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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
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: 0-27605
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VASCULAR SOLUTIONS, INC.
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(Exact name of registrant as specified in its charter)
MINNESOTA 41-1859679
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(State of Incorporation) (IRS Employer Identification No.)
2495 Xenium Lane North
MINNEAPOLIS, MINNESOTA 55441
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(Address of Principal Executive Offices)
(763) 656-4300
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(Registrant's telephone number, including are code)
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past
12 months (or for such shorter period that the registrant was required to file
such reports), and has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
The registrant had 13,187,907 shares of common stock, $.01 par value per share,
outstanding as of May 1, 2001.
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VASCULAR SOLUTIONS, INC.
INDEX
PAGE
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statements of Cash Flows 4
Notes to Unaudited Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
Item 3. Quantitative and Qualitative Disclosure About Market Risks 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities and Use of Proceeds 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
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VASCULAR SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
2001 2000
------------- -------------
(Unaudited) (Note)
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 40,922,504 $ 44,097,563
Accounts receivable, net of allowance for doubtful
accounts of $110,000 in 2001 and $80,000 in 2000 . . . . . . . . . 1,988,597 1,971,383
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,766,196 2,466,445
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 245,492 231,251
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . 45,922,789 48,766,642
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . 902,544 894,094
------------ ------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 46,825,333 $ 49,660,736
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,021,505 $ 933,059
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . 576,273 1,344,995
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 287,659 188,792
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . 1,885,437 2,466,846
Commitments and contingencies
Shareholders' equity:
Common Stock, $.01 par value:
Authorized shares - 16,222,223
Issued and outstanding - March 31,
2001 - 13,142,198; December 31, 2000 - 13,116,008 . . . . . . 131,422 131,160
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . 70,047,744 69,965,240
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,869) (38,182)
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,209,401) (22,864,328)
------------ ------------
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . 44,939,896 47,193,890
------------ ------------
Total liabilities and shareholders' equity . . . . . . . . . . . . . . . $ 46,825,333 $ 49,660,736
============ ============
See accompanying notes.
Note: The balance sheet at December 31, 2000 has been derived from the audited
financial statements at that date.
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VASCULAR SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
MARCH 31,
--------------------------------
2001 2000
----------- -----------
(unaudited)
Net sales . . . . . . . . . . . . . . . . . . . . . $ 3,123,082 $ 642,545
Cost of goods sold . . . . . . . . . . . . . . . . . 1,217,568 348,851
----------- -----------
Gross profit . . . . . . . . . . . . . . . . . . . . 1,905,514 293,694
Operating expenses:
Research and development . . . . . . . . . . . 968,790 691,723
Clinical and regulatory . . . . . . . . . . . 337,051 189,904
General and administrative . . . . . . . . . . 581,201 563,572
Sales and marketing . . . . . . . . . . . . . 3,006,177 901,315
----------- -----------
Total operating expenses . . . . . . . . . . . . . . 4,893,219 2,346,514
----------- -----------
Operating loss . . . . . . . . . . . . . . . . . . . (2,987,705) (2,052,820)
Interest income . . . . . . . . . . . . . . . . . . 642,632 121,699
----------- -----------
Net loss . . . . . . . . . . . . . . . . . . . . . . $(2,345,073) $(1,931,121)
=========== ===========
Basic and diluted net
loss per share . . . . . . . . . . . . . . . . $ (0.18) $ (0.37)
=========== ===========
Shares used in computing
basic and diluted net loss
per share . . . . . . . . . . . . . . . . . . 13,133,287 5,254,603
=========== ===========
See accompanying notes.
