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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (Fee Required)
For the quarterly period ended September 30, 1996
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (No Fee Required)
For the transition period from ___________ to __________
Commission file number 0-15179
NEUROTECH CORPORATION
---------------------------------------------
(Name of small business issuer in its charter)
Delaware 06-1100063
- -------------------------------------- ----------------------------------
(State of incorporation or organization) (I.R.S. Employer Identification No.)
45 Orchard Street, Manhasset, New York 11030
- -------------------------------------- ----------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (516)869-9663
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 of 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 requirements for the past 90 days.
Yes (X) No ( )
24,155,748 shares of issuer's common stock, $.01 par value, were
outstanding at June 30, 1996.
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<PAGE>
NEUROTECH CORPORATION AND SUBSIDIARIES
INDEX
SEPTEMBER 30, 1996
Page
----
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. FINANCIAL STATEMENTS
Consolidated balance sheet ................................... 3 & 4
September 30, 1996
Consolidated statements of income ............................ 5
Three months ended
September 30, 1996 and 1995
Consolidated statements of cash flows ........................ 6
Three months ended
September 30, 1996 and 1995
Notes to consolidated financial statements ................... 7
September 30, 1996
Item 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION & RESULTS OF OPERATION ................... 8
PART II - OTHER INFORMATION .......................................... 9
- ---------------------------
SIGNATURES ........................................................... 10
<PAGE>
NEUROTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
September 30 June 30
1996 1996
---------- ----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 214,701 $ 277,339
Patient accounts receivable, net 1,250,060 1,124,059
Estimated third-party payer settlements 19,477
Inventory and supplies 329,925 357,848
Other current assets 61,970 21,125
---------- ----------
Total current assets 1,856,656 1,799,848
PROPERTY AND EQUIPMENT 2,111,699 2,150,004
OTHER ASSETS 70,462 17,430
---------- ----------
TOTAL ASSETS $4,038,817 $3,967,282
========== ==========
The accompanying notes to the consolidated financial statements are an integral
part of these statements and should also be read in conjunction with those notes
which accompanied the Company's annual report.
<PAGE>
September 30 June 30
1996 1996
----------- -----------
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes payable $ 698,520 $ 514,692
Current maturities of long-term debt 1,794,170 1,843,606
Current maturities of capital lease
obligations 30,815 32,219
Accounts payable 549,384 489,712
Accounts payable - related party 83,211 80,711
Accrued expenses 651,383 584,599
----------- -----------
Total current liabilities 3,807,483 3,545,539
LONG-TERM DEBT 533,138 553,435
CAPITAL LEASE OBLIGATION 39,529 45,307
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $0.01 per share;
40,000,000 shares authorized;
24,155,748 shares outstanding 241,558 241,558
Additional paid-in capital 4,136,256 4,136,256
Retained (deficit) (4,569,147) (4,404,813)
----------- -----------
(191,333) (26,999)
Less 100,000 shares of treasury stock
at cost (150,000) (150,000)
----------- -----------
Total stockholders' equity (deficit) (341,333) (176,999)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 4,038,817 $ 3,967,282
=========== ===========
The accompanying notes to the consolidated financial statements are an integral
part of these statements and should also be read in conjunction with those notes
which accompanied the company's annual report.
<PAGE>
NEUROTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30
1996 1995
----------- -----------
NET PATIENT SERVICE REVENUES $ 1,863,559 $ -0-
EXPENSES
Salaries and benefits 1,140,881
Medical supplies and drugs 252,010
Administrative 273,501 82,000
Equipment rental 32,176
Contract services 61,168
Provision for bad debts 116,326
Depreciation and amortization 51,411
----------- -----------
Total expenses 1,927,473 82,000
----------- -----------
Operating income (loss) (63,914) (82,000)
OTHER INCOME (EXPENSE)
Miscellaneous income 8,908
Interest expense 95,138
----------- -----------
Loss from continuing operations (150,144) (82,000)
Loss from discontinued operations (14,190) (24,787)
----------- -----------
Net loss $ (164,334) $ (106,787)
=========== ===========
Loss per share from
continuing operation $ (.01) $ (.01)
Loss per share from
discontinued operations -0- -0-
----------- -----------
Net loss per share $ (.01) $ (.01)
----------- -----------
Weighted average number of common
shares outstanding 24,155,748 19,608,748
The accompanying notes to the consolidated financial statements are an integral
part of these statements and should also be read in conjunction with those notes
which accompanied the Company's annual report.
