-----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, Eje3U20nNk6h1lVC7UdeTp02hPhWj4lf6zQxP0c7ruk2hF4+TEowOAAtRM81qT5T fFjKBwzBMC4QabGkw9ozdA== 0000950005-98-000690.txt : 19980817 0000950005-98-000690.hdr.sgml : 19980817 ACCESSION NUMBER: 0000950005-98-000690 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: VIDAMED INC CENTRAL INDEX KEY: 0000929900 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 770314454 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-26082 FILM NUMBER: 98687300 BUSINESS ADDRESS: STREET 1: 46107 LANDING PARKWAY STREET 2: SUITE 101 CITY: FREMONT STATE: CA ZIP: 94538 BUSINESS PHONE: 5104924900 MAIL ADDRESS: STREET 1: 46107 LANDING PARKWAY STREET 2: STE 101 CITY: FREMONT STATE: CA ZIP: 94538 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1998 or [ ] TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________ to ________________________ Commission File Number: 0-26082 VIDAMED, INC. (exact name of registrant as specified in its charter) Delaware 77-0314454 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 46107 Landing Parkway Fremont, CA 94538 (Address of principal executive offices) (510) 492-4900 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [ X ] Yes [ ] No The number of outstanding shares of the registrant's Common Stock, $.001 par value, was 19,924,422 as of August 13, 1998. Page 1 of 16 VIDAMED, INC. INDEX PART I: FINANCIAL INFORMATION
Page Item 1. Condensed consolidated financial statements - unaudited Condensed consolidated balance sheets - June 30, 1998 and December 31, 1997 3 Condensed consolidated statements of operations - three months ended June 30, 1998 and 1997 and six months ended June 30, 1998 and 1997 4 Condensed consolidated statements of cash flows - six months ended June 30, 1998 and 1997 5 Notes to condensed consolidated financial statements 6 Item 2. Management's discussion and analysis of financial condition and results of operations 8 PART II: OTHER INFORMATION Item 1. Legal Proceedings 13 Item 2. Changes in Securities 13 Item 3. Defaults Upon Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14 Signatures 15 Page 2 of 16
PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VidaMed, Inc. Condensed Consolidated Balance Sheets (In thousands) June 30, December 31, 1998 1997 -------- -------- (Unaudited) (*) Assets Current Assets: Cash and cash equivalents $ 15,331 $ 8,026 Accounts receivable 2,951 3,644 Inventories 1,763 1,512 Other current assets 1,497 930 -------- -------- Total current assets 21,542 14,112 Property and equipment, net 2,623 2,647 Other assets, net 201 206 -------- -------- Total assets $ 24,366 $ 16,965 ======== ======== Liabilities and stockholders' equity Current liabilities: Notes payable, current portion $ 388 $ 480 Accounts payable 714 1,536 Accrued professional fees 381 559 Accrued clinical trial costs 378 372 Accrued and other liabilities 2,968 2,620 Accrued interest payable 197 422 Restructuring Accrual 431 1,000 Current portion of long-term debt 33 34 Current portion of obligations under capital leases 24 82 Deferred revenue, current portion 339 611 -------- -------- Total current liabilities 5,853 7,716 Other long-term liabilities 6 22 Notes payable, long-term portion 892 -- Stockholders' equity: Capital stock 95,439 77,573 Accumulated deficit (77,824) (68,346) -------- -------- Total stockholders' equity 17,615 9,227 -------- -------- Total liabilities and stockholders' equity $ 24,366 $ 16,965 ======== ======== * The Balance Sheet at December 31, 1997 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying notes. Page 3 of 16 VidaMed, Inc. Condensed Consolidated Statements of Operations (In thousands except per share amounts) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- 1998 1997 1998 1997 -------- -------- -------- -------- Revenues: Product sales, net $ 861 $ 2,103 $ 2,236 $ 5,355 License fees and grant revenue 50 50 339 -------- -------- -------- -------- 100 Net revenues 911 2,153 2,575 5,455 Cost of Products Sold 608 1,265 1,680 3,048 -------- -------- -------- -------- Gross Profit 303 888 895 2,407 Operating Expenses: Research and development 1,200 1,456 2,334 3,354 Selling, general and administrative 3,297 3,865 7,904 7,223 -------- -------- -------- -------- Total operating expenses 4,497 5,321 10,238 10,577 Loss from operations (4,194) (4,433) (9,343) (8,170) Other income(expense), net (46) (102) (135) (109) Net loss $ (4,240) $ (4,535) $ (9,478) $ (8,279) ======== ======== ======== ======== Basic and diluted net loss per share $ (0.24) $ (0.38) $ (0.58) $ (0.72) ======== ======== ======== ======== Shares used in computing basic and diluted net loss per share 17,443 11,913 16,341 11,521 ======== ======== ======== ======== Page 4 of 16
