U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB - AMENDMENT
[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended June 30, 1995
OR
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to ____________.
Commission File Number - 0-12365
MEDICAL DEVICE TECHNOLOGIES, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Utah 58-1475517
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
9191 Towne Centre Drive, Suite 430 - San Diego, CA 92122
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (619) 455-7127
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 requirement
for the past 90 days. Yes [X] No [ ]
At June 30, 1995, there were 7,040,267 shares of the Company's common
stock issued and outstanding. The aggregrate market value of such shares
(based on an average of the bid and offered price of $1.39 of these shares
as of June 30, 1995) held by non-affiliates was approximately $9,785,971.
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REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Medical Device Technologies, Inc.
San Diego, California
We have reviewed the accompanying balance sheet of Medical Device
Technologies, Inc. and subsidiaries as of June 30, 1995, and the
related statements of operations for three and six months and cash
flows for six months ended June 30, 1995 and 1994. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical review procedures to financial data and making inquiries
of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December 31,
1994, and the related consolidated statements of operations, retained
earnings and cash flows for the year then ended (not presented
herein); and in our report dated February 17, 1995, we expressed an
unqualified opinion on those. In our opinion, the information set
forth in the accompanying condensed consolidated balance sheet as of
December 31, 1994 is fairly stated in all material respects in
relation to the consolidated balance sheet from which it has been
derived.
Robert Early & Company, P.C.
Abilene, Texas
August 7, 1995
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<TABLE>
BALANCE SHEET
The following table sets forth the balances sheets for the
periods indicated.
<CAPTION>
MEDICAL DEVICE TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
June 30 December 31
1995 1994
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $ 138,100 $ 483,611
Advances to consultants 6,691 -
Inventory 68,003 -
Prepaid expenses (net of amortization of
$413,281 and $305,469, respectively) 104,800 134,122
Total Current Assets 317,594 617,733
PROPERTY AND EQUIPMENT
Equipment & furniture 102,897 75,015
Equipment under capital lease 5,349 5,349
Accumulated depreciation & depletion (26,958) (16,563)
Total Property & Equipment 81,288 63,801
OTHER ASSETS:
Patent licensing costs 2,176,129 2,176,129
TOTAL ASSETS $ 2,575,011 $ 2,857,663
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable $ 91,525 $ 105,045
Accrued expenses and taxes 52,470 89,644
Short term notes - 50,000
Convertible debentures 262,500 -
Capital lease liability 1,728 1,587
Total Current Liabilities 408,223 246,276
OTHER LIABILITIES:
Long-term portion of note payable 59,913 59,913
Capital lease liability (net of current
portion) 2,361 3,400
Advances and other amounts due 286,996 286,996
Total Liabilities 757,493 596,585
STOCKHOLDER'S EQUITY:
Common stock, $.15 par value (100,000,000
shares authorized, 7,040,267 and
4,289,963 outstanding) 1,056,040 643,495
Stock subscribed (50,000 and 1,096,875
shares) 23,440 796,250
Additional paid-in capital 11,306,880 9,716,486
Deferred stock compensation 210,234 66,406
Retained earnings/(deficit) (10,779,076) (8,961,558)
Total Stockholder's Equity 1,817,518 2,261,078
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 2,575,011 $ 2,857,663
See accountant's report and notes to financial statements.
</TABLE>
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<TABLE>
RESULTS OF OPERATIONS
The following table sets forth the results of operations for the periods
indicated.
<CAPTION>
MEDICAL DEVICE TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
RESEARCH AND DEVELOPMENT COSTS $ (503,107) $ (174,484) $ (673,764) $ (236,983)
OPERATING EXPENSES:
Personnel costs 165,970 64,261 332,847 98,331
Amortization of stock grant 61,953 - 143,828 -
Director fees 44,126 117,253 62,407 117,253
Depreciation 5,330 2,094 10,395 4,336
Professional fees 111,411 35,054 160,316 36,995
Investment banker - 59,375 12,000 213,750
Office expenses 8,866 2,360 16,299 10,640
Rent 10,888 17,603 18,857 19,603
Public relations 227,659 109,197 314,693 179,018
Travel 26,806 7,218 53,568 9,983
Taxes 1,347 - 1,347 -
Loss on disposal of assets - 5,804 - 5,804
Other expenses 10,904 15,929 16,025 17,743
Total operating expenses 675,260 436,148 1,142,582 713,456
INCOME/(LOSS) FROM CONTINUING
OPERATIONS (1,178,367) (436,148) (1,816,346) (950,439)
OTHER INCOME/(EXPENSES):
Interest expense (569) 1,867 (1,172) 1,008
Interest income - - - -
Gain/(loss) on sale of
marketable securities - - - (18,655)
INCOME/(LOSS) FROM CONTINUING
OPERATIONS (1,178,936) (608,765) (1,817,518) (968,086)
Loss on disposal of oil &
gas operations - - - (296,375)
NET INCOME/(LOSS) $ (1,178,936) $ (608,765) $(1,817,518) $(1,264,461)
WEIGHTED AVERAGE SHARES
OUTSTANDING 6,245,650 2,225,242 5,902,917 1,787,739
INCOME/(LOSS) FROM CONTINUING
OPERATIONS PER SHARE $ (.19) $ (.27) $ (.31) $ (.54)
INCOME/(LOSS) PER SHARE $ (.19) $ (.27) $ (.31) $ (.71)
See accountant's report and notes to financial statements.
