U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(mark one)
__X___Quarterly report under Section 13 or 15 of the Securities
Exchange Act of 1934.
For the quarterly period ended December 30, 1999.
______Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the transition period from ______ to ______
Commission file number 0-16341
Advanced Medical Products, Inc.
(Exact name of small business issuer as specified in its charter)
6 Woodcross Drive, Columbia, South Carolina 29212
(Address of principal executive offices) (Zip code)
(803) 407-3044
(Issuer's telephone number, including area code)
(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 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
requirements for the past 90 days.
YES __X___ NO ______
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
5,962,495 at January 10, 2000. .
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
Advanced Medical Products Inc.
Balance Sheet
Dec. 31, 1999 June 30, 1999
(unaudited)
CURRENT ASSETS:
Cash $ 1,155 $ 64,073
Total Current Assets 1,155 64,073
Total Assets 1,155 64,073
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities: -0- -0-
Total Current Liabilities -0- -0-
Liabilities Subject to Compromise 24,030 86,948
Total Liabilities 24,030 86,948
Stockholders' Equity:
Common Stock, $0.01 par value; authorized 7,000,000
shares, 5,962,495 shares issued and outstanding at
September 30, 1999 and at June 30, 1999.
59,625 59,625
Additional Paid-In Capital 4,813,468 4,813,468
Accumulated Deficit (4,895,968) (4,895,968)
Total Stockholders' Equity (Deficit) (22,875) (22,875)
Total Liabilities and
Stockholders Equity $ 1,155 $ 64,023
The accompanying notes are an integral part of these financial statements.
Advanced Medical Products Inc.
Statement of Operations and Accumulated Deficit
Three Months Ended
Dec. 31, 1999 Dec. 31, 1998
(unaudited) (unaudited)
Net Sales $ -0- $ 694,448
Cost of Sales -0- 423,171
Gross Profit -0- 271,277
Selling, General and Administrative -0- 410,123
Allowance for Doubtful Accounts -0- 160,686
Research and Development -0- 43,892
Interest Expenses -0- 29,749
Income Before Income Taxes -0- (373,173)
Provision For Income Taxes -0- -0-
Net Income -0- (373,173)
Accumulated Deficit - Beginning of Period $(4,895,968) (5,293,812)
Accumulated Deficit - End of Period $(4,895,968) $(5,666,985)
Net Income (Loss) Applicable to
Common Shares $ -0- $( 373,173)
Earnings Per Share Data: (Note 8)
Net Income (Loss) $ -0- $( 0.06)
Weighted Average Number of Common
Shares Outstanding 5,962,495 5,962,495
The accompanying notes are an integral part of these financial statements.
Advanced Medical Products Inc.
Statement of Operations and Accumulated Deficit
Six Months Ended
Dec. 31, 1999 Dec. 31, 1998
(unaudited) (unaudited)
Net Sales $ -0- $ 1,369,730
Cost of Sales -0- 782,541
Gross Profit -0- 587,189
Selling, General and Administrative -0- 734,494
Allowance for Doubtful Accounts -0- 166,636
Research and Development -0- 84,181
Interest Expenses -0- 50,613
Income Before Income Taxes -0- (448,735)
Provision For Income Taxes -0- -0-
Net Income -0- (448,735)
Accumulated Deficit -
Beginning of Period $ (4,895,968) $ (5,218,251)
Accumulated Deficit - End of Period $ (4,895,968) $ (5,666,986)
Net Income (Loss) Applicable to
Common Shares $ -0- $ (448,735)
Earnings Per Share Data:
Net Income (Loss) (Note 8) $ -0- $ (0.08)
Weighted Average Number of Common
Shares Outstanding 5,962,495 5,962,495
The accompanying notes are an integral part of these financial statements.
Advanced Medical Products Inc.
