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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cognyte Software Ltd | NASDAQ:CGNT | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.51 | -6.85% | 6.94 | 7.32 | 7.80 | 400 | 13:32:00 |
☒ |
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|
Delaware
|
13-3430173
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
5420 Feltl Road
Minnetonka, Minnesota
|
55343
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Common Stock, $.01 par value
|
The NASDAQ Capital Market
|
|
(Title of class)
|
(Name of Exchange on which registered)
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
|||
Non-accelerated filer
|
☐
(do not check if a smaller reporting company)
|
Smaller reporting company
|
☒
|
|||
Emerging growth company
|
☐
|
2
|
|||
BUSINESS
|
2
|
||
RISK FACTORS
|
18
|
||
UNRESOLVED STAFF COMMENTS
|
31
|
||
PROPERTIES
|
31
|
||
LEGAL PROCEEDINGS
|
31
|
||
MINE SAFETY DISCLOSURE
|
31
|
||
32
|
|||
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
32
|
||
SELECTED FINANCIAL DATA
|
33
|
||
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
33
|
||
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
43
|
||
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
43
|
||
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
43
|
||
CONTROLS AND PROCEDURES
|
43
|
||
OTHER INFORMATION
|
44
|
||
44
|
|||
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
|
44
|
||
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
49
|
||
EXECUTIVE COMPENSATION
|
49
|
||
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
55
|
||
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
55
|
||
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
57 | ||
58
|
|||
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
58
|
||
ITEM 17. | FORM 10-K SUMMARY | 64 |
· |
PrimeSight Endoscopes (i.e., cystoscopes, laryngoscopes, transnasal esophagoscopes and bronchoscopes for medical use; and borescopes for industrial use) and Digital Processing Units (“DPUs”);
|
· |
EndoSheath Protective Barrier;
|
· |
Urgent PC System;
|
· |
Macroplastique;
|
· |
Licensed products, including a full suite of endourological devices such as ureteral access sheaths, gravity irrigation lines and nitinol guide wires that are complementary to our urology product portfolio; and
|
· |
Other products and applications.
|
· |
Stress Urinary Incontinence —
Stress urinary incontinence (“SUI”) refers to the involuntary loss of urine due to an increase in intra-abdominal pressure from ordinary physical activities, such as coughing, sneezing, laughing, straining or lifting. SUI, the most common form of urinary incontinence among women, is estimated to affect almost 30 million women over the age of 18 in the U.S. (Hampel et al., 1997 and 2000 U.S. census data). SUI is caused by urethral hypermobility and/or ISD. Urethral hypermobility – abnormal movement of the bladder neck and urethra – can occur when the anatomic supports for the bladder neck and urethra have weakened. This anatomical change can result from pregnancy, childbirth or age-related tissue deterioration. SUI can also be caused by ISD, or the inability of the urinary sphincteric mechanism to function properly. ISD can be due to congenital or age-related sphincter weakness or can result from damage to the sphincteric mechanism following pelvic trauma, surgery, neurologic diseases or radiation therapy.
|
· |
Urge Incontinence —
Urge incontinence refers to the involuntary loss of urine associated with an abrupt, strong desire to urinate. Urge incontinence often occurs when neurologic problems cause the bladder to contract and empty with little or no warning, and is part of the overactive bladder syndrome
.
|
· |
Overflow Incontinence —
Overflow incontinence is associated with an over-distention of the bladder. This can be the result of an under-active bladder or an obstruction in the bladder or urethra.
|
1. |
coding, which ensures uniform descriptions of procedures, diagnoses and medical products;
|
2. |
coverage, which is the payer’s policy describing the clinical circumstances under which the payer will pay for a given treatment; and
|
3. |
payment processes and amounts.
|
· |
fines, injunctions, and civil penalties;
|
· |
recall or seizure of products;
|
· |
operating restrictions, or total or partial suspension of production;
|
· |
denial of requests for 510(k) clearance or pre-market approval of new products;
|
· |
withdrawal of existing approvals; and
|
· |
criminal prosecution.
|
· |
Quality System Regulations, which require manufacturers to follow design, testing, control, documentation and other quality assurance procedures during the manufacturing process;
|
· |
labeling regulations, which govern product labels and labeling, prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling and promotional activities;
|
· |
medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if such malfunction were to recur; and
|
· |
notices of correction or removal, and recall regulations.
|
· |
regulate our design and manufacturing processes and control them by the use of written procedures;
|
· |
investigate any deficiencies in our manufacturing process or in the products we produce;
|
· |
keep detailed records and maintain a corrective and preventative action plan; and
|
· |
allow the FDA to inspect our manufacturing facilities on a periodic basis to monitor our compliance with Quality System Regulations.
|
· |
Our future revenues, future operating expenses, anticipated use of cash and whether and how long our existing cash and cash equivalents and investments will be sufficient to fund our operations;
|
· |
the market size and market acceptance of our products;
|
· |
the status of our product development programs;
|
· |
the timing, costs and benefits associated with our restructuring plan; and
|
· |
the effect of new accounting pronouncements and future health care, tax and other legislation.
|
• |
matters related to the proposed Merger may require substantial commitments of time and resources thereby diverting management’s and our employees’ attention from our day-to-day business, including servicing existing customers, attracting new customers and developing new products and strategies;
|
• |
our relationships with customers, distributors, collaborative partners, suppliers and patients may be harmed as a result of the proposed Merger and result in uncertainties with respect to our products, employees and business;
|
• |
our financial performance may be negatively impacted by disruptions in our sales and marketing, research and development, and other business activities;
|
• |
we may fail to retain key employees who have sought and obtained different employment in anticipation of the Merger being completed;
|
• |
we have agreed to restrict certain of our activities pending the consummation of the Merger that may negatively affect our ability to execute on our business strategies and attain our financial goals; and
|
• |
certain significant costs related to the proposed Merger, such as legal, advisor and accounting fees and other expenses, are payable by us whether or not the proposed Merger are completed, including a termination fee under certain circumstances.
|
· |
ability to sell products tailored to meet the needs of our customers and patients;
|
· |
sales, marketing, and distribution capabilities;
|
· |
product performance and design;
|
· |
quality of customer support;
|
· |
product pricing;
|
· |
product safety;
|
· |
success and timing of new product development and introductions; and
|
· |
intellectual property protection.
|
· |
actual or anticipated variations in operating results;
|
· |
conditions or trends in the medical device market;
|
· |
announcements of new or acquired products or technologies by us or our competitors;
|
· |
announcements by us or our competitors of significant customer wins or losses, gains or losses of distributors;
|
· |
technological innovations, new products or services;
|
· |
the success of our efforts to acquire or license additional products;
|
· |
additions or departures of key personnel;
|
· |
actual or expected sales of a large number of shares of our common stock;
|
· |
availability of sources of capital;
|
· |
adverse litigation;
|
· |
unfavorable legislative or regulatory decisions;
|
· |
developments in U.S. or international reimbursement systems;
|
· |
variations in interest rates;
|
· |
general market and economic conditions;
|
· |
availability of components on acceptable terms;
|
· |
availability of distributor arrangements on favorable terms; and
|
· |
changes in accounting standards, policies, guidance or interpretations.
|
· |
obsolescence of components or products due to sales trends and new product introductions;
|
· |
our inability to reduce supply and production costs;
|
· |
increases in material or labor costs;
|
· |
changes in shipment volume;
|
· |
loss of cost savings due to changes in component pricing, including the impact of foreign exchange rates for components purchased overseas;
|
· |
changes in distribution channels; and
|
· |
increased warranty costs.
|
· |
sell products that compete with our products in breach of their non-competition agreements with us;
|
· |
fail to adequately promote our products; or
|
· |
fail to provide proper service to our end users.
|
· |
be expensive and time consuming for us to defend;
|
· |
result in us being required to pay significant damages to third parties;
|
· |
cause us to cease making or selling products that incorporate the challenged intellectual property;
|
· |
require us to redesign, reengineer or rebrand our products, if feasible;
|
· |
require us to enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual property, in which agreements may not be available on terms acceptable to us, or at all;
|
· |
divert the attention of our management; or
|
· |
result in our customers or potential customers deferring or limiting their purchases or use of the affected products until resolution of the litigation.
|
· |
the imposition of additional U.S. and foreign governmental controls or regulations;
|
· |
the imposition of costly and lengthy export licensing requirements;
|
· |
local political and economic instability;
|
· |
difficulties in recruiting and maintaining distributors and staff in remote locations, including sales people;
|
· |
changes in duties and tariffs, license obligations and other non-tariff barriers to trade;
|
· |
the imposition of new trade restrictions;
|
· |
the imposition of restrictions on the activities of foreign agents, representatives and distributors;
|
· |
foreign taxation compliance and penalties;
|
· |
deemed repatriation of foreign revenue and resulting U.S. federal income taxation;
|
· |
pricing pressure that we may experience internationally;
|
· |
laws and business practices favoring local companies;
|
· |
longer payment cycles;
|
· |
difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; and
|
· |
difficulties in enforcing or defending intellectual property rights.
