<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended February 28, 1999
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period from
______________ to ________________
Commission File Number 0-9798
MEDICAL MONITORS, INC.
(Name of Small Business Issuer in its Charter)
Delaware 95-2930683
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
1990 Westwood Boulevard, 3rd Floor 90025
Los Angeles, California (Zip Code)
(Address of Principal Executive
Offices)
Issuer's Telephone Number: (310)475-5600
Securities Registered Under Section 12(b) of the Exchange Act: NONE
Securities Registered Under Section 12(g) of the Act:
Common Stock, par value $.01 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 Securities Exchange Act of
1934 during the preceding 12 months (or shorter period that the issuer was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ ] No [X]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein, and will not be contained, to the
best of issuer's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendments to
this Form 10-KSB. [X]
As of February 28, 1999, there were 50,000,000 shares of the issuer's
Common Stock, $.01 par value, outstanding. The aggregate market value of shares
of Common Stock held by non-affiliates of the issuer cannot be determined
since there has been no active trading market for such Common Stock during the
period covered by this report.
DOCUMENTS INCORPORATED BY REFERENCE
No documents are incorporated by reference into this Annual Report on Form
10-KSB.
<PAGE>
PART I
Item 1. Description of Business.
General
-------
Medical Monitors, Inc. (the "issuer" or the "Company"), is a corporation
organized under Delaware law in February, 1975. The issuer previously developed
an automated electronic blood pressure measuring device (the "AES Unit") that
can be used by individuals to measure their own blood pressure without training
or assistance. The issuer has experienced significant operating losses since
inception, and at February 28, 1999 had an accumulated deficit of $1,960,211.
The issuer has been without any material funds to develop and expand its
business since the Fall of 1981 when management determined that the issuer
should remain in an inactive status pending the development of an improved AES
Unit. No such improvement of the AES Unit was undertaken by the issuer and there
have been no active business operations. Since that time, Harry Shuster, the
former sole officer and director of the issuer, has personally financed the
maintenance of the issuer by making non-interest bearing loans to the issuer.
There can be no assurance that Mr. Shuster will be willing or able to continue
to personally finance the issuer's operations or maintenance of the issuer in
the future.
At present, the issuer has no active business. The issuer would consider an
offer from an existing, privately-held company which is profitable and, in
management's view, has growth potential (irrespective of the industry in which
it is engaged), to combine with issuer. A combination may be structured as a
merger, consolidation, exchange of the issuer's Common Stock for stock or assets
or any other form which will result in the combined enterprise being a publicly-
held corporation. There are no assurances that management of the issuer will be
able to locate a suitable combination partner or that a combination can be
structured on terms acceptable to the issuer.
Pending negotiation and consummation of a combination, the issuer
anticipates that it will have limited business activities, will have no
significant sources of revenue and will incur no significant expenses or
liabilities. If expenses are incurred and funds are necessary the issuer may
undertake a private placement of its common stock or borrow the necessary
capital from its officers and directors. Should necessary funds be available,
the issuer will engage attorneys, accountants and/or other consultants to
evaluate and assist in completing a potential combination.
Capital Expenditures
--------------------
The issuer plans no significant expenditures.
Employees and Recent Events
---------------------------
The Company currently has one employee, Stanley Shuster, who is the sole
officer and director of the Company. The Company is not a party to any
collective bargaining agreement. Effective December 15, 1998 Harry Shuster
resigned from all of his positions with the Company. Prior to his resignation,
Harry Shuster appointed his son, Stanley Shuster, President, Chief Executive
Officer, Secretary, Chief Financial Officer and Director. In connection with his
resignation, Harry Shuster gifted 17,604,199 shares of common stock of the
Company to Stanley Shuster and the [VHOLLANDER] note receivable from the Company
to Stanley Shuster.
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Item 2. Description of Property
The Company owns no real property or other materially important physical
facilities. The Company uses offices maintained personally by Stanley Shuster,
the sole officer and director of the Company, at no cost to the Company.