Statement of Cash Flows
Six Months Ended
Dec. 31, 1999 Dec. 31, 1998
(unaudited) (unaudited)
Cash flows from operating activities:
Net income (loss) $ -0- $ ( 448,735)
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization -0- 76,313
Allowance for doubtful accounts -0- 166,686
Change in assets and liabilities:
Accounts receivable -0- (280,968)
Inventory -0- ( 373)
Other assets -0- 20,371
Accounts payable (62,918) 169,342
Other current liabilities -0- 54,938
Total adjustments (62,918) 206,309
Net cash provided (used) by
operating activities 62,918 (242,426)
Cash flows used by investing activities:
Capital expenditures -0- -0-
Proceeds from sale of equipment -0- -0-
Capitalization of software costs -0- ( 9,044)
Net cash used by investing activities -0- ( 9,044)
Cash flows provided (used) by financing activities:
Net proceeds from sale of common stock -0- -0-
Net proceeds (payments) on short term debt -0- 258,140
Payments on long-term debt -0- ( 19,940)
Net cash provided (used) by financing activities -0- 238,200
Net increase (decrease) in cash (62,918) ( 13,270)
Cash, beginning of period 64,073 82,087
Cash, end of period $ 1,155 $ 68,817
Supplemental disclosures of cash flow information:
Cash paid during the period for interest: $ -0- $ 36,040
Supplemental schedule of non-cash investing
and financing activities: (Note 7)
Sale of inventory -0- $ 125,132
Elimination of accrued dividends -0- $ (162,981)
Additional paid in capital -0- $ 2,327,259
Reduction of Preferred Stock -0- $(2,289,710)
The accompanying notes are an integral part of these financial statements.
Advanced Medical Products Inc.
Notes to Financial Statements
1. Basis of Presentation
The accompanying unaudited condensed financial statements have
been prepared in accordance with generally accepted accounting
principals for interim financial information and with the
instructions to Form 10-QSB and Article 10-01 of Regulation S-X.
Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting
principals for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
2. Per Share Earnings
Earnings per common share were computed by dividing net income
by the weighted average number of common shares outstanding
during the period. Earnings per share did not include the
impact of outstanding options since it was not significant.
3. Bankruptcy
On March 23, 1999, after reporting that, for the quarter ended
December 31, 1998 the Company had net losses of $373,173 of
which $130,000 was as a result of the distributor in Europe,
Kontron Instruments Ltd. filing for Administrative
Receivership, Advanced Medical Products, Inc. filed a motion
with the Federal Bankruptcy Court, District of South Carolina,
for an order authorizing the sale of all assets, including
equipment, inventory, and accounts receivable, outside the
ordinary course of business, free and clear of all liens and
encumbrances, pursuant to 11 U.S.C. Section 363 of the bankruptcy code.
Advanced Medical Products, Inc. continued to operate as debtor
in possession, pending sale of the assets. Emergent Asset
Based Lending, L.L.C., Advanced Medical's principle secured
lender whose loan agreement had been in default since December
1998, agreed to continue to lend against receivables and
inventory only if Biosensor Corporation would guarantee the
debt. As of March 22, 1999, $ 253,446 was borrowed by
Advanced Medical under this agreement. As of September 30,
1999 Advanced Medial had no obligation to Emergent under this
agreement, as the loan was assumed by Biosensor on May 11, 1999.
On May 3, 1999, the United State Bankruptcy Court for the
District of South Carolina entered an order approving the
Disclosure Statement filed on March 23, 1999, fixing June 11,
1999 as the last day for filing ballots accepting or rejecting
the Plan of Reorganization, and setting June 21, 1999 as the
date of the hearing on the confirmation of the Plan. On May
11, 1999, pursuant to a court order entered on May 10, 1999 in
the Federal Bankruptcy Court for the District of South
Carolina, Advanced Medical Products, Inc. sold all assets,
including equipment, inventory, and accounts receivable,
outside the ordinary course of business, free and clear of all
liens and encumbrances and other interests, pursuant to 11
U.S.C. Section 363 of the bankruptcy code. Biosensor
Corporation, the Company's majority shareholder, purchased the
assets and assumed all of the secured debt, employee and
commission liabilities, and all customer warranty and service
liabilities of Advanced Medical Products, Inc. In addition,
Biosensor made a payment of $68,000 for certain priority
claims and administrative expenses, and for distribution to
outside unsecured creditors. Biosensor and its subsidiaries
agreed not to participate in distribution of payments toward
unsecured claims, although their claims exceeded unsecured
claims by all non-affiliated creditors combined. The assets
and liabilities of Advanced Medical purchased by Biosensor
were consolidated with the operating assets and liabilities of
Biosensor, and the assets and liabilities of Diagnostic
Monitoring, purchased by Biosensor from Cardiac Science Inc.
on December 31, 1998, into Advanced Biosensor, Inc., a new
wholly owned subsidiary of Biosensor, which also agreed to
assume Advanced Medical's lease obligations and to continue to
operate the business at the present Columbia, SC location.
At a hearing held on June 21, 1999 the Plan of Reorganization,
as amended, was confirmed. The Plan had previously been
approved by all classes of creditors. On June 29, 1999 the
United State Bankruptcy Court for the District of South
Carolina entered an order confirming the Plan of Reorganization.