|
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Year ended December 31, 2017
|
Low
|
High
|
||||||
First Quarter
|
$
|
1.72
|
$
|
2.21
|
||||
Second Quarter
|
$
|
1.60
|
$
|
1.95
|
||||
Third Quarter
|
$
|
1.62
|
$
|
2.94
|
||||
Fourth Quarter
|
$
|
2.60
|
$
|
3.15
|
Year ended December 31, 2016
|
Low
|
High
|
||||||
First Quarter
|
$
|
0.95
|
$
|
1.35
|
||||
Second Quarter
|
$
|
0.71
|
$
|
1.14
|
||||
Third Quarter
|
$
|
0.96
|
$
|
1.99
|
||||
Fourth Quarter
|
$
|
1.37
|
$
|
2.99
|
Plan Category
|
Number of Securities to be
Issued Upon Exercise of
Outstanding Options
|
Weighted-Average
Exercise Price of
Outstanding Options
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans
|
|||||||||
Equity Compensation Plans Approved by Security Holders (1)
|
2,545,963
|
$
|
2.72
|
139,738
|
(1) |
Consists of options outstanding under the Cogentix Medical, Inc. 2015 Omnibus Incentive Plan, the Uroplasty 2006 Amended Stock and Incentive Plan, as amended, the Vision-Sciences, Inc. 2000 Plan, the Vision-Sciences, Inc. 2003 Director Option Plan, and the Vision-Sciences, Inc. 2007 Stock Incentive Plan
|
Period
|
Total
Number of
Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
Maximum Number of
Shares that May Yet
Be Purchased Under
the Plans or Programs
|
||||||||||||
January 1, 2017 – March 31, 2017
|
-
|
-
|
-
|
-
|
||||||||||||
April 1, 2017 – June 30, 2017
|
10,261
|
$
|
1.71
|
-
|
-
|
|||||||||||
July 1, 2017 – September 30, 2017
|
-
|
-
|
-
|
-
|
||||||||||||
October 1, 2017 – December 31, 2017
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
10,261
|
$
|
1.71
|
-
|
-
|
· |
the deferred tax asset on our balance sheet was reduced by approximately $3.3 million of December 31, 2017;
|
· |
the impact to the company of the tax on deferred foreign earnings is immaterial
|
· |
the rate at which our NOL carry forwards will be utilized will be unchanged
|
Expense Adjustments
|
||||||||||||||||||||||||||||
GAAP
|
Share-
based
Expense
|
Long-term
Incentive
Plan
|
Depreciation
|
Disposal
of Assets
|
Amortization
of
Intangibles
|
Non-GAAP
|
||||||||||||||||||||||
Twelve-months ended December 31, 2017
|
||||||||||||||||||||||||||||
Gross Profit
|
$
|
37,443,859
|
$
|
22,329
|
$
|
-
|
$
|
193,968
|
$
|
-
|
$
|
-
|
$
|
37,660,156
|
||||||||||||||
% of Net sales
|
66.5
|
%
|
66.9
|
%
|
||||||||||||||||||||||||
Operating Expenses:
|
||||||||||||||||||||||||||||
General & administrative
|
8,293,814
|
(1,231,667
|
)
|
-
|
(226,939
|
)
|
-
|
-
|
6,835,208
|
|||||||||||||||||||
Research and development
|
4,742,308
|
(42,552
|
)
|
-
|
(12,964
|
)
|
-
|
-
|
4,686,792
|
|||||||||||||||||||
Selling and marketing
|
22,907,468
|
(156,363
|
)
|
-
|
(342,366
|
)
|
(2,001
|
)
|
-
|
22,406,738
|
||||||||||||||||||
Amortization
|
2,389,743
|
-
|
-
|
-
|
-
|
(2,389,743
|
)
|
-
|
||||||||||||||||||||
38,333,333
|
(1,430,582
|
)
|
-
|
(582,269
|
)
|
(2,001
|
)
|
(2,389,743
|
)
|
33,928,738
|
||||||||||||||||||
Operating income (loss)
|
$
|
(889,474
|
)
|
$
|
1,452,911
|
$
|
-
|
$
|
776,237
|
$
|
2,001
|
$
|
2,389,743
|
$
|
3,731,418
|
Expense Adjustments
|
||||||||||||||||||||||||||||
GAAP
|
Share-
based
Expense
|
Long-term
Incentive
Plan
|
Depreciation
|
Disposal
of Assets
|
Amortization
of
Intangibles
|
Non-GAAP
|
||||||||||||||||||||||
Twelve-months ended December 31, 2016
|
||||||||||||||||||||||||||||
Gross Profit
|
$
|
35,603,048
|
$
|
33,330
|
$
|
-
|
$
|
175,696
|
$
|
-
|
$
|
-
|
$
|
35,812,074
|
||||||||||||||
% of Net sales
|
68.7
|
%
|
69.1
|
%
|
||||||||||||||||||||||||
Operating Expenses:
|
||||||||||||||||||||||||||||
General & administrative
|
6,778,010
|
(585,420
|
)
|
74,404
|
(201,031
|
)
|
(5,640
|
)
|
-
|
6,060,323
|
||||||||||||||||||
Research and development
|
4,701,539
|
(23,717
|
)
|
-
|
(2,450
|
)
|
-
|
-
|
4,675,372
|
|||||||||||||||||||
Selling and marketing
|
21,313,364
|
(105,652
|
)
|
-
|
(393,500
|
)
|
-
|
-
|
20,814,212
|
|||||||||||||||||||
Amortization
|
2,363,432
|
-
|
-
|
-
|
-
|
(2,363,432
|
)
|
-
|
||||||||||||||||||||
One-time costs
|
2,257,654
|
-
|
-
|
-
|
-
|
-
|
2,257,654
|
|||||||||||||||||||||
37,413,999
|
(714,789
|
)
|
74,404
|
(596,981
|
)
|
(5,640
|
)
|
(2,363,432
|
)
|
33,807,561
|
||||||||||||||||||
Operating income (loss)
|
$
|
(1,810,951
|
)
|
$
|
748,119
|
$
|
(74,404
|
)
|
$
|
772,677
|
$
|
5,640
|
$
|
2,363,432
|
$
|
2,004,513
|
||||||||||||
One-time costs
|
2,257,654
|
2,257,654
|
||||||||||||||||||||||||||
Operating income excluding one-time costs
|
$
|
4,262,167
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less Than 1
Year
|
1 – 3 Years
|
4 – 5
Years
|
More Than
5 Years
|
||||||||||||||||
Operating lease commitments
|
$
|
2,488,000
|
$
|
817,000
|
$
|
709,000
|
$
|
418,000
|
$
|
544,000
|
2018
|
$
|
-
|
||
2019
|
300,000
|
|||
2020
|
600,000
|
|||
2021
|
900,000
|
|||
2022
|
1,200,000
|
|||
Thereafter
|
1,500,000
|
|||
$
|
4,500,000
|
Increase/(Decrease)
Funded Status at
December 31, 2017
|
Increase/(Decrease)
2018 Pension Expense
|
|||||||
Assumption:
|
||||||||
Increase in discount rate by 1 percentage point
|
$
|
191,000
|
$
|
(52,000
|
)
|
|||
Decrease in discount rate by 1 percentage point
|
(248,000
|
)
|
64,000
|
|||||
Increase in estimated return on assets by 1 percentage point
|
n/a
|
(8,000
|
)
|
|||||
Decrease in estimated return on assets by 1 percentage point
|
n/a
|
8,000
|
||||||
Increase in inflation rate by 1 percentage point
|
(185,000
|
)
|
43,000
|
|||||
Decrease in inflation rate by 1 percentage point
|
160,000
|
(39,000
|
)
|
|||||
Increase in compensation by 1 percentage point
|
(49,000
|
)
|
7,000
|
|||||
Decrease in compensation by 1 percentage point
|
-
|
-
|
1. |
persuasive evidence that an arrangement exists;
|
2. |
delivery has occurred or services were rendered;
|
3. |
the fee is fixed and determinable; and
|
4. |
collectability is reasonably assured
|
Director
|
Audit
|
Compensation
|
Governance and
Nominating
|
|||
James D’Orta
|
√
|
Chair
|
√
|
|||
Cheryl Pegus
|
√
|
√
|
Chair
|
|||
Kenneth Samet
|
Chair
|
—
|
√
|
|||
Nachum Shamir
|
—
|
√
|
—
|
• |
overseeing our accounting and financial reporting processes, systems of internal control over financial reporting and disclosure controls and procedures on behalf of the Board of Directors and reporting the results or findings of its oversight activities to the Board of Directors;
|
• |
having sole authority to appoint, retain and oversee the work of our independent registered public accounting firm and establishing the compensation to be paid to the independent registered public accounting firm;
|
• |
establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls and/or or auditing matters and for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters;
|
• |
reviewing and pre-approving all audit services and permissible non-audit services to be performed for us by our independent registered public accounting firm as provided under the federal securities laws and rules and regulations of the SEC; and
|
• |
overseeing our system to monitor and manage risk, and legal and ethical compliance programs, including the establishment and administration (including the grant of any waiver from) of a written code of ethics applicable to each of our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
|
1
|
Pursuant to 405(a) The Company must include a paragraph regarding any directors, officers or beneficial owners of more than ten percent of any class of equity securities of the Company who failed to file form 3 and 4 (or form 5 amendments) on a timely basis. For each person must set forth the number of late reports, the number of transactions that were not reported on timely basis.
|
• |
determining the annual salaries, incentive compensation, long-term incentive compensation, special or supplemental benefits or perquisites and any and all other compensation applicable to our Chief Executive Officer and other executive officers;
|
• |
determining any revisions to corporate goals and objectives with respect to compensation for our chief executive officer and other executive officers and establishing and leading a process for the full Board of Directors to evaluate the performance of our Chief Executive Officer and other executive officers in light of those goals and objectives;
|
• |
administering our equity-based compensation plans, including determining specific grants of incentive awards for executive officers and other employees under our equity-based compensation plans;
|
• |
reviewing and discussing with our Chief Executive Officer and reporting periodically to the Board of Directors plans for executive officer development and corporate succession plans for the Chief Executive Officer and other key executive officers and employees; and
|
• |
establishing and leading a process for determination of the compensation applicable to the non-employee directors on the Board of Directors.
|
• |
overseeing all aspects of corporate governance, including acting as an independent committee evaluating transactions between our company and significant stockholders, directors and director nominees, or executive officers;
|
• |
succession planning and identifying individuals qualified to become members of the Board of Directors;
|
• |
recommending director nominees for each annual meeting of our stockholders and director nominees to fill any vacancies that may occur between meetings of stockholders;
|
• |
being aware of best practices in corporate governance and developing and recommending to the Board of Directors a set of Corporate Governance Guidelines; and
|
• |
developing and overseeing a Board and Board committee evaluation process.
|
• |
the commercial reasonableness of the terms;
|
• |
the benefit and perceived benefits, or lack thereof, to our company;
|
• |
opportunity costs of alternate transactions; and
|
• |
the materiality and character of the related person’s interest, and the actual or apparent conflict of interest of the related person.
|
ITEM 11. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
• |
focus executive behavior on achievement of our annual and long-term objectives and strategy;
|
• |
provide a competitive compensation package that enables us to attract and retain, on a long-term basis, talented executives;
|
• |
provide a total compensation structure that the Compensation Committee believes is at least comparable with similarly-sized companies in the life sciences industry for which we would compete for talent and which consists of a mix of base salary, equity and cash incentives; and
|
• |
align the interests of management and stockholders by providing management with long-term incentives through equity ownership.
|
• |
each executive’s position within the company and the level of responsibility;
|
• |
the ability of the executive to affect key business initiatives;
|
• |
the executive’s individual experience and qualifications;
|
• |
company and individual performance; and
|
• |
the executive’s current and historical compensation levels.
