10-Q 1 doc1.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number: 01-19890 LIFECELL CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 76-0172936 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) ONE MILLENNIUM WAY 08876 BRANCHBURG, NEW JERSEY (zip code) (Address of principal executive office) (908) 947-1100 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: As of July 31, 2001, there were outstanding 19,834,368 shares of common stock, par value $.001, and 98,777 shares of Series B preferred stock, par value $.001 (which are convertible into approximately an additional 3,490,384 shares of common stock), of the registrant. 1
PART I. FINANCIAL INFORMATION Item 1. Financial Statements --------------------- LIFECELL CORPORATION BALANCE SHEETS June 30, December 31, 2001 2000 --------------- ------------- ASSETS Current Assets: Cash and cash equivalents $ 2,261,000 $ 5,220,000 Short-term investments 315,000 315,000 Accounts and other receivables, net 3,512,000 4,287,000 Inventories 4,276,000 4,711,000 Prepayments and other 227,000 269,000 --------------- ------------- Total current assets 10,591,000 14,802,000 Fixed assets, net 9,410,000 9,991,000 Other assets, net 686,000 617,000 --------------- ------------- Total assets $ 20,687,000 $ 25,410,000 =============== ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 981,000 $ 2,434,000 Accrued liabilities 2,318,000 3,025,000 Notes payable 2,908,000 2,859,000 Current maturities of long-term debt 1,225,000 1,154,000 --------------- ------------- Total current liabilities 7,432,000 9,472,000 Deferred revenue 683,000 794,000 Long term debt, net of current maturities 1,660,000 2,272,000 Other long-term liabilities 57,000 83,000 --------------- ------------- Total liabilities 9,832,000 12,621,000 --------------- ------------- Commitments and Contingencies (Note 5) Stockholders' Equity: Series B preferred stock, $.001 par value, 182,205 shares authorized; 98,777 and 95,931 shares issued and outstanding in 2001 and 2000, respectively -- -- Undesignated preferred stock, $.001 par value, 1,817,795 shares authorized; none issued and outstanding -- -- Common stock, $.001 par value, 48,000,000 shares authorized; 16,709,368 shares issued and outstanding in 2001 and 2000, respectively 17,000 17,000 Warrants outstanding to purchase 3,345,298 and 3,370,298 shares of common stock in 2001 and 2000, respectively 1,313,000 1,269,000 Additional paid-in capital 73,897,000 73,612,000 Accumulated deficit (64,372,000) (62,109,000) --------------- ------------- Total stockholders' equity 10,855,000 12,789,000 --------------- ------------- Total liabilities and stockholders' equity $ 20,687,000 $ 25,410,000 =============== =============
The accompanying notes are an integral part of these financial statements. 2
LIFECELL CORPORATION STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, --------------------------- -------------------------- 2001 2000 2001 2000 ------------ ------------ ------------ ------------ Revenues: Product revenues $ 7,011,000 $ 5,387,000 $13,435,000 $ 9,825,000 Research grant revenues 440,000 475,000 787,000 853,000 ------------ ------------ ------------ ------------ Total revenues 7,451,000 5,862,000 14,222,000 10,678,000 ------------ ------------ ------------ ------------ Costs and Expenses: Cost of products sold 2,358,000 1,912,000 4,853,000 3,100,000 Research and development 1,164,000 1,299,000 2,289,000 2,518,000 General and administrative 1,247,000 1,627,000 2,340,000 2,843,000 Selling and marketing 3,141,000 3,013,000 6,338,000 5,291,000 ------------ ------------ ------------ ------------ Total costs and expenses 7,910,000 7,851,000 15,820,000 13,752,000 ------------ ------------ ------------ ------------ Loss From Operations (459,000) (1,989,000) (1,598,000) (3,074,000) Interest and other expense, net (198,000) (160,000) (375,000) (231,000) ------------ ------------ ------------ ------------ Net Loss (657,000) (2,149,000) (1,973,000) (3,305,000) Preferred Stock Dividends (147,000) (145,000) (290,000) (307,000) ------------ ------------ ------------ ------------ Loss Applicable to Common Stockholders $ (804,000) $(2,294,000) $(2,263,000) $(3,612,000) ============ ============ ============ ============ Loss Per Common Share - Basic and Diluted $ (0.05) $ (0.16) $ (0.14) $ (0.26) ============ ============ ============ ============ Shares Used in Computing Loss Per Common Share - Basic and Diluted 16,709,368 14,021,629 16,709,368 13,639,714 ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements 3
LIFECELL CORPORATION STATEMENTS OF CASH FLOWS (unaudited) Six Months Ended June 30, -------------------------- 2001 2000 ------------ ------------ Cash Flows from Operating Activities: Net loss $(1,973,000) $(3,305,000) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 835,000 551,000 Provision for bad debt 10,000 32,000 Accretion of debt discount 49,000 23,000 Change in assets and liabilities: Decrease (increase) in accounts and other receivables 765,000 (2,356,000) Decrease (increase) in inventories 435,000 (641,000) Decrease (increase) in prepayments and other 74,000 (176,000) (Decrease) increase in accounts payable and accrued liabilities (2,163,000) 439,000 Increase in notes payable - 35,000 (Decrease) increase in deferred revenues (111,000) 491,000 Decrease in other liabilities (26,000) - ------------ ------------ Net