SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(AMENDMENT NO. 1)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended Commission File Number
APRIL 30, 1998 0-9922
AMERICAN ELECTROMEDICS CORP.
(Exact Name of Small Business Issuer as Specified in its Charter)
DELAWARE 04-2608713
(State or Other Jurisdiction (IRS Employer ID No.)
of Incorporation
or Organization)
13 COLUMBIA DRIVE, SUITE 5, AMHERST, NEW HAMPSHIRE 03031
(Address and Zip Code of Principal Executive Offices)
Issuer's telephone number, including area code: 603-880-6300
------------
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, PAR VALUE $.10 PER SHARE
--------------------------------------
(Title of Class)
Indicate by check mark whether the Issuer (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 12 months, and (2) has been subject
to such filing requirements for the past 90 days.
YES X NO
--- ---
As of June 15, 1998, there were outstanding 7,038,136 shares of
the Issuer's Common Stock, $.10 par value.
<PAGE>
AMERICAN ELECTROMEDICS CORP.
Index
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets, April 30, 1998 and
July 31, 1997 . . . . . . . . . . . . . . . . . . 3
Statements of Operations for the Three
and Nine Months Ended April 30, 1998
and April 26, 1997 . . . . . . . . . . . . . . 4
Statements of Cash Flows for the
Nine Months Ended April 30, 1998 and
April 26, 1997 . . . . . . . . . . . . . . . . 6
Notes to Financial Statements . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis or
Plan of Operation . . . . . . . . . . . . . 11
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 13
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
AMERICAN ELECTROMEDICS CORP.
BALANCE SHEET
APRIL 30, JULY 31,
1998 1997
---------- ----------
(Unaudited)
(Thousands)
ASSETS
Current Assets:
Cash and cash equivalents . . . . . . . . $ 110 $ 471
Accounts receivable
Trade . . . . . . . . . . . . . . . . . 1,242 283
-- 379
Affiliate . . . . . . . . . . . . . . . ------- -------
1,242 662
Inventories . . . . . . . . . . . . . . . 2,704 475
704 244
Prepaid and other current assets . . . . ------- -------
Total current assets . . . . . . . . . 4,760 1,852
Property and equipment . . . . . . . . . 840 449
(418) (396)
Accumulated depreciation . . . . . . . . ------- -------
422 53
Deferred financing costs . . . . . . . . 21 128
Investment in affiliate . . . . . . . . . 311 819
849 208
Goodwill . . . . . . . . . . . . . . . . ------- -------
$6,363 $3,060
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable . . . . . . . . . . . . $ 923 $ 187
Bank line of credit . . . . . . . . . . . 285 300
Accrued liabilities . . . . . . . . . . . 469 153
167 152
Current portion of long-term debt . . . . ------- -------
Total current liabilities . . . . . . . 1,844 792
Long-term debt . . . . . . . . . . . . . 1,118 380
Convertible subordinated debentures . . . -- 720
Stockholders' Equity:
Preferred stock, $.01 par value;
Authorized - 1,000,000 shares;
Outstanding - none . . . . . . . . . . -- --
Common stock, $.10 par value; Authorized
- 20,000,000 shares; Outstanding -
5,663,136 shares at April 30, 1998 and
2,553,136 at July 31, 1997 . . . . . . 566 255
Additional paid-in capital . . . . . . . 5,682 2,919
Retained deficit . . . . . . . . . . . . (2,752) (2,006)
(95) --
Foreign currency translation adjustment . ------- -------
3,401 1,168
Total stockholders' equity . . . . . . ------- -------
$6,363 $3,060
======= =======
See accompanying notes.
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<PAGE>
AMERICAN ELECTROMEDICS CORP.
STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED
------------------
APRIL 30, APRIL 26,
1998 1997
--------- ---------
(Thousands, except per
share amounts)
Net sales . . . . . . . . . . . . . . . $ 1,495 $ 423
1,134 247
Cost of goods sold . . . . . . . . . . ---------- ----------
Gross profit . . . . . . . . . . . . . 361 176
Selling, general and administrative . . 1,048 636
-- 10
Research and development . . . . . . . ---------- ----------
1,048 646
Total operating expenses . . . . . . ---------- ----------
Operating loss . . . . . . . . . . . . (687) (470)
Other income (expenses):
Undistributed earnings of affiliate (21) (12)
Interest, net . . . . . . . . . . . (19) (38)
Minority interest in affiliate . . . -- --
(64) (12)
Other . . . . . . . . . . . . . . . ---------- ----------
(104) (62)
Loss before provision for income taxes (791) (532)
-- --
Provision for income taxes . . . . . . ---------- ----------
$ (791) $ (532)
Net loss . . . . . . . . . . . . . . . ========== ==========
Weighted average number of common and 5,404,146 2,526,965
common equivalent shares outstanding ========== ==========
Loss per common and common equivalent
share:
$ (.15) $ (.21)
Basic . . . . . . . . . . . . . . . ========== ==========
$ (.15) $ (.21)
Diluted . . . . . . . . . . . . . . ========== ==========
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<PAGE>
NINE MONTHS ENDED
------------------
APRIL 30, APRIL 26,
1998 1997
--------- ---------
(Thousands, except per
share amounts)
Net sales . . . . . . . . . . . . . . . $ 5,095 $ 1,486
2,979 841
Cost of goods sold . . . . . . . . . . ---------- ---------
Gross profit . . . . . . . . . . . . . 2,116 645
Selling, general and administrative . . 2,637 1,325
-- 85
Research and development . . . . . . . ---------- ---------
2,637 1,410
Total operating expenses . . . . . . ---------- ---------
Operating loss . . . . . . . . . . . . (521) (765)
Other income (expenses):
Undistributed earnings of affiliate . 56 (55)
Interest, net . . . . . . . . . . . . (137) (81)
Minority interest in affiliate . . . (85) --
(58) (25)
Other . . . . . . . . . . . . . . . . ---------- ---------
(224) (161)
Loss before provision for income taxes (745) (926)
(2) --
Provision for income taxes . . . . . . ---------- ---------
$ (747) $ (926)
Net loss . . . . . . . . . . . . . . . ========== ==========
Weighted average number of common and 4,002,804 2,495,232
common equivalent shares outstanding ========== ==========
Loss per common and common equivalent
share:
$ (.19) $ (.37)
Basic . . . . . . . . . . . . . . . ========== ==========
$ (.19) $ (.37)
Diluted . . . . . . . . . . . . . . ========== ==========
See accompanying notes.
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<PAGE>
AMERICAN ELECTROMEDICS CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED
APRIL 30, APRIL 26,
1998 1997
--------- ---------
(Thousands)
OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . $ (747) $ (926)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization . . . . 265 56
Undistributed earnings of affiliate . (56) 55
Minority interest in affiliate . . . 85 --
Changes in operating assets and
liabilities:
Accounts receivable . . . . . . . . 189 135
Inventories, prepaid and other (775) (361)
current assets . . . . . . . . . .
Accounts payable and accrued (233) 16
liabilities . . . . . . . . . . . --------- ----------
Net cash used in operating
activities . . . . . . . . . . . . (1,272) (1,025)
INVESTING ACTIVITIES:
Purchase of property and equipment, net (267) (36)
--------- ----------
Net cash used in investing activities . (267) (36)
FINANCING ACTIVITIES:
Principal payments on long-term debt . (265) (84)
Proceeds from long-term debt and bank 236 500
line of credit . . . . . . . . . . .
Proceeds from issuance of common stock, 994 144
net . . . . . . . . . . . . . . . . .
Proceeds from issuance of convertible -- 720
subordinated debt . . . . . . . . . .
Deferred financing costs . . . . . . . -- (166)
Proceeds from exercise of stock options 150 2
---------- ----------
Net cash provided by financing 1,115 1,116
activities . . . . . . . . . . . . . ---------- ----------
Effect of exchange rate changes on cash
and cash equivalents . . . . . . . . 1 --
Increase (decrease) in cash and cash
equivalents . . . . . . . . . . . . . (423) 55
Cash and cash equivalents, beginning of 533 317
period . . . . . . . . . . . . . . . ---------- ----------
Cash and cash equivalents, end of $ 110 $ 372
period . . . . . . . . . . . . . . . ========== ==========
Supplemental disclosure of cash flow
information:
NON-CASH ACTIVITIES:
Common stock issued in connection with
consulting agreement . . . . . . . . $ 1,000 --
Conversion of convertible subordinated
debt into common stock . . . . . . . 720 __
========== ==========
Common Stock issued in connection with
acquisitions . . . . . . . . . . . . 210 __
========== ==========
See accompanying notes.
