<PAGE>
U. S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
/X/ QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 31, 1997
/ / 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 0-9064
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APPLIED MEDICAL DEVICES, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 84-0789885
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
1722 Buffehr Creek Road, Vail, CO 81657
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code (970) 479-2800
Check whether the Issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---
State the number of shares outstanding of each of the Issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at September 3, 1997
Common Stock, $.01 par value 65,977,800
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APPLIED MEDICAL DEVICES, INC.
Form 10-QSB
Table of Contents
Part I. Financial Information . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets as of July 31, 1997 and
April 30, 1997 . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations for the three month
period ended July 31, 1997, July 31, 1996 and Since Being a
Development Stage Company. . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows for the year-to-date
periods ended July 31, 1997, July 31, 1996, and Since Being
a Development Stage Company. . . . . . . . . . . . . . . . . . 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations. . . . . . . . . . . . . . . . . . . 7,8,9
Part II. Other Information. . . . . . . . . . . . . . . . . . 9
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . 10
Form 10-QSB
Page 2 of 10
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APPLIED MEDICAL DEVICES, INC.
FORM 10-QSB
JULY 31, 1997
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
The unaudited financial statements reflect all adjustments and contain all
information necessary, in the opinion of management, for a fair presentation
of the financial position and results of operation for the interim periods
reported when these statements are read in conjunction with the notes to
financial statements included in the Registrant's Form 10-KSB for the year
ended April 30, 1997.
Form 10-QSB
Page 3 of 10
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APPLIED MEDICAL DEVICES, INC.
(A Developmental Stage Company)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
JULY 31, APRIL 30,
1997 1997
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ASSETS
CURRENT -
Cash and cash equivalents $ 179,900 $ 186,065
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$ 179,900 $ 186,065
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- --------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES -
Accrued expenses $ 3,109 $ 656
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COMMITMENTS
SHAREHOLDERS' EQUITY
Common Stock - $.01 par value,
75,000,000 shares authorized,
issued and outstanding 65,977,800
as of July 31, 1997 and April 30, 1997 659,778 659,778
Additional paid-in capital 4,172,128 4,172,128
Accumulated deficit (4,451,999) (4,451,999)
Deficit accumulated during the
development stage (203,116) (194,498)
- --------------------------------------------------------------------
Total shareholders' equity 176,791 185,409
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$ 179,900 $ 186,065
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- --------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
Form 10-QSB
Page 4 of 10
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APPLIED MEDICAL DEVICES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS THREE MONTHS SINCE BEING
ENDED ENDED A DEVELOPMENT
JULY 31, 1997 JULY 31, 1996 STAGE COMPANY
------------- ------------- -------------
EXPENSES -
General and administrative $10,884 $ 8,479 $ 378,756
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OTHER INCOME:
Interest income 2,266 2,681 112,051
Other - - 32,536
Gain from sale of
marketable securities - - 31,053
- --------------------------------------------------------------------------
Total other income 2,266 2,681 175,640
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Net Loss $(8,618) $(5,798) $(203,116)
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- --------------------------------------------------------------------------
NET LOSS PER SHARE
OF COMMON STOCK NIL NIL
- -------------------------------------------------------
- -------------------------------------------------------
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 65,977,800 65,977,800
- -------------------------------------------------------
- -------------------------------------------------------
See accompanying notes to consolidated financial statements.
Form 10-QSB
Page 5 of 10
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APPLIED MEDICAL DEVICES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
THREE MONTHS THREE MONTHS SINCE BEING
ENDED ENDED A DEVELOPMENT
JULY 31, 1997 JULY 31, 1996 STAGE COMPANY
------------- ------------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss $(8,618) $(5,798) $(203,116)
Adjustments to reconcile net loss to
cash used in operating activities:
Gain from sale of marketable securities - - (31,053)
Issuance of common stock for services - - 7,565
Changes in operating assets and liabilities:
Accounts receivable - - 4,903
Accrued expenses 2,453 3,526 (40,001)
Other - - 10
Prepaid expenses - (1,500) -
- ----------------------------------------------------------------------------------------------------------
Net cash used in operating activities (6,165) (3,772) (261,692)
- ----------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES -
Proceeds from sale of marketable securities - - 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 (6,165) (3,772) 22,716
CASH AND CASH EQUIVALENTS,
beginning of period 186,065 214,845 157,184
- ----------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
end of period $179,900 $211,073 $179,900
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
Form 10-QSB
Page 6 of 10
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Note 1 - The unaudited consolidated financial statements and related
notes have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted
pursuant to such rules and regulations. The accompanying financial
statements and related notes should be read in conjunction with the audited
financial statements of the Company, and notes thereto, for the year ended
April 30, 1997.
