FORM 8-K/A
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): June 1, 2000
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SURGICAL LASER TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-17919 31-1093148
------------------------------- ---------------- -------------------
(State or other jurisdiction of (Commission file (I.R.S. Employer
incorporation or organization) number) Identification No.)
147 Keystone Drive
Montgomeryville, PA 18936
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(Address of principal executive offices)
(Zip Code)
(215) 619-3600
---------------------------------------------------
(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed
since last report)
<PAGE>
The Registrant hereby amends Form 8-K, for the event dated June 1, 2000, to
include the following financial statements and pro forma financial information,
in reliance upon instructions 7 (a) (4) and 7 (b) (2) of Form 8-K.
<TABLE>
<CAPTION>
ITEM 7. Financial Statements and Exhibits PAGE
----
<S> <C> <C>
(a) Financial Statements of Surgical Innovations & Services, Inc.
Independent Auditors' Report 3
Balance Sheet as of December 31, 1998 4
Statement of Operations for the year ended December 31, 1998 5
Statement of Stockholders' Equity for the year ended December 31, 1998 6
Statement of Cash Flows for the year ended December 31, 1998 7
Notes to Financial Statements 8
Independent Auditors' Report 13
Balance Sheet as of December 31, 1999 14
Statement of Operations for the year ended December 31, 1999 15
Statement of Stockholders' Equity for the year ended December 31, 1999 16
Statement of Cash Flows for the year ended December 31, 1999 17
Notes to Financial Statements 18
(b) Interim Financial Information of Surgical Innovations & Services, Inc.
Unaudited Balance Sheet as of March 31, 1999 and March 31, 1998 23
Unaudited Statement of Operations for the quarters ended March 31, 1999 and
March 31, 1998 24
Unaudited Statement of Cash Flows for the quarters ended March 31, 1999 and
March 31, 1998 25
Notes to Unaudited Interim Financial Statements 26
(c) Pro Forma Financial Information of Surgical Laser Technologies, Inc. and Subsidiaries
Unaudited Pro Forma Combined Balance Sheet as of April 2, 2000 28
Unaudited Pro Forma Combined Statement of Operations for the year ended
January 2, 2000 29
Unaudited Pro Forma Combined Statement of Operations for the quarter
ended April 2, 2000 30
Notes to Unaudited Pro Forma Combined Financial Statements 31
SIGNATURES 33
</TABLE>
2
<PAGE>
(a) Financial Statements of Surgical Innovations & Services, Inc.
Report of Independent Public Accountants
Board of Directors
Surgical Innovations & Services, Inc.
We have audited the accompanying balance sheet of Surgical Innovations &
Services Inc. (an Alabama corporation) as of December 31, 1998 and the related
statements of operations, stockholders' equity, and cash flows for the year then
ended. 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 audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. 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 audit provides 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 Surgical Innovations &
Services, Inc, as of December 31, 1998 and the results of its operations and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States.
Grant Thornton LLP
Philadelphia, Pennsylvania
July 28, 2000
3
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 72,096
Accounts receivable, net of allowance for doubtful accounts of $1,500 248,022
Inventories 75,346
Prepaids and other 19,829
----------
Total current assets 415,293
PROPERTY AND EQUIPMENT, net 1,916,942
----------
Total assets $2,332,235
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit $ 73,686
Current maturities of long-term debt 436,055
Accounts payable 514,125
Accrued liabilities 23,878
----------
Total current liabilities 1,047,744
----------
LONG-TERM DEBT, net of current maturities 876,568
----------
DEFERRED INCOME TAXES 205,600
----------
STOCKHOLDERS' EQUITY
Common stock, $1.00 par value, 5,000 shares authorized, 1,000 shares
issued and outstanding 1,000
Additional paid-in capital 245,161
Accumulated deficit (43,838)
----------
Total stockholders' equity 202,323
----------
Total liabilities and stockholders' equity $2,332,235
==========
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
REVENUES $2,098,662
COST OF REVENUES 1,202,959
----------
GROSS PROFIT 895,703
OPERATING EXPENSES 927,413
----------
LOSS FROM OPERATIONS (31,710)
OTHER EXPENSE
Interest expense 123,066
----------
LOSS BEFORE INCOME TAXES (154,776)
PROVISION FOR INCOME TAXES 81,300
----------
Net loss $ (236,076)
==========
The accompanying notes are an integral part of this statement.
5
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Retained
Additional earnings
Common paid-in (accumulated
stock capital deficit) Total
------- ---------- ------------ --------
<S> <C> <C> <C> <C>
BALANCE, beginning of year $1,000 $245,161 $192,238 $438,399
Net loss - - (236,076) (236,076)
------ -------- --------- ---------
BALANCE, end of year $1,000 $245,161 $ (43,838) $202,323
====== ======== ========= ========
</TABLE>
The accompanying notes are an integral part of this statement.
