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EX-32.2 - CERTIFICATION - TRIMEDYNE INCtrimedyne_10q-ex3202.htm
EX-31.2 - CERTIFICATION - TRIMEDYNE INCtrimedyne_10q-ex3102.htm
EX-31.1 - CERTIFICATION - TRIMEDYNE INCtrimedyne_10q-ex3101.htm
EX-32.1 - CERTIFICATION - TRIMEDYNE INCtrimedyne_10q-ex3201.htm
EX-3.1 - AMENDED AND RESTATED ARTICLES OF INCORPORATION OF TRIMEDYNE, INC. - TRIMEDYNE INCtrimedyne_10q-ex0301.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 10-Q
 

 
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2011
or
 
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to _______________________

COMMISSION FILE NO. 0-10581
 
TRIMEDYNE, INC.

 (Exact Name of Registrant as Specified in its Charter)

 
NEVADA   36-3094439
(STATE OR OTHER JURISDICTION OF INCORPORATION)   (I.R.S. EMPLOYER IDENTIFICATION NO.)
     
25901 COMMERCENTRE DRIVE 
LAKE FOREST, CALIFORNIA
 
92630
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)  
(ZIP CODE)
 
Registrant's Telephone Number, Including Area Code:
(949) 951-3800

 
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 per Share
(Title of Class)
 

 
Indicate by check mark whether the registrant (1) has filed all reports 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 o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer o Accelerated filer  o
Non-accelerated filer o Smaller reporting company x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act of 1934). Yes o    No x
 
As of May 23, 2011, there were outstanding 18,365,960 shares of registrant's Common Stock.
 
 

 

TRIMEDYNE, INC.

          PAGE NUMBER  
             
PART I.
 
 Financial Information     3  
             
 
ITEM 1.
Financial Statements (Unaudited)
    3  
             
   
Condensed Consolidated Balance Sheets
    3  
             
   
Condensed Consolidated Statements of Operations
    4  
             
   
Condensed Consolidated Statements of Cash Flows
    5  
             
   
Notes to Condensed Consolidated Financial Statements
    6  
             
 
ITEM 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
    12  
             
 
ITEM 3.
Quantitative and Qualitative Disclosures About Market Risk - N/A
    15  
             
 
ITEM 4.
Controls and Procedures
    15  
             
PART II.
 
Other Information
    16  
             
 
ITEM 1.
Legal Proceedings
    16  
             
 
ITEM 1A.
Risk Factors - N/A
    16  
             
 
ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
    16  
             
 
ITEM 3.
Defaults Upon Senior Securities
    16  
             
 
ITEM 4.
[Removed and Reserved]
    16  
             
 
ITEM 5.
Other Information
    16  
             
 
ITEM 6.
Exhibits
    16  
             
SIGNATURES
 
 
    17  


 
2

 
 
TRIMEDYNE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
ASSETS
           
   
March 31, 2011
   
September 30, 2010
 
             
Current assets:
           
Cash and cash equivalents
  $ 2,586,000     $ 2,528,000  
Trade accounts receivable, net of allowance for doubtful accounts of $12,000 at March 31, 2011 and September 30, 2010
    591,000       691,000  
Inventories
    2,426,000       2,613,000  
Other current assets
    125,000       177,000  
Total current assets
    5,728,000       6,009,000  
                 
Property and equipment, net
    1,143,000       908,000  
Other
    75,000       102,000  
Goodwill
    544,000       544,000  
Total Assets
  $ 7,490,000     $ 7,563,000  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
Current liabilities:
               
Accounts payable
  $ 392,000     $ 129,000  
Accrued expenses
    450,000       588,000  
Deferred revenue
    43,000       75,000  
Accrued warranty
    40,000       17,000  
Income tax payable
    11,000       11,000  
Current portion of note payable and capital leases
    104,000       161,000  
Current portion of note payable to related party
    125,000       --  
Accrued interest due to related party
    19,000       3,000  
Total current liabilities
    1,184,000       984,000  
                 
Note payable and capital leases, net of current portion
    49,000       92,000  
Senior secured convertible note to related party, net of discount of $89,000 and $99,000, respectively`
    411,000       401,000  
Note payable to related party, net of current portion
    125,000       --  
Deferred rent
    86,000       80,000  
Derivative liabilities
    86,000       96,000  
                 
Total liabilities
    1,941,000       1,653,000  
Commitments and contingencies
               
                 
Stockholders' equity:
               
Preferred stock - $0.01 par value, 1,000,000 shares authorized, none issued and outstanding
    --       --  
Common stock - $0.01 par value, 30,000,000 shares authorized, 18,467,569 shares issued at March 31, 2011 and September 30, 2010, 18,365,960 shares outstanding at March 31, 2011 and September 30, 2010
    186,000       186,000  
Additional paid-in capital
    51,245,000       51,238,000  
Accumulated deficit
    (45,169,000 )     (44,801,000 )
      6,262,000       6,623,000  
Treasury stock, at cost (101,609 shares)
    (713,000 )     (713,000 )
                 
Total stockholders' equity
    5,549,000       5,910,000  
                 
Total liabilities and stockholder's equity
  $ 7,490,000     $ 7,563,000  
 
See accompanying notes to condensed consolidated financial statements

 
 
3

 

 
TRIMEDYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
   
Three Months Ended
   
Six Months Ended
 
   
March 31,
   
March 31,
 
   
2011
   
2010
   
2011
   
2010
 
                         
Net revenues
  $ 1,880,000     $ 1,727,000     $ 3,515,000     $ 3,381,000  
Cost of sales
    1,103,000       1,126,000       2,129,000       2,202,000  
Gross profit
    777,000       601,000       1,386,000       1,179,000  
                                 