VidaMed, Inc. Condensed Consolidated Statement of Cash Flows (In thousands) (Unaudited)
Six Months Ended June 30, --------------------------- 1998 1997 --------- -------- Cash flows from operating activities: Net loss $ (9,478) $ (8,279) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 635 671 Changes in assets and liabilities: Accounts receivable 693 (1,089) Inventory (251) (330) Other current assets (567) (581) Other assets 5 (29) Accounts payable (822) 297 Accrued professional fees (178) 52 Accrued clinical trial costs 6 (170) Accrued interest payable (225) 75 Accrued restructuring cost (569) -- Accrued and other liabilities 348 941 Deferred revenue (272) 217 -------- -------- Net cash used in operating activities (10,675) (8,225) -------- -------- Cash flows from investing activities: Expenditures for property and equipment (611) (758) Proceeds from maturities of short-term investments -- 1,976 -------- -------- Net cash provided by (used in) investing activities (611) 1,218 -------- -------- Cash flows from financing activities: Principal payments under capital leases (58) (318) Principal payments of long-term debt (16) (32) Principal payments of notes payable (700) (518) Net proceeds from issuance of notes payable 1,500 -- -------- -------- Net cash proceeds from issuance of common stock 17,865 10,002 -------- -------- Net cash provided by financing activities 18,591 9,134 Net increase (decrease) in cash and cash equivalents 7,305 2,127 Cash and cash equivalents at the beginning of the period 8,026 3,879 -------- -------- Cash and cash equivalents at the end of the period $ 15,331 $ 6,006 ======== ======== Supplemental disclosure of cash flows information: Cash paid for interest $ 458 $ 292 ======== ======== See accompanying notes. Page 5 of 16
VIDAMED, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 1998 (Unaudited) 1. Basis of presentation The accompanying unaudited condensed consolidated financial statements of VidaMed, Inc. (the "Company" or "VidaMed") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. The balance sheet as of June 30, 1998 and the statements of operations for the three and six months ended June 30, 1998 and 1997, and the statements of cash flows for the six months ended June 30, 1998 and 1997, are unaudited but include all adjustments (consisting of normal recurring adjustments) which the Company considers necessary for a fair presentation of the financial position at such date and the operating results and cash flows for those periods. Although the Company believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information normally included in financial statements and related footnotes prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1997 filed with the Securities and Exchange Commission. Results for any interim period are not necessarily indicative of results for any other interim period or for the entire year. 2. Net loss per share Basic and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the periods presented. Common equivalent shares from options, warrants and convertible securities are excluded from the computation, as their effect is anti-dilutive. In February 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings per Share" (Statement 128). Statement 128 replaced the calculation of primary and fully diluted earnings (loss) per share with basic and diluted earnings (loss) per share. Unlike primary earnings (loss) per share, basic earnings (loss) per share exclude any dilutive effects of options, warrants and convertible securities. Diluted earnings (loss) per share are very similar to the previously named fully diluted earnings (loss) per share. All loss per share amounts for all periods have been presented, and where appropriate, restated to conform to the Statement 128 requirements. As the Company has incurred losses from operations in each of the periods presented, there is no difference between basic and diluted net loss per share amounts. 