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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cognyte Software Ltd | NASDAQ:CGNT | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.28 | 4.00% | 7.28 | 6.65 | 8.05 | 7.36 | 7.03 | 7.14 | 233,887 | 01:00:00 |
☒ |
Quarterly Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
|
☐ |
Transition Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
13-3430173
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large Accelerated Filer
☐
|
Accelerated Filer ☐
|
Non-Accelerated Filer ☐
|
Smaller Reporting Company ☒
|
Emerging Growth Company ☐
|
(Do not check if a smaller reporting company)
|
· |
we may obtain additional financing, which may not be available on favorable terms at the time it is needed and which could reduce our operational and strategic flexibility;
|
· |
we may attempt to acquire new products or technologies, and if we are unable to successfully complete these acquisitions or to integrate acquired businesses, products, technologies or employees, we may fail to realize expected benefit or harm our existing business;
|
· |
the use and acceptance of our products depends heavily upon the availability of third-party reimbursement for the procedures in which its products are used;
|
· |
we cannot predict how quickly or how broadly the market will accept our products;
|
· |
that we are subject to changing federal and state regulations that could increase the cost of doing business or impose requirements with which we cannot comply;
|
· |
changes in regulatory policy, particularly at the FDA, might adversely affect our operations;
|
· |
if we are not able to attract, retain and motivate our sales force and expand our distribution channels, our sales and revenues will suffer;
|
· |
the size and resources of our competitors may render it difficult for us to successfully compete in the marketplace;
|
· |
we are primarily dependent on sales from a limited number of product lines and our business would suffer if sales of any of these product lines decline;
|
· |
we could be subject to fines and penalties, or required to temporarily or permanently cease offering products, if we fail to comply with the extensive regulations applicable to the sale and manufacture of medical products;
|
· |
our distributors may not obtain regulatory approvals in a timely basis, or at all;
|
· |
we may not have the resources to successfully market our products, which would adversely affect our business and results of operations;
|
· |
if we cannot attract and retain our key personnel and management team, we may not be able to manage and operate successfully, and we may not be able to meet our strategic objectives;
|
· |
if third parties claim that we infringe upon their intellectual property rights, we may incur liabilities and costs and may have to redesign or discontinue selling the affected product;
|
· |
if we are unable to adequately protect our intellectual property rights, we may not be able to compete effectively;
|
· |
product liability claims could adversely affect our business and results of operations;
|
· |
security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer;
|
· |
the loss or interruption of materials from any of our key suppliers could delay the manufacture of our products, which would limit our ability to generate sales and revenues;
|
· |
if we are not able to maintain sufficient quality controls, regulatory approvals of our products by the European Union, Canada, the FDA or other relevant authorities could be delayed or denied and our sales and revenues will suffer;
|
· |
if we are not able to acquire or license other products, our business and future growth prospects could suffer;
|
· |
our business strategy relies on assumptions about the market for our products, which, if incorrect, would adversely affect our business prospects and profitability;
|
· |
we derive a significant portion of our sales and revenues from outside of the U.S. and we are subject to the risks of international operations;
|
· |
failure to comply with the U.S. Foreign Corrupt Practices Act could subject us to, among other things, penalties and legal expenses that could harm our reputation and have a material adverse effect on our business, financial condition and operating results;
|
· |
our stock is thinly traded and you may find it difficult to sell your investment in our stock at quoted prices;
|
· |
our stock price may fluctuate and be volatile;
|
· |
future sales of our common stock in the public market could lower our share price;
|
· |
we are exempt from certain corporate governance requirements due to our status as a "controlled company" within the meaning of the Nasdaq rules, including certain rules related to board independence;
|
· |
our corporate documents contain provisions that could discourage, delay or prevent a change in control of the company; and
|
· |
we do not intend to declare dividends on our stock in the foreseeable future.
