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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20429
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file Number 0-8735
MRI MEDICAL DIAGNOSTICS, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0682860
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
480 Camino Del Rio South, Suite 140
San Diego, California 92108
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (619) 718-6370
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each exchange on which registered
None None
Securities registered pursuant to Section (g) of the Act:
Common Stock, No Par Value Per Share
(Title of each 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 No X
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 if this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
As of May 31, 2000, 13,700,657 shares of common stock were effectively
outstanding. The aggregate market value of the Registrant's free-trading common
stock (6,896,400 shares) held by non-affiliates on May 31, 2000, was
approximately $1,131,440.60, based on the averaged bid and asked price of the
stock on May 31, 2000.
APPLICABLE ONLY TO CORPORATE REGISTRANTS: As of May 31, 2000, the following
shares of the Registrant's common stock were issued and outstanding: Common
Stock, no par value
DOCUMENTS INCORPORATED BY REFERENCE: None
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SPECIAL NOTE TO ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED MARCH 31, 1994.
The following report covers the year ended March 31, 1994 but it was filed with
the Securities and Exchange Commission on or about July 14, 2000.
In July 1993, the Company filed for bankruptcy under Chapter 11 of the
Bankruptcy Code. Shortly thereafter, in 1994, the Company ceased filing annual,
quarterly and other reports under the Securities Exchange Act of 1934 (the "1934
Act"). During the period from 1993 through 1995, the Company was in bankruptcy
proceedings and wound down its operations. By 1995, at which time the Company
adopted a plan of reorganization under the Bankruptcy Code, it had ceased
operations entirely and had become a publicly-traded shell company, without any
operating assets or ongoing business. The Company remains a publicly-traded
shell Company as of the date of the filing of this report.
In February 2000, the Company resumed filing current reports under the 1934 Act.
In July 2000, the Company filed its past reports for the period from 1994
through 1998. In so doing, the Company decided to provide the most current
available information rather than providing dated information. Accordingly, the
following report is current through, and speaks as of, the year ended March 31,
2000.
1
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PART I
ITEM 1. BUSINESS
The Registrant, MRI Medical Diagnostics, Inc., a Colorado corporation
(the "Company"), was incorporated on November 12, 1971 as Sierra Resources, Inc.
The Company changed its name to Petro-Global, Inc. on May 27, 1987, and to MRI
Medical Diagnostics, Inc. on February 12, 1992 when, pursuant to a change of
control, the Company redirected its business purposes to medical diagnostic
imaging services. In July 1993, the Company and its wholly owned subsidiaries
each filed for bankruptcy in the Central District Court of California. On
November 7, 1995, the Court approved and declared effective a reorganization
plan for the Company, which went into effect on January 2, 1996.
Pursuant to the Reorganization Plan, Tri-National Development
Corporation, a Wyoming corporation, obtained all of the stock of MRI Grand
Terrace, Inc., the Company's wholly owned subsidiary, in partial exchange of
which the bankruptcy estate is to receive 30% of the net proceeds on that
portion of any resulting judgment issued to MRI Grand Terrace, Inc. out of
litigation between Tri-National Development Corporation and MRI Grand Terrace,
Inc. against Citizens Business Bank, then Chino Valley Bank. On June 3, 1998,
the California Superior Court of San Bernardino County entered a gross judgment
in favor of Tri-National Development Corporation and MRI Grand Terrace, Inc. in
the approximate amount of $5,000,000. Approximately $4,411,911 of the gross
judgment was awarded to MRI Grand Terrace, Inc. The judgment is currently under
appeal and, due to the risk of reversal, the Company is unable to estimate the
amount of proceeds, if any, that the bankruptcy estate may receive. See, "LEGAL
PROCEEDINGS" below. In the event of recovery on the judgment, the amount
received by the Company will be less the amounts due the claimants in the
bankruptcy proceedings and fees paid to the bankruptcy trustee. The Company is
unable to determine the extent of such claims and fees at this time.
On July 15, 1997, the Company approved the Agreement and Plan of
Reorganization with Alpine Herbs & Nutrition International, Inc., a Nevada
Corporation ("Alpine"). The Agreement provided for the acquisition of 100% of
the common stock of Alpine for 4,000,000 post-split shares of the common stock
of the Company. The Agreement was later rescinded by mutual agreement of the
parties and the share certificates for 3,900,000 shares issued were canceled on
the Company's books with the understanding that the original certificates would
be returned to the Company.
