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, 1999
( ) 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 Identification Number)
incorporation or organization)
1722 Buffehr Creek Road, Vail, CO 81657
- --------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, (970) 479-2800
including area code
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 10, 1999
----- -----------------------------
Common Stock, $.01 par value 65,977,800
<PAGE>
Applied Medical Devices, Inc.
Form 10-QSB
Table of Contents
Part I. Financial Information......................................... 3
Consolidated Balance Sheets as of January 31, 1999 and
April 30, 1998......................................................... 4
Consolidated Statements of Operations for the three and nine
month periods ended January 31, 1999, January 31, 1998 and
Since Being a Development Stage Company................................ 5
Consolidated Statements of Cash Flows for the year-to-date
periods ended January 31, 1999, January 31, 1998, 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
<PAGE>
Applied Medical Devices, Inc.
Form 10-QSB
January 31, 1999
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,
1998.
Form 10-QSB
Page 3 of 10
<PAGE>
Applied Medical Devices, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
January 31, April 30,
1999 1998
---- ----
(Unaudited)
Assets
Current -
Cash and cash equivalents $ 147,047 $ 160,103
----------- -----------
$ 147,047 $ 160,103
----------- -----------
Liabilities and Shareholders' Equity
Current liabilities -
Accrued expenses $ 525 $ 530
----------- -----------
Shareholders' equity Common Stock - $.01 par value,
75,000,000 shares authorized, issued and
outstanding 65,977,800 as of January 31, 1999
and April 30, 1998 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 (233,385) (220,334)
----------- -----------
Total shareholders' equity 146,522 159,573
=========== ===========
$ 147,047 $ 160,103
=========== ===========
See accompanying notes to consolidated financial statements.
Form 10-QSB
Page 4 of 10
<PAGE>
<TABLE>
<CAPTION>
Applied Medical Devices, Inc.
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
Since Being
Three Months Three Months Nine Months Nine Months A Develop-
Ended Ended Ended Ended ment Stage
Jan. 31, 1999 Jan. 31, 1998 Jan. 31, 1999 Jan. 31, 1998 Company
------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Expenses -
General and
administrative $ 4,736 $ 7,448 $ 18,779 $ 24,680 $ 421,200
------------ ------------ ------------ ------------ ------------
Other income:
Interest income 1,884 2,177 5,728 6,666 124,226
Other -- -- -- -- 32,536
Gain from sale of
marketable securities -- -- -- -- 31,053
------------ ------------ ------------ ------------ ------------
Total other income 1,884 2,177 5,728 6,666 187,815
------------ ------------ ------------ ------------ ------------
Net Loss $ (2,852) $ (5,271) $ (13,051) $ (18,014) (233,385)
============ ============ ============ ============ ============
Basic and diluted income
(loss) per share nil nil nil nil
============ ============ ============ ============ ============
Weighted average number
of common and common
equivalent shares
outstanding 65,977,800 65,977,800 65,977,800 65,977,800
============ ============ ============ ============
See accompanying notes to consolidated financial statements.
Form 10-QSB
Page 5 of 10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Applied Medical Devices, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Nine Months Since Being
ended ended A Development
Jan. 31, 1999 Jan. 31,1998 Stage Company
------------- ------------ -------------
<S> <C> <C> <C>
Operating Activities
Net loss $ (13,051) $ (18,014) $(233,385)
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 (5) 462 (42,585)
Other -- -- 10
Prepaid expenses -- -- --
- --------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (13,056) (17,552) (294,545)
- --------------------------------------------------------------------------------------------------------------
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 (13,056) (17,552) (10,137)
Cash and cash equivalents,
beginning of period 160,103 186,065 157,184
- --------------------------------------------------------------------------------------------------------------
Cash and cash equivalents,
end of period $ 147,047 $ 168,513 $ 147,047
==============================================================================================================
See accompanying notes to consolidated financial statements.
Form 10-QSB
Page 6 of 10
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
- ------------------------------------------------------------------
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, 1998.
The following review concerns the nine month periods ended January 31, 1999, and
January 31, 1998, 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.
Results of Operations Nine Months Ended January 31, 1999 and January 31, 1998.
- ------------------------------------------------------------------------------
During the nine months ended January 31, 1999, the Company had a net loss of
approximately $13,100. The Company incurred general and administrative costs of
approximately $18,800. The Company's revenues consisted primarily of interest on
cash and other money market instruments of approximately $5,700. During the nine
months ended January 31, 1998, the general and administrative costs were
Form 10-QSB
Page 7 of 10
<PAGE>
approximately $24,700 and the Company's revenues consisted primarily of
approximately $6,700 from interest on cash and other money market instruments,
resulting in a loss of approximately $18,000 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.
Net Income (Loss) Per Share
- ---------------------------
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.
New Accounting Pronouncements
- -----------------------------
The Company has implemented Statement of Financial Accounting Standards (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. Management believes that the
adoption of this statement will have no material impact on the Company's
financial statements.
In February 1998, the FASB issued SFAS No. 132, "Employees' Disclosures about
Pensions and Other Postretirement Benefits" which standardizes the disclosure
requirements for pensions and other benefits and requires additional information
on changes in the benefit obligations and fair values of plan assets that will
facilitate financial analysis. SFAS No. 132 is effective for years beginning
after December 15, 1997 and requires comparative information for earlier years
to be restated unless such information is not readily available. Management
believes that adoption of this statement will have no material impact on the
Company's financial statements.
Form 10-QSB
Page 8 of 10
<PAGE>
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which establishes accounting and reporting
standards for derivative instruments including certain derivative instruments
embedded in other contracts and for edging activities. SFAS 133 is effective for
all fiscal quarters of fiscal years beginning after June 15, 1999. Management
believes the adoption of this statement will not have material impact on the
Company's financial statements.
Year 2000 Compliance
- --------------------
The Company has completed a review and risk assessment of all technology items
used in its operations. The Company believes that the year 2000 problem will
pose no significant operational problems. The Company's accounting software
program as well as other office software will be upgraded during 1999 to be year
2000 compliant. The Company estimates that the cost of the upgrades will be
approximately $1,000. The Company will review the status of the year 2000 issues
with its financial institutions.
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.
Part II. Other Information
Not Applicable.
Form 10-QSB
Page 9 of 10
<PAGE>
Applied Medical Devices, Inc.
Form 10-QSB
January 31, 1999
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, 1999 By: /s/ Allan K. Lager
---------------------------------
Allan K. Lager, President
and Chief Financial Officer
Form 10-QSB
Page 10 of 10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JAN-31-1999
<CASH> 147,047
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 147,047
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 147,047
<CURRENT-LIABILITIES> 525
<BONDS> 0
0
0
<COMMON> 659,778
<OTHER-SE> (513,256)
<TOTAL-LIABILITY-AND-EQUITY> 147,047
<SALES> 0
<TOTAL-REVENUES> 1,884
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,736
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,852)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
