SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20459
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1999
COMMISSION FILE NUMBER 0-20970
VISION-SCIENCES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-3430173
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
9 STRATHMORE ROAD, NATICK, MA 01760
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 650-9971
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NONE
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(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 requirement for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of June 30, 1999.
COMMON STOCK, PAR VALUE OF $.01 19,223,021
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(Title of Class) (Number of Shares)
VISION-SCIENCES, INC.
TABLE OF CONTENTS
Part I. Item 1. Financial Information PAGE
----
Consolidated Balance Sheets................................................................3
Consolidated Statements of Operations......................................................4
Consolidated Statement of Stockholders' Equity.............................................5
Consolidated Statements of Cash Flows......................................................6
Notes to Consolidated Financial Statements..............................................7-10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..........................................................11-13
Item 3. Qualitative and Quantitative Disclosure about Market Risk.................................14
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K .........................................................15
Signature..........................................................................................16
2
VISION-SCIENCES, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, March 31,
1999 1999
--------------- --------------
ASSETS (AUDITED)
Current Assets:
Cash and cash equivalents ........................... $ 1,587,925 $ 2,224,863
Marketable securities ............................... 566,390 970,608
Accounts receivable, net of allowance for doubtful
accounts of $133,000 and $130,000, respectively . 1,114,968 1,089,371
Inventories ......................................... 780,465 633,571
Prepaid expenses and deposits ....................... 81,837 98,692
------------ ------------
Total current assets ............................ 4,131,585 5,017,105
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Property and Equipment, at cost:
Machinery and equipment ............................. 2,781,639 2,741,919
Furniture and fixtures .............................. 199,070 199,070
Motor vehicles ...................................... 23,956 23,956
Leasehold improvements .............................. 308,054 279,642
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3,312,719 3,244,587
Less-Accumulated depreciation and amortization ...... 2,669,082 2,561,713
------------ ------------
643,637 682,874
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Equity investment in 3DV Systems, Ltd. ................... 1,462,900 2,053,900
Other Assets, net of accumulated amortization of $17,000
and $22,000, respectively ........................... 113,439 128,457
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Total assets .................................... $ 6,351,561 $ 7,882,336
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Acceptances payable to a bank ....................... $ 86,406 $ 32,333
Accounts payable .................................... 636,646 452,378
Accrued expenses .................................... 1,709,645 1,601,977
Deferred development fee ............................ 180,821 345,821
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Total current liabilities ....................... 2,613,518 2,432,509
------------ ------------
Stockholders' Equity:
Common stock, $.01 par value--
Authorized--25,000,000 shares
Issued and outstanding--19,223,021 shares at
June 30, 1999 and 19,212,021 shares at
at March 31, 1999 ............................... 192,229 192,119
Additional paid-in capital .......................... 51,843,761 51,830,808
Accumulated deficit ................................. (48,297,947) (46,573,100)
------------ ------------
Total stockholders' equity ...................... 3,738,043 5,449,827
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Total liabilities and stockholders' equity ...... $ 6,351,561 $ 7,882,336
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See accompanying notes to consolidated financial statements.
3
VISION-SCIENCES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
June 30,
-----------------------------------
1999 1998
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Net sales................................ $ 1,501,173 $ 1,876,735
Cost of sales............................ 1,289,142 1,564,922
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Gross profit............................. 212,031 311,813
Selling, general and administrative
expenses................................. 830,399 689,962
Research and development expenses........ 51,090 52,528
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Loss from operations..................... (669,458) (430,677)
Interest income.......................... 34,175 35,481
Other income (expense), net.............. (1,089,564) 1,233
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Net loss................................. $ (1,724,847) $ (393,963)
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Basic and diluted net loss per common
share $ (0.09) $ (0.02)
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------------------ ------------------
Shares used in computing basic and diluted
net loss per common share 19,212,746 16,648,525
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------------------ ------------------
See accompanying notes to consolidated financial statements.
4
VISION-SCIENCES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
Common Stock
--------------------------------
Additional Total
Number $.01 Paid-in- Accumulated Stockholders'
of Shares Par Value Capital Deficit Equity
------------- ------------- ------------ ------------- ------------
Balance, March 31, 1999
(audited) 19,212,021 $ 192,119 $51,830,808 $(46,573,100) $ 5,449,827
Exercise of stock options 11,000 110 12,953 - 13,063
Net loss - - - (1,724,847) (1,724,847)
------------- ------------- ------------ ------------- ------------
Balance, June 30, 1999 19,223,021 $ 192,229 $51,843,761 $(48,297,947) $ 3,738,043
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See accompanying notes to consolidated financial statements.
