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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-21982
DIAMETRICS MEDICAL, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1663185
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
2658 PATTON ROAD
ROSEVILLE, MINNESOTA 55113
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 639-8035
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.01 par value
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No _____
------
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K ((S)229.405 of this chapter) is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
From 10-K or any amendment to this Form 10-K. [_]
As of February 28, 1997, 15,235,139 shares of Common Stock were
outstanding, and the aggregate market value of the common shares (based upon the
closing price on said date , on The Nasdaq Stock Market) of DIAMETRICS MEDICAL,
INC., held by non-affiliates was approximately $60,900,000.
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the Registrant's Annual Report to Shareholders for the year ended
December 31, 1996: Part II hereof Parts of the Registrant's definitive Proxy
Statement for 1997 Annual Meeting of Shareholders to be held on May 7, 1997:
Part III hereof
PART I
Unless the context otherwise indicates, all references to the "Registrant,"
the "Company," or "Diametrics" in this Annual Report on Form 10-K are to
Diametrics Medical, Inc., a Minnesota corporation, incorporated in January 1990,
and where the context requires, its subsidiary, Biomedical Sensors, Ltd. (BSL).
The following federally registered trademarks of the Company are used in
this Annual Report on Form 10-K: Diametrics Medical, Inc.(R) and IRMA (R).
ITEM 1. BUSINESS
The Company develops, manufactures and markets blood analysis systems
that provide immediate or continuous diagnostic results at the point of patient
care. The Company's goal is to be the world leader in critical care blood and
tissue analysis systems.
Blood analysis is an integral part of patient diagnosis and treatment,
and access to timely and accurate results is critical to effective patient care.
The Company believes that its blood analysis systems will result in more timely
therapeutic interventions by providing accurate, precise and immediate or
continuous test results, thereby allowing faster patient transfers out of
expensive critical care settings and reducing patient length of stay. In
addition, point-of-care testing can save money for hospitals by reducing the
numerous steps, paperwork and personnel involved in collecting, transporting,
documenting and processing blood samples. Moreover, point-of-care blood
analysis could ultimately eliminate the need for hospitals to maintain expensive
and capital intensive stat laboratories.
The Company's primary product focus since its inception in 1990 has
been the development, manufacturing and marketing of the IRMA (Immediate
Response Mobile Analysis) System, an electrochemical-based blood analysis system
that provides rapid and accurate diagnostic results at point of patient care.
IRMA consists of a portable, microprocessor-based analyzer (the "IRMA Analyzer")
that employs single-use, disposable cartridges to perform simultaneously several
of the most frequently ordered blood tests in a simple 90-second procedure.
The Company's first disposable electrochemical cartridge, introduced
in May 1994, performs three of the most frequently ordered blood tests for
critical care patients--the measurement of oxygen, carbon dioxide and acidity
(pH) (the "blood gases"). In June 1995, the Company expanded the IRMA System
test menu with the introduction of its electrolyte cartridge which measures
sodium, potassium and ionized calcium. The Company further expanded its critical
or "stat" test menu during the third quarter of 1996 with the release of the
second-generation system, IRMA SL, and the addition of the measurement of
hematocrit to its electrolyte cartridge. With the addition of hematocrit, the
IRMA System is able to perform 95% of the critical or stat tests performed
annually in the United States, comprising an estimated $1.2 billion annual
market.
During 1996, the Company expanded its product line with the
introduction of a number of new products and features, and the acquisition of
Biomedical Sensors, Ltd., a Pfizer company. With the acquisition of BSL, the
Company acquired a world-class continuous monitoring fiber optic technology
platform, which complements the Company's existing electrochemical sensor
platform. A description of the Company's principal products follows.
