UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(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 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from_______to_________
Commission file number 0-26208
KERAVISION, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 77-0328942
(State of Incorporation) (I.R.S. Employer
Identification No.)
48630 MILMONT DRIVE
FREMONT, CA 94538
(Address of principal executive offices)
(510) 353-3000
(Registrant's telephone number)
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
------- -------
As of August 6, 1998 there were 12,700,470 shares of Common Stock
outstanding.
<PAGE>
INDEX
-----
PART I. FINANCIAL INFORMATION (unaudited)
Item 1. Condensed Consolidated Balance Sheets as of
June 30, 1998 and December 31, 1997
Condensed Consolidated Statements of Operations
for the three-month and six-month periods
June 30, 1998 and 1997
Condensed Consolidated Statements of Cash Flows
for the six-month periods ended
June 30, 1998 and 1997
Notes to Condensed Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Items
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
KERAVISION, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
----------- -----------
<S> <C> <C>
(Unaudited) (Note 1)
ASSETS
Current assets:
Cash and cash equivalents.......................... $7,262 $2,574
Available-for-sale investments..................... 13,946 11,539
Prepaid expenses and other current assets.......... 913 1,265
----------- -----------
Total current assets................................. 22,121 15,378
----------- -----------
Property and equipment, at cost:
Manufacturing and laboratory equipment............. 3,656 3,298
Office furniture and fixtures...................... 587 586
Leasehold improvements............................. 621 383
----------- -----------
4,864 4,267
Accumulated depreciation and amortization............ (2,743) (2,398)
----------- -----------
Net property and equipment......................... 2,121 1,869
Other assets......................................... 98 98
----------- -----------
Total assets......................................... $24,340 $17,345
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................... $2,633 $1,089
Accrued payroll and related expenses............... 525 489
Accrued clinical trial costs....................... 1,234 1,211
Other accrued liabilities.......................... 251 414
Current portion of capital lease obligations....... 394 355
----------- -----------
Total current liabilities............................ 5,037 3,558
Capital lease obligations............................ 770 850
Redeemable convertible series B preferred stock 16,760 --
Commitments and contingencies
Stockholders' equity:
Common stock....................................... 13 13
Additional paid-in capital......................... 79,339 76,540
Deferred compensation.............................. (105) (179)
Accumulated deficit................................ (76,465) (62,634)
Notes receivable from stockholders................. (1,009) (803)
----------- -----------
Total stockholders' equity........................... 1,773 12,937
----------- -----------
Total liabilities and stockholders' equity........... $24,340 $17,345
=========== ===========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE>
KERAVISION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data; unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales........................... $112 $114 $264 $170
Costs and expenses:
Cost of sales and manufacturing
expenses........................ 989 974 1,949 1,744
Research and development......... 3,113 3,033 6,016 5,406
Selling, general and
administrative................ 1,740 1,700 3,652 3,079
--------- --------- --------- ---------
Total costs and expenses............ 5,842 5,707 11,617 10,229
--------- --------- --------- ---------
Operating loss...................... (5,730) (5,593) (11,353) (10,059)
Interest income, net................ 86 295 179 668
--------- --------- --------- ---------
Net Loss........................... ($5,644) ($5,298) ($11,174) ($9,391)
Deemed dividend on preferred stock (2,611) -- (2,611) --
--------- ------------------------------
Net loss applicable to Common Stockholders ($8,255) ($5,298) ($13,785) ($9,391)
========= ========= ========= =========
Basic and diluted net loss per share
applicable to Common Stockholders.. ($0.65) ($0.42) ($1.09) ($0.75)
========= ========= ========= =========
Shares used in calculation of
net loss per share................. 12,673 12,532 12,655 12,495
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE>
KERAVISION, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(In thousands, unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------
1998 1997
