FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 4, 1999
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: 0-17919
SURGICAL LASER TECHNOLOGIES, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 31-1093148
------------------------------ ---------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
147 Keystone Drive
Montgomeryville, PA 18936
--------------------------------------
(Address of principal executive offices)
(Zip Code)
(215) 619-3600
--------------------------------------------------
(Registrant's telephone number, including area code)
--------------------------------------------------------------
(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 (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
Yes (X) No ( )
On August 4, 1999 the registrant had outstanding 1,977,965 shares of
Common Stock, $.0l par value.
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION: PAGE
ITEM 1. Financial Statements:
a. Condensed Consolidated Balance Sheets,
July 4, 1999 (unaudited) and January 3, 1999 3
b. Condensed Consolidated Statements of Operations
(unaudited) for the quarters ended July 4, 1999 and
June 28, 1998 4
c. Condensed Consolidated Statements of Operations
(unaudited) for the six months ended July 4, 1999 and
June 28, 1998 5
d. Condensed Consolidated Statements of Cash Flows
(unaudited) for the six months ended July 4, 1999 and
June 28, 1998 6
e. Notes to Condensed Consolidated Financial Statements
(unaudited) 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION:
ITEM 4. Submission of Matters to a Vote of Security Holders 12
ITEM 5. Other Information 12
ITEM 6. Exhibits and Reports on Form 8-K 13
2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
July 4, 1999 Jan. 3, 1999
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents (including restricted amounts of $45 and $100) $ 2,428 $ 2,938
Short-term investments 3,091 3,085
Accounts receivable, net of allowance for doubtful accounts of $524 and $138 1,165 1,437
Inventories 1,787 2,540
Other 98 437
-------- --------
Total current assets 8,569 10,437
Property and equipment, net 826 1,191
Property held for sale, net -- 4,339
Patents and licensed technology, net 515 544
Other assets 116 137
-------- --------
Total Assets $ 10,026 $ 16,648
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,883 $ 2,196
Accounts payable 462 763
Accrued liabilities 995 1,130
-------- --------
Total current liabilities 3,340 4,089
-------- --------
Long-term debt 79 3,965
Stockholders' equity:
Common stock, $.01 par value, 30,000 shares authorized,
1,978 shares issued and outstanding 20 20
Additional paid-in capital 33,033 33,033
Accumulated deficit (26,430) (24,438)
Deferred compensation (16) (21)
-------- --------
Total stockholders' equity 6,607 8,594
-------- --------
Total Liabilities and Stockholders' Equity $ 10,026 $ 16,648
======== ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
For the Quarter Ended:
July 4, 1999 June 28, 1998
Net sales $ 1,970 $ 2,284
Cost of sales 884 1,038
------- -------
Gross profit 1,086 1,246
------- -------
Operating expenses:
Selling, general and administrative 1,175 1,496
Product development 229 339
Non-recurring charges 1,440 --
------- -------
2,844 1,835
------- -------
Operating loss (1,758) (589)
Interest expense 134 150
Interest income (81) (87)
Other income (96) (125)
------- -------
Loss before income taxes (1,715) (527)
Provision for income taxes -- --
------- -------
Net loss ($1,715) ($ 527)
======= =======
Basic and diluted loss per share ($ 0.87) ($ 0.27)
======= =======
Shares used in calculating basic and diluted loss per share 1,978 1,978
======= =======
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
For the Six Months Ended:
July 4, 1999 June 28, 1998
Net sales $ 4,232 $ 4,651
Cost of sales 1,855 2,079
------- -------
Gross profit 2,377 2,572
------- -------
Operating expenses:
Selling, general and administrative 2,546 3,031
Product development 457 617
Non-recurring charges 1,440 --
------- -------
4,443 3,648
------- -------
Operating loss (2,066) (1,076)
Interest expense 273 304
Interest income (153) (172)
Other income (194) (223)
------- -------
Loss before income taxes (1,992) (985)
Provision for income taxes -- 3
------- -------
Net loss ($1,992) ($ 988)
======= =======
Basic and diluted loss per share ($ 1.01) ($ 0.50)
======= =======
Shares used in calculating basic and
diluted loss per share 1,978 1,978
======= =======
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
