UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report Date of earliest event reported
September 29, 1999 July 16, 1999
CardioTech International, Inc.
------------------------------
(Name of registrant as specified in its charter)
000-28034
(Commission File Number)
Massachusetts 04-3186647
- ------------------------------ -------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
78 E Olympia Avenue
Woburn, Massachusetts 01801
(Address of principal executive offices)
Registrant's telephone number, including area code (781) 933-4772
1
<PAGE>
The purpose of this report is to amend CardioTech International, Inc. Current
Report on Form 8-K dated July 30, 1999 relative to the acquisition of Tyndale
Plains-Hunter, Ltd. (TPH). Included in this amendment are Item 2, financial
statements of business acquired (Item 7(a)) and pro forma financial information
(Item 7 (b)).
Item 2. Acquisition or Disposition of Assets
On July 16, 1999, CardioTech International, Inc., a Massachusetts
corporation ("CardioTech"), completed the acquisition of Tyndale Plains-Hunter,
Ltd., a New Jersey corporation ("TPH"), pursuant to an Agreement and Plan of
Merger, dated as of May 25, 1999 (the "Merger Agreement"), by and among
CardioTech, CardioTech Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of CardioTech ("Acquisition Sub"), and TPH. TPH
manufactures hydrophilic polyurethanes, which are used to provide permanent
lubricity to the surface of medical devices, improve blood compatibility and act
as drug delivery systems and which are used in personal care products including
hair creams, mousses and skin creams. CardioTech intends to continue to use the
assets of TPH to manufacture hydrophilic polyurethanes.
TPH merged with and into Acquisition Sub (the "Merger"), with Acquisition Sub
surviving the Merger and remaining a wholly-owned subsidiary of CardioTech. Each
share of TPH common stock was (i) converted into the right to receive 0.24 of a
share of CardioTech common stock and (ii) exchanged for a cash payment of
approximately $0.19. The conversion and exchange ratios were determined through
arm's length negotiation between the parties. The total number of shares of
CardioTech common stock and the total amount of cash issued in the Merger was
446,153 shares (valued at $1.625 per share) and $350,000, respectively. The cash
consideration used in the Merger came from CardioTech's working capital.
Approximately $100,000 of the cash consideration was placed into escrow pursuant
to the terms of the Merger Agreement. In connection with this transaction, the
Company assumed liabilities of approximately $123,000 and incurred acquisition
costs of approximately $79,000. The excess of the purchase price over the net
assets is approximately $1,017,000 and has been allocated approximately $700,000
to acquired patents and $317,000 to goodwill. The cost of patents and goodwill
will be amortized over their estimated useful lives of five years on a
straight-line basis. The transaction has been recorded in accordance with the
purchase method of accounting and the designated date of the acquisition for
accounting purposes is June 30, 1999.
The description contained herein of the transaction is qualified in its
entirety by reference to the Merger Agreement (Exhibit 2.1), and a copy of
CardioTech's press release announcing the effectiveness of the Merger (Exhibit
99.1), copies of which are attached hereto and incorporated herein by reference.
2
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial statements of business acquired.
TABLE OF CONTENTS
Page
----
Independent Auditors' Report 4
Balance Sheets at March 31, 1999, and March 31, 1998 5
Statement of Operations and Accumulated Deficit for the year
ended March 31, 1999 6
Statement of Cash Flows for the year ended March 31, 1999 7
Notes to the Financial Statements 8-12
3
<PAGE>
Report of Independent Accountants
To the Board of Directors and Stockholders of Tyndale Plains-Hunter, Ltd.:
We have audited the accompanying balance sheets of Tyndale Plains-Hunter,
Ltd, as of March 31, 1999 and 1998, and the related statements of operations and
accumulated deficit and cash flows for the year then ended March 31, 1999. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits of these statements in accordance with generally
accepted auditing standards, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present
fairly, in all materials respects, the financial position of Tyndale
Plains-Hunter, Ltd. at March 31, 1999 and 1998, and the results of its
operations and cash flows for the year then ended March 31, 1999 in conformity
with generally accepted accounting principles.
