================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarter ended: August 31, 1999 Commission file number: 0-11411
Q-MED, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 22-2468665
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 METRO PARK SOUTH, LAURENCE HARBOR, NEW JERSEY 08878
------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (732) 566-2666
Indicate by check mark whether the registrant (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 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
--- ---
The number of shares outstanding of the registrant's common stock
on October 5, 1999: 12,238,781.
================================================================================
<PAGE>
Q-MED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
August 31, 1999 November 30, 1998
--------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 705,548 $ 2,075,179
Investments 539,120 --
Accounts receivable, net of
allowance of approximately
$492,000 and $500,000 respectively 218,807 304,465
Inventories 447,425 503,994
Prepaid expenses and other current assets 165,061 57,776
------------ ------------
2,075,961 2,941,414
Product software development costs 15,250 34,856
Property and equipment, net 471,414 578,404
Other assets 179,838 202,750
------------ ------------
$ 2,742,463 $ 3,757,424
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 695,072 $ 549,253
------------ ------------
695,072 549,253
Convertible long-term debt 50,000 950,000
Leases payable - long term 79,013 107,724
Deferred warranty revenue 26,003 31,448
------------ ------------
850,088 1,638,425
Temporary equity-put option 4,021,991
Stockholders' equity
Common stock $.001 par value;
20,000,000 shares authorized;
12,238,781 and 11,586,321 shares
issued and 12,216,781 and 11,564,321
shares outstanding 12,239 11,587
Paid-in capital 23,070,467 17,150,547
Accumulated deficit (21,101,638) (18,989,501)
Accumulated other comprehensive income
Unrealized holding loss/gain on
available-for-sale securities (13,068) --
------------ ------------
1,968,000 (1,827,367)
Less: treasury stock at cost, 22,000 common shares (75,625) (75,625)
------------ ------------
Total stockholders' equity 1,892,375 (1,902,992)
------------ ------------
$ 2,742,463 $ 3,757,424
============ ============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
<TABLE>
Q-MED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
<CAPTION>
For the Nine For the Nine For the Three For the Three
Months Ended Months Ended Months Ended Months Ended
August 31, 1999 August 31, 1998 August 31, 1999 August 31, 1998
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenue 1,552,366 1,443,299 540,513 474,291
Cost of revenue 814,639 828,036 300,510 253,867
----------- ----------- ----------- -----------
Gross profit 737,727 615,263 240,003 220,424
Selling, general and
administrative expenses 1,628,949 1,959,737 593,030 575,037
Provision for uncollectible
accounts -- 198,581 -- 79,381
Research and development
expenses 429,877 514,693 150,298 179,212
Debt conversion expense 737,135 -- 737,135 --
----------- ----------- ----------- -----------
Income (loss) from operations (2,058,234) (2,057,748) (1,240,460) (613,206)
Interest expense (112,563) (141,255) (26,515) (46,056)
Other income 58,660 51,310 5,237 11,018
----------- ----------- ----------- -----------
Net (loss) $(2,112,137) $(2,147,693) $(1,261,738) $ (648,244)
Other comprehensive income (loss)
Unrealized gains on securities
Unrealized holding gains (losses)
arising during period (13,068) -- $ (1,505) $ --
----------- ----------- ----------- -----------
Comprehensive (loss) $(2,125,205) $(2,147,693) $(1,263,243) $ (648,244)
=========== =========== =========== ===========
(Loss) per common
share $ (.18) $ (.22) $ (.11) $ (.07)
----------- ----------- ----------- -----------
Weighted average number of
shares of common stock
outstanding 11,605,548 9,655,493 11,636,988 9,659,519
=========== =========== =========== ===========
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Q-MED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Nine Months Ended August 31, 1999
(Unaudited)
<CAPTION>
Common Stock
Held in Treasury
Common Paid-in Accumulated -------------------
Stock Capital Deficit Shares Amount Total
------- ----------- ------------ ------ -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance--November 30, 1998 $11,587 $17,150,547 $(18,989,501) 22,000 $(75,625) $(1,902,992)
Exercise of stock options
and warrants 12 32,948 32,960