Current management has become aware that certificates for approximately
2,500,000 of the shares issued as part of the rescinded transaction with Alpine
have not been submitted to the Company for cancellation. Management is in the
process of trying to obtain these share certificates for cancellation. The
Company has issued stop transfer instruction to its transfer agent to prohibit
transfer of these shares. However, recent revisions to the Colorado Uniform
Commercial Code may result in these instructions being treated as an adverse,
third party claim, and the Company may be forced to obtain an injunction to
prevent transfer of the shares. Should such an action be necessary, the holders
of the certificates may be held liable to the Company for their bad faith
retention of the certificates.
The Company has no current operations, and has retained the services of
Intermountain Capital Corporation to seek possible merger candidates for the
Company and to accomplish the sale, merger, exchange, capital investment, loan,
joint venture or such other transaction as is deemed advisable subject to the
approval of the Company's Board of Directors and shareholders.
2
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On June 1, 2000, the Company received a Letter of Intent from a
Delaware corporation, the terms of which would provide for the reverse
acquisition of the Company through the acquisition of a majority interest in its
common stock. The Letter of Intent has been signed on behalf of the Company;
however, there can be no assurance as to if and when the contemplated
transaction will be consummated. The parties are still in the due diligence
phase of negotiations.
ITEM 2. PROPERTIES
Not Applicable.
ITEM 3. LEGAL PROCEEDINGS
The Bankruptcy Trustee continues to monitor application of the
Company's reorganization plan, specifically with respect to the collection of
the judgment rendered in favor of MRI Grand Terrace, Inc. and Tri-National
Development Corporation against Citizens Business Bank. Pursuant to the
Settlement Agreement approved by the Bankruptcy Court, the bankruptcy estate is
entitled to recover 30% of the net proceeds of any judgment received by MRI
Grand Terrace, Inc. rendered in the litigation. On August 17, 1998, Citizens
Business Bank posted a $7.5 million bond and filed its appeal on June 16, 1999
with the California Court of Appeals, San Bernardino County. Due to the risk of
reversal on appeal, the Company is unable to estimate the proceeds, if any, that
the bankruptcy estate may recover on the judgment. Any amount recoverable by the
bankruptcy estate will be less attorney fees and any fees paid to the trustee.
Current management has become aware that certificates for approximately
2,500,000 of the shares issued as part of the rescinded transaction with Alpine
have not been submitted to the Company for cancellation. Management is in the
process of trying to obtain these share certificates for cancellation. The
Company has issued stop transfer instruction to its transfer agent to prohibit
transfer of these shares. However, recent revisions to the Colorado Uniform
Commercial Code may result in these instructions being treated as an adverse,
third party claim, and the Company may be forced to obtain an injunction to
prevent transfer of the shares. Should such an action be necessary, the holders
of the certificates may be held liable to the Company for their bad faith
retention of the certificates.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
the fiscal year ended March 31, 2000.
3
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The Company's common stock is currently traded on the Over-the-Counter
Bulletin Board under the symbol "MMDI." Following is a statement of the
high and low bid information for each full quarter since the Company's
stock began trading on the OTC in September 1997, including the incomplete
period ending June 6, 2000.
QUARTER HIGH LOW CLOSE
09/30/97 1/2 3/32 13/64
12/31/97 5/16 1/8 5/32
03/31/98 11/64 3/64 3/64
06/30/98 5/64 3/64 3/64
09/30/98 3/32 3/64 3/64
12/31/98 3/64 1/32 1/32
03/31/99 1/16 1/32 3/64
06/30/98 3/32 1/32 1/32
09/30/98 1/16 1/64 1/64
12/31/99 3/64 1/64 1/32
03/31/00 29/64 1/32 1/4
06/30/00 21/64 1/8 11/64
As of May 31, 2000, there were approximately 2,425 holders of record of
the Common Stock.
The Company has not declared any cash dividends on its Common Stock
since the Company's formation in November 1971.
ITEM 6. SELECTED FINANCIAL DATA
The following selected historical financial data set forth below have
been derived from, and are qualified by reference to (i) the audited
Consolidated Financial Statements of the Company for the fiscal year ended March
31, 2000 as compared to the fiscal year ended March 31, 1999. The audited
financial statements referred to above are included elsewhere herein. The
selected financial data set forth below should be read in conjunction with, and
are qualified by reference to, Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Financial Statements and
accompanying notes included elsewhere herein.
