1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-Q
Mark One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For The Quarterly Period Ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period from __________ to __________
COMMISSION FILE NUMBER 0-1000
CHROMAVISION MEDICAL SYSTEMS, INC. 75-2649072
(Exact name of registrant as specified (IRS Employer Identification Number)
in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
33171 PASEO CERVEZA
SAN JUAN CAPISTRANO, CA 92675
(Address of principal executive offices) (Zip code)
(714) 443-3355
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of November 7, 1997, there were 17,153,629 shares outstanding of the
Issuer's Common Stock, $.01 par value.
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CHROMAVISION MEDICAL SYSTEMS, INC.
(FORMERLY MICROVISION MEDICAL SYSTEMS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
TABLE OF CONTENTS
Page
----
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS (UNAUDITED)
Balance Sheets as of December 31, 1996 and September 30, 1997 3
Statements of Operations for the three and nine months ended 4
September 30, 1996 and 1997; and the period from April 1, 1993
(Inception) through September 30, 1997
Statements of Cash Flows for the nine months ended September 30, 1996 5
and 1997; and the period from April 1, 1993 (Inception) through
September 30, 1997
Notes to Financial Statements 6
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 8
CONDITION AND RESULTS OF OPERATIONS
PART II OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS 10
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURES 11
3
PART I - ITEM 1
CHROMAVISION MEDICAL SYSTEMS, INC.
(FORMERLY MICROVISION MEDICAL SYSTEMS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
(UNAUDITED)
DECEMBER 31, SEPTEMBER 30,
1996 1997
---- ----
ASSETS
Current assets:
Cash and cash equivalents .................................. $ 124,092 $ 17,145,678
Accounts receivable ........................................ 550 599
Notes receivable ........................................... -0- 5,000,000
Inventory .................................................. 502,511 816,350
Prepaid expenses ........................................... 27,677 113,308
Capitalized offering costs ................................. 144,760 -0-
Interest receivable ........................................ -0- 112,941
------------ ------------
Total current assets .................................. 799,590 23,188,876
Deposits ...................................................... -0- 57,021
Property and equipment, net ................................... 80,840 470,666
------------ ------------
Total assets .......................................... $ 880,430 $ 23,716,563
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY / (DEFICIT)
Current liabilities:
Due to XL Vision, Inc. ..................................... $ 380,439 $ 7,197
Accounts payable ........................................... 127,808 306,469
Accrued liabilities:
Salaries and benefits ...................................... 89,066 216,920
Severance costs ............................................ 912,050 -0-
Relocation costs ........................................... -0- 95,554
Warranty costs ............................................. 60,000 60,000
Offering costs ............................................. 105,000 111,900
Other ...................................................... 55,565 146,387
------------ ------------
Total current liabilities .............................. 1,729,928 944,427
Revolving line of credit ................................... 806,009 -0-
------------ ------------
Total liabilities ...................................... 2,535,937 944,427
------------ ------------
Commitments and contingencies Stockholders' equity / (deficit):
Series A preferred stock, $.01 par value, authorized
7,246,000 shares, issued and outstanding 7,135,064 shares 71,351 -0-
in 1996 and -0- in 1997
Common stock $.01 par value, authorized 50,000,000 shares,
issued and outstanding 1,931,250 shares in 1996 and ...... 19,313 171,536
17,153,643 in 1997
Additional paid-in capital ................................. 7,059,849 36,323,369
Accumulated deficit during the development stage ........... (8,806,020) (13,722,769)
------------ ------------
Total stockholders' equity / (deficit) ................. (1,655,507) 22,772,136
------------ ------------
Total liabilities and stockholders' equity / (deficit) ........ $ 880,430 $ 23,716,563
============ ============
See accompanying notes to financial statements.
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CHROMAVISION MEDICAL SYSTEMS, INC.
