<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
X Annual Report Pursuant to Section 13 or 15(d) of the
- ------ Securities Exchange Act of 1934 (Fee Required)
Transition Report Pursuant to Section 13 or 15(d) of the
- ------ Securities Exchange Act of 1934 (No Fee Required)
For the fiscal year ended April 30, 1997
--------------
Commission file number 0-9064
APPLIED MEDICAL DEVICES, INC.
----------------------------------------------
(Name of small business issuer in its charter)
COLORADO 84-0789885
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1722 BUFFEHR CREEK ROAD, VAIL, CO 81657
- --------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
(former address)
8100 W. Crestline Avenue, Suite A-15, #330, Denver, CO 80123
Issuer's telephone number (970) 479-2800
Securities registered pursuant to Section 12(b) of the Exchange Act : None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $.01 Par Value
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
------ -----
Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B 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-KSB or any amendment to
this Form 10-KSB. [ X ]
The issuer had no revenues in its most recent fiscal year.
The aggregate market value of the voting stock held by non-affiliates was
approximately $1,278,400 based upon the average bid and asked prices of the
stock on June 24, 1997 of $.02.
The number of shares of the Registrant's $.01 par value common stock outstanding
as of June 24, 1997 was 65,977,800.
<PAGE>
Part I
Item 1. DESCRIPTION/BUSINESS.
(a) BUSINESS DEVELOPMENT. Applied Medical Devices, Inc., (a development
stage company) the Registrant (the "Company"), was incorporated under the laws
of the State of Colorado on February 5, 1979. Until 1986, the Company engaged
in the development and sale of medical devices and medical technology. The
Company's efforts in the medical products industry were unsuccessful, and the
Company accumulated a substantial deficit since inception. In July 1986, the
Company determined to discontinue its operations in the medical products
industry. The Company reduced its staff and commenced its present activities
which consist of the search for an acquisition, merger or other form of business
combination with an existing business. Although the Company has evaluated
certain entities, and in some instances, engaged in discussions concerning
possible arrangements, there are presently no agreements, arrangements or
understandings with respect to any such acquisition, merger or combination.
(b) BUSINESS OF ISSUER. The Company, which originally operated in the
medical products industry, discontinued operations in that industry in 1986 due
to continued losses. Since that time, the Company has been engaged in the
investigation of business opportunities with the goal of attempting to effect a
business combination with another entity.
Although the Company has engaged in evaluations of certain business
opportunities, the Company has no firm arrangements, commitments or agreements
with respect to any acquisition, merger or other form of business combination.
The nature of the specific business which the Company may acquire cannot be
determined at the present time. Due to the limited capital available to the
Company, there can be no assurance that the Company will be able to locate or
acquire any attractive business on terms favorable to the Company. In addition,
it is anticipated that with the Company's limited capital the Company would be
able to acquire only one business.
A substantial amount of time may elapse and the Company may expend
considerable funds for consulting, legal, accounting and other fees before the
Company is able, if at all, to acquire any business or effect a merger or other
form of business combination. Such expenditures may have an adverse impact on
the ability of the Company to carry out its plan or, on its ability to continue
any business which it acquires. The Company will be an insignificant
participant among the firms which engage in the mergers with and acquisitions of
privately-financed entities. There are many established venture capital and
financial concerns which have significant financial and personnel resources,
technical expertise and greater experience than the Company. In addition, the
Company is competing with numerous small entities similar in size and scope of
operations to the Company. In view of the Company's limited financial resources
and limited management availability, the Company is at a significant competitive
disadvantage vis-a-vis many of the Company's competitors.
The Company has no trademarks, licenses, franchises, concessions,
royalty agreements or labor contracts. The Company produces no products, has no
key suppliers and has no backlog. The Company has no contracts with the United
States Government. The Company has no dependence upon a single customer, or a
few customers. The Company has not engaged in any research and development
activities during the past two fiscal years. The Company has not incurred
expenditures in connection with compliance with governmental provisions relating
to the environment.
At the present, the Company employs one person, on a part-time basis.
