UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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: 0-11371
BIOSONICS, INC.
(Exact name of small business issuer as specified in its charter)
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Pennsylvania 23-2161932
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
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260 New York Drive
Fort Washington, Pennsylvania 19034
(Address of principal executive offices) (Zip Code)
(215) 646-7100
(Issuer's telephone number including area code)
N/A
(Former name, former address and former fiscal year, if changed since last
report)
Check mark whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of
1934 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 issuers classes of
common equity, as of the latest practicable date:
as of JUNE 30th 1998, there were outstanding 313,544,536 shares of the
Issuer's Common Stock, $.0001 par value.
</PAGE>
<PAGE> 2
BIOSONICS, INC.
INDEX
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Page
Number
PART IFINANCIAL INFORMATION
Item 1.Financial Statements
Balance Sheets:
June 30, 1998 and December 31, 1997 3
Statements of Loss:
Three and Six Months Ended June 30, 1998 and 1997 and the
period from November 13, 1980 (Inception) to June 30, 1998 4
Statements of Deficit Accumulated:
Six Months Ended June 30, 1998 and 1997 and the Period
from November 13, 1980 (Inception) to June 30, 1998 5
Statements of Cash Flows:
Six Months Ended June 30, 1998 and 1997 and the Period
from November 13, 1980 (Inception) to June 30, 1998 6 & 7
Statements of Shareholders' Equity - Paid-In-Capital:
November 30, 1980 (Inception) to June 30, 1998 8 - 11
Note to Financial Statements 12
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
PART II OTHER INFORMATION
Item 1.Legal Proceedings 13
Item 2.Changes in Securities and Use of Proceeds 14
Item 6.Exhibits and Reports on Form 8-K 15
Signatures 15
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</PAGE>
<PAGE> 3
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
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ASSETS
Unaudited DECEMBER 31,
JUNE 30, 1998 1997
Current assets
Cash $100 $260
Accounts receivable (net of allowance for
doubtful accounts 3,321 2,630
of $2,000 in 1998 and 1997)
Interest receivable 5,825 3,259
Inventory 177,791 42,117
Notes Receivable 40,000 15,000
Advances to affiliate (net of allowance for
doubtful accounts (17,665) 66,606
of $50,000 in 1998
Prepaid expenses and other current assets 4,450 3,000
Total current assets 213,822 132,872
Equipment, furniture and leaseholds, net of 13,099 13,820
accumulated depreciation
Deposits 8,431 8,431
Total assets $235,352 $155,123
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Notes payable, officer and affiliate $97,000 $99,000
Notes payable, other 280,000 148,000
Accrued payroll, officer 824,000 772,500
Accrued interest, officer and affiliate 71,044 66,357
Accrued interest, other 212,041 198,738
Accounts payable and other accrued expenses 923,854 922,093
Advances from affiliates 62,450 62,450
Payments received from unissued debentures 187,000 187,000
Total current liabilities 2,657,389 2,456,138
Shareholders' deficit
Common stock - authorized 750,000,000 shares at
.0001 par value;
Issued and outstanding 313,544,536 and 31,354 30,797
307,964,536 shares at
June 30, 1998 and December 31, 1997 respectively
Capital in excess of par value 12,839,712 12,548,020
Notes receivable from sale of stock (95,000) (95,000)
Deficit accumulated during development stage (15,198,103) (14,784,832)
Total shareholders' deficit (2,422,037) (2,301,015)
Total liabilities and shareholders' deficit $235,352 $155,123
</TABLE>
The accompanying note is an integral part of these financial statements
</PAGE>
<PAGE> 4
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF LOSS
(UNAUDITED)
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SIX MONTHS ENDEDJUNE 30,
1998 1997
Sales $6,975 $13,550
Cost of sales 826 8,297
Gross profit 6,149 5,253
Development stage expenses
Research and development costs 0 0
Professional fees 162,524 132,588
Other development stage expenses 261,568 287,545
Total development stage expenses 424,092 420,133
Less: revenues from cost recovery program - -
Net development stage expenses 424,092 420,133
Other Income
Investment and other income 4,672 2,216
Gain on sale of fixed assets - -
Total other income 4,672 2,216
Net loss $(413,271) $(412,664)
Loss per common share ($.00) ($.00)
</TABLE>
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF LOSS
(UNAUDITED)
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THREE MONTHS ENDEDJUNE 30, 11/13/80
(INCEPTION)
TO JUNE 30
1998 1997 1998
$3,905 $7,925 $871,115
479 4,893 568,450
3,426 3,032 302,665
0 0 416,667
130,650 77,448 3,159,942
142,123 142,377 9,084,352
272,773 219,825 16,410,961
- - 118,082
272,773 219,825 16,292,879
2,717 1,224 758,741
- - 7,620
2,717 1,224 766,361
$(266,630) $(215,569) $(15,223,853)
($.00) ($.00) ($.05)
</TABLE>
The accompanying note is an integral part of these financial statements.
