<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period from to
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 (I.R.S. Employer
incorporation or organization) Identification No.)
2101 W. Commercial Blvd., Ft. Lauderdale, FL 11716
(Address of principal executive offices) (Zip Code)
(516)589-5664
Registrant's telephone number, including area code
1401 Church Street, Bohemia, NY 11716
(Former name, former address and former fiscal
year if changed since last report)
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 ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
<TABLE>
<CAPTION>
Date Class Shares Outstanding
---- ----- ------------------
<S> <C> <C>
6/30/96 Common Stock - $.00001 par value 28l,400,000
</TABLE>
<PAGE> 2
MEDECH DIAGNOSTICS, INC.
JUNE 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
PART 1. FINANCIAL INFORMATION
<S> <C> <C>
ITEM 1. Balance Sheets as of
June 30, 1996 and
September 30, 1995 1
Statements of
Operations and
Accumulated Deficit
For the Period from
October 1, 1995 to
June 30, 1996, For
the year ended
September 30, 1995 2
Statements of Cash
Flows for the Period
from October 1, 1995
to June 30, 1996, For
the year ended
September 30, 1995 3
Statement of Changes in
Stockholders' Equity, Cumulative
from inception to June 30,
1996 4 - 5
Notes to Financial Statements 6 - 8
ITEM 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 10
ITEM 2. Changes in Securities 10
ITEM 3. Defaults Upon Senior Securities 10
ITEM 4. Submission of Matters to a Vote
of Security Holders 10
ITEM 5. Other information 10
ITEM 6. Exhibits and Reports on Form 8-K 10
Signatures 11
</TABLE>
<PAGE> 3
MEDTECH DIAGNOSTICS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30,
1996 SEPTEMBER 30,
UNAUDITED 1995
--------- -------------
<S> <C> <C>
ASSETS
Current Assets
Cash & Cash Equivalents $ 245,147 $ 258,966
------------ -----------
Total Current Assets $ 245,147 $ 258,966
------------ ------------
EQUIPMENT, net of accumulated
depreciation of $31,008 0 0
------------ ------------
TOTAL ASSETS $ 245,147 $ 258,966
============ ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities $ 0 $ 10,950
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
Deficit accumulated during the
development stage (1,194,412) (1,191,543)
----------- -----------
245,147 248,016
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 245,147 $ 258,966
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
-1-
<PAGE> 4
MEDTECH DIAGNOSTICS, INC.
Statements of Operations
<TABLE>
<CAPTION>
(Unaudited)
Period from Period from
10/01/95 to 06/30/96 10/01/94 to 09/30/95
---------------------------- ---------------------------
<S> <C> <C> <C> <C>
Interest Income $5,020 $ 7,283
Costs and Expenses
Research and Development $ 0 $ 0
General and Administrative 7,889 7,889 21,873 21,873
--------- ------ -------- -------
Net Loss $(2,869) $(14,590)
====== =======
Net loss per common share N/L N/L
====== =======
Average number of shares
outstanding 281,400,000
</TABLE>
The accompanying notes are an integral part of these statements.
-2-
<PAGE> 5
MEDTECH DIAGNOSTIC, INC.