<PAGE>
Item 2. DESCRIPTION OF PROPERTIES.
The Company owns no real property. The Company presently subleases
office facilities from, and is provided administrative services by, an entity
that has certain common shareholders with the Company. The facilities and
services are provided on a month-to-month basis for $500 per month pursuant to
an oral arrangement. See Item 12.
Item 3. LEGAL PROCEEDINGS.
The Company is not involved in any material pending legal proceedings.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of the Company's security holders
during the fourth quarter covered by this Report, and this Item is, therefore,
inapplicable.
PART II
Item 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's $.01 par value common stock is traded in the
over-the-counter market. Trading in the Company's stock is believed to be
sporadic. Moreover, the Company's stock is not traded on any exchange or on
NASDAQ, but instead trades on the Electronic Bulletin Board under the symbol
AMDI. Accordingly, although the quotations set forth below have been obtained
from sources believed to be reliable, there can be no assurance that they
accurately reflect the trading markets. The range of high and low bid
quotations for each quarterly period during the two most recent fiscal years
is set forth below:
QUARTER ENDED HIGH BID LOW BID
---------------- -------- -------
April 30, 1997 $.001 $.001
January 31, 1997 $.002 $.001
October 31, 1996 $.002 $.002
July 31, 1996 $.002 $.002
April 30, 1996 $.002 $.0001
January 31, 1996 $.002 $.001
October 31, 1995 $* $*
July 31, 1995 $* $* *No bids were reported
The quotations for the Company's common stock reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not
necessarily represent actual transactions.
At June 24, 1997, the approximate number of holders of record of the
Company's common stock was 9,924. The Company has not paid any cash
dividends.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
PLAN OF OPERATION.
During the fiscal year ended April 30, 1997, the Company continued
its efforts to acquire, merge with or enter into another form of business
combination with another entity, and the Company plans to continue these
efforts in the fiscal year ending April 30, 1998. The Company generated
approximately $10,100 in interest income and had expenses of approximately
$39,500 in the year ended April 30, 1997. Total assets, which declined by
approximately thirteen percent from $214,800 to $186,100, consisted primarily
of cash or cash equivalents. The Company considers its current cash and cash
equivalent balances adequate to satisfy its cash
<PAGE>
requirements for the next twleve months, even if legal and accounting and
other expenses were to increase significantly should the Company identify a
suitable candidate for a business combination. Due to the nature of the
Company's present activities, however, the Company is unable to predict its
likely expenditures for professional fees and other expenses. The Company
has no major capital commitments.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
FISCAL YEARS ENDED APRIL 30, 1997 AND APRIL 30, 1996.
During the fiscal year ended April 30, 1997, the Company had a net
loss of approximately $29,400. Net cash used in operating activities during
the fiscal year 1997 was approximately $28,800. The Company incurred general
and administrative costs of approximately $39,500 in fiscal 1997 of which
approximately $23,300 were incurred in connection with daily operations and
evaluation of business opportunities. Accounting, legal and transfer fees
were approximately $16,200 or 41 percent of the total general and
administrative expenses. The Company earned interest on temporary cash and
other money market instruments of approximately $10,100. Interest income
fluctuates based upon increases and decreases with general interest rates
which cannot be predicted.
During the fiscal year ended April 30, 1996, the Company had a net
loss of $12,300. Net cash used in operating activities during the fiscal
year 1996 was approximately $16,600. The Company incurred general and
administrative costs of approximately $28,400 in fiscal 1996 of which
approximately $18,900 were incurred in connection with daily operations and
evaluation of business opportunities. Accounting, legal and transfer fees
were approximately $9,500 or 33 percent of the total general and
administrative expenses. The Company had gains from the sale of investment
securities of approximately $4,300 and earned interest on temporary cash and
other money market instruments in the amount of approximately $11,700.