5
VISION-SCIENCES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended Three Months Ended
JUNE 30, 1999 JUNE 30, 1998
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Cash flows from operating activities:
Net loss........................................................ $ (1,724,847) $ (393,963)
Adjustments to reconcile net loss to net cash
used for operating activities:
Depreciation and amortization................................. 108,954 103,038
Equity in losses of 3DV Systems, Ltd.......................... 1,091,000 --
Changes in assets and liabilities:
Accounts receivable......................................... (25,597) 216,118
Inventories................................................. (146,894) (31,865)
Prepaid expenses and deposits............................... 16,855 2,928
Accounts payable............................................ 184,268 224,927
Accrued expenses............................................ 107,668 (34,876)
Deferred development fee.................................... (165,000) --
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Net cash provided by (used for) operating activities...... (553,593) 86,307
----------- -----------
Cash flows provided by (used for) investing activities
Decrease in marketable securities............................... 404,218 993,146
Purchase of property and equipment.............................. (68,132) (1,537)
Investment in equity of 3DV Systems, Ltd......................... (500,000) (500,000)
Decrease in other assets........................................ 13,433 6,073
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Net cash used for investing activities.................... (150,481) 497,682
----------- -----------
Cash flows provided by financing activities:
Proceed from (payments of) acceptances payable to a bank........ 54,073 (42,330)
Exercise of Stock Options....................................... 13,063 21,316
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Net cash provided by financing activities................. 67,136 (21,014)
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Net increase (decrease) in cash and cash equivalents................. (636,938) 562,975
Cash and cash equivalents, beginning of period....................... 2,224,863 1,897,905
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Cash and cash equivalents, end of period............................. $ 1,587,925 $ 2,460,880
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See accompanying notes to consolidated financial statements.
6
VISION-SCIENCES, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The unaudited consolidated financial statements included herein have
been prepared by the Company in accordance with generally accepted
accounting principles, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission and include, in
the opinion of management, all adjustments (consisting only of normal
and recurring adjustments) that the Company considers necessary for a
fair presentation of such information. Certain information and footnote
disclosures normally included in financial statements have been
condensed or omitted pursuant to such rules and regulations. The
Company believes, however, that its disclosures are adequate to make
the information presented not misleading. These consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto included in the Company's latest
annual report to stockholders. The results for the interim periods
presented are not necessarily indicative of results to be expected for
the full fiscal year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements reflect the
application of certain accounting policies described below:
a. PRINCIPLES OF CONSOLIDATION: The accompanying consolidated
financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All material intercompany
accounts and transactions have been eliminated in
consolidation.
b. CASH EQUIVALENTS: Cash equivalents are carried at amortized
cost, which approximates market value. Cash equivalents are
short-term, highly liquid investments with original maturities
of less than three months.
c. INVENTORIES: Inventories are stated at the lower of cost or
market using the first-in, first-out (FIFO) method and consist
of the following:
June 30, March 31,
1999 1999
----------------- -----------------
(audited)
Raw materials................................................. $ 222,106 $ 169,653
Work-in-process............................................... 186,752 186,806
Finished goods................................................ 371,607 277,112
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$ 780,465 $ 633,571
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Work-in-process and finished goods inventories consist of
material, labor, and manufacturing overhead.
7
VISION-SCIENCES, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d. DEPRECIATION AND AMORTIZATION: The Company provides for
depreciation and amortization using the straight-line method
in amounts that allocate the cost of the assets to operations
over their estimated useful lives as follows:
Estimated
ASSET CLASSIFICATION USEFUL LIFE
-------------------- -----------
Motor vehicles ................................................................. 3 Years
Machinery and Equipment ........................................................ 3-5 Years
Furniture and Fixtures ......................................................... 5 Years
Leasehold improvements are amortized over the shorter of their
estimated useful lives or the lives of the leases.
e. BASIC AND DILUTED NET LOSS PER COMMON SHARE: Basic and diluted
net loss per common share is based on the weighted average
number of common shares outstanding. Shares of common stock
issuable pursuant to stock options and warrants have not been
considered, as their effect would be antidilutive.
f. REVENUE RECOGNITION: The Company recognizes revenue upon
product shipment.
g. FOREIGN CURRENCY TRANSACTIONS: The Company charges foreign
currency exchange gains or losses, in connection with its
purchases of products from vendors in Japan, to operations in
accordance with SFAS No. 52, FOREIGN CURRENCY TRANSLATION.
h. INCOME TAXES: The Company accounts for income taxes under the
liability method in accordance with SFAS No. 109, ACCOUNTING
FOR INCOME TAXES. Under SFAS No. 109, deferred tax assets or
liabilities are computed based upon the differences between
the financial statement and income tax bases of assets and
liabilities as measured by the enacted tax rates.
