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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 24, 1999
SurgiLight, Inc.
(Exact name of Registrant as specified in charter)
Delaware 0-24897 35-1990562
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
7055 University Blvd, Winter Park, Florida 32792
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (407) 657-6500
MAS Acquisition III Corp.
1710 E. Division St.
Evansville, Indiana 47711
(Former name or former address, if changed, since last report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements.
(iii) Unaudited combined financial statement of MAS Acquisition III Corp.
and SurgiLight, Inc. for the year ended December 31, 1997 and 1998.
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SURGILIGHT, INC.
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
FOR THE YEARS ENDED
DECEMBER 31, 1998 & 1997
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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 December 31, 1998 and 1997 and related Statements of Operations
for the years ended December 31, 1998 and 1997, 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.
Rachel L. Siu
Winter Park, Florida
March 31, 1999
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SURGILIGHT, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
FOR THE YEARS ENDED DECEMBER 31, 1998 & 1997
ASSETS
<TABLE>
<CAPTION>
12/31/98 12/31/97
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 190,667 $ 80,891
Accounts Receivables
Less Allowances for Doubtful Accounts 156,129 -
Inventory 780,851 1,195,373
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TOTAL CURRENT ASSETS 1,127,647 1,276,264
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PROPERTY AND EQUIPMENT, at cost:
Office Equipment 6,224 5,786
Computer Equipment 19,613 17,798
Lab Equipment 94,692 9,327
Remote Location Equipment 1,146,860 528,130
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1,267,389 561,041
Less accumulated depreciation (177,645) (47,070)
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NET PROPERTY AND EQUIPMENT 1,089,744 513,971
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OTHER ASSETS
Deposit 203,051 2,671
Intangible Assets 200,217 200,217
Less Accumulated Amortization (50,145) (36,770)
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NET OTHER ASSETS 353,123 166,118
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TOTAL ASSETS $ 2,570,514 $ 1,956,353
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LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 146,243 $ 75,707
Accrued Interest 19,938 52,935
Notes Payable 102,500 1,050,751
Loans from Shareholders 331,000 -
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TOTAL CURRENT LIABILITIES 599,681 1,179,393
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STOCKHOLDERS' EQUITY:
Common Stock, No par value, 4,062,500
shares issued and outstanding 4,048,459 2,898,542
Paid In Capital 233,994 -
Accumulated Deficit (2,311,620) (2,121,582)
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TOTAL STOCKHOLDERS' EQUITY 1,970,833 776,960
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TOTAL LIABILITIES &
STOCKHOLDER' S EQUITY $ 2,570,514 $ 1,956,353
=========== ===========
</TABLE>
See Accountant's Report and accompanying notes
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SURGILIGHT, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
FOR THE YEARS ENDED DECEMBER 31,1998 & 1997
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
SALES $ 1,138,563 $ 1,057,139
COST OF SALES 287,421 707,232
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Gross Profit 851,142 349,907
GENERAL AND ADMINISTRATIVE
EXPENSES 1,034,471 1,078,637
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Operating Income (Loss) (183,329) (728,730)
OTHER INCOME/EXPENSES
LOSS ON FDA FORFEITURE - (126,985)
LOSS ON CLOSING OF 3 CENTERS - (265,000)
INTEREST INCOME 4,076 3,420
INTEREST EXPENSE (10,785 (58,886)
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Net Income (Loss) $ (190,038) $ (1,176,181)
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</TABLE>
See Accountant's Report and accompanying notes
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SURGILIGHT, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
FOR THE YEARS ENDED DECEMBER 31, 1998 & 1997
<TABLE>
<CAPTION>
Capital Paid In
Stock Capital Deficit Total
--------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE,
December 31, 1996 $ 2,480,476 (945,401) 1,535,075
Net Loss - (1,176,181) (1,176,181)
Capital Contributions 418,066 - 418,066
--------- ---------- ----------- -----------
BALANCE,
December 31, 1997 $ 2,898,542 (2,121,582) 776,960
Net Loss - (190,038) (190,038)
Capital Contributions 1,149,917 233,994 - 1,383,911
--------- ---------- ----------- -----------
BALANCE,
December 31, 1998 $ 4,048,459 233,994 (2,311,620) 1,970,833
========= ========== =========== ===========
</TABLE>
See Accountant's Report and accompanying notes
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SURGILIGHT, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
FOR THE YEARS ENDED DECEMBER 31, 1998 & 1997