As stated above in Plan of Operation, due to the nature of the
Company's activities, the Company's prospects for the future are dependent on
a number of variables which cannot be predicted. Generally, if the Company
were to identify a potential business opportunity, it is likely that the
Company would incur significant costs in evaluating the desirability of an
acquisition or other form of business combination. Should the Company
determine to proceed with the business combination, the transaction costs
could be significant. Thereafter, results of operations would likely be
materially affected by the business acquired by the Company.
INCOME TAXES AND NET OPERATING LOSSES
As discussed in Note 1 in the accompanying consolidated financial
statement, the Company had net operating loss carryforwards for income tax
purposes of approximately $2,991,000, of which approximately $155,000 are
limited to future taxable income, if any, of the Company's inactive
subsidiary. The deferred tax asset arising from the net operating loss
carryforwards has been fully offset by a valuation allowance as it was unable
to be determined if such tax benefits would more likely than not be realized.
On March 3, 1997, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 128 "Earnings Per
Share" (SFAS No. 128). This pronouncement provides a different method of
calculating earnings per share than is currently used in accordance with
Accounting Board Opinion (APB) No. 15, "Earnings Per Share". SFAS 128
provides for the calculation of "Basic" and "Dilutive" earnings per share.
Basic earnings per share includes no dilution and is computed by dividing
income available to common shareholders by the weighted average number of
common shares outstanding for the period. Diluted earnings per share reflects
the potential dilution of securities that could share in the earnings of an
entity, similar to fully diluted earnings per share. The Company will adopt
SFAS No. 128 in 1998 and its implementation is not expected to have a
material effect on the consolidated financial statements.
Item 7. FINANCIAL STATEMENTS.
See pages F-1 through F-9.
<PAGE>
APPLIED MEDICAL DEVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
Report of Independent Certified Public Accountants F-2
Consolidated Balance Sheet as of
April 30, 1997 F-3
Consolidated Statements of Operations for the
Years Ended April 30, 1997 and 1996
and for the Period from May 1, 1987
(Beginning of the Development Stage) to
April 30, 1997 F-4
Consolidated Statements of Stockholders' Equity for
the Years Ended April 30, 1997 and 1996
and for the Period from May 1, 1987
(Beginning of the Development Stage) to
April 30, 1995 F-5
Consolidated Statements of Cash Flows for the
Years Ended April 30, 1997 and 1996
and for the Period from May 1, 1987
(Beginning of the Development Stage) to
April 30, 1997 F-6
Summary of Accounting Policies F-7 - F-8
Notes to Consolidated Financial Statements F-9
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors
Applied Medical Devices, Inc.
Denver, Colorado
We have audited the accompanying consolidated balance sheet of Applied Medical
Devices, Inc. and subsidiary (a development stage company) as of April 30, 1997
and the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the two years in the period ended April 30, 1997. We
have also audited the statements of operations, stockholders' equity and cash
flows for the period from the beginning of development stage (May 1, 1987) to
April 30, 1997. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether 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 evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above, and the
cumulative amounts for the period from May 1, 1987 (beginning of development
stage) to April 30, 1997, present fairly, in all material respects, the
financial position of Applied Medical Devices, Inc. and subsidiary at April 30,
1997 and the results of their operations and their cash flows for each of the
two years in the period ended April 30, 1997 and the period from the beginning
of development stage (May 1, 1987) to April 30, 1997, in conformity with
generally accepted accounting principles.
BDO SEIDMAN, LLP
Denver, Colorado
June 9, 1997
F-2
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APPLIED MEDICAL DEVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
- -------------------------------------------------------------------------------
APRIL 30, 1997
ASSETS
CURRENT -
Cash and cash equivalents $ 186,065
- -------------------------------------------------------------------------------
$ 186,065
- -------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES -
Accrued expenses $ 656
- -------------------------------------------------------------------------------
COMMITMENT (Note 3)
STOCKHOLDERS' EQUITY (Note 2):
Common stock, $.01 par value; 75,000,000 shares
authorized, issued and outstanding, 65,977,800 659,778
Additional paid-in capital 4,172,128
Accumulated deficit (4,451,999)
Deficit accumulated during the development stage (194,498)
- -------------------------------------------------------------------------------
Total stockholders' equity 185,409
- -------------------------------------------------------------------------------
$ 186,065
- -------------------------------------------------------------------------------
SEE ACCOMPANYING SUMMARY OF ACCOUNTING POLICIES AND NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.