cash used in operating activities (2,105,000) (4,907,000) ------------ ------------ Cash Flows from Investing Activities: Capital expenditures (240,000) (3,670,000) Addition to patents (71,000) (63,000) ------------ ------------ Net cash used in investing activities (311,000) (3,733,000) ------------ ------------ Cash Flows from Financing Activities: Proceeds from issuance of stock and warrants - 1,811,000 Proceeds from issuance of notes payable - 3,653,000 Principal payments on long-term debt (541,000) - Cash dividends paid (2,000) (342,000) ------------ ------------ Net cash (used in) provided by financing activities (543,000) 5,122,000 ------------ ------------ Net Decrease in Cash and Cash Equivalents (2,959,000) (3,518,000) Cash and Cash Equivalents at Beginning of Period 5,220,000 4,737,000 ------------ ------------ Cash and Cash Equivalents at End of Period $ 2,261,000 $ 1,219,000 ============ ============ Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 436,000 $ 310,000 ============ ============ Supplemental Disclosure of Non-Cash Financing Activities: Series B Preferred stock issued as payment of dividends $ 285,000 $ - Fair value of warrants issued in connection with notes payable $ 44,000 $ -
The accompanying notes are an integral part of these financial statements. 4 LIFECELL CORPORATION NOTES TO FINANCIAL STATEMENTS (unaudited) 1. BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations. This financial information should be read in conjunction with the financial statements and notes thereto included within the Company's Annual Report on Form 10-K for the year ended December 31, 2000. The unaudited financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary by management for a fair presentation of financial position, results of operations and cash flows for the periods presented. The financial results for interim periods are not necessarily indicative of the results to be expected for the full year or future interim periods. 2. INVENTORIES Inventories consist of the following: June 30, December 31, 2001 2000 ---------- ------------- Raw materials . . . . . . . . . . . . . . . . . $ 723,000 $ 929,000 In-process. . . . . . . . . . . . . . . . . . . 1,926,000 2,259,000 Finished goods. . . . . . . . . . . . . . . . . 1,627,000 1,523,000 ---------- ------------- Total inventories . . . . . . . . . . . . . . . $4,276,000 $ 4,711,000 ========== ============= 3. FINANCING ARRANGEMENTS At June 30, 2001 there was $3.0 million outstanding under a revolving loan facility with a financial institution. In August 2001, the Company satisfied the entire outstanding balance on the revolving loan facility using proceeds from a private placement completed in July 2001 (See Note 7) and voluntarily terminated this revolving loan facility. 4. CAPITAL STOCK The Series B Preferred Stock bears cumulative dividends, payable quarterly, through November 2001 at the annual rate of $6.00 per share. Dividends may be paid in cash, in additional shares of Series B preferred stock based on the stated value of $100 per share, or any combination of cash and Series B Preferred Stock at the Company's option. During the first quarter of 2001, the Company paid dividends for the quarter ended December 31, 2000, through the issuance of 1,428 shares of Series B Preferred Stock. During the first quarter of 2001, the Company accrued dividends on Series B Preferred Stock of $143,000, which were paid through the issuance of 1,418 shares of Series B Preferred Stock in May 2001. During the second quarter of 2001, the Company accrued dividends on Series B Preferred Stock of $147,000, which will be paid through the issuance of 1,455 shares of Series B Preferred Stock on or before August 15, 2001. 5 5. COMMITMENTS AND CONTINGENCIES Litigation ---------- The Company is a party to litigation in the Superior Court of California, Los Angeles County, Central District, captioned Regner, et al., on behalf of themselves and others similarly situated, v. Inland Eye & Tissue Bank of Redlands, et al. The complaint alleges among other things, defendants, including the Company, make profits from the storing, processing, and distribution of human tissue in contravention of California law. The Company is also a party to litigation in the Superior Court of California, Los Angeles County, Central District, captioned Thacker, et al., on behalf of themselves and others similarly situated, v. Inland Eye & Tissue Bank of Redlands, et al. This complaint contains similar allegations to the Regner complaint, and the two cases have been combined. These actions are not denominated class actions and do not involve tort theories. Both actions were brought under a statute that allows individuals to sue on behalf of the people of California for unfair business practices, with the court having the power to award injunctive relief and disgorgement of all profits from the alleged illegal practices. The plaintiffs in each of the actions are seeking injunctive relief, disgorgement of illegal profits, restitution, statutory penalties, fines and attorney's fees. The Company believes that the claims against it in these complaints are without merit and intends to vigorously defend against such action. In January 2001, a complaint was filed in the United States District Court for the Southern District of New York captioned Special Situations Fund III, L.P., et