ADVANSOURCE BIOMATERIALS : REPORTS FISCAL 2016 THIRD QUARTER RESULTS

U

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2015

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: 0-28034

AdvanSource Biomaterials Corporation
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	04-3186647 (I.R.S. Employer Identification No.)
229 Andover Street, Wilmington, Massachusetts (Address of principal executive offices)	01887 (Zip Code)

[phone]

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S- T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☐ Accelerated Filer

Non-accelerated Filer ☒ Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of February 12, 2016, there were 21,490,621 shares of the registrant's Common Stock outstanding.

ADVANSOURCE BIOMATERIALS CORPORATION TABLE OF CONTENTS

Page
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements
Condensed Balance Sheets at December 31, 2015 (unaudited) and March 31, 2015	3
Condensed Statements of Operations for the three and nine months ended December 31, 2015 and 2014 (unaudited)	4
Condensed Statements of Cash Flows for the nine months ended December 31, 2015 and 2014 (unaudited)	5
Notes to Condensed Financial Statements (unaudited)	6
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4	Controls and Procedures	17
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3	Defaults Upon Senior Securities	18
Item 4	Mine Safety Disclosures	18
Item 5	Other Information	18
Item 6	Exhibits	18
Signatures	19

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS

AdvanSource Biomaterials Corporation
Condensed Balance Sheets
(In thousands, except share and per share amounts)
December 31, 2015 (Unaudited)	March 31, 2015
ASSETS
Current assets:
Cash	$ 231	$ 75
Accounts receivable-trade, net of allowance of $5 as of December 31, 2015 and March 31, 2015		166	214
Accounts receivable-other		113	76
Inventories, net		242	304
Prepaid expenses and other current assets		5	6
Total current assets		757	675
Property, plant and equipment, net		1,936	1,998
Deferred financing costs, net		75	80
Other assets		47	47
Total assets		$ 2,815	$ 2,800
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$ 186	$ 295
Accrued expenses		173	362
Customer advance		11	77
Notes payable		-	50
Capital lease obligation		3	8
Deferred revenue		25	43
Total current liabilities		398	835
Long-term liabilities:
Long-term financing obligation		1,986	1,986
Accrued interest on financing obligation		156	147
Total long-term liabilities		2,142	2,133
Total liabilities		2,540	2,968
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock; $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of December 31, 2015 and March 31, 2015		-	-
Common stock; $0.001 par value; 50,000,000 shares authorized; 21,567,313 shares issued; and 21,490,621 shares outstanding as of December 31, 2015 and March 31, 2015		21	21
Additional paid-in capital		38,097	38,061
Accumulated deficit		(37,813)	(38,220)
305	(138)
Less: treasury stock; 76,692 shares at cost as of December 31, 2015 and March 31, 2015		(30)	(30)
Total stockholders' equity (deficit)	275	(168)
Total liabilities and stockholders' equity (deficit)	$ 2,815	$ 2,800

The accompanying notes are an integral part of these unaudited condensed financial statements.

AdvanSource Biomaterials Corporation
Condensed Statements of Operations
(Unaudited - in thousands, except per share amounts)
Three Months Ended December 31,			Nine Months Ended December 31,
2015	2014	2015	2014
Revenues:
Product sales	$ 439	$ 355	$ 2,344	$ 1,020
License, royalty and development fees	153	142	461	652
592	497	2,805	1,672
Cost of sales	242	182	869	620
Gross profit	350	315	1,936	1,052
Operating expenses:
Research, development and regulatory	75	84	228	277
Selling, general and administrative	297	325	1,032	981
372	409	1,260	1,258
Income (loss) from operations	(22)	(94)	676	(206)
Interest expense	(89)	(91)	(269)	(287)
Income (loss) before provision for income taxes	(111)	(185)	407	(493)
Provision for income taxes	-	-	-	-
Net income (loss)	$ (111)	$ (185)	$ 407	$ (493)
Net income (loss) per common share:
Basic	$ (0.01)	$ (0.01)	$ 0.02	$ (0.02)
Diluted	$ (0.01)	$ (0.01)	$ 0.02	$ (0.02)
Shares used in computing net income (loss) per common share:
Basic	21,491	21,491	21,491	21,491
Diluted:	21,491	21,491	22,631	21,491

The accompanying notes are an integral part of these unaudited condensed financial statements.