**SECURITIESAND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 

----

 

**FORM10-QSB**

 
| ý | **QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|--------|----------------------------------------------------------------------------------------|

 

**For the quarterly period ended December 31, 2001**

 
| **o** | **TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|-----------------------------------------------------------------------------------------|

 

**For the transition period from               to               .**

** **

**Commission file number 0-18785**

 

----

 

**SterionIncorporated**

 

(Exact name of small business issuer as specified in its charter)

 
| **Minnesota**                                                                       |   | **41-1391803**                    |
|-------------------------------------------------------------------------------------|--------|-----------------------------------|
| (State or other jurisdiction of incorporation or organization)                      |   | (IRS Employer Identification No.) |
|                                                                                |   |                              |
| **13828 Lincoln Street N.E., Ham Lake, Minnesota 55304**                            |
| (Address of principal executive offices)                                            |
|                                                                                |   |                              |
| **(763) 755-9516**                                                                  |
| (Issuer’s telephone number)                                                    |
|                                                                                |   |                              |
| **Oxboro Medical, Inc.**                                                            |
| (Former name, former address and former fiscal year, if changed since  last report) |

 

----

 

Check whether the issuer (1)filed all reports required to be filed by Section 13 or 15(d) of the ExchangeAct during the past 12 months (or for such shorter period that the registrantwas required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days: YES ý    NO o

 

At February 12, 20021,784,917 shares of the issuer’s Common Stock were outstanding.

 

 

 

**STERION INCORPORATED**

**INDEX TO FORM 10-QSB**

 
| PART I.—FINANCIAL  INFORMATION: |
|--------------------------------------|
| Item 1.                              | Consolidated Financial  Statements (unaudited) |
|                                 | Consolidated  Balance Sheets at December 31, 2001 and September 30, 2001 (unaudited) |
|                                 | Consolidated  Statements of Operations and Comprehensive Income for the Three Months   Ended December 31, 2001 and 2000 (unaudited) |
|                                 | Consolidated  Statements of Cash Flows for the Three Months Ended December 31, 2001 and  2000 (unaudited) |
|                                 | Notes  to Consolidated Financial Statements (unaudited) |
| Item  2.                             | Management’s  Discussion and Analysis or Plan of Operation |
| PART II—OTHER INFORMATION:      |
| Item 5.                              | Other  Information |
| Item 6.                              | Exhibits and  Reports on Form 8-K |
| SIGNATURES                           |

 

2

----

 

**PART I**

**FINANCIAL INFORMATION**

 

**Item 1.Financial Statements.**

 

STERION INCORPORATED

CONSOLIDATEDBALANCE SHEETS (unaudited)

 
|                                                  |   | **December  31,** |      | **September  30,** |   |
|-------------------------------------------------------|--------|-------------------|-----------|--------------------|--------|
|                                                  |   | **2001**          |      | **2001**           |   |
| **ASSETS**                                            |   |
| Current Assets:                                       |   |              |      |               |   |
| Cash and cash equivalents                             |   | $                 | 1,940,527 |               | $      | 2,328,063 |   |
| Warrant proceeds due from  trustee                    |   | 0                 |      | 58,008             |   |
| Trade receivables, net                                |   | 1,376,374         |      | 1,315,070          |   |
| Inventories                                           |   | 2,285,534         |      | 1,824,353          |   |
| Available-for-sale  securities                        |   | 0                 |      | 612,724            |   |
| Income taxes receivable                               |   | 11,747            |      | 0                  |   |
| Deferred income taxes                                 |   | 118,365           |      | 189,000            |   |
| Other current assets                                  |   | 173,583           |      | 117,427            |   |
| Total current assets                                  |   | 5,906,130         |      | 6,444,645          |   |
| PROPERTY AND EQUIPMENT,  NET                          |   | 1,940,266         |      | 1,764,396          |   |
| Intangible assets, net                                |   | 1,119,874         |      | 1,185,946          |   |
| Other assets                                          |   | 36,003            |      | 0                  |   |
| Cash surrender value of  life insurance, net of loans |   | 36,610            |      | 32,084             |   |
| Total other assets                                    |   | 1,192,487         |      | 1,218,030          |   |
| Total assets                                          |   | $                 | 9,038,883 |               | $      | 9,427,071 |   |
|                                                  |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY             |   |
| CURRENT LIABILITIES:                                  |   |              |      |               |   |
|                                                  |   |              |      |               |   |
| Current maturities of  long-term obligations          |   | $                 | 345,145   |               | $      | 323,951 |   |
| Accounts payable                                      |   | 382,977           |      | 416,942            |   |
| Accrued salaries, wages,  and payroll taxes           |   | 232,289           |      | 185,307            |   |
| Accrued income taxes                                  |   | 8,250             |      | 28,250             |   |
| Other accrued expenses                                |   | 150,013           |      | 129,566            |   |
| Total current liabilities                             |   | 1,118,674         |      | 1,084,016          |   |
| LONG-TERM OBLIGATIONS,  less current maturities       |   | 1,576,220         |      | 2,078,635          |   |
| DEFERRED INCOME TAXES                                 |   | 0                 |      | 27,000             |   |
| STOCKHOLDERS’ EQUITY:                            |   |              |      |               |   |
| Common stock, $0.01 par  value                        |   | 17,849            |      | 17,769             |   |
|                                                  |   |              |      |               |   |
| Additional paid-in capital                            |   | 3,382,329         |      | 3,350,281          |   |
| Retained earnings                                     |   | 2,943,811         |      | 2,812,716          |   |
| Accumulated other  comprehensive income               |   | 0                 |      | 56,654             |   |
| Total stockholders’ equity                       |   | 6,343,989         |      | 6,237,420          |   |
| TOTAL LIABILITIES AND  STOCKHOLDERS’ EQUITY      |   | $                 | 9,038,883 |               | $      | 9,427,071 |   |

