U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended November 30, 1999
OR
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
Commission File Number : 0-27380
ECHOCATH, INC.
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(Exact Name of Small Business Issuer as specified in its charter)
New Jersey 22-3273101
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(State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification No.)
Organization)
P.O. Box 7224, Princeton, NJ 08543
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(Address of Principal Executive Offices)
Issuer's Telephone Number. . .(609) 987-8400
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Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report
Check whether Issuer (1) has 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 registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
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State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date:
CLASS OF COMMON EQUITY OUTSTANDING AT JANUARY 14, 2000
Class A common stock (No Par Value) 3,524,036
Transitional Small Business Disclosure Format (check one)
YES NO X
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PART 1: FINANCIAL INFORMATION
PART 2: OTHER INFORMATION
ECHOCATH, INC.
INDEX
Item 1: Financial Statements Page
Balance Sheets,
August 31, 1999 and November 30, 1999 (Unaudited) 3
Statements of Operations for the three months ended
November 30, 1998 (Unaudited), and November 30, 1999 (Unaudited) 4
Statements of Cash Flows for the three months ended
November 30, 1998 (Unaudited), and November 30, 1999 (Unaudited) 5
Notes to Financial Statements 6 - 9
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operation 9 - 12
Signatures 13
2
ITEM 1: FINANCIAL STATEMENTS
ECHOCATH, INC.
BALANCE SHEETS
ASSETS
August 31, 1999 November 30, 1999
(Unaudited)
Current assets:
Cash and cash equivalents $ 26,264 $ 244,577
Inventory 44,325 52,587
Prepaid expenses 71,903 51,057
----------- -----------
Total current assets 142,492 348,221
Furniture, equipment and leasehold improvements, net 184,575 162,862
Intangible assets, net 287,384 286,752
Debt issuance cost, net 340,642 1,143,269
Other assets 61,403 16,414
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$ 1,016,496 $ 1,957,518
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Note payable $ 540,000 $ 150,000
6.5% Convertible Debentures-IPA 525,000 --
Deferred income -- 10,000
Accounts payable 177,066 123,305
Accrued expenses 943,390 677,836
Obligations under capital leases, less current portion 17,863 17,863
----------- -----------
Total current liabilities 2,203,319 979,004
6.5% Convertible notes 850,000 2,525,000
Note payable -- 502,444
Obligations under capital leases 19,271 14,439
Other liabilities 136,750 120,447
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Total liabilities 3,209,340 4,141,334
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Stockholders' deficit:
Preferred stock, no par value, 5,000,000 shares authorized;
280,000 shares of Series B cumulative convertible issued and
outstanding, senior in liquidation to Class A and Class B common
stock, (liquidation value $1,400,000) 1,393,889 1,393,889
Class A common stock, no par value, 18,500,000 shares authorized;
3,524,036 issued and outstanding as of November 30, 1999 and
2,352,018 as of August 31, 1999 7,473,834 12,264,022
Class B common stock, no par value, 1,500,000 shares authorized;
1,172,018 shares issued and outstanding as of August 31, 1999
and 1,172,018 shares converted to Class A shares as of
November 30, 1999 4,023,470 --
Accumulated deficit (15,084,037) (15,841,727)
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Total stockholders' deficit (2,192,844) (2,183,816)
----------- -----------
----------- -----------
$ 1,016,496 $ 1,957,518
=========== ===========
See accompanying notes to financial statements.
3
ECHOCATH, INC.
STATEMENT OF OPERATIONS
THREE MONTHS ENDED NOVEMBER 30, 1998 AND
NOVEMBER 30, 1999
(UNAUDITED)
1998 1999
REVENUE:
License fees $ -- $ 30,000
Product sales 15,719 --
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Cost of sales 7,725 --
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Gross profit 7,994 30,000
Operating expenses:
R&D 389,734 365,322
Marketing and G&A 283,555 276,567
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Total operating expenses 673,289 641,889
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Loss from operations (665,295) (611,889)
Net interest expense (16,480) (126,901)
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Net loss $(681,775) $ (738,790)
========= ==========
Basic and diluted net income per share $ (.26) $ (.28)
Weighted average shares outstanding 2,691,000 2,691,000
See accompanying notes to financial statements.