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (190,038) $ (1,176,181)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation 130,575 43,047
Amortization 13,375 13,376
Issuance of common stock for services - 1
Gift shares issued 2 3
Increase (Decrease) in:
Receivables (156,129) 221,777
Inventory 414,522 139,092
Deposits (200,380) (230)
Accounts Payable 70,535 26,296
Accrued Interest (32,997) 41,048
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Net cash provided (used) by
operating activities 49,465 (691,771)
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of equipment (706,347) (532,321)
Loss on closing of 3 centers - 265,000
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Net cash provided (used) by
investing activities (706,347) (267,321)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings - 614,253
Repayment of short-term borrowings (948,251 -
Loans from Shareholders 331,000 -
Proceeds from sale of stock 1,383,909 418,062
Loans to Photon Data, Inc. - -
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Net cash provided (used) by
financing activities 766,658 1,032,315
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NET INCREASE (DECREASE) IN CASH 109,776 73,223
CASH, beginning of year 80,891 7,668
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CASH, end of year $ 190,667 $ 80,891
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</TABLE>
NONCASH FINANCING ACTIVITIES AND SUPPLEMENTAL INFORMATION:
Operating Activities reflect interest expense of $10,785 For 1998 &
$ 58,886 for 1997.
See Accountant's Report and accompanying notes
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SURGILIGHT, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 Nature of Business and Significant Accounting Policies
NATURE OF BUSINESS: SurgiLight, Inc. (SLI) was originally incorporated
in Florida in May 1998 and later merged with SurgiLight, Inc. that was
incorporated in Delaware in October 1998. The surviving company is
SurgiLight, Inc., Delaware.
In September 1998, the Company acquired the assets of Plantation Vision
Center at Plantation, Florida and also the sub-leasing agreement from LCA
Vision, Inc. for an excimer laser system made by VISX.
In March 1999, the Company merged with Photon Data, Inc. (PDI). The
surviving company is SurgiLight, Inc.
Photon Data, Inc. is a Florida Corporation incorporated in 1993 and began
operations in 1995. The company engages in the development of eye laser
technology and in the operation of Laser Vision Centers (LVC). Its
projects include refractive laser system control, software design, eye
tracking, and the development of UV and IR light sources. PDI also has
an assembling facility at ZPAD free zone, Panama where completed systems
can be shipped to international users.
On March 31, 1999, SurgiLight, Inc. merged into MAS Acquisition III
Corporation, which incorporated on July 31, 1996 in Delaware with the
purpose to acquire suitable business ventures.
INVENTORIES: Inventories are stated at the lower of cost or market. Cost
is determined by the first-in, first-out (FIFO) method. Inventory consists
primarily of VISA key cards and Chiron microkeratome blades for SurgiLight,
Inc. and electronic parts and finished laser systems for Photon Data, Inc.
DEFERRED ASSETS: Deferred assets are being amortized over five years for
organizational costs and over ten years for goodwill. Goodwill represents
the excess of the purchase price over the fair market value of net assets
acquired.
NOTE 2 Operating Leases
The company leases its premises and equipment under operating leases.
Future minimum rental payments for the irrevocable leases as of December 31,
1998 is as follows:
1999 $ 70,485
2000 56,405
2001 38,214
Rental expense of $ 115,304 for 1998 and $ 30,231 for 1997 under these
leases are classified as administrative expenses in the accompanying
statement of income and loss.
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NOTE 3 Accounts Receivable
Allowance for doubtful accounts was $8,000 for 1998 and $4,230 for 1997.
NOTE 4 Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
Finished Laser Systems $ 532,400 $ 0
At Remote Locations
Parts 248,451 1,195,373
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$ 780,851 $ 1,195,373
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</TABLE>
The remote locations as of December 31, 1998 include Panama, Japan, and
New York.
NOTE 5 Property and Equipment
<TABLE>
<CAPTION>
1998 1997
---------- --------
<S> <C> <C>
Office Furniture & Equipment $ 6,224 $ 5,786
Computer Equipment 19,612 17,798
Lab & Clinical Equipment 94,692 9,327
Equipment at Remote Location 1,146,860 528,130
---------- --------
1,267,389 561,041
Less Accumulated Depreciation 177,645 47,070
---------- --------
Net Property and Equipment $1,089,744 $513,971
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</TABLE>
The remote locations referred to above include China, Latin America, Japan,
and New York, USA. Depreciation expenses of $130,575 for 1998 and $43,047
for 1997 are classified as administrative expenses in the accompanying
statement of income and loss.