 

See accompanying notes to consolidated financial statements.

 

3

----

 

STERION INCORPORATED

CONSOLIDATEDSTATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited)

 
|                                                               |   | **For  the Three Months**

**Ended  December 31,** |      |
|--------------------------------------------------------------------|--------|----------------------------------------------------|-----------|
|                                                               |   | **2001**                                           |      | **2000** |   |
| Net Sales                                                          |   | $                                                  | 2,232,238 |   | $ | 1,159,128 |   |
| Cost of Goods Sold                                                 |   | 996,956                                            |      | 417,701 |   |
| Gross profit                                                       |   | 1,235,282                                          |      | 741,427 |   |
| Selling, general and  administrative expenses                      |   | 1,060,135                                          |      | 590,497 |   |
| Income from operations                                             |   | 175,147                                            |      | 150,930 |   |
| Interest expense                                                   |   | 37,554                                             |      | 10,513 |   |
| Interest and other income                                          |   | 11,576                                             |      | 30,492 |   |
| Gain on sale of  available-for-sale securities                     |   | 52,926                                             |      |   |   |
| Income before taxes                                                |   | 202,095                                            |      | 170,909 |   |
| Provision for income taxes                                         |   | 71,000                                             |      | 0 |   |
| Net Income                                                         |   | 131,095                                            |      | 170,909 |   |
| Other comprehensive loss                                           |   | (56,654                                            | )         | (81,250 | ) |
| Comprehensive income                                               |   | 74,441                                             |      | 89,659 |   |
| Net income  per  share:                                       |   |                                               |      |   |   |
| Basic                                                              |   | $                                                  | 0.07      |   | $ | 0.10 |   |
| Diluted                                                            |   | $                                                  | 0.06      |   | $ | 0.09 |   |
| Weighted average common  and common equivalent shares outstanding: |   |                                               |      |   |   |
| Basic                                                              |   | 1,767,503                                          |      | 1,765,116 |   |
| Diluted                                                            |   | 2,125,573                                          |      | 1,903,232 |   |

 

See accompanying notes to consolidated financial statements.

 

4

----

 

STERION INCORPORATED

CONSOLIDATEDSTATEMENTS OF CASH FLOWS (unaudited)

 
|                                                                                               |   | **For  the Three Months**