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ECHOCATH, INC.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED NOVEMBER 30, 1998 AND 1999
(UNAUDITED)
1998 1999
Cash flows from operating activities:
Net loss $ (681,775) $ (738,790)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 29,140 26,504
Deferred income -- 10,000
Change in operating assets & liabilities:
Decrease in trade accounts receivable 4,905 --
Decrease (increase) in inventory 3,415 (8,261)
Decrease in prepaid expenses and other current assets 9,632 20,846
Decrease in other assets 773 44,988
Increase (decrease) in accounts payable 59,594 (53,762)
Increase (decrease) in accrued expenses 58,594 (89,210)
(Decrease) in other liabilities (3,469) (5,203)
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Net cash used in operating activities (519,191) (792,888)
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Cash flows from investing activities:
Purchases of furniture, equipment and leasehold improvements (6,056) --
Purchases of intangible assets (8,890) (4,158)
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Net cash used in investing activities (14,946) (4,158)
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Cash flows from financing activities:
Principal payments on capital lease obligations (4,983) (4,832)
Principal payments on C.R. Bard note -- (75,000)
Proceeds from employee stock purchase plan 538 --
Proceeds from IPA notes 525,000 --
Class B preferred dividends (18,900) (18,900)
Debt issuance costs -- (35,909)
Proceeds from 6.5% convertible notes -- 1,150,000
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Net cash provided by financing activities 501,655 1,015,359
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Net (decrease) increase in cash and cash equivalents (32,482) 218,313
Cash and cash equivalents, beginning of year 256,234 26,264
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Cash and cash equivalents, end of period $ 223,752 $ 244,577
========= ==========
Supplemental disclosure of cash flow information:
Interest expense $ 19,018 $ 134,148
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See Footnote C for non-cash financing activities
See accompanying notes to financial statements.
5
ECHOCATH, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE A: GENERAL AND BUSINESS
The summary financial statements included herein have been prepared, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Management of EchoCath, Inc. (the "Company") believes
that the disclosures are adequate to make the information presented not
misleading. It is suggested that these summary financial statements be read in
conjunction with the financial statements and the notes thereto included in the
Company's Form 10-KSB for the fiscal year ended August 31, 1999.
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the continuation of operations, realization of assets
and liquidation of liabilities in the ordinary course of business. The financial
statements do not include any adjustments that might result from the outcome of
this certainty. In the opinion of management, all adjustments (consisting solely
of normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at November 30, 1998 and 1999
have been made.
NOTE B:
Inventories are summarized as follows:
August 31, 1999 November 30, 1999
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Raw Materials $ 44,325 $ 52,587
Work in Process -- --
Finished Goods -- --
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$ 44,325 $ 52,587
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NOTE C:
PRIVATE PLACEMENT OFFERING
On October 29, 1999 the Company completed a private placement offering. The
offering consisted of Units of (i) a $25,000 convertible promissory note and
(ii) a three-year warrant to purchase 33,333 shares of Class A Common Stock. A
total of 3,366,633 warrants were issued. The notes bear interest at 6.5% per
annum and mature three-years from the date of the final closing October 29,
1999, unless previously converted into Class A Common Stock. A total of
$2,525,000 of notes were issued through the private placement, of which
$1,250,000 are convertible into shares of Common Stock at the option of the
holder, at any time prior to the maturity date, at a rate of one share of Class
A Common Stock for each $0.75 of debt (plus accrued and unpaid interest) and
$1,275,000 of which are convertible at the market price on the date of
conversion, but not less than $0.25 (plus accrued and unpaid interest); the
notes are also convertible at the option of the Company, on the maturity date,
at a conversion price equal to the lesser of $0.75 or the average closing sale
price of the share of Class A Common Stock over the five day period immediately
prior to the maturity date, but not less than $0.25 per share. Each warrant
entitles the holder to purchase one share of Class A Common Stock at an exercise
price of $0.75 per share. The offering resulted in net proceeds of $1,684,358,
and the conversion of $525,000 of 6.5% convertible debentures into the same
convertible debt offered under the private placement described above. In
connection with the warrants issued, the Company recorded debt issuance costs
totaling $673,327, plus $30,642 of other debt issuance costs. The warrants were
valued at $.20 per share using the Black-Scholes pricing model. The debt
issuance costs will be amortized over the life of the debt.