3. Inventories Inventories are stated at the lower of cost (determined using the first-in, first-out method) or market value. Inventories at June 30, 1998 and December 31, 1997 consist of the following (in thousands): Page 6 of 16 June 30, December 31, 1998 1997 ------ ------ Raw materials $ 384 $ 261 Work in process 213 90 Finished goods 1,166 1,161 ------ ------ $1,763 $1,512 ====== ====== 4. Notes Payable In January 1998, the Company entered into a financing agreement with Silicon Valley Bank, for a $1,500,000 42-month term loan. As of June 30, 1998, no funds remained available for borrowing under this loan. 5. Restructuring Accrual In September 1997, VidaMed announced a restructuring program designed to reduce costs and improve operating efficiencies by closing the company's U.K. manufacturing facility. The charge in the third quarter of 1997 was $2.1 million. The elements of the total charge as of June 30, 1998 are as follows (in thousands): Representing ------------------------------------------ Cash Outlays Total Asset ------------------- Charges Write-down Completed Future ------ ------ ------ ------ Fixed assets $ 390 $ 390 $ -- $ -- Facility shut down 1,305 -- 1,279 26 Grant 405 -- -- 405 ------ ------ ------ ------ Total Special Charges $2,100 $ 390 $1,279 $ 431 ------ ------ ------ ------ 6. Reporting Comprehensive Income (Loss) As of January 1, 1998, the Company adopted Statement of Financial Accounting Standards No.130, Reporting Comprehensive Income (Statement 130). Statement 130 establishes new rules for the reporting and display of comprehensive income and its components. Statement 130 requires unrealized gains or losses on the Company's available-for-sale securities and foreign currency translation adjustments, which prior to adoption were reported in shareholders' equity, to be included in other comprehensive income Page 7 of 16 (loss). During the three and six months ended June 30, 1998 and 1997, the total comprehensive loss was not materially different from the net loss. 7. Common Stock In May 1998, the Company completed a private placement of common stock with certain investors. In this transaction, the Company issued 4,340,000 shares of common stock at a purchase price of $4.00 per share resulting in net proceeds of $16,743,000 to the Company. In connection with this financing, the Company issued warrants to purchase an aggregate of 1,085,000 shares of common stock at an exercise price of $5.00 per share for no additional consideration. Page 8 of 16 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management's Discussion and Analysis of Financial Condition and Results of Operations for the three and six months ended June 30, 1998 and 1997, should be read in conjunction with the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements which involve risks and uncertainties. The Company's actual results may differ significantly from those anticipated by the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed below and in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. Overview Since its inception in July 1992, VidaMed has been engaged in the design, development, clinical testing and manufacture of the VidaMed TUNA System for the treatment of symptoms associated with benign prostatic hyperplasia (BPH). The Company commenced international sales of the VidaMed TUNA System in late 1993 and United States sales in October 1996. As of June 30, 1998 there have been over 350 RF generators sold and over 10,000 TUNA procedures performed worldwide. VidaMed anticipates that a substantial amount of its revenues from product sales in the future will be from sales in the United States. The Company received FDA clearance to market this system for the treatment of symptoms associated with BPH in the United States on October 8, 1996. The Company applied to the American Medical Association for a CPT code covering the TUNA Procedure. CPT code number 53852 relating to the TUNA Procedure has been published in the Federal Register and is part of the Medicare Physician Fee Schedule for calendar 1998. VidaMed sells its products in the U.S. to individual and group urology practices, surgery centers and hospitals. The Company markets the VidaMed TUNA System through a network of four VidaMed sales managers, supported by both sales representatives and independent dealers in the U.S. A network of distributors, supported by VidaMed staff, cover other countries in Europe, Asia and South America. VidaMed does not anticipate reaching profitability in the near future. The Company expects its operating losses to continue through at least the next four quarters as it continues to expend substantial resources in expansion of marketing and sales activities, funding clinical trials in support of regulatory and reimbursement approvals, and research and development. The Company's future profitability will be dependent upon, among other factors, market acceptance of the VidaMed TUNA Procedure and availability of third-party reimbursement for procedures performed with the TUNA System. Although the Company has received FDA clearance of its 510(k) notification for the TUNA System for treatment of symptoms associated with BPH and has commenced marketing of the TUNA