<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-QSB
Quarterly or Transitional Report
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED DECEMBER 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 33-13110-NY
MEDTECH DIAGNOSTICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 11-2831380
-------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
201 S. BISCAYNE BLVD. SUITE 2950, MIAMI, FL 33131
- -------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
305 536-8500
------------
(Issuer's telephone number)
Check whether the issuer (1) 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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of the issuer's common stock as of February
20, 1997 was 281,400,000.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
<PAGE> 2
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION: PAGE NO.
ITEM 1. Balance Sheets as of December 31, 1996
and September 30, 1996 3
Statements of Operations
Three Months Ended December 31, 1996 4
Statement of Cash Flows
Three Months Ended December 31, 1996 5
Notes to Financial Statements 6
ITEM 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 7
PART II - OTHER INFORMATION:
ITEM 1. Legal Proceedings 8
ITEM 2. Changes in Securities 8
ITEM 3. Defaults Upon Senior Securities 8
ITEM 4. Submission of Matters to a Vote 8
of Security Holders
ITEM 5. Other Information 8
ITEM 6. Exhibits and Reports on Form 8-K 8
Signatures 9
<PAGE> 3
MEDTECH DIAGNOSTICS, INC.
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
----------- -----------
<S> <C> <C>
ASSETS
Current Assets
Cash & Cash Equivalents $ 243,530 $ 243,606
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $ 7,550 $ 7,000
Stockholders' Equity
Common stock, par value $.00001; 2,814 2,814
authorized 500,000,000 share;
issued and outstanding 281,400,000
Capital in excess of par value 1,436,745 1,436,745
Accumulated deficit
(1,203,579) (1,202,953)
----------- -----------
$ 235,980 $ 236,606
----------- -----------
$ 243,530 $ 243,606
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 4
MEDTECH DIAGNOSTICS, INC.
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31
------------------------------------------------
1996 1995
-------------------- --------------------
<S> <C> <C>
Interest Income $ 1,574 $ 1,837
Costs and Expenses
General and Administrative 2,200 1,994
------- -------
Net Loss $ (626) $ (157)
======= =======
Net loss per common share N/L N/L
======= =======
Average number of shares
outstanding 281,400,000 281,400,000
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 5
MEDTECH DIAGNOSTICS, INC.
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31
-------------------------------------------
1996 1995
-------------------- --------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (626) $ (157)
Adjustments to reconcile net earnings
to net cash used by operating activities:
Changes in operating assets and
liabilities:
Accounts payable and accrued expenses 550 (821)
----------- ------------
Net cash used by Operations (76) (978)
Net (decrease) in cash and
cash equivalents (76) (978)
Cash and cash equivalents at beginning
of period 243,606 258,966
----------- -----------
Cash and cash equivalents at end of
period $ 243,530 $ 257,988
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 6
MEDTECH DIAGNOSTICS, INC.
Notes to Financial Statements
December 31, 1996
NOTE A - SUMMARY OF ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
reporting and instructions to Form 10-QSB. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments(consisting only of normal recurring accruals) necessary for a
fair presentation have been included.
1. Organization and Operations
Medtech Diagnostics, Inc. (the "Company"), previously a development stage
company incorporated under the laws of the State of Delaware on October 27,
1986, was engaged in research and testing which it hoped would lead to the
development of a home Pap Test Kit (the My-Pap Device). In October 1991,
the Company, due to lack of Food and Drug Administration approval,
suspended all operations except for necessary administrative matters.
2. Basis of Presentation
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.
The Company had been in the development state since 1986, however
during fiscal 1992 it suspended all operations except for necessary
administrative matters and, as a result, has sustained operating losses
since inception, resulting in an accumulated deficit of $1,203,579 at
September 30, 1996. This raises substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not
include any adjustments that may result should the Company be unable to
continue in existence.
The Company is currently seeking companies to merge with or acquire, so
as to best utilize the Company's cash and corporate structure.
3. Net Loss per Common Share
Net loss per common share is based on the average common shares
outstanding during the respective periods.
<PAGE> 7
MEDTECH DIAGNOSTICS, INC.
Notes to Financial Statements
December 31, 1996
NOTES A (continued)
4. Cash Flows
For the purpose of the statements of cash flows, the Company considers
all highly liquid debt instruments purchased with maturity of
three months or less to be cash equivalents. The Company paid state
income taxes of approximately $450 for the fiscal years ended September
30, 1996 and 1995, respectively.
