<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
-------------------------------------------------
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 000-20805
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APACHE MEDICAL SYSTEMS, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-2476415
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1650 Tysons Boulevard, McLean, Virginia 22102
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(Address of principal executive offices) (Zip Code)
(703) 847-1400
(Registrant's telephone number, including area code)
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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 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
7,459,956
---------
(Number of shares of common stock, $.01 par value per share, outstanding as
of October 1, 2000)
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APACHE MEDICAL SYSTEMS, INC.
INDEX
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PAGE NO.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations (unaudited) for the Three and
Nine Months Ended September 30, 2000 and 1999
Consolidated Balance Sheets as of the Nine Months Ended September
30, 2000 (unaudited) and Year Ended December 31, 1999
Consolidated Statements of Changes in Stockholders' Equity
(Deficit) for the Nine Months Ended September 30, 2000 (unaudited)
and Year Ended December 31, 1999
Consolidated Statements of Cash Flows (unaudited) for the Nine Months
Ended September 30, 2000 and 1999
Notes to Consolidated Financial Statements (unaudited)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
Index to Exhibits
</TABLE>
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PART 1-FINANCIAL INFORMATION
Item 1. Financial Statements
APACHE MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
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THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30 SEPTEMBER 30
2000 1999 2000 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
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Revenue $ 1,551 $ 2,972 $ 4,963 $ 9,910
Expenses:
Cost of goods sold 761 927 2,164 2,407
Research and development 157 131 456 582
Selling, general and administrative 1,828 1,630 5,139 5,875
Restructuring 225 225
------------ ------------- ------------- -----------
Total expenses 2,971 2,688 7,984 8,864
Income (loss) from operations (1,420) 284 (3,021) 1,046
Other income (expense):
Interest income 49 73 190 248
Interest expense (15) (8) (29) (25)
Other, net - - - 6
------------ ------------- ------------- -----------
Net Income (loss) $ (1,386) $ 349 $ (2,860) $ 1,275
============ ============= ============= ===========
Basic and diluted net income (loss) per share $ (0.19) $ 0.05 $ (0.38) $ 0.17
============ ============= ============= ===========
Weighted average number of shares used for
calculation of net income (loss) per share 7,456 7,361 7,432 7,350
============ ============= ============= ===========
Weighted average number of shares used for
calculation of diluted net income (loss) per
share 7,456 7,602 7,432 7,591
============ ============= ============= ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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APACHE MEDICAL SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
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SEPTEMBER 30, DECEMBER 31,
2000 1999
---------------------------------------------------
(IN THOUSANDS EXCEPT SHARE DATA)
ASSETS (unaudited)
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CURRENT ASSETS:
Cash and cash equivalents $ 2,107 $ 5,194
Short-term investments 448 1,048
Accounts receivable, net 1,028 3,012
Prepaid expenses and other 322 499
------------------ ------------------
TOTAL CURRENT ASSETS 3,905 9,753
Other trade receivables, net of current maturities 63 104
Furniture and equipment 3,937 3,661
Less accumulated depreciation and amortization (3,510) (3,222)
------------------ ------------------
427 439
Capitalized Software Costs, net 974 793
Intangible assets, net 289 377
------------------ ------------------
TOTAL ASSETS $ 5,658 $ 11,466
=================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 469 $ 1,142
Accrued expenses 972 1,780
Accrued restructuring expenses 225
Deferred revenue 1,285 3,220
Current maturities of long term obligations 150 163
------------------ ------------------
TOTAL CURRENT LIABILITIES 3,101 6,305
Deferred rent benefit 51 5
Obligations under capital leases, net of current maturities 93 8
Notes payable - other, net of current maturities - 35
------------------ ------------------
TOTAL LIABILITIES 3,245 6,353
STOCKHOLDERS' EQUITY :
Common stock, $.01 par value, authorized shares, 30,000,000 at September 30, 75 74
2000 and December 31, 1999: issued and outstanding shares, 7,459,956 at
September 30, 2000 and 7,381,985 at December
31, 1999.