4
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FISCAL YEAR ENDED
MARCH 31
1999 2000
---- ----
Income Statement Data:
Operating revenue (1) . . . . . . . . . . . $ 0 $ 0
Expenses. . . . . . . . . . . . . . . . . .
Net Income. . . . . . . . . . . . . . . . . $ 0 $ 0
Accumulated deficit, beginning. . . . . . . $(1,563,343) $(1,582,079)
Accumulated deficit, ending . . . . . . . . $(1,563,343) $(1,582,079)
----------- -----------
Earnings per share. . . . . . . . . $ 0 $ 0
Balance Sheet Data (at end of period):
Total assets. . . . . . . . . . . . . . . . $ 0 $ 0
Total debt. . . . . . . . . . . . . . . . . $ 3,413 $ 22,149
Total Stockholders equity . . . . . . . . . $ (3,413) $ (22,149)
Other Financial Data:
Cash flows. . . . . . . . . . . . . . . . . $ 0 $ (18,736)
(1) Currently, the Company has no operations and is evaluating its options in
the acquisition by or merger with another Company.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
YEAR ENDED MARCH 31, 1999 COMPARED TO YEAR ENDED MARCH 31, 2000
The Company had no operation during the fiscal years ended March 31,
1999 and 2000.
LIQUIDITY AND CAPITAL RESOURCES
Pursuant to the Reorganization Plan, Tri-National Development
Corporation, a Wyoming corporation, obtained all of the stock of MRI Grand
Terrace, Inc., the Company's wholly owned subsidiary, in partial exchange of
which the bankruptcy estate is to receive 30% of the net proceeds of litigation
between MRI Grand Terrace, Inc., Tri-National Development Corporation and
Citizens Business Bank to which MRI Grand Terrace, Inc. would be entitled,
pending in the California Superior Court, San Bernardino County. On June 3,
1998, the Superior Court entered judgment in favor of MRI Grand Terrace, Inc.
and Tri-National Development Corporation in the approximate amount of
$5,000,000. The judgment is currently under appeal. See, "LEGAL PROCEEDINGS"
above. The Company continues to monitor the appeal, and hopes to use any
resulting proceeds in its efforts to locate a potential purchaser or merger
candidate. The Company has retained the services of Intermountain Capital
Corporation to seek such possible merger candidates for the Company and to
accomplish the sale, merger, exchange, capital investment, loan, joint venture
or such other transaction as is deemed advisable subject to the approval of the
Company's Board of Directors and shareholders.
5
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YEAR 2000
The Company has not experienced any negative effects as a result of the
Year 2000 problem, and, because there are no current operations, does not
anticipate related difficulties over the next few months. There is no assurance
that any of the possible merger candidates that the Company has or will approach
will be Year 2000 compliant or that such candidates will not experience Year
2000-related "glitches" over the next six months. As part of its due diligence
in locating potential candidates, the Company will determine the Year 2000
compliance of each such candidate.
FORWARD-LOOKING STATEMENTS
Except for the historical statements and discussions contained herein,
statements contained in this report constitute "forward-looking statements" as
defined in the Securities Act of 1933 and the Securities Exchange Act of 1934,
as amended. These forward-looking statements rely on a number of assumptions
concerning future events, and are subject to a number of risks and uncertainties
and other factors, many of which are outside the control of the Company, that
could cause actual results to differ materially from such statements.
Readers are cautioned not to put undue reliance on such forward-looking
statements, each of which speaks only as of the date hereof. Factors and
uncertainties that could affect the outcome of such forward-looking statements
include, among others, market and industry conditions, increased competition,
changes in governmental regulations, general economic conditions, pricing
pressures, and the Company's ability to continue its growth and expand
successfully into new markets and services. The Company disclaims any intention
or obligation to update publicly or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the Financial Statements contained in Part IV
hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
6
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors of the Company are elected annually by its shareholders to
serve during the ensuing year or until a successor is duly elected and
qualified. Executive officers of the Company are duly elected by its Board of
Directors to serve until their respective successors are elected and qualified.
The following table sets forth certain information with respect to the directors
and executive officers of the Company.