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net Loss................................................ ($11,174) ($9,391)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization......................... 345 328
Issuance of stockholders' notes....................... (251) --
Forgiveness of stockholders' notes.................... 45 --
Amortization of deferred compensation................. 74 74
Prepaid expenses and other current assets........... 352 (338)
Accounts payable.................................... 1,544 5
Other accrued liabilities........................... (104) 428
--------- ---------
Total adjustments.................................... 2,005 497
--------- ---------
Net cash used in operating activities................ (9,169) (8,894)
--------- ---------
Cash flows from investing activities:
Purchases of available-for-sale investments............. (17,226) (15,493)
Sales of available-for-sale investments................. 12,572 7,156
Maturities of available-for-sale investments............ 2,201 16,149
Capital expenditures.................................... (597) (395)
--------- ---------
Net cash provided by (used in) investing activities.. (3,050) 7,417
--------- ---------
Cash flows from financing activities:
Principal payments under capital lease obligations...... (221) (201)
Proceeds from sales-leaseback of capital equipment...... 180 495
Proceeds from issuance of equity securities, net
of repurchases........................................ 268 280
Proceeds from issuance of redeemable convertible
Series B.............................................. 18,000 --
Fees incurred to obtain additional financing............ (1,320) --
--------- ---------
Net cash provided by financing activities.. 16,907 574
--------- ---------
Net increase (decrease) in cash and cash equivalents..... 4,688 (903)
Cash and cash equivalents at the beginning of the period. 2,574 8,291
--------- ---------
Cash and cash equivalents at the end of the period....... $7,262 $7,388
========= =========
Supplemental disclosure of non-cash financing activities:
Accrued dividends to preferred stock..................... $2,597 --
========= =========
Accretion related to preferred stock..................... $14 --
========= =========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE>
KERAVISION, INC.
Notes to Condensed Consolidated Financial Statements, (unaudited)
1. Basis of Presentation
The accompanying unaudited condensed financial statements of
KeraVision, Inc. (the "Company" or "KeraVision"), 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,
the statements of cash flows for the six-month periods ended June 30,
1998 and 1997 and the statements of operations for the three and six-
month periods ended June 30, 1998 and 1997 are unaudited but include all
adjustments (consisting only 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 and Form 10-K for the year ended December 31, 1997. The
accompanying condensed consolidated balance sheet at December 31, 1997
is derived from audited financial statements at that date.
Results for any interim period are not necessarily indicative of
results for any other interim period or for the entire year.
2. Financing
On June 12, 1998, the Company issued 562,500 shares of the
Company's Series B Convertible Preferred Stock (the "Series B Shares")
at $32.00 per share. The Series B Shares are entitled to receive
quarterly dividends at the rate of seven percent (7%) per annum,
payable, at the election of the Company, in either cash or additional
Series B Shares, as described in the Certificate of Designation of
Rights, Preferences and Privileges of Series B Convertible Preferred
Stock (the "Certificate of Designation"). Each Series B Share is
convertible into four shares of Common Stock at $8.00 per share. The
Series B Shares are convertible at the Company's option after two years
if the price of the Company's Common Stock exceeds $16.00 per share.
The conversion rate is subject to adjustment in the event of certain
circumstances described in the Certificate of Designation, including if
the then-current value of the Common Stock is below $8.00 per share on
June 12, 2000. The Series B Shares are redeemable at the option of
the holders after five (5) years. The cumulative quarterly dividends as
of June 30, 1998 were approximately $66,000.
3. Net Loss Per Common Share
Net loss per common share is computed based on the weighted
average number of common shares outstanding and excludes common stock
equivalents as their effect would be antidilutive. For the period ended
June 30, 1998, preferred dividends, including the difference, at the
date of issuance, between the market value of the Company's common stock
and conversion price of the Company's Series B Convertible Preferred
Stock of $2.5 million (See Note 2), are added to the net loss to arrive
at net loss applicable to common stockholders.
