATIONAL HOLDINGS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
June
30,
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December
31,
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|||||||
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2010
|
2009
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|||||||
| ASSETS |
(unaudited)
|
|||||||
| Current Assets: | ||||||||
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Cash
and cash equivalents
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$ | 3,127,330 | $ | 54,155 | ||||
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Accounts
receivable, net of allowance of $122,949 and $81,803,
respectively
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1,948,371 | 1,314,418 | ||||||
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Notes
receivable - trade
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476,628 | 270,565 | ||||||
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Notes
receivable from stockholder
|
- | - | ||||||
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Inventories,
net
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5,906,590 | 5,000,713 | ||||||
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Prepaid
and other current assets
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218,753 | 30,000 | ||||||
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11,677,672 | 6,669,851 | ||||||
|
|
||||||||
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Property
& equipment, net
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2,984,837 | 3,248,096 | ||||||
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Intangible
assets, net
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552,641 | 554,268 | ||||||
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Other
assets
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95,930 | 13,675 | ||||||
|
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||||||||
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$ | 15,311,080 | $ | 10,485,890 | ||||
|
|
||||||||
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LIABILITIES
& STOCKHOLDERS' EQUITY
|
||||||||
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Current
Liabilities:
|
||||||||
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Warrant
derivative liability
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$ | 698,111 | $ | 75,231 | ||||
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Accounts
payable
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1,522,232 | 1,403,950 | ||||||
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Accrued
liabilities
|
605,725 | 463,630 | ||||||
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Notes
payable
|
839,942 | 1,126,693 | ||||||
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Notes
payable to stockholders
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161,124 | 183,461 | ||||||
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Current
portion of capital lease obligations
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53,245 | 85,071 | ||||||
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Convertible
notes payable ($1,850,000 net of debt discount of $121,201 as
of June 30, 2010 and $890,000 net of debt discount of $69,214
as of
December 31, 2009) as
of June 30, 2010 and $890,000 net of debt discount of $69,214 as of December
31, 2009)
|
1,728,799 | 820,787 | ||||||
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Current
portion of long-term debt
|
175,748 | 1,202,574 | ||||||
|
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5,784,926 | 5,361,397 | ||||||
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Capital
lease obligation, less current portion
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8,551 | 27,074 | ||||||
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Long-term
debt, less current portion
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1,235,099 | 412,545 | ||||||
|
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7,028,576 | 5,801,016 | ||||||
|
|
||||||||
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Stockholders'
Equity
|
||||||||
|
Preferred
stock, $.0001 par value; 15,000,000 shares authorized; No
shares issued and outstanding
|
- | |||||||
|
Common
stock, $0.00001 par value; 135,000,000 shares authorized
|
|
566 | 565 | |||||
|
Additional
paid-in capital
|
|
29,662,342 | 22,238,210 | |||||
|
Treasury
stock, 117,794 shares
|
(209,073 | ) | (76,566 | ) | ||||
|
Retained
deficit
|
|
(21,171,331 | ) | (17,477,335 | ) | |||
|
|
8,282,504 | 4,684,874 | ||||||
|
|
||||||||
|
$
|
15,311,080 | $ | 10,485,890 | |||||
BACTERIN
INTERNATIONAL HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
Three
Months EndedJune
30,
|
Six
Months EndedJune
30,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
Amount
|
Amount
|
Amount
|
Amount
|
|||||||||||||
|
Revenues
|
||||||||||||||||
|
Tissue
sales
|
$ | 3,187,682 | $ | 1,653,663 | $ | 5,892,658 | $ | 3,638,340 | ||||||||
|
Royalties
and other
|
15,328 | 67,815 | 46,786 | 181,579 | ||||||||||||
|
Total
Revenue
|
3,203,010 | 1,721,478 | 5,939,444 | 3,819,919 | ||||||||||||
|
Cost
of tissue sales
|
519,082 | 174,480 | 1,123,704 | 658,119 | ||||||||||||
|
Gross
Profit
|
2,683,928 | 1,546,998 | 4,815,740 | 3,161,800 | ||||||||||||
|
|
||||||||||||||||
|
Operating
Expenses
|
||||||||||||||||
|
General,
and administrative
|
1,940,772 | 1,409,694 | 3,406,910 | 2,236,956 | ||||||||||||
|
Sales
and Marketing
|
1,683,853 | 407,319 | 3,126,570 | 754,169 | ||||||||||||
|
Depreciation
|
151,661 | 164,680 | 304,162 | 328,254 | ||||||||||||
|
Stock
Options Compensation expense
|
182,833 | 128,047 | 276,429 | 303,839 | ||||||||||||
|
Total
Operating Expenses
|
3,959,119 | 2,109,740 | 7,114,071 | 3,623,218 | ||||||||||||
|
Income
from Operations
|
(1,275,191 | ) | (562,742 | ) | (2,298,331 | ) | (461,418 | ) | ||||||||
|
|
||||||||||||||||
|
Other
Income (Expense)
|
||||||||||||||||
|
Interest
expense
|
(782,116 | ) | (105,427 | ) | (1,407,928 | ) | (201,588 | ) | ||||||||
|
Other
|
8,250 | 431 | 14,174 | 11,298 | ||||||||||||
|
Total
Other Income (Expense)
|
(773,866 | ) | (104,996 | ) | (1,393,754 | ) | (190,290 | ) | ||||||||
|
|
||||||||||||||||
|
Net
Income Before Benefit (Provision)
|
||||||||||||||||
|
for
Income Taxes
|
(2,049,057 | ) | (667,738 | ) | (3,692,085 | ) | (651,708 | ) | ||||||||
|
|
||||||||||||||||
|
Benefit
(Provision) for Income Taxes
|
||||||||||||||||
|
Current
|
- | - | - | - | ||||||||||||
|
Deferred
|
- | - | - | - | ||||||||||||
|
|
||||||||||||||||
|
Net
Income
|
$ | (2,049,057 | ) | $ | (667,738 | ) | $ | (3,692,085 | ) | $ | (651,708 | ) | ||||
|
|
||||||||||||||||
|
Net
income (loss) per share:
|
||||||||||||||||
|
Basic
|
$ | (0.07 | ) | $ | (0.03 | ) | $ | (0.13 | ) | $ | (0.03 | ) | ||||
|
|
||||||||||||||||
|
Shares
used in the computation:
|
||||||||||||||||
|
Basic
|
28,317,764 | 26,250,262 | 28,274,561 | 25,931,398 | ||||||||||||