The holders of the Company's Class B Common Stock maintain "super voting"
rights, whereby they are entitled to 5 votes per Class B Common Share. As a
condition to the offering, holders of a minimum of 900,000 shares of the
Company's Class B Common Stock were required to convert their shares into Class
A Common Stock at a ratio of 1 to 1. Additionally, each Class B Common
shareholder converting their shares received a three-year warrant to purchase
shares of Class A Common Stock for an equal number of shares, exercisable at
$.75 per share. A total of
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1,172,018 warrants were issued. As of November 30, 1999, all shares of Class B
Common Stock have been converted into Class A Common Stock. In connection with
the warrants issued, the Company recorded issuance costs totaling $234,000. The
warrants were valued at $.20 per warrant using the Black-Scholes pricing model.
The issuance cost will be amortized over the life of the debt.
The Placement Agents for the private placement offering are entitled to cash
compensation equal to 10% of the gross proceeds of the offering and 400,000
five-year warrants to purchase up to 400,000 shares of Class A Common Stock at
$0.75 per share. In connection with the warrants issued, the Company recorded
issuance costs totaling $80,000, plus $200,000 for the placement agent fees. The
warrants were valued at $0.20 per warrant using the Black-Scholes pricing model.
The issuance costs will be amortized over the life of the debt.
Pursuant to the terms of the private placement, the Company has agreed to offer
(a "Rights Offering") to its Class A Common Shareholders as soon as is
practicable and efficacious (i) a right to purchase one share of Class A Common
Stock at a price per share equal to the market price immediately prior to the
effective date of a registration statement covering the Rights Offering and (ii)
a three-year warrant to purchase one share of Class A Common Stock at such
market price. The Placement Agents are entitled to a commission equal to 11.25%
of the gross proceeds of the Rights Offering and five-year warrants to purchase
a number of shares of Class A Common Stock equal to 11.25% of the number of
shares sold in the Offering, at an exercise price of $.75 per share. The Rights
Offering, if and when made, will be made only by means of a prospectus.
NOTE D:
DEVELOPMENT AND LICENSE AND DISTRIBUTION AGREEMENTS
On December 30, 1996 the Company announced that it entered into an exclusive
license agreement with Medtronic, Inc. for the licensing of EchoMark'r' and
ColorMark'r' proprietary technologies for certain medical procedures. The total
payments to the Company under the December 1996 Medtronic Agreement have been
$265,000, including a payment of $65,000 pursuant to a termination agreement in
February 1999.
The Company entered into an exclusive license agreement dated February 27, 1997
with EP MedSystems, Inc. (EP MedSystems). The agreement provides that certain
products can be incorporated into the EP MedSystems' diagnostic catheter line.
The Company may potentially receive development milestone payments of up to
$150,000. Milestones include the sale of a limited quantity of product. When
products are commercially available the Company will receive royalties under the
terms of the agreement. The Company has received no milestone payment but it has
earned minimum royalties of $30,000 per quarter starting with calendar quarter
beginning January 1999 under this agreement. The agreement provides that any
royalty payment can be reduced, but not to an amount below zero, by an amount
equal to the amount of any dividends under the Company's Series B cumulative
preferred stock which are accrued but not paid as of that date. As of November
30, 1999, $110,000 of royalties due have been used to reduce accrued dividends.
As of November 30, 1999 the Company has $98,000 of accrued preferred stock
dividends, which is included as a component of other liabilities on the
accompanying Balance Sheet.
The Company entered into an option agreement on January 11, 1999 with another
company for the licensing of certain technology. The term of the option was
three months and the non-refundable consideration received for the option was
$100,000. The Company extended the option to June 11, 1999 for additional
consideration of $60,000, but did not renew the option beyond June 11, 1999. The
option has now expired.
