10QSB 1 gish1202.txt U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON , D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: December 31, 2002 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No.: 0-10728 GISH BIOMEDICAL, INC. ------------------------------------------------------------------------ (Exact name of small business issuer as specified in its charter) California 95-3046028 -------------------------------- ------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification Number) 22942 Arroyo Vista, Rancho Santa Margarita, California 92688 ------------------------------------------------------- (Address of principal executive offices) (949) 635-6200 ---------------------------------- (Issuer's telephone number) N/A -------------------------------------------------------- (Former name, former address and formal fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- State the number of shares outstanding of each of the issuer's classes of common equity: As of February 7, 2003, the issuer had 3,592,145 shares of its common stock, no par value, outstanding. Transitional Small Business Disclosure Format (check one): Yes No X --- --- PART I - FINANCIAL INFORMATION ------ --------------------- ITEM 1. - Financial Statements ------- -------------------- GISH BIOMEDICAL, INC. CONDENSED BALANCE SHEET As of December 31, 2002 (Unaudited) (In thousands, except share data) ASSETS Current assets: Cash $ 257 Accounts receivable, net 2,405 Relocation receivable 156 Inventories 3,650 Other current assets 127 -------- Total current assets 6,595 Property and equipment, at cost 9,631 Less accumulated depreciation ( 7,041) -------- Net property and equipment 2,590 Other assets 615 -------- Total assets $ 9,800 ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Revolving line of credit $ 663 Accounts payable and other accrued liabilities 1,164 Accrued compensation and related items 326 Accrued relocation liabilities 306 -------- Total current liabilities 2,459 Deferred rent 114 -------- Total liabilities 2,573 -------- Shareholders' equity: Preferred stock, 1,500,000 shares authorized; no shares outstanding Common stock, no par value, 7,500,000 shares authorized, 3,592,145 shares issued and outstanding 10,532 Accumulated deficit ( 3,305) -------- Total shareholders' equity 7,227 -------- Total liabilities and shareholders' equity $ 9,800 ======== See accompanying notes to condensed financial statements. 2 GISH BIOMEDICAL, INC. CONDENSED STATEMENTS OF OPERATIONS Three and six months ended December 31, 2002 and 2001 (Unaudited) Three Months Ended Six Months Ended December 31, December 31, 2002 2001 2002 2001 ---- ---- ---- ---- (In thousands, except share and per share data) Net sales $ 4,260 $ 4,038 $ 8,436 $ 7,886 Cost of sales 3,258 3,188 6,333 6,264 --------- -------- --------- ---------- Gross profit 1,002 850 2,103 1,622 Operating expenses: Selling and marketing 548 964 1,112 1,953 Research and development 215 257 434 510 General and administrative 479 362 947 764 --------- --------- --------- ---------- Total operating expenses 1,242 1,583 2,493 3,227 --------- --------- --------- ---------- Operating loss ( 240) ( 733) ( 390) ( 1,605) Interest expense, net ( 18) ( 22) ( 38) ( 37) --------- --------- --------- ---------- Net loss ($ 258) ($ 755) ($ 428) ($ 1,642) ========= ========= ========= ========== Net loss per share - basic and diluted ($ .07) ($ .21) ($ .12) ($ .46) ========= ========= ========= ========== Basic and diluted weighted average common shares 3,592,145 3,592,145 3,592,145 3,592,145 ========= ========= ========= =========
See accompanying notes to condensed financial statements. 3 GISH BIOMEDICAL, INC. CONDENSED STATEMENTS OF CASH FLOWS Six months ended December 31, 2002 and 2001 (Unaudited) (In thousands) 2002 2001 ---- ---- OPERATING ACTIVITIES: Net loss ($ 428) ($ 1,642) Adjustments: Depreciation 342 342 Amortization 3 3 Gain on disposal of assets ( 3) - Deferred rent 22 28 Changes in operating assets and liabilities 1,173 1,354 -------- --------- Net cash provided by operating activities 1,109 85 -------- --------- INVESTING ACTIVITIES Purchases of property and equipment, net ( 74) ( 273) Increase of other long-term assets ( 143) ( 68) -------- --------- Net cash used in investing activities ( 217) ( 341) -------- --------- FINANCING ACTIVITIES Net borrowings (repayments) on line of credit ( 793) 656 -------- --------- Net cash provided by (used in) financing activities ( 793) 656 -------- --------- Net increase in cash and cash equivalents 99 400 Cash and cash equivalents at beginning of period 158 110 -------- --------- Cash at end of period $ 257 $ 510 ======== ========= See accompanying notes to condensed financial statements. 