Operating expenses:
                               
 Selling, general and administrative
    709,000       659,000       1,416,000       1,288,000  
 Research and development
    171,000       316,000       381,000       621,000  
Total operating expenses
    880,000       975,000       1,797,000       1,909,000  
                                 
Loss from operations
    (103,000 )     (374,000 )     (411,000 )     (730,000 )
                                 
Other income, net
    30,000       71,000       47,000       132,000  
                                 
Loss before provision for income taxes
    (73,000 )     (303,000 )     (364,000 )     (598,000 )
                                 
Provision for income taxes
    2,000       4,000       4,000       9,000  
                                 
Net loss
  $ (75,000 )   $ (307,000 )   $ (368,000 )   $ (607,000 )
                                 
Net loss per share:
                               
Basic
  $ (0.00 )   $ (0.02 )   $ (0.02 )   $ (0.03 )
Diluted
  $ (0.00 )   $ (0.02 )   $ (0.02 )   $ (0.03 )
                                 
Weighted average number of shares outstanding:
                               
                                 
Basic
    18,365,960       18,365,960       18,365,960       18,365,960  
Diluted
    18,365,960       18,365,960       18,365,960       18,365,960  
 
See accompanying notes to condensed consolidated financial statements
 
 
4

 
 
TRIMEDYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 
 
 
Six Months Ended
 
   
March 31,
 
   
2011
   
2010
 
Cash flows from operating activities:
           
Net loss
  $ (368,000 )   $ (607,000 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
               
Stock-based compensation
    6,000       10,000  
Depreciation and amortization
    151,000       167,000  
Amortization of debt discount
    10,000       --  
Change in fair value of warrant liability
    (11,000 )     (4,000 )
Loss on disposal of assets
    (1,000 )     --  
                 
Changes in operating assets and liabilities:
               
Trade accounts receivable
    100,000       214,000  
Inventories
    187,000       (390,000 )
Other assets
    79,000       111,000  
Accounts payable
    263,000       (65,000 )
Accrued expenses
    (138,000 )     (42,000 )
Accrued interest senior notes
    16,000       --  
Income tax payable
    --       9,000  
Deferred revenue
    (32,000 )     (16,000 )
Accrued warranty
    23,000       (14,000 )
Deferred rent
    6,000       (17,000 )
                 
Net cash provided by (used in) operating activities
    291,000       (644,000 )
                 
Cash flows from investing activities:
               
Purchase of property and equipment
    (383,000 )     (29,000 )
Net cash used in investing activities
    (383,000 )     (29,000 )
                 
Cash flows from financing activities:
               
                 
Proceeds from note payable to related party
    250,000       --  
Payments on note payable and capital leases
    (100,000 )     (126,000 )
                 
Net cash provided by (used in) financing activities
    150,000       (126,000 )
                 
Net increase (decrease) in cash and cash equivalents
    58,000       (799,000 )
Cash and cash equivalents at beginning of period
    2,528,000       1,621,000  
Cash and cash equivalents at end of period
  $ 2,586,000     $ 822,000  
                 
Supplemental disclosure of cash flow information:
               
                 
Cash paid for income taxes during the six months ended March 31, 2011 was $2,000 and no cash was paid during the six-month period ended March 31, 2010.
               
                 
Cash paid for interest during the six months ended March 31, 2011 and 2010 was approximately $11,000 and $18,000, respectively.
               
 
See accompanying notes to condensed consolidated financial statements
 
 
5

 
 
TRIMEDYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011
(UNAUDITED)
 
NOTE 1 - Summary of Significant Accounting Policies
 
Principles of Consolidation
 
The accompanying condensed consolidated financial statements include the accounts of Trimedyne, Inc., a Nevada corporation, its wholly owned subsidiary, Mobile Surgical Technologies, Inc. ("MST"), a Texas corporation, and its 90% owned inactive subsidiary, Cardiodyne, Inc. ("Cardiodyne"), a Nevada corporation, (collectively, the "Company"). All intercompany accounts and transactions have been eliminated in consolidation.
 
Management's Plans
 
We plan to introduce a new line of Single Use optical fibers to supplement our line of Reusable optical fibers. These optical fibers are used with our Holmium lasers and Holmium lasers with compatible connectors made by others for the fragmentation of urinary stones in the kidney, ureter and bladder and biliary stones in the gall bladder. Many hospitals in the United States and other developed countries prefer having a new, sterile optical fiber for each stone case, rather than having to clean, clip and re-sterilize a reusable optical fiber after each case.
 
We are exploring various avenues to reduce our cost of manufacturing Lasers, expand the distribution of our products, particularly our new VaporMAX Side Firing Fiber and Single Use Optical Fibers, to increase our revenues and improve our profit margins. We are continuing to seek licensees of our patents and proprietary technologies. There is, of course, no assurance that these efforts will be successful.
 
We believe that existing cash flows are sufficient to fund operations through March 31, 2012; however, we have incurred losses from operations for the past three years. There can be no assurance that we will be able to maintain or achieve sales growth in the next 12 months, or that the Company will be profitable. Thus, it is possible that additional working capital in the next 12 months may be required. If necessary, we will raise additional debt and/or equity capital, sell some of our assets, reduce our costs by eliminating certain personnel positions and reducing certain overhead costs in order to fund operations. There is no assurance that our efforts to do so will be successful.
 
Unaudited Interim Financial Information
 
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, and pursuant to the instructions to Form 10-Q promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all information and disclosures required by generally accepted accounting principles for complete financial statement presentation. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company's consolidated financial position as of March 31, 2011 and the results of its operations and its cash flows for the six months ended March 31, 2011 and 2010. Results for the six months ended March 31, 2011 are not necessarily indicative of the results to be expected for the year ending September 30, 2011.
 