Accumulated other comprehensive income-unrealized loss - (27)
Additional paid-in capital 45,950 45,818
Accumulated deficit (43,612) (40,752)
------------------ ------------------
TOTAL STOCKHOLDERS' EQUITY 2,413 5,113
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,658 $ 11,466
=================== ==================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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APACHE MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
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COMMON ADDITIONAL ACCUMULATED
STOCK PAID-IN COMPREHENSIVE ACCUMULATED COMPREHENSIVE
(in thousands, except share data) SHARES AMOUNT CAPITAL INCOME (LOSS) DEFICIT TOTAL INCOME (LOSS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1999 7,381,985 $ 74 $ 45,818 $ (27) $ (40,752) $ 5,113 1,324
=========
Issuance of common stock under Employee
Stock Purchase Plan 19,425 - 20 - 20 -
Exercise of common stock options 76,661 1 141 - 142 -
Treasury stock purchase (18,115) (29) (29)
Unrealized gain 27 27 27
Net income (2,860) (2,860) (2,860)
BALANCE AT SEPTEMBER 30, 2000 --------- -- ------ ---- -------- -------- ---------
(unaudited) 7,459,956 $ 75 $ 45,950 $ - $ (43,612) $ 2,413 $ (2,833)
========= == ======= ===== ========= ======== =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
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APACHE MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
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NINE MONTHS ENDED SEPTEMBER
30,
2000 1999
------------- -------------
(in thousands)
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (2,860) $ 1,275
Adjustments to reconcile net income (loss) to net cash
provided from (used in) operating activities:
Depreciation and amortization 671 632
Provision for doubtful accounts 74 616
Changes in operating assets and liabilities:
Accounts receivable 1,913 (15)
Other trade receivables 38 36
Other current assets 178 107
Accounts payable and accrued expenses (1,481) (1,720)
Accrued restructuring expenses 225
Deferred rent 46 (49)
Deferred revenue (1,936) (782)
--------------- --------------
NET CASH PROVIDED FROM (USED IN) OPERATING ACTIVITIES (3,132) 100
CASH FLOWS FROM INVESTING ACTIVITIES:
Capitalized software development costs (476) (354)
Purchase of furniture and equipment (276) (70)
Proceeds (purchases) from short-term investments 627 (48)
--------------- --------------
NET CASH PROVIDED FROM (USED IN) INVESTING ACTIVITIES (125) (472)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease obligations 144 (13)
Principal payments on borrowings (106) (134)
Proceeds from issuance of common stock under employee stock purchase plan 161 29
Proceeds from issuance of common stock upon exercise of options, net of treasury stock (29) 2
--------------- --------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 170 (116)
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,087) (488)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,194 5,532
--------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,107 $ 5,044
============= =============
SUPPLEMENTAL INFORMATION:
Cash payments for interest $ 33 $ 8
============= =============
See accompanying Notes to Consolidated Financial Statements.
6
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared by APACHE
Medical Systems, Inc. (the "Company") pursuant to the rules and regulations of
the Securities and Exchange Commission ("SEC"). The financial information
included herein is unaudited. However, in the opinion of management, all
adjustments (which include normal recurring adjustments) considered necessary
for a fair presentation have been made. Certain information and footnote
disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, but the Company believes that
the disclosures made are adequate to make the information presented not
misleading. For more complete financial information, these financial statements
should be read in conjunction with the audited financial statements and notes
thereto for the year ended December 31, 1999 included in the Company's Form
10-K. Results for interim periods are not necessarily indicative of the results
for any other interim period or for the full fiscal year.
Revenue for sales of systems and products are recognized at delivery. For
systems where services are critical to the functionality of the system, revenue
is recognized using contract accounting. Systems support fees are recognized
ratably over the period of performance. Professional services revenue is
recognized as these services are provided and is generally billed on a time and
material basis. Professional services do not involve significant customization,
modification or production of the licensed software. Amounts received prior to
the performance of service or completion of a milestone are deferred. Revenue
recognized for work performed for which billings have not been presented to
customers is recorded as unbilled.
2. BASIC AND DILUTED NET LOSS PER SHARE
The Company has implemented Financial Accounting Standards Board ("FASB")
Statement of Financial Accounting Standards ("SFAS") Statement No. 128,
"Earnings Per Share," which requires dual presentation of basic and diluted
earnings per share. Basic income (loss) per share includes no dilution and is
computed by dividing net income (loss) available to common stockholders by the
weighted average number of common shares outstanding for the period. Diluted
income per share includes the potential dilution that could occur if securities
or other contracts were exercised or converted into common stock. Options and
warrants outstanding were not included in the computation of diluted net loss
per share as their effect would be anti-dilutive. Diluted net loss per share and
basic earnings per share are identical for all periods presented.