4. Comprehensive Income
As of January 1, 1998, the Company adopted Statement No. 130,
"Reporting Comprehensive Income". Statement No. 130 establishes new
rules for the reporting and display of comprehensive income and its
components; however, the adoption of this Statement had no impact on the
Company's net income or stockholders' equity. Statement No. 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 separately in stockholders' equity to be included
in other comprehensive income. Total comprehensive income was not
significant during the periods ended June 30, 1998 and 1997.
5. Available-for-sale investments
The Company's available-for-sale investments at June 30, 1998
were composed of the following (in thousands):
Gross Estimated
Unrealized Fair
Cost Gain Value
----------- ----------- -----------
Certificate of deposit......... $159 $ -- $159
Reverse repurchase agreement... 4,030 -- 4,030
Corporate debt securities...... 9,750 7 9,757
----------- ----------- -----------
Available-for-sale
investments................... $13,939 $7 $13,946
=========== =========== ===========
All available-for-sale investments mature within one year.
Gross realized and unrealized gains/losses were not significant during the
periods ended June 30, 1998 and 1997.
6. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions. These assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
Management believes that all of the assumptions used in the preparation
of financial statements contained in this Quarterly Report are
reasonable and have a reasonable basis. Actual results could differ
from these estimates.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations:
The following discussion should be read in conjunction with the
unaudited financial statements and notes thereto included in Part I -
Item 1 of this Quarterly Report and the audited financial statements and
notes thereto and Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in the Company's Annual
Report and Form 10-K for the year ended December 31, 1997.
Overview
Since its founding in November 1986, the Company has been engaged
in the research and development of the KeraVision Ring and related
technology. Although the Company recorded its first revenue in the
quarter ended December 31, 1996, the Company expects to continue to
incur substantial losses at least through the year ending December 31,
1999 and until sufficient revenue and margin can be generated to offset
expenses. Given the uncertainties in developing a new market, revenues
may not significantly accelerate in the foreseeable future.
Furthermore, the Company expects its expenses to increase as its
marketing and sales and certain other areas continue to increase.
The Company is currently conducting Phase III trials for the
KeraVision Ring in the United States and has completed patient
enrollment for myopia in the range of -1.0 to -3.5 diopters. The Company
is currently enrolling patients in the range of -0.5 and -1.0 diopters
and -3.5 to -5.0 diopters in the Phase III trial. The Company was
granted the right to affix the CE mark on the KeraVision Ring for myopia
which allows the Company to sell product in the range of -1.0 to -5.0
diopters in European Union countries. In May 1998, regulatory approval
was received in Canada to sell product in the range of -1.0 to -5.0
diopters.
The research, manufacture, sale and distribution of medical
devices such as the KeraVision Ring are subject to numerous regulations
imposed by governmental authorities, principally the FDA and
corresponding state and foreign agencies. The regulatory process is
lengthy, expensive and uncertain. Prior to commercial sale in the United
States, most medical devices, including the Company's KeraVision Ring,
must be cleared or approved by the FDA. Securing FDA approvals and
clearances will require the submission to the FDA of extensive clinical
data and supporting information. Current FDA enforcement policy strictly
prohibits the marketing of medical devices for uses other than those for
which the product has been approved or cleared. After approvals have
been given, product approvals and clearances can be withdrawn for
failure to comply with regulatory standards or for the occurrence of
unforeseen problems following initial marketing. Foreign governments or
agencies also have review processes for medical devices which present
many of the same risks. The right to affix the CE mark can be
withdrawn, resulting in an inability to sell products in European
countries.