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<PAGE>
AMERICAN ELECTROMEDICS CORP.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998
(Unaudited)
1. BASIS OF PRESENTATION
---------------------
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information. Accordingly, they
do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included.
Effective July 31, 1997, the Company is reporting its month end
on the last day of each month for accounting purposes.
The Company changed its method from the equity method of
accounting for Rosch GmbH Medizintechnik ("Rosch GmbH") to a
consolidated basis on August 11, 1997 based upon the Company's
determination that it had reached the definition of control of
Rosch GmbH as of August 11, 1997 under generally accepted
accounting principles. The Company's determination of control of
Rosch GmbH was based primarily upon the successful completion of
negotiations to acquire effective voting control. For the
quarterly period ended October 31, 1997, the Company consolidated
the Company and Rosch GmbH, however, the Company continued only
to recognize earnings of Rosch GmbH up to its 50% ownership share
until the remaining 50% was purchased. On December 18, 1997, the
Company closed on the purchase of the remaining 50% of the
outstanding capital stock of Rosch GmbH paying $50,000 plus
105,000 shares of the Company's Common Stock, pursuant to a Stock
Purchase Option Agreement, dated as of November 1, 1997. As a
result of this transaction, the Company has recognized 100% of
earnings by Rosch GmbH since the quarter ended January 31, 1998.
The following proforma information is presented for comparative
purposes to disclose information on the financial position and
results of operations of the Company and Rosch GmbH had they been
consolidated for all periods presented:
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<PAGE>
(IN 000'S)
Three Months Three Months
Ended 4/30/98 Ended 4/26/97
------------- -------------
Sales $ 1,495 $ 1,444
Gross profit 361 637
Net loss (791) (447)
Current assets 4,760 3,722
Non-current assets 1,603 1,294
Current liabilities 1,844 2,052
Non-current liabilities 1,118 1,744
Nine Months Nine Months
Ended 4/30/98 Ended 4/26/97
------------- -------------
Sales $ 5,095 $ 3,302
Gross profit 2,116 1,086
Net loss (747) (967)
Current assets 4,760 3,722
Non-current assets 1,603 1,294
Current liabilities 1,844 2,052
Non-current liabilities 1,118 1,744
Operating results for the three and nine month periods ended
April 30, 1998 are not necessarily indicative of the results that
may be expected for the year ending July 31, 1998. For further
information, refer to the financial statements and footnotes
thereto included in the Company's annual report on Form 10-KSB
for the year ended July 31, 1997.
Foreign Currency Translation
----------------------------
The financial statements of the Company's foreign subsidiary have
been translated into U.S. dollars in accordance with Statement of
Financial Standards No. 52, Foreign Currency Translation. All
balance sheet amounts have been translated using the exchange
rates in effect at the balance sheet date. Statement of
operations amounts have been translated using average exchange
rates. The gains and losses resulting from the changes in
exchange rates from the date of acquisition of Rosch GmbH to
April 30, 1998 have been reported separately as a component of
stockholders equity.
The aggregate transaction gains and losses are insignificant.
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<PAGE>
2. INVESTMENT IN AFFILIATE
-----------------------
On December 18, 1997, the Company invested $255,000, $150,000 in
cash and 105,000 shares of its Common Stock for a 45% interest in
Meditronic Medizinelektronik GmbH ("Meditronic"), pursuant to a
Stock Purchase Option Agreement, dated as of November 1, 1997.
The shares were valued at $1.00 per share, which represented the
fair market value of the Common Stock as of the entry into such
Agreement. Meditronic is a development and manufacturing company
based in Germany, specializing in the manufacture of medical
camera systems. Substantially all of Meditronic's sales are to
Rosch GmbH. At April 30, 1998, the investment in Meditronic
exceeded the Company's share of the underlying equity in net
assets by approximately $190,000 and is being amortized over
twenty-five years.