**Ended  December 31,** |      |
|----------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|-----------|
|                                                                                               |   | **2001**                                           |      | **2000** |   |
| CASH FLOWS FROM OPERATING  ACTIVITIES:                                                             |   |                                               |      |   |   |
| Net income                                                                                         |   | $                                                  | 131,095   |   | $ | 170,909 |   |
| Adjustments to reconcile  net income  to net cash provided by (used in) operating activities: |   |                                               |      |   |   |
|                                                                                               |   |                                               |      |   |   |
| Depreciation and  amortization                                                                     |   | 124,349                                            |      | 51,077 |   |
| Gain on sale of  available-for-sale securities                                                     |   | (52,926                                            | )         | 0 |   |
|                                                                                               |   |                                               |      |   |   |
| Deferred income taxes                                                                              |   | 70,635                                             |      | 0 |   |
|                                                                                               |   |                                               |      |   |   |
| Change in operating assets  and liabilities:                                                       |   |                                               |      |   |   |
| Trade receivables, net                                                                             |   | (61,304                                            | )         | (66,276 | ) |
| Inventories                                                                                        |   | (461,181                                           | )         | (7,101 | ) |
| Income taxes receivable                                                                            |   | (11,747                                            | )         | 0 |   |
| Prepaid expenses                                                                                   |   | 0                                                  |      | (4,602 | ) |
| Other current assets                                                                               |   | (56,156                                            | )         | (13,902 | ) |
| Other assets                                                                                       |   | (40,529                                            | )         | 0 |   |
| Accounts payable                                                                                   |   | (33,965                                            | )         | 21,829 |   |
| Accrued wages, salaries  and payroll taxes                                                         |   | 46,982                                             |      | (16,140 | ) |
| Accrued  income taxes                                                                              |   | (20,000                                            | )         | 0 |   |
| Other accrued expenses                                                                             |   | 20,447                                             |      | (54,816 | ) |
|                                                                                               |   |                                               |      |   |   |
| NET CASH PROVIDED BY (USED  IN) OPERATING ACTIVITIES                                               |   | (344,300                                           | )         | 101,720 |   |
| CASH FLOWS FROM INVESTING  ACTIVITIES:                                                             |   |                                               |      |   |   |
|                                                                                               |   |                                               |      |   |   |
| Purchases of property and  equipment                                                               |   | (234,146                                           | )         | (26,930 | ) |
| Proceeds from sale of  available-for-sale securities                                               |   | 581,996                                            |      | 0 |   |
|                                                                                               |   |                                               |      |   |   |
| Change in other assets                                                                             |   | 0                                                  |      | (50,049 | ) |
| NET CASH PROVIDED BY (USED  IN) INVESTING ACTIVITES                                                |   | 347,849                                            |      | (76,979 | ) |
| CASH FLOWS FROM FINANCING  ACTIVITIES:                                                             |   |                                               |      |   |   |
| Payments on long term debt                                                                         |   | (481,221                                           | )         | (10,263 | ) |
| Proceeds from rights and  warrants exercised and stock options exercised                           |   | 90,136                                             |      | 1,102,257 |   |
|                                                                                               |   |                                               |      |   |   |
| NET CASH PROVIDED BY (USED  IN) FINANCING ACTIVITIES                                               |   | (391,085                                           | )         | 1,091,994 |   |
| NET INCREASE (DECREASE) IN  CASH AND CASH EQUIVALENTS                                              |   | (387,536                                           | )         | 1,116,735 |   |
| CASH AND CASH EQUIVALENTS,  BEGINNING OF PERIOD                                                    |   | $                                                  | 2,328,063 |   | 461,108 |   |
| CASH AND CASH EQUIVALENTS,  END OF PERIOD                                                          |   | $                                                  | 1,940,527 |   | $ | 1,577,843 |   |
| Supplemental cash flows  information:                                                              |   |                                               |      |   |   |
| Cash paid for interest                                                                             |   | $                                                  | 37,554    |   | $ | 10,513 |   |
| Cash paid for income taxes                                                                         |   | $                                                  | 20,000    |   | $ | 9,300 |   |

 

See accompanying notes to consolidated financial statements.

 

5

----

 

STERION INCORPORATED (F/K/A OXBORO MEDICAL, INC.)

NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2001

 

**Note 1—Basis of Financial Statement Presentation**

 

Theaccompanying unaudited consolidated financial statements have been preparedpursuant to the rules and regulations of the Securities and ExchangeCommission. Certain information and footnote disclosures normally included infinancial statements prepared in accordance with generally accepted accountingprinciples have been consolidated or omitted pursuant to such rules andregulations, although management believes that the disclosures are adequate tomake the information presented not misleading.

 

Inthe opinion of management, the unaudited consolidated financial statementscontain all adjustments (consisting of only normal recurring adjustments)necessary to present fairly the financial position and results of operations.Results of operations for the interim periods are not necessarily indicative ofthe results to be expected for the full year or of the results for any futureperiods.

 

Inpreparation of the Company’s consolidated financial statements, management isrequired to make estimates and assumptions that affect reported amounts ofassets and liabilities and related revenues and expenses. Actual results coulddiffer from the estimates used by management.