(FORMERLY MICROVISION MEDICAL SYSTEMS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
(UNAUDITED)
PERIOD(1) FROM
APRIL 1, 1993
(INCEPTION
THREE MONTHS ENDED NINE MONTHS ENDED THROUGH)
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1997(1) 1997 1996(1) 1997 1997
---- ---- ---- ---- ----
Revenue:
Products........................... $-0- $-0- $-0- $-0- $1,120,000
Services........................... -0- -0- -0- -0- 76,886
------------ ------------ ------------ ------------ ------------
-0- -0- -0- -0- 1,196,886
------------ ------------ ------------ ------------ ------------
Cost of revenue:
Products........................... -0- -0- -0- -0- 511,989
Services........................... -0- -0- -0- -0- 30,750
------------ ------------ ------------ ------------ ------------
-0- -0- -0- -0- 542,739
Gross profit....................... -0- -0- -0- -0- 654,147
------------ ------------ ------------ ------------ ------------
Operating expenses:
Selling, general and administrative 575,836 623,967 1,254,496 2,440,171 7,442,529
Research and development........... 1,133,663 1,022,138 1,579,287 2,524,608 6,653,579
------------ ------------ ------------ ------------ ------------
Total operating expenses......... 1,709,499 1,646,105 2,833,783 4,964,779 14,096,108
------------ ------------ ------------ ------------ ------------
Profit (loss) from operations.... (1,709,499) (1,646,105) (2,833,783) (4,964,779) (13,441,961)
------------ ------------ ------------ ------------ ------------
Other income (expense):
Interest income.................... 13,816 210,150 13,816 212,809 230,638
Interest (expense)................. -0- (85,357) -0- (164,779) (164,779)
Other income (expense)............. -0- -0- 423,525 -0- (346,667)
------------ ------------ ------------ ------------ ------------
Total other income (expense)..... 13,816 124,793 437,341 48,030 (280,808)
------------ ------------ ------------ ------------ ------------
Profit (loss) before income taxes (1,695,683) (1,521,312) (2,396,442) (4,916,749) (13,722,769)
Income tax expense (benefit).......... -0- -0- -0- -0- -0-
------------ ------------ ------------ ------------ ------------
Net profit (loss)................ $(1,695,683) $(1,521,312) $(2,396,442) $(4,916,749) $(13,722,769)
============ ============ ============ ============ =============
Net profit (loss) subsequent to
incorporation $(1,695,683) $(1,521,312) $(2,019,285) (4,916,749)
=========== =========== =========== ==========
Net loss per common share............. $ (.16) $ (.11) $ (.40)
============ ============ ============
Pro forma weighted average number of
common shares outstanding.......... 10,850,080 14,334,512 12,208,180
============ ============ ============
See accompanying notes to financial statements.
- ----------
(1) Divisional Operations - Note 2
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CHROMAVISION MEDICAL SYSTEMS, INC.
(FORMERLY MICROVISION MEDICAL SYSTEMS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED PERIOD(1) FROM
SEPTEMBER 30, APRIL 1, 1993
(Inception)
THROUGH
SEPTEMBER 30,
1996 (1) 1997 1997
---- ---- ----
Cash flows from development stage activities:
Net profit (loss) ................................ $ (2,396,442) $ (4,916,749) $(13,722,769)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization ............... 25,720 201,635 317,950
Non-cash issuance of preferred stock ........ 770,192 -0- 770,192
Write-off of note receivable ................ -0- -0- 40,000
Changes in operating assets and liabilities:
Accounts receivable ....................... 200,000 (49) (599)
Inventory ................................. (279,631) (406,216) (908,727)
Prepaid expenses .......................... (17,657) (85,631) (113,308)
Deposits .................................. -0- (57,021) (57,021)
Interest receivable ....................... -0- (112,941) (112,941)
Accounts payable .......................... 82,612 178,661 362,034
Accrued liabilities ....................... 48,783 (597,820) 568,296
------------ ------------ ------------
Net cash used in operating activities ..... (1,566,423) (5,796,131) (12,856,893)
------------ ------------ ------------
Cash flows from investing activities:
Notes receivable ................................. -0- (5,000,000) (5,825,000)
Collections on notes receivable .................. -0- -0- 785,000
Purchases of property and equipment .............. (24,657) (499,084) (696,239)
------------ ------------ ------------
Net cash provided by (used in) investing .. (24,657) (5,499,084) (5,736,239)
activities
------------ ------------ ------------
Cash flows from financing activities:
Due to (from) XL Vision, Inc. .................... (4,156,148) (373,242) 7,197
Sale of common stock ............................. 15,450 29,196,949 29,212,399
Borrowing under revolving line of credit ......... -0- (806,009) -0-
Sale of preferred stock .......................... 6,364,871 998,325 7,363,196
Capitalized offering costs ....................... -0- (699,222) (843,982)
------------ ------------ ------------
Net cash provided by financing activities . 2,224,173 28,316,801 35,738,810
------------ ------------ ------------
Net increase (decrease) in cash and cash .. 633,093 17,021,586 17,145,678
equivalents
Cash and cash equivalents beginning of period .... -0- 124,092 -0-
------------ ------------ ------------
Cash and cash equivalents end of period .......... $ 633,093 $ 17,145,678 $ 17,145,678
============ ============ ============
Cash paid for interest ........................... $ -0- $ 156,902 $ -0-
============ ============ ============
See accompanying notes to financial statements.
