EP Medsystems (MM) (NASDAQ:EPMD)
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EP MedSystems, Inc. (NASDAQ: EPMD), today reported its financial
results for the first quarter ending March 31, 2008.
The Company achieved quarterly revenue of $4.6 million, representing a
29% increase over the $3.5 million reported for the same period in 2007.
The Company’s net loss declined 18% to
$1,243,000, or $.04 per share, for the first quarter of 2008, compared
to a net loss of $1.5 million, or $.05 per share, in the first quarter
of 2007.
Cash on hand at March 31, 2008 was $5.1 million, as compared to $5.6
million at December 31, 2007.
St. Jude Medical Merger Agreement
On April 8, 2008, St. Jude Medical, Inc. and EP MedSystems announced
that the Boards of Directors of both companies have unanimously approved
a definitive agreement (the “merger Agreement”)
whereby St. Jude Medical will acquire all of the issued and outstanding
stock of EP MedSystems for $3.00 per share payable in a combination of
cash and St. Jude Medical stock, for a total of approximately $92
million. Of the consideration payable to holders of outstanding shares
of common stock of the Company, no more than 60% of such consideration
will consist of cash and no more than 40% will consist of shares of St.
Jude Medical common stock, as determined as set forth in the Merger
Agreement.
The closing of the transaction is subject to customary conditions,
including (i) the approval and adoption by the requisite vote of the
holders of the outstanding shares of common stock of the Company, (ii)
authorization of the listing of St. Jude Medical common stock for
trading on the NYSE, (iii) absence of a Material Adverse Event (as
defined in the Merger Agreement) and (iv) certain regulatory approvals.
Additionally, consummation of the Merger is also subject to conditions
requiring (1) that other parties to certain contracts shall not have
terminated or repudiated, or given notice of an intent to terminate or
repudiate, any such contract and (2) that the US Food and Drug
Administration ("FDA") shall not have restricted the Company's ability
to (i) manufacture, market, sell or otherwise distribute any Company
products previously approved or cleared by the FDA for marketing and
sale or (ii) obtain approval or clearance to market and sell any
products which have not yet been approved or cleared for marketing and
sale by the FDA.
Additional Information
St. Jude Medical and the Company will file a registration statement on
Form S-4 containing a proxy statement addressed to the Company’s
shareholders and a prospectus for the St. Jude Medical stock to be
offered in the Merger with the Securities and Exchange Commission (the “SEC”).
A definitive proxy statement will be sent to the Company’s
shareholders seeking their approval of the Merger. Company stockholders
are urged to read the definitive proxy statement regarding the proposed
transaction when it becomes available, because it will contain important
information. Investors and shareholders may obtain a free copy of the
registration statement, when it becomes available, and other documents
filed with, or furnished to, the SEC by St. Jude Medical or the Company
at the SEC's website at http://www.sec.gov.
Copies of the registration statement and other documents filed by St.
Jude Medical or the Company with the SEC may also be obtained for free
from the Company by directing a written request to EP MedSystems, Inc.,
575 Route 73 North, Building D, West Berlin, New Jersey 08091 or from
St. Jude Medical by directing a written request to St. Jude Medical,
Inc., One Lillehei Plaza, St. Paul, Minnesota 55117. St. Jude Medical,
the Company and their respective officers and directors may be deemed to
be participants in the solicitation of proxies from Company shareholders
with respect to the transactions contemplated by the proposed merger. A
description of any interests of the executive officers and directors of
the Company in the proposed merger will be set forth in the proxy
statement/prospectus.
About EP MedSystems:
EP MedSystems develops, manufactures and markets a line of products for
use in the cardiac rhythm management or electrophysiology (“EP”)
market which are used for visualization, diagnosis and treatment of
cardiac rhythm disorders. The Company's EP product line includes the
EP-WorkMate® computerized electrophysiology
workstation and the EP-4™ Computerized
Cardiac Stimulator, with options to incorporate the MapMate®
Navigation Interface, the NurseMate™ Remote
Review Charting Station, and products linking our systems to hospital IT
networks. In addition, our intracardiac echo (ICE) ultrasound catheter
system, including our ViewFlex® intracardiac
imaging catheters and ViewMate® II ultrasound
imaging system, is used for live visualization of devices and anatomy
during catheter based procedures in EP and interventional cardiology.
For more information, visit our website at www.epmedsystems.com.
EP MEDSYSTEMS, INC.
SELECTED FINANCIAL DATA
(Unaudited)
Three Months
March 31,
March 31,
2008
2007
Net sales
4,572,008
3,544,245
Cost of products sold
1,275,470
1,156,762
Gross profit
3,296,538
2,387,483
Operating costs and expenses:
Sales and marketing expenses
2,496,969
2,310,059
Research and development expenses
1,063,218
665,449
General and administrative expenses
970,925
946,082
Total operating expenses
4,531,112
3,921,590
Loss from operations
(1,234,574
)
(1,534,107
)
Interest and other income
34,172
89,791
Interest expense
(42,458
)
(64,493
)
Net Loss
$
(1,242,860
)
$
(1,508,809
)
Basic and diluted loss per share
$
(0.04
)
$
(0.05
)
Weighted average shares outstanding used
to compute basic and diluted loss per share
30,405,236
30,365,236
EP MEDSYSTEMS, INC.
SELECTED FINANCIAL DATA
(Unaudited)
March 31,
December 31,
2008
2007
ASSETS
Current assets:
Cash and cash equivalents
$
5,116,513
$
5,553,637
Accounts receivable, net
3,991,696
4,368,992
Inventories, net of reserves
2,534,348
2,331,567
Prepaid expenses and other current assets
489,704
327,166
Total current assets
12,132,261
12,581,362
Property, plant and equipment, net
1,520,573
1,581,835
Goodwill
341,730
341,730
Other intangible assets, net
80,829
102,293
Other assets
112,192
20,105
Total assets
$
14,187,585
$
14,627,325
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Secured convertible note, current
-
1,998,595
Secured revolving loan
1,200,000
-
Secured term loan
1,500,000
-
Accounts payable
2,014,727
1,684,733
Accrued expenses
1,613,799
2,026,010
Deferred revenue
838,607
814,979
Total current liabilities
7,167,133
6,524,317
Deferred warranty revenue– non-current
479,675
547,034
Total liabilities
$
7,646,808
$
7,071,351
Commitments and contingencies
-
-
Shareholders’ equity:
Preferred stock
-
-
Common stock
30,406
30,406
Additional paid-in capital
68,594,788
68,391,581
Accumulated other comprehensive loss
(434,038
)
(458,494
)
Treasury stock, 50,000 shares at cost
(100,000
)
(100,000
)
Accumulated deficit
(61,550,379
)
(60,307,519
)
Total shareholders’ equity
6,540,777
7,555,974
Total liabilities and shareholders’
equity
$
14,187,585
$
14,627,325