Issuance of shares in exchange
for services 6 19,869 19,875
Elimination of put option related
to convertible debt 4,021,991 4,021,991
Conversion of debt 539 899,461 900,000
Reinvestment of debt conversion
expense 737,135 737,135
Sale of common stock 95 208,516* 208,611
Net loss for the nine months
ended August 31, 1999 (2,125,205) (2,125,205)
------- ----------- ------------ ------ -------- -----------
Balance--August 31, 1999 $12,239 $23,070,467 $(21,114,706) 22,000 $(75,625) $(1,892,375)
======= =========== ============ ====== ======== ===========
* Net of fees of 41,389
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
Q-MED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
---------------------------------
August 31, 1999 August 31, 1998
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(2,125,205) $(2,147,693)
----------- -----------
Adjustments to reconcile net income
to cash (used in) operating activities:
Depreciation and amortization 194,453 208,347
Debt conversion expense 737,135 --
Changes in assets and liabilities:
Decrease in accounts receivable 85,658 12,686
Decrease in inventories 56,569 128,223
Increase (decrease) in accounts payable
and accrued liabilities 145,819 (68,763)
(Increase) in prepaid expenses and
other assets (107,285) (45,821)
Other, net (32,747) 24,304
----------- -----------
Total adjustments 1,079,602 258,976
----------- -----------
Net cash (used in) operating activities (1,045,603) (1,888,717)
=========== ===========
Cash flows from investing activities:
Purchase of securities (539,120) --
Capital expenditures, net (46,354) (174,060)
----------- -----------
Net cash provided by investing activities (585,474) (174,060)
=========== ===========
Cash flows from financing activities:
Net proceeds from issuance of 8%
Convertible Notes -- 1,955,805
Net proceeds from issuance of common
stock 261,446 15,225
----------- -----------
Net cash provided by financing activities 261,446 1,971,030
=========== ===========
Net (decrease) increase in cash and cash equivalents (1,369,631) (91,747)
Cash and cash equivalents at beginning of period 2,075,179 640,266
----------- -----------
Cash and cash equivalents at end of period $ 705,548 $ 548,519
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 13,955 $ 21,255
</TABLE>
Non-cash investing and financing activities:
In August 1999, the holders of $950,000 principal amount of the company's
16% Convertible Notes converted $900,000 principal into 538,922 shares of common
stock.
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Q-MED, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, these financial statements do not include
all of the information and footnotes required by generally accepted accounting
principles. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the nine month period ended August 31, 1999 are
not necessarily indicative of the results that may be expected for the year
ending November 30, 1999. These consolidated condensed financial statements
should be read in conjunction with the financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year ended
November 30, 1998.
Note 1 - Summary of Significant Accounting Policies
Earnings per Share
Effective for the Company's financial statements for the year ended November 30,
1998, the Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings per Share", (SFAS 128). SFAS 128 replaces the presentation of primary
earnings per share ("EPS") and fully diluted EPS with a presentation of basic
EPS and diluted EPS, respectively. Basic EPS excludes dilution and is computed
by dividing earnings available to common stockholders by the weighted-average
number of common shares outstanding during the period. Diluted EPS assumes
conversion of dilutive options and warrants, and the issuance of common stock
for all other potentially dilutive equivalent shares outstanding. All
potentially dilutive equivalent shares outstanding are antidilutive for all
periods. The adoption of SFAS 128 did not have a material effect on the
Company's reported EPS amounts.
Note 2- Results of Operations
In the opinion of management, the financial statements for the nine months ended
August 31, 1999 and August 31, 1998 include all adjustments and accruals
necessary for a fair presentation. All such adjustments are of a normal
recurring nature. The results of operations for the nine months ended August 31,
1999 are not necessarily indicative of the results which may be expected for the
full year ended November 30, 1999.