|
• |
consolidated revenue versus plan revenue (75% of bonus opportunity)
|
• |
completion of a business development deal (15% of bonus opportunity)
|
• |
attainment of team member retention of at least 90% (10% of bonus opportunity)
|
Name
|
Target 2017 Incentive Opportunity as % of
Base Salary
|
Target 2017 Bonus Opportunity
|
||||||
Mr. Hammers
|
65
|
%
|
$
|
276,250
|
||||
Mr. Reynolds
|
45
|
%
|
$
|
135,000
|
||||
Mr. Arnold
|
40
|
%
|
$
|
94,000
|
Name and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
(1)
|
Option
Awards
($)
(2)
|
Non-Equity
Incentive Plan
Compensation
($)
|
All Other
Compensation
($)
(3)
|
Total
($)
|
||||||||||||||||||||||
Darin Hammers
President and Chief Executive Officer
|
2017
|
425,000
|
321,003
|
83,454
|
593,322
|
—
|
9,568
|
1,432,346
|
||||||||||||||||||||||
2016
|
349,038
|
405,123
|
217,000
|
206,930
|
—
|
47,950
|
1,226,042
|
|||||||||||||||||||||||
Brett A. Reynolds
Senior Vice President, Chief Financial Officer and Corporate Secretary
|
2017
|
300,000
|
156,870
|
52,457
|
372,945
|
—
|
3,041
|
885,312
|
||||||||||||||||||||||
2016
|
202,846
|
152,351
|
95,597
|
80,799
|
—
|
7,272
|
538,866
|
|||||||||||||||||||||||
Chris Arnold
Vice President of Sales
|
2017
|
235,000
|
109,228
|
35,765
|
254,282
|
—
|
798
|
635,073
|
||||||||||||||||||||||
2016
|
230,269
|
153,336
|
25,750
|
12,553
|
—
|
7,963
|
429,870
|
(1) |
Amounts reported in the “Stock Awards” column represent the aggregate grant date fair value for restricted stock awards granted to each named executive officer in fiscal 2017 computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The grant date fair value is determined based on the fair value of our common stock at the date of the grant.
|
(2) |
Represents the aggregate grant date fair value for option awards granted to each named executive officer computed in accordance with FASB ASC Topic 718. Details of the assumptions used in valuing these awards are set forth in Note 4 to our audited financial statements.
|
(3) |
Mr. Hammers received a $40,000 moving allowance upon being named President and Chief Executive Officer in 2016. All other amounts represent 401(k) employer match.
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||
Name
|
Grant Date
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
Number
of shares
that have
not
vested (#)
|
Market
value of
shares that
have not
vested
(1)
($)
|
|||||||||||||||||||
Darin Hammers
(2)
|
2/11/2013
|
$
|
72,662
|
$
|
-
|
$
|
3.62
|
2/10/2020
|
-
|
$
|
-
|
|||||||||||||||
8/12/2013
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
4/21/2014
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
4/27/2015
|
66,667
|
-
|
1.64
|
4/27/2022
|
16,666
|
52,498
|
||||||||||||||||||||
6/29/2016
|
33,334
|
-
|
1.03
|
6/29/2023
|
66,666
|
209,998
|
||||||||||||||||||||
7/11/2016
|
100,000
|
-
|
1.14
|
7/11/2023
|
66,666
|
209,998
|
||||||||||||||||||||
5/19/2017
|
-
|
359,589
|
1.65
|
5/19/2027
|
50,578
|
159,321
|
||||||||||||||||||||
Brett Reynolds
(2)
|
6/13/2016
|
50,000
|
100,000
|
0.88
|
6/13/2023
|
46,666
|
146,998
|
|||||||||||||||||||
6/29/2016
|
11,000
|
22,000
|
1.03
|
6/29/2023
|
22,000
|
69,300
|
||||||||||||||||||||
5/19/2017
|
-
|
226,027
|
1.65
|
5/19/2027
|
31,792
|
100,145
|
||||||||||||||||||||
Chris Arnold
(2)
|
4/27/2015
|
36,331
|
18,165
|
1.64
|
4/27/2022
|
4,844
|
15,259
|
|||||||||||||||||||
6/29/2016
|
8,334
|
16,666
|
1.03
|
6/29/2023
|
16,666
|
52,498
|
||||||||||||||||||||
5/19/2017
|
-
|
154,110
|
1.65
|
5/19/2027
|
21,676
|
68,279
|
(1) |
Calculated as the number of restricted stock awards that have not vested multiplied by the closing price of a share of Cogentix Medical’s common stock as reported by Nasdaq on December 30, 2017 ($3.15).
|
(2) |
Restricted stock awards vest on a pro rata basis, so that one-third of the award vests on each of the first, second and third anniversaries of the grant date.
|
Description
|
Annual
Cash Retainer
|
|||
Non-employee Director
|
$
|
50,000
|
||
Board Chair
|
$
|
25,000
|
||
Audit Committee Chair
|
$
|
12,000
|
||
Audit Committee Member
|
$
|
6,000
|
||
Nominating/Governance Committee Chair
|
$
|
6,000
|
||
Nominating/Governance Committee Member
|
$
|
2,500
|
||
Compensation Committee Chair
|
$
|
8,000
|
||
Compensation Committee Member
|
$
|
4,500
|
Name
|
Fees Earned or
Paid in Cash ($)
|
Stock Awards
($)
(1)
|
Option Awards
($)
(2)
|
All Other
Compensation ($)
(3)
|
Total ($)
|
|||||||||||||||
James D’Orta
|
$
|
77,102
|
$
|
100,001
|
$
|
—
|
$
|
—
|
$
|
177,103
|
||||||||||
Uri Geiger
|
—
|
—
|
—
|
32,000
|
32,000
|
|||||||||||||||
Cheryl Pegus
|
75,102
|
100,001
|
—
|
—
|
175,103
|
|||||||||||||||
Kenneth Samet
|
76,602
|
100,001
|
—
|
—
|
176,603
|
|||||||||||||||
Nachum Shamir
|
60,602
|
100,001
|
—
|
—
|
160,603
|
|||||||||||||||
Howard Zauberman
|
56,102
|
100,001
|
—
|
25,500
|
181,603
|
(1) |
Amounts reported in the “Stock Awards” column represent the aggregate grant date fair value for restricted stock awards granted to each director in fiscal 2017 computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The grant date fair value is determined based on the fair value of our common stock at the date of the grant. As of December 31, 2017, there were no restricted stock grants outstanding.
|
(2) |
No option awards were granted to our non-employee directors during fiscal 2017. As of December 31, 2017, Mr. Zauberman and Ms. Pegus had 169,999 and 2,000 option awards outstanding, respectively.
|
(3) |
Amounts reported in the “All Other Compensation” column for Mr. Zauberman represent consulting fees for assessment of our Airway Management and Industrial product lines.
|
ITEM 13. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
• |
each person our company believes beneficially holds more than 5% of the outstanding shares of our common stock based solely on our company’s review of SEC filings;
|
• |
each of our directors and nominees for directors;
|
• |
each of the named executive officers named in the Summary Compensation Table under the heading
“Executive Compensation—Summary Compensation Table for Fiscal 2017
” (we collectively refer to these persons as our “named executive officers”); and
|
• |
all of our directors and executive officers as a group.
|
Name and Address of Beneficial Owner
(1)
|
Amount and
Nature of
Beneficial
Ownership
(2)
|
Percent of
Class
|
||||||
Beneficial Owners of More Than 5%
|
||||||||
Accelmed Growth Partners, L.P. (“Accelmed”)
c/o Accelmed Growth Partners Management Ltd.
6 Hachoshlim St. 6th Floor
Herzliya Pituach, 46120
|
16,129,033
|
26.5
|
%
|
|||||
Nantahala Capital Management LLC
19 Old Kings Highway S, Suite 200
Darien, CT 06820
|
3,693,853
|
6.0
|
%
|
|||||
Named Executive Officers and Directors
|
||||||||
James D’Orta
|
159,172
|
0.3
|
%
|
|||||
Uri Geiger
|
16,129,033
|
(3)
|
26.5
|
%
|
||||
Darin Hammers
|
500,679
|
0.8
|
%
|
|||||
Cheryl Pegus
|
199,472
|
0.3
|
%
|
|||||
Lewis Pell
|
20,051,723
|
32.9
|
%
|
|||||
Kenneth Samet
|
184,172
|
0.3
|
%
|
|||||
Nachum Shamir
|
159,172
|
0.3
|
%
|
|||||
Howard I. Zauberman
|
521,471
|
0.9
|
%
|
|||||
Brett Reynolds
|
142,405
|
0.2
|
%
|
|||||
Chris Arnold
|
80,852
|
0.1
|
%
|
|||||
All Executive Officers and Directors as a Group
|
38,128,151
|
62.6
|
%
|
(1) |
For Nantahala Capital Management LLC (“Nantahala”), information is contained in a Schedule 13G/A filed with the SEC on February 14, 2018 by Nantahala. The filing indicated that as of December 31, 2017, Nantahala shared voting and investment power over all of these shares with managing members Wilmot Harkey and Daniel Mack. .The business address for each of the directors and named executive officers of Cogentix is c/o Cogentix Medical, Inc., 5420 Feltl Road, Minnetonka, Minnesota 55343.
|
(2) |
Includes for the persons listed below the following shares of common stock subject to options held by such persons that are currently exercisable or become exercisable within 60 days of March 15, 2018:
|
Name
|
Shares of Common Stock
Underlying
Stock Options
|
||
Cheryl Pegus
|
2,000
|
||
Howard Zauberman
|
169,999
|
||
Darin Hammers
|
305,996
|
||
Brett Reynolds
|
61,000
|
||
Chris Arnold
|
62,830
|
(3) |
Includes shares held by Accelmed. Mr. Geiger is the controlling member and managing partner of Accelmed Growth Partners (AGP) Limited, which is the general partner of Accelmed Growth Partners (GP), L.P., which is the general partner of Accelmed, and as a result, he may be deemed to beneficially own the shares held by Accelmed. Mr. Geiger is also the controlling shareholder and managing partner of Accelmed Growth Partners Management Ltd., which has certain voting and dispositive power over the shares held by Accelmed pursuant to a management agreement.
|
Aggregate Amount Billed
|
||||||||
2017
|
2016
|
|||||||
Audit Fees
(1)
|
$
|
349,922
|
$
|
298,512
|
||||
Audit Related Fees
(2)
|
16,424
|
33,280
|
||||||
Tax Fees
(3)
|
66,495
|
9,691
|
(1) |
Audit fees consisted of the audit of our annual financial statements for the years ended December 31, 2017 and 2016.
|
(2) |
Audit related fees for the current and prior year consisted of fees related to our annual 401(k) audit. Fees for 2016 also include fees related to the Accelmed Investment and Pell debt conversion.
|
(3) |
Tax fees are for work associated with our international subsidiaries.