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VASCULAR SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED
MARCH 31,
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2001 2000
----------- ------------
(unaudited)
OPERATING ACTIVITIES
Net loss for the period . . . . . . . . . . . . . . . . . . . . . $(2,345,073) $ (1,931,121)
Adjustments to reconcile net loss:
Depreciation and amortization . . . . . . . . . . . . . . . . 101,883 80,724
Value of options granted for services . . . . . . . . . . . . 10,398 --
Deferred compensation expense . . . . . . . . . . . . . . . . 18,210 18,312
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . (17,214) (227,091)
Inventories . . . . . . . . . . . . . . . . . . . . . . . (299,751) (241,733)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . (14,241) (2,746)
Accounts payable . . . . . . . . . . . . . . . . . . . . 88,446 (110,599)
Accrued compensation and expenses . . . . . . . . . . . . (669,855) 86,033
----------- ------------
Net cash used in operating activities . . . . . . . . . . . . . . (3,127,197) (2,328,221)
INVESTING ACTIVITIES
Purchases of property and equipment . . . . . . . . . . . . . (110,333) (158,497)
----------- ------------
Net cash used in investing activities . . . . . . . . . . . . . . (110,333) (158,497)
FINANCING ACTIVITIES
Proceeds from exercise of stock options . . . . . . . . . . . 72,368 22,200
----------- ------------
Net cash provided by financing activities . . . . . . . . . . . . 72,368 22,200
----------- ------------
Effect of exchange rate changes on cash and cash equivalents . . . (9,897) --
Increase (decrease) in cash and cash equivalents . . . . . . . . . (3,175,059) (2,464,518)
Cash and cash equivalents at beginning of period . . . . . . . . . 44,097,563 10,529,191
----------- ------------
Cash and cash equivalents at end of period . . . . . . . . . . . . $40,922,504 $ 8,064,673
=========== ============
See accompanying notes.
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VASCULAR SOLUTIONS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The accompanying unaudited financial statements of Vascular Solutions,
Inc. (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all normal, recurring
adjustments considered necessary for a fair presentation have been
included. The financial statements should be read in conjunction with
the audited financial statements for the year ended December 31, 2000
included in the Annual Report on Form 10-K of the Company filed with the
Securities and Exchange Commission. Interim results of operations are
not necessarily indicative of the results to be expected for the full
year or any other interim periods.
(2) COMPUTATION OF NET LOSS PER SHARE
In accordance with Statement of Financial Accounting Standards No. 128,
Earnings Per Share, (SFAS 128), basic net loss per share for the three
months ended March 31, 2001 and 2000 is computed by dividing net loss by
the weighted average common shares outstanding during the periods
presented. Diluted net loss per share is computed by dividing net loss
by the weighted average common and dilutive potential common shares
outstanding computed in accordance with the treasury stock method. For
all periods presented, diluted loss per share is the same as basic loss
per share, because the effect of outstanding options, warrants and
convertible preferred stock is antidilutive.
(3) REVENUE RECOGNITION
In the United States and Germany, the Company sells its products
directly to hospitals and clinics. Revenue is recognized upon shipment
of products to customers.
In all other international markets, the Company sells its products to
international distributors which subsequently resell the products to
hospitals and clinics. The Company has agreements with each of its
distributors which provide that title and risk of loss pass to the
distributor upon shipment of the products to the distributor. The
Company warrants that its products are free from manufacturing defects
at the time of shipment to the distributor. Revenue is recognized upon
shipment of products to distributors following the receipt and
acceptance of a distributor's purchase order. Allowances are provided
for estimated warranty costs at the time of shipment. To date, warranty
costs have been insignificant.
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VASCULAR SOLUTIONS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(4) INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out method)
or market and are comprised of the following at:
MARCH 31, DECEMBER 31,
2001 2000
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(unaudited)
Raw materials........................... $ 2,060,860 $1,746,279
Work-in process......................... 445,927 371,176
Finished goods.......................... 259,409 348,990
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$2,766,196 $2,446,445
(5) CONCENTRATIONS OF CREDIT AND OTHER RISKS
Financial instruments that potentially subject the Company to
concentrations of credit risk consist primarily of cash and cash
equivalents and accounts receivables. The Company maintains its accounts
for cash and cash equivalents principally at one major bank and two
investment firms in the United States. The Company has a formal written
investment policy that restricts the placement of investments to issuers
evaluated as creditworthy. The Company has not experienced any losses on
its deposits of its cash and cash equivalents.
With respect to accounts receivable, the Company performs credit
evaluations of its customers and does not require collateral. Sales by
geographic destination as a percentage of total net sales for the three
months ended March 31, 2001 and 2000 were 88% and 3% in the United
States, respectively, and 12% and 97% in international markets,
respectively. One customer accounted for 13% of total accounts
receivable as of March 31, 2001. The same customer accounted for 17% of
total accounts receivable as of December 31, 2000. There have been no
material losses on accounts receivable.
The Company operates in a single industry segment and sells its product
directly to hospitals and clinics in the United States and Germany. In
all other international markets, the Company sells its product to
distributors who, in turn, sell to medical clinics. The Company sells
its product in foreign countries through independent distributors
denominated in United States dollars. Loss, termination or
ineffectiveness of distributors to effectively promote the Company's
product would have a material adverse effect on the Company's financial
condition and results of operations.