6
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(236,076)
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation 248,680
Deferred income tax provision 81,300
Changes in assets and liabilities
Accounts receivable 11,356
Inventories (8,675)
Prepaid and other 3,870
Accounts payable 361,976
Accrued liabilities 166
----------
Net cash provided by operating activities 462,597
----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (631,826)
----------
Net cash used in investing activities (631,826)
----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from line of credit 73,686
Proceeds from long term debt 1,312,623
Principal payments on long term debt (1,152,780)
----------
Net cash provided by financing activities 233,529
----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 64,300
CASH AND CASH EQUIVALENTS, beginning of year 7,796
----------
CASH AND CASH EQUIVALENTS, end of year $ 72,096
==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest $ 124,611
==========
The accompanying notes are an integral part of this statement.
7
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE A - THE COMPANY AND BASIS OF PRESENTATION
Surgical Innovations & Services, Inc. (SIS or the Company) was founded in
1993 to create a contract sales and distribution company providing laser
services to hospitals. SIS is headquartered in Tuscaloosa, Alabama, and provides
certified technicians to operate surgical lasers on a fee-per-case basis. SIS
operates lasers for doctors performing urological, gynecological, cosmetic, and
orthopedic procedures primarily in hospitals in the Southeastern United States.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
1. Accounts Receivable
Accounts receivable represent amounts due from clients for services
provided by the Company. Such amounts are recorded net of estimated allowances
for bad debts. The Company regularly reviews its accounts receivable and makes
provisions for potentially uncollectible balances. At December 31, 1998,
management believes the Company had incurred no material impairments to the
carrying values of its accounts receivable, other than uncollectible amounts for
which provisions have been made.
2. Inventories
Inventories consist primarily of disposable medical supplies and equipment
which the Company considers finished goods. Inventories are stated at the lower
of cost (first-in, first-out basis) or market.
3. Property, Equipment and Depreciation
Property and equipment are stated at cost. Depreciation is calculated on a
straight-line basis over the estimated useful lives of the assets. Expenditures
for major renewals and betterments to property and equipment are capitalized,
while expenditures for maintenance and repairs are charged to operations when
incurred.
Laser units and laser accessories used for sales evaluation and
demonstration purposes or those units/accessories used for development and
medical training are capitalized and included in property and equipment. These
capitalized units and accessories are being depreciated on a straight-line basis
over a period of up to ten years.
4. Revenues and Expenses
The Company's revenues are primarily derived from the performance of laser
procedures under service contracts with hospitals and sales of disposable
products used in conjunction with laser procedures. Revenues are recorded at the
time services are performed or products are used. Cost of revenues consists
primarily of the cost of disposable medical supplies and equipment used during
the laser procedures and related labor costs.
(Continued)
8
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998
NOTE B - SIGNIFICANT ACCOUNTING POLICIES - Continued
5. Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
6. Impairment of Long-Lived Assets
Pursuant to Statement of Financial Accounting Standards No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of, SIS is required to evaluate the impairment of long-lived assets and certain
identifiable intangible assets on a periodic basis. SIS reviews the
realizability of its long-lived assets by analyzing the projected undiscounted
cash flows and adjusts the net book value of the recorded assets when necessary.
No such adjustments have been recorded in 1998.
7. Concentrations
In the normal course of business, the Company extends credit to its
customers, which are primarily alternate-site health care providers. At December
31, 1998, approximately 12%, or $30,000, of accounts receivable was concentrated
in one customer. Additionally, approximately 14%, or $304,000, of revenues were
generated from one customer. Also, the Company purchases the majority of its
laser supplies from one supplier.
8. Income Taxes
The Company accounts for its income taxes under the liability method. Under
the liability method, deferred income tax assets and liabilities are determined
based on differences between the financial statement and income tax basis of
assets and liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse. The principal difference between assets
and liabilities for financial statement and tax return purposes is accelerated
depreciation.
NOTE C - PROPERTY AND EQUIPMENT, NET
As of December 31,1998, property and equipment consists of:
Useful lives Amount
------------ ----------
Laser equipment 10 years $2,117,180
Vehicles 5 years 267,313
Computer equipment 3-5 years 39,895
Furniture and office equipment 7 years 13,013
----------
2,437,401
Less accumulated depreciation 520,459
----------
Net property and equipment $1,916,942
==========
9
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998
NOTE D - SHORT-TERM BORROWINGS
The Company has entered into a $100,000 revolving line of credit agreement
with a bank, with interest payable monthly at the bank's commercial rate
(effectively 7.75% at December 31, 1998). The line of credit is secured by
substantially all of the Company's fixed assets. The line of credit contains
various restrictive covenants, generally common to such loan agreements, which
include defined levels of tangible net worth, total liabilities to tangible net
worth and fixed charge coverage. The amount outstanding under the revolving line
of credit at December 31, 1998 was $73,686.
NOTE E - LONG-TERM DEBT
The Company's long-term debt at December 31, 1998 consists of the
following:
<TABLE>
<S> <C>
Term note payable, due in monthly installments of $36,549 including interest at
7.5% per annum through January 10, 2002, secured by the Company's assets $1,190,002
Note payable, due in monthly installments of $4,153, including interest of 7.5%
through September 10, 1999, secured by certain fixed assets 36,226
Note payable, due in monthly installments of $1,552, including interest at 7.5%
through October 10, 2002, secured by certain fixed assets 61,757
Note payable, due in monthly installments of $623, including interest at 8.00%
through October 10, 2002, secured by vehicle 24,638
----------
Total long-term debt 1,312,623
Less current maturities of long-term debt 436,055
----------
$ 876,568
==========
</TABLE>
The Company's credit facilities contain various restrictive covenants.