Note 3 - Inventories
Inventories, consisting of finished units and raw materials, are stated at the
lower of cost (determined on a moving weighted average method) or market.
Inventories consist of the following:
August 31, November 30,
1999 1998
---------------- ----------------
(Unaudited)
Raw materials (component parts) $ 205,266 $ 216,350
Finished units 242,159 287,644
---------------- ----------------
$ 447,425 $ 503,994
================ ================
<PAGE>
Note 4 - Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses include the following:
August 31, November 30,
1999 1998
---------- ----------
(Unaudited)
Accounts payable trade $ 181,169 $ 278,224
Deferred warranty revenue 119,652 156,813
Accrued payroll and commissions 141,671 78,539
Other accrued expenses 134,656 29,430
Interest Payable 117,924 6,247
---------- ----------
$ 695,072 $ 549,253
========== ==========
Note 5 - Principles of Consolidation
The consolidated financial statements include the accounts of qmed, Inc., its
83% owned subsidiary, Heart Map, Inc., and its 100% owned subsidiary,
Interactive Heart Management Corp., which was formed in March, 1995. Interactive
Heart Management Corp. provides coronary artery disease management services to
health care providers throughout the United States. All inter-company accounts
and transactions have been eliminated.
<PAGE>
PART I - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
The following table presents the percentage of total revenues for the periods
indicated and changes from period to period of certain items included in the
Company's Statements of Operations.
<TABLE>
<CAPTION>
Period to Period Percentage Changes
For the Nine Months For the Three Months ------------------------------------------
Ended August 31, Ended August 31, For the Nine Months For the Three Months
------------------- -------------------- Ended August 31, Ended August 31,
1999 1998 1999 1998 1999 Vs. 1998 1999 Vs. 1998
------ ------ ------- ------ ------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue 100.0% 100.0% 100.0% 100.0% 7.6 14.0
Cost of revenue 52.5 57.3 55.6 53.5 (1.6) 18.3
------ ------ ------ ------
Gross profit 47.5 42.7 44.4 46.5 19.9 8.9
Selling, general and administrative 104.9 135.8 109.7 121.3 (16.9) 3.1
Provision for uncollectible accounts -- 13.8 -- 16.8 * *
Research and development 27.7 35.7 27.8 37.8 (16.5) (16.1)
Debt conversion expense 47.5 -- 136.4 -- * *
------ ------ ------ ------
(Loss) from continuing operations (132.6) (142.6) (229.5) (129.4) -- 102.3
Interest expense (7.3) (9.8) (5.0) (9.7) (20.3) (42.4)
Other Income 3.8 3.6 1.0 2.4 14.3 (52.5)
------ ------ ------ ------
Net (loss) (136.1) (148.8) (233.5) (136.7) (1.7) 94.6
====== ====== ====== ======
</TABLE>
* Not meaningful
NINE AND THREE MONTHS ENDED AUGUST 31, 1999 COMPARED WITH THE NINE AND
THREE MONTHS ENDED AUGUST 31, 1998
Net sales for the nine months ended August 31, 1999 increased by 7.6% or
approximately $110,000 when compared to the nine months ended August 31, 1998.
Net sales for the three months ended August 31, 1999 increased by 14.0% or
approximately $66,000 when compared to the three months ended August 31, 1998.
This increase was primarily due to the addition of three health care providers
to our ohms|cad program during fiscal 1999. The Company's management has focused
primarily on the marketing of the ohms|cad system to managed care organizations
through its wholly owned subsidiary, Interactive Heart Management Corp.
("IHMC"). Revenue from the ohms|cad program increased by 20% for the nine months
ended August 31, 1999 when compared to the prior year and 24% for the three
months ended August 31, 1999 when compared to the three months ended August 31,
1998.