Item 3. Legal Proceedings.
There are no material pending legal proceedings to which the Company is a
party or to which any of its property is subject.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
The Common Stock, $.01 par value, of the Company (the "Common Stock") is
very thinly traded in the over-the-counter market with the bid and ask prices
ranging between $.01 and $.02 per share.
There were approximately 1,631 holders of record of the Common Stock as of
February 28, 1999.
The Company has paid no cash dividends on its Common Stock in the past and
does not contemplate paying dividends in the foreseeable future. Future
declarations of dividends, if any, will be determined by the Board of Directors
in its discretion and will depend upon conditions then existing, including the
availability of funds, requirements for working capital expenditures and debt
retirement, general business condition and prospects, and other factors. The
General Corporation Law of the State of Delaware provides that dividends may be
declared and paid only out of surplus, as defined in such statute, or if there
is no such surplus, only out of net profits for the fiscal year in which the
dividend is paid and/or the preceding fiscal year. The Company has no surplus,
as defined in the statute, and has not had any net profits in either of its last
two fiscal years. Accordingly, any future dividends can only be declared and
paid out of current earnings, if any.
Item 6. Management's Discussion and Analysis or Plan of Operation.
General
-------
The Company has experienced severe working capital shortages during most of
the period since 1976, primarily because of its prolonged research and
development stage and its subsequent
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inability to obtain delivery of product from its manufacturers. The issuer had
been primarily a one product company, engaged in the development of the AES
Unit. Since the fall of 1981, the Company has had no active business operations
of any kind. All risks inherent in new and inexperienced enterprises are
inherent in the Company's business.
Plan of Operation
-----------------
As of February 28, 1999, the Company has no liquidity and no presently
available capital resources, such as credit lines, guarantees, etc. The
Company's previous sole officer and director and former majority shareholder has
made an oral undertaking to make loans to the Company in amounts sufficient to
enable it to satisfy its reporting requirements and other obligations incumbent
on it as a public company, and to commence, on a limited basis, the process of
investigating possible merger and acquisition candidates. The loans will be
interest free and are intended to be repaid at a future date, or when the
Company shall have received sufficient funds through any business acquisition.
The loans are intended to provide for the payment of filing fees, professional
fees, printing and copying fees and other miscellaneous fees. However, if these
loans are not made, or payment of presently outstanding obligations is demanded
by the creditor, the Company could be unable to file its required reports, which
could lead to the Secretary of State of Delaware dissolving the Company. If that
should occur, the Company would no longer be a viable corporation under Delaware
law and would be unable to function as a legal entity. Furthermore, should
management decide not to pursue possible acquisitions, management may abandon
all activities of the Company and the shares of the Company would become
worthless.
Based on current economic and regulatory conditions, Management believes
that it is possible, if not probable, for a company like the issuer, without
assets or liabilities, to negotiate a merger or acquisition with a viable
private company. The opportunity arises principally because of the high legal
and accounting fees and the length of time associated with the registration
process of becoming a reporting company. However, should any of these
conditions change, it is very possible that another company would have little or
no interest in merging with the Company.
Item 7. Financial Statements.
Index to Financial Statements
Page
Report of Independent Auditors........................................... 5
Balance Sheets - for the Years ended February 28, 1999 and 1998.......... 6
Statement of Operations and Accumulated Deficit.......................... 7
Statements of Cash Flows................................................. 8
Notes to Financial Statements............................................ 9-10
All other schedules are not submitted because they are not applicable or
not required or because the information is included in the financial statements
or notes thereto.
4
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REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
Medical Monitors, Inc.
We have audited the accompanying balance sheets of Medical Monitors, Inc. as of
February 28, 1999 and 1998, and the related statements of operations and
accumulated deficit, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Medical Monitors, Inc. as of
February 28, 1999 and 1998, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
/s/ HOLLANDER, LUMER & CO. LLP
------------------------------
Los Angeles, California HOLLANDER, LUMER & CO. LLP
December 29, 1999
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MEDICAL MONITORS, INC.