For the Six Months Ended:
July 4, 1999 June 28, 1998
Cash Flows From Operating Activities:
Net loss ($1,992) ($ 988)
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:
Depreciation and amortization 562 547
Imputed interest (8) (14)
Provision for bad debt 60 --
Non-recurring charges 1,440 --
(Increase) decrease in assets:
Accounts receivable (160) 475
Inventories 176 68
Other current assets 49 72
Other assets (16) 45
Increase (decrease) in liabilities:
Accounts payable (301) 321
Accrued liabilities (308) (253)
------- -------
Net cash (used in) provided by operating activities (498) 273
------- -------
Cash Flows From Investing Activities:
Purchase of short-term investments, net (6) (124)
Additions to property and equipment (28) (53)
Sale of property held for sale 4,237 --
Patent costs (16) (63)
Purchase of marketing agreement -- (30)
------- -------
Net cash provided by (used in) investing activities 4,187 (270)
------- -------
Cash Flows From Financing Activities:
Payments on long-term debt (277) (246)
Reduction in long-term debt on property held for sale (3,922) --
------- -------
Net cash used in financing activities (4,199) (246)
------- -------
Net decrease in cash and cash equivalents (510) (243)
Cash and Cash Equivalents, Beginning of Period 2,938 1,555
------- -------
Cash and Cash Equivalents, End of Period $ 2,428 $ 1,312
======= =======
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Summary Financial Information and Results of Operations:
In the opinion of Surgical Laser Technologies, Inc. and Subsidiaries (the
"Company"), the accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles and with the regulations of the Securities and Exchange Commission
and contain all adjustments necessary to present fairly the financial position,
results of operations and cash flows for the interim periods presented.
Interim Financial Information:
While the Company believes that the disclosures presented are adequate to
prevent misleading information, it is suggested that the unaudited condensed
consolidated financial statements be read in conjunction with the audited
consolidated financial statements and notes included in the Company's Form 10-K
report for the fiscal year ended January 3, 1999, as filed with the Securities
and Exchange Commission. Interim results for the quarter and six months ended
July 4, 1999 are not necessarily indicative of the results to be expected for
the full year.
2. Supplemental Cash Flow Information:
There were no material income taxes paid for the six months ended July 4, 1999
and June 28, 1998. Interest paid for the six months ended July 4, 1999 and June
28, 1998 was $273,000 and $304,000, respectively.
3. Basic and Diluted Loss Per Share:
Basic and diluted loss per share have been computed under the guidelines of
Statement of Financial Accounting Standards No. 128 "Earnings per Share" ("SFAS
No. 128"). The Company had common stock options and common stock warrants
outstanding of 442,000 and 458,000 at July 4, 1999 and June 28, 1998,
respectively. The Company also had subordinated debt, which matured on July 30,
1999, convertible into 72,000 shares of common stock at July 4, 1999 and June
28, 1998. Due to the Company's net loss for the quarters ended July 4, 1999 and
June 28, 1998, the inclusion of these common share equivalents would have had an
anti-dilutive effect when calculating diluted earnings per share under SFAS No.
128 and, as a result, diluted earnings per share was equivalent to basic
earnings per share for those periods.
4. Sale of Property:
On June 30, 1999, the Company sold its property in Oaks, Pennsylvania for
$4,475,000, before settlement costs and brokers commissions. At the time of the
sale, the property had a cost basis of $6,472,000 and accumulated depreciation
of $2,235,000. In connection with the sale, the mortgages, having a balance at
June 30, 1999 of $3,922,000 were assumed by the buyer. The income statement
impact for the six months ended July 4, 1999 for the sale of this property was
immaterial.
5. Non-recurring Charges:
In the second quarter of 1999, the Company recorded a non-recurring charge of
$1,440,000. This non-recurring charge consisted of $719,000 in charges related
to the discontinuance of certain new product ventures, a $539,000 charge to
reserve for excess inventories and a $182,000 charge for severance and for
related costs associated with headcount reductions made in response to the
discontinuance of the new product ventures.