al., v. LifeCell Corporation ("LifeCell"), Gruntal & Co., L.L.C. ("Gruntal") and Prudential Securities, Inc. ("Prudential"). The complaint alleged that LifeCell, Gruntal and Prudential violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and were liable under New York common law by making purportedly false and misleading statements to the plaintiffs in connection with LifeCell's private placement of common stock and sought damages in an unspecified amount. Gruntal and Prudential's Vector Healthcare Group acted as placement agents in the Company's private placement which closed in October 2000. In March 2001, the Company filed a motion for dismissal. In July 2001, the plaintiffs withdrew their complaint and released the Company and the other defendants from all claims related to LifeCell's October 2000 private placement. Litigation is subject to many uncertainties and management is unable to predict the outcome of the pending actions. It is possible that the results of operations or liquidity and capital resources of the Company could be adversely affected by the ultimate outcome of the pending litigation or as a result of the costs of contesting such actions. 6. LOSS PER COMMON SHARE Loss per common share has been computed by dividing net loss, increased by stated dividends on Series B Preferred Stock, by the weighted average number of shares of Common Stock outstanding during each period. In all periods, Common Stock equivalents, including the Series B Preferred Stock, were antidilutive and, accordingly, were not included in the computation. 7. SUBSEQUENT EVENT In July 2001, the Company completed a private placement of 3,125,000 shares of its Common Stock with selected accredited investors at a price of $1.92 per share. The net proceeds of the private placement were approximately $5.9 million after deducting offering costs. In connection with the private placement, the Company issued warrants to the investors to purchase 1,750,000 shares of its Common Stock at a price of $1.92 per share. The warrants expire in July 2006. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results ----------------------------------------------------------------------- of Operations. -------------- The following discussion of our operations and financial condition should be read in conjunction with the Financial Statements and Notes included in Part I. "Financial Information". This report contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically are identified by use of terms such as "may," "will," "should," "plan," "expect," "anticipate," "estimate" and similar words, although some forward-looking statements are expressed differently. Forward-looking statements represent our management's judgement regarding future events. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct and you should be aware that our actual results could differ materially from those contained in the forward-looking statements due to a number of factors. These factors include, but are not limited to: we have a history of operating losses and we may continue to incur losses; we may need additional capital to market our current products and to develop and commercialize new products and it is uncertain whether such capital will be available; if the FDA imposes medical device or other regulations that affect our products, the costs of developing, manufacturing and marketing our products will be increased; we are highly dependent upon our independent agents to generate our revenues; and other risks detailed in our Annual Report on Form 10-K for the year ended December 31, 2000 and other reports filed with the Securities and Exchange Commission. GENERAL AND BACKGROUND We develop and market biologic solutions for the repair, replacement and preservation of human tissue. Our core technology removes all cells from the tissue and preserves the tissue without damaging the essential biochemical and structural components necessary for normal tissue regeneration. We currently market three products based on this technology: AlloDerm(R) for plastic reconstructive, burn and periodontal procedures; Cymetra(TM), a version of AlloDerm in particulate form for the correction of soft tissue defects; and Repliform(TM), a version of AlloDerm for urology and gynecology procedures. Our development programs include the application of our technology to process small diameter blood vessel grafts as an alternative to blood vessel grafts taken from the patient, investigation of potential orthopedic applications of our technology, investigation of human tissues as carriers for therapeutics, ThromboSol(TM), a formulation for extended storage of platelets and technologies to enhance the storage of red blood cells for transfusion. RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2001 AND 2000 Total revenues increased 27% to approximately $7.5 million in the three months ended June 30, 2001 compared to approximately $5.9 million in the same period in 2000. The increase was attributable to a 30% increase in product revenues to approximately $7.0 million in the current period as compared to approximately $5.4 million in the prior year. The increase in product revenues was largely due to increased demand for Repliform and AlloDerm. Repliform revenues increased 76% to approximately $2.5 million in the three months ended June 30, 2001 compared to approximately $1.4 million for the same period in 2000. AlloDerm revenues increased 21% to approximately $3.3 million in the second quarter of 2001 compared to approximately $2.7 million in the same period in 2000. Cymetra revenues were approximately $1.0 million in the second quarter of 2001 and 2000. During the three months ended June 30, 2001, product revenues generated through our independent marketing agents, Boston Scientific Corporation and OMP Inc., represented 44% of total product revenues compared to 41% in the same period last year. Cost of products sold in the three months ended June 30, 2001 was approximately $2.4 million, or 34% of product revenues, compared to cost of products sold of approximately $1.9 million, or 35% of product revenues in the same period in 2000. Total research and development expenses decreased slightly to approximately $1.2 million in the three months ended June 30, 2001 compared to approximately $1.3 million in the same period in 2000. The decrease is due primarily to higher expenses incurred during the second quarter of 2000 associated with Cymetra product development and transfer to commercial production. 7 General and administrative expenses decreased 23% to approximately $1.2 million in the three months ended June 30, 2001 compared approximately $1.6 million in the same period in 2000. General and administrative expenses were higher in the second current quarter of 2000 because they included recruiting expenses and other employee related costs associated with hiring new employees in conjunction with the Company's relocation from Texas to New Jersey in 2000. Selling and marketing expenses increased 4% to approximately $3.1 million in the three months ended June 30, 2001 compared to approximately $3.0 million in the same period in 2000. The increase compared to the second quarter of 2000 was primarily attributable to an increase in fees earned by the Company's independent marketing agents for the distribution of Repliform and Cymetra, partially offset by a reduction in direct marketing expenses. Interest and other expense, net increased $38,000 in the three months ended June 30, 2001 compared to same period in 2000. The net increase was due to a $29,000 decline in interest income, resulting from lower cash balances available for investment, and a $9,000 increase in interest expense resulting from an increase in long-term debt. Net loss decreased 69% to approximately $0.7 million in the three months ended June 30, 2001 compared to approximately $2.1 million in the same period in 2000. The decrease in net loss compared to the second quarter of 2000 was due to the increase in gross profit resulting from higher product revenues and the decrease in operating expenses discussed above. SIX MONTHS ENDED JUNE 30, 2001 AND 2000 Total revenues increased 33% to approximately $14.2 million in the six months ended June 30, 2001 compared to approximately $10.7 million in the same period in 2000. The increase was attributable to a 37% increase in product revenues to approximately $13.4 million in the current period as compared to approximately $9.8 million in the prior year. The increase in product revenues was largely due to increased demand for Repliform, Cymetra and AlloDerm. Repliform revenues increased 89% to approximately $4.7 million in the six months ended June 30, 2001 compared to approximately $2.5 million in the same period in 2000. Cymetra revenues contributed approximately $2.1 million in the first six months of 2001 compared to $1.2 million the same period in 2000. Alloderm revenues increased 10% to approximately $6.3 million in the six months ended June 30, 2001 compared to approximately $5.7 million in the same period in 2000. During the six months ended June 30, 2001, product revenues generated through our independent marketing agents represented 44% of total product revenues compared to 33% in the same period last year. Cost of products sold in the six months ended June 30, 2001 was approximately $4.9 million, or 36% of product revenues, compared to cost of products sold of approximately $3.1 million, or 32% of product revenues in the same period in 2000. The increase in costs as a percentage of revenues was principally attributable to increased costs associated with the expansion of our tissue processing operations. In the second quarter of 2000, we closed our processing facility in Houston, Texas and commenced processing tissue in our new facility in Branchburg, New Jersey. Operating costs for the new facility are significantly higher than our operating costs were in our Texas operation, primarily due to the increase in processing capacity. Cost of products sold as a percentage of revenue is expected to decrease as tissue processing volume increases, resulting in greater absorption of fixed expenses. Total research and development expenses decreased slightly to approximately $2.3 million in the six months ended June 30, 2001 compared to approximately $2.5 million in the same period in 2000. The decrease is due primarily to higher expenses incurred during the first half of 2000 associated with Cymetra product development and transfer to commercial production. General and administrative expenses decreased 18% to approximately $2.3 million in the six months ended June 30, 2001 compared approximately $2.8 million in the same period of 2000. General and administrative expenses were higher in the first six months of 2000 because they included recruiting expenses and other employee related costs associated with hiring new employees in conjunction with the Company's relocation from Texas to New Jersey in 2000. Selling and marketing expenses increased 20% to approximately $6.3 million in the six months ended June 30, 2001 compared to approximately $5.3 million in the same period in 2000. The increase compared to the first half of 2000 was primarily attributable to an increase in fees earned by the Company's independent marketing agents for the distribution of Repliform and Cymetra, partially offset by a reduction in direct marketing expenses. 