5. Income Taxes
Deferred income taxes are recognized for temporary differences between
financial statement and income tax bases of assets and liabilities and
loss carryforwards and tax credit carryforwards for which income tax
benefits are expected to be realized in future years. A valuation
allowance is established to reduce deferred tax assets if it is more
likely than not that all, or some portion, of such deferred tax assets
will not be realized. The effect on deferred taxes of a change in tax
rates is recognized in income in the period that includes the
enactment date.
6. Concentration of Credit Risk
The Company maintains certain cash balances at one financial institution
located in New York. These balances are insured by the Federal Deposit
Insurance Corporation up to $100,000. Uninsured balances aggregate to
approximately 145,350 at December 31, 1996.
NOTE B - INCOME TAXES
At September 30, 1996, the Company has net operating loss carryforwards of
approximately $1,203,000 expiring September 30, 2002 through September 30,
2011. On June 5, 1996, the Company sold 141,000,000 shares of its common
stock, which resulted in a more than 50% change of stock ownership.
Consequently, under Section 382 of the Internal Revenue Code, the Company's
ability to utilize the net operating loss carryforwards is subject to an
annual limitation of approximately $14,000, and accordingly the maximum net
operating loss carryforward presently available is approximately $219,000.
<PAGE> 8
MEDTECH DIAGNOSTICS, INC.
Notes to Financial Statements
December 31, 1996
NOTE C - RELATED PARTY TRANSACTION
Currently, the Company, at no charge to the Company, utilizes a portion of
the premises occupied by a Company of which the Company's officers are
principals.
NOTE D - CHANGE IN OWNERSHIP AND CONTROL
On June 5, 1996, pursuant to the terms of a Stock Purchase Agreement (the
"Agreement"), Beverly Hills Bancorp sold 141,000,000 shares of the
Registrant's common stock, representing 50.1% of the Registrant's issued and
outstanding common stock, to Steven N. Bronson and James S. Cassel (the
"Purchasers"). The Agreement provided for a purchase price of $165,000,
which consideration was paid with the Purchasers' own funds. Upon
consummation of the transaction, in accordance with its terms, the Company's
chairman and a director resigned from the Registrant's Board of Directors.
By resolution of the remaining directors dated June 5, 1996, Messrs. Bronson
and Cassel have been appointed to the Registrant's Board of Directors.
<PAGE> 9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis provides information which the
Company's management believes is relevant to an assessment and understanding of
the Company's results of operations and financial condition. This discussion
should be read in conjunction with the financial statements and notes thereto
included elsewhere herein.
RESULTS OF OPERATIONS
In October 1991, the Company suspended all operations except for necessary
administrative matters and ceased to be an operating company. As such, for the
quarter ended December 31, 1996, the Company had no revenues from operations.
Given the virtual suspension of the Company's operations, except for necessary
administrative matters, the Company's officers have waived further
compensation.
Interest of $1,524 was earned in the period from October 1, 1996 to
December 31, 1996 on the Company's cash balance.
QUARTER ENDED DECEMBER 31, 1996 COMPARED WITH PRIOR FISCAL YEARS
The Company was incorporated under the laws of the State of Delaware on
October 27, 1986 and due to the necessity of regulatory approval with respect
to its originally conceived business continued to be in the developmental
stage. Consequently, the Company's activities in prior periods have been purely
organizational and developmental.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 1996, the Company had working capital of $235,580.
Management is currently seeking to arrange for a merger, acquisition or
other arrangement by and between the Company and a viable operating entity,
although there is no assurance that this will occur.
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
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
None
<PAGE> 11
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, duly authorized at Miami, Florida on the day of February,
1997.
MEDTECH DIAGNOSTICS, INC.
BY: /s/ STEVEN N. BRONSON
----------------------------------------
Steven N. Bronson, President
and Chief Executive Officer
BY: /s/ JAMES S. CASSEL
----------------------------------------
James S. Cassel, Secretary, Treasurer
and Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 243,530
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 243,530
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 243,530
<CURRENT-LIABILITIES> 7,550
<BONDS> 0
0
0
<COMMON> 1,439,559
<OTHER-SE> (1,203,579)
<TOTAL-LIABILITY-AND-EQUITY> 243,530
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,574)
<INCOME-PRETAX> (626)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (626)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