7
6. Bank Borrowings:
At July 4, 1999, the Company had a $2,535,000 line of credit agreement with a
bank. Other than for a $17,510 letter of credit, there were no borrowings under
the line at July 4, 1999. The previously outstanding letter of credit in the
amount of $389,000 in favor of Montgomery County Industrial Development
Corporation ("MCIDC") under the terms of the Mortgage and Security Agreement for
the Company's property in Oaks, Pennsylvania expired with the sale of that
property on June 30, 1999 (see Note 4). Borrowings on the line are secured by
the Company's accounts receivable and inventories and bear interest at the
bank's prime rate plus 1/2%. The line expires on August 31, 1999. The Company is
currently in renewal discussions with its bank and does not foresee any events
that would cause a delay in the renewal. The Company's line of credit agreement
prohibits the declaration or payment of any dividends or distributions on any of
its capital stock without the prior written consent of the bank at any time
there are outstanding obligations to the bank. The line is subject to the
Company maintaining certain financial covenants, as defined, with which the
Company was in compliance at July 4, 1999.
7. Income Taxes:
No income tax provision was made for the six months ended July 4, 1999 due to
net losses incurred. The tax provision for the six months ended June 28, 1998,
was for state income taxes.
8. Business Segment and Geographic Data:
Effective January 3, 1999, SLT adopted Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131"). SFAS No. 131 requires that a public business
enterprise report financial and descriptive information about its reportable
operating segments. SFAS No. 131 defines operating segments as "components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance".
SLT is engaged primarily in one business segment: the design, development,
manufacture and marketing of laser products and other instruments for medical
applications. SLT's customers are primarily hospitals and medical centers. For
the six months ended July 4, 1999 and June 28, 1998, SLT did not have material
net sales to any one individual customer.
SLT reported net sales in the following categories (in thousands of dollars):
For the Six Months Ended:
July 4, 1999 June 28, 1998
------------ -------------
Disposables and accessories $3,106 $3,237
Laser system sales, service and rental 1,126 1,414
------ ------
Total net sales $4,232 $4,651
====== ======
For the six months ended July 4, 1999 and June 28, 1998, there were no material
net sales attributed to an individual foreign country. Net sales by geographic
area were as follows (in thousands of dollars):
For the Six Months Ended:
July 4, 1999 June 28, 1998
------------ -------------
Domestic $3,764 $3,918
Foreign 468 733
------ ------
$4,232 $4,651
====== ======
8
9. Inventories:
Inventories at July 4, 1999 and January 3, 1999 were as follows (in thousands
of dollars):
July 4, 1999 January 3, 1998
------------ -------------
Raw material and work-in-process $1,126 $1,691
Finished goods 661 849
------ ------
$1,787 $2,540
====== ======
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Balance Sheet Changes and Subsequent Event
In the second quarter of 1999, CorMedica Corporation, a company that had been
developing a new product for performing percutaneous transluminal endocardial
revascularization ("PTER(TM)"), for which SLT supplied holmium lasers and fiber
delivery systems, advised SLT that CorMedica had not timely achieved a key
development milestone necessary to receive further funding. As a result, SLT
does not anticipate further sales to CorMedica in connection with this
development project. The Company had net sales to CorMedica of $524,000 in the
second half of 1998.
Also, during the second quarter of 1999, in response to the discontinuance of
the CorMedica venture and certain other new product ventures, the Company
reassessed its manpower and inventory requirements. As a result of that
reassessment, certain adjustments were made (see the change in inventories and
non-recurring charge paragraphs below) intending to better align the Company's
cost structure and inventory value with current revenue expectations.
On June 30, 1999, the Company sold its property in Oaks, Pennsylvania (see Note
4 of Notes to Condensed Consolidated Financial Statements). The sale of the
property accounted for the decline in property held for sale, net, on the
balance sheet and also the decline in both current and long term debt, as the
related mortgage obligations were assumed by the buyer with the sale.
Inventories of $1,787,000 at July 4, 1999, declined by $753,000 or 30% from
inventories of $2,540,000 at January 3, 1999. This decline in inventory was
mainly attributable to a non-recurring charge of $539,000 recorded during the
second quarter of 1999 to reserve for excess inventories.
Subsequent to July 4, 1999, the Company's 8% subordinated notes matured. As a
result, on July 30, 1999, the Company paid $1,621,000 to the noteholders to
satisfy the remaining principal balance outstanding. The effect of that payment
reduced cash and the current portion of long term debt by $1,621,000 subsequent
to the July 4, 1999 Balance Sheet presented.