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
September 30, 2017
|
December 31, 2016
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
15,375,756
|
$
|
9,369,624
|
||||
Short-term investments
|
10,656,566
|
13,573,057
|
||||||
Accounts receivable, net
|
7,178,811
|
6,770,838
|
||||||
Inventories
|
7,375,504
|
7,235,043
|
||||||
Other
|
987,982
|
571,527
|
||||||
Total current assets
|
41,574,619
|
37,520,089
|
||||||
Property, plant, and equipment, net
|
2,466,344
|
2,115,316
|
||||||
Goodwill
|
19,150,849
|
18,749,888
|
||||||
Other intangible assets, net
|
7,969,736
|
9,482,578
|
||||||
Long-term investments
|
719,417
|
5,344,004
|
||||||
Equity method investment
|
2,000,000
|
-
|
||||||
Deferred tax assets and other
|
160,716
|
163,427
|
||||||
Total assets
|
$
|
74,041,681
|
$
|
73,375,302
|
September 30, 2017
|
December 31, 2016
|
|||||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
2,051,979
|
$
|
2,689,035
|
||||
Income taxes payable
|
249,690
|
113,191
|
||||||
Note payable
|
198,174
|
-
|
||||||
Accrued liabilities:
|
||||||||
Compensation
|
3,889,783
|
4,670,640
|
||||||
Deferred revenue
|
759,786
|
597,524
|
||||||
Accrued legal fees
|
56,241
|
34,667
|
||||||
Accrued foreign and domestic sales tax/VAT
|
476,355
|
327,992
|
||||||
Accrued employee expenses
|
92,134
|
88,557
|
||||||
Accrued vendor payables
|
826,614
|
190,000
|
||||||
Other
|
358,434
|
197,056
|
||||||
Total current liabilities
|
8,959,190
|
8,908,662
|
||||||
Accrued pension liability
|
244,940
|
308,918
|
||||||
Deferred rent
|
600,092
|
639,019
|
||||||
Note payable – long term
|
289,387
|
-
|
||||||
Other
|
329,549
|
278,780
|
||||||
Total liabilities
|
10,423,158
|
10,135,379
|
||||||
Shareholders’ equity:
|
||||||||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; none issued or outstanding at September 30, 2017 and December 31, 2016, respectively
|
-
|
-
|
||||||
Common stock $0.01 par value; 100,000,000 shares authorized
,
60,907,834
and
60,436,548 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively
|
609,080
|
604,367
|
||||||
Additional paid-in capital
|
145,660,671
|
144,430,382
|
||||||
Accumulated deficit
|
(82,068,028
|
)
|
(81,005,654
|
)
|
||||
Accumulated other comprehensive loss
|
(583,200
|
)
|
(789,172
|
)
|
||||
|
||||||||
Total shareholders’ equity
|
63,618,523
|
63,239,923
|
||||||
Total liabilities and shareholders’ equity
|
$
|
74,041,681
|
$
|
73,375,302
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Net sales
|
$
|
13,765,065
|
$
|
13,407,611
|
$
|
40,779,414
|
$
|
38,618,826
|
||||||||
Cost of goods sold
|
4,370,408
|
4,369,574
|
13,522,655
|
12,257,933
|
||||||||||||
Gross profit
|
9,394,657
|
9,038,037
|
27,256,759
|
26,360,893
|
||||||||||||
Operating expenses
|
||||||||||||||||
General and administrative
|
2,055,763
|
1,558,090
|
6,250,246
|
5,087,871
|
||||||||||||
Research and development
|
1,234,468
|
1,218,669
|
3,556,977
|
3,255,603
|
||||||||||||
Selling and marketing
|
5,697,552
|
5,203,477
|
16,699,590
|
16,272,678
|
||||||||||||
One-time costs
|
-
|
(53,887
|
)
|
-
|
2,257,654
|
|||||||||||
Amortization of intangible assets
|
601,604
|
590,858
|
1,780,803
|
1,772,574
|
||||||||||||
9,589,387
|
8,517,207
|
28,287,616
|
28,646,380
|
|||||||||||||
Operating income (loss)
|
(194,730
|
)
|
520,830
|
(1,030,857
|
)
|
(2,285,487
|
)
|
|||||||||
Other income (expense)
|
||||||||||||||||
Interest income (expense)
|
56,745
|
(380,679
|
)
|
164,678
|
(1,146,941
|
)
|
||||||||||
Other income
|
1,001
|
-
|
7,365
|
-
|
