UPI (MM)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

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FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

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Date of Report (Date of earliest event reported):  January 22, 2015

 

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UROPLASTY, INC.

(Exact name of registrant as specified in its charter)

(952) 426-6140

(Registrant’s telephone number, including area code)

Not Applicable

(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:

☒	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))

                                                                                                                                                                                        

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Item 2.02.

Results of Operations and Financial Condition

 

On January 22, 2015, Uroplasty, Inc. (“Uroplasty”) issued a press release providing information regarding its results of operations and financial condition for the quarter ended December 31, 2014.

 

Uroplasty is furnishing the information contained in this report, including Exhibit 99.1, pursuant to Item 2.02 of Form 8-K promulgated by the Securities and Exchange Commission (the “SEC”). This information shall not be deemed to be “filed” with the SEC for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Important Additional Information and Where to Find It

Participants in the Solicitation

Uroplasty, Vision-Sciences, their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from Uroplasty’s and Vision-Sciences’ respective shareholders in connection with the proposed transaction.  Information about the directors and executive officers of Uroplasty and their ownership of Uroplasty stock is set forth in Uroplasty’s annual report on Form 10-K for the fiscal year ended March 31, 2014,  and its proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on July 22, 2014. Information regarding Vision-Sciences’ directors and executive officers is contained in Vision-Sciences’ annual report on Form 10-K for the fiscal year ended March 31, 2014 and its proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on June 17, 2014. These documents can be obtained free of charge from the sources indicated above. Certain directors, executive officers and employees of Uroplasty and Vision-Sciences may have direct or indirect interest in the transaction due to securities holdings, vesting of equity awards and rights to severance payments. Additional information regarding the participants in the solicitation of Uroplasty and Vision-Sciences shareholders will be included in the joint proxy statement/prospectus filed with the SEC.

 

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Cautionary Statements Related to Forward-Looking Statements

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

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UROPLASTY, INC.

CURRENT REPORT ON FORM 8-K

 

EXHIBIT INDEX

 

 

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Exhibit 99.1

 

Uroplasty Reports Record Revenue in Fiscal Third Quarter

~ Global Urgent PC Sales Up 14.5% ~

~ Proposed Merger with Vision-Sciences to Expand Innovation in Product Portfolio ~

MINNEAPOLIS, January 22, 2015 -- Uroplasty, Inc. (NASDAQ: UPI), a medical device company that develops, manufactures and markets innovative proprietary products to treat voiding dysfunctions, today reported financial results for the fiscal 2015 third quarter ended December 31, 2014.

Global revenue for the Company’s Urgent^® PC Neuromodulation System grew 14.5% to $4.4 million, a new quarterly revenue record, as compared to $3.9 million in the third quarter of the prior year.  Global Macroplastique sales were $2.0 million during the third quarter as compared to $2.3 million in the third quarter of fiscal 2014.  Total revenue for the third quarter of fiscal 2015 was $6.7 million, a 4.2% increase from the same quarter in the prior year. The impact of changes in foreign currency exchange rates negatively impacted revenue by approximately $0.1 million. Adjusting for the negative impact of foreign currency exchange rates, year-over-year total revenue growth would have been 5.7% in the fiscal third quarter, and Urgent PC revenue growth would have been 15.5%.

On December 22, 2014, the Company and Vision-Sciences, Inc. announced that they had entered into an agreement and plan of merger under which the two companies will combine in an all-stock transaction to create a new medical device company to be named Cogentix Medical, Inc.  The proposed merger is expected to be completed in the first half of calendar 2015, subject to shareholder and other customary approvals.  The combined company is expected to generate revenue growth between 10% and 14% in its first fiscal year beginning on April 1, 2015.  Once the existing Uroplasty sales team is fully trained on Vision-Sciences' EndoSheath technology platform, the combined company is expected to achieve sustainable annual revenue growth of 15% beginning with its second fiscal year.

“Third quarter and year-to-date revenue growth for Urgent PC illustrates the ability of our sales organization to penetrate the urology market with innovative technologies that address key needs of our physician customers,” said Rob Kill, President and Chief Executive Officer of Uroplasty. “Our team’s execution during our fiscal third quarter gives us a high level of confidence about the potential to accelerate EndoSheath sales in the in-office urology market once we complete the proposed merger with Vision-Sciences.  With more than five million units sold and zero reported cases of cross contamination, we believe that EndoSheath should be the standard of care for endoscopic applications, and our team fully intends to turn this efficacy leadership into market leadership,” added Mr. Kill.

In the fiscal third quarter, the Company achieved a gross margin of 88.3%, 50 basis points higher than the 87.8% gross margin in the same quarter one year ago.  Operating expenses for the period totaled $8.0 million compared to $6.3 million in the same quarter last year and includes approximately $820,000 of transaction expenses incurred in the third quarter associated with the proposed Vision-Sciences merger.