Adler & Blanchard, LLP
Burlington, Massachusetts
September 24, 1999
4
<PAGE>
Item 7 (a). Financial Statements
TYNDALE PLAINS-HUNTER, LTD.
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 1999 March 31, 1998
-------------- --------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 82,000 $ 92,000
Accounts receivable -- trade 107,000 32,000
Accounts receivable -- other 16,000 --
Inventory 22,000 10,000
Prepaid expenses 9,000 5,000
-------------- --------------
Total Current Assets 236,000 139,000
Property and equipment, net 103,000 93,000
Patents, net of accumulated amortization of $16,000 and $12,000 141,000 92,000
Other non-current assets 8,000 8,000
-------------- --------------
Total Assets $ 488,000 $ 332,000
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 223,000 $ 223,000
Notes payable - Bank 19,000 --
Deferred revenue 70,000 35,000
-------------- --------------
Total Current Liabilities 312,000 258,000
Stockholders' Equity:
Common stock, no par, 5,000,000 shares
authorized, 1,836,342 shares issued
outstanding at March 31, 1999 and 1998 413,000 413,000
Accumulated deficit (162,000) (264,000)
Treasury stock, 53,000 shares, at cost (75,000) (75,000)
-------------- --------------
Total Stockholders' Equity 176,000 74,000
-------------- --------------
Total Liabilities and Stockholders' Equity $ 488,000 $ 332,000
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
TYNDALE PLAINS-HUNTER, LTD.
STATEMENT OF OPERATIONS and ACCUMULATED DEFICIT
For the Year ended March 31, 1999
Revenue
Product Sales $ 246,000
Evaluation Income 105,000
License Fee Income 266,000
---------
617,000
Cost of Sales 239,000
---------
Gross Profit 378,000
Operating Expenses 278,000
---------
Operating Income 100,000
Interest income 2,000
---------
Income before income taxes 102,000
Provision for income taxes (See Note I) --
---------
Net Income $ 102,000
Accumulated Deficit, beginning (264,000)
---------
Accumulated Deficit, ending $(162,000)
=========
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
TYNDALE PLAINS-HUNTER, LTD.
STATEMENT OF CASH FLOWS
For the Year ended March 31, 1999
Cash flows from operating activities:
Net Income $ 102,000
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and Amortization 28,000
Changes in assets and liabilities:
Accounts receivable (91,000)
Inventory (12,000)
Prepaid expenses (4,000)
Other assets --
Accounts payable and accrued expenses 1,000
Deferred revenue 35,000
---------
Net cash flows provided by operating activities 59,000
---------
Cash flows from investing activities:
Purchase of property and equipment (35,000)
Cost of patent applications (53,000)
---------
Net cash flows used by investing activities (88,000)
---------
Cash flows from financing activities:
Net proceeds from bank borrowing 19,000
---------
Net cash flows provided by financing activities 19,000
---------
Net decrease in cash and cash equivalents (10,000)
Cash and cash equivalents at beginning of period 92,000
---------
Cash and cash equivalents at end of period $ 82,000
=========
Supplemental Disclosure of Cash Flow Information:
Interest Paid $ 1,500
Taxes Paid $ 150
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
TYNDALE PLAINS-HUNTER, LTD.
NOTES TO FINANCIAL STATEMENTS
A. Nature of Business:
Tyndale Plains-Hunter, Ltd. develops, licenses and manufactures
hydrophilic polyurethanes, which are used to provide permanent lubricity to the
surface of medical devices, improve blood compatibility, and act as drug
delivery systems. They are also used in personal care products including hair
creams, mousses and skin creams.
B. Summary of Significant Accounting Policies:
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates and such
differences may be material to the financial statements.
Cash and Cash Equivalents
Cash and Cash Equivalents include cash on hand, demand deposits and short
term investments with original maturities of three months or less.
Inventory
Inventory of raw materials and finished polymers are stated at the lower
of cost (first-in, first-out method) or market.
Revenue Recognition
Evaluation Fee Income is earned in connection with agreements where the
Company permits a company to research and study the use of the Company's
polymers for incorporation into their products. These fees are recognized over
the term of the agreements.
