<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A-1
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended: JUNE 30, 1998
Commission File Number: 333-37441
MEDICAL SCIENCE SYSTEMS, INC.
(Name of Small Business Issuer in its Charter)
TEXAS 94-3123681
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 N.E. LOOP 410, SUITE 820
SAN ANTONIO, TEXAS 78216-4749
(Address of principal executive offices)(Zip Code)
Issuer's Telephone Number: (210) 349-6400
Securities registered under Section 12(b) of the Exchange Act:
(Title of each class) (Name of each exchange on which registered)
COMMON STOCK, NO PAR VALUE BOSTON STOCK EXCHANGE
Securities registered under Section 12(g) of the Exchange Act:
(Title of each class)
COMMON STOCK, NO PAR VALUE
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 ( )
Title of Each Class Outstanding at August 1, 1998
- ------------------- -----------------------------
Common stock, no par value 5,540,895
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
================================================================================
<PAGE> 2
MEDICAL SCIENCE SYSTEMS, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------------
1998 1997
----------- -----------
(UNAUDITED)
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net loss $(4,433,778) $(1,833,905)
Reconciling adjustments:
Depreciation and amortization 71,907 15,999
Issuance of stock options for a reduction in salary 0 148,377
Accretion of investments (157,036) 0
(Increase) decrease in:
Accounts receivable (21,358) (28,075)
Inventories 5,156 0
Prepaid expenses (110,635) 0
Increase (decrease) in:
Accounts payable (269,236) 226,809
Accrued expenses 415,011 76,829
Deferred income 126,893 0
----------- -----------
Net cash used in operating activities (4,373,076) (1,393,966)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of furniture and equipment (318,361) (25,023)
Increases in patents (144,811) (67,005)
Decrease in due from shareholder 0 6,565
Maturity of investments 2,052,000 0
----------- -----------
Net cash provided by investing activities 1,588,828 (85,463)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 0 1,371,380
Proceeds from capitalized lease obligations 79,454 0
Increase in deferred offering costs 0 (31,081)
Borrowings on line of credit, net 0 146,277
Retirement of long-term debt (558,538) 0
Proceeds from long-term borrowings 570,000 0
Principal payments of long-term debt (73,762) (18,654)
Principal payments of capitalized lease obligations (30,966) (14,477)
----------- -----------
Net cash provided by (used in) financing activities (13,812) 1,453,445
----------- -----------
Net increase (decrease) in cash and equivalents (2,798,060) (25,984)
Cash and equivalents, beginning of period 6,005,059 55,966
----------- -----------
CASH AND EQUIVALENTS, END OF PERIOD $ 3,206,999 $ 29,982
=========== ===========
</TABLE>
4
<PAGE> 3
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MEDICAL SCIENCE SYSTEMS, INC.
Date: September 2, 1998 By: /s/ U. Spencer Allen
--------------------------------
U. Spencer Allen
Chief Financial Officer
and Treasurer
12