Statements of Cash Flows
<TABLE>
<CAPTION>
(Unaudited)
Period from Period from
10/01/95 to 06/30/96 10/01/94 to 09/30/95
-------------------- --------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (2,869) $(14,590)
Adjustments to reconcile net earnings
to net cash used by operating
activities:
Depreciation -- --
Changes in operating assets and
liabilities:
Interest and other receivables
Accounts payable and accrued
expenses (10,950) 6,700
-------- --------
Net Cash used by Operations (13,819) (7,890)
Net (decrease) in cash and
cash equivalents (13,819) (7,890)
Cash and cash equivalents at beginning
of period 259,966 266,856
-------- --------
Cash and cash equivalents at end of period $245,147 $258,966
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
-3-
<PAGE> 6
MEDTECH DIAGNOSTICS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Period from October 27, 1986
(inception) to June 30, 1996
<TABLE>
<CAPTION>
RECEIVABLE TOTAL
COMMON STOCK CAPITAL IN FROM STOCK-
-------------------- EXCESS OF STOCK- HOLDERS'
DATE SHARES AMOUNT PAR VALUE DEFICIT HOLDER EQUITY
-------------- ----------- ------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of Common Stock
for Cash October 1986 145,000,000 $1,450 $ 24,784 $ 26,234
Net Proceeds of Public Offering August 1987 80,000,000 800 1,258,525 1,259,325
Net loss for the period from
October 27, 1986 (inception)
through September 30, 1987 (101,594) (101,594)
----------- ------ ---------- ---------- ---------- ----------
Balance at September 30, 1987 225,000,000 2,250 1,283,309 (101,594) 1,183,965
Issuance of Common Stock for
consulting services March 1988 300,000 3 2,997 3,000
Net loss for the year ended
September 30, 1988 (248,377) (248,377)
----------- ------ ---------- ---------- ---------- ----------
Balance at September 30, 1988 225,300,000 2,253 1,286,306 (349,971) 938,588
Issuance of Common Stock for
consulting services September 1989 100,000 1 999 1,000
Net loss for the year ended
September 30, 1989 (288,165) (288,165)
----------- ------ ---------- ---------- ---------- ----------
Balance at September 30, 1989 225,400,000 2,254 1,287,305 (638,136) 651,423
Net loss for the year ended
September 30, 1990 (267,690) (267,690)
----------- ------ ---------- ---------- ---------- ----------
Balance at September 30, 1990 225,400,000 2,254 1,287,305 (905,826) 383,733
Net loss for the year ended
September 30, 1991 (200,143) (200,143)
----------- ------ ---------- ---------- ---------- ----------
Balance at September 30, 1991
(carried forward) 225,400,000 2,254 1,287,305 (1,105,969) 183,590
</TABLE>
The accompanying notes are an integral part of this statement.
-4-
<PAGE> 7
MEDTECH DIAGNOSTICS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Period from October 27, 1986
(inception) to June 30, 1996
<TABLE>
<CAPTION>
RECEIVABLE TOTAL
COMMON STOCK CAPITAL IN FROM STOCK-
---------------------- EXCESS OF STOCK- HOLDERS'
DATE SHARES AMOUNT PAR VALUE DEFICIT HOLDERS EQUITY
---- ------ ------ --------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
brought forward from page 4 225,400,000 2,254 1,287,305 (1,105,969) 183,590
Shares received in exchange for
My-Pap Device (Note E) August 1992 (85,000,000) (850) 850
Sale of Common Stock (Note e) August 1992 141,000,000 1,410 148,590 (150,000)
Net loss for the year ended
September 30, 1992 (42,182) (42,182)
----------- ----- ---------- ----------- --------- --------
Balance at September 30, 1992 281,400,000 2,814 1,436,745 (1,148,151) (150,000) 141,408
Receipt of Proceeds of Stock Sale 150,000 150,000
Net loss for the year ended
September 30, 1993 (17,299) (17,299)
----------- ----- ---------- ----------- --------- --------
Balance at September 30, 1993 281,400,000 2,814 1,436,745 (1,165,450) 274,109
----------- ----- ---------- ----------- --------- --------
Net loss for the year ended
September 30, 1994 (7,253) (7,253)
----------- ----- ---------- ----------- --------- --------
Balance at September 30, 1994 281,400,000 2,814 1,436,745 (1,172,703) 266,856
Adjustment of Accumulated Deficit (NOTE D) (4,250) (4,250)
Net loss for the year ended
September 30, 1995 (14,590) (14,590)
----------- ----- ---------- ----------- --------- --------
Balance at September 30, 1995 281,400,000 2,814 1,436,745 (1,191,543) 0 248,016
Net loss for the nine month period ended
June 30, 1996 (2,869) (2,869)
----------- ----- ---------- ----------- --------- --------
Balance at June 30, 1996 281,400,000 2,814 $1,435,745 $(1,194,412) 0 $245,147
=========== ===== ========== ============ ========= ========
</TABLE>
The accompanying notes are an integral part of this statement.