</PAGE>
<PAGE> 5
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE
(UNAUDITED)
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SIX MONTHS ENDEDJUNE 30, 11/13/80 (INCEPTION) TO JUNE 31
1998 1997 1998
BEGINNING BALANCE $(14,784,832) $(13,918,378) $ -
NET LOSS (413,271) (412,664) (15,198,103)
ENDING BALANCE $(15,198,103) $(14,331,042) $(15,198,103)
</TABLE>
The accompanying note is an integral part of these financial statements.
</PAGE>
<PAGE>
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
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11/13/80
SIX MONTHS ENDED JUNE 30 (INCEPTION)
TO JUNE 30,
1998 1997 1998
Cash flows used in operating activities
Net loss $(413,271) $(412,664) $(15,198,103)
Adjustments to reconcile net loss to net
cash used in operating
activities
Depreciation and amortization 2,491 3,002 388,386
Increase in allowance for doubtful accounts - - 52,000
Increase in reserve for inventory obsolescence - - 27,000
Loss on lease abandonment - - 19,550
Gain on sale of fixed assets - - (7,620)
Common stock issued for services 85,000 39,500 670,059
Common stock options issued for services 13,250 14,398 190,928
Common stock issued for product rights - - 12,501
Change in operating assets and liabilities
Accounts receivable (691) (633) (5,321)
Inventory (135,674) 546 (204,791)
Interest receivable (2,566) - (5,825)
Prepaid expenses and other current assets (1,450) (6,352) (4,450)
Accrued payroll, officer 51,500 51,500 824,000
Accrued interest, officer and affiliates 4,687 5,750 145,247
Accrued interest, other 13,303 12,665 212,041
Accounts payable and accrued expenses 1,761 (1,878) 991,856
Advances from (to) affiliates 170,830 (158,963) 239,994
Total adjustments 202,441 (40,465) 3,545,555
Net cash used in operating activities ($210,830)($453,129) ($11,652,548)
</TABLE>
The accompanying note is an integral part of these financial statements
</PAGE>
<PAGE> 7
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
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11/13/80
SIX MONTHS ENDED JUNE 30 (INCEPTION)
TO JUNE 30,
1998 1997 1998
Cash flows from investing activities
Sale of fixed assets $ - $ - $10,825
Capital expenditures (1,770) - (371,096)
Issuance of note receivable (25,000) - (70,000)
(Increase) decrease in deposits - - (8,431)
Decrease in note receivable - - 30,000
Decrease in capitalized patents - - (45,690)
Net cash provided (used) in
investing activities $(26,770) - $(454,392)
Cash flows from financing activities
Proceeds for unissued debentures and
securities $ - $239,530 $498,000
Principal payments of note payable (32,000) (45,000) (370,000)
Proceeds from issuance of note payable 132,000 - 966,444
Increase in capitalized organization costs - - (7,453)
Proceeds from issuance of preferred stock - - 1,105,000
Proceeds from issuance of common stock 137,500 258,599 9,915,109
Net cash provided by financing activities $267,500 $453,129 $12,107,100
Net increase (decrease) in cash and (160) - 100
cash equivalents
Cash and cash equivalents, beginning 260 260 -
Cash and cash equivalents, ending $100 $260 $100
</TABLE>
The accompanying note is an integral part of these financial statements.