 

**Note 2 - Significant Accounting Policies**

 

**Principles of consolidation -** The consolidated financial statementsinclude the accounts of Sterion Incorporated. and its wholly-owned subsidiaries,Oxboro, Inc. (formerly known as Oxboro Medical, Inc.) and Sterion, Inc. Allsignificant intercompany transactions and balances have been eliminated inconsolidation.

 

**Amortization -** Patents and trademarks are being amortized over their estimated usefullives using the straight-line method.

 

**Income taxes -** The Company has adopted Statement of Financial Accounting StandardsNo. 109, “Accounting for Income Taxes,” under which deferred income tax assetsand liabilities are recognized for the temporary differences between thefinancial statement and income tax reporting bases of assets and liabilitiesbased on currently enacted rates and laws. These temporary differences includedepreciation and related party accruals.

 

**Research and development -** The Company expenses all costs related toproduct research and development as incurred.  Research and developmentexpense was $16,876 and $10,634 for the three months ended December 31, 2001and December 30, 2000, respectively.

 

**Note 3 Inventories**

** **
|                    |   | **December  31, 2001** |      | **September  30, 2001** |   |
|-------------------------|--------|------------------------|-----------|-------------------------|--------|
| Inventories consist of: |   |                   |      |                    |   |
| Raw materials           |   | $                      | 1,129,186 |                    | $      | 830,468 |   |
| Work in process         |   | 656,380                |      | 641,977                 |   |
| Finished Goods          |   | 600,479                |      | 603,805                 |   |
| Total                   |   | 2,386,045              |      | 2,076,250               |   |
| Less: valuation reserve |   | (100,511               | )         | (251,897                | )      |
| Inventories, net        |   | $                      | 2,285,534 |                    | $      | 1,824,353 |   |

 

6

----

 

**Note 4 - Available for Sale Securities**

 

TheCompany classified all equity securities, which are not cash equivalents, asavailable-for-sale securities. Available-for-sale securities were reported atfair value with all unrealized gains or losses included in other comprehensiveincome. The fair value of the securities was determined by quoted market pricesof the underlying security.  These securities were sold during the threemonths ended December 31, 2001.

 

**Note 5 - Net Income Per Share**

 

TheCompany’s basic net income per share amounts have been computed by dividing netincome  by the weighted average number of outstanding common shares. TheCompany’s diluted net income  per share is computed by dividing netincome  by the weighted average number of outstanding common shares andcommon share equivalents relating to stock options and warrants, when dilutive.For the three months ended December 31, 2001 and 2000, 358,070 and 138,116shares of common stock equivalents were included in the computation of dilutednet income per share, respectively.

 

Optionsto purchase 52,900 shares of common stock with a weighted average exerciseprice of  $5.51 were outstanding at December 31, 2000, but were excludedfrom the computation of common share equivalents because their exercise priceswere greater than the average market price of the common shares for theperiod.  All options and warrants were dilutive for the three months endedDecember 31, 2001.

 

**Note 6 - Income Taxes**

 

TheCompany recognized as a deferred tax asset the net operating loss carryforwardat September 30, 2001.  Therefore, the income tax provision for the threemonths ended December 31, 2001 represents a reduction in the deferred tax assetin the amount of approximately $71,000.  There are no net operating losscarryforwards available to offset income as of December 31, 2001.

 

**Note 7 - Long-term debt**

 

Asof December 31, 2001, the Company had $675,000 available at the rate of primeunder a line of credit agreement which expires May 31, 2002. No amounts wereoutstanding on this line of credit at December 31, 2001 or September 30, 2001.

 

**Note 8 - Commitments and contingencies**

 

**Treasury stock purchase program -** In September 2001, the Board of Directorsauthorized a treasury stock program under which the Company is authorized torepurchase up to 175,000 common shares of the Company’s stock. Through December31, 2001, the Company repurchased 6,300 common shares for $44,422.

 

7

----

 

**Note 9 -Subsequent Events**

 

OnJanuary 22, 2002, the Company paid $200,000 in cash from its available workingcapital to acquire substantially all of the assets of Surgidyne, Inc. pursuantto that certain Asset Purchase Agreement dated as of October 4, 2001, asamended.

 

OnFebruary 10, 2002, the Company paid $350,000 in cash from its available workingcapital to acquire substantially all of the assets of Bellingham Medical, Inc.pursuant to that certain Asset Purchase Agreement dated as of January 18, 2002.

