UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C.  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):  July 10, 2014
 
BSD MEDICAL CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
001-32526
75-1590407
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

2188 West 2200 South
Salt Lake City, Utah 84119
(Address of principal executive offices, including Zip Code)
 
Registrant’s telephone number, including area code:  (801) 972-5555
 
N/A
(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:
 
 
 
 o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
 o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
 o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
 o  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.
 
On July 10, 2014, BSD Medical Corporation (the “Company”) issued a press release reporting financial results for its fiscal quarter ended May 31, 2014.  A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
 
Item 9.01  Financial Statements and Exhibits.
 
(d) Exhibits.
 
Exhibit No.
  
Description
99.1
  
Press release dated July 10, 2014 regarding financial results for the fiscal quarter ended May 31, 2014
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
BSD MEDICAL CORPORATION
Date:  July 11, 2014
  
   
 
By:      /s/ William S. Barth
 
Name:  William S. Barth
 
Title:    Chief Financial Officer
 
 
 
 
 
 
 
 


Exhibit 99.1


 
Investor Contact:
BSD MEDICAL CORPORATION     
Tricia Ross
2188 West 2200 South                                                 
Financial Profiles
Salt Lake City, Utah 84119-1326                        
310-622-8226
NASDAQ:BSDM
tross@finprofiles.com

For Immediate Release

BSD Medical Announces Third Quarter Fiscal 2014 Financial Results
 
Total Revenues Increased 53% with 50% Increase in Disposable Antennae Sales for the First Nine Months of 2014;
 
Company to Hold Investment Community Conference Call Today at 2:00 p.m. Eastern
 
SALT LAKE CITY -- BSD Medical Corporation (NASDAQ: BSDM) (Company or BSD) (www.BSDMedical.com), a leading provider of medical systems that treat cancer and benign diseases using heat therapy, today reported financial results for the three and nine months ended May 31, 2014.
 
Third Quarter of Fiscal 2014 Highlights (all comparisons with the third quarter of fiscal 2013)
 
●  
Total revenues of $1.3 million decreased 5% as a result of large, initial orders from Terumo Europe NV (Terumo) in the prior year
 
●  
Operating expenses declined 3% to $2.5 million
 
●  
Net loss remained relatively unchanged at $2.0 million
 
Year to Date Fiscal 2014 Highlights (all comparisons with the first nine months of fiscal 2013)
 
●  
Total revenues increased 53% to $4.3 million
 
●  
Gross margin improved to 46% from 42%
 
●  
Operating expenses declined 4% to $6.9 million
 
●  
Net loss improved to $5.0 million from a net loss of $6.0 million
 
●  
Current total sales backlog stands at approximately $917,500
 
BSD reported cash and equivalents of $5.2 million and no long-term debt at May 31, 2014. Subsequently, the Company raised approximately $5.2 million in gross proceeds in a registered direct offering, which was completed July 1, 2014, strengthening the balance sheet.
 
Management Commentary
 
“Our healthy growth in revenues for the first nine months of this year has been driven by the strategic roll-out of our microwave ablation MicroThermX® system by Terumo and increasing sales of our SynchroWave disposable antennas. Revenues were slightly lower in the third quarter due to the large number of MTX systems shipped in the same quarter last year following the signing of our distribution agreement with Terumo; however, we continue to see robust interest and adoption from our partnership, as evidenced by the 50% growth in total antennae sales through the first nine months of the year,” said Harold Wolcott, President of BSD Medical. “In addition, year-to-date we’ve sold a total of six hyperthermia systems, including three to our distributor in Taiwan with the anticipated sale of a fourth system to that distributor in the current quarter.
 
“While growing revenues we have kept tight control over operating expenses and reduced our year-to-date net loss by more than $1 million. With our costs in check and recently strengthened cash position, we are well positioned for continued growth,” added Mr. Wolcott. “Terumo is an excellent distribution partner for the MTX product line, with exclusive license to sell in more than 100 countries in the greater Europe area, and we are seeing growing interest in that part of the world. There is an emerging body of evidence and acceptance of the use of microwave ablation technology in the treatment of cancer, both domestically and abroad, which bodes well for BSD’s future.”
 
 
 
 
Third Quarter and Year to Date Fiscal 2014 Operating Summary
 
BSD reported total revenues of $1,253,189 for the third quarter of fiscal 2014, a decrease of 5% from $1,316,713 for the third quarter of fiscal year 2013. This decline was due primarily to the large number of MTX systems shipped in the prior year three month period following the signing of our MTX distribution partner in Europe, and was largely offset by the sale of two hyperthermia systems compared with one in the prior year period. The Company has a current sales backlog of $917,500.
 
Gross margin was $505,270, or 40% of total revenues, for the third quarter of fiscal 2014, compared with $600,302, or 46% of total revenues, for the same period last year. Lower gross margin as a percent of revenues resulted from the effect of the sale of one hyperthermia system with a lower than normal gross margin.
 