The Chapter 11 bankruptcy estate of Advanced Medical Products,
Inc. has been fully administered. The Company filed the Final
Report in Chapter 11 Proceeding with the Court on October 5,
1999, and the Final Decree closing the bankruptcy case was
issued by the Court on November 9, 1999.
4. Related Party Transactions
Biosensor Corporation, the Company's majority shareholder,
purchased all of the Company's assets, free and clear of all
liens and encumbrances, and assumed all of the secured debt,
employee and commission liabilities, and all customer warranty
and service liabilities of Advanced Medical Products, Inc. In
addition, Biosensor made a payment of $68,000 for certain
priority claims and administrative expenses, and for
distribution to outside unsecured creditors. Biosensor and
its subsidiaries agreed not to participate in distribution of
payments toward unsecured claims, although their claims
exceeded unsecured claims by all non-affiliated creditors
combined. The assets and liabilities of the Company, effective
May 12, 1999, were consolidated with the operating assets and
liabilities of Biosensor, and the assets and liabilities of
Diagnostic Monitoring purchased by Biosensor from Cardiac
Science Inc. on December 31, 1998, into Advanced Biosensor,
Inc., a new wholly owned subsidiary of Biosensor, which also
agreed to assume Advanced Medical's lease obligations and to
continue to operate the business at the present Columbia, SC location.
5. Capital Stock Transactions
On January 12, 1996 Carolina Medical, Inc., a privately held
medical device manufacturing company located in King, North
Carolina, purchased 750,000 shares of Advanced Medical Products,
Inc.'s authorized but un-issued common stock for $150,000.
Biotel International, Inc., a holding company (which was
subsequently acquired by Carolina Medical) purchased an
additional 1,400,000 shares of Advanced Medical's common stock
on March 29, 1996 for $280,000. On October 20, 1997 the Company
entered into a Stock Purchase Agreement with Carolina Medical,
Inc., selling an additional 850,000 shares of common stock of
Advanced Medical Products, Inc. to Carolina Medical, Inc. for
$263,500. Of this amount, $183,500 was paid to the Company in
November and the balance was structured as a note, which was
paid by April 30, 1998. This stock purchase increased Carolina
Medical's ownership in the Company to 3,000,000 shares or 50.3
percent of the 5,962,495 issued and outstanding common stock shares.
Registrant has 4,000 shares of authorized Class A Preferred
Stock, no par value, of which no shares are currently issued and
outstanding. A total of 2,377 Class A Preferred Stock shares
had been issued by the Company between 1992 and 1996. The terms
of the Class A Preferred Stock entitled the holder thereof to
cash dividends at the rate of $50.00 per annum per share.
Dividends on such shares are cumulative. Such dividends are
payable annually in arrears. Since December 31, 1997 the Company
had been in violation of its preferred stock agreements with
Nishimoto-Sangyo Company, Ltd. and SCANA Corporation, the
Company's two preferred stockholders. These two preferred stock
agreements required that an annual dividend of $50 per $1,000 of
the face value of the preferred stock be declared and paid at
the end of each calendar year. However, the Company had
deficits in both retained earnings and stockholders equity at
December 31, 1997 and therefore under Delaware law could not
legally declare a dividend. Nishimoto-Sangyo was unwilling to
convert unpaid dividends into additional common or preferred
shares of Advanced Medical, as they had done in prior years, but
in May 1998 Nishimoto sold their common and preferred stock in
the Company in exchange for shares of Carolina Medical, Inc.
This transaction brought Carolina Medical's ownership in the
Company to 55.3% of the common stock and 93.3% of the preferred
stock of the Company issued and outstanding. In June 1998
Carolina Medical purchased from SCANA the remaining 160 shares
of preferred stock in the Company. As of June 30, 1998,
dividends on the preferred stock of $162,981 were owed to
Carolina Medical by the Company. In July 1998, the Company's
board approved a plan to sell the Company's MICROS QV product
line to Carolina Medical in exchange for all of the 2,377 shares
of Preferred Stock in the Company (having a face value, at
original cost, of $2,377,000), and the unpaid dividends of
$162,981. In October 1998 the exchange of the product line for
all of the shares of the Company's Preferred Stock issued and
outstanding was completed and the shares were retired.
Carolina Medical Inc., a North Carolina corporation, was
merged with and into CMI of Minnesota, ("CMI"), a Minnesota
corporation. CMI also owned Braemar, Inc., a North Carolina
corporation operating in Minneapolis, MN that develops,
manufactures and markets tape recording devices for ambulatory
ECG monitoring devices, digital Holter monitors and event
recorders. On July 23, 1998, Biosensor Corporation, a
Minneapolis corporation, acquired all of the outstanding
shares of CMI of Minnesota, pursuant to a Plan of
Reorganization and Agreement by and between CMI and Biosensor.