The financial statements reflect all adjustments which are, in the
opinion of management, necessary for a fair statement of the results for the
periods presented. All significant intercompany accounts and transactions
have been eliminated in consolidation.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following review concerns the three month period ended July 31,
1997, and July 31, 1996, which should be read in conjunction with the
financial statements and notes thereto presented in this Form 10QSB.
The information set forth in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" below includes "forward
looking statements" within the meaning of Section 27A of the Securities Act,
and is subject to the safe harbor created by that section. Factors that
could cause actual results to differ materially from these contained in the
forward looking statements are set forth in "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
PLAN OF OPERATION.
The Company has 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 current fiscal year. It is
presently unknown whether any transaction will be concluded. The Company
considers its current cash and cash equivalent balances adequate to satisfy
its cash requirements for the next twelve months. However, legal and
accounting and other expenses could increase significantly in connection with
any contemplated 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.
The Company has no significant equipment and has not engaged in any
research or development activities during the past two fiscal years. At
present, the Company employs one person, on a part-time basis. The Company does
not expect any changes unless the Company determines to proceed with a business
combination.
Form 10-QSB
Page 7 of 10
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RESULTS OF OPERATIONS THREE MONTHS ENDED JULY 31, 1997 AND JULY 31, 1996.
During the three months ended July 31, 1997, the Company had a net loss of
approximately $8,600. The Company incurred general and administrative costs of
approximately $10,900. The Company's revenues consisted primarily of interest
on cash and other money market instruments of approximately $2,300. During the
three months ended July 31, 1996, the general and administrative costs were
approximately $8,500 and the Company's revenues consisted primarily of
approximately $2,700 from interest on cash and other money market instruments,
resulting in a loss of approximately $5,800 for the period. As detailed on the
accompanying consolidated statements of cash flows, there were no significant
adjustments between the net loss and net change in cash.
As stated above in the 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, after identifying a
potential business opportunity, the Company could 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.
Recent accounting pronouncements: On March 3, 1997, the Financial
Accounting Standards Board ("FASB") issued the Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings Per Share." This
pronouncement provides a different method of calculating earnings per share
than is currently used in accordance with Accounting Principles Board Opinion
No. 15, "Earnings per Share." SFAS No. 128 provides for the calculation of
"Basic" and "Diluted" 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 fiscal
1998 and its implementation is not expected to have a material effect on the
financial statements.
In June 1997, FASB issued SFAS No. 130, "Reporting Comprehensive Income"
which establishes standards for reporting and display of comprehensive
income, as components and accumulated balances. Comprehensive income is
defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures,
SFAS No. 130 required that all items that are required to be recognized under
current accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence
as other financial statements.
Form 10-QSB
Page 8 of 10
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Also, in June 1997, FASB issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information" which supersedes SFAS No.
14, "Financial Reporting for Segments of a Business Enterprise". SFAS No.
131 establishes standards for the way that public companies report
information about operating segments in annual financial statements and
required reporting of selected information about operating segments in
interim financial statements issued to the public. It also establishes
standards for disclosures regarding products and services, geographic areas
and major customers. SFAS No. 131 defines operating segments as components
of a company about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources in assessing performance.
Both SFAS No. 130 and 131 are effective for financial statements for
periods beginning after December 15, 1997 and require comparative information
for earlier years to be restated. Because of the recent issuance of these
standards, management has been unable to fully evaluate the impact, if any,
they may have on future financial statement disclosures. Results of
operations and financial position, however, will be unaffected by
implementation of these standards.
PART II. OTHER INFORMATION
Not Applicable
Form 10-QSB
Page 9 of 10
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APPLIED MEDICAL DEVICES, INC.
FORM 10-QSB
JULY 31, 1997
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
APPLIED MEDICAL DEVICES, INC.
Date: September 12, 1997 By: /s/ Allan K. Lager
---------------------------
Allan K. Lager, President
and Chief Financial Officer
Form 10-QSB
Page 10 of 10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JUL-31-1997
<CASH> 179,900
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 179,900
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 179,900
<CURRENT-LIABILITIES> 3,109
<BONDS> 0
0
0
<COMMON> 4,831,906
<OTHER-SE> (4,655,115)
<TOTAL-LIABILITY-AND-EQUITY> 179,900
<SALES> 0
<TOTAL-REVENUES> 2,266
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,884
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (8,618)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8,618)
<DISCONTINUED> (8,618)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,618)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