F-3
<PAGE>
APPLIED MEDICAL DEVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
==============================================================================
Development
Stage
YEAR ENDED APRIL 30, 1997 1996 Cumulative(a)
- ------------------------------------------------------------------------------
EXPENSES - General and
administrative $ 39,487 $ 28,405 $ 367,872
- ------------------------------------------------------------------------------
OTHER INCOME:
Interest income 10,112 11,725 109,785
Gain from sale of
marketable securities - 4,340 31,053
Other - 63 32,536
- ------------------------------------------------------------------------------
Total other income 10,112 16,128 173,374
- ------------------------------------------------------------------------------
NET LOSS $ (29,375) $ (12,277) $(194,498)
==============================================================================
NET LOSS PER SHARE OF
COMMON STOCK $ NIL $ NIL
============================================================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 65,977,800 65,977,800
============================================================
SEE ACCOMPANYING SUMMARY OF ACCOUNTING POLICIES
AND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
(a) Cumulative from May 1, 1987 (beginning of the development stage) to April
30, 1997.
F-4
<PAGE>
<TABLE>
APPLIED MEDICAL DEVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
============================================================================================================================
YEARS ENDED APRIL 30, 1997 AND 1996 AND PERIOD FROM MAY 1, 1987 (BEGINNING OF
THE DEVELOPMENT STAGE) TO APRIL 30, 1995
- ----------------------------------------------------------------------------------------------------------------------------
Deficit
Accumulated
Common Stock Additional During the Total
---------------------- Paid-in Accumulated Development Treasury Stockholders'
Shares Amount Capital Deficit Stage Stock Equity
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, May 1, 1987 43,256,994 $432,570 $4,389,342 $(4,451,999) $ - $ 234,949 $ 604,862
Common stock issued
for services 1,357,473 13,575 (6,000) - - - 7,575
Retirement of
treasury stock (3,136,667) (31,367) (203,582) - - (234,949) (469,898)
Issuance of common
stock and warrants
pursuant to public
offering 14,700,000 147,000 (7,632) - - - 139,368
Exercise of stock
purchase warrant 9,800,000 98,000 - - - - 98,000
Net loss for the periods - - - - (152,846) - (152,846)
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, April 30, 1995 65,977,800 $659,778 $4,172,128 $(4,451,999) $(152,846) - $ 227,061
Net loss for the year - - - - (12,277) - (12,277)
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, April 30, 1996 65,977,800 $659,778 $4,172,128 $(4,451,999) $(165,123) - $ 214,784
Net loss for the year - - - - (29,375) - (29,375)
BALANCE, April 30, 1997 65,977,800 $659,778 $4,172,128 $(4,451,999) $(194,498) $ - $ 185,409
============================================================================================================================
SEE ACCOMPANYING SUMMARY OF ACCOUNTING POLICIES AND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-5
</TABLE>
<PAGE>
<TABLE>
APPLIED MEDICAL DEVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
============================================================================================
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Development
Stage
YEAR ENDED APRIL 30, 1997 1996 Cumulative(a)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (29,375) $ (12,277) $ (194,498)
Adjustments to reconcile net
loss to cash used in
operating activities:
Gain from sale of marketable securities - (4,340) (31,053)
Issuance of common stock for services - - 7,565
Changes in operating assets and liabilities:
Accounts receivable - - 4,903
Accrued expenses 595 - (42,454)
Other - 10
- -------------------------------------------------------------------------------------------
Net cash used in operating activities (28,780) (16,617) (255,527)
- -------------------------------------------------------------------------------------------
INVESTING ACTIVITIES -
Proceeds from sale of marketable securities - 4,340 47,040
- -------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Proceeds from issuance of
common stock - - 139,368
Proceeds from exercise of
stock warrants - - 98,000
- -------------------------------------------------------------------------------------------
Net cash provided by financing activities - - 237,368
- -------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (28,780) (12,277) 28,881
CASH AND CASH EQUIVALENTS,
beginning of year 214,845 227,122 157,184
- -------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
end of year $ 186,065 $ 214,845 $ 186,065
===========================================================================================
</TABLE>
SEE ACCOMPANYING SUMMARY OF ACCOUNTING POLICIES AND NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.