|
(a) |
Documents filed as part of this Annual Report on Form 10-K:
|
1. |
Consolidated Financial Statements:
|
PAGE
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets
|
F-3
|
Consolidated Statements of Operations
|
F-5
|
Consolidated Statements of Comprehensive Loss
|
F-6
|
Consolidated Statements of Shareholders’ Equity
|
F-7
|
Consolidated Statements of Cash Flows
|
F-8
|
Notes to Consolidated Financial Statements
|
F-9
|
2. |
Financial Statement Schedule:
|
Balance at
beginning of
fiscal year
|
Additions
charged to
expenses
|
Written off,
less recoveries
|
Effects of
foreign
currency
fluctuations
|
Balance at
end of
fiscal year
|
||||||||||||||||
Allowance for doubtful accounts
|
||||||||||||||||||||
Twelve months ended December 31, 2017
|
$
|
34,000
|
$
|
70,000
|
$
|
(18,000
|
)
|
$
|
1,000
|
$
|
87,000
|
|||||||||
Twelve months ended December 31, 2016
|
$
|
27,000
|
$
|
21,000
|
$
|
(14,000
|
)
|
$
|
-
|
$
|
34,000
|
Balance at
beginning of
fiscal year
|
Additions
charged
against
revenues
|
Returns
written off
|
Effects of
foreign
currency
fluctuations
|
Balance at
end of
fiscal year
|
||||||||||||||||
Allowance for sales returns
|
||||||||||||||||||||
Twelve months ended December 31, 2017
|
$
|
49,000
|
$
|
-
|
$
|
(34,000
|
)
|
$
|
-
|
$
|
15,000
|
|||||||||
Twelve months ended December 31, 2016
|
$
|
41,000
|
$
|
9,000
|
$
|
(1,000
|
)
|
$
|
-
|
$
|
49,000
|
3. |
Exhibits
|
Exhibit
No.
|
Exhibit
|
Method of Filing
|
||
*2.1
|
Agreement and Plan of Merger dated as of December 21, 2014 by and among Vision-Sciences, Inc., Visor Merger Sub LLC, and Uroplasty, Inc.
|
Incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K as filed with the SEC on December 22, 2014 (File No. 000-20970)
|
||
*2.2
|
Agreement and Plan of Merger, dated as of March 11, 2018, by and among LM US Parent, Inc., Camden Merger Sub, Inc. and Cogentix
Medical, Inc.
|
Incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed with the SEC on March 12, 2018 (File No. 000-20970)
|
||
3.1
|
Amended and Restated Certificate of Incorporation.
|
Incorporated by reference to Exhibit 3.1 to Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed on November 13, 2017(File No. 000-20970)
|
||
3.2
|
(a) Amended and Restated By-laws.
|
Incorporated by reference to Exhibit 3.2 to Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed on November 13, 2017 (File No. 000-20970)
|
||
(b) Amendment to the Amended and Restated By-laws.
|
Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed with the SEC on March 12, 2018 (File No. 000-20970)
|
|||
10.1
|
Common Stock Purchase Warrants of Vision-Sciences, Inc. issued to Lewis C. Pell dated November 9, 2009.
|
Incorporated by reference to Exhibit 10.46 to Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 filed with the SEC on November 12, 2009 (File No. 000-20970)
|
||
10.2
|
Common Stock Purchase Warrants of Vision-Sciences, Inc. issued to Lewis C. Pell dated September 30, 2011.
|
Incorporated by reference to Exhibit 99.2 to Current Report on Form 8-K filed on October 4, 2011 (File No. 000-20970)
|
||
10.3
|
Letter Agreement dated December 21, 2014 by and between Vision-Sciences, Inc. and Lewis C. Pell regarding extension of warrants.
|
Incorporated by reference to Exhibit 4.4 to Current Report on Form 8-K as filed with the SEC on December 22, 2014 (File No. 000-20970)
|
||
10.4
|
Convertible Promissory Note issued by Vision-Sciences, Inc. issued to Lewis C. Pell dated as of September 19, 2012.
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed with the SEC on September 20, 2012 (File No. 000-20970)
|
||
10.5
|
Additional Convertible Promissory Note issued by Vision-Sciences, Inc. to Lewis C. Pell dated September 25, 2013.
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed with the SEC on September 30, 2013 (File No. 000-20970)
|
||
10.6
|
2014 Convertible Promissory Note issued by Vision-Sciences, Inc. to Lewis C. Pell dated June 16, 2014.
|
Incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed with the SEC of June 17, 2014 (File No. 000-20970)
|
||
10.7
|
Amendment to Convertible Promissory Note dated December 21, 2014 by and between Vision-Sciences, Inc. and Lewis C. Pell.
|
Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K as filed with the SEC on December 22, 2014 (File No. 000-20970)
|
||
10.8
|
Amendment to Additional Convertible Promissory Note dated December 21, 2014 by and between Vision-Sciences, Inc. and Lewis C. Pell.
|
Incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K as filed with the SEC on December 22, 2014 (File No. 000-20970)
|
||
10.9
|
Amendment to 2014 Convertible Promissory Note dated December 21, 2014 by and between Vision-Sciences, Inc. and Lewis C. Pell.
|
Incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K as filed with the SEC on December 22, 2014 (File No. 000-20970)
|
Exhibit
No.
|
Exhibit
|
Method of Filing
|
||
10.10
|
Settlement Agreement, dated May 23, 2016, by and among Cogentix Medical, Inc., Robert C. Kill, Lewis C. Pell, Howard I. Zauberman, Kevin H. Roche, Kenneth H. Paulus, James P. Stauner, and Cheryl Pegus.
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K as filed with the SEC on May 27, 2016 (File No. 000-20870)
|
||
10.11
|
Note Exchange Agreement, dated September 7, 2016, by and between Cogentix Medical, Inc. and Lewis C. Pell.
|
Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K as filed with the SEC on September 7, 2016 (File No. 000-20870)
|
||
10.12
|
Securities Purchase Agreement, dated September 7, 2016, by and between Cogentix Medical, Inc. and Accelmed Growth Partners, L.P.
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K as filed with the SEC on September 7, 2016 (File No. 000-20870)
|
||
10.13
|
Registration Rights Agreement, dated November 3, 2016, by and among Cogentix Medical, Inc., Accelmed Growth Partners, L.P. and Lewis C. Pell.
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K as filed with the SEC on November 3, 2016
(File No. 000-20870)
|
||
10.14
|
Voting Agreement, dated September 7, 2016, by and between Accelmed Growth Partners, L.P. and Lewis C. Pell.
|
Incorporated by reference to Exhibit 99.2 to Current Report on
Form 8-K
as filed with the SEC on September 7, 2016 (File No. 000-20870)
|
||
10.15
|
Lease Agreement between Vision-Sciences, Inc. and 30 Ramland Road LLC dated as of March 23, 2000.
|
Incorporated by reference to Exhibit 10.27 to Annual Report on Form 10-K for the fiscal year ended March 31, 2000 filed with the SEC on June 29, 2000 (File No. 333-72547)
|
||
10.16
|
First Amendment to Lease between Vision-Sciences, Inc. and 30 Ramland Road, LLC dated as of August 31, 2000.
|
Incorporated by reference to Exhibit 10.22 to Annual Report on Form 10-K for the fiscal year ended March 31, 2015 filed with the SEC on June 25, 2015 (File No. 000-20970)
|
||
10.17
|
Second Amendment to Lease between Vision-Sciences, Inc. and 30 Ramland Road, LLC dated as of January 7, 2005.
|
Incorporated by reference to Exhibit 10.23 to Annual Report on Form 10-K for the fiscal year ended March 31, 2015 filed with the SEC on June 25, 2015 (File No. 000-20970)
|
||
10.18
|
Third Amendment to Lease between Vision-Sciences, Inc. and 30 Ramland Road, LLC dated as of December 26, 2006.
|
Incorporated by reference to Exhibit 10.38 to Annual Report on Form 10-K for the fiscal year ended March 31, 2008 filed with the SEC on July 3, 2008 (File No. 000-20970)
|
||
10.19
|
Fourth Amendment to Lease between Vision-Sciences, Inc. and 30 Ramland Road, LLC dated as of April 12, 2009.
|
Incorporated by reference to Exhibit 10.44 to Annual Report on Form 10-K for the fiscal year ended March 31, 2009 filed with the SEC on June 29, 2009 (File No. 000-20970)
|
||
10.20
|
Fifth Amendment to Lease between Vision-Sciences, Inc. and 30 Ramland Road, LLC dated as of December 12, 2014.
|
Incorporated by reference to Exhibit 10.20 to Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on March 30, 2017 (File No. 000-20970)
|
||
10.21
|
Sixth Amendment to Lease between Vision-Sciences, Inc. and 30 Ramland Road, LLC dated as of January 6, 2017.
|
Incorporated by reference to Exhibit 10.21 to Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on March 30, 2017 (File No. 000-20970)
|
Exhibit
No.
|
Exhibit
|
Method of Filing
|
||
10.22
|
Loan Extension Agreement dated March 21, 2017, to the Loan Agreement, dated September 18, 2015, by and between Cogentix Medical, Inc., Machida Incorporated, Uroplasty, LLC, and Venture Bank
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed with the SEC on March 24, 2017 (File No. 000-20970)
|
||
10.23
|
Supply Agreement, dated December 6, 2007, by and between Cogentix Medical, Inc. (formerly Uroplasty, Inc.) and Tyco Healthcare Group LP (d/b/a Covidien)
|
Incorporated by reference to Exhibit 10.33 to Current Report on Form 8-K filed on December 6, 2007 by Uroplasty, Inc. (File No. 001-32632)
|
||
10.24
|
First Amendment dated February 26, 2008, to the Supply Agreement, dated December 6, 2007, by and between Cogentix Medical, Inc. and Tyco Healthcare Group LP (d/b/a Covidien)
|
Incorporated by reference to Exhibit 10.4 to Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed on May 12, 2017 (File No. 000-20970)
|
||
10.25
|
Second Amendment dated March 24, 2010, to the Supply Agreement, dated December 6, 2007, by and between Cogentix Medical, Inc. and Tyco Healthcare Group LP (d/b/a Covidien)
|
Incorporated by reference to Exhibit 10.5 to Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed on May 12, 2017 (File No. 000-20970)
|
||
10.26
|
Third Amendment dated April 30, 2011, to the Supply Agreement, dated December 6, 2007, by and between Cogentix Medical, Inc. and Tyco Healthcare Group LP (d/b/a Covidien)
|
Incorporated by reference to Exhibit 10.6 to Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed on May 12, 2017 (File No. 000-20970)
|
||
10.27
|
Fourth Amendment dated March 31, 2014, to the Supply Agreement, dated December 6, 2007, by and between Cogentix Medical, Inc. and Covidien Sales LLC
|
Incorporated by reference to Exhibit 10.7 to Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed on May 12, 2017 (File No. 000-20970)
|
||
10.28
|
Fifth Amendment effective July 1, 2017, to the Supply Agreement, dated December 6, 2007, by and between Cogentix Medical, Inc. and Covidien Sales LLC
|
Incorporated by reference to Exhibit 10.8 to Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed on May 12, 2017 (File No. 000-20970)
|
||
**10.29
|
Employment Agreement between Uroplasty, Inc. and Robert C. Kill dated July 22, 2013.
|
Incorporated by reference to Exhibit 10.15 to Uroplasty’s Annual Report on Form 10-K for the fiscal year ended March 31, 2013 (File No. 001-32632)
|
||
**10.30
|
First Amendment to the Employment Agreement between Uroplasty, Inc. and Robert C. Kill dated May 29, 2014.
|
Incorporated by reference to Exhibit 10.1 to Uroplasty’s Current Report on Form 8-K as filed with the SEC on June 3, 2014 (File No. 001-32632)
|
||
**10.31
|
Separation and Release Agreement, dated May 23, 2016, by and among Cogentix Medical, Inc., Robert C. Kill and the other signatories thereto.
|
Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K as filed with the SEC on May 27, 2016 (File No. 000-20870)
|
||
**10.32
|
Employment Agreement, dated July 11, 2016, by and between Cogentix Medical, Inc. and Darin Hammers.