No single customer represented greater than 10% of the total net sales
for the three months ended March 31, 2001. Sales to significant
customers as a percentage of total net sales are as follows for the
three months ended March 31, 2000:
Customer A................................................... 25.7%
Customer B................................................... 25.5%
Customer C................................................... 17.9%
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VASCULAR SOLUTIONS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(6) INITIAL PUBLIC OFFERING
On July 25, 2000, the Company completed the initial public offering of
its common stock. Upon the closing of the initial public offering, the
Company issued 3,500,000 shares of its common stock at an offering price
of $12.00 per share and all of the Company's Series A and Series B
preferred stock automatically converted into 3,777,777 shares of common
stock. On August 15, 2000, the underwriters exercised in full their
over-allotment option to purchase an additional 525,000 shares of common
stock at $12.00 per share. Cash proceeds from the sale of the 4,025,000
shares of common stock, net of underwriters' discount and offering
expenses, totaled approximately $44.0 million. Upon closing of the
Company's initial public offering, the authorized capital stock of the
Company consisted of 40,000,000 shares of common stock, par value $.01
per share, with no shares of preferred stock outstanding or designated.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The Company develops, manufactures and markets the Vascular Solutions
Duett(TM) sealiNG device. Our Duett sealing device is designed to seal the
entire puncture site following catheterization procedures such as angiography,
angioplasty and stenting. We commenced operations in February 1997, and during
1998 and 1999 we received regulatory approvals to market our Duett sealing
device in several international markets, principally in Europe. On June 22,
2000, we received approval from the FDA of our PMA application for the sale of
our Duett sealing device in the United States. As a result, during the third
quarter of 2000 we commenced sales of our product in the United States through
our direct sales force.
We have a limited history of operations and have experienced significant
operating losses since inception. As of March 31, 2001, we had an accumulated
deficit of $25.2 million. We commenced international sales in February 1998.
From inception through June 2000, we generated substantially all of our revenue
from sales to international distributors who resell the device to medical
clinics.
Although we have experienced revenue growth in recent periods, this growth
may not be sustainable and, therefore, these recent periods should not be
considered indicative of future performance. We may never achieve profitability,
or if we achieve profitability it may not be sustained in future periods.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000
Net sales increased 386% to $3,123,082 for the three months ended March 31,
2001 from $642,545 for the three months ended March 31, 2000. The increase in
net sales was attributable to the United States market launch of our Duett
sealing device which began in July 2000. As a result, 88% of net sales for the
three months ended March 31, 2001 were to customers in the United States while
12% of the net sales were to customers in international markets.
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Gross profit as a percentage of net sales increased to 61% for the three
months ended March 31, 2001 from 46% for the three months ended March 31, 2000.
This increase as a percentage of net sales resulted from the initiation of
United States sales of the Duett sealing device, a decrease in cost of goods
sold due to the conversion to the Duett Model 2000 for international sales in
the fourth quarter of 1999, increased volume and improved manufacturing
processes. The Duett Model 2000 incorporates minor modifications to the
procoagulant components and different vendors for certain components, resulting
in lower cost of goods compared to the original Duett Model 1000. The approval
we received from the FDA in June 2000 applies to the Duett Model 1000. We will
not be able to sell the Duett Model 2000 in the United States until we receive
approval of a PMA supplement. We do not expect to receive FDA approval of a PMA
supplement for the Duett Model 2000 prior to the second quarter of 2002.
Research and development expenses increased 40% to $968,790 for the three
months ended March 31, 2001 from $691,723 for the three months ended March 31,
2000. This increase was attributable to continued work on product improvements
and exploring new product line extensions. The Company's first product line
extension is the Duett hemostat which is a surgical hemostat using the
procoagulant components of the Duett sealing device. The Duett hemostat is
intended to be used to control active bleeding in open surgical procedures. The
Company's second product line extension is the Duett pseudoaneurysm closure,
which also uses the Duett procoagulant components and a simple delivery system
to close pseudoaneurysms. A pseudo-aneurysm is a complication which occurs in
approximately 1-3% of patients following a catheterization procedure and often
requires a surgical procedure to repair. We expect our research and development
expenses to increase modestly through the remainder of 2001 as we continue work
on product improvements and the product line extensions.