The Company has recorded a valuation allowance equal to its
net deferred tax asset due to the uncertainty of realizing the
benefit of this asset.
8
VISION-SCIENCES, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)
3. INVESTMENTS IN ISRAEL
(a) 3DV SYSTEMS LTD.
In the three months ended June 30, 1999, the Company loaned $500,000 to
3DV Systems Ltd. ("3DV"), an Israeli company in which the Company has a
25% interest. The loan was a non-interest bearing Convertible Capital
Note (the "Note"), issued pursuant to the Investment Agreement dated
August 6, 1998 between the Company and 3DV. The issuance of the Note is
part of the Company's commitment to finance the working capital needs
of 3DV for calendar years 1999 and 2000. The Note is convertible into
common stock of 3DV according to provisions of the Investment
Agreement. The Company recorded the Note as part of its investment in
3DV.
The Company accounts for its investment in 3DV using the equity method
of accounting. Due to the Company's commitment to finance the working
capital needs of 3DV, the Company absorbs 100% of the losses of 3DV. In
the three-month period ended June 30, 1999 3DV incurred losses of
$1,091,000, recorded as other expense by the Company.
(b) IMAGINEERING LTD. AND VISION-SCIENCES, LTD.
In the three months ended June 30, 1999, the Company recorded an
expense relating to payments made of $165,000 to fund Imagineering Ltd.
and Vision-Sciences, Ltd. This expense was offset by $165,000 of
deferred development fees received from Asahi Optical Co., Ltd.
("Asahi") pursuant to the License Agreement between the Company and
Asahi dated August 6, 1998.
4. SEGMENT INFORMATION
The Company has three reportable segments -- Medical, Industrial and
Corporate. The medical segment designs, manufactures and sells
EndoSheaths and sells endoscopes to users in the health care industry.
The industrial segment designs, manufactures and sells borescopes to a
variety of users, primarily in the aircraft maintenance industry. In
addition, the industrial segment manufactures and repairs endoscopes
for the medical segment. The corporate segment consists of certain
administrative expenses beneficial to the Company as a whole and the
management oversight of the Company's investment in 3DV Systems Ltd.,
Vision-Sciences Ltd and the Company's contractual relations with
Imagineering Ltd.
The accounting policies of the segments are described in the summary of
significant accounting policies. The Company evaluates segment
performance based upon operating income. Identifiable assets are those
used directly in the operations of each segment. Corporate assets
include cash, marketable securities and the investment in 3DV Systems
Ltd. The carrying value of 3DV at June 30, 1999 was $1,462,900. Data
regarding management's view of the Company's segments is provided in
the following table.
9
VISION-SCIENCES, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)
4. SEGMENT INFORMATION (CONTINUED)
Three months ended June 30, Medical Industrial Corporate Adjustments Total
- ------------------------------------------- --------------- --------------- ----------------- ---------------- -----------------
1999
Sales to external customers $ 607,950 $ 893,223 $ -- $ -- $ 1,501,173
Intersegment sales -- 117,070 -- (117,070) --
Interest income, net -- -- 34,175 -- 34,175
Operating income (loss) (500,713) (16,411) (152,334) -- (669,458)
Depreciation and amortization 96,128 10,830 1,996 -- 108,954
Other significant non-cash items:
Equity in losses of 3DV Systems -- -- (1,091,000) -- (1,091,000)
Total assets 2,355,934 1,034,972 3,641,171 (680,516) 6,351,561
Expenditures for fixed assets 66,132 2,000 -- -- 68,132
1998
Sales to external customers $ 967,192 $ 909,543 $ -- $ -- $ 1,876,735
Intersegment sales -- 32,908 -- (32,908) --
Interest income, net -- -- 35,481 -- 35,481
Operating income (loss) (330,627) 64,544 (164,594) -- (430,677)
Depreciation and amortization 90,973 12,065 -- -- 103,038
Other significant non-cash items:
Equity in losses of 3DV Systems -- -- -- -- --
Total assets 2,861,284 1,060,650 2,960,880 (935,923) 5,946,891
Expenditures for fixed assets 1,537 -- -- -- 1,537
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Except for the historical information herein, the matters discussed in this Form
10-Q include forward-looking statements that may involve a number of risks and
uncertainties. Future results may vary significantly based upon a number of
important factors including, but not limited to, risks in market acceptance of
new products and services and continuing demand for same, the impact of
competitive products and pricing, seasonality, changing economic conditions, the
ability of the Company to attain Year 2000 readiness and other risk factors
detailed in the Company's most recent annual report and other filings with the
Securities and Exchange Commission.
