UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended October 31, 1998 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: 0-14961
LUXTEC CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2741310
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
326 Clark Street, Worcester, Massachusetts 01606
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(508) 856-9454
Securities registered pursuant to Section 12(b) of the Act:
American Stock Exchange
Common Stock, $.01 par value per share
(Title of class)
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by checkmark 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 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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
The aggregate market value of the voting Common Stock held by
non-affiliates of the registrant was approximately $2,934,096 based on the
closing price of such stock on January 19, 1999, as reported by the American
Stock Exchange ($2.75 per share).
As of January 19, 1999, 2,872,149 shares of Common stock, $.01 par value,
were issued and outstanding.
Documents Incorporated by Reference Form 10-K Reference
None
The Company's Annual Report on Form 10-K for the year ended October 31,
1998 is hereby amended solely to (i) include the signed Report of Independent
Public Accountants, Arthur Andersen LLP, which was inadvertently omitted from
the original filing of the Annual Report on Form 10-K on January 22, 1999, (ii)
revise disclosure contained in Note 7 of the Notes to Consolidated Financial
Statements to indicate the reasons for the provision of a full valuation
allowance, and (iii) revising the previous disclosure of $320,000 as the
provision for bad debts at October 31, 1997, which should have been shown as
$254,000.
ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LUXTEC CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Public Accountants
To Luxtec Corporation:
We have audited the accompanying consolidated balance sheets of Luxtec
Corporation (a Massachusetts corporation) and subsidiaries as of October 31,
1997 and 1998, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended October 31, 1998. 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 in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as 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 material respects, the financial position of Luxtec Corporation and
subsidiaries as of October 31, 1997 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
October 31, 1998, in conformity with generally accepted accounting principles.
/s/Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Boston, Massachusetts
December 9, 1998
<TABLE>
LUXTEC CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
Assets
<S> <C> <C>
October 31,
1997 1998
Current Assets:
Cash $ 41,712 $ 43,698
Accounts receivable, less reserves of approximately $254,000 and $250,000 in 2,319,945 2,571,230
1997 and 1998, respectively
Inventories 2,527,309 2,549,244
Prepaid expenses and other current assets 71,191 55,068
Total current assets 4,960,157 5,219,240
Property and Equipment, at cost 2,476,691 2,570,501
Accumulated Depreciation and Amortization (1,890,093) (2,075,345)
Property and equipment, net 586,598 495,156
Other Assets, net of accumulated amortization of approximately $143,000 and 255,819 244,754
$109,000 in 1997 and 1998, respectively
Total assets $ 5,802,574 $ 5,959,150
Liabilities and Stockholders' Equity
Current Liabilities:
Revolving line of credit $ 2,082,854 $ 2,186,052
Current portion of equipment facility loan 65,186
88,726
Accounts payable 938,733 497,980
Accrued expenses 478,931 711,745
Total current liabilities 3,565,704 3,484,503
Term Note 460,250 469,250
Equipment Facility Loan, net of current portion 200,992 88,726
Minority Interest
- 51,386
Commitments (Note 13)
Redeemable Preferred Stock, $1.00 par value:
Series A Preferred Stock-
Authorized-500,000 shares
Issued and outstanding-10,000 shares (at liquidation value) 1,119,768 1,199,768
Stockholders' Equity:
Common stock, $.01 par value-
Authorized-10,000,000 shares
Issued and outstanding-2,853,491 shares in 1997 and 2,867,592 in 1998 28,535 28,676
Additional paid-in capital 8,318,685 8,263,018
Accumulated deficit (7,891,360) (7,626,177)
Total stockholders' equity 455,860 665,517
Total liabilities, redeemable preferred stock and stockholders' equity $ 5,802,574 $ 5,959,150
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
LUXTEC CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
October 31, 1998
(7) Income Taxes
As of October 31, 1998, the Company had available net operating loss
carryforwards of approximately $2,034,000, research and development credit
carryforwards of approximately $175,000, and general business credit
carryforwards of approximately $25,000 available to reduce future federal income
taxes, if any. These carryforwards expire through 2012 and are subject to review
and possible adjustment by the Internal Revenue Service. The Tax Reform Act of
1986 limits a corporation's ability to utilize certain net operating loss
carryforwards in the event of a cumulative change in ownership in excess of 50%,
as defined.
The Company follows the liability method of accounting for income taxes in
accordance with the provisions of SFAS No. 109, Accounting for Income Taxes,
whereby a deferred tax liability is measured by the enacted tax rates that will
be in effect when any differences between the financial statement and tax bases
of assets and liabilities reverse.
The components of the net deferred tax amount recognized in the
accompanying consolidated balance sheets are set forth below:
1997 1998
Deferred tax assets $ 1,353,000 $ 1,284,000
Deferred tax liabilities - -
Valuation allowance (1,353,000) (1,284,000)
$ - $ -
The appropriate tax effect of each type of temporary difference and
carryforward before allocation of the valuation allowance is summarized as
follows:
1997 1998
Net operating losses $ 889,000 $ 814,000
Inventory reserve 89,000 95,000
Bad debt reserve 74,000 34,000
Other temporary differences 129,000 141,000
Research and development credits 147,000 175,000
General business credits 25,000 25,000
$ 1,353,000 $ 1,284,000
The Company has provided a full valuation allowance due to its limited
history of profitability. The Company has historically incurred significant
operating losses. Although the Company was profitable in fiscal 1998, it cannot
predict future profitability with adequate assurance that its tax assets will
more likely than not be realized at this time. The Company will periodically
reassess its forecast and valuation allowance levels and revise the level of
reserve when appropriate.
LUXTEC CORPORATION
October 31, 1998
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Corporation has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Worcester, Commonwealth of Massachusetts, on the 1st day of April, 1999.
LUXTEC CORPORATION
by /s/James W. Hobbs
James W. Hobbs, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates indicated:
Signature Title Date
/s/ James W. Hobbs
James W. Hobbs President, Chief Executive Officer April 1, 1999
Officer and Director
/s/ Samuel M. Stein
Samuel M. Stein Chief Financial Officer, Treasurer April 1, 1999
and Assistant Clerk
/s/ James Berardo
James Berardo Director April 1, 1999
/s/ Paul Epstein
Paul Epstein Director April 1, 1999
/s/ James J. Goodman
James J. Goodman Director April 1, 1999
/s/ Patrick G. Phillipps
Patrick G. Phillipps Director April 1, 1999
/s/ Thomas J. Vander Salm
Thomas J. Vander Salm Director April 1, 1999
/s/ Louis C. Wallace
Louis C. Wallace Director April 1, 1999
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports and to all references to our Firm included in or made a part of this
Form 10-K, into the Company's previously filed Registration Statements on Form
S-8 (File Nos. 33-83510, 333-19087 and 333-19107).
S/Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Boston, Massachusetts
April 1, 1999