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K as filed with the SEC on July 12, 2016 (File No. 000-20870)
|
Exhibit
No.
|
Exhibit
|
Method of Filing
|
||
**10.33
|
Employment Agreement, dated June 6, 2016, by and between Cogentix Medical, Inc. and Brett Reynolds.
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K as filed with the SEC on June 15, 2016 (File No. 000-20870)
|
||
10.34
|
Lease Agreement between Uroplasty, Inc. and Liberty Property Limited Partnership dated January 20, 2006.
|
Incorporated by reference to Exhibit 10.25 to Uroplasty’s Current Report on Form 8-K as filed with the SEC on January 24, 2006 (File No. 001-32632)
|
||
10.35
|
First Amendment to Lease by and between Liberty Property Limited Partnership and Uroplasty, Inc. dated January 24, 2014.
|
Incorporated by reference to Exhibit 10.21 to Uroplasty’s Annual Report on Form 10-K for the fiscal year ended March 31, 2014 (File No. 001-32632)
|
||
10.36
|
Lease Agreement between Glenborough Flanders Park, LLC and Cogentix Medical, Inc. dated as of April 2, 2015.
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K as filed with the SEC on April 3, 2015 (File No. 000-20970)
|
||
**10.37
|
Cogentix Medical, Inc. 2015 Omnibus Incentive Plan.
|
Incorporated by reference to Exhibit 4.10 to Registration Statement on Form S-8 as filed with the SEC on March 31, 2015 (File No. 333-203135)
|
||
**10.38
|
Uroplasty, Inc. 2002 Employee Stock Option Plan.
|
Incorporated by reference to the copy filed as Appendix B to Uroplasty’s Definitive Proxy Statement as filed with the SEC on August 1, 2002 (File No. 000-20989)
|
||
**10.39
|
Uroplasty, Inc. 2006 Amended Stock and Incentive Plan.
|
Incorporated by reference to the copy attached as Appendix A to Uroplasty’s Definitive Proxy Statement as filed with the SEC on July 25, 2008 (File No. 001-32632)
|
||
**10.40
|
Form of Nonqualified Stock Option Agreement under the Uroplasty, Inc. 2006 Amended Stock and Incentive Plan.
|
Incorporated by reference to Exhibit 10.1 to Uroplasty’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (File No. 001-32632)
|
||
**10.41
|
Form of Non-employee Director Nonqualified Stock Option Agreement under the Uroplasty, Inc. 2006 Amended Stock and Incentive Plan.
|
Incorporated by reference to Exhibit 10.2 to Uroplasty’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (File No. 001-32632)
|
||
**10.42
|
Form of Restricted Stock Award Agreement under the Uroplasty, Inc. 2006 Amended Stock and Incentive Plan.
|
Incorporated by reference to Exhibit 10.3 to Uroplasty’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (File No. 001-32632)
|
||
**10.43
|
Form of Non-employee Director Restricted Stock Award Agreement under the Uroplasty, Inc. 2006 Amended Stock and Incentive Plan.
|
Incorporated by reference to Exhibit 10.4 to Uroplasty’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (File No. 001-32632)
|
||
**10.44
|
Uroplasty, Inc. Performance Award Grant Notice 2006 Equity and Incentive Plan.
|
Incorporated by reference to Exhibit 10.2 to Uroplasty’s Current Report on Form 8-K filed October 3, 2014 (File No. 001-32632)
|
Exhibit
No.
|
Exhibit
|
Method of Filing
|
||
**10.45
|
Vision-Sciences, Inc. 2000 Stock Incentive Plan.
|
Incorporated by reference to Exhibit 10.26 to the Annual Report on Form 10-K for the fiscal year ended March 31, 2000 filed with the SEC on June 29, 2000 (File No. 333-72547)
|
||
**10.46
|
Vision-Sciences, Inc. 2003 Director Option Plan, as amended.
|
Incorporated by reference to Exhibit 4 to the Registration Statement on Form S-8 filed with the SEC on October 10, 2008 (File No. 333-154150)
|
||
**10.47
|
Vision-Sciences, Inc. 2007 Stock Incentive Plan, as amended.
|
Incorporated by reference to the Appendix A to the Definitive Proxy Statement filed with the SEC on July 27, 2007 on Schedule 14A (File No. 000-20970)
|
||
**10.48
|
Restricted Stock Agreement dated November 26, 2013 between Vision-Sciences, Inc. and Howard I. Zauberman.
|
Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed with the SEC on November 27, 2013 (File No. 000-20970)
|
||
**10.49
|
Consulting Agreement dated March 2, 2017 between Cogentix Medical, Inc. and Howard I. Zauberman.
|
Incorporated by reference to Exhibit 10.42 to Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on March 30, 2017 (File No. 000-20970)
|
||
17.1
|
Letter dated May 24, 2016 from Kevin H. Roche to the Directors of Cogentix Medical, Inc.
|
Incorporated by reference to Exhibit 17.1 to Current Report on Form 8-K as filed with the SEC on May 27, 2016
(File No. 000-20870)
|
||
Subsidiaries of Cogentix Medical, Inc.
|
Filed herewith
|
|||
Consent of Grant Thornton LLP, independent registered public accounting firm.
|
Filed herewith
|
|||
Certification by the PEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
Filed herewith
|
|||
Certification by the PFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
Filed herewith
|
|||
Certification by the PEO pursuant to Section 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Filed herewith
|
|||
Certification by the PFO pursuant to Section 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Filed herewith
|
|||
101.INS
|
XBRL Instance
|
Furnished herewith ***
|
||
101.SCH
|
XBRL Taxonomy Extension Schema
|
Furnished herewith ***
|
||
101.CAL
|
XBRL Taxonomy Extension Calculation
|
Furnished herewith ***
|
||
101.DEF
|
XBRL Taxonomy Extension Definition
|
Furnished herewith ***
|
||
101.LAB
|
XBRL Taxonomy Extension Labels
|
Furnished herewith ***
|
||
101.PRE
|
XBRL Taxonomy Extension Presentation
|
Furnished herewith ***
|
Dated: March 30, 2018
|
COGENTIX MEDICAL, INC.
|
||
By
|
/s/ Darin Hammers
|
||
Darin Hammers
|
|||
President and Chief Executive Officer
|
Name
|
Title / Capacity
|
Date
|
||
/s/ Darin Hammers
|
President and Chief Executive Officer, (Principal Executive Officer)
|
March 30, 2018
|
||
Darin Hammers
|
||||
/s/ Brett Reynolds
|
Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
March 30, 2018
|
||
Brett Reynolds
|
||||
/s/ Uri Geiger
|
Chairman of the Board of Directors
|
March 30, 2018
|
||
Uri Geiger
|
||||
/s/ Nachum Shamir
|
Director
|
March 30, 2018
|
||
Nachum Shamir
|
||||
/s/ James A. D’Orta
|
Director
|
March 30, 2018
|
||
James A. D’Orta
|
||||
/s/ Cheryl Pegus
|
Director
|
March 30, 2018
|
||
Cheryl Pegus
|
||||
/s/ Lewis C. Pell
|
Director
|
March 30, 2018
|
||
Lewis C. Pell
|
||||
/s/ Kenneth S. Samet
|
Director
|
March 30, 2018
|
||
Kenneth S. Samet
|
||||
/s/ Howard I. Zauberman
|
Director
|
March 30, 2018
|
||
Howard I. Zauberman
|
Page(s)
|
||
Report of Independent Registered Public Accounting Firm
|
F-2
|
|
Consolidated Financial Statements:
|
||
Consolidated Balance Sheets
|
F-3
|
|
Consolidated Statements of Operations
|
F-5
|
|
Consolidated Statements of Comprehensive Loss
|
F-6
|
|
Consolidated Statements of Shareholders’ Equity
|
F-7
|
|
Consolidated Statements of Cash Flows
|
F-8
|
|
Notes to Consolidated Financial Statements
|
F-9
|
December 31,
2017
|
December 31,
2016
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
20,909,605
|
$
|
9,369,624
|
||||
Short-term investments
|
6,247,265
|
13,573,057
|
||||||
Accounts receivable, net
|
8,275,518
|
6,770,838
|
||||||
Inventories
|
7,176,695
|
7,235,043
|
||||||
Other
|
1,075,170
|
571,527
|
||||||
Total current assets
|
43,684,253
|
37,520,089
|
||||||
Property, plant, and equipment, net
|
2,427,479
|
2,115,316
|
||||||
Goodwill
|
19,153,554
|
18,749,888
|
||||||
Other intangibles, net
|
7,362,144
|
9,482,578
|
||||||
Long-term investments
|
-
|
5,344,004
|
||||||
Equity method investment
|
1,871,360
|
-
|
||||||
Deferred tax assets and other
|
245,078
|
163,427
|
||||||
Total assets
|
$
|
74,743,868
|
$
|
73,375,302
|
December 31,
2017
|
December 31,
2016
|
|||||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
2,983,899
|
$
|
2,689,035
|
||||
Income taxes payable
|
87,441
|
113,191
|
||||||
Accrued liabilities:
|
||||||||
Compensation
|
4,171,976
|
4,670,640
|
||||||
Deferred revenue
|
774,635
|
597,524
|
||||||
Other
|
1,360,743
|
838,272
|
||||||
Total current liabilities
|
9,378,694
|
8,908,662
|
||||||
Accrued pension liability
|
264,692
|
308,918
|
||||||
Deferred rent
|
586,296
|
639,019
|
||||||
Other
|
478,347
|
278,780
|
||||||
Total liabilities
|
10,708,029
|
10,135,379
|
||||||
Commitments and contingencies
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; none issued or outstanding at December 31, 2017 and 2016, respectively
|
-
|
-
|
||||||
Common stock $.01 par value; 100,000,000 shares authorized, 60,905,666 and 60,436,548 shares issued and outstanding at December 31, 2017 and 2016, respectively.