3. NEW ACCOUNTING PRONOUNCEMENTS
In 1998, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"). SFAS 133 establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts and hedging activities. The Company intends to adopt
SFAS 133 in the first quarter of fiscal 2001. The adoption of SFAS 133 will not
have a material effect on the financial position or results of operations of the
Company.
In 1999, the Securities and Exchange Commission ("SEC") staff issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." SAB 101 explains how generally accepted accounting principles
should be applied in the recognition of revenue in financial statements. The
Company will implement SAB 101 in the fourth quarter of 2000. The adoption of
SAB 101 will not have a material effect on the financial position or results of
operations of the Company.
The American Institute of Certified Public Accountants ("AICPA") has issued
Statement of Position 97-2 "Software Revenue Recognition" ("SOP 97-2") that
supersedes Statement of Position 91-1. SOP 97-2 is effective for revenue
transactions entered into by the Company in fiscal years beginning after
December 31, 1997. The Company has adopted SOP 97-2 and it did not have a
material impact on the financial statements of the Company. In March 1998, AcSEC
issued SOP 98-4, which defers for one year the implementation of certain
provisions of SOP 97-2. The issuance of SOP 98-4 had no effect on the Company.
In December 1998, the AICPA issued SOP 98-9, which extends the deferral date of
implementation of certain provisions of SOP 97-2 to 2000 and amends the method
of revenue recognition in some circumstances. The adoption of this SOP did not
have a significant effect on the results of operations or financial position.
4. STOCKHOLDERS' EQUITY
Stock Options
On May 31, 2000 the Company's shareholders approved an amendment to the
Non-Employee Director Supplemental Stock Option Plan (the "Supplemental Plan"),
to increase the number of shares of the Company's Common Stock available under
the plan from 120,000 to 250,000. The amendment was effective as of January 1,
2000. On November 17, 1999, the Board of Directors granted options to acquire
8,700 shares of Common Stock to each non-employee director of the Company
subject to the approval of the amendment to the Supplemental Plan. The grant
date was effective as of January 1, 2000 and the exercise price was $1.52 per
share, which price was the fair market value of the Common Stock on that date.
5. RESTRUCTURING CHARGE
During the third quarter of 2000, the Board of Directors adopted a plan of
restructuring for the Company designed to reduce expenses. In connection with
the plan, the Company recorded a restructuring charge of $225,000. This charge
was due to a reduction in headcount including severance, personnel, office and
other related costs. The restructuring reduced headcount by approximately 33%,
to 44 employees, through layoffs and closed positions. The costs of the
restructuring are expected to be paid during the fourth quarter of 2000.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RECENT DEVELOPMENTS
During the quarter the Board of Directors adopted a plan of restructuring for
the Company. This plan is expected to reduce expenses by more than $1.5
million annually and is discussed in more detail herein. In addition, the
Company's repositioning program, transitioning the Company to an Internet
Application Service Provider, is near completion. The Company has begun the
first delivery and early marketing of a succession of new, lower-cost medical
decision support products. To better reach targeted domestic and international
markets, the Company is actively exploring alliance and distribution options
for its products. The Company has retained financial advisor Allen and
Company Incorporated to explore strategic options, including the potential
sale of the Company. The Board is in the process of meeting with the financial
advisors to determine what alternatives are available to maximize the value of
the Company's business to its shareholders. At this point, the Company cannot
estimate the time involved or the end result of this process.
RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
REVENUE. Revenue for the quarter ended September 30, 2000 decreased to $1.6
million from $3.0 million in the prior year period. This decrease was related to
a significant decrease in Systems revenue. Revenue for the nine months ended
September 30, 2000 decreased to $5.0 million from $9.9 million in the year ago
period. The overall decrease in revenue resulted from a continuing soft market
for systems and services during the quarter. The Company believes that the
current market conditions are brought about by a combination of the Balanced
Budget Amendment of 1997, Y2K carry-over effect, and looming HIPAA concerns.
COST OF GOODS SOLD. Cost of goods sold for the quarter ended September 30, 2000
decreased to $761,000 from $927,000 in the prior year period. Cost of goods sold
for the nine months ended September 30, 2000 decreased to $2.2 million from $2.4
million in the prior year period. These decreases in cost of goods sold were
primarily related to decreases in systems and services revenue discussed above.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses for the quarter ended September 30, 2000 increased to $1.8 million from
$1.6 million in the prior year period. This increase was due to an increase in
rent,bad debt and compensation expense during the quarter. Selling, general and
administrative expenses for the nine months ended September 30, 2000 decreased
to $5.1 million from $5.9 million in the prior year period. This decrease was
due primarily to a decrease in bad debt expense as well as reductions in legal
and other selling, general and administrative expenses.