||||||||||||
Foreign currency exchange gain (loss)
|
3,020
|
(14,905
|
)
|
49,213
|
(40,311
|
)
|
||||||||||
60,766
|
(395,584
|
)
|
221,256
|
(1,187,252
|
)
|
|||||||||||
Income (loss) before income taxes
|
(133,964
|
)
|
125,246
|
(809,601
|
)
|
(3,472,739
|
)
|
|||||||||
Income tax expense
|
26,125
|
18,932
|
141,276
|
52,122
|
||||||||||||
Net income (loss)
|
$
|
(160,089
|
)
|
$
|
106,314
|
$
|
(950,877
|
)
|
$
|
(3,524,861
|
)
|
|||||
Basic net income (loss) per common share
|
$
|
0.00
|
$
|
0.00
|
$
|
(0.02
|
)
|
$
|
(0.14
|
)
|
||||||
Diluted net income (loss) per common share
|
$
|
0.00
|
$
|
0.00
|
$
|
(0.02
|
)
|
$
|
(0.14
|
)
|
||||||
Weighted average common shares outstanding:
|
||||||||||||||||
Basic
|
60,126,357
|
25,633,172
|
59,888,906
|
25,509,584
|
||||||||||||
Diluted
|
60,126,357
|
25,748,844
|
59,888,906
|
25,509,584
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Net income (loss)
|
$
|
(160,089
|
)
|
$
|
106,314
|
$
|
(950,877
|
)
|
$
|
(3,524,861
|
)
|
|||||
Other comprehensive income (loss), net of tax:
|
||||||||||||||||
Foreign currency translation adjustments
|
68,184
|
(4,458
|
)
|
198,956
|
(29,080
|
)
|
||||||||||
Unrealized gain on available-for-sale investments
|
9,163
|
-
|
17,023
|
-
|
||||||||||||
Pension adjustments
|
(4,398
|
)
|
(41
|
)
|
(10,007
|
)
|
3,876
|
|||||||||
Total other comprehensive income (loss), net of tax
|
72,949
|
(4,499
|
)
|
205,972
|
(25,204
|
)
|
||||||||||
Comprehensive income (loss)
|
$
|
(87,140
|
)
|
$
|
101,815
|
$
|
(744,905
|
)
|
$
|
(3,550,065
|
)
|
Common Stock
|
Additional
Paid-in
|
Accumulated
|
Accumulated
Other
|
Total
Shareholders'
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Income (Loss)
|
Equity
|
|||||||||||||||||||
Balance at December 31, 2016
|
60,436,548
|
$
|
604,367
|
$
|
144,430,382
|
$
|
(81,005,654
|
)
|
$
|
(789,172
|
)
|
$
|
63,239,923
|
|||||||||||
Share-based compensation and vesting of restricted stock
|
474,336
|
4,743
|
1,126,739
|
-
|
-
|
1,131,482
|
||||||||||||||||||
Proceeds from exercise of stock options, net of shares exchanged
|
(3,050
|
)
|
(30
|
)
|
(7,947
|
)
|
-
|
-
|
(7,977
|
)
|
||||||||||||||
Adoption of ASU 2016-09
|
-
|
-
|
111,497
|
(111,497
|
)
|
-
|
-
|
|||||||||||||||||
Comprehensive loss
|
-
|
-
|
-
|
(950,877
|
)
|
205,972
|
(744,905
|
)
|
||||||||||||||||
Balance at September 30, 2017
|
60,907,834
|
$
|
609,080
|
$
|
145,660,671
|
$
|
(82,068,028
|
)
|
$
|
(583,200
|
)
|
$
|
63,618,523
|
Nine Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(950,877
|
)
|
$
|
(3,524,861
|
)
|
||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||
Depreciation and amortization
|
2,336,095
|
2,364,673
|
||||||
Share-based compensation expense
|
1,131,482
|
440,000
|
||||||
Amortization of premium on available-for-sale securities
|
95,727
|
-
|
||||||
Deferred rent
|
(23,840
|
)
|
6,836
|
|||||
Amortization of discount on related party debt
|
-
|
836,288
|
||||||
Proceeds from restricted stock exchanged for taxes
|
(17,690
|
)
|
(57,343
|
)
|
||||
Other
|
8,003
|
(59,048
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
270,965
|
1,399,070
|
||||||
Inventories
|
57,344
|
(1,637,619
|
)
|
|||||
Other current assets
|
(154,906
|
)
|
265,395
|
|||||
Accounts payable
|
(898,771
|
)
|
394,573
|
|||||
Interest payable
|
-
|
261,505
|
||||||
Accrued compensation
|
(1,035,278
|
)
|
1,796,568
|
|||||
Accrued liabilities, other
|
657,950
|
213,387
|
||||||
Accrued pension liability
|
(99,389
|
)
|
(45,463
|
)
|
||||
Deferred revenue
|
250,174
|
220,789
|
||||||