The Company entered into an option agreement on April 16, 1999 with another
company for the licensing of certain technology. The term of the option was
three months, and the non-refundable consideration received for the option was
$35,000. The option has been extended at the election of the holder for up to
three one-month periods upon payment of a non-refundable fee to the Company of
$10,000 per month. As of September 20, 1999 a new agreement was reached
extending the term of the option for four additional months starting November 1,
1999 upon monthly payments of $10,000 per month.
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NOTE E:
PREFERRED STOCK SUBSCRIPTION AGREEMENT
The Company entered into a subscription agreement dated February 27, 1997 with
EP MedSystems. EP MedSystems purchased 280,000 shares of the Company's Series B
cumulative convertible preferred stock for $1,400,000. The agreement provides
for an annual dividend of $.27 per share. The Company can redeem the preferred
stock if certain performance goals of the Class A common stock are achieved. The
Series B preferred stock is convertible into Class A common stock. The
conversion of Series B cumulative convertible preferred stock to Class A common
stock will be at the conversion rate of 1 share of Class A common stock for each
1.2 shares of Series B cumulative preferred stock through 1999. Thereafter, the
conversion rate shall be 1 share of Class A common stock issuable for each 1.3
shares of Series B cumulative convertible preferred stock. See Part II, Item 1,
Legal Proceedings.
NOTE F:
NET LOSS PER SHARE
Basic and dilutive net loss per common share for fiscal quarters ending November
30, 1998 and 1999 is calculated based upon net loss after cumulative Series B
preferred stock dividends of $18,900 in both quarters, divided by the weighted
average number of shares of common stock outstanding during that period. For
purposes of the diluted loss per share calculation, the exercise or conversion
of all potential common shares is not included since their effect would be
antidilutive for all periods presented.
NOTE G:
COMPREHENSIVE INCOME
The net loss of $681,775 and $738,790 recorded for the quarter ended November
30, 1998 and 1999, respectively, is equal to the comprehensive loss for those
periods.
NOTE H:
BARD DEBT
On September 24, 1993, the Company entered into an exclusive worldwide
development, supply and license agreement with Bard Radiology, C.R. Bard, Inc.
(Bard). As part of this agreement, Bard provided to the Company an advance of
$540,000 in order to assist the Company with its manufacturing obligations. This
advance was evidenced by a note payable issued by the Company to Bard, which is
secured by virtually all of the Company's inventory, furniture and equipment.
The development, supply and license agreement was terminated on October 28,
1996. The note bears interest of prime plus 1% and was due December 31, 1998.
The carrying amount of this note approximates its fair value due to the variable
nature of interest rates. The principal and accrued interest due as of November
30, 1999 is $652,445.
On November 23, 1999, the Company reached an agreement to refinance its Bard
debt. In order to satisfy the Bard debt obligation, the Company is required to
make principal payments of $75,000 immediately, 10% of net funds that are
received from subsequent financing, licensing and royalty activity beginning
January 1, 2000 with a minimum payment of $150,000, and beginning with the first
quarter of 2001 and continuing thereafter 7.5% of net revenue and financing
received in that quarter, with a minimum payment of $75,000 every six months
until the indebtedness is repaid. Interest on the unpaid balance of the debt
shall accrue at the rate of prime plus 1% and continue to accrue until full
payment of all principal and interest outstanding.
8
NOTE I:
NEED FOR ADDITIONAL FINANCING
At November 30, 1999 the Company had a working capital deficiency of $700,760.
The report of the Company's independent auditors on the Company's fiscal year
ended August 31, 1999 financial statements included an explanatory paragraph
which stated that the Company's recurring losses from operations, its net
capital deficiency, and negative working capital raises substantial doubt about
the Company's ability to continue as a going concern. The financial statements
do not include any adjustment that might result from the outcome of this
uncertainty. The Company is in immediate need of additional financing and does
not expect its existing cash, together with funds anticipated to be generated
through operations, to be sufficient to meet the Company's cash requirements
beyond March 2000.