System in the United States, there can be no assurance that the TUNA System will be deemed clinically or cost effective Page 9 of 16 by many health care providers and payors, will be deemed superior to other current and emerging methods for treating BPH or will achieve significant market acceptance in the United States. Furthermore, determinations of reimbursement of the VidaMed TUNA Procedure by private and governmental health payors are made by such payors and their medical directors independent of the FDA approval. Accordingly, there can be no assurance that the TUNA Procedure will be reimbursed at adequate levels in the United States under either private or governmental healthcare payment systems. Availability of Medicare reimbursement for the TUNA Procedure may be dependent on the publication of clinical data relating to the cost-effectiveness and duration of the TUNA therapy. Inadequate reimbursement for TUNA procedures could have an adverse effect on the ability of the TUNA System to achieve market acceptance. Failure of the TUNA Procedure to achieve market acceptance in the United States would have a material adverse effect on business, financial condition and results of operations of the Company. The Company does not have a backlog of orders for its products in countries where the VidaMed TUNA System is sold and anticipates that it will continue to manufacture and ship orders after their receipt. Accordingly, the Company does not anticipate that it will develop a significant backlog in the future. Results of Operations Net revenues for the three months ended June 30, 1998 were $0.9 million, down $1.2 million or 58% from $2.2 million in the three months ended June 30, 1997. Product sales in the second quarter of 1998 decreased 59% to $0.9 million from $2.1 in the same period in 1997. For the first six months of 1998 net revenue decreased 53% to $2.6 million from $5.5 million during the same period in 1997. Product sales for the first six months of 1998 decreased 58% to $2.2 million from $5.4 million during the same period in 1997. Revenues for the three and six months ended June 30, 1998 and 1997 include license fees for distribution rights in Japan. The decrease in net revenues and product sales between the 1998 and 1997 periods is the result of slowing sales while the Company awaits Medicare Part A and Part B reimbursement approval at the state levels. VidaMed has now gained approval of the professional component (Medicare Part B) in 13 states, including Colorado, Massachusetts and Ohio. Other states with significant Medicare populations are moving foward with regard to Medicare reimbursement. In order for the Company to achieve significant increases in sales volume, it will likely be necessary for the Company to obtain Medicare Part A and Part B reimbursement approvals in all 50 states, or at least in all states with significant population centers, particularly since sales agreements with major healthcare providers are often on a national, or system-wide, basis. The Company has several initiatives underway to facilitate the Medicare reimbursement approval process, including working in cooperation with state Medicare Medical Directors. In addition, current Medicare reimbursement for the TUNA handpiece extends only to procedures performed in a hospital outpatient setting. Ambulatory Surgical Center reimbursement is moving forward and guidelines are currently in the comment period. Notwithstanding the foregoing, there can be no assurance that the Company will receive additional Medicare reimbursement approvals in major states in a timely manner, and the failure to receive such approvals would have a material adverse effect on the business, financial condition and results of operations of the Company. Page 10 of 16 Another factor contributing to sales for the six months of 1997 was significant accumulated demand resulting from the late-1996 receipt of Food and Drug Administration 510(k) clearance for the VidaMed TUNA System and a sale of 39 TUNA Systems to Tenet Health Care System. Cost of product sold for the three months ended June 30, 1998 was $0.6 million, a decrease of 52% or $0.7 million from $1.3 million for the three months ended June 30, 1997. For the six months ended June 30, 1998 cost of product sales decreased 45% to $1.7 million from $3.0 million in the same period in 1997. The decrease is due to lower product sales and absorption of overhead fixed costs in the first six months of 1998. Research and development (R & D) expenses decreased 18% to $1.2 million in the three months ended June 30, 1998 from $1.5 million in the three months ended June 30, 1997. For