As of December 31, 1998, maturities of long-term debt are as follows:
<TABLE>
<S> <C>
1999 $ 436,055
2000 404,315
2001 435,704
2002 36,549
----------
$1,312,623
==========
</TABLE>
NOTE F - RETIREMENT SAVINGS PLAN
SIS has a defined contribution retirement plan that provides certain
employees an opportunity to accumulate funds for their retirement. The Plan is a
simple IRA and provides for discretionary matching contributions by SIS up to 3%
of the employee's salary, up to a maximum of $6,000 of the employees'
compensation. SIS made a matching contribution of $5,559 in 1998.
10
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998
NOTE G - INCOME TAXES
The provision for income taxes for the year ended December 31, 1998
follows:
<TABLE>
<S> <C>
Current $ -
Deferred 81,300
----------
Total $ 81,300
==========
</TABLE>
The provision for income taxes differed from the amount computed by
applying the federal statutory rate of 34% to net income before income taxes
primarily due to the effect of state income taxes and the establishment during
1998 of a valuation reserve of $92,000 against deferred tax assets.
The tax effects of temporary differences and carryforwards which gave rise
to a significant portion of deferred tax assets and liabilities at December 31,
1998 were as follows:
<TABLE>
<S> <C>
Deferred tax assets
Net operating loss carryforwards $ 171,900
Other 9,800
----------
181,700
Less valuation allowance 92,000
----------
Total deferred tax assets 89,700
Deferred tax liabilities
Property and equipment 295,300
----------
Total deferred tax liabilities 295,300
----------
Net deferred tax liabilities $ 205,600
==========
</TABLE>
At December 31, 1998, the Company has federal and state net operating loss
carryforwards approximating $208,000, expiring through 2013.
NOTE H - RELATED PARTY TRANSACTIONS
A director and stockholder of SIS performs accounting services for SIS.
Total professional fees paid to this firm approximated $4,642 for 1998.
The Company leases office space from an entity owned in part by a
stockholder of the Company. Total lease expense under this lease approximated
$16,800 for 1998. This lease expires in 2006.
11
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998
NOTE I - COMMITMENTS AND CONTINGENCIES
1. Litigation
The Company is subject to litigation occurring in the ordinary course of
business. On the basis of information furnished by legal counsel and others, it
is the opinion of management that no litigation has arisen that will have a
material adverse effect on the financial position or results of operations of
the Company.
2. Contingent Payable
As of December 31, 1998, included in accounts payable is approximately
$322,000 which is due to one supplier. The supplier agreed to forgive $90,000 of
this old accounts payable amount if the Company paid $200,000 of this obligation
by June 30, 2000. The $200,000 payment was made by Surgical Laser Technologies
and the $90,000 forgiveness was accounted for in connection with the Company's
merger with Surgical Laser Technologies (see note J).
3. Leased Facilities
The Company leases office space from a related party. The minimum future
rental payments under the lease which expires in 2006 are as follows:
Year ending December 31,
------------------------
1999 $ 16,800
2000 16,800
2001 16,800
2002 16,800
2003 16,800
Thereafter 42,000
--------
$126,000
========
NOTE J - MERGER
Merger
On June 1, 2000, the Company completed a merger with Surgical Laser
Technologies (SLT), a Delaware corporation, pursuant to an Agreement and Plan of
Reorganization (the "Reorganization") dated May 8, 2000. Under the terms of the
Reorganization Agreement, SIS stockholders received $300,000 in cash and 350,000
shares of SLT common stock in exchange for all SIS common stock issued and
outstanding immediately prior to the effective date of the Reorganization. The
Reorganization will be accounted for under the purchase method of accounting.
12
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Surgical Innovations & Services, Inc.:
We have audited the accompanying balance sheet of Surgical Innovations &
Services, inc. (an Alabama corporation) as of December 31, 1999 and the related
statements of operations, stockholders' equity, and cash flows for the year then
ended. 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 audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. These 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 audit provides 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 Surgical Innovations &
Services, Inc. as of December 31, 1999 and the results of its operations and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States.
Arthur Andersen LLP
Birmingham, Alabama
April 21, 2000
13
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
BALANCE SHEET
DECEMBER 31, 1999
ASSETS
CURRENT ASSETS:
Cash $ 22,511
Accounts receivable, net of allowance for doubtful
accounts of $5,375 318,729
Inventories 198,889
Prepaids and other 48,352
----------
Total current assets 588,481
PROPERTY AND EQUIPMENT, net 2,825,450
----------
Total assets $3,413,931
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of capital lease obligations $ 11,951
Current maturities of long-term debt 483,225
Accounts payable 493,821
Accrued liabilities 46,358
----------
Total current liabilities 1,035,355
----------
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, net of
current maturities 1,810,479
----------
deferred income taxes 278,637
----------
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS' EQUITY:
Common stock, $1.00 par value, 5,000 shares authorized,
1,000 shares issued and outstanding 1,000
Additional paid-in capital 245,161
Retained earnings 43,299
----------
Total stockholders' equity 289,460
----------
Total liabilities and stockholders' equity $3,413,931
==========
The accompanying notes are an integral part of this balance sheet.
