UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1998
or
[ ] TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to ________________________
Commission File Number: 0-26082
VIDAMED, INC.
(exact name of registrant as specified in its charter)
Delaware 77-0314454
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
46107 Landing Parkway
Fremont, CA 94538
(Address of principal executive offices)
(510) 492-4900
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
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. [ X ] Yes [ ] No
The number of outstanding shares of the registrant's Common Stock, $.001 par
value, was 19,924,422 as of August 13, 1998.
Page 1 of 16
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<TABLE>
VIDAMED, INC.
INDEX
PART I: FINANCIAL INFORMATION
<CAPTION>
Page
<S> <C>
Item 1. Condensed consolidated financial statements - unaudited
Condensed consolidated balance sheets - June 30, 1998
and December 31, 1997 3
Condensed consolidated statements of operations - three months
ended June 30, 1998 and 1997 and six months ended
June 30, 1998 and 1997 4
Condensed consolidated statements of cash flows - six months
ended June 30, 1998 and 1997 5
Notes to condensed consolidated financial statements 6
Item 2. Management's discussion and analysis of financial condition
and results of operations 8
PART II: OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Page 2 of 16
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PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VidaMed, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
1998 1997
-------- --------
(Unaudited) (*)
Assets
Current Assets:
Cash and cash equivalents $ 15,331 $ 8,026
Accounts receivable 2,951 3,644
Inventories 1,763 1,512
Other current assets 1,497 930
-------- --------
Total current assets 21,542 14,112
Property and equipment, net 2,623 2,647
Other assets, net 201 206
-------- --------
Total assets $ 24,366 $ 16,965
======== ========
Liabilities and stockholders' equity
Current liabilities:
Notes payable, current portion $ 388 $ 480
Accounts payable 714 1,536
Accrued professional fees 381 559
Accrued clinical trial costs 378 372
Accrued and other liabilities 2,968 2,620
Accrued interest payable 197 422
Restructuring Accrual 431 1,000
Current portion of long-term debt 33 34
Current portion of obligations under capital leases 24 82
Deferred revenue, current portion 339 611
-------- --------
Total current liabilities 5,853 7,716
Other long-term liabilities 6 22
Notes payable, long-term portion 892 --
Stockholders' equity:
Capital stock 95,439 77,573
Accumulated deficit (77,824) (68,346)
-------- --------
Total stockholders' equity 17,615 9,227
-------- --------
Total liabilities and stockholders' equity $ 24,366 $ 16,965
======== ========
* The Balance Sheet at December 31, 1997 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes.
Page 3 of 16
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<TABLE>
VidaMed, Inc.
Condensed Consolidated Statements of Operations
(In thousands except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Product sales, net $ 861 $ 2,103 $ 2,236 $ 5,355
License fees and grant revenue 50 50 339
-------- -------- -------- --------
100
Net revenues 911 2,153 2,575 5,455
Cost of Products Sold 608 1,265 1,680 3,048
-------- -------- -------- --------
Gross Profit 303 888 895 2,407
Operating Expenses:
Research and development 1,200 1,456 2,334 3,354
Selling, general and administrative 3,297 3,865 7,904 7,223
-------- -------- -------- --------
Total operating expenses 4,497 5,321 10,238 10,577
Loss from operations (4,194) (4,433) (9,343) (8,170)
Other income(expense), net (46) (102) (135) (109)
Net loss $ (4,240) $ (4,535) $ (9,478) $ (8,279)
======== ======== ======== ========
Basic and diluted net loss per share $ (0.24) $ (0.38) $ (0.58) $ (0.72)
======== ======== ======== ========
Shares used in computing basic and diluted
net loss per share 17,443 11,913 16,341 11,521
======== ======== ======== ========
Page 4 of 16
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<PAGE>
<TABLE>
VidaMed, Inc.