</PAGE>
<PAGE>
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF SHAREHOLDERS' EQUITY - PAID-IN CAPITAL
NOVEMBER 13, 1980 (INCEPTION) TO JUNE 30, 1998
(UNAUDITED)
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DATE STOCK PRICE PER AMOUNT
ISSUED NUMBER OF SHARES SHARE RECEIVED NOTES
1/13/81 150,000,000 0.0001 15,001 (A)
1/31/81 4,400,000 0.0250 110,000 (B)
1981 400,000 0.0250 10,000 (C)
1981 20,000,000 0.0500 1,000,000 (B)
1982 20,000 0.4000 8,000 (C)
1982 97,500 0.2000 19,500 (C)
1982 1,000,000 0.0600 60,100 (D)
1983 52,500 0.2000 10,500 (C)
1983 75,000 0.3050 22,875 (E)
1983 25,000 0.2350 5,875 (E)
1983 20,000 0.5000 10,000 (C)
12/29/83 7,300,000 0.5000 3,650,000 (F)
1984 390 1.0000 390 (G)
1984 5,948 0.5000 2,975 (G)
1984 1,000 0.3750 375 (C)
1984 72,500 0.2500 18,125 (C)
1984 2,000 0.3750 750 (H)
1984 4,000 0.2500 1,000 (C)
1984 350,000 0.2000 70,000 (C)
1985 26,500 0.2810 7,453 (C)
1985 20,000 0.2500 5,000 (H)
1985 500 0.5000 250 (G)
1985 5,000 0.3440 1,719 (C)
1985 50 1.0000 50 (G)
1985 2,000 0.3750 750 (H)
1985 7,500 0.1560 1,172 (C)
1986 6,882 0.5000 3,472 (G)
1986 85,000 0.1875 15,938 (H)
1986 11,650 0.2810 3,276 (H)
1986 100,000 0.2190 21,875 (H)
1986 10,665,000 0.1810 1,929,737 (I)
1986 202,000 0.1560 31,562 (H)
1986 70,000 0.3130 21,875 (H)
1986 134,855 0.2000 26,939 (H)
1987 7,613,551 0.2000 1,522,710 (G)
1987 476,110 0.2950 140,478 (H)
1987 7,000 0.1590 1,113 (B)
1987 15,000 0.3120 4,687 (C)
1987 240,000 0.2000 48,000 (B)
1987 100,000 0.2180 21,875 (C)
</TABLE>
The accompanying note is an integral part of these financial statements.
</PAGE>
<PAGE> 9
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF SHAREHOLDERS' EQUITY - PAID-IN CAPITAL (CONTINUED)
NOVEMBER 13, 1980 (INCEPTION) TO JUNE 30, 1998
(UNAUDITED)
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DATE STOCK PRICE PER AMOUNT
ISSUED NUMBER OF SHARES SHARE RECEIVED NOTES
1988 125,000 0.2500 31,250 (C)
1988 2,500 0.2180 547 (H)
1988 10,000 0.2000 2,000 (G)
1988 100,000 0.2500 25,000 (B)
1988 4,227,000 0.2000 845,400 (B)
1988 25,000 0.1560 3,906 (C)
1988 11,000 0.0130 143 (H)
1989 400,000 0.0800 32,000 (B)
1989 3,000 0.0938 282 (H)
1989 100,000 0.0800 8,000 (B)
1990 25,000 0.0100 250 (H)
1990 20,311,000 0.0100 203,110 (B)
1990 10,500,000 0.0100 105,000 (B)
1991 1,100,000 0.0100 11,000 (B)
1991 100,000 0.0100 1,000 (H)
1991 48,000 0.0625 3,000 (J)
1991 32,000 0.0625 2,000 (J)
1991 1,100,000 0.0100 11,000 (J)
1991 1,100,000 0.0100 11,000 (B)
1991 400,000 0.0100 4,000 (C)
1995 0 0.0000 87,750 (Q)
1996 1,250,000 0.0800 100,000 (K)
1996 11,375,000 0.0286 325,000 (K)
1996 16,100,000 0.0500 805,000 (K)
1996 1,300,000 0.0100 13,000 (L)
1996 12,900,000 0.0200 258,000 (L)
1996 300,000 0.0300 9,000 (M)
1996 280,000 0.0500 14,000 (M)
1996 400,000 0.0800 32,000 (M)
1996 100,000 0.0650 6,500 (M)
1996 250,000 0.0850 21,250 (M)
1996 (15,368,820) -0- (N)
1996 420,000 0.0238 10,000 (L)
1996 11,150,000 0.0200 223,000 (L)
1996 428,600 0.0350 15,000 (L)
1996 250,000 0.0400 10,000 (L)
1996 1,075,220 0.0500 53,761 (L)
1996 350,000 0.0258 9,032 (J)
1996 1,695,000 0.0345 59,175 (J)
1996 75,000 0.0400 3,000 (O)
1996 200,000 0.0500 10,000 (B)
</TABLE>
The accompanying note is an integral part of these financial statements.
