-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K3hIA+iVgk6SiwLgEYAKbGNoxIapBxTPMWfLzEqSwhqVETQD/Nyh+dQBqoVm641H vFRh89FOA1yWOX+dR8LIXQ== 0000728478-04-000020.txt : 20040813 0000728478-04-000020.hdr.sgml : 20040813 20040813090554 ACCESSION NUMBER: 0000728478-04-000020 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORTECH INC CENTRAL INDEX KEY: 0000728478 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 840894091 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-20726 FILM NUMBER: 04971914 BUSINESS ADDRESS: STREET 1: 376 MAIN STREET CITY: BEDMINSTER STATE: NJ ZIP: 07921 BUSINESS PHONE: 9082341881 MAIL ADDRESS: STREET 1: 376 MAIN STREET STREET 2: P.O. BOX 74 CITY: BEDMINSTER STATE: NJ ZIP: 07921 10QSB 1 crtq10q.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: June 30, 2004 ------------- OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No.: 0-20726 ------- Cortech, Inc. ------------- (Exact name of small business issuer as specified in its charter) Delaware 84-0894091 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 376 Main Street, PO Box 74, Bedminster, NJ 07921 ------------------------------------------------ (Address of principal executive offices) (908) 234-1881 -------------- (Issuer's telephone number) N/A --- (Former name, former address and former 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 July 31, 2004, the issuer had 3,595,780 shares of its common stock, par value $.002 per share, outstanding. Transitional Small Business Disclosure Format (check one): Yes No X --- --- PART I. - FINANCIAL INFORMATION - ------- --------------------- ITEM 1. - Financial Statements - ------- -------------------- CORTECH, INC. BALANCE SHEET JUNE 30, 2004 ($000 Omitted) (UNAUDITED) ASSETS Current assets: Cash and cash equivalents $ 11,455 Other assets 11 -------- Total assets $ 11,466 ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accrued liabilities $ 129 -------- Total liabilities 129 -------- Stockholders' equity: Preferred stock, $.002 par value, 2,000,000 shares authorized, none issued - Common stock, $.002 par value, 5,000,000 shares authorized, 3,595,780 shares issued and outstanding 7 Additional paid-in capital 99,445 Accumulated deficit ( 88,115) -------- Total stockholders' equity 11,337 -------- Total liabilities and stockholders' equity $ 11,466 ======== See accompanying notes to financial statements. 2 CORTECH, INC. STATEMENTS OF OPERATIONS ($000 Omitted, except per share data) (UNAUDITED) Three Months Ended June 30, ---------------------- 2004 2003 -------- -------- Revenues: Interest income $ 28 $ 30 Expenses: General and administrative 154 97 ------- ------- Loss before income taxes ( 126) ( 67) Provision for income taxes - - ------- ------- Net loss ($ 126) ($ 67) ======= ======= Basic and diluted net loss per share ($ .04) ($ .02) ======= ======= Basic and diluted weighted average common shares outstanding (in 000's) 3,596 3,596 ======= ======= See accompanying notes to financial statements. 3 CORTECH, INC. STATEMENTS OF OPERATIONS ($000 Omitted, except per share data) (UNAUDITED) Six Months Ended June 30, -------------------- 2004 2003 -------- -------- Revenues: Interest income $ 52 $ 63 Expenses: General and administrative 261 249 ------- ------- Loss before income taxes ( 209) ( 186) Provision for income taxes 1 2 ------- ------- Net loss ($ 210) ($ 188) ======= ======= Basic and diluted net loss per share ($ .06) ($ .05) ======= ======= Basic and diluted weighted average common shares outstanding (in 000's) 3,596 3,596 ======= ======= See accompanying notes to financial statements. 4 CORTECH, INC. STATEMENTS OF CASH FLOWS ($000 Omitted) (UNAUDITED) Six Months Ended June 30, -------------------- 2004 2003 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss ($ 210) ($ 188) Adjustments: Change in other assets ( 3) ( 31) Change in accrued liabilities ( 27) ( 2) -------- -------- Net cash used in operating activities ( 240) ( 221) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES - Repurchase of common stock ( 1) - -------- -------- Net cash used in financing activities ( 1) - -------- -------- Net decrease in cash and cash equivalents ( 241) ( 221) Cash and cash equivalents at beginning of period 11,696 12,060 -------- -------- Cash and cash equivalents at end of period $ 11,455 $ 11,839 ======== ======== Supplemental disclosure of cash flow information: Cash paid for income taxes $ 1 $ 2 ======== ======== See accompanying notes to financial statements. 5 CORTECH, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. General ------- The accompanying unaudited financial statements of Cortech, Inc. ("Cortech" or the "Company") as of June 30, 2004 and for the three and six months ended June 30, 2004 and 2003 reflect all material adjustments consisting of only normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2003 as filed with the Securities and Exchange Commission. 