- ----------
(1) Divisional Operations - Note 2
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CHROMAVISION MEDICAL SYSTEMS, INC.
(FORMERLY MICROVISION MEDICAL SYSTEMS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
These interim financial statements should be read in conjunction with
the Company's registration statement on Form S-1 (No. 333-26129) filed with the
Securities and Exchange Commission on July 1, 1997, which includes financial
statements for the year ended December 31, 1996 and the quarter ended March 31,
1997.
The accompanying unaudited financial statements reflect all adjustments
which, in the opinion of management, are necessary for a fair presentation of
the financial position and the results of operations for the interim periods
presented. All such adjustments are of a normal, recurring nature. Certain
amounts have been reclassified to conform to the current period presentation.
The results of the Company's operations for any interim period are not
necessarily indicative of the results attained for a full fiscal year.
(2) DEVELOPMENT STAGE
From the inception of ChromaVision on April 1, 1993, the Company was
considered to be in the development stage as defined by the Statement of
Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by
Development Stage Enterprises". Until the Company begins to realize significant
revenue associated from its planned operations, the Company will be considered
in the development stage.
(3) RECENTLY ISSUED ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earning per Share". Statement 128 supersedes Accounting
Principles Board Opinion No. 15, Earnings per Share (APB15), and specifies the
computation, presentation, and disclosure requirements for earnings per share
(EPS) for entities with publicly held common stock or potential common stock.
Statement 128 replaces the presentation of primary and fully diluted EPS with a
presentation of basic and diluted EPS respectively. Statement 128 is effective
for financial statements for both interim and annual periods ending after
December 15, 1997.
(4) INVENTORIES
Inventories consist of the following:
December 31, 1996 September 30, 1997
----------------- ------------------
Raw materials $ 105,520 $ 352,303
Work-in-process -0- 53,636
Finished goods 396,991 410,411
--------------------- ------------------
$ 502,511 $ 816,350
===================== ==================
(5) INITIAL PUBLIC OFFERING
In August 1997, the Company completed its initial public offering of
6,020,000 shares of common stock. The company received net proceeds of
approximately $28.3 million after deducting underwriting discounts and offering
expenses.
(6) REVOLVING LINE OF CREDIT AND CURRENT LIABILITIES
In August and September of 1997, approximately $5.5 million of net
proceeds from the initial public offering were used for repayment of the bank
line of credit indebtedness and reduction of an inter-company payable to XL
Vision, Inc.
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(7) NOTES RECEIVABLE
In August 1997, the Company loaned $5,000,000 to Safeguard Scientifics,
Inc., an affiliate of the Company, pursuant to the terms of a revolving note
agreement. The terms of the agreement call for payment on demand with interest
payable monthly at an effective interest rate of approximately 6.23%. In October
1997, the entire receivable balance was repaid to the Company.
(8) SUBSEQUENT EVENT
In October 1997, the Company signed a three-year exclusive distribution
and development agreement with Sigma Diagnostics, Inc., a subsidiary of Sigma
Aldrich, to market the Company's proprietary pre-natal Down syndrome screening
test, which uses the ChromaVision Dx2000 automated intelligent microscope. The
ChromaVision test is currently in clinical trials in the U.S. and Great Britain
and has not yet received FDA approval.
The Company has commenced litigation against IDEA Research LLC seeking a
determination by the court that the Company's Digital Analyzer does not infringe
certain patent rights of IDEA Research. Any adverse ruling in that litigation
could have a material adverse effect on the Company. See Part II Item 1.
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PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial
Condition and Results of Operations contains "forward-looking statements" which
reflect the Company's current views with respect to future events and financial
performance. These forward looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or those anticipated. The words "plan", "expect",
"anticipate", and similar expressions identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events, or otherwise. Factors that could cause actual results to differ
materially from historical results or those anticipated include, without
limitation, the following: the Company's limited operating history and history
of losses; government regulation; rapid technological change; market acceptance
of the Company's products; the acceptance of the Company's fee per use program;
product and manufacturing regulatory approvals; the status of competing
products; dependence on reimbursement; the risk of third party claims of
infringement; and the dependence on key personnel. For a more detailed
discussion of these factors, see " Risk Factors" from the Form S-1 filed with
the Securities and Exchange Commission on July 1, 1997 (Registration No.
333-26129).
