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: September 30, 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.
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(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
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(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 November 1, 2002, 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
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ITEM 1. - Financial Statements
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GISH BIOMEDICAL, INC.
CONDENSED BALANCE SHEET
As of September 30, 2002
(Unaudited)
(In thousands, except share data)
ASSETS
Current assets:
Cash $ 224
Accounts receivable, net 2,389
Relocation receivable 156
Inventories 3,926
Other current assets 166
--------
Total current assets 6,861
Property and equipment, at cost 9,567
Less accumulated depreciation ( 6,870)
--------
Net property and equipment 2,697
Other assets 467
--------
Total assets $ 10,025
========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Revolving line of credit $ 533
Accounts payable 1,213
Accrued compensation and related items 325
Accrued relocation liabilities 306
Other accrued liabilities 59
--------
Total current liabilities 2,436
Deferred rent 104
--------
Total liabilities 2,540
--------
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 ( 3,047)
--------
Total shareholders' equity 7,485
--------
Total liabilities and shareholders' equity $ 10,025
========
See accompanying notes to condensed financial statements.
2
GISH BIOMEDICAL, INC.
CONDENSED STATEMENTS OF OPERATIONS
Three months ended September 30, 2002 and 2001
(Unaudited)
(In thousands, except share and per share data)
2002 2001
--------- ---------
Net sales $ 4,176 $ 3,848
Cost of sales 3,075 3,076
--------- ---------
Gross profit 1,101 772
Operating expenses:
Selling and marketing 564 989
Research and development 219 253
General and administrative 468 402
--------- ---------
Total operating expenses 1,251 1,644
--------- ---------
Operating loss ( 150) ( 872)
Interest expense, net ( 20) ( 15)
--------- ---------
Net loss ($ 170) ($ 887)
========= =========
Net loss per share - basic and diluted ($ .05) ($ .25)
========= =========
Basic and diluted weighted average
common shares 3,592,145 3,592,145
========= =========
See accompanying notes to condensed financial statements.
3
GISH BIOMEDICAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
Three months ended September 30, 2002 and 2001
(Unaudited)
(In thousands)
2002 2001
------- -------
OPERATING ACTIVITIES:
Net loss ($ 170) ($ 887)
Adjustments:
Depreciation 172 172
Amortization 1 1
Gain on disposal of assets ( 3) -
Deferred rent 11 14
Changes in operating assets and liabilities 980 693
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Net cash provided by (used in) operating activities 991 ( 7)
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INVESTING ACTIVITIES
Purchases of property and equipment, net ( 9) ( 158)
Decrease (increase) of other long-term assets 6 ( 6)
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Net cash used in investing activities ( 3) ( 164)
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FINANCING ACTIVITIES
Net borrowings (repayments) on line of credit ( 922) 22
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Net cash provided by (used in) financing activities ( 922) 22
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Net increase (decrease) in cash and cash equivalents 66 ( 149)
Cash and cash equivalents at beginning of period 158 110
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Cash and cash equivalents (overdraft) at end of period $ 224 ($ 39)
======= ======
See accompanying notes to condensed financial statements.
4
GISH BIOMEDICAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
September 30, 2002 (Unaudited)
1. General
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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 three month periods ended September 30, 2002 and 2001,
and financial position at September 30, 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 a net loss of $170,000 for the three months ended
September 30, 2002, but actually generated $11,000 of cash from the losses.
However, the Company incurred a net loss of $2,730,000 for the year ended June
30, 2002 and used $1,992,000 in financing those losses. As a result, the Company
had a deficit in retained earnings of $3,047,000 at September 30, 2002. Under
its current operating plan, the Company believes its existing cash, together
with cash forecasted to be generated by operations, including proceeds from the
sale of non-core assets, and from borrowings under the existing revolving line
of credit may be sufficient to meet the Company's cash requirements through
September 30, 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)
September 30, 2002 (unaudited)
Statement of Cash Flows
-----------------------
Changes in operating assets and liabilities as shown in the condensed
statements of cash flows comprise (in thousands):
Three Months Ended September 30,
--------------------------------
2002 2001
------ ------
Decrease(increase) in:
Accounts receivable $ 284 $ 384
Relocation receivable - -
Inventories 386 428
Other current assets ( 59) 7
Increase (decrease) in:
Accounts payable 338 28
Accrued compensation and related items 32 ( 125)
Accrued relocation liabilities ( 16) ( 39)
Other accrued liabilities 15 10
------- -------
Net change in operating assets and liabilities $ 980 $ 693
======= =======
The Company did not pay any federal income taxes during the three month
periods ended September 30, 2002 and 2001. The Company paid interest costs of
$22,000 and $20,000 during the three month periods ended September 30, 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):
September 30, 2002
------------------
Raw materials $ 1,754
Work in progress 970
Finished goods 1,202
--------
$ 3,926
========
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
6
secured by the operating assets of the Company and bear interest at prime (4.75%
at September 30, 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 September 30, 2002 the Company had borrowed $533,000 under the revolving line
of credit and, would have been entitled to borrow an additional $1,649,000.