The Company's ability to continue with its plans is contingent upon its ability
to obtain sufficient cash flow from operations or to obtain additional financing
from external sources. The Company expects that additional cash resources will
be available either through financing provided by the completion of license
agreements and strategic alliances, a rights offering or, if necessary, by
reducing the level of its operational expenses by deferring certain research and
development or marketing expenses. There can be no assurances that the Company
will be able to complete the aforementioned license agreements and strategic
alliances on acceptable terms or at all. The Company will need substantial
additional financing in order to continue development of and commercialize
certain of its proposed products and other potential products. The Company has
no binding commitments from any third parties to provide funds to the Company.
While the Company anticipates funding from private equity placements and other
sources, there can be no assurances that the Company will be able to obtain
financing from any other sources on acceptable terms or at all.
NOTE J:
SUBSEQUENT EVENT: SALE OF TAX BENEFITS
As of December 20, 1999, The Company sold tax benefits under the New Jersey
Corporation Business Tax Benefit Certificate Transfer Program for $447,956.
NOTE K:
SEGMENT INFORMATION
The Company is managed and operated as one business. The entire business is
comprehensively managed by a single management team that reports to the Chief
Executive Officer. The Company does not operate separate lines of business or
separate business entities with respect to any of its products. In addition, the
Company does not directly conduct any of its operations outside of the United
States. Accordingly, the Company does not prepare discrete financial information
with respect to separate product areas or by location and does not have separate
reportable segments as defined by SFAS No. 131.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
-------------------------------------------------
GENERAL
Certain statements in this Report on Form 10-QSB ("Report") under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operation" and elsewhere constitute "forward-looking statements" within the
meaning of Private Securities Litigation Reform Act of 1995, including, without
limitation, statements regarding future cash requirements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance, or achievements of the Company,
or industry results, to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: limited
commercial operations; no assurances of success; need for additional financing;
uncertainty of market acceptance;
9
reliance on collaborative agreements; competition and rapid technological
change; failure to receive or delays in receiving regulatory approval; limited
manufacturing and assembly experience; limited marketing and sales experience;
dependence upon, and need for, key personnel; uncertain protection of patent and
proprietary rights; lack of reimbursement; general economic and business
conditions; industry capacity; industry trends; demographic changes; changes in
business strategy or development plans; quality of management; availability,
terms and deployment of capital; potential adverse impact of FDA and other
government regulations; limitations on third party reimbursement; potential
adverse impact of anti-remuneration laws; potential product liability; risk of
loss in lawsuit; risk of low prices stocks; and other factors referenced in this
Report. When used in this Report, statements that are not statements of material
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, the words "anticipates," "plans," "intends," "estimates," "projects,"
"believes," "expects" and similar expressions are intended to identify such
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to publicly release the result of any revisions
to these forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
RESULTS OF OPERATIONS
Three Months Ended November 30, 1998 and 1999
REVENUE:
The Company had revenues of $30,000 from royalties for the quarter ended
November 30, 1999, and revenues of $15,719 from product sales for the quarter
ended November 30, 1998.
RESEARCH AND DEVELOPMENT:
Research and Development expenses decreased $24,412 or 6.2% during the three
months ended November 30, 1999 primarily attributable to the costs associated
with the reallocation of facilities space and decreased payroll costs that was
partially offset by an increase in materials purchased.
MARKETING, GENERAL AND ADMINISTRATIVE:
Marketing, General and Administrative expenses decreased $6,988 or 2.4%
primarily attributable to lower consultant and insurance costs in the current
quarter.
INTEREST EXPENSE:
Interest expense increased $110,421 or 770.1% primarily attributable to the
amortization of debt issuance costs resulting from the completion of the
private placement and the increase in debt in the current quarter.
LIQUIDITY AND CAPITAL RESOURCES
NEED FOR ADDITIONAL FINANCING
At November 30, 1999 the Company had a working capital deficiency of $700,760.