Condensed Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
<CAPTION>
Six Months Ended
June 30,
---------------------------
1998 1997
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (9,478) $ (8,279)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 635 671
Changes in assets and liabilities:
Accounts receivable 693 (1,089)
Inventory (251) (330)
Other current assets (567) (581)
Other assets 5 (29)
Accounts payable (822) 297
Accrued professional fees (178) 52
Accrued clinical trial costs 6 (170)
Accrued interest payable (225) 75
Accrued restructuring cost (569) --
Accrued and other liabilities 348 941
Deferred revenue (272) 217
-------- --------
Net cash used in operating activities (10,675) (8,225)
-------- --------
Cash flows from investing activities:
Expenditures for property and equipment (611) (758)
Proceeds from maturities of short-term investments -- 1,976
-------- --------
Net cash provided by (used in) investing activities (611) 1,218
-------- --------
Cash flows from financing activities:
Principal payments under capital leases (58) (318)
Principal payments of long-term debt (16) (32)
Principal payments of notes payable (700) (518)
Net proceeds from issuance of notes payable 1,500 --
-------- --------
Net cash proceeds from issuance of common stock 17,865 10,002
-------- --------
Net cash provided by financing activities 18,591 9,134
Net increase (decrease) in cash and cash equivalents 7,305 2,127
Cash and cash equivalents at the beginning
of the period 8,026 3,879
-------- --------
Cash and cash equivalents at the end of the period $ 15,331 $ 6,006
======== ========
Supplemental disclosure of cash flows information:
Cash paid for interest $ 458 $ 292
======== ========
<FN>
See accompanying notes.
</FN>
Page 5 of 16
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VIDAMED, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
1. Basis of presentation
The accompanying unaudited condensed consolidated financial statements of
VidaMed, Inc. (the "Company" or "VidaMed") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions for Form 10-Q and Article 10 of Regulation S-X. The
balance sheet as of June 30, 1998 and the statements of operations for the three
and six months ended June 30, 1998 and 1997, and the statements of cash flows
for the six months ended June 30, 1998 and 1997, are unaudited but include all
adjustments (consisting of normal recurring adjustments) which the Company
considers necessary for a fair presentation of the financial position at such
date and the operating results and cash flows for those periods. Although the
Company believes that the disclosures in these financial statements are adequate
to make the information presented not misleading, certain information normally
included in financial statements and related footnotes prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange Commission.
The accompanying financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's annual report
on Form 10-K for the year ended December 31, 1997 filed with the Securities and
Exchange Commission.
Results for any interim period are not necessarily indicative of results for any
other interim period or for the entire year.
2. Net loss per share
Basic and diluted net loss per share is computed using the weighted average
number of shares of common stock outstanding during the periods presented.
Common equivalent shares from options, warrants and convertible securities are
excluded from the computation, as their effect is anti-dilutive. In February
1997, the Financial Accounting Standards Board issued Statement No. 128,
"Earnings per Share" (Statement 128). Statement 128 replaced the calculation of
primary and fully diluted earnings (loss) per share with basic and diluted
earnings (loss) per share. Unlike primary earnings (loss) per share, basic
earnings (loss) per share exclude any dilutive effects of options, warrants and
convertible securities. Diluted earnings (loss) per share are very similar to
the previously named fully diluted earnings (loss) per share. All loss per share
amounts for all periods have been presented, and where appropriate, restated to
conform to the Statement 128 requirements. As the Company has incurred losses
from operations in each of the periods presented, there is no difference between
basic and diluted net loss per share amounts.
3. Inventories
Inventories are stated at the lower of cost (determined using the first-in,
first-out method) or market value. Inventories at June 30, 1998 and December 31,
1997 consist of the following (in thousands):
Page 6 of 16
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June 30, December 31,
1998 1997
------ ------
Raw materials $ 384 $ 261
Work in process 213 90
Finished goods 1,166 1,161
------ ------
$1,763 $1,512
====== ======
4. Notes Payable
In January 1998, the Company entered into a financing agreement with Silicon
Valley Bank, for a $1,500,000 42-month term loan. As of June 30, 1998, no funds
remained available for borrowing under this loan.
5. Restructuring Accrual
In September 1997, VidaMed announced a restructuring program designed to reduce
costs and improve operating efficiencies by closing the company's U.K.
manufacturing facility.
The charge in the third quarter of 1997 was $2.1 million.