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 reported amounts of assets and liabilities and 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. Actual results could differ from those estimates. The results of operations for the three and six months ended June 30, 2004 and 2003 are not necessarily indicative of the results to be expected for the entire year or for any other period. 2. Legal Proceedings ----------------- Arbitrations ------------ Subsequent to March 31, 2001, disagreements arose between Cortech and Ono Pharmaceutical Co., Ltd. ("Ono") as to the status of Ono's license rights under a 1999 Agreement. On August 7, 2001, Cortech filed a Demand for Arbitration with the American Arbitration Association against Ono seeking resolution of the dispute. The arbitration concluded in August 2002, purportedly resolving any questions concerning the ownership of Cortech's Intellectual Property and Ono's development rights. On November 1, 2002, the Company announced that Ono had advised it of Ono's intention to discontinue the development of ONO-6818 because of potential liver toxicity. In a series of subsequent letters, Ono sought to 6 renegotiate its rights to make compounds using Cortech's technology. When Cortech declined, on February 7, 2003 Ono admitted that it had been developing what it called "Improved Compounds" since April of 2002 and that it had not disclosed this development as required by the 1999 Agreement, assuming that these new compounds met the Agreement's definition of "Improved Compounds". In further breach of the 1999 Agreement, Ono refused to reveal the chemical structure of these so-called "Improved Compounds" and announced that Ono had filed a patent in Japan. Within days, Cortech received a notice of Arbitration in which Ono claimed that its rights to develop and designate compounds for development as commercial products extended beyond the termination of the period provided in the 1999 Agreement for designating Developed Compounds, as defined in such agreement. Settlement and Termination -------------------------- On March 19, 2004 Cortech signed an Assignment, Termination and Settlement Agreement with Ono. Under the Agreement, Ono assigned to Cortech all pharmaceutical compounds and intellectual property rights that Ono acquired under the 1999 Agreement, including all technical and clinical information related to the pharmaceutical compounds. Moreover, Ono agreed to pay approximately $17,000 of outstanding patent prosecution expenses. Cortech and Ono settled the pending arbitration in its entirety. Both parties terminated the 1999 Agreement, with all of Ono's rights under the 1999 Agreement reverting to Cortech. Ono's confidentiality obligations survived the termination of the 1999 Agreement. The Company will continue to seek other partners to develop the elastase technology, although there can be no assurance that it will succeed in this endeavor. 3. Related Party Transactions -------------------------- A management fee of $15,000 per month is paid to Asset Value Fund Limited Partnership ("AVF") for management services performed for the Company. Management services include, among other things, SEC filings, negotiation, evaluating merger and acquisition proposals, accounting and shareholder relations. The Company believes that the management fee is materially less than the cost for the Company to perform these services. AVF is the beneficial owner of 50.06% of the Company's Common Stock at June 30, 2004. 4. Common Stock ------------ In October 2000 the Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to 320,000 shares of its Common Stock at prices deemed favorable from time to time in the open 7 market or in privately negotiated transactions subject to market conditions, the Company's financial position and other considerations. As of June 30, 2004, 158,640 shares of Common Stock have been repurchased under this plan for approximately $557,000. All shares repurchased were returned to the status of authorized but unissued shares. 5. Basic and Diluted Net Loss Per Share ------------------------------------ Basic loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed by dividing the net loss by the sum of the weighted-average number of common shares outstanding plus the dilutive effect of shares issuable through the exercise of stock options. The shares used for basic loss per share and diluted loss per share are reconciled below (in 000's). Three Months Ended Six Months Ended June 30, June 30, ------------------ ------------------ 2004 2003 2004 2003 ---- ---- ---- ---- Average shares outstanding for basic loss per share 3,596 3,596 3,596 3,596 Dilutive effect of stock options - - - - ----- ----- ----- ----- Average shares outstanding for dilutive loss per share 3,596 3,596 3,596 3,596 ===== ===== ===== ===== Excluded from the calculation of diluted loss per share for the three and six months ended June 30, 2004 and 2003 are 478,036 common stock options which if included, would have an anti dilutive effect. 