Results of Operations
Historically the Company has generated its net sales from positioning its
technology and products across a wide range of surgical specialties. In an
effort to attain more significant growth in sales, the Company redefined its
strategy for growth to include a specific focus in the surgical specialties of
Otolaryngology, Head and Neck surgery and Neurosurgery ("ENT and Neurosurgery").
In conjunction with this focused strategy, the Company has entered and will
continue to seek to enter into relationships with other companies to expand the
use of the Company's products in surgical specialties other than ENT and
Neurosurgery, and has sought and will continue to seek to utilize its strengths
in supplying other companies with products that draw on the Company's expertise
and competencies. While refocusing its strategy in ENT and Neurosurgery, the
Company will take these other actions in an effort to enhance sales and to
promote continued utilization of its products and services.
9
Additionally, as part of this transition, the Company is exploring opportunities
to expand the utilization of its proprietary technologies by entering into
private label relationships with other companies to market products encompassing
the Company's core competencies under their product labeling.
Net sales for the quarter ended July 4, 1999 of $1,970,000 decreased $314,000 or
14% compared to the second quarter 1998 net sales of $2,284,000. For the six
months ended July 4, 1999, net sales were $4,232,000 compared to $4,651,000 in
the first six months of 1998, a decrease of $419,000 or 9%.
Net sales of disposables and related accessories declined $131,000 or 4% in the
first six months of 1999 from the first six months of 1998 due to the lower
level of Contact Laser Delivery System and Accessory sales primarily within the
urology market, which were offset, in part, by increases in sales within the ENT
and Neurosurgery markets where the Company is currently concentrating its sales
efforts, as well as sales increases of new products introduced in the fourth
quarter of 1998.
Net sales of Nd:YAG laser systems, service and rentals of $1,126,000 in the
first six months of 1999 declined $288,000 or 20% from the comparable period in
1998. This decline in laser systems, service and rentals was the result of a
decrease in service, rental and international laser system unit sales, offset in
part, by an increase in domestic laser unit sales, resulting primarily from the
Company's focus in the neurosurgery market.
Gross profits of $1,086,000 for the quarter ended July 4, 1999 decreased
$160,000 or 13% from the second quarter of 1998, while gross profits for the six
months ended July 4, 1999 of $2,377,000 decreased $195,000 or 8% from the first
six months of 1998. As a percentage of net sales, gross profit of 56% and 55%
was relatively consistent for the six months ended July 4, 1999 and June 28,
1998, respectively.
Operating expenses, excluding the non-recurring charge, for the second quarter
of 1999 were $1,404,000, a decrease of $431,000 or 24% from the second quarter
of 1998. For the first six months of 1999, operating expenses, excluding the
non-recurring charge, were $3,003,000 a decrease of $645,000 or 18% from the
first six months of 1998. This decrease was due primarily to personnel and other
expense reductions made for the purpose of bringing expenses more in line with
the sales revenue being generated.
Selling, general and administrative expenses were $1,175,000 in the second
quarter of 1999, a decrease of $321,000 or 22% from the comparable prior year
period. In the first six months of 1999, selling, general and administrative
expenses were $2,546,000 compared to $3,031,000 in the first six months of 1998,
a decrease of $485,000 or 16%. Reductions in personnel and associated expenses
accounted for a majority of the reduced spending level.
Product development expenses of $229,000 in the second quarter of 1999 decreased
by $110,000 or 32% from the comparable period in 1998. Product development
expenses of $457,000 in the first six months of 1999 decreased by $160,000 or
26% from the comparable period in 1998. This lower level of spending was
principally due to a decrease in laser system development consulting charges
associated with a discontinued new product venture (see non-recurring charge
below).
In the second quarter of 1999, the Company recorded a non-recurring charge of
$1,440,000. This non-recurring charge consisted of $719,000 in charges related
to the discontinuance of certain new product ventures, a $539,000 charge to
reserve for excess inventories and a $182,000 charge for severance and for
related costs associated with headcount reductions made in response to the
discontinuance of the new product ventures.
Other income was $194,000 in the first six months of 1999, a decrease of $29,000
from the comparable period in 1998. Other income primarily consists of facility
related income and expense items.