PRODUCTS
IRMA SL BLOOD ANALYSIS SYSTEM IRMA SL, the second generation IRMA
blood analyzer, was released in the third quarter 1996. The IRMA SL Blood
Analysis System is comprised of the IRMA SL Analyzer and a variety of
electrochemical-based single-use disposable cartridges which simultaneously
perform select combinations of the most frequently ordered critical care
diagnostic tests of blood gases, electrolytes and hematocrit, in a simple 90-
second procedure. IRMA SL also features electronic quality control, as an
alternative to aqueous quality control measures, which eliminates the need for
this costly and time-consuming process for many customers.
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The IRMA SL Analyzer is a battery or AC operated, portable
microprocessor-based instrument weighing approximately four pounds, and includes
an on-board printer. The IRMA SL Analyzer can be easily linked for data
downloading purposes to a hospital's laboratory or information system.
IDMS - THE IRMA DATA MANAGEMENT SYSTEM Also released in the third
quarter 1996 was IDMS, an advanced data management software program that
provides a comprehensive data management system for point of care testing
technologies. Developed initially for the IRMA Blood Analysis System, IDMS is
network compatible and features an open architecture design that allows the
program to accept applications and information from other devices.
CAPILLARY COLLECTION DEVICE The Capillary Collection Device was
introduced in the third quarter 1996 as a new feature for use on the IRMA or
IRMA SL Blood Analysis Systems, which provides the capability to collect and
test a capillary blood sample. The Capillary Collection device is used with the
System's single use cartridges to perform blood gas, electrolyte, and hematocrit
testing. The capillary collection capability of the IRMA SL is useful in such
patient areas as neonatal and pediatric intensive care, and in other situations
where a capillary sample is preferred over an arterial or venous sample.
AVOXIMETER 4000 Under a distribution agreement initiated in the third
quarter 1996 with A-VOX Systems, Inc., the Company exclusively distributes the
AVOXimeter 4000 in the United States. The AVOXimeter 4000 is a battery-operated
and easily portable system which provides an accurate and timely assessment of
the levels of hemoglobin and calculated oxygen content in a patient's blood.
PARATREND 7 As part of its acquisition of BSL in November 1996, the
Company began marketing the Paratrend 7, which was part of BSL's existing
product line. Paratrend 7 is an intravascular continuous monitoring system for
blood gases and temperature. The Paratrend 7 consists of a monitoring system and
intravascular disposable sensors. Inserted via an arterial catheter, the sensor
provides constant, precise measurement of vital blood gas parameters.
NEOCATH 1000 Also introduced as part of the Company's acquisition of
BSL, the Company markets Neocath 1000, an umbilical artery oxygen monitoring
system for neonatal patients. The Neocath 1000 consists of a monitoring system
and an umbilical artery catheter, which allows direct, continuous and accurate
measurement of oxygen, with minimal physical disturbance to the neonate.
TISSUTRAK Another BSL product, Tissutrak is a system for monitoring
tissue oxygenation of muscle flaps during plastic reconstructive surgery.
Tissutrak is currently being marketed in Europe, and does not yet have FDA
clearance for sale in the U.S.
REGULATORY STATUS
Human diagnostic products are subject, prior to clearance for
marketing, to rigorous pre-clinical and clinical testing mandated by the United
States Food and Drug Administration (the "FDA") and comparable agencies in other
countries and, to a lesser extent, by state regulatory authorities. The Company
has obtained pre-market notification clearances under Section 510(k) ("Section
501(k)") of the Food, Drug and Cosmetic Act (the "FDC Act") to market the IRMA
System to test blood gases, electrolytes and hematocrit in whole blood in
hospital laboratories and at the point of care and the Paratrend 7 to monitor
blood gases. A 510(k) clearance is subject to continual review and later
discovery of previously unknown problems may result in restrictions on the
product's marketing or withdrawal of the product from the market. The Company's
long-term business strategy includes development of cartridges and sensors for
performing additional blood and tissue chemistry tests, and any such additional
tests will be subject to the same regulatory process. No assurance can be given
that the Company will be able to develop such additional products or uses on a
timely basis, if at all, or that the necessary clearances for such products and
uses will be obtained by the Company on a timely basis or at all, or that the
Company will not be subjected to a more extensive prefiling testing and FDA
approval process. The Company also plans to market its products in several
foreign markets. Requirements vary
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widely from country to country, ranging from simple product registrations to
detailed submissions such as those required by the FDA. Manufacturing facilities
are also subject to FDA inspection on a periodic basis and the Company and its
contract manufacturers must demonstrate compliance with current Good
Manufacturing Practices ("GMP") promulgated by the FDA.
