UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2016
Commission file number 0-11254
ITUS Corporation
(Exact name of registrant as specified in its charter)
Delaware |
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| 11-2622630 |
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| (State or other jurisdiction of incorporation or organization) |
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| (I.R.S. Employer Identification No.) |
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| 12100 Wilshire Boulevard, Suite 1275 |
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| Los Angeles, CA |
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| 90025 |
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| (Address of principal executive offices) |
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| (Zip Code) |
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(310) 484-5200
(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 ___
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 X 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.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ____ No X
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
On February 15, 2016, the registrant had outstanding 8,730,878 shares of Common Stock, par value $.01 per share, which is the registrant ' s only class of common stock.
TABLE OF CONTENTS | ||
PART I. FINANCIAL INFORMATION | ||
Item 1. | Financial Statements. | |
Condensed Consolidated Balance Sheets as of January 31, 2016 (Unaudited) and October 31, 2015 | 3 | |
Condensed Consolidated Statements of Operations (Unaudited) for the three months ended January 31, 2016 and 2015 | 4 | |
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) for the three months ended January 31, 2016 | 5 | |
Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended January 31, 2016 and 2015 | 6 | |
Notes to Condensed Consolidated Financial Statements (Unaudited) | 7 – 17 | |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations. | 18 - 23 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 23 |
Item 4. | Controls and Procedures. | 23 |
PART II. OTHER INFORMATION | ||
Item 1. | Legal Proceedings. | 24 |
Item 1A. | Risk Factors. | 24 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 24 |
Item 3. | Defaults Upon Senior Securities. | 24 |
Item 4 . | Mine Safety Disclosures. | 24 |
Item 5. | Other Information. | 24 - 25 |
Item 6. | Exhibits. | 25 |
SIGNATURES | 26 | |
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Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements .
ITUS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) | |||||
January 31, | October 31, | ||||
ASSETS | 2016 | 2015 | |||
Current assets: | |||||
Cash and cash equivalents | $ | 3,980,826 | $ | 4,369,219 | |
| Short-term investments in certificates of deposit | 2,150,000 | 2,400,000 | |||
| Prepaid expenses and other current assets | 55,774 | 126,528 | |||
| Total current assets | 6,186,600 | 6,895,747 | |||
| Patents, net of accumulated amortization of $721,069 and $639,744, respectively | 2,315,042 | 2,396,367 | |||
| Property and equipment, net of accumulated depreciation of $17,465 and $13,617, respectively | 145,620 | 43,456 | |||
| Total assets | $ | 8,647,262 | $ | 9,335,570 | |
LIABILITIES AND SHAREHOLDERS' EQUITY |
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| Current liabilities: | |||||
| Accounts payable and accrued expenses | $ | 1,036,218 | $ | 380,765 | |
| Royalties and contingent legal fees payable | 207,789 | 213,017 | |||
| Total current liabilities | 1,244,007 | 593,782 | |||
| Patent acquisition obligation (Note 9) | 3,812,088 | 3,688,187 | |||
| Total liabilities | 5,056,095 | 4,281,969 | |||
| Commitments and contingencies (Note 9) | |||||
| Shareholders' equity: | |||||
| Preferred stock, par value $100 per share; 19,860 shares authorized; | |||||
| no shares issued or outstanding | - | - | |||
| Series A convertible preferred stock, par value $100 per share; 140 shares | |||||
| issued and outstanding | 14,000 | 14,000 | |||
| Common stock, par value $.01 per share; 24,000,000 shares authorized; 8,730,878 | |||||
| and 8,724,878 shares issued and outstanding, respectively | 87,309 | 87,249 | |||
| Additional paid-in capital | 151,231,712 | 151,101,117 | |||
| Accumulated deficit | (147,741,854) | (146,148,765) | |||
| Total shareholders' equity | 3,591,167 | 5,053,601 | |||
| Total liabilities and shareholders' equity | $ | 8,647,262 | $ | 9,335,570 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
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