Net sales for the three months ended June 30, 1999 decreased $375,000, or 20%,
compared to the prior year three-month period. During this period sales of
medical products decreased by $359,000, or 37%, and sales of industrial products
decreased by $16,000, or 2%.
The decrease in medical sales was due primarily to a decrease in sales of ENT
endoscopes of $192,000 and decrease in sales of ENT EndoSheaths of $207,000. The
decline in sales of these products was due directly to the transition from
selling to one master distributor as the Company did in the fiscal period ended
June 30, 1998 to selling through the Company's own independent sales
representative network. This shift in strategy began April 1, 1999. The Company
expected this transition to take time due to the training required of its new
sales representatives, the time required to properly promote the Company's new
strategy to current and future customers and to the time required to allow the
former master distributor to deplete its inventory. The Company expects this
transition period may continue at least through the three months ending
September 30, 1999. The Company is committed to the strategy of selling directly
to end users, and believes it will result in higher sales and gross profit of
ENT products. However, there can be no assurance that this strategy will result
in higher sales.
The decline in sales of ENT products was partially offset by an increase in
sales of the Company's proprietary sigmoidoscope EndoSheaths of $126,000 in the
three months ended June 30, 1999 compared to the prior year three-month period.
This increase in sales is due primarily to increased demand in the three months
ended June 30,1999 compared to the same period ended June 30, 1998 when demand
was lower due to a price increase imposed by the Company on April 1, 1998. That
price increase encouraged customers to purchase larger amounts of EndoSheaths in
the fourth quarter of fiscal 1998, thus reducing demand in the first quarter of
fiscal 1999. Lower sales of sigmoidoscopes, and lower sales for repairs and
accessories accounted for the remainder of the reduction in medical sales.
The lower sales of industrial products in the three months ended June 30, 1999,
compared to the same period in fiscal 1999 were due primarily to slightly lower
demand during this period for the Company's products by the defense and aircraft
maintenance markets.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Gross profit for the three months ended June 30, 1999 decreased to $212,000, or
14% of net sales, compared to $312,000, or 17% of net sales for the comparable
prior year three-month period. The decrease in gross profit was due primarily to
the reduced volume of sales of ENT EndoSheaths, offset partially by the higher
sales of sigmoidoscope EndoSheaths. The Company expects gross profit to increase
significantly as sales of ENT EndoSheaths increase to levels comparable to prior
fiscal periods, due primarily to higher prices for the products.
Selling, general and administrative expenses for the three-month period ended
June 30, 1999 increased by 20%, or $140,000 compared to the prior year
three-month period. Selling, general and administrative expenses amounted to 55%
of net sales, compared to 37% in the three-month period ended June 30, 1998. The
increase in these expenses was primarily attributable to increased expenses for
commissions, product promotion, consulting and payroll, as the Company has
increased its efforts to promote its products through its new sales channel of
independent sales representatives, and to promote its new Slide-On(TM) ENT
EndoSheath.
Research and development expenses for the three months ended June 30, 1999
decreased $1,400 compared to the prior year three-month period. These expenses
amounted to 3% of net sales for each of the three-month periods ended June 30,
1999 and 1998.
Other expense, net for the three months ended June 30, 1999 increased by
$1,091,000 due to the equity in losses of 3DV Systems that the Company
recognized in the fiscal quarter ended June 30, 1999. The losses at 3DV were
larger than expected due to higher expenses for product promotion incurred
during the three months ended June 30, 1999. Part of the increased product
promotion expenses included the exhibition in April 1999 of 3DV's new Z-Cam(TM),
a 3-D camera system, at the National Broadcasters Convention in Las Vegas. The
Z-Cam won an "Editors' Pick of the Show" award, and has generated interest from
both computer and media companies.
The net loss per share for the three months ended June 30, 1999 was $.09,
compared to $.02 per share for the same period last year. Without the equity in
losses of 3DV, the loss would have been $.03 per share for the three months
ended June 30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1999, the Company had $2,154,000 in cash, cash equivalents and
marketable securities, and working capital of $1,518,000. The Company also had a
cash collateralized demand line of credit with a bank for borrowings of up to
$250,000. At June 30, 1999, there was approximately $164,000 available under
this line for use in support of general working capital needs and the issuance
of commercial and standby letters of credit.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
The Company's cash and cash equivalents decreased by $637,000 in the three
months ended June 30, 1999, due primarily to net cash used in operations of
$554,000. In addition, the Company loaned $500,000 to 3DV, which was partially
offset by the sale of marketable securities of $404,000.