The Company has continued to aggressively market ohms|cad to leading health care
providers throughout the United States. The Company began its enrollment of
patients from CIGNA Healthcare of Massachusetts during August 1999 and has had
discussions with other large providers to use its ohms|cad system within their
organizations to effectively manage coronary artery disease. Included in the net
loss of ($2,125,205) for the nine months ended August 31, 1999 was approximately
($1,085,000) from IHMC and ($737,135) as a non cash charge from the conversion
of the 16% Convertible Notes due December 18, 2002.
The Company's gross profit margin increased to 47.5% during the nine months
ended August 31, 1999 when compared to 42.7% for the nine months ended August
31, 1998. The Company's gross profit margin decreased to 44.4% during the three
months ended August 31,1999 from 46.5% for the three months ended August 31,
1998. The nine month increase was primarily due to the additional revenue
related to the ohms|cad program from three additional contracts. The three-month
decrease was primarily due to the implementation costs related to one of these
contracts. Management believes the gross profit margin will remain consistent
for the remainder of the fiscal year.
<PAGE>
Selling, general and administrative expenses decreased by 16.9% or approximately
$331,000 for the nine months ended August 31, 1999 when compared to the nine
months ended August 31, 1998. Selling, general and administrative expenses for
the three months ended August 31, 1999 increased by 3.1% or approximately
$18,000 when compared to the corresponding quarter of 1998. The overall decrease
was primarily due to a reclassification of certain direct costs related to the
ohms|cad program as well as reductions in overall administrative and
sales-related expenses.
The provision for uncollectible accounts decreased by approximately $198,000 and
$79,000 respectively for the nine and three months ended August 31, 1999.
Research and development expenses for the nine months ended May 31, 1999
decreased by 16.5% and 16.1% or approximately $85,000 and $29,000, respectively
when compared to the corresponding periods of the prior year. This decrease is
primarily due to management's efforts at cost reductions while continuing to
develop new products and applications.
The Company reported a one-time debt conversion expense for the nine and three
month periods ended August 31, 1999 of $737,135. This non-cash charge resulted
from the conversion of $900,000 of debt held by the Galen Funds to equity at a
price of $1.67 per share rather than the conversion price of $3.6875 originally
set at the time the Note was issued. This conversion is discussed in more detail
under "Liquidity and Capital Resources". Without the debt conversion expense,
net losses for the nine and three month periods ended August 31, 1999 would have
been $1,388,070 and $526,108 compared to $2,147,693 and $648,244 reported in the
same periods of the prior year.
The Company has conducted a review of its computer systems and products to
identify the systems that could be affected by the "Year 2000" issue and is
developing an implementation plan to resolve the issue. Any of the Company's
programs that have time sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in a major system
failure or miscalculations. Certain of the Company's products will require a
software upgrade to resolve the problem. The Company has developed and has
implemented a Year 2000 upgrade for each of its products where warranted. All
related expenses to develop this upgrade have been charged to research and
development expense as incurred.
While the Company's ohms|cad system is fully compliant for the "Year 2000", the
Company relies on the information technology of its existing and prospective
customers for data utilized in proposing a contract and in measuring the amount
of costs saved through the implementation of ohms|cad. The Company cannot assess
the effect that Year 2000 programs implemented by these other companies will
have.
Liquidity and Capital Resources
To date, the Company's principle sources of working capital have been provided
by proceeds from public and private placements of securities, operations and the
sale of certain assets. Since the Company's inception, sales of securities and
assets have generated approximately $23,000,000 less applicable expenses.
On December 18, 1997, the Company sold 8% Convertible Notes (the "Notes") in the
principal amount of $2,000,000 in a private placement to three investors.