 

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The operating loss of $2.1 million in the fiscal third quarter compares with a $0.7 million operating loss in the same quarter last year.  Excluding non-cash charges for share-based compensation and depreciation and amortization expense, the non-GAAP operating loss was $1.5 million ($0.7 million excluding merger related costs) in the third quarter of fiscal 2015, compared with a $0.3 million non-GAAP operating loss in the year ago period.

The loss per diluted share of $0.10 in the fiscal third quarter compares to a loss per diluted share of $0.03 in the same quarter last year.  Excluding merger related costs, the non-GAAP loss per diluted share in the third quarter of fiscal 2015 was $0.06.

For the nine-month period ended December 31, 2014, global revenue from Urgent PC increased 17.1% to $12.7 million.  Total revenue grew 7.1% to $19.5 million.  At December 31, 2014, cash, cash equivalents and cash investments totaled $8.7 million.  During the third quarter, the Company used $0.7 million in cash for operations.

For the fourth quarter of fiscal 2015, the Company currently expects Urgent PC sales to grow approximately 15% over the same quarter of the prior fiscal year and currently expects global Macroplastique sales to be approximately $2.0 million, which is consistent with the revenue generated from this product line over the prior four quarters.  Total fiscal year 2015 revenue is now expected to be in a range from $26.5 million to $26.8 million.

Conference Call

Uroplasty will host a conference call and webcast today at 4:30 p.m. Eastern Time (3:30 p.m. Central Time) to discuss these results. Rob Kill, President and Chief Executive Officer, and Brett Reynolds, Chief Financial Officer, will host the call. Individuals wishing to participate in the conference call should dial 888-523-1225. No passcode is necessary.  To access a live webcast of the call, go to Uroplasty’s website at www.uroplasty.com and click on the Investor Relations section.

An audio replay will be available for 30 days following the call at 888-203-1112 with the passcode 2270603.  An archived webcast will also be available at investor.uroplasty.com.

About Uroplasty

 

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Important Additional Information and Where to Find It

In connection with the proposed merger, Vision-Sciences plans to file with the SEC a registration statement on Form S-4 that will include a joint proxy statement of Uroplasty and Vision-Sciences that also constitutes a prospectus of Vision-Sciences.  Uroplasty and Vision-Sciences will make the joint proxy statement/prospectus available to their respective shareholders. Investors are urged to read the joint proxy statement/prospectus when it becomes available, because it will contain important information. The registration statement, definitive joint proxy statement/prospectus and other documents filed by Uroplasty and Vision-Sciences with the SEC will be available free of charge at the SEC’s website (www.sec.gov) and from Uroplasty and Vision-Sciences. Requests for copies of the joint proxy statement/prospectus and other documents filed by Uroplasty with the SEC may be made by contacting Brett Reynolds, Senior Vice President, Chief Financial Officer by phone at (952) 426-6152 or by email at brett.reynolds@uroplasty.com, and request for copies of the joint proxy statement/prospectus and other documents filed by Vision-Sciences may be made by contacting Gary Siegel, Vice President, Finance by phone at (845) 848-1085 or by email at gary.siegel@visionsciences.com.

Participants in the Solicitation

Uroplasty, Vision-Sciences, their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from Uroplasty’s and Vision-Sciences’ respective shareholders in connection with the proposed transaction.  Information about the directors and executive officers of Uroplasty and their ownership of Uroplasty stock is set forth in Uroplasty’s annual report on Form 10-K for the fiscal year ended March 31, 2014,  and its proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on July 22, 2014. Information regarding Vision-Sciences’ directors and executive officers is contained in Vision-Sciences’ annual report on Form 10-K for the fiscal year ended March 31, 2014 and its proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on June 17, 2014. These documents can be obtained free of charge from the sources indicated above. Certain directors, executive officers and employees of Uroplasty and Vision-Sciences may have direct or indirect interest in the transaction due to securities holdings, vesting of equity awards and rights to severance payments. Additional information regarding the participants in the solicitation of Uroplasty and Vision-Sciences shareholders will be included in the joint proxy statement/prospectus filed with the SEC.