Net cash provided by operating activities
|
1,626,989
|
2,874,750
|
||||||
Cash flows from investing activities:
|
||||||||
Proceeds from maturity of available-for-sale securities
|
9,900,000
|
-
|
||||||
Purchases of available-for-sale securities
|
(2,438,322
|
)
|
-
|
|||||
Purchase of equity method investment
|
(2,000,000
|
)
|
-
|
|||||
Purchases of property, plant and equipment
|
(680,416
|
)
|
(232,331
|
)
|
||||
Acquisition of business, net of cash acquired
|
(196,560
|
)
|
-
|
|||||
Net cash provided by (used in) investing activities
|
4,584,702
|
(232,331
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Borrowings from line of credit
|
3,033,385
|
2,646,500
|
||||||
Repayments of line of credit
|
(3,033,385
|
)
|
(2,646,500
|
)
|
||||
Payments of note payable
|
(7,354
|
)
|
-
|
|||||
Payments of secured borrowings
|
(180,755
|
)
|
-
|
|||||
Financing costs
|
-
|
(375,839
|
)
|
|||||
Proceeds from exercise of stock options
|
9,713
|
-
|
||||||
Net cash used in financing activities
|
(178,396
|
)
|
(375,839
|
)
|
||||
Effect of exchange rates on cash and cash equivalents
|
(27,163
|
)
|
(4,949
|
)
|
||||
Net increase in cash and cash equivalents
|
6,006,132
|
2,261,631
|
||||||
Cash and cash equivalents at beginning of period
|
9,369,624
|
1,976,594
|
||||||
Cash and cash equivalents at end of period
|
$
|
15,375,756
|
$
|
4,238,225
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the period for income tax
|
$
|
152,941
|
$
|
35,424
|
||||
Cash paid during the period for interest
|
$
|
13,741
|
$
|
47,754
|
||||
Non-cash financing activities:
|
||||||||
Note payable issued in conjunction with acquisition of business
|
$
|
617.740
|
-
|
|||||
Deferred financing costs in AP/Accruals
|
-
|
$
|
975,061
|
Cash and cash equivalents
|
$
|
83,891
|
||
Accounts receivable
|
860,734
|
|||
Inventory
|
186,193
|
|||
Tangible fixed assets
|
172,241
|
|||
Customer relationships
|
268,000
|
|||
Goodwill
|
398,190
|
|||
Total assets acquired
|
$
|
1,969,249
|
||
Accounts payable
|
$
|
1,032,589
|
||
Deferred tax liability
|
50,920
|
|||
Total liabilities assumed
|
$
|
1,083,509
|
||
Total Purchase Price
|
$
|
885,740
|
Amount
|
Weighted Average Life-Years
|
|||||||
Customer relationships
|
$
|
268,000
|
3
|
September 30, 2017
|
December 31, 2016
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Remaining
Useful Life
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Remaining
Useful Life
|
|||||||||||||||||||
Developed technology
|
$
|
6,200,000
|
$
|
2,214,000
|
4.50
|
$
|
6,200,000
|
$
|
1,550,000
|
5.25
|
||||||||||||||
Patents
|
5,653,000
|
5,631,000
|
7.50
|
5,653,000
|
5,616,000
|
8.25
|
||||||||||||||||||
Trademarks and trade names
|
190,000
|
82,000
|
7.50
|
190,000
|
74,000
|
8.25
|
||||||||||||||||||
Customer relationships
|
7,538,000
|
3,684,000
|
2.52
|
7,270,000
|
2,590,000
|
3.25
|
||||||||||||||||||
$
|
19,581,000
|
$
|
11,611,000
|
$
|
19,313,000
|
$
|
9,830,000
|
|||||||||||||||||
Accumulated amortization
|
11,611,000
|
9,830,000
|
||||||||||||||||||||||
Net book value of amortizable intangible assets
|
$
|
7,970,000
|
3.47
|
$
|
9,483,000
|
4.23
|
October 1, 2017 through December 31, 2017
|
$
|
609,000
|
||
2018
|
2,437,000
|
|||
2019
|
2,430,000
|
|||
2020
|
1,307,000
|
|||
2021
|
894,000
|
|||
Thereafter
|
293,000
|
|||
Total
|
$
|
7,970,000
|
· |
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
· |
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
· |
Level 3: Significant
unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions.
