<PAGE> 1
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 OCTOBER 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 November 15, 1999
Common Stock, $.01 par value 65,977,800
<PAGE> 2
APPLIED MEDICAL DEVICES, INC.
Form 10-QSB
Table of Contents
<TABLE>
<S> <C>
Part I. Financial Information.........................................................................3
Consolidated Balance Sheets as of October 31, 1999 and April 30, 1999..................................4
Consolidated Statements of Operations for the three and six month periods ended
October 31, 1999, October 31, 1998 and Since Being a
Development Stage Company..............................................................................5
Consolidated Statements of Cash Flows for the year-to-date periods ended October
31, 1999, October 31, 1998, and Since Being a Development
Stage Company..........................................................................................6
Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................................................7&8
Part II. Other Information............................................................................8
Signature Page.........................................................................................9
</TABLE>
Form 10-QSB
Page 2 of 9
<PAGE> 3
APPLIED MEDICAL DEVICES, INC.
Form 10-QSB
October 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,
1999.
Form 10-QSB
Page 3 of 9
<PAGE> 4
APPLIED MEDICAL DEVICES, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
October 31, April 30,
1999 1999
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT -
Cash and cash equivalents $ 138,463 $ 146,121
-------------- -------------
$ 138,463 $ 146,121
-------------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES -
Accrued expenses $ 60 $ 310
-------------- -------------
SHAREHOLDERS' EQUITY
Common Stock - $.01 par value, 75,000,000 shares
authorized, issued and outstanding 65,977,800
as of October 31, 1999 and April 30, 1999 $ 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 (241,504) (234,096)
-------------- -------------
Total shareholders' equity 138,403 145,811
-------------- -------------
$ 138,463 $ 146,121
-------------- -------------
</TABLE>
See accompanying notes to consolidated financial statements.
Form 10-QSB
Page 4 of 9
<PAGE> 5
APPLIED MEDICAL DEVICES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Since Being
Three Months Three Months Six Months Six Months A Develop-
Ended Ended Ended Ended ment Stage
Oct. 31, 1999 Oct. 31, 1998 Oct. 31, 1999 Oct. 31, 1998 Company
------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Expenses -
General and
Administrative $ 7,117 $ 4,723 $ 10,649 $ 14,044 $ 433,861
------------- ------------- ------------- ------------ ------------
Other income:
Interest income 1,612 1,840 3,241 3,844 128,767
Other -- -- -- -- 32,536
Gain from sale of
marketable securities -- -- -- -- 31,053
------------- ------------- ------------- ------------ ------------
Total other income 1,612 1,840 3,241 3,844 192,356
------------- ------------- ------------- ------------ ------------
Net Loss $ (5,505) $ (2,883) $ (7,408) $ (10,200) (241,505)
============ ============= ============= ============ ============
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
============ ============= ============= ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
Form 10-QSB
Page 5 of 9
<PAGE> 6
APPLIED MEDICAL DEVICES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Six Months Since Being
ended ended A Development
Oct. 31, 1999 Oct. 31, 1998 Stage Company
-------------- -------------- --------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss $ (7,408) $ (10,200) $ (241,505)
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 (250) 524 (43,049)
Other -- -- 10
Prepaid expenses -- -- --
------------- ------------ -------------
Net cash used in operating activities (7,658) (9,676) (303,129)
------------- ------------ -------------
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
------------- ------------ -------------
Decrease in cash and cash equivalents (7,658) (9,676) (18,721)
Cash and cash equivalents,
beginning of period 146,121 160,103 157,184
------------- ------------ -------------
Cash and cash equivalents,
end of period $ 138,463 $ 150,427 $ 138,463
============= ============ =============
</TABLE>
See accompanying notes to consolidated financial statements.
Form 10-QSB
Page 6 of 9
<PAGE> 7
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, 1999.
The following review concerns the six-month periods ended October 31, 1999, and
October 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 Six Months Ended October 31, 1999 and October 31, 1998
During the six months ended October 31, 1999, the Company had a net loss of
approximately $7,400. The Company incurred general and administrative costs of
approximately $10,600. The Company's revenues consisted solely of interest on
cash and other money market instruments of approximately $3,200. During the six
months ended October 31, 1998, the general and administrative costs were
approximately $14,000 and the Company's revenues consisted of approximately
$3,800 from interest on cash and
Form 10-QSB
Page 7 of 9
<PAGE> 8
other money market instruments, resulting in a loss of approximately $10,200 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 that 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.
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 have been upgraded during 1999 and are
year 2000 compliant. The Company has reviewed the status of the year 2000 issues
with its financial institutions and has determined that the financial
institutions are year 2000 compliant.
The financial statements reflect all adjustments that 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 8 of 9
<PAGE> 9
APPLIED MEDICAL DEVICES, INC.
FORM 10-QSB
OCTOBER 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: December 8, 1999 By: /s/ Allan K. Lager
--------------------------------------
Allan K. Lager, President
and Chief Financial Officer
Form 10-QSB
Page 9 of 9
<PAGE> 10
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> OCT-31-1999
<CASH> 138,463
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 138,463
<CURRENT-LIABILITIES> 60
<BONDS> 0
0
0
<COMMON> 659,778
<OTHER-SE> (521,375)
<TOTAL-LIABILITY-AND-EQUITY> 138,403
<SALES> 0
<TOTAL-REVENUES> 3,241
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,649
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,408)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,408)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,408)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