14
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
REVENUES $2,684,869
COST OF REVENUES 1,647,090
----------
GROSS PROFIT 1,037,779
OPERATING EXPENSES 774,981
----------
INCOME FROM OPERATIONS 262,798
OTHER INCOME (EXPENSE)
Interest expense (132,009)
Other income 29,384
----------
INCOME BEFORE INCOME TAXES 160,173
PROVISION FOR INCOME TAXES 73,037
----------
Net income $ 87,136
==========
BASIC AND DILUTED EARNINGS PER SHARE (Note 2) $ 87
==========
WEIGHTED AVERAGE SHARES OUTSTANDING--BASIC AND DILUTED $ 1,000
==========
The accompanying notes are an integral part of this statement.
15
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Additional
Common Paid-In Retained
Stock Capital Earnings Total
------- ----------- --------- --------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1998 $1,000 $245,161 $ (43,837) $202,324
Net income 0 0 87,136 87,136
------ -------- -------- --------
BALANCE, December 31, 1999 $1,000 $245,161 $ 43,299 $289,460
====== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
16
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 87,136
----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 318,622
Provision for bad debt allowance 3,875
Deferred income tax provision 73,037
Changes in assets and liabilities:
Accounts receivable (74,582)
Inventories (153,931)
Other current assets (28,523)
Accounts payable 10,083
Accrued liabilities 22,481
----------
Net cash provided by operating activities 258,198
----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,188,727)
----------
Net cash used in investing activities (1,188,727)
----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of debt 2,283,071
Payments on debt (1,402,127)
----------
Net cash provided by financing activities 880,944
----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (49,585)
CASH AND CASH EQUIVALENTS, beginning of year 72,096
----------
CASH AND CASH EQUIVALENTS, end of year $ 22,511
==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 128,272
==========
NONCASH INVESTING AND FINANCING ACTIVITIES:
Purchase of equipment under capital lease obligations $ 38,402
==========
The accompanying notes are an integral part of this statement.
17
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. THE COMPANY AND BASIS OF PRESENTATION
Surgical Innovations & Services, Inc. ("SIS" or the "Company") was founded
in 1993 to create a contract sales and distribution company providing laser
services to hospitals. SIS is headquartered in Tuscaloosa, Alabama, and provides
a certified technician to operate surgical lasers on a fee-per-case basis. SIS
operates lasers for doctors performing urological, gynecological, cosmetic, and
orthopedic procedures primarily in hospitals in the Southeastern United States.
2. SIGNIFICANT ACCOUNTING POLICIES
Accounts Receivable
Accounts receivable represent amounts due from clients for services
provided by the Company. Such amounts are recorded net of estimated allowances
for bad debts. The Company regularly reviews its accounts receivable and makes
provision for potentially uncollectible balances. At December 31, 1999,
management believes the Company had incurred no material impairments to the
carrying values of its accounts receivable, other than uncollectible amounts for
which provisions had been made.
Inventories
Inventories consist primarily of disposable medical supplies and equipment.
Inventories are stated at the lower of cost (first-in, first-out basis) or
market.
Property, Equipment, and Depreciation
Property and equipment are stated at cost. Depreciation is calculated on a
straight-line basis over the estimated useful lives of the assets. Expenditures
for major renewals and betterments to property and equipment are capitalized,
while expenditures for maintenance and repairs are charged to operations as
incurred.
Laser units and laser accessories used for sales evaluation and
demonstration purposes or those units/accessories used for development and
medical training are capitalized and included in property and equipment. These
capitalized units and accessories are being depreciated on a straight-line basis
over a period of up to 10 years.
Revenues and Expenses
The Company's revenues are primarily derived from the performance of laser
procedures under service contracts with hospitals and sales of disposable
products used in conjunction with laser procedures. Revenues are recorded at the
time services are performed or products are used. Cost of revenues consists
primarily of the cost of disposable medical supplies and equipment used during
the laser procedures and related labor costs.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Earnings Per Share
Earnings per share ("EPS") are calculated by dividing net income by the
weighted average number of shares of common stock outstanding during the period.
There are no dilutive shares issued or outstanding for the year ended December
31, 1999; therefore, basic and diluted EPS are equal.
18
<PAGE>
Impairment of Long-Lived Assets
Pursuant to SFAS 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of, SIS is required to evaluate the
impairment of long-lived assets and certain identifiable intangible assets on a
periodic basis. SIS reviews the realizability of its long-lived assets by
analyzing the projected undiscounted cash flows and adjusts the net book value
of the recorded assets when necessary. No such adjustments have been recorded in
1999.
Concentrations
In the normal course of business, the Company extends credit to its
customers, which are primarily alternate-site health care providers. At December
31, 1999, approximately 10.5%, or $34,000, of accounts receivable was
concentrated in one customer. Additionally, approximately 10.6%, or $285,000, of
revenues were generated from one customer. Also, the Company purchases the
majority of its laser supplies from one supplier.
3. PROPERTY AND EQUIPMENT, NET
As of December 31, 1999, property and equipment consists of:
Useful Lives Amount
------------ ----------
Laser equipment 10 $3,206,364
Vehicles 5 380,088
Furniture and office equipment 3-7 64,764
----------
3,651,216
Less accumulated depreciation (825,766)
----------
Net property and equipment $2,825,450
==========
At December 31, 1999, net property and equipment included $38,402 in assets
recorded under capitalized lease arrangements (see Note 5).
