SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 1998
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ____________ to ___________
COMMISSION FILE NUMBER 0-19467
MEDAMICUS, INC.
(Exact name of small business issuer in its charter)
MINNESOTA 41-1533300
(State of Incorporation) (IRS Employer Identification No.)
15301 HIGHWAY 55 WEST, PLYMOUTH, MN 55447
(Address of principal executive office, including zip code)
(612) 559-2613
(Registrant's telephone number, including area code)
N/A
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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, as
amended, 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 ___
The number of shares of Registrant's Common Stock outstanding on September 30,
1998 was 4,112,274
Transitional Small Business Disclosure Format. Yes ___ No _X_
1
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MEDAMICUS, INC.
INDEX
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Page #
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets as of September 30, 1998 and December 31, 1997 3
Statements of Operations for the three and nine months ended
September 30, 1998 and 1997 4
Statement of Shareholders' Equity for the nine months ended
September 30, 1998 4
Statements of Cash Flows for the nine months ended September
30, 1998 and 1997 5
Condensed Notes to the Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 6-10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 10
ITEM 2. CHANGES IN SECURITIES 10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 10
ITEM 5. OTHER INFORMATION 10
ITEM 6(a). EXHIBITS 10
ITEM 6(b). REPORTS ON FORM 8-K 10
2
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MEDAMICUS, INC.
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
09/30/98 12/31/97
----------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 834,967 $ 1,102,490
Accounts receivable 1,124,490 1,004,939
Inventories 1,249,721 1,170,289
Prepaid expenses and other assets 81,058 96,423
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TOTAL CURRENT ASSETS 3,290,236 3,374,141
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PROPERTY AND EQUIPMENT:
Equipment 2,073,129 1,942,072
Office furniture, fixtures and computers 539,195 502,806
Leasehold improvements 363,950 363,950
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2,976,274 2,808,828
Less accumulated depreciation and amortization (2,275,714) (1,940,914)
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NET PROPERTY AND EQUIPMENT 700,560 867,914
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LONG-TERM INVESTMENTS, RESTRICTED 0 19,296
PATENT RIGHTS, NET OF ACCUMULATED AMORTIZATION OF
$141,246 AND $124,319, RESPECTIVELY 5,732 18,202
==============================================================================================
TOTAL ASSETS $ 3,996,528 $ 4,279,553
==============================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable to bank $ 684,579 $ 659,240
Accounts payable 463,223 607,029
Accrued expenses 291,382 208,112
Current installments of note payable to customer 0 2,822
Current installments of capital lease obligations 37,836 37,836
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TOTAL CURRENT LIABILITIES 1,477,020 1,515,039
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LONG-TERM LIABILITIES:
Capital lease obligations, less current intallments 16,572 47,190
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TOTAL LONG-TERM LIABILITIES 16,572 47,190
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TOTAL LIABILITIES 1,493,592 1,562,229
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SHAREHOLDERS' EQUITY:
Preferred stock-undesignated, authorized 1,000,000 shares 0 0
Common stock-$.01 par value, authorized 9,000,000 shares 41,123 41,123
Additional paid-in capital 8,578,142 8,578,142
Accumulated deficit (6,116,329) (5,901,941)
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TOTAL SHAREHOLDERS' EQUITY 2,502,936 2,717,324
==============================================================================================
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,996,528 $ 4,279,553
==============================================================================================
</TABLE>
SEE ACCOMPANYING CONDENSED NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
MEDAMICUS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
09/30/98 09/30/97 09/30/98 09/30/97
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Sales $ 2,109,510 $ 1,711,548 $ 5,800,465 $ 5,280,446
Cost of sales 1,207,234 974,433 3,386,476 2,946,491
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GROSS PROFIT 902,276 737,115 2,413,989 2,333,955
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OPERATING EXPENSES:
Research and development 187,802 125,952 439,083 361,410
Selling, general and administrative 673,774 672,473 2,141,207 2,057,098
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TOTAL OPERATING EXPENSES 861,576 798,425 2,580,290 2,418,508
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OPERATING INCOME (LOSS) 40,700 (61,310) (166,301) (84,553)
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OTHER INCOME (EXPENSE):
Interest expense (26,187) (15,744) (75,206) (63,147)
Interest income 9,986 11,522 34,506 36,229
Other 663 (3,743) (7,387) (16,465)
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TOTAL OTHER INCOME (EXPENSE) (15,538) (7,965) (48,087) (43,383)
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NET INCOME (LOSS) $ 25,162 $ (69,275) $ (214,388) $ (127,936)
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NET INCOME (LOSS) PER SHARE
Basic $ 0.01 $ (0.02) $ (0.05) $ (0.03)
Diluted $ 0.01 $ (0.02) $ (0.05) $ (0.03)
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING
Basic 4,112,274 4,108,199 4,112,274 4,084,742
Diluted 4,124,175 4,108,199 4,112,274 4,084,742
</TABLE>
SEE ACCOMPANYING CONDENSED NOTES TO FINANCIAL STATEMENTS