Net interest expense was $120,000 and $132,000 in the first six months of 1999
and 1998, respectively.
10
Liquidity and Capital Resources
The Company had cash, cash equivalents and short-term investments of $5,519,000
at July 4, 1999. In addition, the Company currently has a $2,535,000 credit
facility with its bank. Other than one immaterial letter of credit, there were
no borrowings outstanding under the line of credit. Borrowings under the line
are secured by the Company's accounts receivable and inventories. The line is
subject to the Company maintaining certain financial covenants, as defined, with
which the Company was in compliance at July 4, 1999. The facility expires on
August 31, 1999. The Company is currently in renewal discussions with its bank
and does not foresee any events that would cause a delay in the renewal.
Net cash used in operating activities was $498,000 in the first six months of
1999 compared to cash provided by operating activities of $273,000 in the
comparable period in 1998. Excluding non-recurring charges, the comparative
decrease in the net loss was more than offset by a comparatively higher change
in the level of accounts receivable due to the timing of sales and liability
payments.
On June 30, 1999, the Company sold its property in Oak, Pennsylvania. The sale
resulted in an increase in cash provided by investing activities of $4,237,000,
which represented the net book value of the property at the time of sale and an
increase in cash used by financing activities of $3,922,000, which represented
the assumption of the mortgages on the property by the buyer at the time of
sale.
Excluding the sale of the property in Oaks, Pennsylvania, net cash used in
investing activities was $50,000 in the first six months of 1999 compared to net
cash used in investing activities of $270,000 in the first six months of 1998.
The comparable decrease in cash used in investing activities was caused by a
reduction in purchases of short-term investments and patent costs.
Excluding the sale of the property in Oaks, Pennsylvania, net cash used in
financing activities was $277,000 and $246,000 in the first six months of 1999
and 1998, respectively.
Management believes the Company's current cash position and available line of
credit will be sufficient to fund operations and meet commitments for long-term
debt, other commitments and contingencies and capital expenditures.
Management believes that inflation has not had a material effect on operations
for the periods presented.
The Company has analyzed its information technology systems for the "Year 2000"
compliance issues. Management believes that the "Year 2000" issue related to the
Company's hardware and software programs are not likely to result in any
material adverse disruptions in the Company's computer systems or its internal
business operations. The Company has purchased and implemented the latest
version of its operating software package to provide remediation for the "Year
2000" issue. The cost of this new software was $8,000.
The Company has analyzed and determined that the "Year 2000" issue related to
its non-information technology, such as its telephone and security system, are
not likely to result in any material disruption of its business operations.
The Company is currently in the process of evaluating its relationships with
third parties, such as banks, service providers and suppliers, with which the
Company has a direct and material relationship to determine whether they are
"Year 2000" compliant. The responses received to date from such third parties to
inquiries made by the Company indicate that these third parties either are or
expect to be compliant by the Year 2000.
Even assuming that all material third parties confirm that they are or expect to
be "Year 2000" compliant by December 31, 1999, it is not possible to state with
certainty that such parties will be so compliant, or that the operations of such
third parties will not be materially impacted by other parties with whom they
themselves have a material relationship, and who fail to timely become "Year
2000" compliant. Consequently, it is not possible to predict whether or to what
extent the "Year 2000" issues may have an adverse material impact on the Company
as
11
a result of the impact of this issue on the operations of the third parties
with whom the Company has a material relationship. For example, the failure to
be "Year 2000" compliant by a bank with whom the Company has a material banking
relationship could cause significant disruption in the Company's ability to make
payments, deposit funds and make investments, which could have a material
adverse effect on the Company's financial condition.
The Company has not established a contingency plan in case of failure of its
information technology systems since it has implemented its new software system.
The Company will continually monitor its relationships with banks, service
providers and suppliers to ensure they expect to be "Year 2000" compliant. If
the Company learns that one of these third parties will not be "Year 2000"
compliant, the Company's contingency plan would include replacing such third
party.
Risk Factors
For information regarding certain risk factors that could cause actual results
to differ materially from those suggested in forward-looking statements
contained herein or otherwise made from time to time by the Company, reference
is made to the Company's Form 10-K, Item 7, "Risk Factors," for the fiscal year
ended January 3, 1999, which is incorporated herein by reference. The risk
factors described in such report continue to be applicable at July 4, 1999.