BALANCE SHEETS
FEBRUARY 28, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------ ------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Notes payable $ 485,448 $ 485,448
Accrued officer's salaries 283,464 283,464
------------ ------------
TOTAL CURRENT LIABILITIES 768,912 768,912
------------ ------------
SHAREHOLDERS' DEFICIENCY
Common stock-authorized 50,000,000 shares,
$.001 par value; issued and outstanding-
50,000,000 shares 50,000 50,000
Additional paid-in capital 1,141,299 1,141,299
Accumulated deficit (1,960,211) (1,960,211)
----------- -----------
TOTAL SHAREHOLDERS' DEFICIENCY (768,912) (768,912)
----------- -----------
$ - $ -
=========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
6
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MEDICAL MONITORS, INC.
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEARS ENDED FEBRUARY 28, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Sales $ - $ -
Cost of sales - -
----------- -----------
Gross profit - -
General and administrative expenses - -
----------- -----------
Income (loss) before income taxes - -
Income taxes - -
----------- -----------
Net income (loss) - -
Accumulated deficit, beginning of year (1,960,211) (1,960,211)
----------- -----------
Accumulated deficit, end of year $(1,960,211) $(1,960,211)
=========== ===========
Net income (loss) per share $ - $ -
=========== ===========
Weighted average number of common shares outstanding 50,000,000 50,000,000
=========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
7
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MEDICAL MONITORS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED FEBRUARY 28, 1999 AND 1998
1999 1998
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES $ - $ -
CASH FLOWS FROM INVESTING ACTIVITIES - -
CASH FLOWS FROM FINANCING ACTIVITIES - -
---------- ----------
NET INCREASE (DECREASE) IN CASH - -
CASH, BEGINNING OF YEAR - -
---------- ----------
CASH, END OF YEAR $ - $ -
========== ==========
See accompanying Notes to Financial Statements.
8
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MEDICAL MONITORS, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1999 AND 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business - Medical Monitors, Inc. (the "Company") was
-----------------------
incorporated in Delaware in February 1975. Initially, its purpose was to
develop and market blood pressure measuring devices. In April 1980, the
Company raised $884,000 from the initial public offering of its common
stock. Because the Company was unable to raise additional capital to
continue developing and marketing its product, in the fall of 1981, it
ceased its operations. In 1986, the Company ceased making the required
public filings under the Securities and Exchange Act of 1934, as amended.
The Board of Directors of the Company is currently investigating the
possibility of a new business direction and searching for viable
acquisition or merger candidates that would enable the Company to maximize
value to its shareholders.
Use of Estimates - The preparation of financial statements in conformity
----------------
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Income taxes - Income taxes are provided using the liability method.
------------
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax basis (i.e., temporary differences).
Earnings (Loss) Per Share - The Company adopted SFAS No. 128 "Earnings per
-------------------------
Share" during its fiscal year ended February 28, 1998. SFAS No. 128
requires the presentation of basic earnings per common share and diluted
earnings per common share. A basic earnings per common share is computed by
dividing income available to common shareholders by the weighted average
number of common shares outstanding. A diluted earnings per common share
includes the diluting effect of stock options and warrants using the
treasury stock method. The Company had no income from operations for the
fiscal years ended February 28, 1999 and 1998, and, as a result, there are
no earnings per share.
2. GOING CONCERN
The Company ceased its operations in the fall of 1981. The Company's
ability to continue as a going concern will be dependent upon obtaining a
viable business through merger or acquisition. There can be no assurance
that the Company will be able to find a business to acquire or merge with.