While management believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these condensed consolidated financial statements be read in conjunction with the condensed consolidated financial statements and the notes included in the Company's 2010 Annual Report on Form 10-K for the year ended September 30, 2010.
 
Stock-Based Compensation
 
The fair value of stock-based awards is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires subjective assumptions regarding future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the pricing term of the grant effective as of the date of the grant. The expected volatility is based on the Company's historical volatilities of its common stock. These factors could change in the future, affecting the determination of stock-based compensation expense in future periods. During the three and six months ended March 31, 2011, there were no stock options granted.

 
 
6

 
 
TRIMEDYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011
(UNAUDITED)
 
As of March 31, 2011, there was approximately $23,078 of total unrecognized compensation cost, net of estimated expected forfeitures, related to employee and director stock option compensation arrangements. This unrecognized cost is expected to be recognized on a straight-line basis over the next three years.
 
The following table summarizes stock-based compensation expense related to employee and director stock options under Accounting Standards Codification ("ASC") No. 718 Stock Compensation for the three and six months ended March 31, 2011 and 2010, which was allocated as follows:
 
   
Three Months Ended
   
Six Months Ended
 
   
March 31, 2011
   
March 31, 2010
   
March 31, 2011
   
March 31, 2010
 
Stock-based compensation included in:
                       
Cost of revenues
  $ --     $ 1,000     $ 1,000     $ 2,000  
Research and development expenses
  $ --     $ 1,000     $ 1,000     $ 2,000  
Selling, general, and administrative expenses
  $ 2,000     $ 3,000     $ 6,000     $ 7,000  
 
 
NOTE 2 - Composition of Certain Balance Sheet Captions
 
Inventories, net of reserves, consist of the following:
 
 
 
March 31,
   
September 30,
 
 
 
2011
   
2010
 
             
Raw materials
  $ 890,000     $ 885,000  
Work-in-process
    594,000       635,000  
Finished goods
  $ 942,000     $ 1,093,000  
    $ 2,426,000     $ 2,613,000  

For the three months ended March 31, 2011 and 2010, the aggregate net realizable value of demonstration and evaluation lasers did not comprise a material amount in inventories.
 
Other current assets consist of the following:

   
March 31,
   
September 30,
 
     2011      2010  
                 
Royalty receivable
  $ 49,000     61,000  
Prepaid insurance
    --       55,000  
Prepaid income tax
    24,000       4,000  
Prepaid Rent
    26,000       26,000  
Short-term deposits
    11,000       8,000  
Other
    15,000       23,000  
Total other current assets
  $ 125,000     177,000  
 
Property and equipment consist of the following:
 
   
March 31,
   
September 30,
 
     2011      2010  
                 
Furniture and equipment
  $ 3,742,000     $ 3,377,000  
Leasehold improvements
    643,000       643,000  
Other
    244,000       244,000  
 
    4,629,000       4,264,000  
Less accumulated depreciation and amortization
    (3,486,000 )         (3,356,000 )
Total property and equipment
  $ 1,143,000     $ 908,000  
 
 
 
7

 
 
TRIMEDYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011
(UNAUDITED)
 
Accrued expenses consist of the following:
 
   
March 31,
   
September 30,
 
     2011      2010  
                 
Accrued vacation
  $ 186,000     $ 169,000  
Accrued salaries and wages
    42,000       78,000  
Sales and use tax
    63,000       63,000  
Accrued legal
    25,000       175,000  
Customer deposits
    24,000       6,000  
Accrued commissions
    91,000       79,000  
Accrued payroll taxes
    4,000       3,000  
Other
    15,000       15,000  
Total accrued expenses
  $ 450,000     $ 588,000  
 

NOTE 3 - Notes Payable to Related Parties
 
Senior Secured Convertible Note Payable to Related Party
 
On August 20, 2010, Marvin P. Loeb, the Company's Chairman and CEO, who is currently on temporary sick leave, loaned the Company $500,000 evidenced by a 6% Senior Secured Convertible Note with a principal amount of $500,000 (the "Senior Note"), which is secured by all of the assets of the Company, and is due August 19, 2015. However, the Senior Note contained a provision whereby the CEO can redeem the note at any time. The CEO agreed not to redeem the Note, without the written consent of the Company, for a period of two years from September 30, 2010. Thus, the Note is reflected as a long-term obligation as of March 31, 2011 on the accompanying consolidated balance sheet. The funds provided under the Note are to be used for operations.
 
The Senior Note can be converted at any time into shares of the Company's common stock at a conversion price of $0.21 per share. The conversion price equaled the fair market value of the Company's common stock on the date of the purchase of the Note, and thus no beneficial conversion feature was recorded. However, the Note contains an anti-dilution provision whereby the price resets in the event of the sale or issuance of shares at a price lower than the conversion price set forth in the Note. Thus, the Company determined that this provision caused the conversion feature to be bifurcated from the Senior Note and treated as a derivative and accounted for at its fair value. The Company will revalue the derivative at each reporting period.
 
At September 30, 2010, management determined the fair market value of the conversion feature was $94,000 and recorded the offset as a discount to the Note. At March 31, 2011, management determined the fair market value of the conversion feature was $85,000, resulting in a gain on change in derivative liability of $9,000 for the six months ended March 31, 2011.
 
The Company estimated the fair value of the conversion feature using the Lattice model. Accordingly, the fair value of the conversion feature as determined using the Lattice model is affected by our stock price on the date of issuance as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the Senior Note, actual and projected redemptions and conversion price resets.
 