</TABLE>
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<TABLE>
CHANGES IN STOCKHOLDERS' EQUITY
The following table sets forth the changes in the Stockholders'
Equity for the period(s) indicated.
<CAPTION>
MEDICAL DEVICE TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Additional Deferred Retained
Common Stock Stock Subscribed Paid in Compen- Earnings
Shares Amount Shares Amount Capital Warrants sation (Deficit)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCES, 12/31/94 4,289,963 $643,495 1,096,875 $796,250 $9,716,486 820,000 $ 66,406 $ (8,961,558)
Issued for:
Cash 156,250 119,459 81,250
Professional services 92,500 12,202 55,001
Research & development 118,500 17,775 74,475
Director compensation 11,350 3,375 14,906
Employment incentive 75,000 81,875
Net loss for quarter (638,582)
Balances, March 31, 1995 4,512,313 676,847 1,253,125 915,709 9,860,868 976,250 148,281 (9,600,140)
Issued for:
Cash 86,000 12,900 93,750 75,000 17,100 37,500
Subscriptions 1,482,175 222,326 (1,296,875) (967,269) 726,443
Professional services 282,500 42,375 266,871
Research & development 631,279 94,692 398,373
Director compensation 46,000 6,900 37,226
With notes payable 137,500
Public relations 300,000
Accrued stock issuance 61,953
Net loss for quarter (1,178,936)
Balances, June 30, 1995 7,040,267 $1,056,040 50,000 $23,440 $11,306,880 1,451,250 $210,234 $(10,779,076)
See accountant's report and notes to financial statements.
</TABLE>
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<TABLE>
STATEMENT OF CASH FLOWS
The following table sets forth the cash flows for the periods indicated.
<CAPTION>
MEDICAL DEVICE TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(1,817,518) $ (1,264,461)
Adjustments to reconcile net income/(loss)
to net cash provided by operations:
Depreciation, depletion and amortization 262,035 230,898
(Gain)/loss on disposal of fixed assets - 5,804
Loss on disposal of marketable securities - 18,655
Loss on disposal of oil & gas operations - 296,374
Stock issued for services 972,640 502,703
(Increase)/decrease in:
Accounts receivable - (45,135)
Advances to consultants (6,691) -
Prepaid expenses - (3,336)
Inventory (68,003) -
Increase/(decrease) in:
Trade accounts and accrued expenses
payable (50,694) (31,921)
Advances and other (898) 41,217
NET CASH PROVIDED BY/(USED BY)
OPERATING ACTIVITIES (709,129) (249,202)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of office equipment (27,882) (6,355)
Patent licensing costs - (34,403)
Proceeds from sale of marketable securities - 55,344
NET CASH PROVIDED BY/(USED BY) INVESTING
ACTIVITIES (27,882) 14,586
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock subscriptions 129,000 -
Proceeds from convertible debentures 262,500 -
Proceeds from issuing stock - 281,604
NET CASH PROVIDED BY/(USED BY)
FINANCING ACTIVITIES 391,500 281,604
NET INCREASE/(DECREASE) IN CASH (345,511) 46,988
CASH AT BEGINNING OF PERIOD 483,611 10,010
CASH AT END OF PERIOD $ 138,100 $ 56,998
SUPPLEMENTAL DISCLOSURES:
Cash payments for:
Interest $ 1,172 $ -
Income taxes - -
Stock issued for:
Legal and professional services $ 78,281 $ 7,500
Public relations and marketing services 195,144 65,300
Product development 638,340 192,650
Directors' fees 62,407 117,253
Marketing Rights - 233,333
Note payable 50,000 50,000
Contract payable 50,000 -
Prepaid expenses 78,490 -
See accountant's report and notes to financial statements.