The elements of the total charge as of June 30, 1998 are as follows (in
thousands):
Representing
------------------------------------------
Cash Outlays
Total Asset -------------------
Charges Write-down Completed Future
------ ------ ------ ------
Fixed assets $ 390 $ 390 $ -- $ --
Facility shut down 1,305 -- 1,279 26
Grant 405 -- -- 405
------ ------ ------ ------
Total Special Charges $2,100 $ 390 $1,279 $ 431
------ ------ ------ ------
6. Reporting Comprehensive Income (Loss)
As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No.130, Reporting Comprehensive Income (Statement 130). Statement 130
establishes new rules for the reporting and display of comprehensive income and
its components. Statement 130 requires unrealized gains or losses on the
Company's available-for-sale securities and foreign currency translation
adjustments, which prior to adoption were reported in shareholders' equity, to
be included in other comprehensive income
Page 7 of 16
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(loss). During the three and six months ended June 30, 1998 and 1997, the total
comprehensive loss was not materially different from the net loss.
7. Common Stock
In May 1998, the Company completed a private placement of common stock with
certain investors. In this transaction, the Company issued 4,340,000 shares of
common stock at a purchase price of $4.00 per share resulting in net proceeds of
$16,743,000 to the Company. In connection with this financing, the Company
issued warrants to purchase an aggregate of 1,085,000 shares of common stock at
an exercise price of $5.00 per share for no additional consideration.
Page 8 of 16
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results of
Operations for the three and six months ended June 30, 1998 and 1997, should be
read in conjunction with the Management's Discussion and Analysis of Financial
Condition and Results of Operations included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1997.
This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from those
anticipated by the forward-looking statements. Factors that might cause such a
difference include, but are not limited to, those discussed below and in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
Overview
Since its inception in July 1992, VidaMed has been engaged in the design,
development, clinical testing and manufacture of the VidaMed TUNA System for the
treatment of symptoms associated with benign prostatic hyperplasia (BPH). The
Company commenced international sales of the VidaMed TUNA System in late 1993
and United States sales in October 1996. As of June 30, 1998 there have been
over 350 RF generators sold and over 10,000 TUNA procedures performed worldwide.
VidaMed anticipates that a substantial amount of its revenues from product sales
in the future will be from sales in the United States. The Company received FDA
clearance to market this system for the treatment of symptoms associated with
BPH in the United States on October 8, 1996. The Company applied to the American
Medical Association for a CPT code covering the TUNA Procedure. CPT code number
53852 relating to the TUNA Procedure has been published in the Federal Register
and is part of the Medicare Physician Fee Schedule for calendar 1998. VidaMed
sells its products in the U.S. to individual and group urology practices,
surgery centers and hospitals. The Company markets the VidaMed TUNA System
through a network of four VidaMed sales managers, supported by both sales
representatives and independent dealers in the U.S. A network of distributors,
supported by VidaMed staff, cover other countries in Europe, Asia and South
America.
VidaMed does not anticipate reaching profitability in the near future. The
Company expects its operating losses to continue through at least the next four
quarters as it continues to expend substantial resources in expansion of
marketing and sales activities, funding clinical trials in support of regulatory
and reimbursement approvals, and research and development. The Company's future
profitability will be dependent upon, among other factors, market acceptance of
the VidaMed TUNA Procedure and availability of third-party reimbursement for
procedures performed with the TUNA System.
Although the Company has received FDA clearance of its 510(k) notification for
the TUNA System for treatment of symptoms associated with BPH and has commenced
marketing of the TUNA System in the United States, there can be no assurance
that the TUNA System will be deemed clinically or cost effective
Page 9 of 16
<PAGE>
by many health care providers and payors, will be deemed superior to other
current and emerging methods for treating BPH or will achieve significant market
acceptance in the United States. Furthermore, determinations of reimbursement of
the VidaMed TUNA Procedure by private and governmental health payors are made by
such payors and their medical directors independent of the FDA approval.