There can be no assurance that the Company's research and
development efforts will be successfully completed, and until the
development and testing processes for the KeraVision Ring are complete,
there can be no assurance that the KeraVision Ring will perform in the
manner anticipated. Although the Company does have approval to sell
product in the European Union and Canada, there can be no assurance that
the KeraVision Ring will prove to be safe or effective over the long
term in correcting vision, that the product will be approved for
marketing by the FDA or other government agencies or that the approvals
that the Company has obtained will not be withdrawn. There can also be
no assurance that the KeraVision Ring or any other product developed by
the Company, if any, will be commercially successful, will be
successfully marketed or achieve market acceptance. There can be no
assurance that the Company will ever achieve either significant revenues
from sales of the KeraVision Ring or any other products, if developed,
or ever achieve profitable operations.
Results of Operations
Three Months Ended June 30, 1998 and 1997
Revenues for the quarter ended June 30, 1998 totaled $112,000 on
the sales of KeraVision Ring and related instruments compared to
$114,000 for the same quarter in the previous year. During the quarter,
the Company initiated its first shipments to Canada following regulatory
approval in May 1998.
Cost of sales and manufacturing expenses of $1.0 million, exceeded
revenues, reflecting currently low production volumes and certain fixed
costs associated with the Company's manufacturing capabilities and
investment in its quality system.
Research and development expenses, which include clinical and
regulatory expenses, for the three-month period ended June 30, 1998 were
$3.1 million, an increase of $0.1 million from the three-month period
ended June 30, 1997. The increase is primarily attributable to expenses
related to patent coverage for KeraVision technology.
Selling, general and administrative expenses in total remained
unchanged from the prior period a year ago. An increase in sales and
marketing expenses associated with market-development investments in
Canada were offset by a decrease in expenditures in general and
administrative functions.
The Company recorded $0.1 million of net interest income for the
three-month period ended June 30, 1998, as compared to $0.3 million for
the previous year. Interest income decreased due to lower average cash
and investment balances from period to period. The net loss for the
quarter was $5.6 million versus $5.3 million for the same quarter in
1997. The net loss per share applicable to common stockholders was 65
cents. This per share calculation includes the effect of a deemed
dividend of $2.6 million to preferred stockholders as part of the
recently completed Series B Preferred Stock financing. (See Note 2 to
"Notes to Consolidated Financial Statements"). The Company believes that
its net loss may significantly increase in future periods.
Six Months Ended June 30, 1998 and 1997
Revenue increased by $94,000 to $264,000 for the six-month period
ended June 30, 1998 compared to $170,000 for the six-month period ended
June 30, 1997. Although sales for the six-month period were primarily
concentrated in Germany and France, the Company initiated its first
product shipments to Canada following regulatory approval in May 1998.
Research and development expenses for the six-month period ended
June 30, 1998 were $6.0 million, an increase of $0.6 million from the
comparable six-month period in the prior year. This increase was due to
higher expenses related to continued investments in patent coverage.
Selling, general and administrative expenses for the six-month
periods ended June 30, 1998 and 1997 were $3.7 million and $3.1 million,
respectively. The increase in selling, general and administrative
expenses is primarily the result of increased marketing efforts relating
to European commercialization and to market-development investments,
including in Canada.
The Company recorded $0.2 million of net interest income for the
six-month period ended June 30, 1998, as compared to $0.7 million for
the same period in 1997. Interest income decreased during the period
due to lower average cash and investment balances. The net loss for the
six-month period ended June 30, 1998 was $11.2 million, an increase of
$1.8 million over the loss of $9.4 million in the same period of the
prior year. The Company believes that its net loss may significantly
increase in future periods.
Liquidity and Capital Resources
The Company has financed its operations since incorporation
primarily through its initial public offering, private sales of
preferred stock, interest income and equipment financing arrangements.
