<PAGE>
U. S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 1998
( ) 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
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
incorporation or organization) Identification Number)
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 March 2, 1998
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 January 31, 1998 and
April 30, 1997........................................................ 4
Consolidated Statements of Operations for the nine month periods
ended January 31, 1998, January 31, 1997 and Since Being a
Development Stage Company............................................. 5
Consolidated Statements of Cash Flows for the year-to-date periods ended
January 31, 1998, January 31, 1997, 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
JANUARY 31, 1998
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 Development Stage Company)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JANUARY 31, APRIL 30,
1998 1997
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT -
Cash and cash equivalents $ 168,513 $ 186,065
- -------------------------------------------------------------------------------
$ 168,513 $ 186,065
===============================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES -
Accrued expenses $ 1,118 $ 656
- -------------------------------------------------------------------------------
COMMITMENTS
SHAREHOLDERS' EQUITY
Common Stock - $.01 par value,
75,000,000 shares authorized,
issued and outstanding 65,977,800
as of January 31, 1998 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 (212,512) (194,498)
- -------------------------------------------------------------------------------
Total shareholders' equity 167,395 185,409
- -------------------------------------------------------------------------------
$168,513 $ 186,065
===============================================================================
</TABLE>
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)
<TABLE>
<CAPTION>
THREE MONTHS Three Months NINE MONTHS Nine Months Since Being
ENDED Ended ENDED Ended A Development
JAN. 31, 1998 Jan. 31, 1997 JAN. 31, 1998 Jan. 31, 1997 Stage Company
-------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
EXPENSES -
General and administrative $7,448 $13,365 $24,680 $31,249 $392,552
____________________________________________________________________________________________________________
OTHER INCOME:
Interest income 2,177 2,502 6,666 7,876 116,451
Other - - - - 32,536
Gain from sale of
marketable securities - - - - 31,053
____________________________________________________________________________________________________________
Total other income 2,177 2,502 6,666 7,876 180,040
____________________________________________________________________________________________________________
Net Loss $(5,271) $(10,863) $(18,014) $(23,373) $(212,512)
============================================================================================================
BASIC INCOME (LOSS) PER SHARE NIL NIL
=========================================================================
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 65,977,800 65,977,800
=========================================================================
</TABLE>
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>
<CAPTION>
NINE MONTHS Nine Months Since Being
ENDED ended A Development
JAN. 31, 1998 Jan. 31,1997 Stage Company
------------- ------------ -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss $(18,014) $(23,373) $(212,512)
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 462 - (41,992)
Other - - 10
Prepaid expenses - (500) -
_____________________________________________________________________________________________
Net cash used in operating activities (17,552) (23,873) (273,079)
_____________________________________________________________________________________________
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 (17,552) (23,873) 11,329
CASH AND CASH EQUIVALENTS,
beginning of period 186,065 214,845 157,184
_____________________________________________________________________________________________
CASH AND CASH EQUIVALENTS,
end of period $168,513 $190,972 $168,513
=============================================================================================
</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.
Note 2 - The Company has implemented Statement of Financial Accounting
Standards (SFAS) No. 128, "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 or loss
available to common stockholders 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. In loss periods,
dilutive common equivalent shares are excluded as the effect would be
anti-dilutive. Basic and diluted earnings per share are the same for all
periods presented.
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 nine month periods ended January 31,
1998, and January 31, 1997, which should be read in conjunction with the
financial statements and notes thereto presented in this Form 10-QSB.
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 NINE MONTHS ENDED JANUARY 31, 1998 AND JANUARY 31, 1997.
During the nine months ended January 31, 1998, the Company had a net
loss of approximately $18,000. The Company incurred general and
administrative costs of approximately $24,700. The Company's revenues
consisted primarily of interest on cash and other money market instruments of
approximately $6,700. During the nine months ended January 31, 1997, the
general and administrative costs were approximately $31,300 and the Company's
revenues consisted primarily of approximately $7,900 from interest on cash
and other money market instruments, resulting in a loss of approximately
$23,400 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 substantial.
Thereafter, results of operations would likely be materially affected by the
business acquired by the Company.
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
<PAGE>
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
JANUARY 31, 1998
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: March 11, 1998 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> 9-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JAN-31-1998
<CASH> 168,513
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 168,513
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 168,513
<CURRENT-LIABILITIES> 1,118
<BONDS> 0
0
0
<COMMON> 4,831,906
<OTHER-SE> (4,664,511)
<TOTAL-LIABILITY-AND-EQUITY> 168,513
<SALES> 0
<TOTAL-REVENUES> 6,666
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 24,680
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (18,014)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (18,014)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18,014)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