License Fee Income is received from royalties dependent on a percentage of
the licensee's sales on products containing the Company's polymers. Minimum
royalty payments are recognized ratably over the year. Royalties in excess of
minimum royalties are recognized as earned.
Product sales are generated from the development and sale of proprietary
biomaterials for use in medical devices and personal care products. Revenue is
recognized in the period in which it occurs. Revenue received, but not yet
earned, is classified as deferred revenue.
Research and Development Expense
Research and development expense is charged to expense as incurred.
8
<PAGE>
Property and Equipment
Property and equipment are stated at cost and depreciated using the
straight-line method over the estimated useful lives of the assets, ranging from
five to seven years. Expenditures for repairs and maintenance are charged to
expense as incurred. When assets are retired or disposed of, the cost and
accumulated depreciation thereon is removed from the accounts and related gains
and losses are included in operations.
Uncertainties
The Company is subject to risks common to companies in the medical device
industry, including, but not limited to, development of new technology
innovations by competitors of the Company, dependence on key personnel,
protection of proprietary technology, and compliance with FDA government
regulations.
Income Taxes
Deferred tax assets and liabilities are recognized based on temporary
differences between the financial statements and tax basis of assets and
liabilities using enacted tax rates expected to be in effect when they are
realized. A valuation reserve against the net deferred assets is recorded, if,
based upon weighed available evidence, it is more likely than not that some or
all of the deferred tax assets will not be realized.
Patents
Costs incurred for application and filing of patents, including legal
fees, have been capitalized and are being amortized over the seventeen year life
of the patents. The Company evaluates the carrying value of intangible assets
versus the discounted cash benefit expected to be realized from the performance
of the underlying operations and adjusts for any impairment in value.
Accordingly, patent costs are recorded at their realizable value. Amortization
expense was $3,675 for the year ended March 31, 1999.
Concentration of Credit Risk
The Company's principal financial instrument, subject to potential
concentration of credit risk is accounts receivable, which are unsecured. As of
March 31, 1999, Helene Curtis, Inc. accounted for approximately 82% of accounts
receivable.
C. Accounts Receivable - Other
Accounts Receivable - Other represents reimbursements due for patent
application costs incurred related to license fee contracts.
D. Inventory:
Inventory at March 31, 1999 and 1998 consist of the following:
9
<PAGE>
1999 1998
-------- --------
Raw Materials $ 11,000 $ 4,000
Finished Goods 11,000 6,000
-------- --------
$ 22,000 $ 10,000
======== ========
E. Property and Equipment:
Property and equipment at March 31, 1999 and 1998 consist of the
following:
1999 1998
-------- --------
Laboratory Equipment $138,000 $103,000
Office Equipment 5,000 5,000
-------- --------
143,000 108,000
-------- --------
Less Accumulated Depreciation 40,000 15,000
-------- --------
Property and Equipment, Net $103,000 $ 93,000
======== ========
Depreciation expense for property and equipment was approximately $25,000
for the year ended March 31, 1999.
F. Accounts Payable and Accrued Expenses:
1999 1998
-------- --------
Accounts Payable, trade $ 11,000 $ 5,000
Professional Fees 206,000 202,000
Accrued Officer's Compensation -- 4,000
Other Accrued Expenses 6,000 12,000
-------- --------
$223,000 $223,000
======== ========
G. Related Party Transactions:
The Company incurs legal fees for services by its general counsel, a
shareholder of the Company. Included in accrued expenses at March 31, 1999 and
1998, is $100,500 and $112,500, respectively, due and payable to the general
counsel.
10
<PAGE>
H. Commitments and Contingencies:
The Company leases operating facilities under a five year lease which
expires in April 2002. Rent expense for the year ending March 31, 1999 was
$40,000. Future minimum lease payments are as follows:
2000 $ 41,616
2001 41,616
2002 41,616
2003 3,468
--------
$128,316
========
I. Income Taxes:
Provision for income taxes consists of the following components:
1999
--------
Current Taxes $ 37,000
Tax benefit of net operating loss carryforward (37,000)
--------
Provision for income taxes $ --
========
The Company has federal net operating loss carryforwards of $235,354 and
state net operating loss carryforwards of $377,977 at the year ending March 31,
1999. These net operating losses will begin to expire in 2001. There is a
valuation allowance recorded to offset the related deferred tax assets due to
uncertainty of realizing the benefit of these assets. The following is a summary
of the significant components of the Company's deferred tax assets and
liabilities as of March 31, 1999.