Accordingly, there can be no assurance that the TUNA Procedure will be
reimbursed at adequate levels in the United States under either private or
governmental healthcare payment systems. Availability of Medicare reimbursement
for the TUNA Procedure may be dependent on the publication of clinical data
relating to the cost-effectiveness and duration of the TUNA therapy. Inadequate
reimbursement for TUNA procedures could have an adverse effect on the ability of
the TUNA System to achieve market acceptance. Failure of the TUNA Procedure to
achieve market acceptance in the United States would have a material adverse
effect on business, financial condition and results of operations of the
Company.
The Company does not have a backlog of orders for its products in countries
where the VidaMed TUNA System is sold and anticipates that it will continue to
manufacture and ship orders after their receipt. Accordingly, the Company does
not anticipate that it will develop a significant backlog in the future.
Results of Operations
Net revenues for the three months ended June 30, 1998 were $0.9 million, down
$1.2 million or 58% from $2.2 million in the three months ended June 30, 1997.
Product sales in the second quarter of 1998 decreased 59% to $0.9 million from
$2.1 in the same period in 1997. For the first six months of 1998 net revenue
decreased 53% to $2.6 million from $5.5 million during the same period in 1997.
Product sales for the first six months of 1998 decreased 58% to $2.2 million
from $5.4 million during the same period in 1997. Revenues for the three and six
months ended June 30, 1998 and 1997 include license fees for distribution rights
in Japan. The decrease in net revenues and product sales between the 1998 and
1997 periods is the result of slowing sales while the Company awaits Medicare
Part A and Part B reimbursement approval at the state levels. VidaMed has now
gained approval of the professional component (Medicare Part B) in 13 states,
including Colorado, Massachusetts and Ohio. Other states with significant
Medicare populations are moving foward with regard to Medicare reimbursement. In
order for the Company to achieve significant increases in sales volume, it will
likely be necessary for the Company to obtain Medicare Part A and Part B
reimbursement approvals in all 50 states, or at least in all states with
significant population centers, particularly since sales agreements with major
healthcare providers are often on a national, or system-wide, basis. The Company
has several initiatives underway to facilitate the Medicare reimbursement
approval process, including working in cooperation with state Medicare Medical
Directors. In addition, current Medicare reimbursement for the TUNA handpiece
extends only to procedures performed in a hospital outpatient setting.
Ambulatory Surgical Center reimbursement is moving forward and guidelines are
currently in the comment period. Notwithstanding the foregoing, there can be no
assurance that the Company will receive additional Medicare reimbursement
approvals in major states in a timely manner, and the failure to receive such
approvals would have a material adverse effect on the business, financial
condition and results of operations of the Company.
Page 10 of 16
<PAGE>
Another factor contributing to sales for the six months of 1997 was significant
accumulated demand resulting from the late-1996 receipt of Food and Drug
Administration 510(k) clearance for the VidaMed TUNA System and a sale of 39
TUNA Systems to Tenet Health Care System.
Cost of product sold for the three months ended June 30, 1998 was $0.6 million,
a decrease of 52% or $0.7 million from $1.3 million for the three months ended
June 30, 1997. For the six months ended June 30, 1998 cost of product sales
decreased 45% to $1.7 million from $3.0 million in the same period in 1997. The
decrease is due to lower product sales and absorption of overhead fixed costs in
the first six months of 1998.
Research and development (R & D) expenses decreased 18% to $1.2 million in the
three months ended June 30, 1998 from $1.5 million in the three months ended
June 30, 1997. For the six months ended June 30, 1998, R & D expenses decreased
30% to $2.3 million from $3.4 million in the same period for 1997. The
difference is primarily due to the investment in the first six months of 1997 in
development efforts on the VidaMed TUNA System (VTS) RF generator and VTS hand
piece. Additionally, R & D includes the United States patient enrollment to
support the clinical trials completed in 1995. The costs associated with
follow-up visits for these clinical trials will continue through 1998 and
beyond.