Expected volatility is based primarily on historical volatility. Historical volatility was computed using daily pricing observations for recent periods that correspond to expected remaining life of the Notes. We believe this method produces an estimate that is representative of our expectations of future volatility over the expected term of this conversion feature. We currently have no reason to believe future volatility over the expected remaining life of the conversion feature is likely to differ materially from historical volatility. Volatility used in the calculation ranged from a low of 124% in year one to a high of 301% in year five. Management estimated that the probability of the Note being redeemed 0% increasing by 10% per quarter.
 
The Company is amortizing the discount over the period of two years, the term of the CEO's commitment not to call the Note, using the effective interest method. During the six months ended March 31, 2011, the Company amortized $10,000 of the discount to interest expense. As of March 31, 2011, the unamortized discount is $89,000.
 
 
8

 
 
TRIMEDYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011
(UNAUDITED)
 
Note Payable to Related Party

On March 3, 2011, the Company was loaned $250,000 by Marcia H. Yeik Irrevocable Living Trust, Marcia H. Yeik trustee thereof, the daughter of Marvin Loeb, CEO and Chairman, and the wife of Glenn D. Yeik, Interim CEO, President and a member of the Board of Directors of the Company. Evidenced by a Note Payable (the “Note”) with a principal amount of $250,000 at an interest rate of 12% per annum, the Note requires monthly payment through April 2, 2013. The proceeds from the Note were used to pay accounts payable due to a vendor in connection with the purchase of property and equipment for MST. The Note is subordinated to the security interest of the holder of the Company’s Senior Note, and is payable in increments applied to the principal at $10,416 per month along with accrued interest on the remaining principal over the life of the Note. The current portion of the Note at March 31, 2011 was $125,000.
 
 
Note 4 - Notes Payable and Capital leases
 
Notes payable and capital leases consists of the following at March 31, 2011 and September 30, 2010:
 
   
March 31,
   
September 30,
 
 
 
2011
   
2010
 
Capital lease agreement in connection with the purchasing of equipment bearing an effective interest rate of 8.69% per annum. The lease requires monthly payments of $3,147 through September 2012.
  $ 18,000     $ 37,000  
Capital lease agreement in connection with the purchasing of equipment bearing an effective interest rate of 9.25% per annum. The lease requires monthly payments of $4,979 through January 2013.
    96,000       121,000  
Capital lease agreement in connection with the purchasing of equipment bearing an effective interest rate of 9.23% per annum. The lease requires monthly payments of $526 through February 2013.
    11,000       14,000  
Capital lease agreement in connection with the purchasing of equipment bearing an effective interest rate of 8.82% per annum. The lease requires monthly payments of $2,403 through March 2012.
    28,000       38,000  
Capital lease agreement in connection with the purchasing of ERP software bearing an effective interest rate of 8.51% per annum. The lease required monthly payments of $3,195 through April 2011, and was fully repaid.
    --       19,000  
Finance agreement issued in connection with the purchasing of certain insurance policies. The note bears interest at 4.7% per annum and required monthly principal and interest payments of $6,042 through January 2011, and was fully repaid.
    --       24,000  
    $ 153,000     $ 253,000  
Less: current portion
    (104,000 )     (161,000 )
    $ 49,000     $ 92,000  
 
 
NOTE 5 - Commitments and Contingencies
 
Litigation
 
We are subject to various claims and actions that arise in the ordinary course of business. The litigation process is inherently uncertain, and it is possible that the resolution of any future litigation may adversely affect us.
 
To avoid the cost and uncertainty of litigation, on November 24, 2010, we settled the lawsuit filed against us and others by CardioFocus. We paid CardioFocus $175,000, entered into mutual releases and the lawsuit was dismissed. This settlement expense was accrued and included in other expense for the year ended September 30, 2010 and paid during the six months ended March 31, 2011.
 
The Company is currently a co-defendant in one product liability lawsuit. The case, filed on behalf of Paula Tsakonas, plaintiff, in the Circuit Court of Cook County, Illinois on February 23, 2011, relates to injuries that occurred in connection to a medical procedure in which the Company's laser was used and names Spiros G. Stamelos, MD, Stamelos Bros., LTD., an Illinois Corporation, doing business as Advanced Orthopaedic Associates, Lakeshore Surgery Center, LLC, an Illinois corporation and Trimedyne, Inc. as defendants. The case is currently in litigation. The Company has insurance to cover product liability claims. This insurance provides the Company with $5,000,000 of coverage for each occurrence with a general aggregate of $5,000,000. Trimedyne's liability is limited to a maximum of $25,000 per occurrence unless the judgment against the Company exceeds the insurance coverage. In such case, Trimedyne would be liable for any liability in excess of $5,000,000. Management has recorded a loss contingency for this claim in the amount of $25,000 based on the deductible under the insurance policy. Management is not accruing any additional provision for this claim, as it is not expected that this claim will exceed the limits of the insurance coverage.
 
 
9

 
 
TRIMEDYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011
(UNAUDITED)
 
Leases and Commitments
 
On March 29, 2011 the lease for our subsidiary MST, was amended due to the expansion of the facility.  The facility will be expanded to twice the square footage and the new lease will commence on July 1, 2011 at a monthly rate of $3,575 for five years ending June 30, 2016.
 
Guarantees and Indemnities
 
The Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party. The Company indemnifies its directors, officers, employees and agents to the maximum extent permitted under the laws of the State of California. In connection with its facility leases, the Company has indemnified its users of lasers for certain claims arising from the use of the lasers. The duration of the guarantees and indemnities varies, and in many cases is indefinite. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying condensed consolidated balance sheet.
 
Risks and Uncertainties
 
The Centers for Medicare and Medicaid Services (CMS), the agency of the U.S. Government that administers the Medicare Program, does not reimburse for thermal intradiscal procedures to treat spinal discs including the use of the Company's pulsed Holmium Lasers. Since most people suffering from a herniated or ruptured spinal disc are below Medicare age, we do not believe CMS's decision will have an adverse impact on our business.
 