1999 1998
--------- ---------
Deferred Tax Assets
Federal Net Operating Loss $ 82,374 $ 129,555
State Net Operating Loss 34,018 47,432
--------- ---------
116,392 176,987
Valuation Allowance (116,392) (176,987)
--------- ---------
Net Deferred Tax Asset $ -- $ --
========= =========
J. Major Customers:
Three customers accounted for approximately 42, 24, and 11 percent of the
Company's revenue for the year ended March 31, 1999.
11
<PAGE>
K. Note Payable - Bank:
The Company has a note payable consisting of a $19,000 unsecured bank
note, due June 2001, at an annual rate of 8.5%, as of March 31, 1999. The note
was subsequently paid in full in June 1999.
L. Subsequent Events:
On July 16, 1999, the Company was acquired by CardioTech Acquisition
Corp., a wholly subsidiary of CardioTech International Inc., in exchange for
446,153 shares of CardioTech International Inc's Common Stock valued at $1.625
per share and $350,000 in cash. The acquisition is structured as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code and will be
accounted for pursuant to the purchase method of accounting.
12
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(b) Pro forma financial information
TABLE OF CONTENTS
Page
----
Unaudited Pro Forma Consolidated Statement of Operations
for the Period ended March 31, 1999 15
Unaudited Pro Forma Consolidated Balance Sheets at June 30, 1999 16
Unaudited Pro Forma Consolidated Statement of Operations
for the Period ended June 30, 1999 17
Unaudited Notes to the Pro Forma Consolidated Financial Statements 18
13
<PAGE>
The accompanying pro forma condensed consolidated financial statements are
prepared to illustrate the estimated effects of CardioTech International, Inc's
acquisition of Tyndale Plains-Hunter, Ltd. accounted for under the purchase
method of accounting. The unaudited pro forma consolidated statement of income
for the year end March 31, 1999 and for the three months ended June 30, 1999
combines CardioTech International's and Tyndale Plains-Hunter's historical
results for the respective periods also giving effect to the pro forma
transactions as if they occurred as of April 1, 1998. The unaudited pro forma
consolidated balance sheet combines CardioTech's June 30, 1999 consolidated
balance sheet with Tyndale Plains-Hunter June 30, 1999 balance sheet and gives
the effect to the pro forma transactions as if they had occurred on June 30,
1999, the last day of CardioTech International's most recently completed
quarter.
The unaudited pro forma consolidated financial statements were prepared
utilizing the accounting principles of the respective entities as outlined in
each entity's historical financial statements. The pro forma adjustments are
based upon available information and certain assumptions that CardioTech
International believes are reasonable under the circumstances. The unaudited pro
forma consolidated financial statements do not purport to be indicated of the
operating results or financial position that would has been achieved had the
acquisition taken place on the dates indicated or the results that may be
obtained in the future.
The pro forma consolidated financial statements are based upon, and should
be read in conjunction with, the audited financial statements, including the
notes thereto, of CardioTech International and Tyndale Plains-Hunter.