Selling, general and administrative (SG&A) expenses decreased 15% to $3.3
million in the three months ended June 30, 1998 from $3.9 in the three months
ended June 30, 1997. For the six months ended June 30, 1998 SG&A expenses
increased 9% to $7.9 million from $7.2 million in the same period in 1997. The
increase in 1998 from 1997 was primarily due to an increase to the allowance for
doubtful accounts of $894,000, as a result of the length of time involved in
obtaining Medicare reimbursement levels for each state, and the transition to a
new CEO. Spending in SG&A in both periods included start-up and launch costs for
new products and as well as costs associated with the continued efforts to
support domestic and international sales and secure global reimbursement for
TUNA. In particular, the periods ended June 30, 1998 included an investment in
additional headcount to enhance the existing sales and field reimbursement
force. The periods ended June 30, 1997 included a co-op advertising agreement
with Tenet HealthSystem.
Other expense for the three months ended June 30, 1998 was $46,000 compared to
other expense of $102,000 for the comparable period in 1997. For the six months
ended June 30, 1998 other expense was $135,000 compared to $109,000 for the same
period in 1997. These changes were primarily a function of the balance of cash,
cash equivalents and debt, the interest earned or incurred, respectively, and
fluctuations in the relative balances.
Liquidity and Capital Resources
VidaMed has financed its operations primarily through the public and private
sale of equity securities and, to a lesser extent, through borrowings, equipment
lease financing, product sales, distribution rights fees, government grants and
other product sales.
At June 30, 1998 the Company's cash and cash equivalents were $15.3 million
compared to $8.0 at December 31, 1997. The increase is due primarily to a
private placement of 4.3 million shares of common stock in May 1998 (the net
proceeds from which were approximately $16.7 million) offset by operating
Page 11 of 16
<PAGE>
expenses. The cash used in operations was used primarily in the marketing and
sale of the VidaMed TUNA System, research and development activities including
clinical trials, increased SG&A expenses to support increased operations,
working capital (due in part to delays in receivable collections due to Medicare
reimbursement) and payments related to the U.K. transition.
In January 1998, the Company entered into a financing agreement with Silicon
Valley Bank, for a $1,500,000 42-month term loan with principal and interest
payable monthly. In addition, the Company established a $3,000,000 working
capital line with this bank. The Company is currently in compliance with all
bank covenants. The note payable to the bank was reflected on the Company's
balance sheet as a current liability at the end of the quarter ended March 31,
1998 as a result of the Company not being in compliance with its debt covenants
at that date. As the Company is now in compliance with the bank covenants, the
long-term portion of this debt has been reclassified as a long-term liability in
the balance sheet.
In April 1995, the Company obtained a $3,000,000 secured credit facility. To
date, the Company has borrowed $3,000,000 under this facility and has completely
repaid the principal amount due. As of June 30, 1998, $150,000 remains to be
paid relating to lump sum interest due in July, 1998.
VidaMed believes that the equity financing, combined with its current capital
resources and cash generated from the sale of products will be enough to meet
the Company's operating and capital requirements for the next twelve months.
There can be no assurance that additional financing, if required, will be
available on satisfactory terms or at all. If financing were not available,
management would need to reevaluate and revise current operating plans as well
as reduce capital spending in general. VidaMed's future liquidity and capital
requirements will depend on numerous other factors, including progress of
clinical trials, actions related to regulatory and reimbursement matters and the
extent to which the TUNA system gains market acceptance.
Restructuring Accrual
In September 1997, VidaMed announced a restructuring program designed to reduce
costs and improve operating efficiencies by closing the Company's U.K.
manufacturing facility. The Company expects to incur approximately $431,000 in
cash outlays over the next twenty-four months. See also Note 5 of notes to
condensed consolidated financial statements.
Impact of Year 2000
The Company's essential system software is currently functioning properly to
handle the transition into the Year 2000. The Company does not depend on
in-house custom systems and as a policy purchase off the shelf software from
reputable vendors who have tested their software for Year 2000 compliance. The
Company believes the Year 2000 issue will not pose significant operational
problems for its computer systems. There can be no assurance that this will
completely eliminate problems resulting from the Year 2000 issue. The Company is
evaluating significant suppliers and large customers systems to determine the
extent to which the Company's interface with these systems is vulnerable to the
Year 2000 issue. The Year 2000 issue is being considered for all future software
purchases.