As noted, the Company has obtained 510(k) clearance to market the IRMA
and IRMA SL Systems. The IRMA SL system, introduced in the third quarter 1996,
adds electronic quality control testing capability, significantly reducing the
burden of running traditional liquid quality control products to meet laboratory
regulations as described in the Clinical Laboratory Improvement Act (CLIA).
The Company also has 510(k) clearance to market two products obtained
through the acquisition of BSL; the Paratrend 7, used for in-vivo measurement of
blood gases in the critically ill patient, and Neocath, used for in-vivo
monitoring of oxygen in critically ill neonates. These products are also
marketed internationally. The Company plans to expand the use of the Paratrend 7
for other applications in the United States and will be seeking 510(k) clearance
during 1997. These applications include monitoring of blood gases (oxygen,
carbon dioxide and pH) in critically ill neonates, monitoring of tissue
perfusion during neuro-surgery, and monitoring of gastric pH as a possible
indicator of the onset of multiple organ failure.
The tests performed by the Company's Blood Analysis Systems have been
categorized under CLIA as "moderate complexity" tests by the FDA, which places
these systems in the same category as all other commercially available blood gas
and blood chemistry testing instruments.
RESEARCH AND DEVELOPMENT
The Company owns two complimentary technology platforms; an
electrochemical platform, on which IRMA discrete testing products are based, and
a fiber optic platform, on which the Paratrend 7 continuous monitoring product
is primarily based. The Company is pursuing product line extensions from both
of these core technology platforms.
The Company intends to expand its cartridge and test menus available
on the IRMA System. Currently under development is a combination cartridge which
tests blood gases, hematocrit and electrolytes using one single-use cartridge.
This cartridge will be very suitable for high-volume testing situations.
Development is also currently underway to provide glucose testing on the IRMA
platform. Point of care glucose testing is the single largest point of care test
segment in hospitals. Application for 510(k) clearance is scheduled for mid-
1997. In addition to the single-use cartridge, the Company is developing a
multi-use application that will incorporate the Company's current biosensor and
calibration technologies into products that can be used to perform up to
hundreds of blood tests over an extended period of time. A multi-use system will
serve the needs of high volume critical care centers where rapid patient
throughput and a low cost per test panel is required. The Company believes that
the IRMA System and related core technologies provide a flexible platform which,
with a limited amount of additional development, will be capable of performing a
variety of blood chemistry tests.
The Company plans to continually improve the IRMA System through
software upgrades, manufacturing process improvements and equipment redesign,
based on the results of ongoing marketing studies and field experience.
The Company is also pursuing new multi-parameter applications of the
Paratrend 7 technology for use with neonates. Such an application will provide
the only continuous blood gas monitoring of neonatal patients and will give
clinicians a more complete analysis of the respiratory status and temperature of
their patients. 510(k) trial studies will be initiated in the United Kingdom
and in the United States in 1997. Studies are also underway to apply the
Paratrend 7 continuous monitoring technology to other areas, such as
neurological and intramucosal applications.
The Company has incurred research and development expenses of
approximately $6,056,000 $6,321,000 and $5,119,000 for the years ended December
31, 1996, 1995 and 1994, respectively.
