UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended - March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
Commission file number 0-24897
SurgiLight, Inc.
(Name of Small Business Issuer in its charter)
Delaware 35-1990562
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
7055 University Blvd, Winter Park, Florida 32792
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 657-6500
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act:
Common Stock, $.001 par value per share
(Title or class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(D) of the securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES [x] NO [ ]
As of March 31, 1999, the Registrant has outstanding 11,500,000 shares
of Common Stock.
<PAGE>
SurgiLight, Inc.
Form 10-QSB
Quarterly Report
March 31, 1999
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
<TABLE>
<CAPTION>
(1) Financial Statements Page
<S> <C>
Consolidated Balance Sheets at March 31, 1999 and
March 31, 1998 (unaudited) F-1
Consolidated Statements of Operations for the three
months ended March 31, 1999 and
March 31, 1998 (unaudited) F-2
Consolidated Statements of Cash Flows for the three
month ended March 31, 1999 and
March 31, 1998 (unaudited) F-3
Consolidated Statements of Changes in Stockholder's
Equity for the years ended December 31, 1998 and
December 31, 1997 and for the three months ended
March 31, 1999 and March 31, 1998. (unaudited) F-4
Notes to Unaudited Financial Statements F-5
</TABLE>
<PAGE>
SURGILIGHT, INC.
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 1998
<PAGE>
Rachel L. Siu
Certified Public Accountant
5100 Old Howell Branch Road
Winter Park, FL 32792
SurgiLight, Inc.
7055 University Blvd.
Winter Park, FL 32792
We have compiled the accompanying Consolidated Balance Sheets of SurgiLight,
Inc. as of March 31, 1999 and 1998 and related Statements of Operations for
the three months ended March 31, 1999 and March 31, 1998, in accordance with
statements on standards for accounting and review services issued by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not
express and opinion or any other form of assurance on them.
Management has elected to omit substantially all the disclosures ordinarily
included in the financial statements. If the omitted disclosures were
included in the financial statements, they might influence the user's
conclusions about the company's financial position, results of operations,
and cash flows. Accordingly, these financial statements are not designed for
those who are not informed about such matters.
Rachel L. Siu
Winter Park, Florida
April 30, 1999
<PAGE>
SURGILIGHT, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March, 31 March, 31
1999 1998
--------- ---------
<S> <C> <C>
ASSETS
Current Assets
Cash $ 434,381 $ 42,180
Accounts Receivables, Net 228,375 59,000
Inventory 876,708 1,359,165
Other Current Assets 2,500 -
--------- ---------
Total Current Assets 1,541,964 1,460,345
Property & Equipment, Net 1,156,591 493,673
Intangibles, Net 146,694 160,045
Other Assets 203,051 2,671
--------- ---------
Total Assets $ 3,048,300 $ 2,116,734
========= =========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 174,125 91,418
Accrued Expenses 19,872 52,935
Other Current Liabilities 482,132 102,500
--------- ---------
Total Current Liabilities 676,129 246,853
Long-term Liabilities 56,095 -
--------- ---------
Total Liabilities 732,223 246,853
Stockholders' Equity
Common Stock 4,048,364 4,036,446
Paid In Capital 571,680 -
Accumulated Deficit (2,303,968) (2,166,565)
--------- ---------
Total Stockholders' Equity 2,316,076 1,869,881
--------- ---------
Total Liabilities &
Stockholders' Equity $ 3,048,300 $ 2,116,734
========= =========
</TABLE>
F-1
<PAGE>
SURGILIGHT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March, 31 March, 31
1999 1998
---------- ----------
<S> <C> <C>
Net Sales $ 554,686 $ 204,377
Cost of Goods Sold 80,861 20,020
---------- ----------
Gross Profit 473,825 184,357
General and Administrative
Expenses 469,651 230,030
---------- ----------
Operating Income (Loss) 4,174 (45,673)
Other Income (Expenses)
Interest Expense (16) -
Interest Income 3,443 659
---------- ----------
Net Income (Loss) $ 7,601 $ (45,014)
========== ==========
Diluted Earnings Per Share (Loss) $ 0.001 $ (0.450)
Weighted Average Number of
Diluted Shares Outstanding 6,124,614 100,000
</TABLE>
F-2
<PAGE>
SURGILIGHT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March, 31 March, 31
1999 1998
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 7,601 $ (45,014)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation 52,166 20,299
Amortization 3,333 3,340