</PAGE>
<PAGE> 10
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF SHAREHOLDERS' EQUITY - PAID-IN CAPITAL (CONTINUED)
NOVEMBER 13, 1980 (INCEPTION) TO JUNE 30, 1998
(UNAUDITED)
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DATE STOCK PRICE AMOUNT
ISSUED NUMBER OF SHARES PER SHARE RECEIVED NOTES
1996 - - 75,530 (Q)
1997 550,000 0.0500 27,500 (M)
1997 200,000 0.0500 10,000 (O)
1997 5,000,000 0.0100 50,000 (P)
1997 1,000,000 0.0200 20,000 (P)
1997 - - 14,398 (Q)
1997 11,130,600 0.0500 556,529 (R)
1997 500,000 0.0500 25,000 (P)
1997 40,000 0.0500 2,000 (M)
1997 80,000 0.0200 1,600 (L)
1997 1,600,000 0.0500 80,000 (R)
1998 1,650,000 0.0500 82,500 (R)
1998 100,000 0.0500 5,000 (O)
1998 2,730,000 0.0500 136,500 (S)
1998 1,100,000 0.0500 80,000 (R)
1998 - - 13,250 (Q)
1998 (1,600,000) - -0- (N)
1998 1,600,000 0.0500 80,000 (M)
</TABLE>
TOTAL SHARES - COMMON STOCK 313,544,536
TOTAL PAID-IN CAPITAL $ 13,313,207
LESS: Notes Receivable for Stock Purchase 95,000
LESS: Offering Expenses 473,495
NET PAID-IN CAPITAL - COMMON STOCK $ 12,744,712
The accompanying note is an integral part of these financial statements.
</PAGE>
<PAGE> 11
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF SHAREHOLDERS' EQUITY - PAID-IN CAPITAL (RESTATED) (CONTINUED)
NOVEMBER 13, 1980 (INCEPTION) TO JUNE 30 , 1998
(UNAUDITED)
NOTES
(A) $1 additional was paid on stock certificate #3.
(B) Cash purchases.
(C) Represents stock issued in consideration for services rendered. The
value assigned was based on the fair market
value of the stock on the date the transaction was authorized.
(D) 1,000,000 common stock warrants were issued to the underwriter, Monarch
Funding Corporation, at par value
($.0001). On November 15, 1982, these warrants were exercised at $.06
per share.
(E) Represents stock issued in consideration for services rendered and
$7,500 cash. The value assigned was based on the fair market value of
the stock on the date the transaction was authorized.
(F) Stock issued as part of unit offering. Each unit consisted of 2 shares
common stock, 2 Series "A" warrants and 1
Series "B" warrant. No separate value was assigned to the warrants.
(G) Issued pursuant to the exercise of warrants described in (F).
(H) Issued pursuant to the employee incentive stock bonus plan.
(I) Issued as part of an offering completed March 26, 1986 for cash and
redemption of warrants described in (F).
(J) Liabilities converted to common stock.
(K) Preferred Stock transferred to Common Stock as per agreement.
(L) Issued stock for monies received during time when common stock was not
able to be issued.
(M) Issued stock as payment for services rendered.
(N) Shares contributed by IMRCH.
(O) Issued stock as payment for interest on loans received.
(P) Issued pursuant to exercising stock purchase option.
(Q) Stock Options granted.
(R) Issued pursuant to a private offering.
(S) Issued stock as payment for Inventory that was repurchased for previous
Dry Mouth Center locations.
The accompanying note is an integral part of these financial statements.