MEDAMICUS, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Additional
------------------------ Paid In Accumulated
Shares Amount Capital Deficit Total
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<S> <C> <C> <C> <C> <C>
BALANCES AT DECEMBER 31, 1997 4,112,274 $ 41,123 $ 8,578,142 $(5,901,941) $ 2,717,324
Net loss for the nine month period ended 09/30/98 0 0 0 (214,388) (214,388)
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BALANCES AT SEPTEMBER 30, 1998 4,112,274 $ 41,123 $ 8,578,142 $(6,116,329) $ 2,502,936
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</TABLE>
SEE ACCOMPANYING CONDENSED NOTES TO FINANCIAL STATEMENTS
4
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MEDAMICUS, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
09/30/98 09/30/97
----------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (214,388) $ (127,936)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization 351,727 368,124
Interest added to investments (704) (1,193)
Common stock issued as sales incentive 0 3,028
Changes in operating assets and liabilities:
Accounts receivable (119,551) 404,564
Inventories (79,432) 33,604
Prepaid expenses and other assets 15,365 (31,806)
Accounts payable (143,806) (395,117)
Accrued expenses 83,270 56,220
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (107,519) 309,488
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net of retirements (167,446) (164,290)
Additions to patent rights (4,457) (3,784)
Purchase of available-for-sale marketable securities, including reinvestment
of securities which matured 0 (19,011)
Sale of available-for-sale marketable securities, including sales of securities
which matured 20,000 30,000
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NET CASH USED IN INVESTING ACTIVITIES (151,903) (157,085)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease obligations (30,618) (41,859)
Proceeds from sale of stock, net of offering costs 0 0
Proceeds from exercise of stock options 0 50,000
Proceeds from (payments on) note payable to bank 25,339 (363,939)
Payments on note payable to customer (2,822) (10,800)
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NET CASH USED IN FINANCING ACTIVITIES (8,101) (366,598)
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NET DECREASE IN CASH AND CASH EQUIVALENTS (267,523) (214,195)
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CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,102,490 1,205,783
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 834,967 $ 991,588
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 73,493 $ 58,235
</TABLE>
SEE ACCOMPANYING CONDENSED NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
CONDENSED NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
1. BASIS OF PRESENTATION
The financial statements included in this Form 10-QSB have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted, pursuant to such rules and
regulations, although management believes the disclosures are adequate to make
the information presented not misleading. These statements should be read in
conjunction with the Company's annual report on Form 10-KSB for the year ended
December 31, 1997, filed by the Company with the Securities and Exchange
Commission.
The financial statements presented herein as of September 30, 1998 and for the
three and nine months ended September 30, 1998 and 1997 reflect, in the opinion
of management, all material adjustments consisting only of normal recurring
adjustments necessary for a fair presentation of the financial position, results
of operations and cash flows for these interim periods.
2. INVENTORIES
Inventories are stated at the lower of cost, determined on a first-in, first-out
(FIFO) basis, or market. Inventories consist of the following:
SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------------------------------
Purchased parts and subassemblies $ 662,148 $ 638,542
Work in process 190,558 238,042
Finished goods 397,015 293,705
------------------------------------------
$ 1,249,721 $ 1,170,289
==========================================
3. NET INCOME (LOSS) PER SHARE
Net income (loss) per common share is determined by dividing the net income
(loss) by the weighted average number of shares of common stock outstanding
during the period and the dilutive effect of common stock equivalents. Common
stock equivalents, consisting of stock options and warrants, have been excluded
from the loss period calculations as their inclusion would have an antidilutive
effect.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis provides information that the Company's
management believes is relevant to an assessment and understanding of the
Company's results of operations and financial condition. This discussion should
be read in conjunction with the accompanying financial statements and footnotes.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1997
Total revenues were $5,800,465 for the nine months ended September 30, 1998
compared to $5,280,446 for the nine months ended September 30, 1997,
representing a 9.9% increase. Sales of vessel introducers, primarily to
Medtronic under an exclusive distribution arrangement, were $3,223,891 for the
nine months ended September 30, 1998, compared to $3,055,780 for the nine months
ended September 30, 1997, representing a 5.5% increase. This increase was
primarily due to Medtronic increasing its inventory levels during the third
quarter in response to their introduction of several new pacing and
defibrillator products. Medtronic has added additional sales people to help
support these new products and the Company has received additional orders above
Medtronic's expected sell-through for the fourth quarter. The Company expects
sales levels to Medtronic will decline somewhat in the first quarter of 1999 as
Medtronic completes their inventory build in support of these new activities in
1998.