</TABLE>
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MEDICAL DEVICE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1995
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with the generally accepted accounting principles for interim
financial information and with instructions to Form 10-01 of Regulation S-X.
They do not include all information and footnotes required by
generally accepted accounting principles for complete financial
statements. However, except as disclosed herein, there has been no
material change in the information included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1994. In the opinion of
Management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. The
report of Robert Early & Company, P.C. commenting on their review
accompanies the condensed financial statements included in Item 1 of Part
1. Operating results for the six month period ended June 30, 1995, are
not necessarily indicative of the results that may be expected for the
year ending December 31, 1995.
NOTE 2: NAME CHANGE AND CHANGE IN AUTHORIZED STOCK
During the first quarter of 1995, the Company changed its name from
CytoProbe Corporation to Medical Device Technologies, Inc. in order to
more accurately represent in its name the business being carried on.
During the second quarter of 1995, the Company amended its Articles of
Incorporation to authorize 10,000,000 shares of $.01 par preferred stock.
No preferred shares had been issued at June 30, 1995.
NOTE 3: AMORTIZATION
Stock Grant -- This is the accrual of $61,953 for this quarter ($143,828
for the year) as the value of stock compensation which is to be delivered
upon the completion of two years of service with the Company which should
occur during 1996.
Public Relations -- This amount includes $53,906 in amortization for the
quarter ($107,812 for the year) of prepaid marketing acquired in previous
years through the issuance of stock.
NOTE 4: STOCK ISSUANCE AND WARRANTS
In each of the most current three years, the Company's board of directors
has approved a stock compensation plan whereby services are obtained in
exchange for issuance of free trading stock of the Company. During 1995,
the Company issued 1,182,129 shares valued at $1,076,130 for directors
fees, research & development, legal, public relations, note payments and
contract liabilities, as presented in the statement of cash flows.
A portion of these shares issued for services were for services to be
rendered during July and August, 1995. The value of these shares,
$78,490, has been recorded as prepaid expenses at June 30, 1995.
Warrants were issued during the first quarter as an employment incentive
to the vice-president of marketing and warrants were issued as partial
consideration for public relations services. These warrants are in
addition to the warrants issued as part of the stock subscriptions
discussed at Note 5 and Note 7.
NOTE 5: STOCK SUBSCRIBED AND EARNINGS PER SHARE
During the fourth quarter of 1994, the Company initiated a private stock
placement offering based on units consisting of stock and warrants.
Certificates and warrants were to be issued upon closing the offering.
During the second quarter of 1995, the Company issued 1,482,175 shares
pursuant to the placement offering.
Subscriptions for 93,750 shares and related warrants were received during
the second quarter and included in the issuance described above.
Outstanding warrants have not been included in the earnings per share
calculation because they were not considered to be dilutive.
NOTE 6: INVENTORY
During March 1995, the Company began accumulating parts and materials to
be used in production of PAS device components in anticipation of clearing
the FDA review process. The inventory balance shown is the accumulated
costs of these raw materials at June 30, 1995.
NOTE 7: CONVERTIBLE DEBENTURES
During June 1995, the Company raised $262,500 from the issuance of
convertible debentures. These promises to pay also included warrants
entitling the holder to purchase stock from the Company at $.60 per share
during the next six months. The notes mature in six months and earn
interest at 4% per month. At the option of the holders, the notes can be
converted into 2.5 shares of stock for each $1 of note principal converted
at any time prior to repayment.
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In accordance with Section 13 or 15(d) fo the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
MEDICAL DEVICE TECHNOLOGIES, INC.
Dated: May 30, 1996 By: /s/ Edward C. Hall
--------------------------------
Edward C. Hall
Chief Financial Officer and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Medical Device Technologies, Inc. for the period
ended March 31, 1995, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000723906
<NAME> MEDICAL DEVICE TECHNOLOGIES, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 138100
<SECURITIES> 0
<RECEIVABLES> 6691
<ALLOWANCES> 00000
<INVENTORY> 68003
<CURRENT-ASSETS> 317594
<PP&E> 108246
<DEPRECIATION> (26958)
<TOTAL-ASSETS> 2575011
<CURRENT-LIABILITIES> 408223
<BONDS> 0
0
0
<COMMON> 1056040
<OTHER-SE> 761478
<TOTAL-LIABILITY-AND-EQUITY> 2575011
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1816346
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1172
<INCOME-PRETAX> (1817518)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1817518)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1817518)
<EPS-PRIMARY> (.31)
<EPS-DILUTED> (.31)
</TABLE>