</PAGE>
<PAGE> 12
BIOSONICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTE TO FINANCIAL STATEMENTS
JUNE 30 , 1998
Note 1 - The unaudited financial statements presented herein have been
prepared in accordance with the
instructions to Form 10-QSB and do not include all of the information
and note disclosures required
by generally accepted accounting principles. These statements should
be read in conjunction with
the financial statements and notes thereto included in the Company's
Form 10-K annual report for
the year ended December 31, 1997. In the opinion of management,
these financial statements
include all adjustments, consisting only of normal recurring
adjustments, necessary to summarize
fairly the Company's financial position and results of operations.
The results of operations for the
nine-month period ended June 30, 1998 may not be indicative of the
results that may be expected for
the year ending December 31, 1998.
</PAGE>
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
PLAN OF OPERATIONS
Biosonics, Inc. ("the Company" and "Biosonics") is preparing a marketing plan
for the Salitronregistered trademark (dry mouth) device.
The Company does have current inventory for the Salitron, and believes that
this existing inventory is not obsolete
and that the Company can sell and ship such units after testing the equipment.
Although approximately 46 private insurance carriers have reimbursed Biosonics
for the use of the Salitronregistered trademark system
and Medicaid reimbursement has been obtained in four states, there is
uncertainty as to whether third party payers
will approve or continue to reimburse Biosonics for the devices and whether
reimbursement, if approved or
continued, will be sufficient for purchasers of the Company's products. On
May 23, 1994, a proposed notice was
published in the Federal Register by Health Care Financing Administration
("HCFA") that it intended to disapprove
Biosonics' application for Medicare reimbursement for the Salitron System. In
1996, Biosonics met with HCFA
officials to urge a reevaluation of its intent to disapprove the Company's
request for reimbursement approval. The
Company continued its efforts with HCFA and in October 1997 submitted
additional data to HCFA. During a
Senate Appropriations Subcommittee Hearing in March 1998, the Administrator of
HCFA stated that HCFA would
be prepared to withdraw the 1994 notice. On June 1, 1998 the Federal Register
published a notice stating that the
previous non-coverage notice of 1994 was withdrawn and that a technical review
of the Salitron was underway.
Since the non-coverage notice was withdrawn, Biosonics has contacted the four
regional carriers with the
information submitted regarding the Salitron for their review. The regional
carriers have indicated that they will
schedule a conference call in August to discuss their decision for regionally
approved coverage of the Salitron.
Biosonics intends to implement the marketing plan in August due to the
progress with Medicare.
The Company has developed a marketing plan for the Cystotrontrademark product
(Incontinence) which includes a six-
month market study. The purpose of the study is to provide further data for
physicians to assist them in deciding
whether to prescribe the Cystotron System for their patients. The Company
intends to proceed with this marketing
plan if and when the Company has received sufficient funds for manufacturing
the product.
Biosonics is also planning to develop a strategy to market its products in the
international market. The Company
has initiated contact with various companies in the European market. Further
development of this plan will require
engineering aspects and the qualification of the European CE mark for
importing into Europe.
Biosonics does not have any material commitments for capital expenditures,
although management is considering
making capital expenditures during 1998 in connection with the manufacturing
of the Cystotron System, if funds
become available. The extent of the development or testing, if any, of
Biosonics' other devices will depend on the
availability of funds, and there is no assurance that development or testing
of the devices will occur or be successful
or that sufficient funds will be available.
FORWARD LOOKING STATEMENTS
All statements contained in this report that are not historical facts,
including but not limited to the Company's plans
for product development and marketing, are based on current expectations.
These statements are forward-looking
(as defined in the U.S. Private Securities Litigation Reform Act of 1995 and
the Act) in nature and involve a number
of risks and uncertainties. Such statements can be identified by the use of
forward-looking terminology such as
"may", "will", "should", "expect", "anticipate", "believe", "estimate" or
"continue", or the negative thereof or other
variations thereon or comparable terminology. Actual results may vary
materially, as discussed herein. The factors
that could cause actual results to vary materially include: The availability
of capital to finance the Company's
operations on terms satisfactory to the Company; the availability of
clearances or approvals of the Company's
products by federal, state and foreign governmental authorities; the market
acceptance of the Company's products;
the availability of reimbursement by third part payors, including Medicare
reimbursement; product liability claims;
the availability of protection of the Company's patents and future litigation
relating to protection of its patent, trade
secret and know-how; the Company's dependence on Jack Paller; general business
and economic conditions and
competition from products that address the same or similar medical problems as
those addressed by the Company's
products; and other risks that may be described from time to time in the
reports that the Company will be required
to file with the Commission. The Company cautions potential investors not to
place undue reliance on any such
forward-looking statements.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Biosonics' primary sources of funds to date have been proceeds from the sale
of its securities and investment income
on such proceeds, including loans and advances for securities purchases
through private and public offerings.