Contract manufacturing sales were $474,946 for the nine months ended September
30, 1998, compared to $311,646 for the nine months ended September 30, 1997,
representing a 52.4% increase. This increase is primarily due to the
6
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Company's existing customer increasing the size of its orders compared to last
year and the addition of another contract manufacturing customer during the
second quarter of 1998. The Company expects to see a slight decline in contract
manufacturing sales in the fourth quarter due to one of the products being
phased out. The Company also does some contract research and development work
periodically for Medtronic and realized sales of $67,852 for the nine months
ended September 30, 1998 compared to $14,467 for the nine months ended September
30, 1997. This contract research and development work is not expected to be a
continuous revenue item for the Company.
Sales of the Company's fiber optic pressure sensing catheter and monitor
transducer products were $2,033,776 for the nine months ended September 30,
1998, compared to $1,898,553 for the nine months ended September 30, 1997,
representing a 7.1% increase. Monitor sales decreased 15.2% or $203,374,
catheter sales increased 56.0% or $292,638 and accessory and service sales
increased 123.1% or $45,959 over the comparable period. While the Company has
been pleased with the steady growth in its catheter sales, it has been
disappointed with the slow rate of growth in its monitor sales. The Company had
expected an increase in monitor sales during the third quarter due to the large
number of leads from major shows that were held late in the second quarter, but
these sales have not materialized to date.
Consequently, the Company has embarked on a significant change in its
distribution strategy for its LuMax products. The Company has been selling the
LuMax System through an independent sales force since 1995 and added regional
managers in early 1997 to oversee sales activities. This strategy has not
produced the growth rate in sales anticipated by the Company. In April 1998, the
Company hired a new Vice President of Sales & Marketing whose initial
responsibilities were to evaluate the results and the market opportunities
associated with the LuMax System. As a result of this evaluation, the Company
decided to embark on a direct sales strategy for selling the LuMax. The
Company's former national sales manager resigned in July and a new national
sales manager was hired in September. The Company also terminated its regional
managers in September and sent notices to the independent sales reps that their
contracts would end on December 31, 1998. The Company is currently in the
process of interviewing candidates for the direct sales positions and has
already hired two individuals, with plans to hire a total of 10 individuals by
the end of the year. The Company has been in contact with its independent sales
reps regarding fourth quarter sales and has put extra incentives in place to
provide additional motivation. While the Company believes that most of the
independent sales reps will continue their sales efforts, the Company expects to
see a sales decline in the fourth quarter compared to last year.
Total gross profit increased from $2,333,955 for the nine months ended September
30, 1997, to $2,413,989 for the nine months ended September 30, 1998, an
increase of 3.4%. Total gross profit as a percent of sales decreased from 44.2%
to 41.6% in such periods. The gross profit percentage on vessel introducers and
contract manufacturing totaled 53.1% for the nine months ended September 30,
1997, compared to 49.5% in the nine months ended September 30, 1998. The
decrease in the gross profit percentage on vessel introducers and contract
manufacturing was primarily due to price concessions passed along to Medtronic
in the second and third quarters of 1997 and continuing throughout 1998 in order
to respond to competitive pressures it was experiencing in the market place. For
fiber optic products, the gross profit percent totaled 27.1% for the nine month
period ended September 30, 1998 compared to 28.3% for the nine month period
ended September 30, 1997. This decrease was primarily due to two factors. First,
monitor sales, which carry a higher margin than catheter and accessory sales,
were lower in 1998 compared to 1997. Second, because monitor sales were lower,
the Company has not been able to utilize its capacity as anticipated. The
Company expects gross profit in the fiber optic business to improve in the
future as the Company increases sales and better utilizes its capacity.
Total research and development expenditures were $439,083 or 7.6% of sales for
the nine months ended September 30, 1998, compared to $361,410 or 6.8% of sales
for the nine months ended September 30, 1997. The Company has been developing an
interface box, which allows high-end urodynamic equipment owners to utilize the
Company's fiber optic catheters. The interface box is currently in beta testing
and the results have been encouraging. The Company is also conducting handling
studies of a lower cost catheter design. The Company anticipates that it will
begin marketing the Interface Box and low cost catheters in January 1999.