14
<PAGE>
Item 7 (b). Unaudited Pro Forma Consolidated Financial Statements
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
Year Ended March 31, 1999
<TABLE>
<CAPTION>
Pro Forma
Adjustments for
Historical Tyndale Company
CardioTech Tyndale Plains-Hunter, Ltd. Pro Forma
International, Inc. Plains-Hunter, Ltd. Acquisition Combined
------------------- ------------------- ------------------- --------------
<S> <C> <C> <C> <C>
Revenue $ 1,083,000 $ 617,000 $ -- $ 1,700,000
Cost of Sales -- 239,000 -- 239,000
-------------- -------------- -------------- --------------
Gross Profit 1,083,000 378,000 -- 1,939,000
-------------- -------------- -------------- --------------
Research and Development 2,222,000 -- -- 2,222,000
Selling, General and Administrative 1,257,000 250,000 -- 1,507,000
Amortization and Depreciation 118,000 28,000 127,038(2) 273,038
-------------- -------------- -------------- --------------
3,597,000 278,000 127,038 4,002,038
-------------- -------------- -------------- --------------
Operating Income (2,514,000) 100,000 (127,038) (2,063,038)
-------------- -------------- -------------- --------------
Other Income (Expense) (111,000) 2,000 (15,750)(3) (124,750)
-------------- -------------- -------------- --------------
Income before income taxes (2,625,000) 102,000 (142,788) (2,187,788)
Provision for income tax -- -- -- --
-------------- -------------- -------------- --------------
Net Income (Loss) $ (2,625,000) $ 102,000 $ (142,788) $ (2,187,788)
============== ============== ============== ==============
Other comprehensive income:
Foreign currency translation adjustments 12,000 -- -- 12,000
-------------- -------------- -------------- --------------
Comprehensive loss (2,613,000) $ 102,000 $ (142,788) $ (2,175,788)
============== ============== ============== ==============
Net loss per common share, basic and diluted (0.55) -- -- (0.45)
</TABLE>
15
<PAGE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
June 30, 1999
<TABLE>
<CAPTION>
Pro Forma
Adjustments for
Historical Tyndale Company
CardioTech Tyndale Plains-Hunter, Ltd. Pro Forma
International, Inc. Plains-Hunter, Ltd. Acquisition(1) Combined
------------------- ------------------- ------------------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current Assets: $ 1,762,000 $ 79,000 $ (350,000) $ 1,491,000
Property and equipment, net 479,000 96,000 16,000 591,000
Other non-current assets 325,000 148,000 877,000 1,350,000
-------------- -------------- -------------- -----------
Total Assets $ 2,566,000 $ 323,000 $ 543,000 $ 3,432,000
============== ============== ============== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities: $ 813,000 $ 123,000 $ 18,000 $ 954,000
Long Term Obligations: 2,209,000 -- -- 2,209,000
Commitments and Contingencies 500,000 -- -- 500,000
Stockholders' Equity (Deficit): (956,000) 200,000 525,000 (231,000)
Total Liabilities and Stockholders' Equity (Deficit) $ 2,566,000 $ 323,000 $ 543,000 $ 3,432,000
============== ============== ============== ===========
</TABLE>
16
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
Period Ended June 30, 1999
<TABLE>
<CAPTION>
Pro Forma
Adjustments for
Historical Tyndale Company
CardioTech Tyndale Plains-Hunter, Ltd. Pro Forma
International, Inc. Plains-Hunter, Ltd. Acquisition Combined
------------------- ------------------- ------------------- --------------
<S> <C> <C> <C> <C>
Revenue $ 219,000 $ 141,000 $ -- $ 360,000
Cost of Sales -- 68,000 -- 68,000
-------------- -------------- -------------- --------------
Gross Profit 219,000 73,000 -- 428,000
-------------- -------------- -------------- --------------
Research and Development 590,000 -- -- 590,000
Selling, General and Administrative 523,000 64,000 -- 587,000
Amortization and Depreciation 33,000 8,000 31,760(2) 72,760
-------------- -------------- -------------- --------------
1,146,000 72,000 31,760 1,249,760
-------------- -------------- -------------- --------------
Operating Income (927,000) 1,000 (31,760) (821,760)
-------------- -------------- -------------- --------------
Other Income (Expense) 25,000 -- (3,937)(3) 21,063
-------------- -------------- -------------- --------------
Income before income taxes (902,000) 1,000 (35,697) (800,697)
Provision for income tax -- -- -- --
-------------- -------------- -------------- --------------
Net Income (Loss) $ (902,000) $ 1,000 $ (35,697) $ (800,697)
============== ============== ============== ==============
Other comprehensive income:
Foreign currency translation adjustments (34,000) -- -- (34,000)
-------------- -------------- -------------- --------------
Comprehensive loss (936,000) $ 1,000 $ (35,697) $ (834,697)
============== ============== ============== ==============
Net loss per common share, basic and diluted (0.15) -- -- (0.14)
</TABLE>
17
<PAGE>
CardioTech INTERNATIONAL, INC.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
1. To reflect purchase of Tyndale Plains-Hunter, Ltd. and restatement of net
assets to their estimated fair market value of $112,000 for property and
equipment, $700,000 of patents, and $317,000 in goodwill.