NAME AGE POSITION OR OFFICE
Jacob J. Parker, M.D. 62 Director and Vice-President
William J. Piggott, M.D. 55 Director and Secretary
Javaid I. Sheikh 46 Director, President and Treasurer
JACOB J. PARKER, M.D. (62), Director and Vice-President of the Company
since June 20, 2000. He held the office of President for the Company from March
4, 1998 until that date. Dr. Parker also serves as Vice-President of Medical
Development for Tri-National Development Corporation, a reporting company, and
has held that position he has held since 1996. Dr. Parker is currently Medical
Director and Director of Radiology for several MRI centers and breast imaging
centers in Northern California. He was previously Chief of Radiology and Nuclear
Medicine at Ross General Hospital, Clinical Professor of Radiology at the
University of California, Irvine, and Instructor of Radiology at the University
of Southern California Medical Center from 1970 to 1988. Dr. Parker received his
M.D. from the University of Manitoba, Canada in 1962.
WILLIAM J. PIGGOTT, M.D. (55), Director and Secretary of the Company
since March 24, 1998. Dr. Piggott currently operates an international medical
technology consulting firm, I.M.T.E.C., as a sole proprietorship. In the past,
he has served with or been a member of the American Society of
anesthesiologists, the California Society of Anesthesiologists, the California
Medical Association and the San Diego County Medical Association. Dr. Piggott
obtained his M.D. from the University of California at San Diego in 1972.
JAVAID IQBAL SHEIKH, M.D. (46), Director, President and Treasurer of
the Company since June 20, 2000. He held the office of Vice-President from March
4, 1998 until appointed President on June 20, 2000. Dr. Sheikh is an associate
professor of psychiatry at the Stanford University School of Medicine, a
position he has held since 1993. At the University, Dr. Sheikh's research
focuses on studying phenomenology, vulnerability factors, and psychiatric and
medical comorbidity of panic disorder in old age, as well as treatment responses
to medication in elders with panic disorder. Dr. Sheikh obtained his M.D. from
King Edward Medical College in 1978.
ITEM 11. EXECUTIVE COMPENSATION
None of the executive officers listed in Item 10 received compensation
for their services during the Company's fiscal year ended March 31, 2000. The
Company is not bound by any employment agreement with past or present employees
of the Company, and has no current employees other than the officers listed
above.
7
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DIRECTOR COMPENSATION
None of the directors listed in Item 10 above have received any
compensation for their services as directors of the Company for the Company's
fiscal year ended March 31, 2000.
OPTION PLANS
The Company does not currently maintain a stock option plan, employee
stock purchase plan or any other employment compensation plan. Currently, there
are no outstanding options to purchase MRI stock.
COMMITTEES
The Company does not currently have an executive compensation
committee.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of
each class of the Company's capital stock beneficially owned as of May, 2000, by
(i) each person known to the Company to be the beneficial owner of more than 5%
of any class of the Company's equity securities, (ii) each of the Company's
directors and nominees, and (iii) all directors and executive officers of the
Company as a group.
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TITLE NAME AND ADDRESS AMOUNT AND NATURE PERCENTAGE
OF CLASS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
No Par Value Jacob J. Parker 243,317 shares(2)(5) 0.178%
Common Stock Director and Vice-President
333 Locust Ave.
San Rafael, CA 94901
No Par Value William J. Piggott 151,785 shares(2) 0.1%
Common Stock Director and Secretary
7833 Lower River Road
Grants Pass, OR 97526
No Par Value Javaid I. Sheikh 160,068 shares(2) 0.12%
Common Stock Director, President
and Treasurer
988 St Joseph Ave,
Los Altos, CA 94024
No Par Value Michael A. Sunstein 1,351,488 shares(1)(2) 9.86%
Common Stock 480 Camino del Rio South
Suite 140
San Diego, CA 92108
No Par Value Ronald C. Hibbard 1,720,000 shares(3)(4) 12.56%
Common Stock 72-751 Jamie Way
Rancho Mirage, CA 92270
No Par Value Jeanne M. Hibbard 1,560,000 shares(3)(4) 11.38%
Common Stock 72-751 Jamie Way
Rancho Mirage, CA 92270
No Par Value Rod Jones 1,000,000 shares(4) 7.3%
75-560 Mary Lane
Indian Wells, CA 92210
No Par Value All directors and 555,170 shares 0.41%
Common Stock officers as a group
(1) Includes 15,616 shares held indirectly for Post Kirby Noonan & Sweat, LLP,
401,948 shares held by Tri-National Development Corporation, a company in which
Mr. Sunstein is an officer, director and majority shareholder, and 140,000
issued on February 17, 2000 as repayment of a loan to the Company.