|
September 30, 2017
|
||||||||||||||||||||||||||||
Adjusted Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
Cash and Cash
Equivalents
|
Short-Term
Investments
|
Long-Term
Investments
|
||||||||||||||||||||||
Cash
|
$
|
4,005,930
|
$
|
-
|
$
|
-
|
$
|
4,005,930
|
$
|
4,005,930
|
$
|
-
|
$
|
-
|
||||||||||||||
Level 1:
|
||||||||||||||||||||||||||||
Money market funds
|
11,369,826
|
-
|
-
|
11,369,826
|
11,369,826
|
-
|
-
|
|||||||||||||||||||||
Subtotal
|
11,369,826
|
-
|
-
|
11,369,826
|
11,369,826
|
-
|
-
|
|||||||||||||||||||||
Level 2:
|
||||||||||||||||||||||||||||
Certificates of deposit
|
2,160,000
|
-
|
(826
|
)
|
2,159,175
|
-
|
1,439,758
|
719,417
|
||||||||||||||||||||
Commercial paper
|
1,194,342
|
114
|
-
|
1,194,456
|
-
|
1,194,456
|
-
|
|||||||||||||||||||||
Corporate notes/bonds
|
6,025,967
|
-
|
(1,715
|
)
|
6,024,252
|
-
|
6,024,252
|
-
|
||||||||||||||||||||
U.S. government agencies
|
2,000,000
|
-
|
(1,900
|
)
|
1,998,100
|
-
|
1,998,100
|
-
|
||||||||||||||||||||
Subtotal
|
11,380,309
|
-
|
(4,441
|
)
|
11,375,983
|
-
|
10,656,566
|
719,417
|
||||||||||||||||||||
Total
|
$
|
26,756,065
|
$
|
114
|
$
|
(4,441
|
)
|
$
|
26,751,739
|
$
|
15,375,756
|
$
|
10,656,566
|
$
|
719,417
|
September 30, 2017
|
December 31, 2016
|
|||||||
Raw materials
|
$
|
4,437,000
|
$
|
4,483,000
|
||||
Work-in-process
|
180,000
|
462,000
|
||||||
Finished goods
|
2,758,000
|
2,290,000
|
||||||
Total inventory
|
$
|
7,375,000
|
$
|
7,235,000
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Net income (loss)
|
$
|
(160,089
|
)
|
$
|
106,314
|
$
|
(950,877
|
)
|
$
|
(3,524,861
|
)
|
|||||
Weighted average shares outstanding - basic
|
60,126,357
|
25,633,172
|
59,888,906
|
25,509,584
|
||||||||||||
Dilutive impact of common stock equivalents outstanding
|
-
|
115,672
|
-
|
-
|
||||||||||||
Weighted Averages shares used to compute diluted net income (loss) per share
|
60,126,357
|
25,748,844
|
59,888,906
|
25,509,584
|
||||||||||||
Net income (loss) per share – basic
|
$
|
0.00
|
$
|
0.00
|
$
|
(0.02
|
)
|
$
|
(0.14
|
)
|
||||||
Net income (loss) per share – diluted
|
$
|
0.00
|
$
|
0.00
|
$
|
(0.02
|
)
|
$
|
(0.14
|
)
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Restricted stock
|
774,647
|
305,432
|
774,647
|
899,333
|
||||||||||||
Common stock options
|
2,618,768
|
1,549,905
|
2,618,769
|
1,699,905
|
||||||||||||