8 ITEM 2. Management's Discussion and Analysis of Financial Condition - ------- --------------------------------------------------------------------- and Results of Operations ------------------------- The following discussion and analysis should be read in conjunction with Cortech, Inc.'s ("Cortech" or the "Company") 2003 Annual Report on Form 10-KSB as well as the Company's financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-QSB. When used in this discussion, the word "expects" and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. The forward-looking statements contained herein speak only as of the date hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. General - ------- Until 1998, Cortech operated as a biopharmaceutical company whose research and development efforts focused primarily on bradykinin antagonists and protease inhibitors. Those efforts produced a technology portfolio which may have potential therapeutic application across a broad range of medical conditions. Cortech's strategy is to seek collaborative partners to conduct and fund future research and development on the components of its portfolio, although there can be no assurance that any particular agreement will be completed. At the same time, the Company is seeking to redeploy its assets into an operating business. Results of Operations - --------------------- Cortech had a net loss of $126,000 or $.04 basic and fully diluted loss per share for the quarter ended June 30, 2004 compared to a net loss of $67,000 or $.02 basic and fully diluted loss per share for the same period in 2003. For the six months ended June 30, 2004, Cortech had a net loss of $210,000, or $.06 basic and fully diluted loss per share compared to a net loss of $188,000 or $.05 basic and fully diluted loss per share for the same period in 2003. Revenues - -------- Interest income was $28,000 and $52,000 in the three and six months ended June 30, 2004, respectively, compared to $30,000 and $63,000 for the same periods in 2003, a decrease of $2,000 and $11,000 in the three and six month periods, respectively. Lower yields on investments and lower invested balances were the reasons for this decrease. 9 Expenses - -------- General and administrative expenses were $154,000 and $261,000 in the three and six months ended June 30, 2004, respectively, and $97,000 and $249,000 in the same periods in 2003, respectively, an increase of $57,000 and $12,000. This increase was due principally to higher legal fees incurred in connection with the Company's patent portfolio. Liquidity and Capital Resources - ------------------------------- At June 30, 2004, the Company had cash and cash equivalents of approximately $11.5 million. Cash equivalents of $11.3 million consisted of U.S. Treasury Bills with an original maturity of three months or less with yields ranging between 1.3% and 1.4%. Management believes its cash and cash equivalents are sufficient for its remaining business activities for the next twelve months and for the costs of seeking an acquisition of an operating business. Net cash of $240,000 was used by operating activities for the six months ended June 30, 2004 compared to net cash used by operating activities of $221,000 for the same period in 2003. Cash flows caused by the net losses were the primary reasons for the cash used in operating activities. Net cash of $1,000 was used in financing activities in the six months ended June 30, 2004 due to the repurchase of common stock. Factors Which May Affect Future Results - --------------------------------------- Future earnings of the Company are dependent on interest rates earned on the Company's invested balances and expenses incurred. Other Disclosures - Related Party Transactions - ---------------------------------------------- A management fee of $15,000 per month is paid to Asset Value Fund Limited Partnership ("AVF") for management services performed for the Company. Management services include, among other things, SEC filings, negotiation, evaluating merger and acquisition proposals, accounting and shareholder relations. The Company believes that the management fee is materially less than the cost for the Company to perform these services. AVF is the beneficial owner of 50.06% of the Company's Common Stock at June 30, 2004. 10 Item 3. Controls and Procedures - ------- ----------------------- As of the end of the period covered by this report, the Company carried out, under the supervision and with the participation of the Company's management, including its Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures are effective. There were no significant changes in the Company's internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended June 30, 2004 that have materially affected or are reasonably likely to materially affect the company's internal controls over financial reporting evaluation. 