4 GISH BIOMEDICAL, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS December 31, 2002 (Unaudited) 1. General ------- The condensed financial statements included herein have been prepared by the Company, without audit, and include all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of operations and cash flows for the six month periods ended December 31, 2002 and 2001, and financial position at December 31, 2002, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. Although the Company believes that the disclosures in such condensed financial statements are adequate to make the information presented not misleading, these condensed financial statements should be read in conjunction with the Company's financial statements and the notes thereto included in the Company's Annual Report filed with the SEC on Form 10-KSB for the year ended June 30, 2002. The accompanying financial statements have been prepared assuming the Company will remain a going concern. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The Company incurred net losses of $428,000 and $2,730,000 and used $64,000 and $1,992,000 of cash in financing such losses during the six months ended December 31, 2002 and the year ended June 30, 2002. As a result, the Company had a deficit in retained earnings of $3,305,000 at December 31, 2002. Under its current operating plan, the Company believes its existing cash, together with cash forecasted to be generated by operations and from borrowings under the existing revolving line of credit may be sufficient to meet the Company's cash requirements through December 31, 2003. However, if the Company is unable to achieve the financial performance embodied in the Company's current operating plan, including maintaining or reducing its current level of operating losses, a cash shortage could occur earlier and it would require either additional sources of funding or raising additional cash through the sale of assets. There can be no assurances that additional sources of funding will be available when needed or will be available at rates and terms favorable to the Company or that any potential assets sale will occur. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying condensed balance sheet does not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. 5 GISH BIOMEDICAL, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (continued) December 31, 2002 (Unaudited) Statement of Cash Flows ----------------------- Changes in operating assets and liabilities as shown in the condensed statements of cash flows comprise (in thousands): Six Months Ended December 31, 2002 2001 -------- -------- Decrease(increase) in: Accounts receivable $ 268 $ 404 Relocation receivable - - Inventories 663 648 Other current assets ( 20) ( 53) Increase (decrease) in: Accounts payable and other accrued liabilities 244 528 Accrued compensation and related items 34 ( 115) Accrued relocation liabilities ( 16) ( 58) ------- ------- Net change in operating assets and liabilities $ 1,173 $ 1,354 ======= ======= The Company did not pay any federal income taxes during the six month periods ended December 31, 2002 and 2001. The Company paid interest costs of $42,000 and $44,000 during the six month periods ended December 31, 2002 and 2001, respectively. 2. Inventories ----------- Inventories are stated at the lower of cost (first-in, first-out) or net realizable value and are summarized as follows (in thousands): December 31, 2002 ----------------- Raw materials $ 1,594 Work in progress 846 Finished goods 1,210 -------- $ 3,650 ======== 3. Revolving line of credit agreement ---------------------------------- In December 2000, the Company entered into a $2,000,000 three-year revolving line of credit agreement. In February 2002, the revolving line of credit agreement was amended to extend the agreement for an additional year and increase the line to $4,000,000. Advances, based on eligible receivables, are secured by the operating assets of the Company and bear interest at prime (4.25% at December 31, 2002) plus 2%. The agreement also includes various restrictive loan covenants, including a requirement for the Company to maintain a minimum 6 net worth of $7,000,000, and to achieve net income on a rolling three-month basis, effective March 2003. At December 31, 2002 the Company had borrowed $663,000 under the revolving line of credit and, would have been entitled to borrow an additional $1,500,000. 4. Commitments and Contingencies ----------------------------- During the three months ended March 31, 2001, the Company relocated to a new operating facility in Rancho Santa Margarita, California. Costs for the construction of improvements to the new facility totaled approximately $1,800,000 of which $148,000 is included in accrued relocation liabilities at December 31, 2002. The Company has excluded from the improvement construction costs at December 31, 2002, approximately $300,000 billed to the Company by the improvement construction contractor. The accuracy and validity of these billings are currently being disputed by the Company. Binding arbitration of this dispute was completed on February 10, 2003, and the Company expects to receive the arbitrator's decision by February 28, 2003. Upon resolution of this issue the current landlord will reimburse this Company $156,000 for leasehold improvements, which is included in relocation receivable at December 31, 2002. 5. Loss per share -------------- The Company calculates loss per share pursuant to SFAS 128 "Earnings Per Share". Due to the incurrence of losses in each reporting period, there is no difference between basic and diluted per share amounts. 