NOTE 7 - Segment Information
 
The Company's segments consist of individual companies managed separately with each manager reporting to the Chief Executive Officer. Revenues, and operating or segment profit, are reflected net of inter-segment sales and profits. Segment profit is comprised of net sales less operating expenses. Other income and expense and income taxes are not allocated and reported by segment since they are excluded from the measure of segment performance reviewed by management.
 
Data with respect to these operating activities for the three and six months ended March 31, 2011 and 2010 are as follows:
                                                                            
    For the Three Months Ended March 31, 2011     For the Three Months Ended March 31, 2010  
    Products    
Service and
Rental
    Total     Products    
Service and
Rental
    Total  
Revenue
  $ 1,238,000     $ 642,000     $ 1,880,000     $ 1,067,000     $ 660,000     $ 1,727,000  
Cost of sales
    721,000       382,000       1,103,000       746,000       380,000       1,126,000  
                                                 
Gross profit
    517,000       260,000       777,000       321,000       280,000       601,000  
                                                 
Expenses:
                                               
Selling, general and administrative
    510,000       199,000       709,000       492,000       167,000       659,000  
Research and development
    171,000       --       171,000       316,000       --       316,000  
                                                 
Income (loss) from operations
  $ (164,000 )   $ 61,000       (103,000 )   $ (487,000 )   $ 113,000       (374,000 )
                                                 
Other:
                                               
Interest income
                    1,000                       1,000  
Interest expense
                    (16,000 )                     (8,000 )
Royalty income
                    49,000                       73,000  
Other income
                    --                       1,000  
Gain on change in fair value of warrant liability
                    (4,000 )                     4,000  
Income taxes
                    (2,000 )                     (4,000 )
Net loss
                  $ (75,000 )                   $ (307,000 )
 
 
 
10

 
 
TRIMEDYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011
(UNAUDITED)
 
    For the Six Months Ended March 31, 2011     For the Six Months Ended March 31, 2010  
    Products    
Service and
Rental
    Total     Products    
Service and
Rental
    Total  
Revenue
  $ 2,167,000     $ 1,348,000     $ 3,515,000     $ 2,018,000     $ 1,363,000     $ 3,381,000  
Cost of sales
    1,332,000       797,000       2,129,000       1,428,000       774,000       2,202,000  
                                                 
Gross profit
    835,000       551,000       1,386,000       590,000       589,000       1,179,000  
                                                 
Expenses:
                                               
Selling, general and administrative
    1,039,000       377,000       1,416,000       954,000       334,000       1,288,000  
Research and development
    381,000       --       381,000       621,000       --       621,000  
                                                 
Income (loss) from operations
  $ (585,000 )   $ 174,000       (411,000 )   $ (985,000 )   $ 255,000       (730,000 )
                                                 
Other:
                                               
Interest income
                    2,000                       1,000  
Interest expense
                    (34,000 )                     (18,000 )
Royalty income
                    68,000                       141,000  
Gain on change in fair value of warrant liability
                    11,000                       4,000  
Other income
                    --                       4,000  
Income taxes
                    (4,000 )                     (9,000 )
Net loss
                  $ (368,000 )                   $ (607,000 )

Sales and gross profit to customers by similar products and services for the three and six months ended March 31, 2011 and 2010 were as follows:
 
    For the Three Months Ended March 31,     For the Six Months Ended March 31,  
    2011     2010     2011     2010  
By similar products and services:
                       
Revenues:
                       
Products:
                       
Laser equipment and accessories
  $ 511,000     $ 252,000     $ 767,000     $ 513,000  
Delivery and disposable devices
    727,000       815,000       1,400,000       1,505,000  
Service and rental
    642,000       660,000       1,348,000       1,363,000  
Total
  $ 1,880,000     $ 1,727,000     $ 3,515,000     $ 3,381,000  
                                 
Gross profit
                               
Products:
                               
Laser equipment and accessories
  $ 134,000     $ 30,000     $ 182,000     $ 60,000  
Delivery and disposable devices
    383,000       291,000       653,000       530,000  
Service and rental
    260,000       280,000       551,000       589,000  
Total
  $ 777,000     $ 601,000     $ 1,386,000     $ 1,179,000  
 
Sales in foreign countries for the three months ended March 31, 2011 and 2010, accounted for approximately 23% and 24%, respectively, of the Company's total sales. Sales in foreign countries for the six months ended March 31, 2011 and 2010 accounted for approximately 23% and 21%, respectively, of the Company's total sales. The breakdown by geographic region is as follows:
 
 
 
Three Months
   
Three Months
   
Six Months
   
Six Months
 
 
 
Ended
March 31, 2011
   
Ended
March 31, 2010
   
Ended
March 31, 2011
   
Ended
March 31, 2010
 
                                 
Asia
  $ 165,000     $ 336,000     $ 441,000     $ 468,000  
Europe
    61,000       46,000       101,000       108,000  
Latin America
    5,000       26,000       49,000       40,000  
Middle East
    94,000       1,000       102,000       4,000  
Australia
    99,000       14,000       110,000       103,000  
Other
    --       --       --       2,000  
 
  $ 424,000     $ 423,000     $ 803,000     $ 725,000  
 
All long-lived assets were located in the United States during the six months ended March 31, 2011 and 2010 with the exception of one laser located in Canada. Total segment assets for the Products segment were $5,620,000 and Service and Rental were $1,849,000 at March 31, 2011. Total segment assets differ from total assets on a consolidated basis as a result of unallocated corporate assets primarily comprised of immaterial amounts of property and equipment, etc.
 