19
<PAGE>
4. SHORT-TERM BORROWINGS
At December 31, 1999, SIS had two available unused lines of credit. A
$250,000 revolving line of credit is to be used for working capital purposes,
extends through October 2000, and had an interest rate of 8.35% at December 31,
1999. A $350,000 line of credit is to be used for purchasing laser equipment and
components, extends through October 2000, and bears interest at the 30-day LIBOR
rate plus 245 basis points, 7.86% at December 31, 1999. Any outstanding
borrowings under both lines of credit are 50% guaranteed by the Company's
stockholders.
The unused lines of credit contain various restrictive covenants, generally
common to such loan agreements, with which the Company was in compliance at
December 31, 1999.
5. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
The Company's long-term debt at December 31, 1999 consists of the
following:
<TABLE>
<S> <C>
Term note payable, due in monthly installments of $34,507, including interest
at 30-day LIBOR plus 2.45% (8.58% at December 31, 1999) through
October 31, 2003, secured by the Company's assets, half of outstanding
debt guaranteed by the Company's stockholders $1,377,410
Term note payable, due in monthly installments of $15,387, including interest
at 30-day LIBOR plus 2.45% (8.58% at December 31, 1999) through
October 25, 2004, secured by the Company's assets, half of outstanding
debt guaranteed by the Company's stockholders 743,453
Note payable, due in monthly installments of $904, including interest of
8.75% through December 10, 2003, secured by a vehicle 36,405
Note payable, due in monthly installments of $804, including interest at
8.75% through December 25, 2003, secured by a vehicle 32,405
Note payable, due in monthly installments of $800, including interest at
8.70% through October 18, 2003, secured by a vehicle 31,152
Note payable, due in monthly installments of $792, including interest at
8.50% through April 5, 2003, secured by a vehicle 27,537
Note payable, due in monthly installments of $623, including interest at
8.00% through October 10, 2002, secured by a vehicle 18,891
----------
Total long-term debt 2,267,253
Less current maturities of long-term debt (483,225)
----------
$1,784,028
==========
</TABLE>
The Company's credit facilities contain various restrictive covenants, generally
common to such loan agreements, with which the Company was in compliance at
December 31, 1999.
20
<PAGE>
As of December 31, 1999, future minimum lease payments under capital lease
obligations and maturities of debt are as follows:
<TABLE>
<CAPTION>
Capital
Leases Debt
------- -----------
<S> <C> <C>
2000 $15,751 $ 483,225
2001 15,751 523,494
2002 13,775 565,160
2003 0 542,703
2004 0 152,671
------- ----------
Total minimum lease payments and maturities 45,277 $2,267,253
==========
Less amounts representing interest and taxes 6,875
-------
Present value of minimum lease payments 38,402
Less current maturities of capital lease obligations 11,951
-------
Long-term portion of capital lease obligations $26,451
=======
</TABLE>
At December 31, 1999, the estimated fair value of long-term debt described
above was approximately the same as the carrying amount of such debt.
6. RETIREMENT SAVINGS PLAN
SIS has a defined contribution retirement plan that provides certain
employees an opportunity to accumulate funds for their retirement. The Plan is a
simple IRA and provides for discretionary dollar for dollar matching
contributions by SIS up to 3% of the employee's salary, up to a maximum of
$6,000 of the employee's compensation. SIS made a matching contribution of
$6,687 in 1999.
7. INCOME TAXES
The provision for income taxes for the year ended December 31, 1999
follows:
Current $ 0
Deferred 73,037
-------
Total $73,037
=======
The provision for income taxes differed from the amount computed by
applying the federal statutory rate of 34% to net income before income taxes
primarily due to the effect of state income taxes.
The tax effects of temporary differences and carryforwards which gave rise
to a significant portion of deferred tax assets and liabilities at December 31,
1999 were as follows:
Deferred tax assets:
Net operating loss carryforwards $117,526
Other 7,802
--------
Total deferred tax assets 125,328
Deferred tax liabilities:
Property and equipment (403,965)
--------
Total deferred tax liabilities (403,965)
--------
Net deferred tax liabilities $278,637
========
21
<PAGE>
At December 31, 1999, the Company has federal and state net operating loss
carryforwards approximating $313,000. Net operating loss carryforwards of
approximately $36,000, $172,000, and $105,000 will expire in the years 2012,
2013, and 2019, respectively.
8. RELATED PARTY TRANSACTIONS
A director and stockholder of SIS performs accounting services for SIS.
Total professional fees paid to this firm approximated $10,000 for 1999.
The Company leases office space from an entity owned in part by a
stockholder of the Company. Total lease expense under this lease approximated
$17,000 for 1999. This lease expires in 2006.
9. COMMITMENTS AND CONTINGENCIES
Litigation
The Company is subject to litigation occurring in the ordinary course of
business. On the basis of information furnished by legal counsel and others, it
is the opinion of management that no litigation has arisen that will have a
material adverse effect on the financial position or results of operations of
the Company.
Contractual Commitments
Contractual obligations for purchases of equipment amounted to
approximately $138,000 at December 31, 1999.