Common stock warrants
|
-
|
376,123
|
-
|
376,123
|
||||||||||||
3,393,415
|
2,231,460
|
3,393,415
|
2,975,361
|
2017
|
||||
Expected life in years
|
3.00
|
|||
Risk-free interest rate
|
1.45
|
%
|
||
Expected volatility
|
66.89
|
%
|
||
Expected dividend yield
|
0
|
%
|
||
Weighted-average grant date fair value
|
$
|
0.74
|
Number of
shares
|
Weighted
average
exercise price
|
Weighted
average
remaining
life in years
|
Aggregate
intrinsic
value
|
|||||||||||||
Outstanding at December 31, 2016
|
1,680,990
|
$
|
3.54
|
6.55
|
$
|
752,290
|
||||||||||
Options granted
|
1,042,809
|
1.65
|
||||||||||||||
Options exercised
|
(7,211
|
)
|
1.35
|
|||||||||||||
Options surrendered
|
(97,820
|
)
|
4.53
|
|||||||||||||
Outstanding at September 30, 2017
|
2,618,768
|
$
|
2.76
|
6.27
|
$
|
2,151,629
|
||||||||||
Exercisable at September 30, 2017
|
1,095,392
|
$
|
4.56
|
3.44
|
$
|
492,887
|
Number of
restricted
shares
|
Weighted
average
grant date
fair value
|
Weighted
average
remaining
life in years
|
Aggregate
intrinsic
value
|
|||||||||||||
Balance at December 31, 2016
|
992,548
|
$
|
1.30
|
1.35
|
$
|
1,995,021
|
||||||||||
Shares granted
|
542,541
|
1.67
|
||||||||||||||
Shares vested
|
(692,237
|
)
|
1.39
|
1,772,127
|
||||||||||||
Shares surrendered
|
(68,205
|
)
|
1.56
|
|||||||||||||
Balance at September 30, 2017
|
774,647
|
$
|
1.46
|
1.72
|
$
|
1,983,096
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Gross service cost
|
$
|
26,000
|
$
|
28,000
|
$
|
75,000
|
$
|
83,000
|
||||||||
Interest cost
|
25,000
|
29,000
|
71,000
|
87,000
|
||||||||||||
Expected return on assets
|
(23,000
|
)
|
(24,000
|
)
|
(65,000
|
)
|
(72,000
|
)
|
||||||||
Amortization
|
(1,000
|
)
|
(2,000
|
)
|
(1,000
|
)
|
(5,000
|
)
|
||||||||
Net periodic retirement cost
|
$
|
27,000
|
$
|
31,000
|
$
|
80,000
|
$
|
93,000
|
United
States
|
All Other Foreign
Countries (1)
|
Consolidated
|
||||||||||
Three months ended September 30, 2017
|
$
|
10,415,000
|
$
|
3,350,000
|
$
|
13,765,000
|
||||||
Three months ended September 30, 2016
|
$
|
10,701,000
|
$
|
2,707,000
|
$
|
13,408,000
|
||||||
Nine months ended September 30, 2017
|
$
|
29,990,000
|
$
|
10,789,000
|
$
|
40,779,000
|
||||||
Nine months ended September 30, 2016
|
$
|
28,877,000
|
$
|
9,742,000
|
$
|
38,619,000
|
(1)
|
No other country accounts for 10% of more of the consolidated net sales.