3
SALES AND MARKETING
The Company is focusing its marketing efforts for its Blood Analysis
Systems on acute care hospitals. Near term sales of the Company's products are
expected to continue to come from hospital critical care departments where blood
tests are frequently requested on a stat basis. The Company has also begun to
market the IRMA system for use in emergency transport vehicles. The Company's
longer-term marketing objective is to penetrate smaller hospitals and alternate-
site markets, such as emergency medical facilities, home healthcare agencies,
outpatient clinics, skilled nursing homes and doctors' offices or clinics. The
Company believes that the potential advantages of its Blood Analysis Systems
will form the basis of the Company's marketing efforts to overcome the possible
reluctance of acute care hospitals to change standard operating procedures for
performing blood testing or incur additional capital expenses.
The Company markets and distributes its products in the United States,
the United Kingdom and Germany through its direct sales and marketing
organization. Outside of these countries, the Company markets and distributes
its products through third party distribution channels, including corporate
partners strategically positioned to access targeted foreign markets, including
Japan and other Pacific Rim Countries, Europe, Mexico, Canada and Latin America.
The Company may also consider additional distribution channels in the United
States, including joint ventures, licensing arrangements or OEM relationships
with strategically positioned corporate partners.
Additionally, the Company has entered into several arrangements with
hospital systems, healthcare facilities and other influential healthcare buying
groups which establish the Company as a preferred or sole source supplier of its
blood analysis systems. The Company expects to continue to enter into
arrangements with other buying groups and customers with respect to purchases of
its Blood Analysis Systems.
MANUFACTURING
The Company's manufacturing facilities support its discrete testing
and continuous monitoring platforms and are located in Roseville, Minnesota and
High Wycombe, United Kingdom, respectively. The Company manufactures its IRMA
electrochemical thick-film sensor chips in its Roseville, Minnesota facility.
All other components of the IRMA cartridge are manufactured to the Company's
specifications by outside vendors. Components for the Company's continuous
monitoring sensors used in the Paratrend 7 and Neocath 1000 products are sourced
from a variety of outside vendors, but the unique assembly of the sensing
elements is performed in the Company's High Wycombe facility. Sub-assembly of
external plastic assemblies are sub-contracted to outside vendors. The Company
uses external manufacturers to produce a range of hardware items, including the
IRMA Analyzer and Paratrend 7 and Neocath 1000 monitors. These devices could be
manufactured by a number of microelectronics assembly companies, using primarily
off-the-shelf components. Software for the IRMA SL Analyzer is developed and
maintained by the Company, and software for the Paratrend 7 and Neocath 1000
products is jointly developed with an external source, with acceptance and
validation performed by the Company.
The majority of the raw materials and purchased components used to
manufacture the Company's products are readily available. Most of the Company's
raw materials are or may be obtained from more than one source. A small number
of these materials, however, are unique in their nature, and are therefore
single sourced. A plan is underway to add additional second sourcing where
appropriate.
The Company's manufacturing facilities include five clean rooms in
Roseville which range from Class 1,000 to Class 10,000, and two clean rooms in
High Wycombe, both rated as Class 10,000. The Company believes its current
facilities, with further planned development, can support production of required
cartridges and sensors for the foreseeable future.
The Company maintains a comprehensive quality assurance and quality
control program, which includes complete documentation of all material
specifications, operating procedures,
4
maintenance and equipment calibration procedures, training programs and quality
control test methods. To control the quality of its finished product, the
Company utilizes ongoing statistical process control systems during the
manufacturing process and comprehensive performance testing of finished goods.
The Company continues to successfully undergo regular routine
inspections of its manufacturing facilities by the FDA (most recently in
February and March 1996 for Roseville and High Wycombe facilities,
respectively), and by BSI for the High Wycombe facility (most recently in
February 1996). As a result of these inspections, the Company's manufacturing
facilities, documentation and quality control systems are deemed satisfactory
and free of any violations of Good Manufacturing Practices (GMP).