RESEARCH AND DEVELOPMENT. Research and development expenses for the quarter
ended September 30, 2000 increased nominally to $157,000 from $131,000 in the
prior year period. Research and development expenses for the nine months ended
September 30, 2000 decreased to $456,000 from $582,000 in the prior year period.
The decrease was due to an increase in capitalized software development costs
and improvements in productivity in product generation processes that resulted
in decreased expenses. This was partially offset by the Company's repositioning
program. The program is proceeding according to plan and the rollout of the
Company's Internet initiative, APACHE 2000, is near completion. The Company has
begun the first delivery and early marketing of its new, lower cost medical
decision support products. During the nine months ended September 30, 2000,
capitalized software development costs were $476,000, compared to $354,000 in
the prior year period.
RESTRUCTURING. During the third quarter of 2000, the Board of Directors adopted
a plan of restructuring for the Company designed to reduce expenses. In
connection with the plan, the Company recorded a restructuring charge of
$225,000. This charge was due to a reduction in headcount including severance,
personnel, office and other related costs. The restructuring reduced headcount
by approximately 33%, to 44 employees, through layoffs and closed positions. The
costs of the restructuring are expected to be paid during the fourth quarter of
2000. The plan will be funded from currently available cash and is expected to
reduce expenses by more than $1.5 million annually.
OTHER INCOME (EXPENSE). Other income (expense) for the quarter ended September
30, 2000 decreased to $34,000 from $65,000 in the prior year period. Other
income (expense) for the nine months ended September 30, 20000 decreased to
$161,000 from $229,0000 in the prior year period. The decrease is due to a
decrease in interest income as a result of a reduction in cash.
LIQUIDITY AND CAPITAL RESOURCES
Cash and short-term investments were $2.6 million as of September 30, 2000
compared to $6.2 million as of December 31, 1999.
The Company anticipates that funds generated from operations will be sufficient
to meet its planned ongoing operating and working capital requirements and to
finance planned product development, sales and marketing activities and capital
acquisitions for the next twelve months. The aforementioned restructuring is
expected to reduce expenses by more than $1.5 million annually. In addition, the
Company's repositioning program, transitioning the Company to an Internet
Application Service Provider, is nearing completion. The Company has begun the
first delivery and early marketing of a succession of new, lower-cost medical
decision support products. To better reach targeted domestic and international
markets, the Company is actively exploring alliance and distribution options for
its products. Through September 30, 2000, the Company has incurred cumulative
net operating losses of approximately $43.6 million. There can be no assurance
that the Company will be profitable in the future or that present capital will
be sufficient to fund the Company's ongoing operations. If additional financing
is required to fund operations, there can be no assurance that such financing
can be obtained or obtained on terms acceptable to the Company.
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SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Statements in this filing which are not historical facts are forward-looking
statements under provisions of the Private Securities Litigation Reform Act of
1995. All forward-looking statements involve risks and uncertainties.
Forward-looking statements may be recognized by the use of words such as
"anticipate", "believe", "expect", "intend" and "estimate" or similar language.
All forward looking statements in this document are made as of the date of this
document and are based on information available to the Company's management as
of that date. The Company undertakes no obligation to update any statement in
this document to reflect information that becomes available to the Company after
that date. The Company wishes to caution readers that the following important
factors, among others, in some cases have affected, and in the future could
affect the Company's actual results and could cause its actual results in fiscal
2000 and beyond to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company.
Important factors that could cause actual results to differ materially include
but are not limited to the Company's: having sufficient sales and timely
collections to meet cash requirements and achieve profitability; ability to
attract and retain key employees; success of its strategy to concentrate its
product offerings on high-risk, high-cost patients; ability to timely develop
new products and enhance existing products; ability to compete in the
competitive and rapidly evolving healthcare information technology industry;
success of its marketing and consulting efforts and ability to effectively
utilize its direct sales force; ability to protect proprietary information and
to obtain necessary licenses on commercially reasonable terms; ability to comply
with and adopt products and services to potential regulatory changes; and
ability to adapt to economic, political and regulatory conditions affecting the
healthcare industry.