|
609,059
|
604,368
|
||||||
Additional paid-in capital
|
145,982,121
|
144,430,381
|
||||||
Accumulated deficit
|
(81,999,901
|
)
|
(81,005,654
|
)
|
||||
Accumulated other comprehensive loss
|
(555,440
|
)
|
(789,172
|
)
|
||||
Total shareholders’ equity
|
64,035,839
|
63,239,923
|
||||||
Total liabilities and shareholders’ equity
|
$
|
74,743,868
|
$
|
73,375,302
|
Twelve Months Ended
December 31
|
Twelve Months Ended
December 31
|
|||||||
2017
|
2016
|
|||||||
Net sales
|
$
|
56,316,109
|
$
|
51,851,159
|
||||
Cost of goods sold
|
18,872,250
|
16,248,111
|
||||||
Gross profit
|
37,443,859
|
35,603,048
|
||||||
Operating expenses
|
||||||||
General and administrative
|
8,293,814
|
6,778,010
|
||||||
Research and development
|
4,742,308
|
4,701,539
|
||||||
Selling and marketing
|
22,907,468
|
21,313,364
|
||||||
One-time costs
|
-
|
2,257,654
|
||||||
Amortization of intangibles
|
2,389,743
|
2,363,432
|
||||||
38,333,333
|
37,413,999
|
|||||||
Operating loss
|
(889,474
|
)
|
(1,810,951
|
)
|
||||
Other income (expense)
|
||||||||
Interest income
|
245,678
|
25,455
|
||||||
Interest expense
|
(29,034
|
)
|
(1,298,253
|
)
|
||||
Debt conversion expense
|
-
|
(18,841,407
|
)
|
|||||
Foreign currency exchange gain (loss)
|
48,479
|
(25,022
|
)
|
|||||
Other
|
7,365
|
-
|
||||||
272,488
|
(20,139,227
|
)
|
||||||
Loss before income taxes
|
(616,986
|
)
|
(21,950,178
|
)
|
||||
Income tax expense
|
137,124
|
144,769
|
||||||
Equity-method investment activity, net of tax
|
128,640
|
-
|
||||||
Net loss
|
$
|
(882,750
|
)
|
$
|
(22,094,947
|
)
|
||
Basic and diluted net loss per common share
|
$
|
(0.01
|
)
|
$
|
(0.71
|
)
|
||
Weighted average common shares outstanding:
|
||||||||
Basic and diluted
|
59,981,534
|
30,903,035
|
Twelve Months Ended
December 31
|
Twelve Months Ended
December 31
|
|||||||
2017
|
2016
|
|||||||
Net loss
|
$
|
(882,750
|
)
|
$
|
(22,094,947
|
)
|
||
Other comprehensive income, net of tax:
|
||||||||
Foreign currency translation adjustments
|
226,801
|
(111,515
|
)
|
|||||
Unrealized gain (loss) on available-for-sale investments
|
17,335
|
(21,349
|
)
|
|||||
Pension adjustments
|
(10,404
|
)
|
220,190
|
|||||
Total other comprehensive income, net of tax
|
233,732
|
87,326
|
||||||
Comprehensive loss
|
$
|
(649,018
|
)
|
$
|
(22,007,621
|
)
|
Common
Stock
|
Shares
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
Shareholders’
Equity
|
|||||||||||||||||||
Balance at December 31, 2015
|
26,057,327
|
$
|
260,574
|
$
|
76,485,650
|
$
|
(58,910,707
|
)
|
$
|
(876,498
|
)
|
$
|
16,959,019
|
|||||||||||
Share-based compensation expense
|
629,994
|
6,300
|
741,819
|
-
|
-
|
748,119
|
||||||||||||||||||
Restricted stock exchanged for taxes
|
(68,229
|
)
|
(682
|
)
|
(56,661
|
)
|
-
|
-
|
(57,343
|
)
|
||||||||||||||
Conversion of related party debt and accrued interest
|
17,688,423
|
176,885
|
43,991,964
|
-
|
-
|
44,168,849
|
||||||||||||||||||
Issuance of common stock, net of expenses
|
16,129,033
|
161,291
|
23,267,609
|
-
|
-
|
23,428,900
|
||||||||||||||||||
Comprehensive loss
|
-
|
-
|
-
|
(22,094,947
|
)
|
87,326
|
(22,007,621
|
)
|
||||||||||||||||
Balance at December 31, 2016
|
60,436,548
|
604,368
|
144,430,381
|
(81,005,654
|
)
|
(789,172
|
)
|
63,239,923
|
||||||||||||||||
Share-based compensation expense
|
472,168
|
4,722
|
1,448,189
|
-
|
-
|
1,452,911
|
||||||||||||||||||
Proceeds from exercise of stock options, net of shares exchanged for taxes
|
(3,050
|
)
|
(31
|
)
|
(7,946
|
)
|
-
|
-
|
(7,977
|
)
|
||||||||||||||
Adoption of ASU 2016-09
|
-
|
-
|
111,497
|
(111,497
|
)
|
-
|
-
|
|||||||||||||||||
Comprehensive loss
|
-
|
-
|
-
|
(882,750
|
)
|
233,732
|
(649,018
|
)
|
||||||||||||||||
Balance at December 31, 2017
|
60,905,666
|
$
|
609,059
|
$
|
145,982,121
|
$
|
(81,999,901
|
)
|
$
|
(555,440
|
)
|
$
|
64,035,839
|
Twelve Months ended
December 31,
|
Twelve Months ended
December 31,
|
|||||||
2017
|
2016
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(882,750
|
)
|
$
|
(22,094,947
|
)
|
||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
3,165,980
|
3,136,109
|
||||||
Debt conversion expense
|
-
|
18,841,407
|
||||||
Loss by equity method investee
|
128,640
|
-
|
||||||
Loss on disposal of equipment
|
1,997
|
5,640
|
||||||
Amortization of premium on marketable securities
|
104,757
|
8,003
|
||||||
Share-based compensation expense
|
1,452,911
|
748,119
|
||||||
Amortization of discount on related party debt
|
-
|
940,923
|
||||||
Long term incentive plan
|
-
|
(74,404
|
)
|
|||||
Deferred income taxes
|
(80,048
|
)
|
57,536
|
|||||
Deferred rent
|
(32,697
|
)
|
3,777
|
|||||
Restricted stock exchanged for taxes
|
(17,690
|
)
|
(57,343
|
)
|
||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(661,770
|
)
|
1,359,056
|
|||||
Inventories
|
276,090
|
(2,655,221
|
)
|
|||||
Other current assets
|
(279,327
|
)
|
253,553
|
|||||
Accounts payable
|
(90,320
|
)
|
484,237
|
|||||
Interest payable
|
-
|
292,049
|
||||||
Accrued compensation
|
(768,485
|
)
|
1,609,281
|
|||||
Accrued liabilities, other
|
(108,111
|
)
|
270,612
|
|||||
Accrued pension liability
|
(85,270
|
)
|
(116,395
|
)
|
||||
Deferred revenue
|
182,804
|
288,329
|
||||||
Net cash provided by operating activities
|
2,306,711
|
3,300,321
|
||||||
Cash flows from investing activities:
|
||||||||
Proceeds from maturity of available-for-sale-securities
|
15,020,000
|
-
|
||||||
Purchases of available-for-sale securities
|
(2,438,322
|
)
|
(18,945,717
|
)
|
||||
Purchase of equity method investment
|
(2,000,000
|
)
|
-
|
|||||
Purchases of property, plant and equipment
|
(856,875
|
)
|
(355,145
|
)
|
||||
Acquisition of business, net of cash acquired
|
(181,261
|
)
|
-
|
|||||
Net cash provided by (used in) investing activities
|
9,543,542
|
(19,300,862
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Borrowings from line of credit
|
3,033,385
|
2,646,500
|
||||||
Repayments of line of credit
|
(3,033,385
|
)
|
(2,646,500
|
)
|
||||
Payments of note payable
|
(47,329
|
)
|
-
|
|||||
Payments of secured borrowings
|
(238,984
|
)
|
-
|
|||||
Proceeds from exercise of stock options
|
9,713
|
-
|
||||||
Proceeds from sale of common stock, net
|
-
|
23,428,900
|
||||||
Net cash provided by (used in) financing activities
|
(276,600
|
)
|
23,428,900
|
|||||
Effect of exchange rates on cash and cash equivalents
|
(33,672
|
)
|
(35,329
|
)
|
||||
Net increase in cash and cash equivalents
|
11,539,981
|
7,393,030
|
||||||
Cash and cash equivalents at beginning of period
|
9,369,624
|
1,976,594
|
||||||
Cash and cash equivalents at end of period
|
$
|
20,909,605
|
$
|
9,369,624
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the period for income tax
|
$
|
284,374
|
$
|
42,957
|
||||
Cash paid during the period for interest
|
$
|
13,845
|
$
|
62,418
|
||||
Non-cash financing activities:
|
||||||||
Note payable issued in conjunction with acquisition of business
|
$
|
462,184
|
$
|
-
|
||||
Non-cash debt and interest converted to equity
|
$
|
-
|
$
|
25,327,441
|
1. |
persuasive evidence that an arrangement exists;
|
2. |
delivery has occurred or services were rendered;
|
3. |
the fee is fixed and determinable; and
|
4. |
collectability is reasonably assured
|
· |
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
· |
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
· |
Level 3: Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions.