the six months ended June 30, 1998, R & D expenses decreased 30% to $2.3 million from $3.4 million in the same period for 1997. The difference is primarily due to the investment in the first six months of 1997 in development efforts on the VidaMed TUNA System (VTS) RF generator and VTS hand piece. Additionally, R & D includes the United States patient enrollment to support the clinical trials completed in 1995. The costs associated with follow-up visits for these clinical trials will continue through 1998 and beyond. Selling, general and administrative (SG&A) expenses decreased 15% to $3.3 million in the three months ended June 30, 1998 from $3.9 in the three months ended June 30, 1997. For the six months ended June 30, 1998 SG&A expenses increased 9% to $7.9 million from $7.2 million in the same period in 1997. The increase in 1998 from 1997 was primarily due to an increase to the allowance for doubtful accounts of $894,000, as a result of the length of time involved in obtaining Medicare reimbursement levels for each state, and the transition to a new CEO. Spending in SG&A in both periods included start-up and launch costs for new products and as well as costs associated with the continued efforts to support domestic and international sales and secure global reimbursement for TUNA. In particular, the periods ended June 30, 1998 included an investment in additional headcount to enhance the existing sales and field reimbursement force. The periods ended June 30, 1997 included a co-op advertising agreement with Tenet HealthSystem. Other expense for the three months ended June 30, 1998 was $46,000 compared to other expense of $102,000 for the comparable period in 1997. For the six months ended June 30, 1998 other expense was $135,000 compared to $109,000 for the same period in 1997. These changes were primarily a function of the balance of cash, cash equivalents and debt, the interest earned or incurred, respectively, and fluctuations in the relative balances. Liquidity and Capital Resources VidaMed has financed its operations primarily through the public and private sale of equity securities and, to a lesser extent, through borrowings, equipment lease financing, product sales, distribution rights fees, government grants and other product sales. At June 30, 1998 the Company's cash and cash equivalents were $15.3 million compared to $8.0 at December 31, 1997. The increase is due primarily to a private placement of 4.3 million shares of common stock in May 1998 (the net proceeds from which were approximately $16.7 million) offset by operating Page 11 of 16 expenses. The cash used in operations was used primarily in the marketing and sale of the VidaMed TUNA System, research and development activities including clinical trials, increased SG&A expenses to support increased operations, working capital (due in part to delays in receivable collections due to Medicare reimbursement) and payments related to the U.K. transition. In January 1998, the Company entered into a financing agreement with Silicon Valley Bank, for a $1,500,000 42-month term loan with principal and interest payable monthly. In addition, the Company established a $3,000,000 working capital line with this bank. The Company is currently in compliance with all bank covenants. The note payable to the bank was reflected on the Company's balance sheet as a current liability at the end of the quarter ended March 31, 1998 as a result of the Company not being in compliance with its debt covenants at that date. As the Company is now in compliance with the bank covenants, the long-term portion of this debt has been reclassified as a long-term liability in the balance sheet. In April 1995, the Company obtained a $3,000,000 secured credit facility. To date, the Company has borrowed $3,000,000 under this facility and has completely repaid the principal amount due. As of June 30, 1998, $150,000 remains to be paid relating to lump sum interest due in July, 1998. VidaMed believes that the equity financing, combined with its current capital resources and cash generated from the sale of products will be enough to meet the Company's operating and capital requirements for the next twelve months. There can be no assurance that additional financing, if required, will be available on satisfactory terms or at all. If financing were not available, management would need to reevaluate and revise current operating plans as well as reduce capital spending in general. VidaMed's future liquidity and capital requirements will depend on numerous other factors, including progress of clinical trials, actions related to regulatory and reimbursement matters