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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
AMENDMENT NO. 1
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended:
June 30, 1997, or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition period from to .
Commission file number: 0-28448
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GENERAL SURGICAL INNOVATIONS, INC.
(Exact name of Registrant as specified in its charter)
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<S> <C>
CALIFORNIA 97-3170244
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
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10460 BUBB ROAD, CUPERTINO, CALIFORNIA 95014
(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 863-2500
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001 per share
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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 ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant was approximately $33,942,829 as of August 31, 1996, based upon the
closing sale price on the NASDAQ National Market System reported for such date.
Shares of Common Stock held by each officer and director and by each person who
owns 5% of more of the outstanding Common Stock have been excluded in that such
persons may be deemed to be affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.
There were 13,306,172 shares of Registrant's Common Stock issued and
outstanding as of August 31, 1997.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement of the Registrant for the 1998 Annual
Meeting of Shareholders are incorporated by reference in Part III of this Form
10-K.
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The undersigned Registrant hereby amends the Annual Report on Form 10-K
for the fiscal year ended June 30, 1997 as set forth below.
1. The Report of Independent Auditors on page 41 of the Form 10-K for
the year ended June 30, 1997 is amended and restated as follows.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
General Surgical Innovations, Inc. and Subsidiary:
We have audited the accompanying consolidated balance sheets of General
Surgical Innovations, Inc. and Subsidiary as of June 30, 1997 and 1996, and the
related consolidated statements of operations, shareholders' equity and cash
flows for each of the three years in the period ended June 30, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 principals used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of General
Surgical Innovations, Inc. and Subsidiary as of June 30, 1997 and 1996, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended June 30, 1997, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
San Jose, California
July 29, 1997, except for Note 14, as
to which the date is September 29, 1997
41
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2. Notes 10 and 14 to the Consolidated Financial Statements are amended
and restated as follows.
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GENERAL SURGICAL INNOVATIONS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. COMMITMENTS: (CONTINUED)
this technology through 2001. Minimum royalties under the agreement are $25,000,
$62,500, $75,000 and $37,500 for the years ending June 30, 1998, 1999, 2000 and
2001, respectively.
CONTINGENCIES:
In May 1996, the Guidant Corporation unit of Origin MedSystems, Inc.
("Origin") filed an action against GSI in the U.S. District Court for the
Northern District of California, alleging patent infringement of its patent
entitled "Apparatus and Method for Peritoneal Retraction." GSI also filed an
action against Origin in the U.S. District Court for the Northern District of
California alleging patent infringement of its patent for a method of tissue
plane dissection using balloon systems. Discovery is ongoing and Management
believes it has meritorious defenses in relation to the action.
One of the patent applications filed by the Company, which is directed to a
surgical method using balloon dissection technology, has been placed in
interference with a patent application filed by Origin Medsystems, Inc.
("Origin"), a competitor of the Company. The Company believes that the inventor
named in its patent application was the first to invent this subject matter, and
has asserted that the Origin patent application was filed after a disclosure
made by such inventor to employees of Origin. Origin takes a contrary position.
This interference is presently pending in the United States Patent and Trademark
Office ("USPTO") and, as permitted by the rules of the USPTO, has been referred
to an arbitrator for completion of the interference proceeding. A decision is
not expected in this interference proceeding until 1998 and, while the Company
believes it will be successful in this interference proceeding, there can be no
assurance of such success.
No accrual for the above matters has been made in the accompanying
consolidated financial statements as the ultimate outcomes of the litigation
and dispute presently are not determinable. The litigation and dispute are
subject to inherent uncertainties and thus, there can be no assurance that
the litigation or dispute will be resolved favorably to the Company or that
they will not have a material adverse effect on the Company's financial
position or results of operations.
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GENERAL SURGICAL INNOVATIONS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. SUBSEQUENT EVENTS:
On September 25, 1997, the Company filed another claim against Origin
alleging patent infringement of its patent for a method serial inflation of
tissue dissectors (See Note 10).
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report on Form
10-K/A to be signed on its behalf by the undersigned, thereunto duly
authorized.
GENERAL SURGICAL INNOVATIONS, INC
By: /s/ STEPHEN J. BONELLI
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Stephen J. Bonelli
CHIEF FINANCIAL OFFICER AND VICE
PRESIDENT OF FINANCE
Date: October 3, 1997
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PART IV
Item 14(a)(3) is hereby amended to amend and restate the following
exhibit:
EXHIBIT
NUMBER DESCRIPTION
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23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants.
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3. Exhibit 23.1, Consent of Coopers & Lybrand, LLP, Independent
Accountants is amended and restated as follows.
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EXHIBIT 23.1
CONSENT OF COOPERS & LYBRAND, LLP, INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement of General Surgical Innovations, Inc. on Form S-8 (File No.
333-10305) of our report dated July 29, 1997, except for Note 14, as to which
the date is September 29, 1997, on our audits of the consolidated financial
statements and financial statement schedule of General Surgical Innovations,
Inc. as of June 30, 1997 and 1996 and for the years ended June 30, 1997, 1996
and 1995 which report is included in this Annual Report on Form 10-K for the
year ended June 30, 1997.
COOPERS & LYBRAND
San Jose, California
September 29, 1997