Biosonics will require additional funds estimated to be approximately $3.0
million to implement current
manufacturing and marketing plans. The Company will also require additional
funds in the immediate future to
maintain the operations of the Company. Biosonics has initiated a private
offering of securities to acquire the
immediately required funds.
Net development stage expenses for the six and three months ended June 30,
1998 ($424,092 and $272,773
respectively) were higher by less than 1% of the comparable periods of the
prior year ($420,133 and $219,825
respectively) which is not a significant difference. Other development stage
expenses include primarily salaries,
rent, supplies, transfer agent fees, manufacturing, marketing, public
relations and travel expenses.
The Company's professional fees for the six and three months ended June 30,
1998 ($162,524 and $130,650
respectively) were higher than the comparable periods on the prior year
($132,588 and $77,448 respectively) due
to additional costs associated with consulting services relating to the
ongoing Medicare process and financing the
Company.
The Company's sales for the six and three months ended June 30, 1998 ($6,975
and $3,905 respectively) were lower
as compared to the same period of the prior year ($13,550 and $7,925
respectively). The decrease in sales resulted
primarily from not having available funds to maintain a marketing program for
the Salitron System.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES.
Biosonics has effected a private placement of common stock to a limited number
of accredited investors for which
it received subscriptions for an aggregate of $82,500, or 1,650,000 shares for
eight accredited investors for the
period ended March 31, 1998 and an aggregate of $55,000 or 1,100,000 shares
for four accredited investors for the
period ended June 30, 1998. These private sales were made pursuant to the
exemption afforded under Section 4(2)
and Regulation D under the Securities Act of 1933.
Also during the period ended June 30, 1998, Biosonics issued an aggregate of
2,730,000 shares of common stock
to two sophisticated investors at $.05 per shares for the purchase of Salitron
Systems to place in the Company's
inventory. These devices were sold as part of the original Dry Mouth Center
program. These devices were tested
and verified prior to placing the company's our inventory. The Company also
issued 100,000 shares of common
stock at $.05 per share to an individual as interest for a short-term loan.
Common stock options were also awarded:
common stock options of 1,000,000 shares at an exercise price of $.02 per
share for a period of three years were
granted to an individual in payment for consulting services valued at $5,000;
common stock options of 2,000,000
shares at an exercise price of $.02 per share for a period of three years were
granted to an individual as a financing
fee on a loan which is valued at $5,000: and common stock options of 130,000
shares at an exercise price of $.02
per share for a term of six months were granted to four individuals as
financing fees on loan which is valued at
$3,250. These issuances and grants were made pursuant to the exemption
afforded under Section 4(2) under the
Securities Act of 1933.
Consultants were also contracted for financial services for both International
Management & Research Corp.
(IMRC) as well as for Biosonics, Inc. IMRC returned 1,600,000 shares of it's
Biosonics common stock to Biosonics
for issuance to the contracted individuals, priced at $.05 per share which was
the average market price at the time
of the contracts.
</PAGE>
<PAGE> 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
*3.1 Articles of Incorporation as amended (incorporated by reference
to Registrant's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1996).
*3.5 By-laws of Registrant, as amended. (incorporated by reference
to Registrant's Annual Report or Form 10-K for the year ended
December 31, 1983 ["1983 Form 10-K"]).
27 Financial Data Schedule
(b) Reports on Form 8-K:
None
* Incorporated by reference
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunder duly authorized.
BIOSONICS, INC.
Date: August 10, 1998 By: /s/Jack Paller
Jack Paller, President, Chairman and
Executive Officer,
Principal Financial Officer and
Principal Accounting
Officer and Sole Director.
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