Finally, the Company has been working on new product development projects with
Medtronic. The Company expects research and development expenditures to increase
both in amount and as a percentage of sales during the fourth quarter as it
continues to work on these projects.
7
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Selling, general and administrative expenses increased from $2,057,098 for the
nine months ended September 30, 1997 to $2,141,207 for the nine months ended
September 30, 1998. Sales and marketing expenses increased $67,883 for the nine
months ended September 30, 1998 over the comparable period in 1997 primarily
because of increased spending on salaries, travel and conventions. The Company
incurred salaries and travel expenses for its two regional managers for the full
nine months of 1998 that were not in place for the full nine-month period in
1997. Additionally, the Company incurred severance costs related to the
termination of the regional managers. The Company has also attended a greater
number of trade shows in 1998 compared to 1997. General and administrative
expenses increased $16,226 during the comparable periods, primarily due to
increases in salaries. Interest expense, interest income and other expenses
remained relatively unchanged during the comparable periods. The move to a
direct sales force is expected to increase the Company's sales and marketing
expenses and, to the extent there is a lag between hiring sales personnel and
such personnel making sales, the Company's net loss will increase as well.
As a result, the Company incurred a net loss of $214,388 or $.05 per share for
the nine months ended September 30, 1998, compared to a net loss of $127,936 or
$.03 per share for the nine months ended September 30, 1997.
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1997
Total revenues were $2,109,510 for the three months ended September 30, 1998
compared to $1,711,548 for the three months ended September 30, 1997,
representing a 23.3% increase. Sales of vessel introducers, primarily to
Medtronic under an exclusive distribution arrangement, were $1,239,527 for the
three months ended September 30, 1998, compared to $937,717 for the three months
ended September 30, 1997, representing a 32.2% increase. This increase was
primarily due to the factors discussed above. The Company expects to see
continued strong sales in the fourth quarter as Medtronic builds their
inventories in support of their new products.
Contract manufacturing sales were $144,045 for the three months ended September
30, 1998, compared to $39,142 for the three months ended September 30, 1997,
representing a 268.0% increase. This increase was primarily due to the factors
discussed above. The Company expects contract manufacturing sales to decline
slightly in the fourth quarter due to one of its customer's products being
phased out. The Company also does some contract research and development work
periodically for Medtronic and realized sales of $27,066 for the three months
ended September 30, 1998 compared to $0 for the three months ended September 30,
1997.
Sales of the Company's fiber optic pressure sensing catheter and monitor
transducer products were $698,872 for the three months ended September 30, 1998,
compared to $734,689 for the three months ended September 30, 1997, representing
a 4.9% decrease. Monitor sales decreased 30.2% or $150,140, catheter sales
increased 38.0% or $84,335 and accessory and service sales increased 203.1% or
$29,987 in the three months ended September 30, 1998 over the comparable period
in 1997, primarily due to the factors discussed above.
Total gross profit increased from $737,115 for the three months ended September
30, 1997, to $902,276 for the three months ended September 30, 1998, an increase
of 22.4%. Total gross profit as a percent of sales decreased from 43.1% in the
three months ended September 30, 1997 to 42.8% in the comparable period in 1998.
The gross profit percentage on vessel introducers and contract manufacturing
totaled 51.3% in the third quarter of 1998, compared to 49.6% in the third
quarter of 1997, primarily due to the increased orders from Medtronic which
allowed the Company to absorb its overhead more effectively. For fiber optic
products, the gross profit percent totaled 25.6% in the third quarter of 1998
compared to 34.4% in the third quarter of 1997, primarily due to the lower
monitor sales in the third quarter of 1998, which carry a higher gross margin.
Total research and development expenditures were $187,802 or 8.9% of sales for
the three months ended September 30, 1998, compared to $125,952 or 7.4% of sales
for the three months ended September 30, 1997, primarily due to the factors
discussed above.
Selling, general and administrative expenses increased from $672,473 for the
three months ended September 30, 1997 to $673,774 for the three months ended
September 30, 1998. Sales and marketing expenses decreased $20,938 primarily due
to lower commissions and general and administrative expenses increased $22,239
in the third
8
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quarter of 1998 compared to the third quarter of 1997 primarily for the reasons
discussed above. Interest expense, interest income and other expenses remained
relatively unchanged during the comparable periods.