(a) Cumulative from May 1, 1987 (beginning of the development stage) to
April 30, 1997.
F-6
<PAGE>
APPLIED MEDICAL DEVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
SUMMARY OF ACCOUNTING POLICIES
==============================================================================
ORGANIZATION Applied Medical Devices, Inc. (the "Company")(a development
AND stage company) was incorporated on February 5, 1979 under
BUSINESS the laws of the State of Colorado to engage in the
development and sale of medical devices and medical
technology. In July, 1986, the Company decided to
discontinue its business operations and commenced disposing
of its business assets. As of May 1, 1987, the Company had
completed the disposition of its business operations.
Since that time, the Company's operations have consisted
of efforts to pursue other business opportunities and
funding sources. Accordingly, the Company is considered to
be in the development stage.
The financial statements include the accounts of the
Company and its inactive wholly owned subsidiary, Applied
Medical, Inc. ("AMI"). All intercompany accounts and
transactions have been eliminated.
FINANCIAL The Company's financial instruments that are exposed to
INSTRUMENTS concentrations of credit risk consist primarily of cash
AND equivalents.
CONCENTRATIONS
OF The Company's cash equivalents are invested in money market
CREDIT RISK accounts placed with major financial institutions and in
United States government securities. The investment policy
limits the Company's exposure to concentrations of credit
risk. Money market deposit accounts at times may exceed
federally insured limits. The Company has not experienced
any losses in such accounts.
USE OF The preparation of financial statements in conformity with
ESTIMATES generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the consolidated financial statements and the reported
amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NET LOSS Net loss per common share is based on the weighted average
PER SHARE number of shares outstanding during each period presented.
Stock options and warrants, when outstanding, are included
as common stock equivalents, when dilutive.
CASH The Company considers all highly liquid investments
EQUIVALENTS purchased with an original maturity of three months or less
to be cash equivalents. At April 30, 1997 cash equivalents
include a United States Treasury bill of approximately
$150,000.
INCOME TAXES The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109 ("FASB No. 109").
Temporary differences are differences between the tax
basis of assets and liabilities and their reported amounts
in the financial statements that will result in taxable or
deductible amounts in future years. The Company's
temporary differences consist of its net operating loss
carryforwards and capitalized start-up costs.
F-7
<PAGE>
APPLIED MEDICAL DEVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
SUMMARY OF ACCOUNTING POLICIES
==============================================================================
RECENT ACCOUNTING On March 3, 1997, the Financial Accounting Standards Board
PRONOUNCEMENTS (FASB) issued Statement of Financial Accounting Standards
No. 128 "Earnings Per Share" (SFAS No. 128). This
pronouncement provides a different method of calculating
earnings per share than is currently used in accordance
with Accounting Board Opinion (APB) No. 15, "Earnings Per
Share". SFAS 128 provides for the calculation of "Basic"
and "Dilutive" earnings per share. Basic earnings per
share includes no dilution and is computed by dividing
income available to common shareholders by the weighted
average number of common shares outstanding for the period.
Diluted earnings per share reflects the potential dilution
of securities that could share in the earnings of an
entity, similar to fully diluted earnings per share.
The Company will adopt SFAS No. 128 in 1998 and its
implementation is not expected to have a material effect
on the consolidated financial statements.
F-8
<PAGE>
APPLIED MEDICAL DEVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==============================================================================
1. INCOME TAXES As of April 30, 1997 the net deferred tax asset
recorded and its approximate tax effect consists of
tax operating loss carryforwards and capitalized start-up
costs of $1,368,000. As of April 30, 1997, a valuation
allowance equal to the net deferred tax asset recognized
has been recorded, as it was determined that it is more
likely than not that the deferred tax asset will not be
realized.