3. DEBT
----
On October 28, 1997, the Company entered into a Forbearance and
Workout Agreement with its bank as a result of the Company not
being in compliance with certain financial covenants under its
loan agreement as of July 31, 1997. The bank waived the
non-compliance and the Company agreed to, among other things,
raise an additional $250,000 of equity capital and to apply
$150,000 of such amount against outstanding term loans.
Additionally, as part of this Agreement, the Company's revolving
line of credit was reduced to $300,000. Certain of the loan
agreement financial covenants were also amended to more
reasonably reflect the Company's current financial position. See
Note 6, Subsequent Events.
As of November 26, 1997, the Company closed a private placement
of 1,030,000 shares of Common Stock at a price of $1.00 per
share, and used $150,000 of the placement proceeds to repay
portions of its bank indebtedness.
In connection with the October 1997 amendments to its bank
arrangements and efforts to obtain additional equity capital, the
Company reduced the conversion price of its outstanding 14%
Convertible Subordinated Debentures (the "Debentures") from $3.75
to $1.00 per share of Common Stock. As of November 3, 1997, the
holders of all outstanding $720,000 principal amount of
Debentures elected to convert. As a result of these conversions,
the Company also reduced its long-term debt by $720,000 and
issued 720,000 shares of Common Stock.
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<PAGE>
4. CAPITAL STOCK
-------------
Effective as of March 15, 1998, the Company retained Liviakis
Financial Communications, Inc. ("LFC") as a financial consultant
for a term of one year for a fee of 1,000,000 shares of the
Company's Common Stock, valued at $1.00 per share, the fair
market value, and warrants for an additional 1,000,000 shares of
Common Stock exercisable at $1.00 per share for four years. LFC
would receive a finder's fee equal to 2.5% of the gross funding
of any debt or equity placement and 2% of the gross consideration
on any acquisition for which LFC acts as a finder for the
Company.
5. YEAR 2000
---------
The Company has completed an assessment of Year 2000 issues with
respect to its computer systems. The Company believes that the
Year 2000 issue will not pose significant operational problems
for its computer systems in that all required modifications and
conversions to comply with Year 2000 requirements should be fully
completed by the third quarter of 1999. In the opinion of
management, the total cost of addressing the Year 2000 issue will
not have a material impact on the Company's financial position or
results of operations.
6. SUBSEQUENT EVENTS
-----------------
On May 5, 1998, the Company acquired Dynamic Dental Systems,
Inc., a Delaware corporation ("DDS"), in exchange for 750,000
shares of the Company's Common Stock and $225,000, pursuant to an
Agreement and Plan of Merger, whereby DDS became a wholly-owned
subsidiary of the Company. DDS is based in Gainesville, Georgia
and is a distributor of digital operator hardware, cosmetic
imaging software, and intraoral dental cameras.
On May 12, 1998, the Company acquired Equidyne Systems, Inc., a
California corporation ("ESI"), in exchange for 600,000 shares of
the Company's Common Stock, pursuant to an Agreement and Plan of
Merger, whereby ESI became a wholly-owned subsidiary of the
Company. ESI is based in San Diego, California and is engaged in
the development of the INJEX(TM) needle-free drug injection
system.
During May 1998, the Company closed the placement of three
tranches of 1,000 shares each of Series A Convertible Preferred
Stock, $.01 par value (the "Series A Preferred Stock"), to one
purchaser (the "Purchaser") at a purchase price of $1,000 per
share or an aggregate purchase price of $3 million, pursuant to a
Securities Purchase Agreement (the "Purchase Agreement"), among
the Company, West End Capital LLC ("West End") and the Purchaser.