2. To reflect additional depreciation and amortization of acquired property
and equipment and intangible assets.
3. To reflect loss of interest income of cash used to acquire Tyndale
Plains-Hunter
18
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Unaudited Quarterly financial information
TABLE OF CONTENTS
Page
----
Unaudited Pro Forma Balance Sheet at June 30, 1999 20
Unaudited Statements of Operations for the Periods ended
June 30, 1999 and 1998 21
Unaudited Statements of Cash Flows for the Periods ended
June 30, 1999 and 1998 22
19
<PAGE>
TYNDALE PLAINS-HUNTER
UNAUDITED BALANCE SHEET
June 30, 1999
Tyndale
Plains-Hunter, Ltd.
-------------------
ASSETS
Current Assets: $ 79,000
Property and equipment, net 96,000
Other non-current assets 148,000
-------------------
Total Assets $ 323,000
===================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities: $ 123,000
Long Term Obligations: --
Commitments and Contingencies --
Stockholders' Equity: 200,000
Total Liabilities and Stockholders' Equity $ 323,000
===================
20
<PAGE>
TYNDALE PLAINS-HUNTER, LTD.
UNAUDITED STATEMENT OF OPERATIONS
For the Periods Ended June 30,
1999 1998
-------- --------
Revenue $141,000 $155,000
Cost of Sales 68,000 52,000
-------- --------
Gross Profit 73,000 103,000
-------- --------
Research and Development -- --
Selling, General and Administrative 64,000 58,000
Amortization and Depreciation 8,000 7,000
-------- --------
72,000 65,000
-------- --------
Operating Income 1,000 38,000
-------- --------
Other Income (Expense) -- --
-------- --------
Income before income taxes 1,000 38,000
Provision for income tax -- --
-------- --------
Net Income (Loss) $ 1,000 $ 38,000
======== ========
21
<PAGE>
TYNDALE PLAINS-HUNTER, LTD.
UNAUDITED STATEMENT OF CASH FLOWS
For the Periods ended June 30,
1999 1998
Cash flows from operating activities:
Net Income $ 1,000 $ 38,000
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and Amortization 8,000 7,000
Changes in assets and liabilities:
Current assets 98,000 (57,000)
Other assets -- --
Current liabilities (170,000) (44,000)
--------- --------
Net cash flows used by operating activities (63,000) (56,000)
--------- --------
Cash flows from investing activities:
Purchase of property and equipment -- --
Proceeds from stock issuance 23,000 --
--------- --------
Net cash flows provided by investing activities 23,000 --
--------- --------
Cash flows from financing activities:
Cash (paid) proceeds on bank borrowing (19,000) 25,000
Net cash flows used by financing activities (19,000) 25,000
--------- --------
Net decrease in cash and cash equivalents (59,000) (31,000)
Cash and cash equivalents at beginning of period 82,000 92,000
--------- --------
Cash and cash equivalents at end of period $ 23,000 $ 61,000
========= ========
Supplemental Disclosure of Cash Flow Information:
Interest Paid $ -- $ --
Taxes Paid $ 150 $ 150
22
<PAGE>
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
Exhibit 23 Consent of Adler & Blanchard, LLP
23
<PAGE>
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.
CARDIOTECH INTERNATIONAL, INC.
/s/ Michael Szycher
-----------------------------------
Michael Szycher, Ph.D.
Chairman and Chief Executive Officer
Dated: September 29, 1999
24
Exhibit 23
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our reports
dated September 24, 1999, on the financial statements of Tyndale Plains-Hunter,
Ltd. as of March 31, 1999 and 1998 and for the year ended March 31, 1999,
included in this Form 8-K.
/s/ Adler & Blanchard, LLP
Burlington, MA
September 24, 1999
25
