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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20429
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended December 31, 1998
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 January 19, 2000, 8,600,657 shares of common stock were effectively
outstanding. The aggregate market value of the Registrant's free-trading common
stock (8,600,657 shares) held by non-affiliates on January 19, 2000 was
approximately $301,023, based on the averaged bid and asked price of the stock
on January 19, 2000.
APPLICABLE ONLY TO CORPORATE REGISTRANTS: As of June 30, 1999, the following
shares of the Registrant's common stock were issued and outstanding: Common
Stock, no par value
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SPECIAL NOTE TO QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 1998
The following report covers the quarter ended December 31, 1998 but it
was filed with the Securities and Exchange Commission on or about July 19, 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.
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MRI MEDICAL DIAGNOSTICS, INC.
FORM 10-Q
FOR THE YEAR ENDED MARCH 31, 2000
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INDEX
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PART I FINANCIAL INFORMATION
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ITEM 1. Financial Statements (Unaudited)
Independent Auditors' Report........................................................................3
Balance Sheets at March 31, 1999 and 2000...........................................................4
Statements of Income & Retained Earnings for
March 31, 1999 and 2000....................................................................5
Statements of Cash Flows for March 31, 1999 and 2000................................................6
Notes to Financial Statements.......................................................................7
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations .........8
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings..............................................................................9
ITEM 2. Changes in Securities..........................................................................9
ITEM 3. Default Upon Senior Securities.................................................................9
ITEM 4. Submission of Matters to a Vote of Security Holders............................................9
ITEM 5. Other Information..............................................................................9
ITEM 6. Exhibits and Reports on Form 8-K..............................................................10
SIGNATURES............................................................................................11
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PART I
ITEM 1. FINANCIAL STATEMENTS
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
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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.
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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.
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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.
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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
------------------
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
-----
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.
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ITEM 2. 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.
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.
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PART II
ITEM 1. 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 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
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.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit No.
-----------
27.0 Financial Data Schedule
(b) Reports on Form 8-K
None.
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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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