and the extent to which the TUNA system gains market acceptance. Restructuring Accrual In September 1997, VidaMed announced a restructuring program designed to reduce costs and improve operating efficiencies by closing the Company's U.K. manufacturing facility. The Company expects to incur approximately $431,000 in cash outlays over the next twenty-four months. See also Note 5 of notes to condensed consolidated financial statements. Impact of Year 2000 The Company's essential system software is currently functioning properly to handle the transition into the Year 2000. The Company does not depend on in-house custom systems and as a policy purchase off the shelf software from reputable vendors who have tested their software for Year 2000 compliance. The Company believes the Year 2000 issue will not pose significant operational problems for its computer systems. There can be no assurance that this will completely eliminate problems resulting from the Year 2000 issue. The Company is evaluating significant suppliers and large customers systems to determine the extent to which the Company's interface with these systems is vulnerable to the Year 2000 issue. The Year 2000 issue is being considered for all future software purchases. Page 12 of 16 VIDAMED, INC. PART II: OTHER INFORMATION Item 1. Legal Proceedings On May 20, 1997 VidaMed, Inc. filed a complaint against Prosurg, Inc., in the United States District Court for the Northern District of California. The complaint alleges that Prosurg Inc. is infringing and inducing others to infringe three VidaMed Patents, U.S. Patent Nos. 5,526,240, 5,531,676, and 5,531,677. On March 20, 1998, at the request of the parties, the Court dismissed without prejudice all claims relating to U.S. patent Nos. 5,531,676 and 5,531,677. Accordingly, the only claims remaining in the litigation are those relating to U.S Patent No. 5,526,240. VidaMed seeks both damages and injunctive relief from the Court. A factual discovery cut-off was set for June 1, 1998, however that date has been extended to August 20, 1998 for VidaMed only to allow the Company to obtain discovery from Prosurg and other third parties. The Court tentatively has set January 11, 1999 as a trial date. Item 2. Changes in Securities None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders The Company held its annual meeting of stockholders on May 7, 1998. The following items of business were acted upon. The election of all directors was conducted and the following nominees were elected: David J. Illingworth, Franklin D. Brown, Stuart D. Edwards, Robert Erra, Wayne I. Roe, John V. Scibelli and Michael H. Spindler. The vote with respect to each nominee was as follows: Votes Votes Name For Withheld -------------------- ---------- ------- David J. Illingworth 11,122,108 215,726 Franklin D. Brown 11,124,508 213,326 Stuart D. Edwards 11,089,299 248,535 Robert Erra 11,124,608 213,226 Wayne I. Roe 11,134,108 203,726 John V. Scibelli 11,130,508 207,326 Michael H. Spindler 11,125,708 212,126 Page 13 of 16 The Company's Employee Stock Purchase Plan was amended and the number of shares of Common Stock reserved for issuance under the plan was increased by 200,000 to 400,000 with 4,090,261 votes in favor and 462,373 votes against. The Company's Stock Plan was amended and the number of shares of Common Stock reserved for issuance under the plan was increased by 1,200,000 to 4,300,000 with 2,914,486 votes in favor and 1,597,156 votes against. Ernst & Young LLP was ratified as the independent auditors of the Company for the fiscal year ending December 31, 1998 with 11,178,310 votes in favor and 75,518 votes against. Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K a) Exhibits (27.1) Financial Data Schedule b) Reports on Form 8-K. No reports on Form 8-K were filed during the quarter ended June 30, 1998. Page 14 of 16 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto. VIDAMED, INC. Date: August 13, 1998 By: /s/ David J. Illingworth ----------------------------- ---------------------------- David J. Ilingworth Chairman, President, Chief Executive Officer Date: August 13, 1998 By: /s/ Richard D. Brounstein ----------------------------- ---------------------------- Richard D. Brounstein VP Finance, Chief Financial Officer (Principal Financial and Accounting Officer) Page 15 of 16 EX-27.1 2 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS Dec-31-1998 Jan-01-1998 Jun-30-1998 15,331 0 4,801 1,850 1,763 21,542 6,063 3,440 24,366 5,853 0 0 0 20 17,595 24,366 2,236 2,575 1,680 1,680 (135) 894 158 (9,477) 1 (9,478) 0 0 0 (9,478) (.58) (.58)
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