The report of the Company's independent auditors on the Company's fiscal year
ended August 31, 1999 financial statements included an explanatory paragraph
which stated that the Company's recurring losses from operations, its net
capital deficiency, and negative working capital raises substantial doubt about
the Company's ability to continue as a going concern. The financial statements
do not include any adjustment that might result from the outcome of this
uncertainty. The Company is in immediate need of additional financing and does
not expect its existing cash, together with funds anticipated to be generated
through operations, to be sufficient to meet the Company's cash requirements
beyond March 2000.
10
The Company's ability to continue with its plans is contingent upon its ability
to obtain sufficient cash flow from operations or to obtain additional financing
from external sources. The Company expects that additional cash resources will
be available either through financing provided by the completion of license
agreements and strategic alliances, a rights offering or, if necessary, by
reducing the level of its operational expenses by deferring certain research and
development or marketing expenses. There can be no assurances that the Company
will be able to complete the aforementioned license agreements and strategic
alliances on acceptable terms or at all. The Company will need substantial
additional financing in order to continue development of and commercialize
certain of its proposed products and other potential products. The Company has
no binding commitments from any third parties to provide funds to the Company.
While the Company anticipates funding from private equity placements and other
sources, there can be no assurances that the Company will be able to obtain
financing from any other sources on acceptable terms or at all.
YEAR 2000 COMPATIBILITY
The Company has determined the potential impact of the Year 2000 on its
computerized information systems to accurately process information that may be
date-sensitive. Any of the Company's programs or computer-assisted systems that
recognize a date using "00" as the year 1900 rather than the Year 2000 could
result in errors or systems failures. It is also possible that certain computer
systems or software products of the Company's suppliers and contractors may not
be year 2000 compatible. The Company is requesting assurances from all software
vendors from which it has purchased or from which it may purchase software that
such software will correctly process all date information at all times.
Furthermore, the Company has requested its suppliers and contractors to notify
EchoCath of their progress in identifying and addressing problems that their
computer and other technological systems will face in correctly processing date
information as the Year 2000. The Company has completed its assessment, and
believes that it is Year 2000 compliant. The costs associated with the Year 2000
assessment remediation and testing have not had material impact on the Company's
operating results. The Company has not experienced any Year 2000 problems.
PART II: OTHER INFORMATION
Item 1: Legal Proceedings
On October 16, 1997, EP MedSystems delivered to the Company a complaint
subsequently amended (the "Complaint") filed in the United States District Court
for the District of New Jersey (the "Court") in connection with the Company's
sale of securities to EP MedSystems pursuant to a Subscription Agreement, dated
as of February 27, 1997, by and between the Company and EP MedSystems. In the
Complaint, EP MedSystems alleges that the Company violated Section 10(b) of the
Exchange Act and committed common law fraud in connection with EP MedSystems'
purchase of securities from the Company. EP MedSystems requested unspecified
compensatory damages, costs, attorneys' fees and punitive damages. On November
26, 1997, pursuant to an order of the Court, the Company filed an Answer,
without prejudice to its right to move to dismiss the Complaint, denying the
material allegations of the Complaint, and asserting a counterclaim against EP
MedSystems seeking its costs and expenses in the action, including its
attorneys' fees, based on EP MedSystems' breach of the Subscription Agreement.
On October 20, 1998, the Court dismissed the suit with prejudice, but did not
decide on the Company's outstanding counterclaims against EP MedSystems. On June
9, 1999 EP MedSystems filed an appeal of that dismissal. If the appeal is
successful, the suit will be reinstated. The appellate court on December 7, 1999
heard oral arguments of the appeal. A decision on the matter is not expected
until February 2000.
Item 2: Changes in Securities and Use of Proceeds - None
Item 3: Defaults Upon Senior Securities - None
Item 4: Submission of Matters to a Vote of Security Holders - None
11
Item 5: Other Information - None
Item 6: Exhibits and Reports on Form 8-K
a) 27) Financial Data Schedule
b) None
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: January 18, 2000
EchoCath, Inc.
----------------------------
(Registrant)
By: /s/ Frank DeBernardis
---------------------
Frank DeBernardis
President, Chief Executive Officer,
Principal Financial and Accounting
Officer
13
STATEMENT OF DIFFERENCES
The registered trademark symbol shall be expressed as......................'r'