Increase (Decrease) in:
Receivables (72,246) (59,000)
Inventory (95,856) (163,792)
Loans Receivable (2,500) -
Accounts Payable 27,881 15,710
Accrued Expenses (65) -
---------- ----------
Net cash provided (used) by
operating activities (79,686) (228,457)
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of equipment (119,013) -
---------- ----------
Net cash provided (used) by
investing activities (119,013) -
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term borrowing 104,727 -
Repayment of long-term borrowing - (948,251)
Capital Contributions 337,686 1,137,998
---------- ----------
Net cash provided (used) by
financing activities 442,413 189,747
---------- ----------
NET INCREASE (DECREASE) IN CASH 243,714 (38,710)
CASH, beginning of period 190,667 80,891
---------- ----------
CASH, end of period $ 434,381 $ 42,181
========== ==========
</TABLE>
F-3
<PAGE>
SURGILIGHT, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Dec., 31 March, 31 Dec., 31 March,31
1998 1999 1997 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Capital Stock $ 4,048,363 $ 4,048,364 $ 2,898,448 $ 4,036,446
Additional
Paid In Capital 233,994 571,680 - -
Deficit (2,311,569) (2,303,968) (2,121,551) (2,166,565)
---------- ---------- ---------- ----------
Total $ 1,970,788 $ 2,316,076 $ 776,897 $ 1,869,881
========== ========== ========== ==========
</TABLE>
F-4
<PAGE>
NOTES FOR FIRST QUARTER FINANCIAL STATEMENTS
1. The weighted average number of diluted shares is: 6,124,614 shares for
the first quarter of 1999 and 100,000 shares for the first quarter of 1998.
As of March 31, 1999 the Company has a total outstanding shares of
11,500,000 common stocks and no stock options or warrants have been issued.
The increased number of outstanding shares is attributed to the mergers
and/or acquisitions and certain technology licensing right. For greater
details, see the Company's SEC Schedule 14f-1 filed on March 31, 1999.
2. The consolidated revenue for the first quarter, 1999 is attributed from
the Company's divisions of Laser Technology (for sales of laser systems),
Cosmetic Mobile Center in Ft. Lauderdale, FL and the Laser Vision Centers
in Plantation, FL and Centers outside the US. The Plantation Vision Center
has a gross revenue of about $412,500 or about 74% of the quarter
consolidated revenue. The cosmetic center has a gross revenue of about
$70,370, or about 13%. The rest of the revenue about 13% is from system
sales. The Company's strategy is to focus on the recurring revenue and
income from the laser centers operation. The Company, however, will continue
to develop new products for new markets mainly outside US. These new
products shall include diode lasers for microsurgery, infrared laser for
vision correction and the Company's patent pending new technology for
presbyopia correction.
3. The Company foresees to keep the fast growth rate in revenue and profit
in future quarters by the expected new centers and sales of new products.
However there can be no assurance that the Company will be successful in
maintaining its current growth in revenue and profit.
F-5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITIONS.
In our Management's Discussion and Analysis of Financial Condition and
Results of Operations we review our past performance and, where appropriate,
state our expectations about future activity in forward-looking statements.
Our future results may differ from our expectations.
OVERVIEW
The Company currently has three divisions: 1) the Laser Technology, 2)
the Laser Vision Centers, 3) the Cosmetic Mobile Laser Centers and 4) the
Thermal Infrared Technology. In laser technology division , we develop and
conduct research for lasers in the UV and infrared spectra for applications
including vision correction and microsurgery. We also conduct clinical trials
outside US for various new applications. We currently operate 14 laser vision
centers internationally and one Vision Center in Plantation, FL and one
cosmetic laser center in Florida. For the thermal infrared technology , we
develop and market thermal infrared systems used in search and secure, security
and law enforcement. These technologies may also apply for medical uses in
thermal imaging of tissues and patient body.
The Company's strategy is to focus on the recurring revenue and income from
the laser centers operation. The Company, however, will continue to develop
new products for new markets mainly outside US. These new products shall
include diode lasers for microsurgery, infrared laser for vision correction
and the Company's patent pending new technology for presbyopia correction.