 

8

----

 

**Item 2.Management’s Discussion and Analysis or Plan of Operation**

 

**Overview**

 

SterionIncorporated, formerly known as Oxboro Medical, Inc. ( Sterion” “), with itswholly-owned subsidiary Sterion, Inc. (collectively, the “Company”), develop,manufacture , and market medical and surgical devices. Principal medicalproducts produced and sold by the Company include silicone loops, silicone andfabric clamp covers, instrument guards, suture aid booties, identificationsheet and roll tape, and various holders and organizers for instruments used inthe operating room under the name “Sterion®”.  On January 22, 2002 theCompany completed the purchase of a line of surgical drainage and fluidcontainment systems from Surgiyne, Inc.  On February 10, 2002, the Companycompleted the purchase of a line of wound closure strips and related productsfrom Bellingham Medical, Inc.

 

**Results of Operations**

 

Netsales for the three-month period ended December 31, 2001 were $2,232,238 ascompared to $1,159,128 for the corresponding period in the previous fiscalyear.  This represents an increase of approximately 92.5%. First quartersales includes $951,586 for the Company’s  Sterion®, Container Divisionsubsidiary. The Sterion® product line was acquired from Johnson & JohnsonMedical division of Ethicon, Inc. in May 2000.  Excluding the effect ofSterion® Container Division sales, Sterion’s  net sales for the firstquarter rose 11 percent over the same period last year.

 

Continuedcompetition and pricing pressure have constrained revenue growth in theCompany’s existing product lines.  However several new products haverecently been added through the acquisition of the surgical drainage and fluidcontainment systems from Surgidyne, Inc. and the wound closure strips andrelated products from Bellingham Medical, Inc., the Company expects these newproducts, together with newly developed or acquired products to contribute tosales growth in the future.

 

Grossprofit as a percent of net sales for the first three months of fiscal 2002 and2001 was 55.3% and 64.0%, respectively. The gross profit percentage decrease isattributable to sales of the Sterion® product, which typically have a lowergross profit margin percentage.  Gross profit dollars increased for thethree months ended December 31, 2001 compared to the corresponding period inthe prior year by $493,855.  The principal reason for the increase in grossprofit for the period is that Sterion® contributed $502,440 to total grossprofit.

 

Netincome for the first three months of fiscal year 2002 was $131,095 as comparedto income of $170,909 in the same period of fiscal 2001.  Net income wassomewhat lower in the three months ended December 31, 2001 principally due tothe income tax provision recorded for the three months ended December 31, 2001in the amount of approximately $71,000 compared to $0 for the prior comparablequarter.

 

**Liquidity and Capital Resources**

 

TheCompany has typically financed its operations through internal working capitaland a bank line of credit. Financing of its building has been through long-termbank financing. The Company believes it has adequate capital to meet its cashrequirements for the next twelve months. As of December 31, 2001, the Companyhad working capital of $4,787,456 as compared to $5,360,629 at September 30,2001, and long-term debt of $1,576,220 compared to $2,078,635 at September 30,2001.  The decrease in working capital and in long-term debt principallyrelates to the sale of available-for-sale securities and utilization of cashreserves for improvements.   As of December 31, 2001, the Company had$1,940,527 in cash and cash equivalents as compared to $2,328,063 at

 

9

----

 

September 30, 2001.  The decrease in cash and cash equivalents ofapproximately $387,000 from September 30, 2001 to December 31, 2001 principallyrelates to an increase in inventories of new products, paydown of long termbank debt, and purchases of new equipment.

 

Duringthe three months ended December 31, 2001, the Company used $344,300 in net cashfrom operating activities primarily due to net income and purchases ofinventory. The Company generated $347,849 in investing activities during thethree months ended December 31, 2001, primarily due to the sale ofavailable-for-sale securities (net of purchases of property and equipment inthe amount of $234,146). The Company used $481,221 in cash to pay down long-termbank debt.  Additionally, the Companyreceived $90,136 from the exercise of warrants issued in the Company’s stockrights offering completed on November 30, 1999 and receipt of cash on stockoptions exercised.

 

**Subsequent Events**

 

OnJanuary 22, 2002, the Company paid $200,000 in cash from its available workingcapital to acquire substantially all of the assets of Surgidyne, Inc. pursuantto that certain Asset Purchase Agreement dated as of October 4, 2001, asamended.

 

OnFebruary 10, 2002, the Company paid $350,000 in cash from its available workingcapital to acquire substantially all of the assets of Bellingham Medical, Inc.pursuant to that certain Asset Purchase Agreement dated as of January 18, 2002.