Contingent Payable
As of December 31, 1999, included in accounts payable is approximately
$423,000 which is due to one supplier. Included in that amount is approximately
$322,000 which represents invoices prior to December 31, 1998. If $200,000 of
this old accounts payable amount with this supplier is paid by June 30, 2000,
the supplier has agreed to forgive the remaining $90,000 old accounts payable.
10. SUBSEQUENT EVENT
Pending Merger
On May 8, 2000, the Company entered into an Agreement and Plan of
Reorganization (the "Reorganization") with Surgical Laser Technologies ("SLT"),
a Delaware corporation. Under the terms of the Reorganization Agreement, upon
completion of the reorganization, SIS stockholders will receive approximately
$300,000 in cash and 350,000 shares of SLT common stock in exchange for all SIS
common stock issued and outstanding immediately prior to the effective date of
the Reorganization. The Reorganization will be accounted for under the purchase
method of accounting.
22
<PAGE>
(b) Interim Financial Information of Surgical Innovations & Services, Inc.
SURGICAL INNOVATIONS & SERVICES, INC.
BALANCE SHEETS (UNAUDITED)
(In thousands, except par value)
<TABLE>
<CAPTION>
Mar. 31, 1999 Mar. 31, 1998
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 31 $ 3
Accounts receivable 217 246
Inventories 65 60
Other 17 20
------- -------
Total current assets 330 329
Property and equipment, net 2,115 1,745
------- -------
Total assets $ 2,445 $ 2,074
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 495 $ 345
Accounts payable 468 228
Accrued liabilities 22 24
------- -------
Total current liabilities 985 597
------- -------
Long-term debt 1,051 877
------- -------
Deferred income taxes 206 124
------- -------
Stockholders' equity:
Common stock, $1.00 par value, 5 shares authorized,
1 share issued and outstanding 1 1
Additional paid-in capital 245 245
Accumulated (deficit) earnings (43) 230
------- -------
Total stockholders' equity 203 476
------- -------
Total liabilities and stockholders' equity $ 2,445 $ 2,074
======= =======
</TABLE>
The accompanying notes are an integral part of these interim
financial statements.
23
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the Quarter Ended:
Mar. 31, 1999 Mar. 31, 1998
------------- -------------
<S> <C> <C>
Net sales $ 588 $476
Cost of sales 398 260
----- ------
Gross profit 190 216
----- ------
Operating expenses:
Selling, general and administrative 161 148
----- ------
Operating income 29 68
Interest expense 28 30
----- ------
Income before income taxes 1 38
Provision for income taxes -- --
----- ------
Net income $ 1 $ 38
===== ======
Basic and diluted income per share $1.00 $38.00
===== ======
Shares used in calculating basic and diluted income per share 1 1
</TABLE>
The accompanying notes are an integral part of these interim
financial statements.
24
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
For the Quarter Ended:
Mar. 31, 1999 Mar. 31, 1998
------------- -------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 1 $ 38
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 71 54
Decrease in assets:
Accounts receivable 31 13
Inventories 10 6
Other assets 3 3
(Decrease) Increase in liabilities:
Accounts payable (46) 76
Accrued liabilities (2) 1
----- -----
Net cash provided by operating activities 68 191
----- -----
Cash Flows From Investing Activities:
Additions to property and equipment -- (73)
Cash Flows From Financing Activities:
Payments on long-term debt (109) (126)
Issuances of debt -- 3
----- -----
Net cash used in financing activities (109) (123)
----- -----
Net decrease in cash and cash equivalents (41) (5)
Cash and Cash Equivalents, Beginning of Period 72 8
----- -----
Cash and Cash Equivalents, End of Period $ 31 $ 3
===== =====
Non Cash Investing and Financing Activities:
----- -----
Purchase of equipment under long term debt obligations $ 269 $ 192
===== =====
</TABLE>
The accompanying notes are an integral part of these interim
financial statements.
25
<PAGE>
SURGICAL INNOVATIONS & SERVICES, INC.
NOTES TO INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation:
The Unaudited Interim Financial Statements of Surgical Innovations & Services,
Inc. ("SIS") for the quarters ended March 31, 1999 and March 31, 1998 have been
prepared by SIS without audit by SIS's independent auditors. In the opinion of
SIS's management, all adjustments necessary to present fairly the financial
position, results of operations, and cash flows of SIS as of March 31, 1999 and
March 31, 1998 and for the periods then ended have been made. Those adjustments
consist only of normal and recurring adjustments.
Certain information and note disclosures normally included in SIS's annual
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These condensed consolidated
financial statements should be read in conjunction with the financial statements
and notes thereto included in this Form 8-K filing.
The results of operations for the quarters ended March 31, 1999 and March 31,
1998 are not necessarily indicative of the results to be expected for the full
year.
26
<PAGE>
(c) Pro Forma Combined Condensed Financial Data
The Unaudited Pro Forma Combined Statement of Operations of Surgical Laser
Technologies, Inc. ("SLT") for the fiscal year ended January 2, 2000 and the
three-month period ended April 2, 2000 (the "Pro Forma Statements of
Operations"), and the Unaudited Pro Forma Combined Balance Sheet of the Company
as of April 2, 2000 (the "Pro Forma Balance Sheet" and together with the Pro
Forma Statements of Operations, the "Pro Forma Financial Statements"), have been
prepared to illustrate the estimated historical effect of the SIS acquisition.