On June 12, 1998, the Company completed the sale of Series B Convertible
Preferred Stock with gross proceeds to the Company of $18 million. The
Company completed an initial public offering of its Common Stock on
August 2, 1995, from which it realized net proceeds (after underwriting
discounts and expenses) of $44.4 million. Prior to the initial public
offering, the Company had raised approximately $29.5 million from the
sale of preferred stock, related warrants and common stock. Cash used in
operating activities for the first six months of 1998 has increased to
$9.2 million from $8.9 million in the same period of the prior year,
reflecting increasing net losses principally related to increased
selling, general and administrative and research and development
expenditures. Cash, cash equivalents and available-for-sale investments
increased to $21.2 million at June 30, 1998 from $14.1 million at
December 31, 1997, primarily as a result of the sale of Series B
Convertible Preferred Stock. Capital expenditures for the first six
months of 1997 and 1998 were $0.4 million and $0.6 million,
respectively.
The Company expects to continue to incur substantial expenses in
support of additional research and development and sales and marketing
activities, including cost of clinical studies, manufacturing costs,
and the support for ongoing administrative activities. The Company
anticipates that the existing cash, cash equivalents and available-for-
sale investments will enable it to maintain its current operations through
at least December 1998.
The Company's cash requirements may vary materially from those now
planned because of results of research, development and clinical
testing, establishment of relationships with strategic partners, changes
in focus and direction of the Company's research and development
programs, changes in the scale, timing, or cost of the Company's
commercial manufacturing facility, competitive and technological
advances, the FDA or other regulatory processes, changes in the
Company's marketing and distribution strategy, and other factors. As a
result, the Company will need to raise additional funds in the form of
equity or debt financing to fund its future operations. The Company
may also enter into collaborative arrangements with corporate partners
that could provide the Company with additional funding in the form of
equity, debt or license fees in exchange for the Company's rights with
respect to certain markets or technology. There can be no assurance
that the Company will be able to raise any additional funds or enter into
any such collaborative arrangements on terms favorable to the Company,
or at all. If the Company is unable to obtain the necessary capital,
significant reductions in spending and the delay or cancellation of
planned activities or more substantial restructuring options may be
necessary.
Year 2000
Based on a recent assessment, the Company determined that it will
be required to modify a small portion of its software so that its
computer systems will function properly with respect to dates in the
year 2000 and thereafter. The Company determined that most of its
currently employed software is already Year 2000 compliant. The Company
presently believes that, with the required slight modification, the Year
2000 issue will not pose significant operational problems for its
computer systems and that the costs of addressing this issue will not
have a material adverse impact on the Company's financial position.
The Company has initiated communications with key suppliers to
determine to the extent to which the Company's interface systems are
vulnerable to those third parties' failure to remediate their own Year
2000 issues. The Company is currently communicating with suppliers and
customers to determine their exposure to the Year 2000 issue. There can
be no guarantee that the systems of other companies on which the
Company's systems rely will converted in a timely fashion and would not
have an adverse effect on the Company's systems.
Forward Looking Statements
The Company notes that certain of the foregoing statements in this
report are forward looking and that actual results may differ materially
due to a variety of factors including, but not limited to (i) slower
than anticipated market acceptance of the KeraVision Ring and challenges
associated with creating a market for a new products in the European
Union and the United States, (ii) significant unforeseen delays in the
FDA or foreign regulatory approval processes, (iii) determinations by
the FDA or foreign regulatory bodies that the clinical data collected
are insufficient to support safety and efficacy of the KeraVision Ring,
(iv) the FDA's failure to schedule advisory review panels, (v) changes
in FDA or foreign regulatory review guidelines, procedures, regulations
or administrative interpretations, (vi) complications relating to the
KeraVision Ring, the surgical procedure to insert the KeraVision Ring or
use of the KeraVision Ring, (vii) competitive products and technology
and (viii) other risk factors described under the heading "Risk Factors
Affecting the Company, its Business and its Stock Price" set forth in
Item 1 of the Company's Form 10-K for the year ended December 31, 1997,
in the Company's Registration Statement on Form S-3 filed on July 13,
1998 and in other filings made with the Securities and Exchange
Commission.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In July 1997, an interference action was brought in the
United States Patent Trademark Office before the Board of
Patent Appeals and Interferences in the matter of Loomas et.
al. vs. Simon et. al., Interference No. 103,973. The
interference involves the issue of the priority of
inventions relating to technology for forming corneal
channels in which an implant or implants may be placed.