11 PART II - OTHER INFORMATION - ------- ----------------- ITEM 1. - LEGAL PROCEEDINGS - ------- ----------------- Arbitrations - ------------ Subsequent to March 31, 2001, disagreements arose between Cortech and Ono as to the status of Ono's license rights under a 1999 Agreement. On August 7, 2001, Cortech filed a Demand for Arbitration with the American Arbitration Association against Ono seeking resolution of the dispute. The arbitration concluded in August 2002, purportedly resolving any questions concerning the ownership of Cortech's Intellectual Property and Ono's development rights. On November 1, 2002, the Company announced that Ono had advised it of Ono's intention to discontinue the development of ONO-6818 because of potential liver toxicity. In a series of subsequent letters, Ono sought to renegotiate its rights to make compounds using Cortech's technology. When Cortech declined, on February 7, 2003 Ono admitted that it had been developing what it called "Improved Compounds" since April of 2002 and that it had not disclosed this development as required by the 1999 Agreement, assuming that these new compounds met the Agreement's definition of "Improved Compounds". In further breach of the 1999 Agreement, Ono refused to reveal the chemical structure of these so-called "Improved Compounds" and announced that Ono had filed a patent in Japan. Within days, Cortech received a notice of Arbitration in which Ono claimed that its rights to develop and designate compounds for development as commercial products extended beyond the termination of the period provided in the 1999 Agreement for designating Developed Compounds, as defined in such agreement. Settlement and Termination - -------------------------- On March 19, 2004 Cortech signed an Assignment, Termination and Settlement Agreement with Ono. Under the Agreement, Ono assigned to Cortech all pharmaceutical compounds and intellectual property rights that Ono acquired under the 1999 Agreement, including all technical and clinical information related to the pharmaceutical compounds. Moreover, Ono agreed to pay approximately $17,000 of outstanding patent prosecution expenses. Cortech and Ono settled the pending arbitration in its entirety. Both parties terminated the 1999 Agreement, with all of Ono's rights under the 1999 Agreement reverting to Cortech. Ono's confidentiality obligations survived the termination of the 1999 Agreement. The Company will continue to seek other partners to develop the elastase technology, although there can be no assurance that it will succeed in this endeavor. 12 ITEM 2. Changes in Securities - ------- --------------------- SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES (1) (COMMON STOCK) (c) Total Number of Shares (or) (d) Maximum Units) Number of Purchased as Shares that Part of May Yet Be (a) Total Publicly Purchased Number of (b) Announced Under the Shares Average Price Plans or Plans or Period Purchased Paid Per Share Programs Programs ------ --------- -------------- -------- -------- April 1, 2004 - April 30, 2004 - $ - - 161,360 May 1, 2004 - - - - 161,360 May 31, 2004 June 1, 2004 - June 30, 2004 - - - 161,360 Total - - - 161,360 (1) In October 2000, the Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to 320,000 shares of its common stock. This program has no expiration date. ITEM 6. Exhibits and Reports on Form 8-K - ------- -------------------------------- (a) Exhibits -------- 31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 Certification 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 during the quarter for which this report is being filed. 13 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. CORTECH, INC. Date: August 13, 2004 /s/ Sue Ann Merrill ----------------------------------- Sue Ann Merrill Chief Financial Officer, Treasurer and Secretary (Principal Accounting and Financial Officer) 14 EXHIBIT 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Paul O. Koether, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Cortech, Inc.; 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. August 13, 2004 /s/ PAUL O. KOETHER ----------------------------- Paul O. Koether Chairman, President and Chief Executive Officer EXHIBIT 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Sue Ann Merrill, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Cortech, Inc.; 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. August 13, 2004 /s/ Sue Ann Merrill ----------------------------- Sue Ann Merrill (Principal Accounting and Financial Officer) Exhibit 32 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), Paul O. Koether, the Chairman, President and Chief Executive Officer of Cortech, Inc., (the "Company"), and Sue Ann Merrill, the Chief Financial Officer, Treasurer and Secretary 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 June 30, 2004, to which this Certification is attached as Exhibit 32 (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 and results of operations of the Company. Dated: August 13, 2004 /s/ Paul O. Koether - ---------------------------------- Paul O. Koether Chairman, President and Chief Executive Officer /s/ Sue Ann Merrill - ---------------------------------- Sue Ann Merrill Chief Financial Officer, Treasurer and Secretary -----END PRIVACY-ENHANCED MESSAGE-----