Cautionary Statements Related to Forward-Looking Statements

This press release includes forward-looking statements.  These forward-looking statements generally can be identified by the use of words such as “anticipate,” “expect,” “plan,” “could,” “may,” “will,” “believe,” “estimate,” “forecast,” “goal,” “project,” and other words of similar meaning.  Forward-looking statements in this press release include, but are not limited to, statements about the benefits of the transaction; expected revenue growth rates; the expected timing of the completion of the transaction; and the combined company’s plans, objectives, expectations and intentions with respect to future operations, products and services.  Each forward-looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement.  Applicable risks and uncertainties include, among others, uncertainties as to the timing of the transaction; uncertainties as to whether Uroplasty shareholders and Vision-Sciences shareholders will approve the transaction; the risk that competing offers will be made; the possibility that various closing conditions for the transaction may not be satisfied or waived; the risk that shareholder litigation in connection with the transaction may result in significant costs of defense, indemnification and liability; other business effects, including the effects of industry, economic or political conditions outside of either company’s control; the failure to realize synergies and cost-savings from the transaction or delay in realization thereof; the businesses of Uroplasty and Vision-Sciences may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; operating costs and business disruption following completion of the transaction, including adverse effects on employee retention and on each company’s respective business relationships with third parties; transaction costs; actual or contingent liabilities; the adequacy of the combined company’s capital resources; and the risks identified under the heading “Risk Factors” in Uroplasty’s Annual Report on Form 10-K, for the fiscal year ended March 31, 2014, filed with the Securities and Exchange Commission (“SEC”) on June 9, 2014, and Vision-Sciences’ Annual Report on Form 10-K for the fiscal year ended March 31, 2014, filed with the SEC on May 30, 2014, as well as both companies’ subsequent Quarterly Reports on Form 10-Q and other information filed by each company with the SEC.  Uroplasty and Vision-Sciences caution investors not to place considerable reliance on the forward-looking statements contained in this press release.  You are encouraged to read Uroplasty’s and Vision-Sciences’ filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this release, and Uroplasty and Vision-Sciences undertake no obligation to update or revise any of these statements.  Uroplasty’s and Vision-Sciences’ businesses are subject to substantial risks and uncertainties, including those referenced above.  Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

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For Further Information:

Brett Reynolds, SVP and CFO

952-426-6152

Doug Sherk/Brian Moore (Investors)

415-652-9100/310-579-6199

Janine McCargo (Media)

646-688-0425

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		Three Months Ended December 31,								Nine Months Ended December 31,
		2014				2013				2014				2013
Net sales		$	6,666,905			$	6,398,675			$	19,506,164			$	18,216,391
Cost of goods sold			778,406				778,267				2,322,942				2,268,156
Gross profit			5,888,499				5,620,408				17,183,222				15,948,235
Operating expenses
General and administrative			2,283,333				1,194,882				5,148,998				5,166,255
Research and development			665,539				526,224				2,226,018				1,434,647
Selling and marketing			5,015,916				4,546,100				15,107,241				13,496,593
Amortization			7,584				7,873				24,136				22,347
			7,972,372				6,275,079				22,506,393				20,119,842
Operating loss			(2,083,873	)			(654,671	)			(5,323,171	)			(4,171,607	)
Other income (expense)
Interest income			1,761				3,836				6,606				18,576
Interest expense			(250	)			-				(250	)			-
Foreign currency exchange gain (loss)			(2,038	)			(506	)			(3,317	)			(4,540	)
			(527	)			3,330				3,039				14,036
Loss before income taxes			(2,084,400	)			(651,341	)			(5,320,132	)			(4,157,571	)
Income tax expense			20,938				19,491				55,785				50,033
Net loss		$	(2,105,338	)		$	(670,832	)		$	(5,375,917	)			(4,207,604	)
Basic and diluted net loss per common share		$	(0.10	)		$	(0.03	)		$	(0.25	)		$	(0.20	)
Weighted average common shares outstanding:
Basic and diluted			21,663,924				21,258,736				21,683,892				21,035,874

		December 31, 2014				March 31, 2014
Assets
Current assets:
Cash and cash equivalents		$	8,703,789			$	8,681,609
Short-term investments			-				3,451,086
Accounts receivable, net			2,567,403				2,875,275
Inventories			437,471				517,217
Other			449,046				507,299
Total current assets			12,157,709				16,032,486
Property, plant, and equipment, net			946,726				997,609
Intangible assets, net			95,845				119,980
Prepaid pension assets			-				855
Deferred tax assets			127,625				150,116
Total assets		$	13,327,905			$	17,301,046
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable		$	1,193,692			$	904,879
Current portion – deferred rent			-				2,917
Current portion – capital lease obligation			4,434				-
Income tax payable			23,729				21,922
Accrued liabilities:
Compensation			2,199,586				1,999,966
Other			394,732				479,373
Total current liabilities			3,816,173				3,409,057
Deferred rent – less current portion			26,644				171
Capital lease obligation – less current portion			18,411				-
Long-term incentive plan			131,907				-
Accrued pension liability			543,934				678,118
Total liabilities			4,537,069				4,087,346
Total shareholders’ equity			8,790,836				13,213,700
Total liabilities and shareholders’ equity		$	13,327,905			$	17,301,046