NOTE 9 - Subsequent Event
 
On April 14, 2011 the Company entered into a finance agreement to purchase certain insurance policies. The note bears interest at 3.8% per annum and require monthly principal and interest payments of $13,803 through February 2012.
 
11

 

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
FORWARD-LOOKING STATEMENTS
 
This information should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Item 1 of Part I of this Quarterly Report and the audited consolidated financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations for the year ended September 30, 2010 contained in our 2010 Annual Report on Form 10-K.
 
The statements contained in this Quarterly Report on Form 10-Q that are not historical facts may contain forward-looking statements that involve a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated by management. Potential risks and uncertainties include, among other factors, general business conditions, government regulations governing medical device approvals and manufacturing practices, competitive market conditions, success of the Company's business strategy, delay of orders, changes in the mix of products sold, availability of suppliers, concentration of sales in markets and to certain customers, changes in manufacturing efficiencies, development and introduction of new products, fluctuations in margins, timing of significant orders, and other risks and uncertainties currently unknown to management. We do not undertake any duty to update forward-looking statements after the date they are made or to conform them to actual results or to changes in circumstances or expectations.
 
OVERVIEW
 
Trimedyne, Inc. (the "Company", "we", "our" or "us") is engaged in the development, manufacturing and marketing of 80 and 30 watt Holmium "cold" pulsed lasers ("Lasers") and a variety of disposable and reusable, fiber optic laser energy delivery devices ("Fibers", "Needles" and "Tips") for use in a broad array of medical applications.
 
Our Lasers, Fibers, Needles and Tips have been cleared for sale by the U.S. Food and Drug Administration for use in orthopedics, urology, ear, nose and throat surgery, gynecology, gastrointestinal surgery, general surgery and other medical specialties. Many of the medical procedures in which our Lasers, Fibers, Needles and Tips are used are being reimbursed by Medicare and many insurance companies and health plans.
 
Our 100% owned subsidiary, Mobile Surgical Technologies, Inc. ("MST"), is engaged in the rental of lasers, along with the services of a trained operator and, if requested, the provision of applicable Fibers, Needles or Tips, on a "fee per case" basis to hospitals, surgery centers, group practices and individual physicians in Texas and nearby areas.
 
The principal market for our Lasers and Side Firing Needles is presently in orthopedics to treat herniated (bulging) and ruptured lumbar, thoracic and cervical discs in the spine, two of the four major causes of lower back, neck and leg pain, typically on an outpatient basis. Our Lasers and Tips are also used in orthopedics to treat damage in joints, such as the knee, shoulder, elbow, hip, ankle and wrist, in outpatient, arthroscopic procedures.
 
The Company's Lasers and Fibers are also used in Urology to fragment stones in the Kidney, ureter or bladder. The Company's new VaporMAX(R) Side Firing Optical Fiber device is also used to vaporize a portion of the male prostate which is used with the Company’s lasers in the treatment of benign prostate hyperplasia or "BPH", commonly referred to as an "enlarged prostate."
 
CRITICAL ACCOUNTING POLICIES
 
Revenue Recognition
 
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements require the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Our management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.
 
 
12

 
 
The methods, estimates, and judgment we use in applying our most critical accounting policies have a significant impact on the results we report in our financial statements. The SEC has defined "critical accounting policies" as those accounting policies that are most important to the portrayal of our financial condition and results, and require us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based upon this definition, our most critical estimates relate to the fair value of warrant liabilities. We also have other key accounting estimates and policies, but we believe that these other policies either do not generally require us to make estimates and judgments that are as difficult or as subjective, or it is less likely that they would have a material impact on our reported results of operations for a given period. For additional information see Note 2, "Summary of Significant Accounting Policies" in the notes to our reviewed financial statements appearing elsewhere in this quarterly report and our annual audited financial statements appearing on Form 10-K. Although we believe that our estimates and assumptions are reasonable, they are based upon information presently available, and actual results may differ significantly from these estimates.
 
RESULTS OF OPERATIONS
 
Method of Presentation
 
The unaudited condensed consolidated financial statements include the accounts of Trimedyne, Inc., MST and its 90% owned subsidiary, Cardiodyne.
 
Three months ended March 31, 2011 compared to three months ended March 31, 2010
 
During the quarter ended March 31, 2011, net revenues were $1,880,000 as compared to $1,727,000 for the same period of the previous year, a $153,000 or 8.9% increase. Net sales from lasers and accessories increased by $259,000 or 102.8% to $511,000 during the quarter ended March 31, 2011 from $252,000 in the same period of the previous year. During the quarter ended March 31, 2011, the Company recognized a total of $140,000 in laser sales relating to deposits from customers received prior to December 31, 2010, for which revenue recognition criteria was not met. Lasers carry a high selling price and are subject to a longer, less predictable closing period, which as a result, can create larger variances between periods. Net sales from delivery and disposable devices decreased by $88,000 or 10.8% to $727,000 in the quarter ended March 31, 2011 from $815,000 in the same period of the previous year. Net sales from service and rental decreased by $18,000 or 2.7% to $642,000 from $660,000 for the same quarters. The decrease in service and rental revenue was primarily due to a decrease in billable service calls. Revenue from export sales remained relatively unchanged from the same quarter of the previous year.
 
Cost of sales during the quarter ended March 31, 2011 was $1,103,000 or 58.7% of net revenues as compared to $1,126,000 or 65.2% the same period of the previous year, primarily due to better margins on laser sales. Gross profit from the sale of lasers and accessories was 26.2% as compared to a gross profit of 11.9% for the same quarter of the previous year.  The gross profit from the sale of delivery and disposable devices was 52.7% as compared to 35.7% for the same quarter of the previous year. This increase in gross profit as compared to the same quarter of the prior year was primarily the result of a higher percentage of overhead being absorbed by lower production rates resulting from a temporary shutdown of production due to repairs in the manufacturing facility during the same quarter of the previous year. Gross profit from revenue received from service and rentals were 40.5% as compared to 42.4% for the same quarter of the previous year. This decrease in gross profit was primarily due to a decrease in revenue from billable service calls while maintaining existing overhead.
 