Page 12 of 16
<PAGE>
VIDAMED, INC.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
On May 20, 1997 VidaMed, Inc. filed a complaint against Prosurg, Inc., in the
United States District Court for the Northern District of California. The
complaint alleges that Prosurg Inc. is infringing and inducing others to
infringe three VidaMed Patents, U.S. Patent Nos. 5,526,240, 5,531,676, and
5,531,677. On March 20, 1998, at the request of the parties, the Court dismissed
without prejudice all claims relating to U.S. patent Nos. 5,531,676 and
5,531,677. Accordingly, the only claims remaining in the litigation are those
relating to U.S Patent No. 5,526,240. VidaMed seeks both damages and injunctive
relief from the Court. A factual discovery cut-off was set for June 1, 1998,
however that date has been extended to August 20, 1998 for VidaMed only to allow
the Company to obtain discovery from Prosurg and other third parties. The Court
tentatively has set January 11, 1999 as a trial date.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of stockholders on May 7, 1998. The
following items of business were acted upon.
The election of all directors was conducted and the following nominees were
elected: David J. Illingworth, Franklin D. Brown, Stuart D. Edwards, Robert
Erra, Wayne I. Roe, John V. Scibelli and Michael H. Spindler. The vote with
respect to each nominee was as follows:
Votes Votes
Name For Withheld
-------------------- ---------- -------
David J. Illingworth 11,122,108 215,726
Franklin D. Brown 11,124,508 213,326
Stuart D. Edwards 11,089,299 248,535
Robert Erra 11,124,608 213,226
Wayne I. Roe 11,134,108 203,726
John V. Scibelli 11,130,508 207,326
Michael H. Spindler 11,125,708 212,126
Page 13 of 16
<PAGE>
The Company's Employee Stock Purchase Plan was amended and the number of shares
of Common Stock reserved for issuance under the plan was increased by 200,000 to
400,000 with 4,090,261 votes in favor and 462,373 votes against.
The Company's Stock Plan was amended and the number of shares of Common Stock
reserved for issuance under the plan was increased by 1,200,000 to 4,300,000
with 2,914,486 votes in favor and 1,597,156 votes against.
Ernst & Young LLP was ratified as the independent auditors of the Company for
the fiscal year ending December 31, 1998 with 11,178,310 votes in favor and
75,518 votes against.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
(27.1) Financial Data Schedule
b) Reports on Form 8-K.
No reports on Form 8-K were filed during the
quarter ended June 30, 1998.
Page 14 of 16
<PAGE>
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.
VIDAMED, INC.
Date: August 13, 1998 By: /s/ David J. Illingworth
----------------------------- ----------------------------
David J. Ilingworth
Chairman, President, Chief
Executive Officer
Date: August 13, 1998 By: /s/ Richard D. Brounstein
----------------------------- ----------------------------
Richard D. Brounstein
VP Finance, Chief Financial
Officer (Principal Financial
and Accounting Officer)
Page 15 of 16
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1998
<PERIOD-END> Jun-30-1998
<CASH> 15,331
<SECURITIES> 0
<RECEIVABLES> 4,801
<ALLOWANCES> 1,850
<INVENTORY> 1,763
<CURRENT-ASSETS> 21,542
<PP&E> 6,063
<DEPRECIATION> 3,440
<TOTAL-ASSETS> 24,366
<CURRENT-LIABILITIES> 5,853
<BONDS> 0
0
0
<COMMON> 20
<OTHER-SE> 17,595
<TOTAL-LIABILITY-AND-EQUITY> 24,366
<SALES> 2,236
<TOTAL-REVENUES> 2,575
<CGS> 1,680
<TOTAL-COSTS> 1,680
<OTHER-EXPENSES> (135)
<LOSS-PROVISION> 894
<INTEREST-EXPENSE> 158
<INCOME-PRETAX> (9,477)
<INCOME-TAX> 1
<INCOME-CONTINUING> (9,478)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,478)
<EPS-PRIMARY> (.58)
<EPS-DILUTED> (.58)
</TABLE>