As part of its entry into the Purchase Agreement, the Company
entered into a Registration Rights Agreement (the "Registration
Agreement") and a Warrant Agreement. Concurrently with the
closing for the first tranche of Series A Preferred Stock, the
Company issued warrants under the Warrant Agreement (the
"Warrants") to West End for the purchase of 50,000 shares of the
Company's Common Stock at an exercise price of $4.80 per share,
subject to customary anti-dilution provisions, expiring on May 5,
2002. The Company also issued warrants for the purchase of
30,000 shares of Common Stock to the placement agent, exercisable
at $4.40 per share for three years.
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<PAGE>
The Registration Agreement requires the Company to file a
registration statement (the "Registration Statement") under the
Securities Act of 1933, as amended, for the Warrants and shares
of the Company's Common Stock underlying the Series A Preferred
Stock and the Warrants.
The Series A Preferred Stock is immediately convertible into
shares of the Company's Common Stock at a conversion rate equal
to $1,000 divided by the lower of (i) $4.00 or (ii) 75% of the
average closing bid price for the Common Stock for the five
trading days immediately preceding the conversion date. The
Company may force conversion of all (and not less than all) of
the outstanding shares of Series A Preferred Stock at any time
after the first anniversary of the effective date of the
Registration Statement. There is no minimum conversion price.
Should the bid price of the Common Stock fall substantially prior
to conversion, the holders of the Series A Preferred Stock could
obtain a significant portion of the Common Stock upon conversion,
to the detriment of the then holders of the Common Stock.
The Series A Preferred Stock has a liquidation preference of
$1,000 per share, plus any accrued and unpaid dividends, and
provides for an annual dividend equal to 5% of the liquidation
preference, which may be paid at the election of the Company in
cash or shares of its Common Stock. The annual dividend rate was
increased to 12% as of June 5, 1998 because the Company did not
file the Registration Statement covering the Common Stock
underlying the Series A Preferred Stock within 30 days of the
initial closing. Such rate may increase up to 18% by reason of
further delays in the effective date of the Registration
Statement, and remain in effect until the effective date thereof
when the dividend rate would return to 5%.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
This Report contains or refers to forward-looking information,
made pursuant to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. That information covers
future revenues, products and income and is based upon current
expectations that involve a number of business risks and
uncertainties. Among the factors that could cause actual results
to differ materially from those expressed or implied in any
forward-looking statement include, but not limited to,
technological innovations of competitors, delays in product
introductions, changes in health care regulations and
reimbursements, changes in foreign economic conditions or
currency translation, product acceptance or changes in government
regulation of the Company's products, as well as other factors
discussed in other Securities and Exchange Commission filings for
the Company.
RESULTS OF OPERATIONS
---------------------
Net sales for the three and nine month periods ended April 30,
1998 were $1,495,000 and $5,095,000, respectively, compared to
$423,000 and $1,486,000 for the three and nine month periods
ended April 26, 1997. The increase in sales in fiscal 1998 was
attributable to accounting for sales of Rosch GmbH on a
consolidated basis as well as sales of the new intraoral dental
camera system. Sales of the dental camera commenced in the
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<PAGE>
second quarter of fiscal 1997. During the third quarter of
fiscal 1998, Rosch GmbH began a transition from utilizing a major
distributor for the sale of its dental cameras in Europe to
direct sales. Management believes that selling the cameras on a
direct basis should result in increased sales and profits
commencing in early fiscal 1999. This transitioning though
resulted in decreased sales in the third quarter of fiscal 1998
when compared with sales for the second quarter of fiscal 1998.
Cost of sales for the three and nine month periods ended April
30, 1998 were 75.8% and 58.5%, compared to 58.4% and 56.6% of net
sales during the same periods in the prior year. The increase in
cost as a percentage of sales can be attributed to the product
mix which included sales of Rosch GmbH on a consolidated basis.
As the Company's sales mix becomes more significantly related to
dental camera products, and as costs of sales for dental camera
products is greater than for other product lines, as expected,
costs of sales as a percentage increased.