The Company has incurred losses since its inception, and losses are expected to
continue at least through the fiscal year ending March 31, 2000. The Company has
funded the losses principally with the proceeds from public and private equity
financings. Management believes that, in order to fund the research and
development efforts at 3DV, the Company will require additional financial
support for the fiscal year 2000. Management is pursuing additional sources of
capital; however, there can be no assurance that additional funding will be
available, or available on reasonable terms.
YEAR 2000 READINESS DISCLOSURE
The Company has evaluated its information technology infrastructure to address
its exposure to the "Year 2000" computer problem. The areas of concern to the
Company include its products, its primary software and hardware system, its
telecommunications, its machinery and equipment and the Year 2000 readiness of
its primary vendors and customers. The Company established a plan that was
approved by its Chairman and CEO for the attainment of readiness of its
information technology infrastructure.
The Company has completed preliminary tests of its video processor, which is
used with its video sigmoidoscope. Results of these preliminary tests indicated
that the video processor would process the date change successfully from
December 31, 1999 to January 1, 2000. The primary products sold by the Company
do not contain embedded microchips, and the Company believes these products are
Year 2000 ready.
The major areas of concern are the Company's primary software system and its
telecommunications equipment. During the year ended March 31, 1999, the Company
upgraded its primary software system to the version that has been certified Year
2000 compliant by the Information Technology Association of America.
During the fiscal year ended March 31, 1999, the Company procured and installed
new hardware that utilizes a 32-bit operating system, upgraded its desktop
software to be Year 2000 ready and upgraded its network to be Year 2000 ready.
During the year ended March 31, 1999, the Company reviewed its
telecommunications systems at its New York and Massachusetts locations. These
reviews indicated the telecommunications equipment at both sites is currently
Year 2000 ready.
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
The Company has contacted customers and vendors with whom it has a material
relationship to determine the readiness of those customers and vendors, and to
determine what risks the Company might incur if those customers and vendors do
not become Year 2000 ready in a timely fashion.
The Company currently estimates that the cost to attain readiness will not
exceed $200,000, and that as of June 30, 1999 it has completed 95% of the work
necessary to be Year 2000 ready. The Company will continue to test its
procedures and equipment as the need arises. At this time the Company does not
have a contingency plan, but will develop one if the need arises.
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK
The Company, in the normal course of business, is subject to the risks
associated with fluctuations in interest rates and changes in foreign currency
exchange rates.
INTEREST AND MARKET RISK
The Company maintains a portfolio of marketable, primarily fixed income,
available-for-sale securities of various issuers, types and maturities. The
Company has not used derivative financial instruments in its investment
portfolio. The Company attempts to limit its exposure to interest rate and
credit risk by placing its investments with high-quality financial institutions
and has established investment guidelines relative to diversification and
maturities designed to maintain safety and liquidity.
Investments in both fixed-rate and floating-rate interest earning instruments
carry a degree of interest rate risk. Fixed-rate securities may have their fair
market value adversely impacted due to a rise in interest rates, while
floating-rate securities may produce less income than expected if interest rates
decline. Due in part to these factors, the Company's future investment income
may fall short of expectations due to changes in interest rates, or the Company
may suffer losses in principal if forced to sell securities which have seen a
decline in market value due to changes in interest rates. The fair market value
of marketable securities held at June 30, 1999 was $566,390.
FOREIGN CURRENCY EXCHANGE
The Company faces exposure, due to purchases of raw materials from Japanese
suppliers, to adverse movements in the value of the Japanese Yen. This exposure
may change over time, and could have a materially adverse effect on the
Company's financial results. The Company may attempt to limit this exposure by
purchasing forward contracts, as required. Most of the Company's liabilities are
settled within 90 days of receipt of materials. At June 30, 1999 the Company's
liabilities relating to Japanese Yen were approximately $144,000.
14
PART II - OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Employment letter between Vision-Sciences, Inc. and
James A. Tracy, dated July 18, 1997.
10.2 Employment letter between Vision-Sciences, Inc. and
Gerald B. Lichtenberger dated October 7, 1998.
27. Financial Data Schedule
(b) Reports on Form 8-K
None.
15
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.
Vision-Sciences, Inc.
Date: August 13, 1999 By:
/s/ GERALD B. LICHTENBERGER
---------------------------
Dr. Gerald B. Lichtenberger, Ph. D.
Vice President of Business Development
/s/ JAMES A. TRACY
------------------
James A. Tracy
Vice President Finance, Chief Financial Officer and
Controller (Principal Financial Officer and Principal
Accounting Officer)
16