Interest on the Notes accrued monthly and was due on December 18, 2002. On
November 16, 1998, the Company sold an aggregate of 1,926,702 shares of its
common stock for $3,217,626 in a private placement to investors led by the same
three investors that purchased the Notes. The Company received gross cash
proceeds of $2,020,936 from the sale of the shares and the balance was paid by
converting $1,050,000 of $2,000,000 principal amount of the Notes and accrued
interest of $146,663 into shares of common stock. The remaining $950,000
principal amount of the Notes were amended to increase the interest rate to 16%
per annum, and to grant the Noteholders a security interest in substantially all
of the Company's assets.
<PAGE>
In connection with the sale of the shares, the Company granted certain rights to
the purchasers, including registration rights and the right to cause the Company
to purchase the shares at certain prices in certain events, such as bankruptcy,
a default in payments or if the Company is no longer listed on the NASDAQ Small
Cap Market.
On May 17, 1999 the agreement was amended to eliminate such redemption rights in
exchange for 290,000 common stock purchase warrants exercisable at $1.67 per
share and 200,000 warrants exercisable at $2.87 per share until November 15,
2005 to be distributed pro rata among such holders. The exercise price of all
the warrants issued and amended may be adjusted in certain circumstances to
protect holders against dilution. The elimination of these redemption rights
resulted in a significant increase to total stockholders' equity because such
rights were previously characterized as temporary equity.
On August 25, 1999, the holders of $950,000 principal amount of the Company's
16% Convertible Notes due December 18, 2002 (the "Notes") converted $900,000 of
the principal into 538,922 shares of common stock and 500,000 common stock
purchase warrants exercisable at $1.67 per share (subject to adjustment in the
manner described below) until November 15, 2002. In addition, Galen Partners
III, L.P., a Delaware limited partnership, Galen Partners International III,
L.P., a Delaware limited partnership, and Galen Employee Fund III, L.P., a
Delaware limited partnership (collectively the "Galen Funds") invested an
additional $250,000 in exchange for 95,238 shares of the Company's common stock
and 75,000 common stock purchase warrants exercisable at $1.67 per share until
November 15, 2002. The exercise price of all the warrants issued and amended may
be adjusted in certain circumstance to protect the holders against dilution. The
note purchase agreements between the Company and the funds represented by Galen
were further amended to limit the Company's ability to prepay the remaining
$50,000 principal and $118,407.34 due on the Notes and to reduce the conversion
price of the Notes to $2.87. In the event the closing price of the Company's
common stock equal or exceeds $8.61 for twenty consecutive days and the average
trading volume during the two weeks preceding the notice of redemption is equal
or greater than 100,000 shares per week then the Notes may be redeemed by the
Company at the following prices
Year Redemption Price
---- ----------------
1999 104%
2000 103%
2001 102%
2002 100%
The Notes continue to bear interest at the rate of 16% per annum on the
remaining principal (which is capitalized annually and due upon maturity) and
payment is secured by a lien on substantially all of the Company's assets.
The Company had working capital of $1,380,889 at August 31, 1999 compared to
$2,392,161 at November 30, 1998 and ratios of current assets to current
liabilities of 3.0:1 as of August 31, 1999 and 5.4:1 as of November 30, 1998.
The working capital decrease of approximately $1,010,000 was primarily due to
the accumulated losses during the nine months ending August 31, 1999 of
approximately ($1,388,000) reduced by the sale of common stock of approximately
$210,000.
The Company has anticipated that funds generated from operations, together with
cash and investments, should be sufficient to meet its working capital
requirements for the current year. See "Need for Additional Capital".
The Company maintains a general policy of net 30-day payment terms on equipment
sales to distributors, cash or third-party leasing arrangements with direct
sales to physicians and letters of credit for international sales. In some
instances, the Company has extended payment terms beyond net 30 to selected
distributors.
<PAGE>
The Company's receivables balances over 90 days past due was 14.8% of the
receivables balance at May 31, 1999 compared to 11.4% at November 30, 1998. The
Company is aggressively seeking payment arrangements on these overdue amounts.