6. Merger Agreement ---------------- Effective October 25, 2002, the Company entered into an Agreement to convert all of its outstanding shares of common stock into shares of common stock of CardioTech International, Inc. (CTE). The Agreement provides for the issuance of shares of common stock of CTE equal to the adjusted tangible net book value of the Company at September 30, 2002 ($7,292,000) and for the market value of CTE common shares to be set at the average daily closing price for the twenty-five trading days preceding October 25, 2002 ($1.51). As a result, each share of common stock of the Company will be converted into 1.34 shares of common stock of CTE. The Agreement is subject to Shareholder approval and various pre-closing conditions and, accordingly, no assurance can be given that this transaction will be completed or be consummated in the form currently proposed. The Company has scheduled a special shareholders' meeting on March 5, 2003 for shareholders to vote on the merger. At December 31, 2002 the Company had incurred costs of $153,000 related to the merger transaction. The costs are included in other assets at December 31, 2002 and costs totaling $148,000 were unpaid and included in accounts payable and accrued expenses at December 31, 2002. 7 7. Related Party Transaction ------------------------- On July 15, 2002 the Company entered into a one-year Agreement with T. R. Winston & Company, Inc. (TRW) which granted TRW the non-exclusive right to arrange financial transactions for the Company, at a price and on terms satisfactory to the Company. On transactions initiated by TRW, TRW will be due a cash commission based on all consideration paid to or received by the Company. TRW will receive a cash commission of 5% of the first $1,000,000, 4% of the next $1,000,000, 3% of the next $1,000,000, 2% of the next $1,000,000, and 1% of the amounts in excess of $4,000,000. TRW initiated the proposed merger transaction between the Company and CTE previously described and according to the terms of the Agreement, would have been due a cash commission of $174,000, if the merger is completed as currently proposed. However, on October 23, 2002 the Company and TRW entered into a Termination Agreement whereby both parties agreed to terminate the previously mentioned one-year Agreement in return for a payment by the Company to TRW of $100,000. John W. Galuchie, Jr. is the president of TRW and the Chairman of the Board of Directors of Gish Biomedical, Inc. TRW is affiliated with Asset Value Fund Limited Partnership, who beneficially owns 590,400 shares (16%) of the outstanding common shares of the Gish Biomedical, Inc. John W. Galuchie, Jr. is also Treasurer and Secretary of Asset Value Management, Inc., the sole general partner of Asset Value Fund Limited Partnership. 8 ITEM 2. - Management's Discussion and Analysis of Financial Condition and ------- -------------------------------------------------------------------- Results of Operations --------------------- This Quarterly Report on Form 10-QSB contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Company intends that such forward-looking statements be subject to the safe harbors created thereby. Words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", variations of such words and similar expressions are intended to identify such forward-looking statements. In light of the important factors that can materially affect results, including those set forth below and elsewhere in this Quarterly Report on Form 10-QSB, the inclusion of forward-looking information herein should not be regarded as a representation by Gish or any other person that our objectives or plans will be achieved. We may encounter competitive, technological, financial and business challenges making it more difficult than expected to continue to develop and market our products; the market may not accept our existing and future products; we may be unable to retain key management personnel; and there may be other material adverse changes in our operations or business. Certain important factors affecting the forward-looking statements made herein include, but are not limited to (i) continued downward pricing pressures in our targeted markets, (ii) the continued acquisition of our customers by certain of our competitors and (iii) continued periods of net losses, which could require the Company to find additional sources of financing to fund operations, implement its financial and business strategies, meet anticipated capital expenditures and fund research and development costs. Assumptions relating to budgeting, marketing, product development and other management decisions are subjective in many respects and thus susceptible to interpretations and periodic revisions based on actual experience and business developments, the impact of which may cause us to alter our marketing, capital expenditure or other budgets, which may in turn affect our financial position and results of operations. The reader is therefore cautioned not to place undue reliance on forward-looking statements contained herein, which speak as of the date of this report. The Company assumes no responsibility to update any forward-looking statements as a result of