9
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(2) During its 1999 calendar year, the Company borrowed $7,000 each from Jacob
J. Parker, William J. Piggott, Javaid J. Sheikh and Michael A. Suntein to pay
expenses. Each of the lenders agreed that the Company could pay back the loans
in shares of restricted common stock of the Company. On February 17, 2000, the
Company issued 140,000 shares each to these persons as repayment of their loans
to the Company. (3) Includes 1,520,000 shares held jointly by Ronald C. Hibbard
and Jeanne M. Hibbard and 40,000 shares held in trusts for which Mrs. Hibbard
acts as trustee. Mr. Hibbard is deceased and 200,000 of the 1,720,00 shares
attributable to him are apparently being held by his estate. (4) These shares
were issued pursuant to the Agreement and Plan of Reorganization with Alpine
Herbs & Nutrition International, Inc., a Nevada Corporation ("Alpine") on July
15, 1997. Of the 4 million shares issued pursuant to this Plan, 3.9 million
shares were cancelled and returned to treasury pursuant to the subsequent
recission of the Plan. (5) Includes 85,067 shares held by Ross Radiology Medical
Group, Inc., Dr. Parker's pension trust.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During its fiscal year ended March 31, 1999 and the nine-month interim
period ended December 31, 1999, the Company borrowed funds from each of its
officers and directors in an amount of $7,000 each, to be repaid with restricted
shares of the Company's common stock. On February 17, 2000, the Company issued
140,000 shares each to its officers and directors in full payment of these
loans. These funds, along with $14,000 borrowed from Michael A. Sunstein and
Delanorte Investments, Inc., were borrowed in order to pay expenses incurred by
the Company, including amounts due to the Company's transfer agent. In February
2000, the Company issued 140,000 shares to each of Palomar Investment, Inc., a
company in which Michael A. Suntein, as community property with his spouse,
maintains a majority ownership interest, and Delanorte Investments, Inc. in
repayment of these loans.
ADVISORY SERVICES AGREEMENT
The Company has retained the services of Intermountain Capital
Corporation to seek possible merger candidates for the Company and to accomplish
the sale, merger, exchange, capital investment, loan, joint venture or such
other transaction as is deemed advisable subject to the approval of the
Company's Board of Directors and shareholders. Pursuant to the agreement, the
Company issued 500,000 shares of its common stock to Intermountain in February
2000.
10
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements. The following financial information for the Company
for the fiscal years ended March 31, 1999 and 2000 is filed as part of this
report.
MRI Medical Diagnostics and
Independent Auditors' Report. . . . . . . . . . . . . . . . . . . .F-1
Balance Sheets at March 31, 1999 and 2000 . . . . . . . . . . . . .F-2
Statements of Income & Retained Earnings for
March 31, 1999 and 2000 . . . . . . . . . . . . . . . . . . . . . .F-3
Statements of Cash Flows for March 31, 1999 and 2000. . . . . . . .F-4
Notes to Financial Statements . . . . . . . . . . . . . . . . . . .F-5
2. Financial Statement Schedules.
Not Applicable.
3. Exhibits
Exhibit No.
------------
* 3.1 Articles of Incorporation of Registrant.
* 3.2 By-Laws of Registrant.
* 10.1 MRI/Colorado agreement to acquire MRI/California.
* 10.2 MRI/Colorado agreement to acquire Grand Terrace retirement
hotel.
* 10.3 MRI/Colorado agreement to acquire Sierra Cardiac.
** 10.4 Agreement and Plan of Reorganization dated June 20, 1997
between Registrant and Alpine Herbs & Nutrition
International, Inc.
*** 10.5 Advisory Agreement between the Registrant and Intermountain
Capital Corporation dated February 19, 1999.
27.1 Financial Data Schedule
*** 99.1 Order Approving Application to Compromise Controversy
entered on August 31, 1995 by Federal Bankruptcy Court.
----------------
* Previously filed with Amended Form 10-K filed June 21, 1993.