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 September 30, 2002. The Company has excluded from the improvement
construction costs at September 30, 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 and the issue is
scheduled for arbitration in January 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 September 30, 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. Subsequent Event - 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.
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.
7
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 month period ending September 30, 2002 with the
three month period ended September 30, 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 $170,000, or $.05 basic and diluted net loss
per share, for the three months ended September 30, 2002 compared to a net loss
of $887,000, or $.25 basic and diluted net loss per share, for the comparable
period in the prior fiscal year.
The Company had sales of $4,176,000 for the quarter ended September 30, 2002
compared to sales of $3,848,000 for the comparable quarter in the prior fiscal
year.
The $328,000 net sales increase for the quarter ended September 30, 2002
compared to the quarter ended September 30, 2001 included an increase of sales
volume across all product lines, except for cardioplegia delivery system sales,
which were comparable between periods and HEMED sales which decreased 15%
($29,000).
9
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 month period ended September
30, 2002, except for 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 $1,101,000 for the three months ended September 30,
2002 compared to $772,000 for the three months ended September 30, 2001. The
primary cause of the gross profit increase was the increase in sales compared to
the prior year quarter, and decreased production costs related to the previously
mentioned April 2002 personnel charges.
Selling and marketing expenses for the three months ended September 30, 2002
were $564,000 compared to $989,000 for the three months ended September 30,
2001. The decrease is primarily due to decreased costs related to the previously
mentioned April 2002 personnel charges.
Research and development expenses for the three months ended September 30, 2002
were $219,000 compared to $253,000 for the three months ended September 30,
2001. The decrease is primarily due to decreased costs related to the previously
mentioned April 2002 personnel charges.
For the three months ended September 30, 2002, general and administrative
expenses were $468,000 compared to $402,000 for the three months ended September
30, 2001. The $66,000 increase from the prior year period is primarily due to
increased legal expenses related to the previously mentioned dispute with the
improvement construction contractor over billings for construction of
improvements at the Company's Rancho Santa Margarita, California operating
facility.
10
Liquidity and Capital Resources
At September 30, 2002, the Company had cash of $224,000.
For the three months ended September 30, 2002 net cash provided by operating
activities was $991,000 compared to net cash used in operating activities of
$7,000 for the three months ended September 30, 2001. The increase in cash
provided by operating activities, results primarily from the Company's ability
to reduce its operating losses and increased use of trade credit. 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 three months ended September 30, 2002.
Net cash used by investing activities for the three months ended September 30,
2002 was $3,000 compared to net cash used by investing activities of $164,000
for the three months ended September 30, 2001.
For the three months ended September 30, 2002 net cash used in financing
activities was $922,000 compared to net cash provided by financing activities of
$22,000 for the three months ended September 30, 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 (4.75% at September
30, 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 September 30, 2002 the Company had borrowed $533,000 under the revolving line
of credit and, would have been entitled to borrow an additional $1,649,000.
The Company completed its relocation to a new operating facility in the April
2001. At September 30, 2002 unpaid improvement and relocation costs of $306,000
are included in accrued relocation liabilities. Additionally, the Company has
excluded from the costs recorded for the construction improvements at September
30, 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 and the issue is scheduled for
arbitration in January 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 September 30, 2002.
Under its current operating plan, the Company believes its existing cash,
together with cash forecasted to be generated by operations, including proceeds
from the sale of non-core assets, and from borrowings under the existing
revolving line of credit may be sufficient to meet the Company's cash
requirements through September 30, 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.
11
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. The Company's balance sheet at September 30, 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 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.
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.
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.
12
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:
2.1 - Agreement and Plan of Merger and Reorganization by and among
CARDIOTECH INTERNATIONAL, INC., GISH ACQUISITION CORP. and GISH
BIOMEDICAL, INC. dated October 25, 2002.
10.22 - Termination Agreement dated October 23, 2002 between Gish
Biomedical, Inc. and T. R. Winston & Company, Inc.
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 September 30, 2002.
13
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: November 8, 2002 /s/ Leslie M. Taeger
-----------------------------
Leslie M. Taeger
Vice President/CFO
14
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.
November 8, 2002 /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.
November 8, 2002 /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
September 30, 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: November 8, 2002
/s/ Kelly D. Scott
- -------------------------------------
Kelly D. Scott
President and Chief Executive Officer
/s/ Leslie M. Taeger
- -------------------------------------
Leslie M. Taeger
Chief Financial Officer