NOTE 6 Investment in China and Latin America
In 1996, Photon Data, Inc. purchased six LVC's in China from Lasersight,
Inc. The purchase price of $600,000 was for the income stream only. One
center was closed in 1996. Three additional centers closed in 1997. In
1998, fourteen (14) new centers, including twelve in China and two in
Latin America, were added by PDI. The profit of the centers are shared
with medical institutions. The Company provides the laser systems that
are operated by the institutions.
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NOTE 7 Advances from Shareholders
The loans from shareholders of Photon Data, Inc. converted to paid-in
capital as approved by the board of directors amounted to $374,338 and
$408,110 for 1998 and 1997, respectively.
NOTE 8 Notes Payable
<TABLE>
<CAPTION>
Balance at Balance at
12/31/98 12/31/97
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<S> <C> <C>
Yuan Lin, $ - $ 948,251
promissory note
unsecured, payable
upon maturity
including interest
at 12%
Kuo Chang Wang, 102,500 102,500
promissory note
unsecured, payable
upon maturity
including interest
at 8%
</TABLE>
NOTE 9 Related-Party Transactions
The promissory notes payable as described in Note 7 were with related parties.
In 1998, the notes payable to Yuan Lin were converted to capital. The same
year, SurgiLight, Inc. loaned $ 15,000 to Photon Data, Inc. The intercompany
transaction was excluded from the financial statements.
NOTE 10 Capital Stock
For Photon Data, Inc., there are 4,062,500 shares of No par value stock
issued and outstanding. In 1998 and 1997, the shareholders increased their
capital to $ 4,048,459 and $ 2,898,542.
For SurgiLight, Inc., as of December 31, 1998, there are 623,630 Shares of
$.0001 par value stock issued and outstanding. The shareholders increased
their capital to $234,056 which is net of the deferred offering costs.
NOTE 11 Income Taxes
Since 1995, Photon Data, Inc. has elected to be taxed as an S-Corporation
where income and loss passes through the shareholders. In 1998, with the
addition of nonresident shareholders, the company is converted to a
C-Corporation which pays income taxes at the corporate level.
Beginning 1998, both SurgiLight, Inc. and Photon Data, Inc. are part of a
control group for income tax purposes. There are no income tax liabilities
for members of the group as of December 31, 1998.
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NOTE 12 Industry Regulations
The Company started a plant in Panama to assemble laser systems in 1997.
Under federal law, the providers cannot use the lasers unless they have
been certified by the Food and Drug Administration (FDA). Consequently,
all systems produced in the United States prior to September 1997 were
surrendered to the FDA. The loss in 1997 amounted to $ 126,985.
In December 1998, the Company entered into a Consent Decree with the FDA
to post a bond in the amount of $ 100,000 to secure the destruction of
the laser devices and compliance with regulations. In addition, the
Company is to deposit $ 100,000 into an escrow account to be maintained
for a period of five years. The escrow funds will be returned to the
Company after that time if no violations of the Federal Food, Drug &
Cosmetic Act occur during the five years. Mr. JT Lin, one of the
shareholders, agreed to pay the above $ 200,000 deposits on behalf of the
Company as loans from shareholders (see Note 14).
NOTE 13 Commitments and Contingencies
PDI is defending a lawsuit filed by Pillar Point Partners for patent
infringement and the interference on the sale of excimer laser systems.
Both parties have entered a settlement negotiation in an attempt to
resolve the matter without further litigation. The settlement is
estimated to be about $ 40,000 according to the management.
NOTE 14 Subsequent Events
1. The $ 200,000 deposits described in Note 12 were paid by Mr. JT Lin
in January 1999.
2. In March 1999, the company entered into an Agreement to be merged with
SurgiLight, Inc., a Delaware Corporation. The shareholders of PDI were
issued 8,125,000 shares of SurgiLight common stock.
3. On March 31, 1999, SurgiLight, Inc. merged into MAS Acquisition III
Corporation and changed the name to SurgiLight, Inc.
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Date: May 24, 1999
SurgiLight, Inc.
By: /s/J.T. Lin
--------------------------------
J.T. Lin, President and CEO
and Chairman of Board Directors
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