OVERVIEW
ChromaVision Medical Systems, Inc., formerly MicroVision Medical
Systems, Inc., a development stage enterprise, ("ChromaVision" or the "Company")
is a Delaware corporation. Prior to the formation of the Company on March 28,
1996, the Company's business was conducted as the MicroVision Medical Systems
Division (the "Division") of XL Vision, Inc. ("XL Vision").
On March 28, 1996, the assets and liabilities of the Division were
contributed to the Company, which is a wholly owned subsidiary of XL Vision.
This transaction was accounted for as a reorganization of entities under common
control and, accordingly, the assets and liabilities were recorded at their
historical book value. As of the date of incorporation, the Division had assets,
net of assumed liabilities, of $102,677 and an accumulated deficit of
$4,775,757. The Company assumed a liability to XL Vision totaling $4,862,984
which consisted of the net assets and the accumulated deficit of the Division
less consideration paid for common stock, $15,450.
Subsequent to incorporation, the Company raised $6.4 million from a
private equity placement in June 1996, from which the proceeds were used
primarily to fund the repayment of amounts due to XL Vision and for working
capital.
The Company was established to develop medical imaging technologies and
to introduce a computer-based microscope for the healthcare services market.
From the inception of the business on April 1, 1993 through September 30, 1997,
the Company and its predecessor have devoted substantially all of their
resources to the development of the ChromaVision Digital Analyzer technology.
The ChromaVision Digital Analyzer is designed to identify cells with
specific characteristics within a sample of cells by detecting color produced by
the reaction between common laboratory reagents (or stains) in the cells. The
ChromaVision Digital Analyzer uses proprietary imaging software and technology
to capture digital images of cell samples and detect the presence, count the
number and measure the color intensity of cells containing a particular stain.
The Company believes the ChromaVision Digital Analyzer offers flexibility
because the software can be configured to identify different stains thereby
allowing the system to be adapted for use with different reagents to identify a
broad range of cellular conditions. The Company's goal is to establish the
ChromaVision Digital Analyzer as the preferred platform for multiple microscopic
diagnostic applications.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1996
Revenues and gross profits. Because it is a development stage enterprise, the
Company had no revenue or gross profit for the three months ended September
30,1997 or September 30, 1996.
Selling, general and administrative expenses. Expenses increased $48,131 to
$623,967 as compared to $575,836 in 1996. This increase is primarily due to
relocation costs incurred moving the Company to California and due to the
increase in the number of management and administrative personnel necessary to
support the growth of the business.
Research and development expenses. Expenses decreased $111,525 to $1,022,138 as
compared to $1,133,663 in 1996. In 1996 $770,192 of value attributed to
Preferred Stock was issued to Centocor for its clinical collaboration on a
minimal residual disease
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application. This increase in 1996 was offset by increases during 1997 due to
clinical trial costs for prenatal screening for Down syndrome and cancer and the
additional personnel to further develop the Company's products.
Other income (expense). Other income represents net interest income of $124,793
in 1997 as compared to $13,816 in 1996. The improvement in net interest income
resulted from the investment of the Company's initial public offering net
proceeds in interest bearing securities, which was offset by interest expense
incurred on the Company's revolving line of credit before it was paid off during
the third quarter of 1997.
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1996.
Revenues and gross profits. Because it is a development stage enterprise, the
Company had no revenue or gross profit for the nine months ended September 30,
1997 or September 30, 1996.
Selling, general and administrative expenses. Expenses increased $1,185,675 to
$2,440,171 for 1997 as compared to $1,254,496 in 1996. This increase is
primarily due to additional management and administrative personnel necessary to
support the development of the business. Augmenting this increase is the costs
of moving the Company to California from Florida.
Research and development expenses. Expenses increased $945,321 to $2,524,608 as
compared to $1,579,287 in 1996. The increase is primarily due to the cost of the
first clinical trial related to the Company's 510 (k) clearance received from
the U.S. Food and Drug Administration on June 5, 1997, its cost of the current
clinical trials for prenatal screening for Down syndrome and cancer and the
addition of technical personnel to further develop the Company's products.
Other income (expense). Other income (expense) decreased $389,311 to $48,030 in
1997 as compared to $13,816 in 1996. The decrease in other income (expense) was
primarily due to other income recorded in 1996 relating to design work performed
for another company totaling $423,525.
The Company has commenced litigation against IDEA Research LLC seeking a
determination by the court that the Company's Digital Analyzer does not infringe
certain patent rights of IDEA Research. Any adverse ruling in that litigation
could have a material adverse effect on the Company. See Part II Item 1.
