CardioDynamics extends maturity of 8% convertibles to 2011, adds put

By Angela McDaniels

Seattle, Dec. 7 - CardioDynamics International Corp. said it entered into an amendment to its $5.25 million 8% subordinated convertible debt securities with its largest institutional shareholder.

The amendment extends the maturity of the convertible notes to 2011 from 2009, adds an investor put option at the end of 2009 and eliminates some anti-dilution language that required complex embedded derivative accounting treatment under Statement of Financial Standards 133, according to a company news release.

As a result of the amendments, the company will no longer be required to record quarterly conversion option valuation adjustments, which totaled $1.5 million during the second and third quarters.

In addition, CardioDynamics will no longer be required to record non-cash accounting charges related to the elimination of the implied discount on the convertibles, which totaled $236,000 in the second and third quarters.

"These amendments will eliminate the historically large, non-cash adjustments for the quarterly conversion option valuation, $2 million of remaining non-cash implied discount charges, as well as roughly $50,000 of annual accounting expenses required to value and report the effects of the note on a quarterly basis," chief executive officer Michael K. Perry said in the release.

San Diego-based CardioDynamics manufactures non-invasive impedance cardiography products and medical device electrodes.

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