The Pro Forma Financial Statements do not reflect any anticipated cost savings
from the SIS acquisition, or any synergies that are anticipated to result from
the SIS acquisition, and there can be no assurance that any such cost savings or
synergies will occur. The Pro Forma Statements of Operations give pro forma
effect to the SIS acquisition as if it had occurred on January 4, 1999. The Pro
Forma Balance Sheet gives pro forma effect to the SIS acquisition as if it had
occurred on April 2, 2000. The Pro Forma Financial Statements do not purport to
be indicative of the results of operations or financial position of SLT that
would have actually been obtained had such transactions been completed as of the
assumed dates and for the periods presented, or which may be obtained in the
future. The pro forma adjustments are described in the accompanying notes and
are based upon available information and certain assumptions that SLT believes
are reasonable. The Pro Forma Financial Statements should be read in conjunction
with SLT's Consolidated Financial Statements for the year ended January 2, 2000
filed with the Form 10-K.
The SIS acquisition has been accounted for under the purchase method of
accounting. The purchase price has been preliminarily determined, and may be
subject to further adjustment as further information becomes available and
further analysis is made. A preliminary allocation of the purchase price has
been made to major categories of assets and liabilities in the accompanying Pro
Forma Financial Statements based on available information. The actual allocation
of purchase price and the resulting effect on income from operations may differ
significantly from the pro forma amounts included herein. Moreover, the
categories of assets may be subject to further refinement, especially as to
intangible assets other than goodwill, as further information becomes available
and further analysis is conducted. These pro forma adjustments represent SLT's
preliminary determination of purchase accounting adjustments and are based upon
available information and certain assumptions that SLT believes to be
reasonable. Consequently, the amounts reflected in the Pro Forma Financial
Statements are subject to change, and the amounts, when finally determined, may
differ substantially.
27
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF APRIL 2, 2000
(In thousands, except par value)
<TABLE>
<CAPTION>
Historical Pro Forma Pro Forma
SLT SIS Adjustments Combined
-------- -------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,045 $ 30 ($ 300)(1a) $ 775
Short-term investments 2,616 -- -- 2,616
Accounts receivable 1,105 248 -- 1,353
Inventories 1,777 258 -- 2,035
Other 190 42 -- 232
-------- -------- -------- --------
Total current assets 6,733 578 (300) 7,011
Property and equipment, net 589 2,811 -- 3,400
Patents and licensed technology, net 491 -- -- 491
Other assets 68 -- 507(1c) 575
-------- -------- -------- --------
Total assets $ 7,881 $ 3,389 $ 207 $ 11,477
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 104 $ 531 ($ 497)(5) $ 138
Accounts payable 543 571 -- 1,114
Accrued liabilities 408 39 89 (1b) 536
-------- -------- -------- --------
Total current liabilities 1,055 1,141 (408) 1,788
-------- -------- -------- --------
Long-term debt 14 1,680 497 (5) 2,191
-------- -------- -------- --------
Deferred income taxes -- 279 (279)(3) --
-------- -------- -------- --------
Stockholders' equity:
Common stock 20 1 2 (4a) 23
Additional paid-in capital 33,033 245 438 (4b) 33,716
Accumulated (deficit) earnings (26,234) 43 (43)(4c) (26,234)
Deferred compensation (7) -- -- (7)
-------- -------- -------- --------
Total stockholders' equity 6,812 289 397 7,498
-------- -------- -------- --------
Total liabilities and stockholders' equity $ 7,881 $ 3,389 $ 207 $ 11,477
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these unaudited pro forma
financial statements.
28
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JANUARY 2, 2000
(In thousands, except per share data)
<TABLE>
<CAPTION>
Historical Pro Forma Pro Forma
SLT SIS Adjustments Combined
---------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 7,951 $ 2,685 -- $ 10,636
Cost of sales 3,386 1,647 -- 5,033
-------- -------- -------- --------
Gross profit 4,565 1,038 -- 5,603
-------- -------- -------- --------
Operating expenses:
Selling, general and administrative 4,427 775 25(2) 5,227
Product development 741 -- -- 741
Non-recurring charges 1,440 -- -- 1,440
-------- -------- -------- --------
6,608 775 25 7,408
-------- -------- -------- --------
Operating income (loss) (2,043) 263 (25) (1,805)
Interest expense 304 132 -- 436
Interest income (270) -- 17 (6) (253)
Other income (194) (29) -- (223)
-------- -------- -------- --------
Income (loss) before income taxes (1,883) 160 (42) (1,765)
Provision for income taxes -- 73 (73)(3) --
-------- -------- -------- --------
Net income (loss) ($ 1,883) $ 87 31 ($ 1,765)
======== ======== ======== ========
Basic and diluted loss per share ($ 0.76)(7)
Shares used in calculating basic and diluted loss per share 2,328 (7)
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these unaudited pro forma
financial statements.