PATENTS AND PROPRIETARY RIGHTS
The Company has implemented a strategy of pursuing patent applications
to provide both design freedom and protection from competitors. This strategy
includes evaluating and seeking patent protection both for inventions most
likely to be used in its Blood Analysis Systems and for those inventions most
likely to be used by others as competing alternatives. The Company currently
holds three patents to its calibration technology, two patents related to its
sensor technology and one for other technology. In addition, two patents have
been issued covering the IRMA analyzer and disposable cartridge designs. The
Company has additional patent applications pending in the United States
relating to electronic quality control and its Capillary Collection Device.
Overseas, the Company has foreign patent applications pending, filed
under the Patent Cooperation Treaty, designating various jurisdictions,
including Canada, the major European countries, Brazil, Australia and Japan,
corresponding to one or more U.S. applications. The Company has been issued
design patents, related to its U.S. design patents, in the United Kingdom,
Germany, and Canada, and has design patent applications pending in France,
Italy, and Japan.
As it relates to its continuous monitoring platform, the Company has
issued eight U.S. patents associated with the design of its multiparameter
sensor, the Paratrend 7, and has issued three U.S. patents associated with its
manufacture, with an additional two pending. These 13 patents are at various
patent process stages in the major European countries and Japan. The Company
also has issued eight other sensor technology based patents in the U.S. These
eight patents are also at various patent process stages in the major European
countries and Japan.
The Company is not currently a party to any patent litigation.
The Company has federally registered the trademarks "IRMA" and
"Diametrics Medical, Inc." and claims trademark rights in "When Stat Isn't Fast
Enough."
COMPETITION
The Company believes that potential purchasers of point-of-care blood
analysis systems will base their purchase decision upon a combination of
factors, including the product's test menu, ease of use, accuracy, price and
ability to manage the data collected. The Company is aware of one company,
i-STAT, that has introduced and is marketing a portable point-of-care blood
analysis system. The Company believes that the IRMA System possesses distinct
competitive advantages over i-STAT's products including ease of use, closed
instead of open handling of blood samples and the ability to interface to the
hospital's laboratory or information system.
The Company also competes with companies that market portable multi-
use blood gas systems. These companies include AML Scientific Corporation, SenDx
Medical, Inc. and Instrumentation Laboratories with their acquisition of the GEM
Premier. However, the Company believes that to be successful in the point-of-
care market, a company's device must be able to perform a variety of commonly-
ordered blood chemistry tests, as well as blood gas tests.
The Company's Blood Analysis Systems also compete with manufacturers
providing traditional blood analysis systems to central and stat laboratories of
hospitals. Although these laboratory-based instruments provide the same tests
available with the Companies products, they are
5
complex, expensive and require the use of skilled technicians. The Company
believes that its Blood Analysis Systems offer several advantages over these
laboratory-based instruments including immediate or continuous results, ease-of-
use, reduced opportunity for error and cost effectiveness.
Many of the companies in the medical technology industry have
substantially greater capital resources, research and development staffs and
facilities than the Company. Such entities may be developing or could in the
future attempt to develop additional products competitive with the Company's
Blood Analysis Systems. Many of these companies also have substantially greater
experience than the Company in research and development, obtaining regulatory
approvals, manufacturing and marketing, and may therefore represent significant
competition for the Company. There can be no assurance that the Company's
competitors will not succeed in developing or marketing technologies and
products that will be more effective or less expensive than those being marketed
by the Company or that would render the Company's technology and products
obsolete or noncompetitive.
EMPLOYEES
As of December 31, 1996, the Company had a total of 220 full-time
employees, including 45 persons engaged in research and development activities.
None of the Company's employees is covered by a collective bargaining agreement,
and Diametrics believes it maintains good relations with its employees.