8 Interest and other expense, net increased $144,000 for the six months ended June 30, 2001 compared to same period in 2000. The net increase was due a $66,000 decline in interest income resulting from lower cash balances available for investment and a $78,000 increase in interest expense resulting from an increase in long-term debt. Net loss decreased 40% to approximately $2.0 million in the six months ended June 30, 2001 compared to approximately $3.3 million in the same period in 2000. The decrease in net loss compared to the first half of 2000 was due to the increase in gross profit resulting from higher product revenues and the decrease in operating expenses discussed above. LIQUIDITY AND CAPITAL RESOURCES At June 30, 2001, we had cash and cash equivalents and short-term investments of approximately $2.6 million compared to approximately $5.5 million at December 31, 2000. The decrease resulted principally from cash required to fund the operating loss in the first six months of 2001, reductions in accounts payable and accrued liabilities, principal payments on long-term debt and capital expenditures. Working capital decreased to approximately $3.2 million at June 30, 2001 from approximately $5.3 million at December 31, 2000. The decrease resulted principally from decreases in cash, accounts receivable, inventory, accounts payable and accrued expenses. In July 2001, we completed a private placement of 3,125,000 shares of our common stock with selected accredited investors at a price of $1.92 per share. The net proceeds of the private placement were approximately $5.9 million, after deducting offering costs. Our operating activities used cash of approximately $2.1 million in the six month period ended June 30, 2001 to fund our operating loss in the period, net of non-cash charges, and a reduction in accounts payable and accrued liabilities. In the six months ended June 30, 2001, our investing activities used cash of $311,000 for the purchase of capital equipment and additions to patents. Our financing activities used $543,000 in the six-month period ended June 30, 2001 for principal payments on long-term debt. At June 30, 2001, we had an aggregate of approximately $5.8 million outstanding under our borrowing arrangements, including $3.0 outstanding under a revolving loan facility. In August 2001, we satisfied the entire outstanding balance on the revolving loan facility using proceeds from the private placement completed in July 2001. In August 2001, we voluntarily terminated the revolving loan facility and accordingly have no additional borrowing availability through our existing credit facilities. Our term loans require aggregate principal payments over the next 12 months of approximately $1.2 million. We expect to incur additional net losses as well as negative cash flow from operations in the near term as we continue to expand marketing efforts with respect to our current products and continue our product development programs. Our ability to increase revenues and achieve profitability and positive cash flows from operations will depend on increased market acceptance of our current products and our ability to commercialize products currently under development. We expect that our current resources, including the net proceeds from the private placement completed in July 2001, together with anticipated product revenues and research and development grant funding will satisfy our cash needs through at least the end of 2001. However, there can be no assurance that such sources of funds will be sufficient to meet our future needs and as a result, we may need additional funding to operate our business. We have no commitments for any future funding and there can be no assurance that we will be able to obtain additional funding from either debt or equity financing, bank loans, collaborative arrangements or other sources on terms acceptable to us, or at all. If adequate funds are not available, we expect that we will be required to delay, scale back or eliminate one or more of our product development programs. Any additional equity financing may be dilutive to stockholders, and debt financing, if available, may involve significant restrictive covenants. Collaborative arrangements, if necessary to raise additional funds, may require us to relinquish our rights to certain of our technologies, products or marketing territories. It is possible that our results of operations or liquidity and capital resources could be adversely affected by the ultimate outcome of pending litigation or as a result of the cost of contesting such legal actions. For a discussion of these matters see Note 5 of "Notes to Financial Statements" and Part II., Item 1. "Legal Proceedings". 