3. NOTES PAYABLE
Notes payable as of February 28, 1999 and 1998:
1999 1998
-------- --------
Non-interest bearing advances payable
to H. Shuster $ 84,865 $ 84,865
Non-interest bearing notes payable
to Loma Vista, Ltd. 379,833 379,833
Non-interest bearing notes payable
to European Diamond Trading Corporation 20,750 20,750
-------- --------
$485,448 $485,448
======== ========
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A portion of the notes payable to Loma Vista, Ltd. in the amount of
$304,000 is secured by all assets of the Company. Harry Shuster, the
former President of the Company, is the sole general partner of Loma Vista,
Ltd.
Harry Shuster is an officer and majority shareholder of European Diamond
Trading Corporation.
All of the above notes are in default.
4. ACCRUED OFFICER'S SALARIES
Accrued officer's salaries consisted of amounts due Harry Shuster under his
employment agreement, which expired in December 1981.
10
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Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Directors and Executive Officers
The following table sets forth certain information with respect to the
Company's directors and executive officers:
<TABLE>
<CAPTION>
Positions Currently Held
Name Age With the Company Director Since
---- ------- ------------------------------------------- -----------------
<S> <C> <C> <C>
Stanley Shuster 37 Director, President, Chief Executive 1998
Officer, Secretary, Chief Financial Officer
</TABLE>
Stanley Shuster has served as a director, Chief Executive Officer,
President, Secretary and Chief Financial Officer of Medical Monitors since
December 1998. Mr. Shuster has also served as a director, Chief Executive
Officer, President, Secretary and Chief Financial Officer of Grand Havana since
May 1999, and as Executive Vice President of Grand Havana since June 1995. From
March 1991 through February 1994, Mr. Shuster served as Vice President of Artist
and Repertoire for J.R.S. Records, an independent record company, with major
distribution through BMG.
Harry Shuster is a founder of the Company and was its Chairman of the
Board, President and a Director since its inception in February, 1975 through
December 1998. From 1967 until May, 1999, Mr. Shuster was an officer and
director of United Leisure Corporation, which develops and licenses proprietary
Internet technology and sites on the World Wide Web that incorporate that
technology. From 1993 to May, 1999, Mr. Shuster was also an officer and director
of Grand Havana Enterprises, Inc., a company engaged in the business of the
ownership and operation of private membership restaurants and cigar clubs. Mr.
Shuster resigned from his position with the Company on December 15, 1998.
The present term of each Director will expire at the time of the next
Annual Meeting of Stockholders of the Company. Executive officers are elected
each year at the Annual Meeting of the Board of Directors held immediately
following the Annual Meeting of Stockholders and hold office until the next
Annual Meeting of the Board of Directors or until their successors are duly
elected and qualified. The Company has held no Annual Meeting of Shareholders
since August 26, 1980.
There are no arrangements or understandings known to the Company between
any of the Directors or executive officers of the Company and any other person
pursuant to which any of such persons was or is to be selected as a Director or
an executive officer. There are no family relationships between any Director or
executive officer and any other Director or executive officer of the Company.
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The Board of Directors has held no formal meetings since 1983. The Company
has no standing audit, nominating or compensation committees of the Board of
Directors.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who own
more than 10 percent of a registered class of the Company's equity securities to
file with the Securities Exchange Commission, initial reports of ownership and
reports of changes in ownership of Common Stock. Officers, directors and greater
than 10 percent shareholders are required by the regulations of the Securities
and Exchange Commission to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, based solely on the fact that the Company has
not received copies of such reports or any representations regarding such
reports, the Company believes that its officers, directors and 10 percent
shareholders have not complied with all Section 16(a) filing requirements for
the fiscal year ended February 28, 1999.
The Company believes that Harry Shuster, the Company's former officer and
director, failed to file a Form 4 in connection with his gift of 17,604,199
shares of Common Stock to his son, Stanley Shuster, in December 1998. In
addition, the Company believes that Stanley Shuster, the Company's officer and
director, failed to file a Form 3 in connection with his receipt of 17,604,199
shares of Common Stock from his father Harry Shuster.