 

**Forward-Looking Statements**

 

Thisreport contains forward-looking statements within the meaning of Section 21E ofthe Securities Exchange Act of 1934. In addition, forward-looking statementsmay be made orally in the future by or on behalf of the Company. When used inthis report, the words “believe,” “expect,” “will,” “can,” “estimate,”“anticipate” and similar expressions are intended to identify suchforward-looking statements. The Company wishes to caution readers not to placeundue reliance on any forward-looking statements and to recognize that thestatements are not predictions of actual future results. Actual results coulddiffer materially from those anticipated in the forward-looking statements dueto the risks and uncertainties set forth in our 2001 Annual Report on Form10-KSB under the caption “Risks Related to Our Business,” as well as others notnow anticipated. These risks and uncertainties include, without limitation: ourability to successfully integrate newly acquired products and introduce newproducts, pricing strategies of competitors, the success of competitiveproducts, general conditions in the industries served by our products,including consolidation of customers and the potential loss of those customersor their ability to demand discounted pricing on our products, changes in managementof the Company, maintenance of operating capital and bank financing, the effectof government regulation of our products, continuing relationships with ourthird party suppliers, and overall economic conditions, including inflation andconsumer buying patterns.

 

10

----

 

**PART II**

**OTHER INFORMATION**

 

**Item 4.  Submission ofMatters to a Vote of Security Holders.**

 

OnJanuary15, 2002 the Company held its Annual Meeting of Shareholders. Of the1,791,217 shares outstanding and entitled to vote at the meeting, 1,666,805shares were present, either in person or by proxy.  The followingdescribes the matters considered by the Company’s Shareholders at the meeting,as well as the results of the votes cast at the meeting:

 

1.             To elect one director to hold office as a Class IIIdirector for a three-year term or until his successor has been elected or 

appointed.

 
| Allan Anderson |   |      |   |
|----------------|--------|-----------|--------|
| For:           |   | 1,663,999 |   |
| Withhold:      |   | 2,806     |   |

 

Messrs.Kenneth Brimmer and Gary Copperud and Ms. Gervaise Wilhelm continued in theirterms as directors after this 2002 Annual Meeting.

 

2.             To approve an amendment to the Articles of Incorporationto change the name of the Company to “Sterion Incorporated.”

 
| For:             |   | 1,660,098 |   |
|------------------|--------|-----------|--------|
| Against:         |   | 4,434     |   |
| Abstain:         |   | 2,273     |   |
| Broker Non-Vote: |   | 0         |   |

 

3.             To approve an amendment to the Company’s 2000 StockOption Plan to increase the number of shares available under the 

plan from 300,000 to400,000.

 
| For:             |   | 987,010 |   |
|------------------|--------|---------|--------|
| Against:         |   | 45,452  |   |
| Abstain:         |   | 3,078   |   |
| Broker Non-Vote: |   | 631,265 |   |

 

**Item 6.Exhibits and Reports on Form 8-K:**

 

(a)             Exhibits:

 

Exhibit 10.1            Asset Purchase Agreement dated as ofOctober 4, 2001 by and between the Company and

Surgidyne, Inc.

 

Exhibit 10.2            Amendment No. 1 dated as of November29, 2001 to Asset Purchase Agreement dated

October 4, 2001 by andbetween the Company and Surgidyne, Inc.

 

Exhibit 10.3            Amendment No. 2 dated as of January15, 2001 to Asset Purchase Agreement dated

October 4, 2001 by andbetween the Company and Surgidyne, Inc.

 

Exhibit 10.4            Asset Purchase Agreement dated as ofJanuary 18, 2002 by and between the Company

and Bellingham Medical, Inc.

 

(b)            Reports on Form 8-K:

 

None.

 

11

----

 

 

**SIGNATURES**

 

Inaccordance with the requirements of the Exchange Act, the registrant causedthis report to be signed on its behalf by the undersigned, thereunto dulyauthorized.

 
|                     | OXBORO  MEDICAL, INC.                         |
|--------------------------|-----------------------------------------------|
|                     |                                          |
| Date:  February 14, 2002 | By:                                           | /s/  J. David Berkley |
|                     | J.  David Berkley, President                  |
|                     | (Principal  Executive Officer)           |
|                     |                                          |
| Date:  February 14, 2002 | By:                                           | /s/  Ramon L. Burton |
|                     | Ramon  L Burton, Chief Financial Officer      |
|                     | (Principal  Financial and Accounting Officer) |

 

12

----