		Nine Months Ended
		December 31,
		2014				2013
Cash flows from operating activities:
Net loss		$	(5,375,917	)		$	(4,207,604	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			207,011				267,369
Loss (gain) on disposal of equipment			161				(5,000	)
Amortization of premium on marketable securities			311				7,562
Share-based compensation expense			1,077,928				1,210,201
Long-term incentive plan			131,907				-
Deferred income tax expense			5,129				3,245
Deferred rent			23,556				(27,790	)
Changes in operating assets and liabilities:
Accounts receivable, net			220,002				79,428
Inventories			73,626				255,207
Other current assets			48,142				16,868
Accounts payable			295,113				21,724
Accrued compensation			212,259				274,139
Accrued liabilities			(59,459	)			(120,881	)
Accrued pension liability			(56,226	)			(39,011	)
Net cash used in operating activities			(3,196,457	)			(2,264,543	)
Cash flows from investing activities:
Proceeds from maturity of available-for-sale instruments			3,450,000				2,750,000
Proceeds from held-to-maturity instruments			-				4,180,000
Purchases of property, plant and equipment			(206,498	)			(221,769	)
Proceeds from sale of property, plant and equipment			3,104				6,773
Payments for intangible assets			-				(41,300	)
Net cash provided by investing activities			3,246,606				6,673,704
Cash flows from financing activities:
Proceeds from exercise of  stock options			67,850				172,485
Net cash provided by financing activities			67,850				172,485
Effect of exchange rates on cash and cash equivalents			(95,819	)			48,741
Net increase in cash and cash equivalents			22,180				4,630,387
Cash and cash equivalents at beginning of period			8,681,609				3,533,864
Cash and cash equivalents at end of period		$	8,703,789			$	8,164,251
Supplemental disclosure of cash flow information:
Cash paid during the period for income tax		$	56,144			$	34,640

						Expense Adjustments
(dollar amounts in thousands)		GAAP				Share-based Compensation				Long-term Incentive Plan				Depreciation				Amortization				Non-GAAP
Three Months Ended December 31, 2014
Gross Profit		$	5,888			$	11			$	-			$	4			$	-			$	5,903
% of sales			88.3	%																			88.6	%
Operating Expenses
General & administrative			2,282				(313	)			(132	)			(36	)			-				1,801
Research and development			666				(11	)			-				-				-				655
Selling and marketing			5,016				(81	)			-				(19	)			-				4,916
Amortization			8				-				-				-				(8	)			-
			7,972				(405	)			(132	)			(55	)			(8	)			7,372
Operating Loss		$	(2,084	)		$	416			$	132			$	59			$	8			$	(1,469	)
Three Months Ended December 31, 2013
Gross Profit		$	5,620			$	6			$	-			$	8			$	-			$	5,634
% of sales			87.8	%																			88.1	%
Operating Expenses
General & administrative			1,195				(197	)			-				(50	)			-				948
Research and development			526				(11	)			-				(1	)			-				514
Selling and marketing			4,546				(75	)			-				(22	)			-				4,449
Amortization			8				-				-				-				(8	)			-
			6,275				(283	)			-				(73	)			(8	)			5,911
Operating Loss		$	(655	)		$	289			$	-			$	81			$	8			$	(277	)

						Expense Adjustments
(dollar amounts in thousands)		GAAP				Share-based Expense				Long-term Incentive Plan				Depreciation				Amortization				Non-GAAP
Nine Months Ended December 31, 2014
Gross Profit		$	17,183			$	36			$	-			$	13			$	-			$	17,232
% of sales			88.1	%																			88.3	%
Operating Expenses
General & administrative			5,149				(755	)			(132	)			(111	)			-				4,151
Research and development			2,226				(41	)			-				(2	)			-				2,183
Selling and marketing			15,107				(246	)			-				(57	)			-				14,804
Amortization			24				-				-				-				(24	)			-
			22,506				(1,042	)			(132	)			(170	)			(24	)			21,138
Operating Loss		$	(5,323	)		$	1,078			$	132			$	183			$	24			$	(3,906	)
Nine Months Ended December 31, 2013
Gross Profit		$	15,948			$	20			$	-			$	26			$	-			$	15,994
% of sales			87.5	%																			87.8	%
Operating Expenses
General & administrative			5,166				(952	)			-				(153	)			-				4,061
Research and development			1,435				(36	)			-				(3	)			-				1,396
Selling and marketing			13,497				(202	)			-				(63	)			-				13,232
Amortization			22				-				-				-				(22	)			-
			20,120				(1,190	)			-				(219	)			(22	)			18,689
Operating Loss		$	(4,172	)		$	1,210			$	-			$	245			$	22			$	(2,695	)