The Company's quarterly revenues and operating results have varied significantly
in the past and are likely to vary from quarter to quarter in the future.
Quarterly revenues and operating results may fluctuate as a result of a variety
of factors, including: the Company's relatively long sales cycle; variable
customer demand for its products and services; changes in the Company's product
mix and the timing and relative prices of product sales; the loss of customers
due to consolidation in the healthcare industry; changes in customer budgets;
investments by the Company in marketing or other corporate resources;
acquisitions of other companies or assets; the timing of new product
introductions and enhancements by the Company and its competitors; changes in
distribution channels; sales and marketing promotional activities and trade
shows; and general economic conditions. Further, due to the relatively fixed
nature of most of the Company's costs, which primarily include personnel costs,
as well as facilities costs, any unanticipated shortfall in revenue in any
fiscal quarter would have an adverse effect on the Company's results of
operations in that quarter. Accordingly, the Company's operating results for any
particular quarterly period may not necessarily be indicative of results for
future periods.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Information regarding the Company's investment securities as it relates to
market risk is not included as the possible effect of such risk is considered to
be immaterial.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The following Exhibits are filed herewith and made a part hereof:
<TABLE>
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Exhibit Number Description
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2.1 Asset Purchase Agreement by and among the Company and Dun &
Bradstreet HealthCare Information, Inc. and Cognizant
Corporation dated as of December 30, 1996 (1)
2.2 Asset Purchase Agreement by and among the Company and Iowa
Health Centers, P.C. d/b/a Iowa Heart Center, P.C., Mercy
Hospital Medical Center, Mark A. Tannenbaum, M.D. and Iowa
Heart Institute dated as of January 7, 1997 (1)
2.3 Agreement and Plan of Merger among the Company, NHA
Acquisition Corporation, National Health Advisors, Ltd.,
Scott A. Mason and Donald W. Seymour dated as of June 2,
1997 (5)
3.1 Amended and Restated Certificate of Incorporation (5)
3.2 By-Laws (2)
4.1 Specimen Common Stock Certificate (2)
4.2 Rights Agreement between the Company and First Chicago Trust
Company of New York, dated as of May 6, 1997 (3)
10.1 APACHE Medical Systems, Inc. Employee Stock Option Plan +(5)
10.2 APACHE Medical Systems, Inc. Non-Employee Director Option
Plan +(5)
10.3 Sublease Agreement between the Company and First Union
National Bank of Virginia, dated March 17, 1994 (2)
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<TABLE>
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10.4 Registration Agreement between the Company and Certain
Stockholders, dated December 28, 1995 (2)
10.5 Form of Warrant Agreement relating to warrants issued in 1995 (2)
10.6 Warrant Agreement between the Company and Venture Fund of
Washington, dated May 13, 1991 (2)
10.7 Licensing Agreement between the Company and Cerner
Corporation, dated February 2, 1995 (2)
10.8 Nonqualified Stock Option Agreement between the Company and
The Cleveland Clinic Foundation, dated August 19, 1994 (2)
10.9 Agreement between the Company and The George Washington
University, dated August 19, 1994 (2)
10.10 Letter Agreement between the Company and the Northern New
England Cardiovascular Disease Study Group, dated March 13,
1995 (2)
10.11 Licensing Agreement between the Company and Quality
Information Management Corporation, dated March 24, 1994 (2)
10.12 Marketing Agreement between the Company and American
Healthcare Systems Purchasing Partners, L.P., dated as of
June 3, 1996 (2)
10.13 Registration Agreement between the Company and each of Iowa
Health Centers, P.C. d/b/a Iowa Heart Center, P.C., Mercy
Hospital Medical Center, Mark A. Tannenbaum, M.D. and Iowa
Heart Institute dated January 7, 1997 (1)
10.14 Nonqualified Stock Option Agreements between the Company and
each of Iowa Health Centers, P.C. d/b/a Iowa Heart Center,
P.C., Mercy Hospital Medical Center and Mark A. Tannenbaum,
M.D., dated January 7, 1997 (4)
10.15 Security Agreement dated February 11, 1997 made by the
Company for the use and benefit of Crestar Bank and
corresponding Commercial Note (5)
10.16 License Agreement between the Company and Vermont Oxford
Network, Inc., Related Services Agreement between the
Company and Vermont Oxford Network, Inc. and Consulting
Agreement between the Company and Clinimetrics, Inc. each
effective as of June 24, 1997 ++(5)