Selling, general and administrative expenses increased in the quarter ended March 31, 2011 to $709,000 from $659,000 in the same period of the previous year, an increase of $50,000 or 7.6%. The increase in selling, general and administrative expenses during the quarter ended March 31, 2011 compared to the same period of the previous year was primarily the result of increases in commissions expense of $39,000, legal expense of $25,000 and marketing expense of $5,000, offset by decreases in payroll related expense of $14,000 due to staff reductions and outside administrative services of $9,000.
 
Research and development expenditures for the quarter ended March 31, 2011,decreased $145,000 or 45.9% to $171,000 as compared to $316,000 in the same period of the previous year. The continuing expenditure for research and development was primarily a result of the Company continuing its product development efforts in developing its new reusable Side-Firing Laser Fibers for sale by the Company.
 
Other income, net, decreased by $41,000 or 57.7% to $30,000 in the quarter ended March 31, 2011 from $71,000 in the same period of the previous year. This decrease was primarily the result of a decrease of $24,000 in royalty income to $49,000 as compared to $73,000 in the same quarter of the previous year along with a recognized gain of $12,000 on depreciated equipment used as a trade-in on newer equipment for MST during the same quarter of the previous year.
 
For the quarters ended March 31, 2011 and 2010, the Company had a net loss of $75,000 or $0.00 per share, as compared to a net loss of $307,000 or $0.02 per share, respectively, based on 18,365,960 basic weighted average number of common shares outstanding, resulting from the above mentioned factors.
 
 
13

 
 
Six months ended March 31, 2011 compared to six months ended March 31, 2010
 
During the six months ended March 31, 2011, net revenues increased to $3,515,000 as compared to $3,381,000 for the same period of the previous year, a $134,000 or 4.0% increase, primarily due to better margins on laser sales. Net sales from lasers and accessories increased by $254,000 or 49.5% to $767,000 during the six months ended March 31, 2011 from $513,000 in the same period of the previous year.  Lasers carry a high selling price and are subject to a longer, less predictable closing period, which as a result, can create larger variances between periods. Net revenues from delivery and disposable devices decreased by $105,000 or 7.0% to $1,400,000 during the six months ended March 31, 2011 from $1,505,000 for the same period of the previous year. Net revenues from service and rental decreased by $15,000 or 1.1% to $1,348,000 from $1,363,000 for the same period of the previous year. The decrease in service and rental revenue was primarily due to a decrease in billable service calls during the current six-month period as compared to the same period of the previous year. Revenue from export sales increased by $78,000 to $803,000 during the six-month period ended March 31, 2011 from $725,000 during the same period of the previous year.
 
Cost of sales during the six months ended March 31, 2011 were $2,129,000 or 60.6% of net revenues as compared to $2,202,000 or 65.1% for the same period of the previous year. Gross profit from the sale of lasers and accessories was 23.4% as compared to 11.7% for the same six-month period of the previous year. Gross profit from the sale of delivery and disposable devices was 46.6% as compared to 35.2% for the same six-month period of the previous year. This increase in gross profit as compared to the same six-month period of the prior year was primarily the result of exiting overhead being absorbed by lower production rates, resulting from a temporary shutdown of production due to repairs in the manufacturing facility during the same six-month period of the previous year. This increase in gross profit was primarily due to due to a higher percentage of overhead being absorbed by lower production rates resulting from a temporary shutdown of production due to repairs in the manufacturing facility during the same six-month period of the previous year. Gross profit from revenue received from service and rentals was 40.9% as compared to 43.2% for the same six-month period of the previous year. This decrease in gross profit was primarily due to a decrease in revenue from billable service calls while maintaining existing overhead.
 
For the six months ended March 31, 2011, selling, general and administrative expenses totaled $1,416,000 as compared to $1,288,000 for the same period of the previous year, a $128,000 or 9.9% increase. The increase in selling, general and administrative expenses during the six-month period ended March 31, 2011 was primarily the result of increases in legal expense of $48,000, marketing expense of $36,000, commissions expense of $22,000, amortization expense of $15,000 for MST, bank fees of $9,000, and other administrative expense of $7,000, offset by decreases payroll related expenses of $18,000.
 
During the six months ended March 31, 2011, research and development expenses decreased to $381,000 from $621,000 in the same six-month period of the previous year, a decrease of $240,000 or 38.7%. The continuing expenditure for research and development was primarily due to the Company continuing its product development efforts in developing its new reusable Side-Firing Laser Fibers for sale by the Company.
 
Other income decreased by $85,000 or 64.4% to $47,000 in the six-month period ended March 31, 2011 from $132,000 in the same six-month period of the previous year. During the six months ended March 31, 2011, royalty income decreased $73,000 to $68,000 as compared to $141,000 in the same six-month period of the previous year. Interest income increased $1,000 to $2,000 as compared to $1,000 during the same six-month period of the previous year as a result of higher maintained balances in interest bearing accounts. During the six-month period of the previous year a gain of $12,000 was recognized on depreciated equipment used as a trade-in on newer equipment for MST during the prior year quarter.
 
For the six months ended March 31, 2011 and 2010, the Company had a net loss of $368,000 or $0.02 per share, as compared to a net loss of $607,000 or $0.03 per share, respectively, based on 18,365,960 basic weighted average number of common shares outstanding, resulting from the above mentioned factors.
 
