The information required by this Item will appear under the heading "Stock Ownership of Certain Beneficial Owners and Management" in the 2008 Proxy Statement, which section is incorporated herein by reference, and in Part II hereof under the caption "Securities Authorized for Issuance Under Equity Compensation Plans."
Item 13. Certain Relationships and Related Transactions
The information required by this Item will appear under the headings "Proposal 1: Election of Directors" and "Proposal 1: Election of Directors—Certain Relationships and Related Transactions" in the 2008 Proxy Statement, which sections are incorporated herein by reference, and in Part II hereof under the caption "Market for Registrant's Common Stock and Related Stockholder Matters."
Item 14. Principal Accountant Fees and Services
The information required in this Item will appear under the heading "Fees and Services" in the 2008 Proxy Statement which section is incorporated herein by reference.
55
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
- (a)
- Index
to Consolidated Financial Statements.
- 2.
- Exhibits. The exhibits which are filed with this report or which are incorporated herein by reference are set forth in the Exhibit Index.
56
Pursuant to the requirements of Sections 13 or 15(d) 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: July 3, 2008 |
By: |
/s/ RON HADANI Ron Hadani President, Chief Executive Officer |
|
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ron Hadani and Yoav M. Cohen, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission hereby ratifying and confirming that each of said attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
| Signature | Title | Date | ||
|---|---|---|---|---|
| /s/ RON HADANI Ron Hadani | President and CEO (Principal Executive Officer), Director | July 3, 2008 | ||
/s/ YOAV M. COHEN Yoav M. Cohen |
Chief Financial Officer (Principal Financial and Accounting Officer) |
July 3, 2008 |
||
/s/ LEWIS C. PELL Lewis C. Pell |
Chairman of the Board of Directors |
July 3, 2008 |
||
/s/ KATSUMI ONEDA Katsumi Oneda |
Director |
July 3, 2008 |
||
/s/ DAVID W. ANDERSON David W. Anderson |
Director |
July 3, 2008 |
||
/s/ KENNETH ANSTEY Kenneth Anstey |
Director |
July 3, 2008 |
57
/s/ WARREN L. BIELKE Warren L. Bielke |
Director |
July 3, 2008 |
||
/s/ JOHN J. WALLACE John J. Wallace |
Director |
July 3, 2008 |
58
APPENDIX A
Vision-Sciences, Inc. and Subsidiaries
CONSOLIDATED FINANCIAL STATEMENTS
as of March 31, 2008 and 2007
and For the Years Then Ended
Together with Report of Independent Registered
Public Accounting Firm
Index to Consolidated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board
of Directors and Stockholders
Vision-Sciences, Inc.
Orangeburg, New York
We have audited the accompanying consolidated balance sheets of Vision-Sciences, Inc. and subsidiaries as of March 31, 2008 and 2007 and the related consolidated statements of operations, stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Vision-Sciences, Inc. and subsidiaries as of March 31, 2008 and 2007 and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/
BDO Seidman, LLP
Valhalla, New York
June 30, 2008
F-1
Vision-Sciences, Inc. and Subsidiaries
Consolidated Balance Sheets
| |
March 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| |
2008 | 2007 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 10,655,033 | $ | 28,955,497 | |||||||
| Short term investments | 8,062,418 | — | |||||||||
| Accounts receivable, net of allowance for doubtful accounts of $162,800 and $129,600 in 2008 and 2007, respectively | 1,092,460 | 1,230,285 | |||||||||
| Inventories, net | 4,021,077 | 2,102,757 | |||||||||
| Prepaid expenses and deposits | 446,682 | 111,282 | |||||||||
| Total current assets | 24,277,670 | 32,399,821 | |||||||||
Property and equipment, at cost: |
|||||||||||
| Machinery and equipment | 5,073,701 | 3,713,074 | |||||||||
| Furniture and fixtures | 390,586 | 307,961 | |||||||||
| Leasehold improvements | 594,953 | 591,196 | |||||||||
| 6,059,240 | 4,612,231 | ||||||||||
| Less—Accumulated depreciation and amortization | 4,282,783 | 4,071,537 | |||||||||
| Total property and equipment, net | 1,776,457 | 540,694 | |||||||||
| Other assets, net of accumulated amortization of $72,200 and $81,700 in 2008 and 2007, respectively | 363,225 | 62,393 | |||||||||
| Total assets | $ | 26,417,352 | $ | 33,002,908 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||||||
| Current liabilities: | |||||||||||
| Capital lease obligations | $ | 56,810 | $ | 3,785 | |||||||
| Accounts payable | 1,768,859 | 591,166 | |||||||||
| Accrued expenses | 2,439,158 | 1,443,434 | |||||||||
| Income taxes payable | — | 549,000 | |||||||||
| Total current liabilities | 4,264,827 | 2,587,385 | |||||||||
| Capital lease obligations, net of current portion | 81,083 | — | |||||||||
| Total liabilities | 4,345,910 | 2,587,385 | |||||||||
Commitments and contingencies |
— |
— |
|||||||||
Stockholders' equity: |
|||||||||||
| Preferred stock, $.01 par value— | |||||||||||
| Authorized—5,000,000 shares | |||||||||||