At April 30, 1997 the Company has net operating loss
carryforwards of approximately $2,991,000 which expire
through 2002.
In addition, AMI has approximately $155,000 in net
operating loss carryforwards which were generated prior
to AMI's acquisition by the Company. These net
operating loss carryforwards may be used only to offset
AMI's future earnings should AMI reactivate its
operations.
2. STOCKHOLDERS' During fiscal 1988 and 1989, the Company issued a total
EQUITY of 1,356,473 of its common shares to certain employees
and directors for services valued at $7,565.
In fiscal 1989, the Company completed a public offering
whereby it sold 14,700,000 shares of its common stock
and 9,800,000 warrants to purchase common shares at
$.01 per share. Total proceeds, net of expenses of
$7,632 were $139,368.
During fiscal 1990, all of the warrants were exercised
and the Company received proceeds of $98,000.
In fiscal 1993, the Company issued 1,000 of its common
shares to a stockholder for consideration received in
prior years valued at $10.
3. COMMITMENT The Company leases office space from an affiliate of a
stockholder for $500 per month on a month-to-month basis.
Rent expense for the years ended April 30, 1997, and 1996
was $6,200 and $6,260.
F-9
<PAGE>
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There were no changes in accountants during the fiscal year ended
April 30, 1997. Not applicable.
PART III
Item 9. DIRECTORS AND EXECUTIVE OFFICERS.
Date First
Elected Principal Occupation
Name Age Director and Employment
- -------------------------------------------------------------------------------
Gary Brunner 52 1988 Mr. Brunner has been self employed as a
medical services consultant since 1985.
From 1981 to 1985, he was Vice President
of Operations of the Company. Mr. Brunner
received a B.S. degree from the
University of Northern Colorado in 1968.
Mr. Brunner became Secretary and Director
of the Company in October 1988.
Allan K. Lager 54 1989 Mr. Lager has been an automotive
consultant since 1988. From 1978 to 1988,
he was President and Director of Storz,
Inc., a firm involved in the sales and
service of Porsche automobiles. Mr. Lager
became President and Director of the
Company in April 1989.
Kenneth E. Shearer 52 1988 Since 1990, Mr. Shearer has been a
management consultant in the area of
health management and economics.
Mr. Shearer received a Bachelor's degree
in pre-law in 1962 from Central State
University and a Master's degree in public
and international affairs in 1964 from the
University of Pittsburgh.
The directors of the Company are elected to serve until the next Annual
Meeting of Shareholders or until their successors have been duly elected and
qualified. None of the Company's officers has an employment agreement with
the Company and, therefore, each serves at the pleasure of the Company's
Board of Directors. There are no family relationships among the Company's
officers and directors. During the fiscal year ended April 30, 1997, the
Company held one meeting of Directors. The Company's Board of Directors has
no committees. There are no standard or other arrangements pursuant to which
directors are compensated as such or for committee particpation.
Based solely upon a review of Forms 3, 4 and 5, which have been furnished
to the Company with respect to the past fiscal year of the Company, and
certain representations made by officers and directors of the Company in
connection therewith, the Company has no knowledge that any current officer
or director failed to file on a timely basis any reports required by Section
16(a) of the Securities Exchange Act of 1934 with respect to the fiscal year
of the Company ended April 30, 1997.
<PAGE>
Item 10. EXECUTIVE COMPENSATION.
(a) CASH COMPENSATION. The following sets forth cash compensation paid by
the Company during the fiscal year ended April 30, 1997 to executive officers as
a group. No officer received more than $100,000 during the fiscal year.
Mr. Lager receives a salary of $400 per month ($4,800 annually) for serving
as President of the Company. Mr. Lager's salary has remained at this level in
each of the three fiscal years in which he has served as President of the
Company. Neither Mr. Lager nor any other officer or director of the Company has
received any other compensation, cash or otherwise, from the Company, in any of
the past three years. Accordingly, the Summary Compensation Table has been
omitted.