|
December 31, 2017
|
||||||||||||||||||||||||||||
Adjusted Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
Cash and Cash
Equivalents
|
Short-Term
Investments
|
Long-Term
Investments
|
||||||||||||||||||||||
Cash
|
$
|
4,318,229
|
$
|
-
|
$
|
-
|
$
|
4,318,229
|
$
|
4,318,229
|
$
|
-
|
$
|
-
|
||||||||||||||
Level 1:
|
||||||||||||||||||||||||||||
Money market funds
|
16,591,376
|
-
|
-
|
16,591,376
|
16,591,376
|
-
|
-
|
|||||||||||||||||||||
Subtotal
|
16,591,376
|
-
|
-
|
16,591,376
|
16,591,376
|
-
|
-
|
|||||||||||||||||||||
Level 2:
|
||||||||||||||||||||||||||||
Certificates of deposit
|
1,440,000
|
-
|
(1,783
|
)
|
1,438,217
|
-
|
1,438,217
|
-
|
||||||||||||||||||||
Commercial paper
|
1,198,574
|
-
|
(362
|
)
|
1,198,212
|
-
|
1,198,212
|
-
|
||||||||||||||||||||
Corporate notes/bonds
|
3,612,704
|
-
|
(1,868
|
)
|
3,610,836
|
-
|
3,610,836
|
-
|
||||||||||||||||||||
U.S. government agencies
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Subtotal
|
6,251,278
|
-
|
(4,013
|
)
|
6,247,265
|
-
|
6,247,265
|
-
|
||||||||||||||||||||
Total
|
$
|
27,160,883
|
$
|
-
|
$
|
(4,013
|
)
|
$
|
27,156,870
|
$
|
20,909,605
|
$
|
6,247,265
|
$
|
-
|
December 31, 2016
|
||||||||||||||||||||||||||||
Adjusted Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
Cash and Cash
Equivalents
|
Short-Term
Investments
|
Long-Term
Investments
|
||||||||||||||||||||||
Cash
|
$
|
3,773,790
|
$
|
-
|
$
|
-
|
$
|
3,773,790
|
$
|
3,773,790
|
$
|
-
|
$
|
-
|
||||||||||||||
Level 1:
|
||||||||||||||||||||||||||||
Money market funds
|
3,197,958
|
-
|
-
|
3,197,958
|
3,197,958
|
-
|
-
|
|||||||||||||||||||||
Subtotal
|
3,197,958
|
-
|
-
|
3,197,958
|
3,197,958
|
-
|
-
|
|||||||||||||||||||||
Level 2:
|
||||||||||||||||||||||||||||
Certificates of deposit
|
2,160,010
|
2,285
|
-
|
2,162,295
|
-
|
720,031
|
1,442,264
|
|||||||||||||||||||||
Commercial paper
|
5,984,110
|
-
|
(4,100
|
)
|
5,980,010
|
2,397,876
|
3,582,134
|
-
|
||||||||||||||||||||
Corporate notes/bonds
|
9,688,957
|
-
|
(13,885
|
)
|
9,675,072
|
-
|
7,273,992
|
2,401,080
|
||||||||||||||||||||
U.S. government agencies
|
3,503,208
|
-
|
(5,648
|
)
|
3,497,560
|
-
|
1,996,900
|
1,500,660
|
||||||||||||||||||||
Subtotal
|
21,336,285
|
2,285
|
(23,633
|
)
|
21,314,937
|
2,397,876
|
13,573,057
|
5,344,004
|
||||||||||||||||||||
Total
|
$
|
28,308,033
|
$
|
2,285
|
$
|
(23,633
|
)
|
$
|
28,286,685
|
$
|
9,369,624
|
$
|
13,573,057
|
$
|
5,344,004
|
December 31,
2017
|
December 31,
2016
|
|||||||
Raw materials
|
$
|
3,449,000
|
$
|
4,483,000
|
||||
Work-in-process
|
322,000
|
462,000
|
||||||
Finished goods
|
3,406,000
|
2,290,000
|
||||||
$
|
7,177,000
|
$
|
7,235,000
|
December 31,
2017
|
December 31,
2016
|
|||||||
Land
|
$
|
147,000
|
$
|
129,000
|
||||
Building
|
674,000
|
588,000
|
||||||
Leasehold improvements
|
1,248,000
|
1,240,000
|
||||||
Internal use software
|
829,000
|
821,000
|
||||||
Equipment
|
4,155,000
|
3,203,000
|
||||||
$
|
7,053,000
|
$
|
5,981,000
|
|||||
Less accumulated depreciation and amortization
|
(4,626,000
|
)
|
(3,866,000
|
)
|
||||
$
|
2,427,000
|
$
|
2,115,000
|
December 31,
2017
|
December 31,
2016
|
|||||||
Warranty reserve at beginning of period
|
$
|
127,000
|
$
|
146,000
|
||||
Warranties accrued during the period
|
167,000
|
77,000
|
||||||
Warranties settled during the period
|
(141,000
|
)
|
(96,000
|
)
|
||||
Warranty reserve at end of period
|
$
|
153,000
|
$
|
127,000
|
December 31,
2017
|
December 31,
2016
|
|||||||
Sales tax and VAT payable
|
$
|
579,000
|
$
|
328,000
|
||||
Note payable
|
214,000
|
-
|
||||||
Accrued legal and accounting fees
|
21,000
|
101,000
|
||||||
Accrued vendor payables
|
142,000
|
190,000
|
||||||
Other accrued expenses
|
405,000
|
219,000
|
||||||
$
|
1,361,000
|
$
|
838,000
|
Number of options,
warrants and unvested
restricted stock
|
Range of
exercise prices
|
|||||||
Years ended:
|
||||||||
Twelve months December 31, 2017
|
3,022,582
|
$
|
0.88 - $24.40
|
|||||
Twelve months December 31, 2016
|
2,674,000
|
$
|
0.88 - $24.40
|
December 31, 2017
|
December 31, 2016
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Weighted
Average
Amortization
period
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Weighted
Average
Amortization
period
|
|||||||||||||||||||
Developed technology
|
$
|
6,200,000
|
$
|
2,436,000
|
4.25
|
$
|
6,200,000
|
$
|
1,550,000
|
5.25
|
||||||||||||||
Patents & trademarks
|
5,653,000
|
5,634,000
|
7.25
|
5,653,000
|
5,616,000
|
8.25
|
||||||||||||||||||
Trademarks and trade names
|
190,000
|
84,000
|
7.25
|
190,000
|
75,000
|
8.25
|
||||||||||||||||||
Customer relationships
|
7,540,000
|
4,067,000
|
2.27
|
7,270,000
|
2,590,000
|
3.25
|
||||||||||||||||||
19,583,000
|
$
|
12,221,000
|
19,313,000
|
$
|
9,831,000
|
|||||||||||||||||||
Accumulated amortization
|
12,221,000
|
9,831,000
|
||||||||||||||||||||||
Net book value of amortizable intangible assets
|
$
|
7,362,000
|
3.22
|
$
|
9,482,000
|
4.23
|
Year ending December 31,
|
||||
2018
|
$
|
2,437,000
|
||
2019
|
2,431,000
|
|||
2020
|
1,307,000
|
|||
2021
|
894,000
|
|||
2022
|
230,000
|
|||
Thereafter
|
63,000
|
|||
Total
|
$
|
7,362,000
|
Cash and cash equivalents
|
$
|
104,373
|
||
Accounts receivable
|
811,034
|
|||
Inventory
|
202,410
|
|||
Property, plant and equipment
|
172,242
|
|||
Customer relationships
|
268,000
|
|||
Goodwill
|
400,870
|
|||
Total assets acquired
|
$
|
1,958,929
|
||
Accounts payable
|
$
|
1,001,885
|
||
Deferred tax liability
|
50,920
|
|||
Total liabilities assumed
|
$
|
1,052,805
|
||
Total Purchase Price
|
$
|
906,124
|
Amount
|
Weighted Average Life-Years
|
|||||||
Customer relationships
|
$
|
268,000
|
3
|
December 31,
2017
|
December 31,
2016
|
|||||||
Expected life, in years
|
3.00
|
3.90
|
||||||
Risk-free interest rate
|
1.45
|
%
|
.98
|
%
|
||||
Expected volatility
|
66.89
|
%
|
61.86
|
%
|
||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
Number of
shares
|
Weighted
average
exercise
price
|
Weighted
average
grant date
fair value
|
Aggregate
intrinsic
value
|
Weighted
average
remaining
life in years
|
||||||||||||||||
Balance at December 31, 2015
|
2,573,640
|
$
|
4.46
|
-
|
5.24
|
|||||||||||||||
Options granted
|
692,400
|
1.05
|
$
|
0.49
|
||||||||||||||||
Options exercised
|
-
|
|||||||||||||||||||
Options surrendered
|
(1,585,050
|
)
|
3.90
|
|||||||||||||||||
Balance at December 31, 2016
|
1,680,990
|
$
|
3.54
|
$
|
752,290
|
6.55
|
||||||||||||||
Options granted
|
1,042,809
|
1.65
|
$
|
0.74
|
||||||||||||||||
Options exercised
|
(7,211
|
)
|
1.35
|
$
|
13,001
|
|||||||||||||||
Options surrendered
|
(170,625
|
)
|
4.36
|
|||||||||||||||||
Balance at December 31, 2017
|
2,545,963
|
$
|
2.72
|
$
|
3,243,914
|
6.13
|
||||||||||||||
Options exercisable at December 31, 2017
|
1,031,731
|
$
|
4.55
|
$
|
705,799
|
3.39
|
Number of
Shares
|
Weighted
average
grant date
fair value
|
Weighted
average
remaining
life in years
|
Aggregate
intrinsic
value
|
|||||||||||||
Balance at December 31, 2015
|
686,910
|
$
|
2.41
|
1.59
|
$
|
886,114
|
||||||||||
Shares granted
|
937,858
|
1.18
|
||||||||||||||
Shares vested
|
(324,521
|
)
|
2.19
|
652,287
|
||||||||||||
Shares surrendered
|
(307,699
|
)
|
2.45
|
|||||||||||||
Balance at December 31, 2016
|
992,548
|
$
|
1.30
|
1.35
|
$
|
1,995,021
|
||||||||||
Shares granted
|
542,541
|
1.67
|
||||||||||||||
Shares vested
|
(988,097
|
)
|
1.48
|
$
|
3,112,506
|
|||||||||||
Shares surrendered
|
(70,373
|
)
|
1.56
|
|||||||||||||
Balance at December 31, 2017
|
476,619
|
$
|
1.32
|
1.93
|
$
|
1,501,350
|
2018
|
$
|
817,000
|
||
2019
|
430,000
|
|||
2020
|
279,000
|
|||
2021
|
254,000
|
|||
2022
|
164,000
|
|||
Thereafter
|
544,000
|
|||
$
|
2,488,000
|
2018
|
$
|
-
|
||
2019
|
300,000
|
|||
2020
|
600,000
|
|||
2021
|
900,000
|
|||
2022
|
1,200,000
|
|||
Thereafter
|
1,500,000
|
|||
$
|
4,500,000
|
2018
|
$
|
23,000
|
||
2019
|
24,000
|
|||
2020
|
24,000
|
|||
2021
|
31,000
|
|||
2022
|
39,000
|
|||
2023 to 2027
|
262,000
|
|||
$
|
403,000
|
Twelve months ended
December 31, 2017
|
Twelve months ended
December 31, 2016
|
|||||||
Changes in benefit obligations:
|
||||||||
Projected benefit obligation, beginning of period
|
$
|
3,510,000
|
$
|
3,665,000
|
||||
Service cost
|
95,000
|
104,000
|
||||||
Interest cost
|
75,000
|
76,000
|
||||||
Benefits paid
|
(21,000
|
)
|
(21,000
|
)
|
||||
Plan amendment
|
-
|
(658,000
|
)
|
|||||
Actuarial loss (gain)
|
(8,000
|
)
|
474,000
|
|||||
Foreign currency translation
|
498,000
|
(130,000