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders.
The Company held its Annual Meeting of Stockholders on July 20, 1999. Sheldon M.
Bonovitz, Richard J. DePiano, Jay L. Federman, Vincenzo Morelli and W. Keith
Stoneback, the director nominees set forth in the Notice of Annual Meeting, were
elected to serve as directors. The following table provides the details of the
votes cast for each director nominee.
Nominee Votes For Withhold Authority
- ------- --------- ------------------
Sheldon M. Bonovitz 1,588,717 40,560
Richard J. DePiano 1,588,757 40,520
Jay L. Federman 1,588,717 40,560
Vincenzo Morelli 1,588,757 40,520
W. Keith Stoneback 1,588,717 40,560
Arthur Andersen LLP was ratified to serve as the Company's independent
accountants for the fiscal year ending January 2, 2000, with 1,547,899 votes
favoring ratification, 74,613 votes opposing and 6,765 votes abstaining.
Subsequent to election as Director, W. Keith Stoneback resigned his position as
President, Chief Executive Officer and Director of the Company, effective July
21, 1999. Michael R. Stewart was elected to succeed Mr. Stoneback as President,
Chief Executive Officer and Director to fill the vacancy created by Mr.
Stoneback's resignation.
ITEM 5. Other Information
Proposals of stockholders of the Company which are intended to be presented by
such stockholders at the 2000 Annual Meeting of Stockholders must be received by
the Company no later than February 17, 2000 in order that they may be included,
subject to compliance with applicable federal securities laws and regulations,
in the proxy statement and form of proxy relating to that meeting.
12
In addition, the persons named as proxies on the form of proxy to be mailed in
connection with the solicitation of proxies on behalf of the Company's Board of
Directors for use at the 2000 Annual Meeting of Stockholders will be authorized
to vote in their discretion on any stockholder proposal not included in the
Company's Proxy Statement if the Company does not receive written notice of such
proposal by May 2, 2000. Such proxy holders' authority to vote in their
discretion on stockholder proposals as to which the Company does not receive
notice by May 2, 2000 will be determined in accordance with the rules of the
Securities and Exchange Commission.
ITEM 6. Exhibits and Reports on Form 8-K
a. Exhibits:
Exhibit Number Description of Exhibit
-------------- ----------------------
10.50 Termination of Lease, dated June 29, 1999 and
effective June 30, 1999, between the Company and
SLT Properties, Inc.
10.51 Assumption and Assignment Agreement, dated June 28,
1999 and effective June 30, 1999, among Montgomery
County Industrial Development Corporation,
Pennsylvania Industrial Development Authority,
Lenfest Oaks, Inc., and SLT Properties, Inc.
10.52 Assumption Agreement, dated June 28, 1999 and
effective June 30, 1999, among American United
Life Insurance Company, Montgomery County
Industrial Development Corporation, Lenfest
Oaks, Inc., SLT Properties, Inc. and the
Company.
10.53 Consent, Subordination and Assumption Agreement,
dated June 28, 1999, among Pennsylvania Industrial
Development Authority, Montgomery County Industrial
Development Corporation, Lenfest Oaks, Inc., Suburban
Cable TV Co. Inc., SLT Properties, Inc. and the
Company.
10.54 Termination of Assignment of Lease Agreement, dated
June 23, 1999 and effective June 30, 1999, among
Pennsylvania Industrial Development Authority, SLT
Properties, Inc. and the Company.
10.55 Termination of Sublease Agreement, dated June
29, 1999 and effective June 30, 1999, between
Suburban Cable TV Co. Inc. and the Company.
10.56* Severance Agreement, dated July 21, 1999,
between W. Keith Stoneback and the Company.
27 Financial Data Schedule, July 4, 1999.
* This exhibit represents a management contract or compensatory
plan or arrangement.
b. Reports on Form 8-K: none
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
SURGICAL LASER TECHNOLOGIES, INC.
Date: August 12, 1999 By: /s/ Michael R. Stewart
------------------------
Michael R. Stewart
President and
Chief Executive Officer
Signing on behalf of the
Registrant and as principal
officer.
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