Settlement discussions are in progress. However, no
assurance can be made that a settlement can be reached and,
if not reached, that the interference will be resolved
favorably to the Company.
Item 2. Changes in Securities
(a) Securities Sold. On June 12, 1998, the Company issued
and sold 562,500 shares of the
of the Company's Series B Convertible Preferred Stock
(the "Series B Shares").
(b) Underwriter and Other Purchasers. There were no
underwriters for the sale of the Series B Shares. The
Series B Shares were sold in a private placement to a
group of accredited investors. Cowen & Company acted
as placement agent.
(c) Consideration. The Series B Shares were sold at $32
per share, with gross proceeds to the Company of $18
million. The Company estimates that the aggregate
fees and expenses associated with the private
placement of the Series B Shares were $1,355,000.
(d) Exemption from Registration Claimed. The private
placement of the Series B Shares was exempt from
registration under the Securities Act of 1993, as
amended, pursuant to Rule 506 of Regulation D
promulgated by the SEC.
(e) Terms of Conversion or Exercise. Each Series B Share
is convertible into four shares of Common Stock at
$8.00 per share. The Series B Shares are convertible
at the Company's option after two years if the price
of the Company's Common Stock exceeds $16.00 per
share. The conversion rate is subject to adjustment
in the event of certain circumstances described in the
Certificate of Designation or Rights, Preferences and
Privileges of Series B Convertible Preferred Stock,
including if the then-current value of the Common
Stock is below $8.00 per share on June 12, 2000. The
Series B Shares are redeemable at the option of the
holders after five (5) years.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
1. The 1998 Annual Meeting of Stockholders of the Company
was held pursuant to notice at 1:00 p.m., Pacific time
on May 4, 1998 at the Embassy Suites, 901 East
Calaveras Blvd., Milpitas, California. There were
present at the meeting, in person or represented by
the proxy, the holders of 11,370,595 shares of Common
Stock. The matters voted on at the meeting and the
votes cast are as follows:
(a) As listed below, all of Management's nominees for
Class III Directors were elected at the meeting:
Name of Nominee
No. of Common
Votes in Favor
No. of Common
Votes Withheld
John R. Gilbert
11,298,203
72,392
Thomas M. Loarie
11,298,495
72,100
(b) Approval of the Amendment to the 1995 Stock Option
Plan was ratified and approved with 10,912,921 Common
shares voting in favor, 428,142 Common shares voting
against and 29,532 Common shares abstaining.
(c) The appointment of Ernst & Young, LLP as independent
public accountants of the Company for the fiscal year
ending December 31, 1998 was ratified and approved
with 11,351,975 Common hares voting in favor, 8,275
Common shares voting against and 10,345 Common shares
abstaining.
Item 5. Other Items
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27.1 Financial Data Schedule (filed via the EDGAR
system)
(b) Reports on Form 8-K: None
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.
KERAVISION, INC.
/s/Mark Fischer-Colbrie
Mark Fischer-Colbrie
Vice President, Finance and
Administration
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: August 11, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONDENSED CONSOLIDATED BALANCE SHEET AND THE
STATEMENT OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 7,262
<SECURITIES> 13,946
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,121
<PP&E> 4,864
<DEPRECIATION> 2,743
<TOTAL-ASSETS> 24,340
<CURRENT-LIABILITIES> 5,037
<BONDS> 0
0
0
<COMMON> 13
<OTHER-SE> 1,760
<TOTAL-LIABILITY-AND-EQUITY> 24,340
<SALES> 112
<TOTAL-REVENUES> 112
<CGS> 989
<TOTAL-COSTS> 989
<OTHER-EXPENSES> 4,853
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,644)
<INCOME-TAX> 0
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</TABLE>