|
United States
|
United Kingdom/
The Netherlands
|
Consolidated
|
||||||||||
September 30, 2017
|
$
|
1,805,000
|
$
|
661,000
|
$
|
2,466,000
|
||||||
December 31, 2016
|
$
|
1,676,000
|
$
|
439,000
|
$
|
2,115,000
|
Expense Adjustments
|
||||||||||||||||||||||||
Three-Months Ended
|
GAAP
|
Share-
based
Expense
|
Long-
term
Incentive
Plan
|
Depreciation
|
Amortization
|
Non-GAAP
|
||||||||||||||||||
September 30, 2017
|
||||||||||||||||||||||||
Gross profit
|
$
|
9,394,657
|
$
|
5,257
|
$
|
-
|
$
|
54,271
|
$
|
-
|
$
|
9,454,185
|
||||||||||||
% of net sales
|
68.3
|
%
|
68.7
|
%
|
||||||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||
General and administrative
|
2,055,763
|
(365,780
|
)
|
-
|
(51,026
|
)
|
-
|
1,638,957
|
||||||||||||||||
Research and development
|
1,234,468
|
(11,577
|
)
|
-
|
(3,571
|
)
|
-
|
1,219,320
|
||||||||||||||||
Selling and marketing
|
5,697,552
|
(45,548
|
)
|
-
|
(81,405
|
)
|
-
|
5,570,599
|
||||||||||||||||
Amortization
|
601,604
|
-
|
-
|
-
|
(601,604
|
)
|
-
|
|||||||||||||||||
Total operating expenses
|
$
|
9,589,387
|
$
|
(422,905
|
)
|
$
|
-
|
$
|
(136,002
|
)
|
$
|
(601,604
|
)
|
$
|
8,428,876
|
|||||||||
Operating income (loss)
|
$
|
(194,730
|
)
|
$
|
428,162
|
$
|
-
|
$
|
190,273
|
$
|
601,604
|
$
|
1,025,309
|
|||||||||||
September 30, 2016
|
||||||||||||||||||||||||
Gross profit
|
$
|
9,038,037
|
$
|
5,375
|
$
|
-
|
$
|
41,938
|
$
|
-
|
$
|
9,085,350
|
||||||||||||
% of net sales
|
67.4
|
%
|
69.9
|
%
|
||||||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||
General and administrative
|
1,558,090
|
(174,385
|
)
|
17,534
|
(55,408
|
)
|
-
|
1,345,831
|
||||||||||||||||
Research and development
|
1,218,669
|
(7,526
|
)
|
-
|
(1,779
|
)
|
-
|
1,209,364
|
||||||||||||||||
Selling and marketing
|
5,203,477
|
(27,714
|
)
|
-
|
(89,427
|
)
|
-
|
5,086,336
|
||||||||||||||||
Amortization
|
590,858
|
-
|
-
|
-
|
(590,858
|
)
|
-
|
|||||||||||||||||
One-time costs
|
(53,887
|
)
|
-
|
-
|
-
|
-
|
(53,887
|
)
|
||||||||||||||||
Total operating expenses
|
$
|
8,517,207
|
$
|
(209,625
|
)
|
$
|
17,534
|
$
|
(146,614
|
)
|
$
|
(590,858
|
)
|
$
|
7,587,644
|
|||||||||
Operating income (loss)
|
$
|
520,830
|
$
|
215,000
|
$
|
(17,534
|
)
|
$
|
188,552
|
$
|
590,858
|
$
|
1,497,706
|
|||||||||||
One-time costs
|
(53,887
|
)
|
(53,887
|
)
|
||||||||||||||||||||
Cash operating income excluding one-time costs
|
$
|
1,443,819
|
Expense Adjustments
|
||||||||||||||||||||||||
Nine-Months Ended
|
GAAP
|
Share-
based
Expense
|
Long-
term
Incentive
Plan
|
Depreciation
|
Amortization
|
Non-GAAP
|
||||||||||||||||||
September 30, 2017
|
||||||||||||||||||||||||
Gross profit
|
$
|
27,256,759
|
$
|
17,072
|
$
|
-
|
$
|
140,406
|
$
|
-
|
$
|
27,414,237
|
||||||||||||
% of net sales
|
66.8
|
%
|
67.2
|
%
|
||||||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||
General and administrative
|
6,250,246
|
(971,688
|
)
|
-
|
(150,210
|
)
|
-
|
5,128,348
|
||||||||||||||||
Research and development
|
3,556,977
|
(30,975
|
)
|
-
|
(8,905
|
)
|
-
|
3,517,097
|
||||||||||||||||
Selling and marketing
|
16,699,590
|
(111,747
|
)
|
-
|
(255,770
|
)
|
-
|
16,332,073
|
||||||||||||||||
Amortization
|
1,780,803
|
-
|
-
|
-
|
(1,780,803
|
)
|
-
|
|||||||||||||||||
Total operating expenses
|
$
|
28,287,616