The medical laser industry is new and needs the approval from FDA prior to
marketing in US. Our competitors are significantly larger in financial and
several of them have now received FDA approval in vision correction using
excimer lasers. We will face increased competition from manufacturers of
vision correction lasers and from company operating laser centers in US and
internationally. Our medical lasers will need either 510(K) approval or IDE
clinical trials which may take few years to complete the final approval prior
to our market in US. Prior to the market approval, our medical products will
be limited to international sales and these products needed to be
manufactured at our Panama facility. For laser vision corrections using UV
lasers, there are several existing patents which may prohibit our sales of
the vision correction lasers without obtaining a license. The Company has
two pending patents for the use of infrared lasers in replacing the UV
lasers used by most of our competitors. However, prior to the market approval
in US these new products will be limited to international sales. To increase
the Center revenue, we have developed promotion marketing programs for our
existing centers and plan to increase the number of centers by either
establishing new centers or acquiring existing centers. The existing surgeons
who currently worked at our Laser Centers may leave the Company if they
decide to operate their own Center or join other Centers which may offer a
better terms. All of these factors may influence our systems sales and income
from laser centers. Accordingly, our past results may not be useful in
predicting our future results.
RESULTS OF OPERATIONS
Revenues for first quarter, 1999 were $554,686, compared with $204,377 in the
same period of 1998. The revenue growth of 270% in the first quarter of this
year is attributed mainly to the growth of the Plantation Vision Center which
performed 280 cases in this quarter, compared with 172 cases for the previous
quarter.
For the first quarter of 1999, the Company reported an operation income of
$54,540, excluding the facility depreciation of $46,940. The net income (after
the facility depreciation) of the first quarter of 1999 was $7,601; or $0.001
per share, compared with a net loss of $35,918, or $0.36 per share for the
same period in 1998.
The consolidated revenue for the first quarter, 1999 is attributed from the
Company's divisions of Laser Technology (for sales of laser systems), Cosmetic
Mobile Center in Ft. Lauderdale, FL and the Laser Vision Centers in Plantation,
FL and Centers outside the US. The Plantation Vision Center has a gross revenue
of about $412,500 or about 74% of the quarter consolidated revenue. The
cosmetic center has a gross revenue of about $70,370, or about 13%. The rest of
the revenue about 13% is from system sales. The system sale for the first
quarter was counted from the deposit of one new laser center contract in China
which will also generate recurring income. The Company's strategy is to focus
on the recurring revenue and income from the laser centers operation. Therefore
the revenue from system sales will not be expected to grow as fast as centers
revenue until the new products are developed or approved for market.
The Company foresees to keep the fast growth rate in revenue and profit in
future quarters by the expected new centers and sales of new products. However
there can be no assurance that the Company will be successful in maintaining
its current growth in revenue and profit.
LIQUIDITY AND CAPITAL RESOURCES
The net cash increased $243,14 due mainly to the capital contribution via a
private placement and the operational income generated in this quarter.
The Company anticipates that its current cash, cash equivalents, as well as
anticipated cash flows from operations and additional capital contribution from
private placement, will be sufficient to meet its working capital and capital
equipment needs at least through the next twelve months.
<PAGE>
Part II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the quarter ended
March 31, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SurgiLight, Inc.
Date: May 21, 1999
By: /s/ J. T. Lin
----------------------------------
J. T. Lin
President, Chief Executive Officer
and Director
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Balance Sheet at March 31, 1999 (unaudited) and the Statement of
Operations for the three months ended March 31, 1999 (unaudited) and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 434,381
<SECURITIES> 0
<RECEIVABLES> 228,375
<ALLOWANCES> 0
<INVENTORY> 876,708
<CURRENT-ASSETS> 1,541,964
<PP&E> 1,156,591
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,048,300
<CURRENT-LIABILITIES> 676,129
<BONDS> 0
0
0
<COMMON> 4,048,364
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,048,300
<SALES> 554,686
<TOTAL-REVENUES> 554,686
<CGS> 80,861
<TOTAL-COSTS> 469,651
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (16)
<INCOME-PRETAX> 7,601
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,601
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