Selling, general and administrative ("SGA") expenses for the
three and nine month periods ended April 30, 1998 were $1,048,000
and $2,637,000, respectively, compared to $636,000 and $1,325,000
for the comparable prior year periods. The increases reflect
increased corporate activity, as well as accounting for the
selling, general and administrative expenses of Rosch GmbH on a
consolidated basis. The Company expects that the higher level of
marketing and selling expenses will continue for the balance of
fiscal 1998, when compared to the prior year, as the Company
seeks to promote its new dental camera product line. The
increased corporate activity relates to management time and
related expenses in connection with preliminary acquisition
discussions conducted during the fiscal quarter. These
discussions resulted in the two acquisitions closed early in the
fourth quarter of fiscal 1998. The Company expects to continue
incurring expenses related to acquisition discussions as its
current strategy is to grow through acquisitions. Additionally,
as a result of the Company's entering into a consulting agreement
with LFC (see Note 4), the Company will incur additional SGA
expense related to the ratable amortization of the fair value of
the services performed at a rate of $250,000 per quarter over a
one-year period ending March 15, 1998.
Net loss for the three and nine month periods ended April 30,
1998 were $791,000, or $.15 per share, and $747,000, or $.19 per
share, compared to a net loss of $532,000, or $.21 per share, and
$926,000, or $.37 per share for the same periods in the prior
fiscal year. The increase in net loss is the result of decreased
sales, as described above, and the per share amounts were also
affected by increases during fiscal 1998 in the number of
outstanding shares upon which such calculation was based.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Working capital of the Company at April 30, 1998 was $2,916,000,
compared to $1,060,000 at fiscal year ended July 31, 1997. The
$1,856,000 increase in working capital primarily reflects the
accounting for Rosch GmbH on a consolidated basis. As mentioned
in Note 3 of the Notes to the financial statements to this
Report, the Company applied $150,000 to repay portions of its
bank indebtedness and $200,000 as the cash portion of the
purchase price of its acquisition of Rosch GmbH and investment in
Meditronic. Further, the November 1997 conversion of the
Debentures should reduce the annual interest expense going
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<PAGE>
forward by approximately $100,000 a year. The principal
components of the increase in working capital were inventory and
accounts receivable as the result of accounting for Rosch GmbH on
a consolidated basis.
Subsequent to April 30, 1998, the Company received $2,665,000 in
net proceeds from the placement of the Series A Preferred Stock.
It used $225,000 of such proceeds for the cash portion of the DDS
acquisition and $600,000 to repay the outstanding bank
indebtedness.
The Company expects that available cash should be sufficient to
meet its normal operating requirements, including research and
development expenditures, for the next 12 months, subject to
needs of further cash for possible future acquisitions. The
Company would seek additional capital through equity and/or debt
placements or secured financings; however, no assurance can be
given that such financing arrangements would be successfully
completed and, if so, on terms not dilutive to existing
stockholders.
The Company is considering future growth through acquisitions of
companies or business segments in related lines of business or
other lines of business, as well as through expansion of existing
lines of business. There is no assurance that management will
find suitable acquisition candidates or effect the necessary
financial arrangements for such acquisitions. In May 1998, the
Company acquired Dynamic Dental Systems, Inc. ("DDS") and
Equidyne Systems, Inc. ("ESI"). The Company, through DDS, is
marketing intraoral dental cameras in the United States and
expects to commence marketing the ESI INJEX needle-free injection
system at the end of calendar 1998.
PART II. - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) During the fiscal quarter, the Company issued an
aggregate of 1,000,000 shares of its Common Stock as part of the
fee for the retention of a financial consultant, and also granted
the warrants to purchase the Company's Common Stock, see Note 4
of the Notes to the financial statements in this Report. The
issuance of the foregoing shares of Common Stock and warrants was
claimed exempt from the registration requirements of the
Securities Act of 1933, as amended, by reason of Section 4(2)
thereof.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The Company filed a report on Form 8-K for an event on March 27,
1998 to report that the Company entered into an Agreement and
Plan of Merger to acquire ESI, mentioned in Item 2 of Part I of
this Report.
Exhibits -
27 Financial Data Schedule
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<PAGE>
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.
AMERICAN ELECTROMEDICS CORP.
Dated: September 9, 1998 /s/ Thomas A. Slamecka
--------------------------
Thomas A. Slamecka
Chairman
Dated: September 9, 1998 /s/ Michael T. Pieniazek
--------------------------
Michael T. Pieniazek
President and Chief Financial
Officer
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