|
$
|
(1,114,410
|
)
|
-
|
(414,885
|
)
|
$
|
(1,780,803
|
)
|
$
|
24,977,518
|
|||||||||||
Operating income (loss)
|
$
|
(1,030,857
|
)
|
$
|
1,131,482
|
$
|
-
|
$
|
555,291
|
$
|
1,780,803
|
$
|
2,436,719
|
|||||||||||
September 30, 2016
|
||||||||||||||||||||||||
Gross profit
|
$
|
26,360,893
|
$
|
27,629
|
$
|
-
|
$
|
135,321
|
$
|
-
|
$
|
26,523,743
|
||||||||||||
% of net sales
|
68.3
|
%
|
68.7
|
%
|
||||||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||
General and administrative
|
5,087,871
|
(314,838
|
)
|
64,404
|
(155,208
|
)
|
-
|
4,682,229
|
||||||||||||||||
Research and development
|
3,255,603
|
(16,191
|
)
|
-
|
(2,960
|
)
|
-
|
3,236,452
|
||||||||||||||||
Selling and marketing
|
16,272,678
|
(81,342
|
)
|
-
|
(298,711
|
)
|
-
|
15,892,625
|
||||||||||||||||
Amortization
|
1,772,574
|
-
|
-
|
-
|
(1,772,573
|
)
|
-
|
|||||||||||||||||
One-time costs
|
2,257,654
|
-
|
-
|
-
|
-
|
2,257,654
|
||||||||||||||||||
Total operating expenses
|
$
|
28,646,380
|
$
|
(412,371
|
)
|
$
|
64,404
|
$
|
(456,879
|
)
|
$
|
(1,772,573
|
)
|
$
|
26,068,961
|
|||||||||
Operating income (loss)
|
$
|
(2,285,487
|
)
|
$
|
440,000
|
$
|
(64,404
|
)
|
$
|
592,100
|
$
|
1,772,573
|
$
|
454,782
|
||||||||||
One-time costs
|
2,257,654
|
|
2,257,654
|
|||||||||||||||||||||
Cash operating income excluding one-time costs
|
$
|
2,712,436
|
Exhibit
No.
|
Exhibit
|
Method of Filing
|
||
3.1 | Amended and Restated Certificate of Incorporation of Cogentix Medical, Inc. |
Filed herewith
|
||
3.2 |
Amended and Restated By-Laws of Cogentix Medical, Inc.
|
Filed herewith
|
||
10.1*
|
Fifth Amendment dated May 9, 2017, to the Supply Agreement, dated December 6, 2007, by and between Cogentix Medical, Inc. and Covidien Sales LLC
|
Incorporated by reference to Exhibit 10.8 to Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed with the SEC on May 12, 2017 (File No. 000-20970)
|
||
31.1 |
Certification by the PEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
||
Certification by the PFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
|||
Certification by the PEO pursuant to Section 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
|||
Certification by the PFO pursuant to Section 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
|||
101
|
Financial Statements for the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2017, formatted in Extensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statement of Operations; (iii) Condensed Consolidated Statement of Comprehensive Income (Loss); (iv) Condensed Consolidated Statement of Shareholders’ Equity; (v) Condensed Consolidated Statement of Cash Flows and (vi) Notes to Condensed Consolidated Financial Statements
|
Filed herewith
|
*
|
Portions of this exhibit have been exhibit have been omitted pursuant to a request for confidential treatment
|
COGENTIX MEDICAL, INC.
|
|||
Date: November 13, 2017
|
By:
/s/ DARIN HAMMERS
Darin Hammers
President and Chief Executive Officer
(Principal Executive Officer)
|
||
Date: November 13, 2017
|
By:
/s/ BRETT REYNOLDS
Brett Reynolds
Senior Vice President, Chief Financial Officer and Corporate Secretary
(Principal Financial and Accounting Officer)
|
1 Year Cognyte Software Chart |
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