| Issued and outstanding—none | — | — | |||||||||
| Common stock, $.01 par value— | |||||||||||
| Authorized—50,000,000 shares | |||||||||||
| Issued and outstanding—35,647,512 shares and 35,243,931 shares at March 31, 2008 and 2007, respectively | 356,475 | 352,438 | |||||||||
| Additional paid-in capital | 77,477,690 | 76,483,273 | |||||||||
| Accumulated deficit | (55,762,723 | ) | (46,420,188 | ) | |||||||
| Total stockholders' equity | 22,071,442 | 30,415,523 | |||||||||
| Total liabilities and stockholders' equity | $ | 26,417,352 | $ | 33,002,908 | |||||||
The accompanying notes are an integral part of these consolidated financial statements
F-2
Vision-Sciences, Inc. and Subsidiaries
Consolidated Statements of Operations
for Fiscal Years Ended March 31, 2008 and 2007
| |
2008 | 2007 | ||||||
|---|---|---|---|---|---|---|---|---|
| Net sales | $ | 9,949,454 | $ | 9,486,712 | ||||
| Cost of sales | 8,555,717 | 7,534,721 | ||||||
| Gross profit | 1,393,737 | 1,951,991 | ||||||
Selling, general and administrative expenses |
8,177,895 |
5,183,717 |
||||||
| Research and development expense | 3,441,245 | 2,371,630 | ||||||
| Restructuring charge | 659,521 | — | ||||||
| Loss from operations | (10,884,924 | ) | (5,603,356 | ) | ||||
Interest income |
1,021,712 |
151,347 |
||||||
| Interest expense | (9,065 | ) | (1,415 | ) | ||||
| Other income (expense), net | 94,754 | (11,839 | ) | |||||
| Gain on sale of product line, net of direct costs | 1,434,988 | 26,096,855 | ||||||
| Loss in equity investment, including impairment loss of $650,000 | (1,000,000 | ) | — | |||||
| (Loss) income before provision for income taxes | (9,342,535 | ) | 20,631,592 | |||||
| Provision for income taxes | — | 520,000 | ||||||
| Net (loss) income | $ | (9,342,535 | ) | $ | 20,111,592 | |||
Net (loss) income per common share—basic |
$ |
(0.26 |
) |
$ |
0.57 |
|||
| Net (loss) income per common share—diluted | $ | (0.26 | ) | $ | 0.56 | |||
Shares used in computing net (loss) income per common share: |
||||||||
| Basic | 35,286,184 | 35,166,760 | ||||||
| Diluted | 35,286,184 | 35,772,764 | ||||||
The accompanying notes are an integral part of these consolidated financial statements
F-3
Vision-Sciences, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
for Fiscal Years Ended March 31, 2008 and 2007
| |
Preferred Stock | Common Stock | |
|
|
||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
Number of Shares |
$0.01 Par Value |
Number of Shares |
$0.01 Par Value |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders' Equity |
||||||||||||||
| Balance, March 31, 2006 | 50,000,000 | $ | — | 35,148,427 | $ | 351,483 | $ | 75,678,615 | $ | (66,531,780 | ) | $ | 9,498,318 | ||||||||
| Exercise of stock options | — | — | 95,504 | 955 | 91,472 | — | 92,427 | ||||||||||||||
| Stock based compensation expense | — | — | — | — | 713,186 | — | 713,186 | ||||||||||||||
| Net income | 20,111,592 | 20,111,592 | |||||||||||||||||||
| Balance, March 31, 2007 | 50,000,000 | $ | — | 35,243,931 | $ | 352,438 | $ | 76,483,273 | $ | (46,420,188 | ) | $ | 30,415,523 | ||||||||
| Exercise of stock options | — | — | 403,581 | 4,036 | 525,095 | — | 529,131 | ||||||||||||||
| Stock based compensation expense | — | — | — | — | 469,322 | — | 469,322 | ||||||||||||||
| Net loss | — | — | — | — | — | (9,342,535 | ) | (9,342,535 | ) | ||||||||||||
| Balance, March 31, 2008 | 50,000,000 | $ | — | 35,647,512 | $ | 356,474 | $ | 77,477,690 | $ | (55,762,723 | ) | $ | 22,071,441 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements
F-4
Vision-Sciences, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
for the Fiscal Years Ended March 31, 2008 and 2007
| |
2008 | 2007 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Cash flows from operating activities: | ||||||||||
| Net (loss) income | $ | (9,342,535 | ) | $ | 20,111,592 | |||||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||||
| Depreciation and amortization | 254,788 | 490,263 | ||||||||
| Gain on sale of product line | (1,434,988 | ) | (26,096,855 | ) | ||||||
| Loss in equity investment | 1,000,000 | — | ||||||||
| Stock-based compensation | 469,322 | 713,186 | ||||||||
| Changes in assets and liabilities: | ||||||||||
| Accounts receivable | 137,825 | 537,628 | ||||||||
| Inventories | (1,918,323 | ) | 282,236 | |||||||
| Prepaid expenses and deposits | (344,743 | ) | (51,750 | ) | ||||||
| Accounts payable | 1,177,693 | (301,412 | ) | |||||||
| Accrued expenses | 995,725 | 415,288 | ||||||||
| Income taxes payable | (549,000 | ) | 549,000 | |||||||
| Net cash used in operating activities | (9,554,233 | ) | (3,350,824 | ) | ||||||
| Cash flows from investing activities: | ||||||||||
| Purchase of short term investments | (47,121,608 | ) | — | |||||||
| Sale of short term investments | 39,059,190 | — | ||||||||
| Purchase of property and equipment | (1,332,040 | ) | (627,451 | ) | ||||||
| Net proceeds from sale of product line | 1,434,988 | 26,791,572 | ||||||||
| Purchase of equity investment | (1,000,000 | ) | — | |||||||
| Cash paid for business acquisition | ||||||||||