Clinical and regulatory expenses increased 77% to $337,051 for the three
months ended March 31, 2001 from $189,904 for the three months ended March 31,
2000. These expenses consist primarily of payments to clinics for participation
in clinical studies, company personnel related to clinical study administration
and payments to regulatory agencies as part of the product approval process. The
increase is attributed to additional regulatory activities for the Duett 2000
and the initial clinical work related to the new product line extensions. We
expect clinical and regulatory expenses to increase modestly during 2001 as we
pursue additional regulatory approval the Duett 2000 and new products.
Sales and marketing expenses increased 234% to $3,006,177 for the three
months March 31, 2001 from $901,315 for the three months ended March 31, 2000.
This increase was due primarily to $1,290,000 in increased personnel costs
associated with hiring, training and deploying a direct United States sales
force and $452,000 associated with travel, marketing and physician training for
the domestic and international distribution of our Duett sealing device. We
currently anticipate that sales and marketing expenses will increase through
2001 as we continue to hire, train and deploy our direct sales force in the
United States.
General and administrative expenses increased 3% to $581,201 for the three
months ended March 31, 2001 from $563,572 for the three months ended March 31,
2000. Personnel costs and litigation expenses have remained relatively stable
compared to the prior year. We anticipate that general and administrative
expenses will increase by modest amounts through 2001 as we continue to incur
substantial litigation expenses related to existing patent infringement claims
(See "Legal Proceedings" in Item 1 of Part II of this Form 10-Q).
Interest income increased to $642,632 for the three months ended March 31,
2001 from $121,699 for the three months ended March 31, 2000 primarily as a
result of higher cash balances from the cash proceeds received upon the closing
of our initial public offering in July 2000.
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INCOME TAXES
We have not generated any pre-tax income to date and therefore have not
paid any federal income taxes since inception in December 1996. No provision or
benefit for federal and state income taxes has been recorded for net operating
losses incurred in any period since our inception.
As of March 31, 2001, we had approximately $22.0 million of federal net
operating loss carryforwards available to offset future taxable income which
begin to expire in the year 2013. As of March 31, 2001, we also had federal and
state research and development tax credit carryforwards of approximately $1.2
million which begin to expire in the year 2013. Under the Tax Reform Act of
1986, the amounts of and benefits from net operating loss carryforwards may be
impaired or limited in certain circumstances, including significant changes in
ownership interests. Future use of our existing net operating loss carryforwards
may be restricted due to changes in ownership or from future tax legislation.
We have established a valuation allowance against the entire amount of our
deferred tax asset because we have not been able to conclude that it is more
likely than not that we will be able to realize the deferred tax asset, due
primarily to our history of operating losses.
LIQUIDITY AND CAPITAL RESOURCES
We have financed all of our operations since inception through the issuance
of equity securities. Through March 31, 2001, we had sold common stock and
preferred stock generating aggregate net proceeds of $69.5 million. At March 31,
2001, we had $40.9 million in cash and cash equivalents on-hand. During the
three months ended March 31, 2001, we used $3.1 million of cash and cash
equivalents in operating activities. The cash used in operating activities was
primarily used to fund our net loss for the period of $2.3 million and increase
inventories to support our increased operations. Our capital expenses to acquire
manufacturing and office equipment totaled $110,000 during the three months
ended March 31, 2001.
We do not have any significant cash commitments related to supply
agreements, nor do we have any commitments for capital expenditures.
We currently anticipate that we will continue to experience significant
growth in our expenses for the foreseeable future and our expenses will be a
material use of our cash resources. We anticipate that our operating losses will
continue through at least the remainder of 2001, as we plan to spend substantial
amounts hiring and training a direct United States sales force, funding sales
and marketing activities and creating and expanding research and development
initiatives. We believe that current cash balances along with cash generated
from the future sales of products will be sufficient to meet our operating and
capital requirements through at least the end of 2002. Our liquidity and capital
requirements beyond 2002 will depend on numerous factors, including the extent
to which our Duett sealing device gains market acceptance and competitive
developments.
CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
The Private Securities Litigation Reform Act of 1995 (the "Act") provides a
"safe harbor" for forward-looking statements to encourage companies to provide
prospective information about their business, so long as those statements are
identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those discussed in the statement. Vascular Solutions,
Inc. desires to take advantage of the safe harbor provisions with respect to any
forward-looking statements it may make in this filing, other
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filings with the Securities and Exchange Commission and any public oral
statements or written releases. The words or phrases "will likely," "is
expected," "will continue," "is anticipated," "estimate," "projected,"
"forecast," or similar expressions are intended to identify forward-looking
statements within the meaning of the Act. Such statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those projected. The Company cautions readers not to place undue reliance
on any such forward-looking statements, which speak only as of the date made. In
accordance with the Act, the Company identifies the following important general
factors which if altered from the current status could cause the Company's
actual results to differ from those described in any forward-looking statements:
risks associated with our limited operating history, defense of patent
infringement lawsuits, adoption of our new sealing methodology, reliance on a
sole product, lack of profitability, lack of experience with a direct sales
force, exposure to possible product liability claims, the development of new
products by others, dependence on third party distributors in international
markets, doing business in international markets, limited manufacturing
experience, the availability of third party reimbursement, actions by the FDA
related to the Duett sealing device, the loss of key vendors and those factors
set forth under the heading "Factors Affecting Future Operating Results" in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000. This
list is not exhaustive, and the Company may supplement this list in any future
filing with the Securities and Exchange Commission or in connection with the
making of any specific forward-looking statement.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
Financial instruments that potentially subject us to concentrations of
credit risk consist primarily of cash and cash equivalents and accounts
receivables. We maintain our accounts for cash and cash equivalents principally
at one major bank and two investment firms in the United States. We have a
formal written investment policy that restricts the placement of investments to
issuers evaluated as creditworthy. We have not experienced any losses on our
deposits of our cash and cash equivalents.
With respect to accounts receivable, we perform credit evaluations of our
customers and do not require collateral. There have been no material losses on
accounts receivables.
In the United States and Germany, we sell our products directly to
hospitals and clinics. Revenue is recognized upon shipment of products to
customers.
In all other international markets, we sell our products to independent
distributors who, in turn, sell to medical clinics. We sell our product in
foreign countries through independent distributors denominated in United States
dollars. Loss, termination or ineffectiveness of distributors to effectively
promote our product would have a material adverse effect on our financial
condition and results of operations.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In July 1999, we were named as the defendant in a patent infringement
lawsuit brought by Datascope Corp., a competitor, in the United States District
Court of the District of Minnesota. The complaint requested a judgment that our
Duett sealing device infringes and, following FDA approval, will infringe, a
United States patent held by Datascope and asks for relief in the form of an
injunction that would prevent us from selling our product in the United States
as well as an award of attorneys' fees, costs and disbursements. In August 1999,
we filed our answer to this lawsuit and moved for summary
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judgment to dismiss Datascope's claims. On March 15, 2000, the court granted
summary judgment dismissing all of Datascope's claims, subject to the right of
Datascope to recommence the litigation after our receipt of FDA approval of our
Duett sealing device. On July 12, 2000, after our receipt of FDA approval,
Datascope recommenced this litigation, alleging that the Duett sealing device
infringes a United States patent held by Datascope and requesting relief in the
form of an injunction that would prevent us from selling our product in the
United States, damages caused by our alleged infringement, and other costs,
disbursements and attorneys' fees. It is not possible to predict the timing or
outcome of this lawsuit, including whether we will be prohibited from selling
our Duett sealing device in the United States or internationally, or to estimate
the amount or range of potential loss, if any.
On July 3, 2000, we were named as the defendant in a patent infringement
lawsuit brought by the Daig division of St. Jude Medical, Inc., a competitor, in
the United States District Court of the District of Minnesota. The complaint
requests a judgment that our Duett sealing device infringes a series of four
patents held by St. Jude Medical and asks for relief in the form of an
injunction that would prevent us from selling our product in the United States,
damages caused by the manufacture and sale of our product, and other costs,
disbursements and attorneys' fees. It is not possible to predict the timing or
outcome of the St. Jude Medical litigation, including whether we will be
prohibited from selling our Duett sealing device in the United States or
internationally, or to estimate the amount or range of potential loss, if any.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.13 Vascular Solutions, Inc. Stock Option and Stock Award Plan, as
amended.
(b) Reports on Form 8-K:
The Company did not file any Current Report on Form 8-K during the
quarter ended March 31, 2001.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VASCULAR SOLUTIONS, INC.
Date: May 4, 2001 By: /s/ Jerry Johnson
--------------------------------------
Jerry S. Johnson
Chief Financial Officer
(Duly authorized officer and
principal financial and
accounting officer)
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