Operating expenses declined 3% to $2.5 million for the third quarter of fiscal 2014 from $2.6 million for the comparable period last year. Research and development expenses declined 8% to $559,568 for the third quarter of fiscal 2014, from $607,960 for the third quarter of fiscal 2013. Selling, general and administrative expenses declined 2% to $1.9 million from $2.0 million for the third quarter of fiscal 2013.
 
The Company reported a net loss of $2.0 million, or $0.06 per share, for the third quarter of fiscal 2014, essentially flat with the third quarter of fiscal 2013.
 
Total revenues for the first nine months of fiscal 2014 increased 53% to $4.3 million, from $2.8 million for the first nine months of 2013. Gross margin was $2.0 million, or 46% of total revenues, for the nine months ended May 31, 2014, compared with $1.2 million, or 42% of total revenues, for the nine months ended May 31, 2013. Operating expenses decreased 4% to $6.9 million from $7.3 million in the prior year period. Net loss for the first nine months of fiscal 2014 declined to under $5.0 million dollars, or $0.15 per share, for the nine months of fiscal 2014, from a net loss of over $6.0 million, or $0.20 per share, for the nine months of fiscal 2013.
 
Conference Call
 
Management will hold a conference call today at 2:00 p.m. Eastern time/12:00 p.m. Mountain time to discuss financial results and provide a business update. Individuals interested in participating in the conference call may do so by visiting the Investor Relations section of the Company's website at www.BSDMedical.com or by dialing 800.860.2442 from the United States, or 412.858.4600 from outside the United States, and referencing “BSD Medical.” A telephone replay will be available through July 18, 2014, by dialing 877.344.7529 from the United States, or 412.317.0088 from outside the United States, and entering conference ID 10048867.
 
About BSD Medical Corporation
 
BSD Medical Corporation develops, manufactures, markets and services systems to treat cancer and benign diseases using heat therapy, which is delivered using focused radiofrequency (RF) and microwave energy. BSD’s product lines include both hyperthermia and ablation treatment systems. BSD’s MicroThermX microwave ablation system has been developed as a stand-alone therapy to employ precision-guided microwave energy to ablate (destroy) soft tissue. The Company has developed extensive intellectual property, multiple products in the market and established distribution in the United States, Europe and Asia. Certain of the Company’s products have received regulatory approvals and clearances in the United States, Europe and China. For further information visit BSD Medical's website at www.BSDMedical.com.
 
This press release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including, among other things, the demand for the Company’s products, the ability of the Company to produce the products to meet the demand, global economic conditions and uncertainties in the geopolitical environment and other risk factors set forth in the Company’s most recent reports on Form 10-K and Form 10-Q. Any forward-looking statements in this release are based on limited information currently available to the Company, which is subject to change, and the Company will not necessarily update the information.
 

 
 
 
 


BSD MEDICAL CORPORATION
  
Condensed Balance Sheets
  
(Unaudited)
  
 
ASSETS
  
May 31,
2014
    
August 31,
2013
  
Current assets:
            
   Cash and cash equivalents
  
$
5,174,602
    
$
9,450,528
  
   Accounts receivable, net of allowance for doubtful accounts of $20,000
    
404,991
      
899,969
  
   Related party trade accounts receivable
    
221,170
      
24,201
  
   Inventories, net
    
2,242,985
      
2,445,770
  
   Other current assets
    
193,266
      
200,028
  
      Total current assets
    
8,237,014
      
13,020,496
  
                 
Property and equipment, net
    
1,292,214
      
1,319,880
  
                 
   
$
9,529,228
    
$
14,340,376
  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
                 
Current liabilities:
                
   Accounts payable
  
$
499,739
    
$
521,417
  
   Accrued liabilities
    
431,685
      
573,880
  
   Note payable
    
57,852
      
-
  
   Customer deposits
    
99,650
      
317,480
  
   Deferred revenue – current portion
    
453,047
      
730,593
  
      Total current liabilities
    
1,541,973
      
2,143,370
  
                 
Deferred revenue – net of current portion
    
-
      
53,115
  
                 
      Total liabilities
    
1,541,973
      
2,196,485
  
                 
Commitments and contingencies
                
                 
Stockholders’ equity:
                
   Preferred stock, $.001 par value; 10,000,000 shares authorized, no shares issued and outstanding
    
-
      
-
  
   Common stock, $.001 par value, 80,000,000 shares authorized, 34,199,463 and 34,006,202 shares issued, respectively
    
  34,200
      
  34,007
  
   Additional paid-in capital
    
58,561,526
      
57,739,056
  
   Stock subscriptions receivable
    
(7,485
)
    
-
  
   Treasury stock, 24,331 shares at cost
    
(234
)
    
(234
)
   Accumulated deficit
    
(50,600,752
)
    
(45,628,938
)
      Total stockholders’ equity
    
7,987,255
      
12,143,891
  
                 
   
$
9,529,228
    
$
14,340,376
  

 

 
 
 
 


BSD MEDICAL CORPORATION
Condensed Statements of Comprehensive Loss
(Unaudited)
   