<PAGE>
NEUROTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
September 30
----------------------------
1996 1995
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) ($164,334) ($106,787)
Adjustments to reconcile net income
(loss) to net cash used in
operating activities:
Depreciation and amortization 51,411
Provision for bad debts 116,326
Increase in accounts receivable (222,850)
Increase (decrease) in inventory
and other current assets (12,922) 43,908
Increase in accounts payable
and accrued expenses 128,956
Increase in other assets (53,032)
Discontinued operations 62,879
-------- --------
Net cash used in operating activities (156,445) -0-
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Book value of equipment sold 3,684
Purchase of property and equipment (16,790)
-------- --------
Net cash used in investing activities (13,106)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds notes payable 118,677
Payments on note payable and capital
lease obligations (11,764)
-------- --------
Net cash provided by financing
activities 106,913
-------- --------
Net (decrease) in cash and cash
equivalents (62,638)
Cash and cash equivalents, beginning
of period 277,339
-------- --------
Cash and cash equivalents, end of period $214,701 -0-
======== =========
The accompanying notes to the consolidated financial statements are an integral
part of these statements and should also be read in conjunction with those notes
which accompanied the Company's annual report.
<PAGE>
NEUROTECH CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the instruction to Form 10-QSB and article 10 of
Regulation S-X. Accordingly, they do not include all information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments considered necessary
for a fair presentation have been included. Operating results for the three
month period ended September 30, 1996 are not necessarily indicative of results
that may be expected for the year ending June 30, 1997. For further information,
refer to the consolidated financial statements and footnotes, thereto included
in the Company's annual report on Form 10-KSB for the year ended June 30, 1996.
In August 1996, the Company determined to discontinue its previous core
business, manufacturing intracranial pressure monitoring systems, custom delay
lines and visual systems. The operations of these previous core businesses are
reported as discontinued operations.
<PAGE>
NEUROTECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
In August 1996 the Company abandoned its previous core businesses,
manufacturing intracranial pressure monitoring systems, custom delay lines and
visual systems and distribution of non-ozone depleting refrigerant products, as
the Company believed they were no longer viable business pursuits. The Company
through its subsidiary, Global Health Enterprises, Inc, operates an acute care
hospital, Lakes Regional Medical Center, and it's affiliated home health care
agency in Jasper, Texas. The Company has chosen to concentrate its future
efforts to expanding its medical related businesses.
The Company reported a net loss of $164,334 for the three months ended
September 30, 1996 as compared to a net loss of $106,787 for the three months
ended September 30, 1995.
In comparing the results of operations for the two periods, losses from
discontinued operations for the three months ended September 30, 1996 and 1995
were $14,190 and $24,787 respectively. The consolidated operating results of
Global for the three months ended September 30, 1996 was a net loss of $110,055.
The remaining net loss from operations of $40,089 was made up of Company general
and administrative expenses.
Global, in connection with the acquisition of Lakes acquired over
$2,700,000 in debt service; $1,685,000 of this debt service is owed to the Bank
of America. The credit extension from the Bank of America has numerous negative
covenants, of which Global is currently in default of several of the covenants.
Bank of America has not called the loan, as the Company is attempting to
restructure this debt.
The Company does not have the capital resources and liquidity necessary to
meet all of the obligations, debt repayments, and commitments of the Company
during the next twelve months. The Company's viability is dependent on its
ability to enter new markets in the medical field and to restructure its debt.
<PAGE>
NEUROTECH CORPORATION AND SUBSIDIARIES
OTHER INFORMATION
ITEM 1 Legal Proceedings
No new legal proceedings or material development has occurred in this
quarter. For further information regarding pending legal proceedings, refer to
the Company's annual report on Form 10-KSB for the year ended June 30, 1996
ITEM 2-5 Inapplicable
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
<PAGE>
NEUROTECH CORPORATION AND SUBSIDIARIES
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undesigned, thereunto duly
authorized.
NEUROTECH CORPORATION
BY: /s/ BERNARD ARTZ
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CHAIRMAN OF THE BOARD
Date: June 5, 1997