new information, future events, or otherwise. The following is management's discussion and analysis of certain significant factors which have affected the earnings and financial position of the Company during the period included in the accompanying financial statements. This discussion compares the three and six month periods ending December 31, 2002 with the three and six month periods ended December 31, 2001. This discussion should be read in conjunction with the financial statements and associated notes. Results of Operations: ---------------------- The Company incurred a net loss of $258,000, or $.07 basic and diluted net loss per share, for the three months ended December 31, 2002 compared to a net loss of $755,000, or $.21 basic and diluted net loss per share, for the comparable period in the prior fiscal year. For the six months ended December 31, 2002, the Company incurred a net loss of $428,000, or $.12 basic and diluted net loss per share, compared to a net loss of $1,642,000 or $.46 basic and diluted net loss per share, for the six months ended December 31, 2001. The Company had sales of $4,260,000 for the three months ended December 31, 2002 compared to sales of $4,038,000 for the comparable period in the prior fiscal year. For the six months ended December 31, 2002, the Company had sales of $8,436,000 compared to sales of $7,886,000 for the six months ended December 31, 2001. 9 The $222,000 net sales increase for the quarter ended December 31, 2002 compared to the quarter ended December 31, 2001 included an increase of sales volume across all product lines, except for cardioplegia delivery system sales, which sales decreased 25% ($116,000) and HEMED sales which decreased 18% ($44,000). The decrease in Cardioplegia delivery system sales was primarily due to the termination of a foreign distributor and the transition to a new distributor. The decrease in HEMED sales was primarily due to expiration of a Taiwan distributor's license to import. A majority of the Company's sales are derived from products used in the open-heart bypass circuit which is employed when a patient's heart is stopped during cardiac surgery. In response to the events which occurred on September 11, 2001, most healthcare facilities immediately ceased non-emergency surgeries in an effort to conserve the nations blood supply and reserve their care capacity for potential future emergency needs. The Company experienced a significant reduction in orders in September 2001, which in turn had the effect of September revenue being approximately $500,000 lower than the prior months revenue and budgeted revenue. The Company believes that sales have also been negatively affected by the growing trend to perform cardiac surgery without stopping the heart ("Beating Heart"), the growing demand for products to have a biocompatible coating ("Coated Products") and by doubt of its ability to continue as a going concern. Beating Heart cardiac surgery may be involved in 10% to 20% of the cardiac surgeries currently performed in the United States of America. The Company has a biocompatible coating under development, but does not currently offer Coated Products. The Company believes its lack of Coated Products may have contributed to its inability to retain certain customers and prevented the opportunity to acquire certain new customers. While the current effect on the Company's sales of the demand for Coated Products cannot be determined, if the Company is unable to develop Coated Products and the demand for Coated Products continues to increase, the lack of Coated Products could have a significant negative impact on future Company sales. After taking into account the loss of revenue in September 2001 discussed previously, sales by product group for the three and six month periods ended December 31, 2002, except for cardioplegia delivery systems and HEMED, were comparable to the average quarterly sales for the year ended June 30, 2002. Effective April 2002 the Company restructured its sales organization to return to greater representation by distributors and manufacturer's representatives instead of by a direct sales force. This change resulted in the elimination of eight direct sales positions. During the same period, the Company also restructured its non-production work force, resulting in the elimination of 17 positions. Gross profit increased to $1,002,000 for the three months ended December 31, 2002 compared to $850,000 for the three months ended December 31, 2001. For the six months ended December 31, 2002, gross profit was $2,103,000 compared to $1,622,000 for the six months ended December 31, 2001. The primary cause of the gross profit increase was the increase in sales compared to the prior year periods. Selling and marketing expenses for the three months ended December 31, 2002 were $548,000 compared to $964,000 for the three months ended December 31, 2001. Selling and marketing expenses for the six months ended December 31, 2002 were $1,112,000 compared to $1,953,000 for the six months ended December 31, 2001. The decline in selling and marketing expenses results primarily from the April 2002 restructure. 