(b) OPTION SAR GRANTS TABLE; AGGREGATED OPTION/SAR EXERCISE AND FISCAL
YEAR END OPTION/SAR TABLE; AGGREGATED OPTION/SAR EXERCISED IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES; TERM INCENTIVE PLAN AWARDS TABLE.
None of the Company's officers or directors was granted or exercised any
stock option, stock appreciation right or received any awards under any long
term incentive, stock option or similar plan; accordingly, no tables for these
items are included.
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth the persons known to the Company to own
beneficially more than five percent of the outstanding shares of common stock of
the Company on June 24, 1997, and the number of shares of common stock of the
Company beneficially owned by each director of the Company and all officers and
directors of the Company as a group.
Number of Percent of
Beneficial Owner Shares Class
- --------------------------------------------------------------------------
Gary Brunner (1)
1071 S. Foothill Drive
Lakewood, Colorado 80228 716,493 1.1%
Allan K. Lager
1040 S. Franklin Street
Denver, Colorado 80209 1,141,667 1.7%
Kenneth E. Shearer
1175 Emerson Street, Suite 208
Denver, Colorado 80218 200,000 .3%
All officers and directors
as a group (3 persons) 2,058,140 3.1%
Gary McAdam (2)
14 Red Tail Drive
Highlands Ranch, Colorado 80126 5,975,000 9.1%
<PAGE>
Jill J. Pusey (3)
1722 Buffehr Creek Road
Vail, Colorado 81657 4,933,333 7.5%
- ---------
(1) Includes 560,000 shares owned by Brunner & Associates, P.C., a corporation
owned by Mr. Brunner. Does not include 568,566 shares owned by Mr. Brunner's
father.
(2) Includes shares held by: GJM Trading Partners, Ltd., a partnership of
which Mr. McAdam is the general partner; Creative Investment Services, Inc., a
corporation of which Mr. McAdam is President and a director; and pension and
profit sharing plans of which Mr. McAdam is the trustee and sole beneficiary.
(3) Includes 1,766,666 shares held by Mrs. Pusey as custodian for her minor
children. Does not include 1,293,000 shares owned beneficially by Gregory
Pusey, who is Mrs. Pusey's husband. Mrs. Pusey disclaims any beneficial
interest in the shares owned by Mr. Pusey.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Since August 1989, the Company has been subleasing office facilities from,
and been provided administrative services by, Livingston Capital, Ltd.
("Livingston"), a venture capital firm, for $500 per month. Gregory Pusey is an
officer and director of Livingston and Jill J. Pusey is an officer and principal
shareholder of Livingston. See Item 11. The Company believes that the terms of
its arrangement with Livingston are as favorable as could be obtained with
another firm. The Company's arrangements with Livingston are on a
month-to-month basis.
Item 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
The exhibits listed on the accompanying index to exhibits are filed as
part of this Annual Report.
(b) REPORTS ON FORM 8-K.
No Reports on Form 8-K were filed during the period covered by this
report.
<PAGE>
INDEX TO EXHIBITS
3 (a) Articles of Incorporation, as amended, of the Company, previously
filed as an exhibit to the Form 10-K Report for the year ended April 30, 1981,
which Exhibit is incorporated herein by reference thereto.
(b) Bylaws of the Company, previously filed as Exhibit 2(b) to the
Company's Registration Statement on Form S-18 (File No. 2-65079), which Exhibit
is incorporated herein by reference.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
APPLIED MEDICAL DEVICES, INC.
Date: July 24, 1997 By: /s/ Allan K. Lager
------------------------------------
Allan K. Lager, President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Date: July 24, 1997 By: /s/ Allan K. Lager
------------------------------------
Allan K. Lager, President
Date: July 24, 1997 By: /s/ Gary Brunner
------------------------------------
Gary Brunner, Secretary and Director
Date: July 24, 1997 By: /s/ Kenneth E. Shearer
------------------------------------
Kenneth E. Shearer, Director
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