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 September 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 September 30, 1995, there were 7,368,559 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 $1.09 of these shares as
of September 30, 1995) held by non-affiliates was approximately $8,031,729.
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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 September 30, 1995, and the
related statements of operations for three and nine months and cash
flows for nine months ended September 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
November 10, 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
September 30 December 31
1995 1994
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $ 7,114 $ 483,611
Advances to consultants 5,764 -
Inventory 100,627 -
Prepaid expenses (net of amortization of
$413,281 and $305,469, respectively) 43,341 134,122
Total Current Assets 156,846 617,733
PROPERTY AND EQUIPMENT
Equipment & furniture 104,531 75,015
Equipment under capital lease 5,349 5,349
Accumulated depreciation & depletion (33,635) (16,563)
Total Property & Equipment 76,245 63,801
OTHER ASSETS:
Patent licensing costs 2,176,129 2,176,129
TOTAL ASSETS $ 2,409,220 $ 2,857,663
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 105,895 $ 105,045
Accrued expenses and taxes 65,388 89,644
Short term notes 90,000 50,000
Convertible debentures 275,000 -
Capital lease liability 1,728 1,587
Total Current Liabilities 538,011 246,276
OTHER LIABILITIES:
Long-term portion of note payable 59,913 59,913
Capital lease liability (net of current
portion) 1,952 3,400
Advances and other amounts due 286,996 286,996
Total Liabilities 886,872 596,585
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value (10,000,000
shares authorized, none outstanding)
Common stock, $.15 par value (100,000,000
shares authorized, 7,355,559 and
4,289,963 outstanding) 1,103,334 643,494
Stock subscribed (50,000 and 1,096,875
shares) 23,440 796,250
Additional paid-in capital 11,730,963 9,716,486
Accrued employee stock grant 285,469 66,406
Retained earnings (deficit) (11,620,858) (8,961,558)
Total Stockholders' Equity 1,522,348 2,261,078
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,409,220 $ 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 Nine Months Ended
September 30 September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
RESEARCH AND DEVELOPMENT COSTS $ (161,404) $ (244,641) $ (835,168) $ (481,624)
OPERATING EXPENSES:
Personnel costs 264,964 69,873 580,914 168,204
Amortization of stock grant 75,234 - 219,062 -
Director fees 25,063 - 87,470 117,253
Depreciation 6,677 2,215 17,072 6,551
Professional fees 72,367 219,314 279,344 256,309
Investment banker - 56,375 12,000 270,125
Office expense 21,820 5,885 38,119 22,916
Rent 6,700 3,187 25,557 22,790
Marketing & public relations 128,879 201,735 396,911 380,753
Travel 26,069 595 79,637 10,578
Taxes - - 1,347 -
Loss on disposal of assets - - - 5,804
Other expenses 52,421 14,279 85,343 25,631
Total operating expenses 680,194 573,458 1,822,776 1,286,914
INCOME/(LOSS) FROM CONTINUING
OPERATIONS (841,598) (573,458) (2,657,944) (1,286,914)
OTHER INCOME/(EXPENSES):
Interest expense (184) - (1,356) 1,008
Interest income - - - -
Gain/(loss) on sale of
marketable securities - - - (18,655)
INCOME/(LOSS) FROM CONTINUING
OPERATIONS (841,782) (818,099) (2,659,300) (1,786,185)
Loss on disposal of oil &
gas operations - - - (296,375)
NET INCOME/(LOSS) $ (841,782) $ (818,099) $(2,659,300) $(2,082,560)
WEIGHTED AVERAGE SHARES
OUTSTANDING 7,264,257 3,447,909 6,383,502 2,347,210
INCOME/(LOSS) FROM CONTINUING
OPERATIONS PER SHARE $ (.11) $ (.24) $ (.42) $ (.76)
INCOME/(LOSS) PER SHARE $ (.11) $ (.24) $ (.42) $ (.89)
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)
Issued for:
Professional services 175,927 26,390 152,720
Research & development 137,282 20,592 105,449
Director compensation 2,083 312 1,120
Officer compensation 300,000
Employee incentives 25,000
Accrued stock issuance 75,234
Net loss for quarter (688,782)
Balances, September
30, 1995 7,355,559 $1,103,334 50,000 $23,440 $11,566,169 1,776,250 $285,468 ($11,467,858)
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
Nine Months Ended September 30
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ (2,659,300) $ (2,082,560)
Adjustments to reconcile net income/(loss)
to net cash provided by operations:
Depreciation, depletion and amortization 236,134 346,395
(Gain)/loss on disposal of fixed assets - 5,804
Loss on disposal of marketable securities - 18,655
Loss on disposal of oil & gas operations - 282,324
Stock and warrants issued for services 1,497,404 984,478
(Increase)/decrease in:
Accounts receivable - (61,062)