On May 23, 1999 stockholders of Biosensor Corporation voted to
change the name of Biosensor Corporation to BIOTEL Inc., the
company that now owns 55.3% of the common stock of the Company.
The Company has been advised that since October 1999, BIOTEL,
Inc. has had discussions with several parties regarding the
possibility of BIOTEL selling its 3,300,000 common stock
shares of the Company, or voting its majority shares in the
Company in favor of a reverse merger. Management of the
Company has entered into discussions with several potential
merger partners. No agreement has been reached with any
party at the time of this filing, however BIOTEL intends to
continue to pursue the possibility of selling all or part of
its holdings in the Company to a third party, or approving a
reverse merger, and the Company intends to continue
discussions with interested potential merger partners.
Potential buyers of the majority position in the Company's
stock have also indicated that their interest is in merging a
privately held company into the Company in a "reverse merger.
The Board of Directors of Advanced Medical Products Inc. has
approved and recommended certain changes in the Company's
Certificate of Incorporation to better position the Company to
seek a reverse merger with a privately held company in an
attempt to recover some value for the Advanced Medical
Products, Inc. stockholders. An information Statement filed
on December 27, 1999 with the Securities and Exchange
Commission in connection with corporate actions authorized by
written consent, without a meeting, by holders of a majority
of the outstanding Common Stock of the Company entitled to
vote thereon, included: 1.) a Name Change to ADVA
International Inc., 2.) a 1 share for 10 shares Reverse Stock
Split, 3.) Authorization of Additional Common, and 4.) a New
Class B Preferred Stock. Notice of the Information Statement
was mailed to shareholders on or about January 7, 2000.
There can be no assurances, however, that the foregoing
effects will occur or that the market price of the Common
Stock immediately after implementation of the proposed Reverse
Stock Split will be maintained for any period of time, or that
such market price will approximate ten times the market price
before the proposed Reverse Stock Split, or that a suitable
reverse merger partner can be timely located, or that a
suitable reverse merger transaction can be successfully
negotiated or completed. All of the current Directors of the
Company have agreed to resign if their resignation is
requested in order to facilitate a possible reverse merger
that could create value for the Company's stockholders.
ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS
Forward Looking Statements
This and other sections of this report contain "forward-
looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, which represent the
Company's expectations concerning future events, including
whether changes in the Company's Certificate of Incorporation
will occur, or that the market price of the Common Stock
immediately after implementation of the proposed Reverse Stock
Split will be maintained for any period of time, or that such
market price will approximate ten times the market price
before the proposed Reverse Stock Split, or that a suitable
reverse merger partner can be timely located, or that a
suitable reverse merger transaction can be successfully
negotiated or completed. By their very nature, forward-
looking statements are subject to known and unknown risks and
uncertainties relating to the Company's and other parties'
future performance that may cause actual results to differ
materially from those expressed or implied in such forward-
looking statements. The Company does not undertake and
assumes no obligation to update any forward-looking statement
that may be made herein or from time to time by or on behalf
of the Company.
The following discussion should be read in conjunction with
the accompanying Financial Statements, including the notes
thereto, appearing elsewhere herein.
Results of Operations
The Company has ceased operations and had no operations and no
sales for the three months or six months ended December 31, 1999.
There were no selling, general and administrative expenses and no
research and development costs, and there was no profit or loss.
The Company's gross profit margin for the three months ended
December 31, 1998 was 39 % of net sales. Selling, general and
administrative expenses, not including bad debt writeoffs,
for the three months ended December 31, 1998 were 59.3% of net sales.
Research and development costs for the quarter ended December
31, 1998 were 6.3% of sales.
Net loss applicable to common shares for the quarter ended
December 31, 1998 was $0.06.
During the first three months ended December 31, 1999, cash
decreased by $62,918 and liabilities decreased by $62,918 as
administrative expenses and priority claims were paid by the
debtor in possession.
Liquidity and Capital Resources
The Company ceased operations on May 11, 1999. The cash
available on December 31, 1999 of $1,155 was insufficient to
meet remaining priority claims totaling approximately $
24,030. No capital resources are presently available to the
Company, and there is no liquidity.
PART II - OTHER INFORMATION
ITEM 6: Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - A report was filed on Form
8-K on October 18, 1999 regarding the US 11 363 sale of the Company's
assets through the U.S. Bankruptcy Court, District of South Carolina.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Advanced Medical Products, Inc.
(Registrant)
By: GEORGE L. DOWN
George L. Down, President
Dated: January 10, 2000
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