ITEM 2. PROPERTIES
The Company's principal properties are as follows:
Location of Use of Approximate Lease
Property Facility Square Footage Expiration Date
Roseville, Minnesota Manufacturing, research 50,000 September 1999
and development, marketing to September 2001
and administrative operations
Malvern, Pennsylvania Research and development 2,000 October 1997
High Wycombe, Manufacturing, process 14,500 September 2005
United Kingdom engineering, purchasing
and distribution
High Wycombe, Sales and marketing 5,500 January 2015
United Kingdom
High Wycombe, Research and development 6,000 April 1997
United Kingdom
The Company believes that its facilities are sufficient for its projected needs
through 1998.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Position
David T. Giddings 53 President, Chief Executive Officer and
Chairman
Roy S. Johnson 44 Executive Vice President
President and Managing Director of
Diametrics Medical, Ltd.
Laurence L. Betterley 43 Senior Vice President and
Chief Financial Officer
James R. Miller 43 Senior Vice President of Commercial and
Business Development
Information concerning the background of Messrs. Giddings and Johnson is
contained in the Proxy Statement under the heading "Election of Directors" and
is incorporated herein by reference.
Mr. Betterley has been Senior Vice President of the Company since October
1996 and Chief Financial Officer since August 1996. Prior to this, he was with
Cray Research, Inc. in various management and financial positions including
Chief Financial Officer from 1994 to 1996, Vice President of Finance from 1993
to 1994 and Corporate Controller from 1989 to 1993. Cray Research develops,
manufactures and sells high performance computing systems used for computational
research.
Mr. Miller joined the Company in March 1995 as Vice President of Sales and
Marketing and has been Senior Vice President of Commercial and Business
Development since July 1996. From 1991 to early 1995, Mr. Miller was Vice
President of Sales and Marketing at IMED Corporation, where he had global sales
and marketing responsibility for infusion and monitoring products for hospital
and alternate site markets.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock, $.01 par value, trades on The Nasdaq Stock
Market under the symbol "DMED." The information contained under the heading
"Stock Information" in the Company's Annual Report to Shareholders for the year
ended December 31, 1996 (the "Annual Report to Shareholders"), is incorporated
herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information contained under the heading "Selected Five-Year Financial
Data" on page 13 in the Annual Report to Shareholders is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The information contained under the heading "Management's Discussion and
Analysis of Results of Operations and Financial Condition" on pages 14 through
17 in the Annual Report to Shareholders is incorporated herein by reference.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information contained under the headings "Consolidated Statements of
Operations", "Consolidated Balance Sheets," "Consolidated Statements of Common
Shareholders' Equity (Deficit)," "Consolidated Statements of Cash Flows," "Notes
to Consolidated Financial Statements" on pages 18 through 31 and "Report of
Independent Auditors" on page 32 in the Annual Report to Shareholders is
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS OF THE REGISTRANT
The information contained under the heading "Election of Directors" in the
Company's definitive Proxy Statement for its 1997 Annual Meeting of Shareholders
to be held on May 7, 1997, which definitive Proxy Statement will be filed within
120 days after the close of the fiscal year ended December 31, 1996 (the "Proxy
Statement"), is incorporated herein by reference.
EXECUTIVE OFFICERS OF THE REGISTRANT
See part I of this report for information on Executive Officers of the
Company.
ITEM 11. EXECUTIVE COMPENSATION
The information contained under the heading "Executive Compensation" in the
Proxy Statement is incorporated herein by reference, except that, pursuant to
Item 402(a)(8) of Regulation S-K, the subsections under "Executive Compensation"
entitled "Report of Compensation Committee on Executive Compensation" and
"Comparative Stock Performance" provided in response to paragraphs (k) and (l)
of Item 402 are not incorporated by reference herein.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information contained under the heading "Security Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement is incorporated herein
by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained under the heading "Certain Transactions" in the
Proxy Statement is incorporated by reference.