The Company believes that there has not been a significant impact from inflation
on the Company's operations during the past three fiscal years.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
FUTURE OPERATING RESULTS Future operating results may be impacted by a
number of factors that could cause actual results to differ materially from
those stated herein, which reflect management's current expectations. These
factors include worldwide economic and political conditions, industry specific
factors, the Company's ability to maintain access to external financing sources
and its financial liquidity, the acceptance of the ohms|cad system by managed
care organizations, and the Company's ability to manage expense levels.
NEED FOR ADDITIONAL CAPITAL As of August 31, 1999, the Company had
approximately $1,245,000 of cash and short term investments. The Company has
experienced negative cash flows since fiscal 1995 and expects the negative cash
flow will decrease as a result of increased activities related to ohms|cad. The
Company's future success is highly dependent upon its continued access to
sources of financing which it believes are necessary for the continued support
of IHMC's sales effort. In the event the Company is unable to maintain access to
its existing financing sources, or obtain other sources of financing there would
be a material adverse effect on the Company's business, financial position and
results of operations.
REGULATION The Company's products are subject to extensive government
regulation in the United States by federal, state and local agencies including
the Food and Drug Administration. The process of obtaining and maintaining FDA
and other required regulatory approvals for the Company's products is lengthy,
expensive and uncertain. There can be no assurance that changes in existing
regulations or the adoption of new regulations will not occur which will
adversely affect the Company.
STOCK PRICE FLUCTUATIONS The Company's participation in a highly
competitive industry often results in significant volatility in the Company's
common stock price. This volatility in the stock price is significant risk
investors should consider.
FORWARD LOOKING STATEMENTS This report contains certain forward-looking
statements that are based on current expectations. In light of the important
factors that can materially affect results, including those set forth above and
elsewhere in this report, the inclusion of forward-looking information herein
should not be regarded as a representation by the Company or any other person
that the objectives or plans of the Company will be achieved. The Company may
encounter competitive, technological, financial and business challenges making
it more difficult than expected to continue to market its products and services;
competitive conditions within the industry may change adversely; the Company may
be unable to retain existing key management personnel; the Company's forecasts
may not accurately anticipate market demand; and there may be other material
adverse changes in the Company's operations or business. Certain important
factors affecting the forward looking statements made herein include, but are
not limited to (i) accurately forecasting capital expenditures and (ii)
obtaining new sources of external financing. Assumptions relating to budgeting,
marketing, product development and other management decisions are subjective in
many respects and thus susceptible to interpretations and periodic revisions
based on actual experience and business developments, the impact of which may
cause the Company to alter its capital expenditure or other budgets, which may
in turn affect the Company's financial position and results of operations.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
No change from previous filing.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports of Form 8-K
Form 8-K report dated August 25, 1999
<PAGE>
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, thereunto duly authorized.
Q-Med, Inc.
By:_______________________
Michael W. Cox
President
Principal Executive and
Financial Officer
Dated: October 5, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-END> AUG-31-1999
<CASH> 705,548
<SECURITIES> 539,120
<RECEIVABLES> 711,215
<ALLOWANCES> 492,408
<INVENTORY> 447,425
<CURRENT-ASSETS> 2,075,961
<PP&E> 2,845,548
<DEPRECIATION> 2,374,134
<TOTAL-ASSETS> 2,742,463
<CURRENT-LIABILITIES> 695,072
<BONDS> 0
<COMMON> 12,239
0
0
<OTHER-SE> 1,880,136
<TOTAL-LIABILITY-AND-EQUITY> 2,742,463
<SALES> 1,552,366
<TOTAL-REVENUES> 1,611,026
<CGS> 814,639
<TOTAL-COSTS> 2,795,961
<OTHER-EXPENSES> 13,068
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 112,563
<INCOME-PRETAX> (2,125,205)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,125,205)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,125,205)
<EPS-BASIC> (0.18)
<EPS-DILUTED> (0.18)
</TABLE>