Item 10. Executive Compensation.
No officer or Director of the Company either received or had accrued on the
books of the Company any remuneration with respect to the fiscal1 year ended
February 28, 1999.
There was no health or life insurance provided to officers or Directors by
the Company which discriminates in favor of officers or Directors and which is
not available generally to all salaried employees of the Company. The Company
has no employee incentive, bonus or benefit plans, profit-sharing plans,
retirement plans, deferred compensation plans or similar arrangements. No fees
are paid Directors for attendance at meetings of the Board of Directors,
although out-of-pocket expenses incurred in connection therewith are reimbursed.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information with respect to (a) all
persons, or groups of persons, known by the Company to own beneficially more
than five percent of the Common Stock, its only outstanding class of voting
securities; (b) the beneficial ownership of the Common Stock by the Directors of
the Company, individually; and (c) ownership of the Common Stock by all
Directors and officers as a group, all at February 28, 1999.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature or
Beneficial Owner (a) Beneficial Ownership Percentage (b)
-------------------- -------------------- --------------
<S> <C> <C>
Stanley Shuster
1990 Westwood Blvd.
Los Angeles, California 90025 17,604,199 35.2%
All officers and Directors as
A Group (One person) 17,604,199 35.2%
</TABLE>
------------------
(a) Addresses are shown only for the beneficial owners of at least five-
percent of the Common Stock.
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(b) Percentages are determined on the basis of 50,000,000 shares of
outstanding Common Stock.
Item 12. Certain Relationships and Related Transactions.
The following table outlines certain information with respect to
obligations of the Company to Harry Shuster, the Company's former officer,
director and former principal shareholder and his affiliates as of February 28,
1999.
<TABLE>
<CAPTION>
Accrued
Purchase Loans for Total Due
of AES to the Services At End of
Obligee Rights Company Rendered year
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Loma Vista, Ltd. $75,833(1) $304,000 (1) $ - $379,833
European
Diamond Trading
Corporation (2) 20,750 20,750
Harry Shuster 84,865 283,464 (3) 368,329
------------------------------------------------------------------------
$75,833 $409,615 $283,464 $768,912
======= ======== ======== ========
</TABLE>
(1) This note is secured by a security interest in all of the assets of
the Company. These notes are presently in default, but payment has not been
demanded by Loma Vista, Ltd. See Note 3 of "Notes to Financial Statements."
(2) These demand notes are payable to European Diamond Trading
Corporation, a corporation controlled by Harry Shuster.
(3) Consists of amounts due to Harry Shuster under his employment
agreement which expired in December 1981. See Note 4 of "Notes to Financial
Statements."
(4) Effective December 15, 1998, Harry Shuster gifted his interest in the
salary owed to him under his employment agreement with the Company and in the
notes receivable held by Loma Vista, Ltd., and European Trading Corporation to
his son, Stanley Shuster.
All of the above notes are in default.
13
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Item 13. Exhibits and Reports on Form 8-K.
(a) Documents filed as a part of this report:
(1) Financial Statements of the issuer set forth under Item 8 are
filed as part of this report.
(2) The Financial Statement Schedules other than those listed above
have been omitted because they are either not required, not
applicable, or the information is otherwise included.
(b) Reports on Form 8-K:
None.
SIGNATURES
In accordance with Section 13 of 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: June 1, 2000 MEDICAL MONITORS, INC.
BY /s/ Stanley Shuster
---------------------------------------
Stanley Shuster, Chairman of the Board,
President and Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons, on behalf of the registrant and in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ Stanley Shuster Chairman of the Board, June 1, 2000
-------------------------- President and Chief Executive Officer,
Stanley Shuster Secretary, Chief Financial Officer
(Principal Financial Officer) and Director
</TABLE>
14
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EXHIBIT INDEX
(27) Financial Data Schedule (filed herewith)
15