8
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(A) 1. FINANCIAL STATEMENTS
The following consolidated financial statements of Diametrics Medical,
Inc., which are included in the Annual Report to Shareholders, are incorporated
by reference in Item 8 hereof:
Report of Independent Auditors
Consolidated Statements of Operations for each of the years in the three
year period ended December 31, 1996
Consolidated Balance Sheets at December 31, 1996 and 1995
Consolidated Statements of Common Shareholders' Equity (Deficit) for each
of the years in the three year period ended December 31, 1996
Consolidated Statements of Cash Flows for each of the years in the three
year period ended December 31, 1996
Notes to Consolidated Financial Statements
Except for the financial statements listed above and the items specifically
incorporated by reference in Items 5, 6, 7 and 8 hereof, the Annual Report to
Shareholders is not deemed to be filed as part of this Annual Report on Form 10-
K.
(a) 2. FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted because they are not applicable or not
required, or because the required information is included in the financial
statements or the notes thereto.
(a) 3. EXHIBITS
Exhibit
No. Description Method of Filing
- --- ----------- ----------------
3.1 Articles of Incorporation of the Company (as amended) Filed herewith
3.2 Bylaws of the Company (as amended) Filed herewith
4.1 Form of Certificate for Common Stock (1)
4.2 Form of Registration Rights Agreement between the
Company and certain of its shareholders and
warrant holders (1)
4.3 Form of Registration Rights Agreement dated as of February 3, 1995
between the Company and certain of its shareholders (3)
4.4 Registration Rights Agreement, dated as of January 30, 1997,
by and between the Company and purchasers of Series I Junior
Participating Preferred Stock (5)
4.5 Form of Certificate for Series I Junior Participating Preferred Stock (5)
4.6 Form of Stock Purchase Warrant, dated as of January 30, 1997 (5)
9
10.1 Real Property Lease dated May 3, 1990, between Commers-
Klodt, a Minnesota General Partnership and the Company (1)
10.2 Real Property Lease dated May 28, 1991, between Commers-
Klodt, a Minnesota General Partnership and the Company (1)
10.3 Real Property Lease dated July 2, 1991, between Commers-
Klodt, a Minnesota General Partnership and the Company (1)
10.4 Real Property Lease dated December 20, 1992, between Commers-
Klodt, a Minnesota General Partnership and the Company (1)
10.5 Real Property Lease dated May 10, 1993, between Commers-
Klodt, a Minnesota General Partnership and the Company (1)
10.6 Equipment Sublease Agreement dated August 12, 1992, between
FIM, Inc. and the Company (1)
10.7 Master Lease Agreement dated November 11, 1992, between
Bankers Leasing Association, Inc. and the Company (1)
10.8 Master Equipment Lease Agreement dated as of June 15, 1993,
between the Company The Northern Leasing Fund, as amended
by Amendment No. 1 dated June 8, 1994 (including form of warrant
issued in connection therewith) (1)
10.9 Master Equipment Lease Agreement dated as of June 15, 1993,
between the Company and Phoenix Growth Capitol Corp., as
amended by Amendment No. 1 dated June 8, 1994 (including
form of warrant issued in connection therewith) (1)
10.10* 1990 Stock Option Plan (as revised and restated), including
form of option agreement Filed herewith
10.11* 1993 Directors' Stock Option Plan, as amended. (4)
10.12* 1995 Equalizing Director Stock Option Plan. (4)
10.13 1995 Employee Stock Purchase Plan (as revised and restated) Filed herewith
10.14 Agreement dated July 7, 1993 between the Company and
AmHS Purchasing Partners, L.P. (1)
10.15 Agreement dated January 1, 1995 between the Company and
Vencor, Inc. (3)
10.16 Settlement Agreement and Mutual General Releases
dated March 25, 1994 among PPG Industries, Inc., the
Company, Walter L. Sembrowich, David W. Deetz and
Kee Van Sin (1)
10.17 Letter agreement dated as of February 1, 1995 among