10 Research and development expenses for the three months ended December 31, 2002 were $215,000 compared to $257,000 for the three months ended December 31, 2001. Research and development expenses for the six months ended December 31, 2002 were $434,000 compared to $510,000 for the comparable period in the prior year. The decrease in research and development expenses results from the completion of a new cardioplegia device in April 2002 and the April 2002 restructure. For the three months ended December 31, 2002, general and administrative expenses were $479,000 compared to $362,000 for the three months ended December 31, 2001. For the six months ended December 31, 2002, general and administrative expenses were $947,000 compared to $764,000 for the six month period ended December 31, 2001. The increase from the prior year periods is primarily due to legal expenses related to the dispute with the Company's improvement construction contractor as described in Note 4. Liquidity and Capital Resources: -------------------------------- At December 31, 2002, the Company had cash of $257,000. For the six months ended December 31, 2002 net cash provided by operating activities was $1,109,000 compared to net cash provided by operating activities of $85,000 for the six months ended December 31, 2001. The increase in cash provided by operating activities, results primarily from the Company's ability to reduce its operating losses. Liquidity and cash flow of the Company were materially affected by its ability to reduce its inventory and accounts receivable levels. The reductions were the result of management efforts and a movement to a more "just in time" purchasing and production plan. The Company believes it will continue to reduce inventory levels, but achieve a substantially smaller quarterly inventory level reduction than achieved in the six months ended December 31, 2002. Net cash used in investing activities for the six months ended December 31, 2002 was $217,000 compared to net cash used in investing activities of $341,000 for the six months ended December 31, 2001. For the six months ended December 31, 2002 net cash used in financing activities was $793,000 compared to net cash provided by financing activities of $656,000 for the six months ended December 31, 2001. The increase in net cash used in financing activities is due to repayments on the revolving line of credit. In December 2000 the Company entered into a $2,000,000 three-year revolving line of credit agreement. In February 2002, the revolving line of credit agreement was amended to extend the agreement for an additional year and increase the line to $4,000,000. Advances, based on eligible receivables, are secured by the operating assets of the Company and bear interest at prime (4.25% at December 31, 2002) plus 2%. The agreement also includes various restrictive loan covenants, including a requirement for the Company to maintain a minimum net worth of $7,000,000, and to achieve net income on a rolling three-month basis, effective March 2003. At December 31, 2002 the Company had borrowed $663,000 under the revolving line of credit and, would have been entitled to borrow an additional $1,500,000. The Company completed its relocation to a new operating facility in the April 2001. At December 31, 2002 unpaid improvement and relocation costs of $306,000 are included in accrued relocation liabilities. 11 Additionally, the Company has excluded from the costs recorded for the construction improvements at December 31, 2002 approximately $300,000 billed to the Company by the improvement construction contractor. The accuracy and validity of these billings are currently being disputed by the Company. Binding arbitration of this dispute was completed on February 10, 2003, and the Company expects to receive the arbitrator's decision by February 28, 2003. Upon resolution of this issue the current Landlord will reimburse the Company $156,000 for leasehold improvements, which is included in relocation receivable at December 31, 2002. Under its current operating plan, the Company believes its existing cash, together with cash forecasted to be generated by operations, and from borrowings under the existing revolving line of credit may be sufficient to meet the Company's cash requirements through December 31, 2003. However, if the Company is unable to achieve the financial performance embodied in the Company's current operating plan, including maintaining or reducing its current level of operating losses, a cash shortage could occur earlier and would require either additional sources of funding or raising additional cash through the sale of assets. There can be no assurances that additional sources of funding will be available when needed or will be available at rates and terms favorable to the Company or that any potential assets sale will occur. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at December 31, 2002 presented elsewhere in this Form 10-QSB, does not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. Merger ------ Effective October 25, 2002, the Company entered into an Agreement to convert all of its outstanding shares of common stock into shares of common stock of CardioTech International, Inc. (CTE). The Agreement provides for the issuance of shares of common stock of CTE equal to the tangible net book value of the Company at September 30, 2002 ($7,292,000) and for the market value of CTE common shares to be set at the average daily closing price for the twenty-five trading days preceding October 25, 2002 ($1.51). As a result, each share of common stock of the Company will be converted into 1.34 shares of common stock of CTE. The Agreement is subject to Shareholder approval and various pre-closing conditions and, accordingly, no assurance can be given that this transaction will be completed or be consummated in the form currently proposed. The Company has scheduled a special shareholders' meeting on March 5, 2003 to vote on the merger. At December 31, 2002 the Company had incurred costs of $153,000 related to the merger transaction. The costs are included in other assets at December 31, 2002 and costs totaling $148,000 were unpaid and included in accounts payable and accrued expenses at December 31, 2002. On July 15, 2002 the Company entered into a one-year Agreement with T. R. Winston & Company, Inc. (TRW) which granted TRW the non-exclusive right to arrange financial transactions for the Company, at a price and on terms satisfactory to the Company. On transactions initiated by TRW, TRW will be due a cash commission based on all consideration paid to or received by the Company. TRW will receive a cash commission of 5% of the first $1,000,000, 4% of the next $1,000,000, 3% of the next $1,000,000, 2% of the next $1,000,000, and 1% of the amounts in excess of $4,000,000. 12 TRW initiated the proposed merger transaction between the Company and CTE previously described and according to the terms of the Agreement would, have been due a cash commission of $174,000 if the merger is completed as currently proposed. However, on October 23, 2002 the Company and TRW entered into a Termination Agreement whereby both parties agreed to terminate the previously mentioned one-year Agreement in return for a payment by the Company to TRW of $100,000. John W. Galuchie, Jr. is the president of TRW and the Chairman of the Board of Directors of Gish Biomedical, Inc. TRW is affiliated with Asset Value Fund Limited Partnership, who beneficially owns 590,400 shares (16%) of the outstanding common shares of the Gish Biomedical, Inc. John W. Galuchie, Jr. is also Treasurer and Secretary of Asset Value Management, Inc., the sole general partner of Asset Value Fund Limited Partnership. Disclosure controls and procedures ---------------------------------- Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's President and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the President and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company's periodic SEC filings. There were no significant changes in internal controls, or other factors, that could significantly affect these controls, subsequent to the date of the evaluation. 13 PART II - OTHER INFORMATION ------- ----------------- ITEM 6. - Exhibits and Reports on Form 8-K ------- -------------------------------- (A) Exhibits -------- The following Exhibits are filed as part of this Report: 99.1 - Certifications pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (B) Reports on Form 8-K ------------------- No reports on Form 8-K were filed by the Company during the quarterly period ended December 31, 2002. 14 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GISH BIOMEDICAL, INC. Date: February 12, 2003 /s/ Leslie M. Taeger ----------------------------------- Leslie M. Taeger Vice President/CFO 15 CERTIFICATIONS I, Kelly D. Scott, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Gish Biomedical, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly represent in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. February 12, 2003 /s/ KELLY D. SCOTT ------------------------------ Kelly D. Scott President/Chief Executive Officer CERTIFICATIONS I, Leslie M. Taeger, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Gish Biomedical, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly represent in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. February 12, 2003 /s/ LESLIE M. TAEGER --------------------------- Leslie M. Taeger Chief Financial Officer Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 906 of the Public Company Accounting Reform and Investor Protection Act of 2002 (18 U.S.C. 1350, as adopted), Kelly D. Scott, the President and Chief Executive Officer of Gish Biomedical, Inc., (the "Company"), and Leslie M. Taeger, the Chief Financial Officer of the Company each hereby certifies that, to the best of their knowledge: 1. The Company's Quarterly Report on Form 10-QSB for the period ended December 31, 2002, to which this Certification is attached as Exhibit 99.1 (the "Periodic Report"), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Periodic Report and results of operations of the Company for the period covered by the Periodic Report. Dated: February 12, 2003 /s/ Kelly D. Scott ------------------------------------------ Kelly D. Scott President and Chief Executive Officer /s/ Leslie M. Taeger ------------------------------------------ Leslie M. Taeger Chief Financial Officer