** Previously filed with Form 8-K filed July 15, 1997.
*** Previously filed with Form 10-K filed February 4, 2000.
(b) Reports on Form 8-K
During the fiscal year ended March 31, 1999, no reports were filed on
Form 8-K.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
MRI MEDICAL DIAGNOSTICS, INC.
Dated: July 12, 2000 /s/ JACOB J. PARKER
--------------------------------------
Jacob J. Parker, M.D.
Executive Vice-President
Dated: July 12, 2000 /s/ WILLIAM J. PIGGOTT
--------------------------------------
William J. Piggott, M.D.
Secretary
Dated: July 12, 2000 /s/ JAVAID I. SHEIKH
--------------------------------------
Javaid I. Sheikh, M.D.
President
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INDEX TO FINANCIAL STATEMENTS
MRI Medical Diagnostics and
Independent Auditors' Report. . . . . . . . . . . . . . . . . . . .F-1
Balance Sheets at March 31, 1999 and 2000 . . . . . . . . . . . . .F-2
Statements of Income & Retained Earnings for
March 31, 1999 and 2000. . . . . . . . . . . . . . . . . . . . . .F-3
Statements of Cash Flows for March 31, 1999 and 2000. . . . . . . .F-4
Notes to Financial Statements . . . . . . . . . . . . . . . . . . .F-5
<PAGE>
LUDLOW & HARRISON
a CPA corporation
3545 Camino Del Rio South, Suite D (619) 283-3333
San Diego, CA 92108 Fax: (619) 2837997
INDEPENDENT AUDITOR'S REPORT
----------------------------
We have audited the accompanying balance sheets of MRI Medical Diagnostics, Inc.
as of March 31, 1999 and 2000, and the related statements of income, retained
earnings, cash flows and stockholders' equity for the years ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit on accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance that the financial statements are free of material misstatement. An
audit includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as assessing the overall financial statements presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MRI Medical Diagnostics, Inc.
as of March 31, 1999 and 2000, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ LUDLOW & HARRISON
Ludlow & Harrison
A CPA Corporation
June 19, 2000
F-1
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MRI MEDICAL DIAGNOSTICS, INC.
Balance Sheets
March 31,
2000 1999
---- ----
Total Assets $ - $ -
=========== ===========
Accounts Payable $ 22,149 $ 3,413
----------- -----------
Total Current Liabilities 22,149 3,413
----------- -----------
Stockholders' Equity
Capital Stock
Common, no par value
Authorized 50,000,000 shares,
outstanding 8,600,657 shares
Preferred, no par value
Authorized 10,000,000 shares,
no shares issued 1,599,930 1,599,930
Accumulated Deficit (1,582,079) (1,563,343)
----------- -----------
Total Stockholders' Equity ( 22,149) ( 3,413)
----------- -----------
Total Liabilities and Stockholders' Equity $ - $ -
=========== ===========
See accountant's report and notes to financial statements.
F-2
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MRI MEDICAL DIAGNOSTICS, INC.
Statements of Income and Retained Earnings
March 31,
2000 1999
---- ----
Revenues $ - $ -
Expenses 18,736 -
----------- -----------
Net Income ( 18,736) -
Accumulated deficit, beginning (1,563,343) (1,563,343)
----------- -----------
Accumulated deficit, ending $(1,563,343) $(1,563,343)
----------- -----------
Earnings per share $( .0022) $ -
=========== ===========
See accountant's report and notes to financial statements.
F-3
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MRI MEDICAL DIAGNOSTICS, INC.
Statements of Cash Flows
March 31,
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $( 18,736) $ -
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Increase in accounts payable 18,736 -
----------- -----------
NET CASH PROVIDED
BY OPERATING ACTIVITIES - -
CASH AT BEGINNING OF YEAR - -
----------- -----------
CASH AT OF YEAR $ - $ -
=========== ===========
See accountant's report and notes to financial statements.
F-4
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MRI MEDICAL DIAGNOSTICS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999 AND 2000
Note A - Significant Accounting Policies
Nature of Business
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The business of the Company in the past has consisted of the acquisition,
development and operation of outpatient medical diagnostic imaging facilities.
Currently, the Company is not operating and is evaluating its options in the
acquisition or merger with another company.
Taxes
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The Company owes taxes to the Franchise Tax Board of the State of California.
The minimum tax in the State of California for the privilege of doing business
within the State of California is $800 per year.
F-5