As a result, the Company reported net income of $25,162 or $.01 per share for
the three months ended September 30, 1998, compared to a net loss of $69,275 or
$.02 per share for the three months ended September 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities for the nine months ended September 30,
1998 was $107,519, consisting of a net loss of $214,388 less adjustments for
depreciation and amortization of $351,727 and interest accretion of $704. In
addition, cash was used to fund net changes in operating assets and liabilities
of $244,154. The Company saw an increase in accounts receivable during the first
nine months of 1998 primarily due to the increase in Medtronic orders during the
third quarter. The Company also saw an increase in inventory during the first
nine months of 1998 primarily due to the lower than expected monitor sales in
the third quarter. The Company also utilized its line of credit to pay down
payables and prepay some items in order to help meet the minimum interest
requirement under its line of credit.
Net cash used in investing activities for the nine months ended September 30,
1998 was $151,903. The Company purchased $167,446 of equipment during the period
and had additions to patent rights of $4,457. The Company also redeemed a
$20,000 Treasury bill that had been pledged against the lease for the Company's
new enterprise management software system purchased in 1996. The leasing company
agreed to release the pledged Treasury bill early due to the Company's payment
history on the lease.
Net cash used in financing activities for the nine months ended September 30,
1998 was $8,101. The Company increased its usage on the credit line by $25,339
during the period and had a balance due on the line of $684,579 as of September
30, 1998. The Company used the line of credit aggressively during the first six
months of 1998 in order to meet the minimum interest requirement. The Company
also made principal debt payments totaling $33,440.
As a result, the Company's cash and cash equivalents were $834,967 as of
September 30, 1998 compared to $1,102,490 at December 31, 1997. Working capital
decreased from $1,859,102 as of December 31, 1997 to $1,813,216 as of September
30, 1998.
On June 17, 1998, the Company signed a one-year extension through June 30, 1999
on its revolving line of credit with a financial institution. The line was
increased from $1,200,000 to $1,500,000 and the agreement calls for interest at
the rate of 1.00% over the financial institution's base rate with no minimum
interest due. The availability under the line is subject to borrowing base
requirements, and advances are at the discretion of the lender. The line is
secured by substantially all of the Company's assets.
If sales estimates and working capital needs meet the Company's projections, the
Company believes its available cash and investments, along with borrowing
availability under its line of credit, will be sufficient to meet the Company's
anticipated operating expenses and cash requirements for the foreseeable future.
If the sales estimates are not realized or working capital requirements exceed
those projected, the Company may need to secure additional capital or, if
capital is not available, to curtail its marketing efforts.
The Company has investigated the impact of Year 2000 issues on both its own
internal information systems and the products it develops, markets and sells.
During 1997, the Company purchased, from a worldwide supplier and developer of
information systems, an enterprise-wide information system with written
assurance from the developer that the system will correctly function across the
year 2000. During 1997, the Company also reviewed all of the products it
develops, markets and sells, as well as the raw materials and subassemblies
required to manufacture them, and believes that there are no Year 2000 issues.
The Company has not investigated its suppliers' progress in dealing with Year
2000 issues. The Company does not conduct any business with its suppliers using
EDI technology, so the primary risk associated with its suppliers is in their
ability to deliver materials to the Company in a timely manner. Because of the
diversity of sources available for the Company's raw materials and
subassemblies,
9
<PAGE>
the Company believes that Year 2000 issues will not have a material adverse
effect on the Company's financial position, operations or cash flow; however,
there can be no assurance that such will be the case.
Forward-looking statements herein are made pursuant to the safe harbor
provisions of the Private Securities Reform Litigation Act of 1995. Certain
important factors could cause results to differ materially from those
anticipated by some statements made herein. You are cautioned that all
forward-looking statements involve risks and uncertainties. Among the factors
that could cause results to differ materially are the following: inability to
attract and retain key personnel; delays in new product launches; lack of market
acceptance of the Company's products; failure of the interface box to perform as
expected; introduction of competitive products; patent and government regulatory
matters; inability to attract effective sales representatives and/or
unsatisfactory performance by sales representatives; and the Risk Factors
included in Form 8-K filed with the Securities and Exchange Commission on
November 13, 1996.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None
ITEM 2 - CHANGES IN SECURITIES
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER INFORMATION
The Company announced the resignation of Ted K. Schwarzrock from its
Board of Directors effective October 8, 1998. Mr. Schwarzrock indicated
that recent commitments to other business interests will not allow him
sufficient time to devote to the responsibilities associated with Board
membership.
ITEM 6(a) - EXHIBITS
Exhibit 27
ITEM 6(b) - REPORTS ON FORM 8-K
None
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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:
MEDAMICUS, INC.
Date: November 3, 1998 By: /s/ James D. Hartman
President, Chief Executive Officer and Chief
Financial Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 834,967
<SECURITIES> 0
<RECEIVABLES> 1,133,720
<ALLOWANCES> 9,230
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0
0
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</TABLE>