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk. ---------------------------------------------------------------- We are exposed to changes in interest rates primarily from our debt arrangements and, secondarily, from our investments in certain securities. Although our short-term investments are available for sale, we generally hold such investments until maturity. We do not utilize derivative instruments or other market risk sensitive instruments to manage exposure to interest rate changes. We believe that a hypothetical 100 basis point adverse move in interest rates along the entire interest rate yield curve would not materially affect the fair value of our interest sensitive financial instruments at June 30, 2001. PART II. OTHER INFORMATION Item 1. Legal Proceedings ------------------ Special Situations Fund III, L.P., et al., v. LifeCell Corporation, Gruntal & -------------------------------------------------------------------------------- Co., L.L.C. and Prudential Securities, Inc. ------------------------------------------------ In July 2001, the plaintiffs in this action withdrew their complaint and released the Company and the other defendants from all claims related to LifeCell's October 2000 private placement. Item 2. Changes in Securities and Use of Proceeds. ------------------------------------------------ In July 2001, we issued 3,125,000 shares of Common Stock at a price of $1.92 per share pursuant to a private placement without an underwriter. Equity funds managed by OrbiMed Advisors LLC purchased $4.5 million of the total offering and Special Situations Funds, an existing investor, purchased the remaining $1.5 million. In connection with the private placement, we issued warrants to the investors to purchase 1,750,000 shares of Common Stock at a price of $1.92 per share. These securities were issued in a transaction not involving a public offering and therefore were exempt from registration under Section 4(2) of the Securities Act of 1933, as amended. Item 4. Submission of Matters to A Vote of Security Holders. ------------------------------------------------------------ An Annual Meeting of Stockholders was held on June 1, 2001. The directors elected at the annual meeting were: Paul G. Thomas, Stephen A. Livesey, M.D., Ph.D., Michael E. Cahr, Peter D. Costantino, M.D.,FACS, James G. Foster and David A. Thompson. All directors of the Company hold office until the next annual meeting of stockholders or until their respective successors are duly elected and qualified or their earlier resignation or removal. Arthur Andersen LLP were appointed as the Company's independent auditors for fiscal year 2001. The matters voted upon at the Annual Meeting and the results of the voting are set forth below: (i) With respect to the election of Directors by the holders of Common Stock and Series B Preferred Stock, voting together as a class, the persons named below received the following number of votes: Name Votes For Votes Withheld ------------------------------- ---------- -------------- Paul G. Thomas 15,240,304 169,781 Stephen A. Livesey, M.D., Ph.D. 15,246,234 163,851 Michael E. Cahr 15,291,948 118,137 Peter D, Costantino, M.D., FACS 15,277,108 118,687 James G. Foster 15,292,148 117,937 David A. Thompson 15,290,848 119,237 10 (ii) With respect to a proposal to ratify the appointment of Arthur Andersen LLP as the Company's independent auditors for fiscal year 2001, the votes cast by the holders of Common Stock and Series B Preferred Stock voting together as a class were; 15,355,467 voted in favor, 33,880 voted against, and 20,738 votes abstained from voting on the proposal. Item 6. Exhibits and Reports on Form 8-K. -------------------------------------- a. EXHIBITS none b. REPORTS ON FORM 8-K On July 2, 2001, we filed a Current Report on Form 8-K to report that we had entered into purchase agreements with selected accredited investors for the private placement of 3,125,000 shares of our Common Stock and warrants to purchase up to 1,750,000 additional shares of our Common Stock at a price of $1.92 per share. On July 11, 2001, we filed a Current Report on Form 8-K to report that we completed the private placement of 3,125,000 shares of our Common Stock and warrants to purchase up to 1,750,000 additional shares of our Common Stock at a price of $1.92 per share with selected accredited investors. We also reported that Special Situations Fund III, L.P., et al., who had filed a complaint in the United States District Court for the Southern District of New York against LifeCell, Gruntal & Co., L.L.C. and Prudential Securities, Inc., withdrew its complaint and released us and the other defendants from all claims related to LifeCell's October 2000 private placement. 11 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 thereunto duly authorized. LIFECELL CORPORATION Date: August 13, 2001 By: /s/ Paul G. Thomas --------------------- Paul G. Thomas Chairman of the Board President and Chief Executive Officer (Principal Executive Officer) Date: August 13, 2001 By: /s/ Steven T. Sobieski ------------------------- Steven T. Sobieski Vice President, Finance Chief Financial Officer and Secretary (Principal Financial Officer) Date: August 13, 2001 By: /s/ Bradly C. Tyler ---------------------- Bradly C. Tyler Controller (Principal Accounting Officer) 12