10.17 Employment Agreement by and between the Company and Gerald
E. Bisbee, Jr., Ph.D., dated May 5, 1997 +(5)
10.18 Employment Agreement by and between the Company and Scott A.
Mason, dated June 15, 1999 +(10)
10.19 Nonqualified Stock Option Agreement between the Company and
William A. Knaus, M.D. dated May 29, 1997 +(5)
10.20 APACHE Medical Systems, Inc. Employee Stock Option Plan,
Amended and Restated Effective May 12, 1999 (9)
10.21 Form of 1998 Employment Agreement +(6)
10.22 Form of Nonqualified Director Stock Option Agreement +(6)
10.23 Employment Agreement by and between Peter Gladkin and the
Company, dated May 30, 1998 +(7)
10.24 Employment Agreement by and between Regina Campbell
and the Company, dated August 16, 2000 +(12)
10.25 Employment Agreement by and between Violet Shaffer
and the Company, dated September 20, 2000 +(12)
10.26 Employment Agreement by and between Karen Miller
and the Company, dated July 28, 2000 +(12)
10.27 APACHE Medical Systems, Inc. Non-Employee Director
Supplemental Stock Option Plan, Amended and Restated
Effective May 12, 1999 +(9)
10.28 Employment Agreement by and between Sean Seerey and the Company,
Dated May 11, 1999 +(10)
10.29 Lease between Tysons II Development Co. Limited Partnership
and the Company, dated August 16, 1999 (11)
10.30 Employment Agreement by and between William Knaus and the Company,
dated July 28, 2000 +(12)
10.31 APACHE Medical Systems, Inc. Non-Employee Director Supplemental
Stock Option Plan, Amended and Restated Effective
January 1, 2000 +(3)
11.1 Computation of Earnings (Loss) Per Share (14)
27.1 Financial Data Schedule (14)
10
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+ Reflects management contract or other compensatory arrangement required
to be filed as an exhibit pursuant to Item 14(c) of this Form 10-Q
++ Confidential treatment was requested for a portion of this Exhibit
(1) Incorporated herein by reference to the Company's Report on Form 8-K
filed on January 14, 1997 (File No. 0-20805)
(2) Incorporated herein by reference to the
Company's Registration Statement on Form S-1
(File No. 333-04106)
(3) Incorporated herein by reference to the
Company's Current Report on Form 8-K filed
on June 4, 1997 (File No. 0-20805)
(4) Incorporated herein by reference to the
Company's Report on Form 10-Q for the
quarter ended March 31, 1997 (File No.
0-20805)
(5) Incorporated herein by reference to the
Company's Report on Form 10-Q for the
quarter ended June 30, 1997 (File No.
0-20805)
(6) Incorporated herein by reference to the
Company's Report on Form 10-K for the year
ended December 31, 1997 (File No. 0-20805)
(7) Incorporated herein by reference to the
Company's Report on Form 10-Q for the
quarter ended June 30, 1998 (File No.
0-20805)
(8) Incorporated herein by reference to the
Company's Report on Form 10-K for the year
ended December 31, 1998 (File No. 0-20805)
(9) Incorporated herein by reference to the
Company's Report on Form 10-Q for the
quarter ended March 31, 1999 (File No.
0-20805)
(10) Incorporated herein by reference to the
Company's Report on Form 10-Q for the
quarter ended September 30, 1999 (File No.
0-20805)
(11) Incorporated herein by reference to the
Company's Report on Form 10-K for the year
ended December 31, 1999 (File No. 0-20805)
(12) Incorporated herein by reference to the Company's
Report on Form 10-Q for the Quarter ended June 30,
2000 (File No. 0-20805)
(13) Incorporated herein by reference to the Company's
Definitive Proxy Statement filed on April 27, 2000
(File No. 0-20805)
(14) Filed herewith
</TABLE>
(b) Reports on Form 8-K
The company has not filed any reports on Form 8-K during the quarterly period
ended September 30, 2000.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
APACHE MEDICAL SYSTEMS, INC.
Date: November 13, 2000 /s/William A. Knaus
-------------------
William A. Knaus
President and Chief Executive Officer
/s/Karen C. Miller
------------------
Karen C. Miller
Vice President of Finance & Chief Financial
Officer
12
<PAGE> 13
INDEX TO EXHIBTS
Exhibit Number Description
11.1 Computation of Earnings (Loss) Per Share
27.1 Financial Data Schedule
13