|
)
|
|||||
Projected benefit obligation, end of period
|
$
|
4,149,000
|
$
|
3,510,000
|
||||
Changes in plan assets:
|
||||||||
Plan assets, beginning of period
|
$
|
3,321,000
|
$
|
3,002,000
|
||||
Contributions to plan
|
141,000
|
125,000
|
||||||
Management cost
|
(14,000
|
)
|
(12,000
|
)
|
||||
Actual return on assets
|
47,000
|
357,000
|
||||||
Benefits paid
|
(21,000
|
)
|
(21,000
|
)
|
||||
Foreign currency translation
|
472,000
|
(130,000
|
)
|
|||||
Plan assets, end of period
|
$
|
3,946,000
|
$
|
3,321,000
|
Twelve months ended
December 31, 2017
|
Twelve months ended
December 31, 2016
|
|||||||
Unrecognized net prior service benefit
|
$
|
(892,000
|
)
|
$
|
(870,000
|
)
|
||
Unrecognized net losses
|
865,000
|
779,000
|
||||||
Additional other comprehensive gain (gross of income taxes)
|
$
|
(27,000
|
)
|
$
|
(91,000
|
)
|
December 31, 2017
|
December 31, 2016
|
|||||||
Projected benefit obligation
|
$
|
4,149,000
|
$
|
3,510,000
|
||||
Accumulated benefit obligation
|
4,005,000
|
3,376,000
|
||||||
Fair value of plan assets
|
3,946,000
|
3,321,000
|
Twelve months ended
December 31, 2017
|
Twelve months ended
December 31, 2016
|
|||||||
Gross service cost, net of employee contribution
|
$
|
84,000
|
$
|
99,000
|
||||
Interest cost
|
75,000
|
76,000
|
||||||
Management cost
|
13,000
|
5,000
|
||||||
Expected return on assets
|
(74,000
|
)
|
(66,000
|
)
|
||||
Amortization
|
(54,000
|
)
|
(30,000
|
)
|
||||
Net periodic retirement cost
|
$
|
44,000
|
$
|
84,000
|
December 31, 2017
|
December 31, 2016
|
|||||||
Discount rate
|
2.00
|
%
|
2.00
|
%
|
||||
Expected return on assets
|
2.00
|
%
|
2.00
|
%
|
||||
Expected rate of increase in future compensation:
|
||||||||
General
|
2.5
|
%
|
2.5
|
%
|
||||
Individual
|
0
|
%
|
0
|
%
|
2018
|
$
|
194,000
|
||
2019
|
-
|
|||
2020
|
-
|
|||
2021
|
-
|
|||
2022
|
-
|
|||
2023 to 2027
|
714,000
|
|||
$
|
908,000
|
Twelve months ended
December 31, 2017
|
Twelve months ended
December 31, 2016
|
|||||||
Changes in benefit obligations:
|
||||||||
Projected benefit obligation, beginning of period
|
$
|
736,000
|
$
|
744,000
|
||||
Service cost
|
4,000
|
4,000
|
||||||
Interest cost
|
20,000
|
26,000
|
||||||
Benefits paid
|
-
|
(96,000
|
)
|
|||||
Other
|
(4,000
|
)
|
(4,000
|
)
|
||||
Actuarial loss
|
34,000
|
197,000
|
||||||
Foreign currency translation
|
72,000
|
(135,000
|
)
|
|||||
Projected benefit obligation, end of period
|
$
|
862,000
|
$
|
736,000
|
||||
Changes in plan assets:
|
||||||||
Plan assets, beginning of period
|
$
|
616,000
|
$
|
775,000
|
||||
Contributions to plan
|
57,000
|
53,000
|
||||||
Management cost
|
(4,000
|
)
|
(4,000
|
)
|
||||
Benefits Paid
|
-
|
(96,000
|
)
|
|||||
Actual return on assets
|
68,000
|
15,000
|
||||||
Foreign currency translation
|
63,000
|
(127,000
|
)
|
|||||
Plan assets, end of period
|
$
|
800,000
|
$
|
616,000
|
Twelve months ended
December 31, 2017
|
Twelve months ended
December 31, 2016
|
|||||||
Unrecognized net losses (gross of deferred taxes)
|
$
|
225,000
|
$
|
276,000
|
December 31, 2017
|
December 31, 2016
|
|||||||
Projected benefit obligation
|
$
|
862,000
|
$
|
736,000
|
||||
Accumulated benefit obligation
|
862,000
|
736,000
|
||||||
Fair value of plan assets
|
800,000
|
616,000
|
Twelve months ended
December 31, 2017
|
Twelve months ended
December 31, 2016
|
|||||||
Gross service cost, net of employee contribution
|
$
|
4,000
|
$
|
5,000
|
||||
Interest cost
|
20,000
|
26,000
|
||||||
Expected return on assets
|
(14,000
|
)
|
(21,000
|
)
|
||||
Amortization
|
53,000
|
7,000
|
||||||
Net periodic retirement cost
|
$
|
63,000
|
$
|
17,000
|
December 31, 2017
|
December 31, 2016
|
|||||||
Discount rate
|
2.50
|
%
|
2.70
|
%
|
||||
Expected return on assets
|
2.13
|
%
|
2.20
|
%
|
December 31, 2017
|
December 31, 2016
|
|||||||||||||||
Target
Allocation
|
Actual
Allocation
|
Target
Allocation
|
Actual
Allocation
|
|||||||||||||
Other Contract (Netherlands Plan)
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
||||||||
Deposit Administration Contract (U.K. Plan)
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
Asset Class
|
Total
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
December 31, 2017
|
||||||||||||||||
Other Contract (Netherlands Plan)
|
$
|
3,946,000
|
$
|
-
|
$
|
-
|
$
|
3,946,000
|
||||||||
Deposit Administration Contract (U.K. Plan)
|
800,000
|
-
|
800,000
|
-
|
||||||||||||
December 31, 2016
|
||||||||||||||||
Other Contract (Netherlands Plan)
|
$
|
3,321,000
|
$
|
(5,000
|
)
|
$
|
-
|
$
|
3,326,000
|
|||||||
Deposit Administration Contract (U.K. Plan)
|
616,000
|
-
|
616,000
|
-
|
Other Contract (Netherlands Pension Plan Assets)
|
Twelve months ended
December 31, 2017
|
Twelve months ended
December 31, 2016
|
||||||
Beginning balance
|
$
|
3,326,000
|
$
|
3,005,000
|
||||
Loss recognized in earnings
|
59,000
|
54,000
|
||||||
Actuarial loss
|
(26,000
|
)
|
291,000
|
|||||
Purchases
|
141,000
|
130,000
|
||||||
Sales
|
(21,000
|
)
|
(21,000
|
)
|
||||
Transfers
|
(5,000
|
)
|
(3,000
|
)
|
||||
Foreign currency translation
|
472,000
|
(130,000
|
)
|
|||||
Ending balance
|
$
|
3,946,000
|
$
|
3,326,000
|
Twelve months ended
December 31, 2017
|
Twelve months ended
December 31, 2016
|
|||||||
Income tax provision:
|
||||||||
Current:
|
||||||||
Federal and state
|
$
|
13,000
|
$
|
91,000
|
||||
Foreign
|
118,000
|
49,000
|
||||||
Deferred:
|
||||||||
Federal and state
|
-
|
-
|
||||||
Foreign
|
7,000
|
5,000
|
||||||
Total income tax expense
|
$
|
138,000
|
$
|
145,000
|
Twelve months ended
December 31, 2017
|
Twelve months ended
December 31, 2016
|
|||||||
Statutory federal income tax benefit
|
$
|
(246,000
|
)
|
$
|
(7,462,000
|
)
|
||
State tax benefit, net of federal taxes
|
13,000
|
(55,000
|
)
|
|||||
Foreign tax
|
(82,000
|
)
|
(39,000
|
)
|
||||
Nondeductible expenses - debt forgiveness
|
-
|
5,575,000
|
||||||
Nondeductible expenses – other
|
130,000
|
163,000
|
||||||
Subpart F Income
|
-
|
51,000
|
||||||
Valuation allowance (decrease)
|
(2,795,000
|
)
|
(7,334,000
|
)
|
||||
Stock compensation shortfall (windfall)
|
(94,000
|
)
|
96,000
|
|||||
Stock compensation true-up and expirations
|
10,000
|
958,000
|
||||||
NOL expiration and true-up
|
204,000
|
8,110,000
|
||||||
Deferral rate change
|
3,313,000
|
-
|
||||||
True-up of undistributed foreign earnings
|
(317,000
|
)
|
-
|
|||||
Other
|
2,000
|
80,000
|
||||||
Total income tax expense
|
$
|
138,000
|
$
|
143,000
|
December 31, 2017
|
December 31, 2016
|
|||||||
Fixed assets
|
$
|
29,000
|
$
|
(51,000
|
)
|
|||
Intangible assets
|
(1,806,000
|
)
|
(3,479,000
|
)
|
||||
Equity method investment
|
33,000
|
-
|
||||||
Pension liability
|
69,000
|
76,000
|
||||||
Stock based compensation
|
446,000
|
535,000
|
||||||
Inventory
|
128,000
|
483,000
|
||||||
Other reserves and accruals
|
524,000
|
778,000
|
||||||
Deferred rent
|
165,000
|
250,000
|
||||||
Undistributed foreign earnings
|
-
|
(504,000
|
)
|
|||||
Foreign tax credits
|
68,000
|
68,000
|
||||||
Credit carryforwards
|
88,000
|
72,000
|
||||||
Net operating losses
|
7,000,000
|
11,230,000
|
||||||
Customer relations intangible
|
(44,000
|
)
|
-
|
|||||
6,700,000
|
9,458,000
|
|||||||
Less valuation allowance
|
(6,587,000
|
)
|
(9,382,000
|
)
|
||||
$
|
113,000
|
$
|
76,000
|
Segment Revenue
|
December 31,
2017
|
December 31,
2016
|
||||||
Urology
|
49,314,000
|
44,747,000
|
||||||
Airway Management
|
3,277,000
|
3,208,000
|
||||||
Industrial
|
3,725,000
|
3,896,000
|
||||||
Total
|
56,316,000
|
51,851,000
|
Operating Income (Loss)
|
December 31,
2017
|
December 31,
2016
|
||||||
Urology
|
281,000
|
(1,111,000
|
)
|
|||||
Airway Management
|
(988,000
|
)
|
(940,000
|
)
|
||||
Industrial
|
(182,000
|
)
|
240,000
|
|||||
Total
|
(889,000
|
)
|
(1,811,000
|
)
|
United
States
|
All Other
(Foreign)
Countries (1)
|
Consolidated
|
||||||||||
Twelve months ended December 31, 2017
|
$
|
40,888,000
|
$
|
15,428,000
|
$
|
56,316,000
|
||||||
Twelve months ended December 31, 2016
|
$
|
39,513,000
|
$
|
12,338,000
|
$
|
51,851,000
|
(1)
|
No other (foreign) country accounts for 10% or more of the consolidated net sales
|
United States
|
United Kingdom
and The
Netherlands
|
Consolidated
|
||||||||||
December 31, 2017
|
$
|
1,793,000
|
$
|
634,000
|
$
|
2,427,000
|
||||||
December 31, 2016
|
$
|
1,676,000
|
$
|
439,000
|
$
|
2,115,000
|
1 Year Cognyte Software Chart |
1 Month Cognyte Software Chart |
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