Three Months Ended
May 31,
    
Nine Months Ended
May 31,
  
   
2014
    
2013
    
2014
    
2013
  
Revenues:
                        
   Sales
  
$
764,044
    
$
1,256,583
    
$
3,611,679
    
$
2,540,281
  
   Sales to related parties
    
376,245
      
230
      
394,679
      
76,776
  
   Equipment rental
    
112,900
      
59,900
      
268,200
      
178,700
  
                                 
   Total revenues
    
1,253,189
      
1,316,713
      
4,274,558
      
2,795,757
  
                                 
Cost of Revenues:
                                
   Cost of sales
    
456,832
      
713,383
      
2,003,969
      
1,533,618
  
   Cost of related party sales
    
288,140
      
81
      
296,053
      
66,527
  
   Cost of equipment rental
    
2,947
      
2,947
      
8,841
      
8,841
  
                                 
   Total cost of revenues
    
747,919
      
716,411
      
2,308,863
      
1,608,986
  
                                 
Gross margin
    
505,270
      
600,302
      
1,965,695
      
1,186,771
  
                                 
Operating expenses:
                                
   Research and development
    
559,568
      
607,690
      
1,621,612
      
1,693,648
  
   Selling, general and administrative
    
1,934,277
      
1,967,082
      
5,321,309
      
5,562,013
  
                                 
   Total operating expenses
    
2,493,845
      
2,574,772
      
6,942,921
      
7,255,661
  
                                 
Loss from operations
    
(1,988,575
)
    
(1,974,470
)
    
(4,977,226
)
    
(6,068,890
)
                                 
Other income (expense):
                                
   Interest income
    
3,623
      
7,708
      
15,050
      
24,374
  
   Other expense
    
(3,898
)
    
(2,984
)
    
(9,638
)
    
(5,291
)
                                 
   Total other income
    
(275
) 
    
4,724
      
5,412
      
19,083
  
                                 
Loss before income taxes
    
(1,988,850
)
    
(1,969,746
)
    
(4,971,814
)
    
(6,049,807
)
                                 
Provision for income taxes
    
-
      
-
      
-
      
-
  
                                 
Net loss and comprehensive loss
  
 $
(1,988,850
) 
  
$ 
(1,969,746
) 
  
 $
(4,971,814
) 
  
 $
(6,049,807
) 
                                 
Net loss per common share:
                                
    Basic
  
 $
(0.06 
) 
  
 $
(0.06 
 )
  
 $
(0.15 )
    
 $
(0.20 
 )
    Diluted
  
 $
(0.06 
) 
  
 $
(0.06 
 )
  
 $
(0.15 )
    
 $
(0.20 
 )
                                 
Weighted average number of shares outstanding:
                                
   Basic
    
34,040,000
      
32,042,000
      
34,002,000
      
30,541,000
  
   Diluted
    
34,040,000
      
32,042,000
      
34,002,000
      
30,541,000
  
 

 
 
 

BSD MEDICAL CORPORATION
Condensed Statements of Cash Flows
(Unaudited)

   
Nine Months Ended
May 31,
  
   
2014
    
2013
  
Cash flows from operating activities:
            
   Net loss
  
$
(4,971,814
)
  
$
(6,049,807
)
   Adjustments to reconcile net loss to net cash used in operating activities:
                
      Depreciation and amortization
    
93,322
      
101,454
  
      Stock-based compensation
    
634,859
      
862,514
  
      Stock issued for services
    
180,000
      
180,001
  
      Loss on disposition of property and equipment
    
(30
) 
    
-
  
      Decrease (increase) in:
                
         Receivables
    
298,009
      
(901,822
)
         Inventories
    
202,785
      
94,658
  
         Other current assets
    
80,814
      
(81,540
)
      Increase (decrease) in:
                
         Accounts payable
    
(21,678
)
    
189,580
  
         Accrued liabilities
    
(142,195
)
    
(1,279
)
         Customer deposits
    
(217,830
) 
    
851,250
  
         Deferred revenue
    
(330,661
)
    
(30,760
)
                 
   Net cash used in operating activities
    
(4,194,419
)
    
(4,785,751
)
                 
Cash flows from investing activities:
                
    Purchase of property and equipment
    
(67,651
)
    
(18,072
)
    Proceeds from disposition of property and equipment
    
2,025
      
-
  
                 
   Net cash used in investing activities
    
(65,626
)
    
(18,072
)
                 
Cash flows from financing activities:
                
    Net proceeds from sale of common stock
    
319
      
-
  
    Payments on note payable
    
(16,200
)
    
4,583,437
  
                 
   Net cash used in or provided by financing activities
    
(15,881
) 
    
4,583,437
  
                 
Net decrease in cash and cash equivalents
    
(4,275,926
)
    
(220,386
)
Cash and cash equivalents, beginning of the period
    
9,450,528
      
11,102,508
  
                 
Cash and cash equivalents, end of the period
  
$
5,174,602
    
$
10,882,122
  

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