Advances to consultants (5,764) -
Prepaid expenses - (7,551)
Inventory (65,637) -
Increase/(decrease) in:
Trade accounts and accrued payable 26,594 33
Advances and other (409) 122,688
NET CASH PROVIDED/(USED) BY
OPERATING ACTIVITIES (970,978) (390,796)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of office equipment (29,519) (7,104)
Patent licensing costs - (111,528)
Proceeds from sale of marketable
securities - 55,344
NET CASH PROVIDED/(USED) BY INVESTING
ACTIVITIES (29,519) (63,288)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock subscriptions 129,000 -
Proceeds from convertible debentures
and short term notes 365,000 -
Proceeds from issuing stock 30,000 484,262
NET CASH PROVIDED/(USED) BY FINANCING
ACTIVITIES 524,000 484,262
NET INCREASE/(DECREASE) IN CASH (476,497) 30,178
CASH AT BEGINNING OF PERIOD 483,611 10,010
CASH AT END OF PERIOD $ 7,114 $ 40,188
SUPPLEMENTAL DISCLOSURES:
Cash payments for:
Interest $ 1,356 $ -
Income taxes - -
Stock issued for:
Legal and professional services $ 151,260 $ 282,670
Marketing and public relations 369,298 171,650
Product development 711,356 412,905
Directors' fees 63,839 117,253
Marketing Rights - 426,333
Note payable 50,000 50,000
Contract payable 50,000 -
Prepaid expenses and inventory 50,638 -
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)
September 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 nine month
period ended September 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 SHARES
During the first quarter of 1995, the Company changed its name to
Medical Device Technologies, Inc.( from CytoProbe Corporation) in
order to more accurately represent in its name the business being
carried on.
At the Company's annual stockholders meeting in April 1995,
shareholders approved an amendment to the Articles of Incorporation
which authorized 10,000,000 shares of $.01 par value preferred stock.
No preferred shares have been issued as of September 30, 1995.
NOTE 3: AMORTIZATION
Stock Grant -- This is the accrual of $81,683 for this quarter
($225,511 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 $17,969 in amortization for
the quarter ($125,781 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 1,522,397 shares valued at
$1,317,002 for directors fees, research & development, legal, public
relations, note payments, contract liabilities, etc. as presented in
the statement of cash flows.
Warrants were issued during the first quarter as an employment
incentive to the vice-president of marketing and as partial
consideration for public relations services. During the third
quarter, warrants to purchase 300,000 shares of stock were issued to
the President of the Company as additional compensation. These
warrants have an exercise price of $.40 per share. Since this price
is below the market value of the underlying shares, additional
compensation of $153,000 has been included in Personnel costs.
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.
The Company has various warrants outstanding. These warrants are not
considered to be dilutive and have been excluded from the earnings
per share calculation.
NOTE 6: INVENTORY
During March 1995, the Company began preliminary accumulation of
parts and materials in preparation for production of the PAS device
components. This has been done in anticipation of clearing the FDA
review process. The inventory balance shown is the accumulated raw
materials costs at September 30, 1995.
NOTE 7: CONVERTIBLE DEBENTURES
During June and July 1995, the Company raised $275,000 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 at any time prior to repayment.
All of these note holders have notified the Company of their intent
to convert their notes.
NOTE 8: SUBSEQUENT EVENTS
During the third quarter, the Company received clearance from the FDA
for the manufacturing and sale of its PAS device. In October 1995,
the Company initiated a limited convertible preferred stock offering
in an effort to raise funding for the Company.
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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 September 30, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 7114
<SECURITIES> 0
<RECEIVABLES> 5764
<ALLOWANCES> 0
<INVENTORY> 100627
<CURRENT-ASSETS> 156846
<PP&E> 109880
<DEPRECIATION> (33635)
<TOTAL-ASSETS> 2409220
<CURRENT-LIABILITIES> 538011
<BONDS> 0
0
0
<COMMON> 1103334
<OTHER-SE> 419014
<TOTAL-LIABILITY-AND-EQUITY> 2409220
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2657944
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1356
<INCOME-PRETAX> (2659300)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2659300)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2659300)
<EPS-PRIMARY> (.42)
<EPS-DILUTED> (.42)
</TABLE>