Liquidity and Capital
 
At March 31, 2011, the Company had working capital of $4,544,000 compared to $5,025,000 at the end of the fiscal year ended September 30, 2010. Cash increased by $58,000 to $2,586,000 from $2,528,000 at the fiscal year ended September 30, 2010. During the six month period ended March 31, 2011, net cash provided by operating activities was $291,000. Net cash used in investing activities was $383,000 for the purchase of equipment for MST. Net cash provided by financing activities during the same three month period was $150,000, which primarily was the result of payments on debt of $100,000 incurred for the servicing of loans for equipment and certain insurance policies, offset by the Company borrowing $250,000 at a more favorable interest rate from a related party to pay a vendor for the purchase of property and equipment for MST.
 
 
 
14

 
 
We have introduced a new line of Single Use optical fibers to supplement our line of Reusable Optical Fibers. These optical fibers are used with our Holmium lasers and Holmium lasers with compatible connectors made by others for the fragmentation of urinary stones in the kidney, ureter and bladder and biliary stones in the gall bladder. Many hospitals in the United States and other developed countries prefer having a new, sterile optical fiber for each stone case, rather than having to clean, clip and re-sterilize a reusable optical fiber after each case.
 
We are exploring various avenues to reduce our cost of manufacturing Lasers, expand the distribution of our products, particularly our new VaporMAX Side Firing Fiber and Single Use Optical Fibers, to increase our revenues and improve our profit margins.
 
We are continuing to seek licensees of our patents and proprietary technologies. There is, of course, no assurance that these efforts will be successful.
We believe that existing cash flows are sufficient to fund operations through March 31, 2012; however, we have incurred losses from operations for the past three years. There can be no assurance that we will be able to maintain or achieve sales growth in the next 12 months, or that the Company will be profitable. Thus, it is possible that additional working capital in the next 12 may be required. If necessary, we will raise additional debt and/or equity capital, sell some of our assets, reduce our costs by eliminating certain personnel positions and reducing certain overhead costs in order to fund operations. There is no assurance that our efforts to do so will be successful.
 
OFF BALANCE SHEET ARRANGEMENTS
 
None.
 
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. N/A
 
 
ITEM 4. CONTROLS AND PROCEDURES
 
Disclosure Controls and Procedures. Our management has evaluated, under the supervision and with the participation of our interim chief executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the "Exchange Act"). Based on that evaluation, our interim chief executive officer and principal financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our chief executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
 
Changes in Internal Control Over Financial Reporting. There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 
 
15

 
 
PART II
Other Information
 
Item 1.
Legal Proceedings
 
The Company is currently a defendant in one product liability lawsuit. The case, filed on behalf of Paula Tsakonas, plaintiff, in the Circuit Court of Cook County, Illinois on February 23, 2011, relates to injuries that occurred in connection to a medical procedure in which the Company's laser was used and names Spiros G. Stamelos, MD, Stamelos Bros., LTD., an Illinois Corporation, doing business as Advanced Orthopaedic Associates, Lakeshore Surgery Center, LLC, an Illinois corporation and Trimedyne, Inc. as defendants. The case is currently in litigation. The Company has insurance to cover product liability claims. This insurance provides the Company with $5,000,000 of coverage for each occurrence with a general aggregate of $5,000,000. Trimedyne's liability is limited to a maximum of $25,000 per occurrence unless the judgment against the Company exceeds the insurance coverage. In such case, Trimedyne would be liable for any liability in excess of $5,000,000. Management has recorded a loss contingency for this claim in the amount of $25,000 based on the deductible under the insurance policy. Management is not accruing any additional provision for this claim, as it is not expected that this claim will exceed the limits of the insurance coverage.

 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
None
 
 
Item 3.
Defaults Upon Senior Securities
None
 
 
Item 4.
[Removed and Reserved]
 
 
Item 5.
Other Information
 
On May 19, 2011, the Board of Directors appointed Director Glenn Yeik as interim Chief Executive Officer, to serve on a temporary basis until such time as Company CEO Marvin Loeb returns to his duties.  The Company expects Mr. Loeb to return in a few weeks.
 
GLENN D. YEIK has been our President, Chief Operating Officer, and Director since September 2003. Since October 2004, he has been a Director of Cardiomedics, Inc., a privately held company which developed and is marketing a circulatory assist device. Before September 2003, he was our Executive Vice President from April 2002 to September 2003 and Vice President Product Development from March 2000 to April 2002 to September 2003. Mr. Yeik was Manager and Director of Electronic Systems at AngioTrax, Inc. from May 1998 to March 2000. He was our Manager, Laser Engineering from May 1994 to May 1998 and our Senior Electrical Engineer from July 1992 to May 1994. Before joining Trimedyne, Mr. Yeik was a Software Engineer at Cardiac Science, Inc. from June 1991 to July 1992. Mr. Yeik received a Bachelor of Science of Engineering Degree in Electrical Engineering from LeTourneau University. Mr. Yeik is Mr. Loeb's son-in-law.

 
Item 6.
Exhibits
 
(a)      Exhibits
 
3.1   Amended and Restated Articles of Incorporation of Trimedyne, Inc.
31.1   Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Glenn Yeik
 31.2   Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Jeffrey S. Rudner
32.1   Interim Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
32.2   Principal Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
 
 
 
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SIGNATURE PAGE

 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
 

      TRIMEDYNE, INC.  
         
Date:
May 23, 2011
  /s/ Glenn Yeik  
      Glenn Yeik  
      Interim Principal Executive Officer  
         
                                             

Date:
May 23, 2011
  /s/ Jeffrey S. Rudner  
      Jeffrey S. Rudner  
      Principal Financial Officer  
                                             
 
 
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