LIQUIDITY AND CAPITAL RESOURCES
On August 13, 1997, the Company competed its initial public offering of
6,020,000 shares of Common Stock. The Company received net proceeds of
approximately $28.3 million after deducting underwriting discounts and offering
expenses. Prior to this offering, the Company's primary source of financing was
a $5.0 million revolving line of credit and a $6.4 million private placement in
June 1996.
In August and September of 1997, approximately $5.5 million of net
proceeds from the initial public offering were used for repayment of the bank
line of credit indebtedness and reduction of an inter-company payable to XL
Vision, Inc. At September 30, 1997, working capital amounted to $22.2 million.
As a development stage enterprise, the Company expects that losses from
operations and increases in working capital requirements will produce
significant negative cash flows from operations for the foreseeable future. The
Company anticipates that the net proceeds from the initial public offering will
be sufficient to satisfy its operating cash needs for the foreseeable future.
The Company's business plan anticipates manufacturing the ChromaVision
Digital Analyzer, placing the instrument with users at no initial charge and
charging on a per use or per click fee for each test run on the instrument. The
manufacture of these instruments will require a significant outlay of cash for
which revenues will not be recognized until future periods.
The Company's future capital requirements will depend on many factors,
including the extent and rate of adoption of the Digital Analyzer and the per
use fee program, receiving the requisite regulatory approvals, reimbursement for
the procedures by insurance companies and other third party payors and the
status of competing products. To support the Company's future cash needs it
intends to consider, but not be limited to, additional debt or equity financing.
However there can be no assurance that any such financing will be
available to the Company, or that adequate funds for the company's operations
will be available when needed, or on terms attractive to the Company. If the
Company is unable to obtain sufficient additional funds, the Company may have to
delay, scale back or eliminate some or all of its development activities,
clinical trials and/or regulatory activities.
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PART II OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
On November 10, 1997 the Company commenced litigation against IDEA
Research LLC seeking a determination by the court that the Company's automated
microscope systems do not infringe certain patent rights of IDEA Research. The
litigation, which is pending in the Federal District Court in Santa Ana,
California, seeks to resolve claims that were first made by IDEA Research early
in 1997 and that have previously been publicly disclosed by the Company. The
Company is also seeking recovery of damages for interference with prospective
business advantage in connection with certain disparaging statements made by
IDEA Research about the Company and its microscope systems and may seek
injunctive relief prohibiting further disparaging statements.
The Company anticipates that IDEA Research may respond to the Company's
complaint by asserting claims against the Company for infringement of patent or
other proprietary rights of IDEA Research. The Company believes that its
automated microscope systems do not infringe on any rights of IDEA Research and
that the Company will prevail in the litigation. If, however, the court were to
uphold any such claims by IDEA Research, the Company could be subject to
significant liabilities to IDEA Research and may be required to license disputed
rights from IDEA Research in order to use its microscope systems for a number of
applications, including the pending screening process for Down syndrome. No
assurance can be given that such a license could be obtained or could be
obtained on terms acceptable to the Company, if at all. If such a license could
not be obtained, the Company would not be able to use its microscope systems for
any application which is found to infringe the technology of IDEA Research.
Accordingly, an adverse result in the litigation could have a material adverse
effect on the Company's business, operating results and financial condition.
Regardless of the outcome, the Company may incur substantial costs in connection
with the litigation.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Certificate of Incorporation of the Company*
3.2 Bylaws of the Company**
10.1 Distribution Agreement between ChromaVision
Medical Systems and Sigma Diagnostics,
Inc. dated October 22, 1997
10.2 UR-NAP Application Development Agreement and Right
of First Refusal of New Applications between the
Company and Sigma Diagnostics, Inc. dated October
22, 1997
27. Financial Data Schedule
(b) Report on Form 8-K
None
- -------------
*Previously filed as Exhibit 2.1 to the Company's Registration Statement No.
333-26129 on Form S-1 filed with the Securities and Exchange Commission on
July 1, 1997, and incorporated herein by reference.
**Previously filed as Exhibit 3.2 to the Company's Registration Statement No.
333-26129 referenced above, and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CHROMAVISION MEDICAL SYSTEMS, INC.
DATE: November 14, 1997 BY: /s/ Douglas S. Harrington, M.D.
------------------------------ --------------------------------
Douglas S. Harrington, M.D.
Chief Executive Officer
DATE: November 14, 1997 BY: /s/ Kevin C. O'Boyle
------------------------------ --------------------------------
Kevin C. O'Boyle
Vice President, Chief Financial
Officer
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