the Company, Allstate Venture Capital and Frazier
and Company L.P. (2)
10.18 Letter agreement dated January 5, 1993 between the
Company and Michael F. Connoy (2)
10
10.19 Agreement dated June 29, 1990 between the
Company and David W. Deetz, as supplemented by
the letter agreement dated March 28, 1995 (2)
10.20 Agreement dated June 29, 1990 between the
Company and Walter L. Sembrowich, Ph.D. (2)
10.21 Agreement dated December 21, 1995 between the
Company and Walter L. Sembrowich, Ph.D. (4)
10.22 Agreement dated March 1, 1996 between the
Company and Barbara E. Roth (4)
10.23 Agreement dated April 12, 1996 between the Company and
David T. Giddings Filed herewith
10.24 Stock Purchase Agreement, dated as of January 30, 1997,
between the Company and the Purchasers named therein (5)
13.1 Portions of the Company's Annual Report to Shareholders
for the year ended December 31, 1996 incorporated by reference
in this Form 10-K Filed herewith
23.1 Consent of KPMG Peat Marwick LLP Filed herewith
24.1 Powers of Attorney Filed herewith
27 Financial Data Schedule Filed herewith
99 Cautionary Factors Under the Private Securities Litigation
Reform Act Filed herewith
___________________
* Management compensatory plan filed pursuant to Item 601(b)(10)(iii)(A) of
Regulation S-K.
(1) Incorporated by reference to the Company's Registration Statement on Form
S-1 (Registration Number 33-78518) (the "Registration Statement").
(2) Incorporated by reference to the Company's 1994 Annual Report on Form 10-K.
(3) Incorporated by reference to the Company's Registration Statement on Form
S-1 (Registration Number 33-94442).
(4) Incorporated by reference to the Company's 1995 Annual Report on Form 10-K.
(5) Incorporated by reference to the Company's Current Report on Form 8-K filed
March 25, 1997.
(b) REPORTS ON FORM 8-K
On November 21, 1996, the Company filed a Current Report on Form 8-K
relating to the acquisition of Biomedical Sensors, Ltd. On January 20,
1977, the Company filed an amendment to that report to include the
financial statements and pro forma financial information required by Item
7(a) and (b) of Form 8-K, which were omitted from that report as initially
filed.
11
SIGNATURES
Pursuant to the requirements of Section 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, on March 28, 1997.
DIAMETRICS MEDICAL, INC.
By /s/ David T. Giddings
--------------------------------
David T. Giddings
President, Chief Executive
Officer and Chairman
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 March 28, 1997.
Name Title
---- -----
/s/ David T. Giddings President, Chief Executive Officer and
- -----------------------------------
David T. Giddings Chairman (Principal Executive Officer)
/s/ Laurence L. Betterley Senior Vice President and Chief
- -----------------------------------
Laurence L. Betterley Financial Officer (Principal Financial
Officer)
/s/ Jill M. Nussbaum Corporate Controller
- -----------------------------------
Jill M. Nussbaum (Principal Accounting Officer)
James E. Ashton* Director
Gerald L. Cohn* Director
Andre' de Bruin* Director
Roy S. Johnson* Director
Mark B. Knudson, Ph.D.* Director
Richard A. Norling* Director
Fred E. Silverstein, M.D.* Director
*By /s/ Laurence L. Betterley
--------------------------
Laurence L. Betterley
Attorney-in-Fact
EXHIBIT INDEX
Exhibit
No. Description Page
- --- ----------- ----
3.1 Articles of Incorporation of the Company (as amended)
3.2 Bylaws of the Company (as amended)
10.10 1990 Stock Option Plan (as revised and restated), including form
of option agreement
10.13 1995 Employee Stock Purchase Plan (as revised and restated)
10.23 Agreement dated April 12, 1996 between the Company and
David T. Giddings
13.1 Portions of the Company's Annual Report to Shareholders
for the year ended December 31, 1996 incorporated by reference
in this Form 10-K
23.1 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney
27 Financial Data Schedule
99 Cautionary Statements Under the Private Securities Litigation Reform Act