29
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED APRIL 2, 2000
(In thousands, except per share data)
<TABLE>
<CAPTION>
Historical Pro Forma Pro Forma
SLT SIS Adjustments Combined
---------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 1,837 $ 712 -- $ 2,549
Cost of sales 772 547 -- 1,319
------- ------- ------- -------
Gross profit 1,065 165 -- 1,230
------- ------- ------- -------
Operating expenses:
Selling, general and administrative 880 200 6 (2) 1,086
Product development 146 -- -- 146
------- ------- ------- -------
1,026 200 6 1,232
------- ------- ------- -------
Operating income (loss) 39 (35) (6) (2)
Interest expense 9 47 -- 56
Interest income (57) -- 4 (6) (53)
------- ------- ------- -------
Income (loss) before income taxes 87 (82) (10) (5)
Provision for income taxes -- -- -- --
------- ------- ------- -------
Net income (loss) $ 87 ($ 82) ($ 10) ($ 5)
------- ------- ------- -------
Basic and diluted loss per share ($ 0.00)(7)
Shares used in calculating basic and diluted loss
per share 2,328 (7)
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these unaudited pro forma
financial statements.
30
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
1. Preliminary allocation of purchase price to identifiable net assets and
goodwill:
SLT has accounted for the acquisition of SIS under purchase accounting. As a
result, the purchase price has been allocated to the fair market value of the
net assets acquired, with the excess allocated to goodwill. Listed below is the
schedule of the preliminary allocation of goodwill. This schedule has been
calculated based on information available to SLT. The actual allocation of the
purchase price and the resulting effects on income may differ significantly from
that presented in the Pro Forma Financial Statements and the notes thereto.
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
(a) Cash payment to SIS owners $300
Issuance of 350,000 shares of SLT's Common Stock to SIS owners 686
(b) Accrue for miscellaneous acquisition costs 89
-----
Total purchase price 1,075
Fair market value of net assets acquired 568
-----
(c) Goodwill $507
=====
</TABLE>
2. Goodwill Amortization:
SLT will amortize the goodwill from the SIS acquisition over a 20-year
straight-line basis. The following presents the effects of the amortization of
goodwill on the Pro Forma Combined Statement of Operations (in thousands):
Year Ended Period Ended
January 2, 2000 April 2, 2000
--------------- -------------
S, G, & A S, G, & A
--------------- -------------
Amortization of Goodwill $25 $6
3. Treatment of Tax Liabilities:
In accordance with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS 109"), the deferred tax liability of SIS
will be absorbed by the net operating loss carryforwards and temporary
differences of SLT and as a result, are eliminated as a pro forma adjustment.
Also in accordance with SFAS 109, the income tax expense of SIS for the year
ended January 2, 2000 is eliminated as a pro forma adjustment due to the
elimination of income tax expense in consolidation with the net operating losses
of SLT.
31
<PAGE>
4. Adjustments to Stockholders'Equity:
The adjustments to common stock, paid in capital, and retained earnings as a
result of the SIS acquisition are as follows (in thousands):
<TABLE>
<CAPTION>
(a) Common Stock:
<S> <C>
Issuance of 350,000 shares of common stock of $0.01 par value per share $3
Elimination of SIS common stock (1)
----
Total $2
====
(b) Paid-in Capital:
Issuance of 350,000 shares of common stock valued at $1.96 per share $686
Estimated stock registration costs (3)
Elimination of SIS paid-in capital (245)
----
Total $438
====
(c) Retained Earnings:
Elimination of SIS retained earnings (43)
</TABLE>
5. Refinancing of Debt:
As of April 2, 2000, SIS had outstanding debt obligations to AmSouth Bank in the
amount of $2.1 million. This debt was secured by personal guarantees of the
stockholders of SIS. In accordance with the terms of the SIS acquisition, SLT
was obliged to secure funding of this debt, and thus cause AmSouth Bank to
remove the personal guarantees. As a result, concurrent with the SIS
acquisition, SLT obtained a $3 million credit facility from AmSouth Bank to
replace the term debt of SIS. This $3 million credit facility has a commitment
term of 3 years and is secured by SLT's business assets, including
collateralization with the bank of $2 million of SLT's cash and short-term
investments. The credit facility permits the deferment of principal payments
until the end of the commitment term.
The pro forma adjustment on the Pro Forma Balance Sheet represents the transfer
of this term debt to the credit facility. The interest rate on the credit
facility, floating LIBOR +2.25%, is similar to the interest rate on the term
debt of SIS. As a result, there is no pro forma adjustment recorded for changes
in interest expense on the Pro Forma Financial Statements.
6. Adjustment to Interest Income:
The cash payment included in the acquisition cost of SIS of $300,000 resulted in
a reduction in interest income of $17,000 and $4,000 in the Pro Forma Statement
of Operations for the year ended January 2, 2000 and quarter ended April 2,
2000, respectively.
7. Shares used in calculation of loss per share:
The shares used in the calculation of loss per share includes 350,000 shares of
Common Stock issued to the stockholders of SIS in accordance with the terms of
the acquisition.
32
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has caused this report to be signed on behalf by the undersigned thereunto duly
authorized:
Dated: August 14, 2000 SURGICAL LASER TECHNOLOGIES, INC.
By: /s/ Davis Woodward
--------------------------------------
Davis Woodward
Vice President and Chief Financial Officer
Signing on behalf of the Company
and as principal financial officer.
33