-5-
<PAGE> 8
Medtech Diagnostics, Inc.
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
NOTE A - SUMMARY OF ACCOUNTING POLICIES
The following represents a summary of significant accounting policies of the
Company consistently applied in the preparation of the accompanying financial
statements.
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), The device was
intended to permit a woman to collect a sample of her own vaginal cells for
testing by a qualified laboratory. 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.
However, the Company has been in the development state and during fiscal
1992 suspended all operations except for necessary administrative matters
and has sustained operating losses since inception, resulting in an
accumulated deficit of $1,180,593 at September 30, 1995. 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 an the average common shares outstanding
during the respective periods.
-6-
<PAGE> 9
Medtech Diagnostics, Inc.
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 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 $400 for the fiscal years ended September 30,
1995 and 1994, respectively. Not reflected in the statement of cash
flows in fiscal 1992 is the sale by the Company of 141,000,000 shares
of the Company's common stock and the acquisition of $85,000,000 shares
of its common stock in exchange of the patent of its product (Note D).
5. Income Taxes
The Company plans to defer adoption of Statement of Financial
Accounting Standards No. 109 (SFAS No. 109"), "Accounting for Income
Taxes," until the first quarter of fiscal 1995. SFAS No. 109 requires
the Company to adopt an asset and liability approach for financial
accounting and reporting for deferred income taxes. SFAS No. 109 is not
expected to have a material effect on the Company's financial position.
NOTE B - INCOME TAXES
At September 30, 1995, the Company has net operating loss carryforwards of
approximately $1,180,000, expiring September 30, 2003 through September 30,
2009. On August 5, 1992, 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 $19,000, and accordingly
the maximum net operating loss carryforward presently available is
approximately $302,000.
-7-
<PAGE> 10
Medtech Diagnostics, Inc.
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 1996
NOTE C - COMMON STOCK
On August 5, 1992, the Company entered into an agreement, subject to
stockholder approval, with another company which provides for the purchase of
141,000,000 shares of the Company's common stock for $150,000. The agreement
was conditioned upon the Company acquiring $85,000,000 shares of its common
stock from the then President and Treasurer of the Company in consideration
for the sale of all assets related to the Company's My-Pap Device, including
its patent and license agreement. On November 4, 1992, the Company's
stockholders' approved the above transactions.
NOTE D - ADJUSTMENT TO ACCUMULATED DEFICIT
On January 24, 1996, Grant Thornton, our auditor informed us of changes to be
made to the financial statement as of 09/30/95. This change was an adjustment
for legal and professional fees for the year ended 09/30/94 that were not
accrued in that year.
-8-
<PAGE> 11
ITEM 2-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OPERATIONS - QUARTER ENDED JUNE 30, 1996
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 June 30, 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 $5,020 was earned in the period from October 1, 1995 to June
30, 1996 on the Company's cash balance.
QUARTER ENDED JUNE 30, 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 June 30, 1996, the Company had working capital of $245,147.
-9-
<PAGE> 12
MEDTECH DIAGNOSTICS, INC.
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
Form 8-K filed on June 10, 1996 disclosing a change in control of
Registrant.
-10-
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) 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 Bohemia, New York on the 12th
day of August, 1996.
MEDTECH DIAGNOSTICS, INC.
By:/s/ Steven N. Bronson
-----------------------------------------
STEVEN N. BRONSON, Chairman,
Principal Executive Officer
By:/s/ James S. Cassel
-----------------------------------------
JAMES S. CASSEL, Secretary,
Treasurer & Principal Financial
and Accounting Officer
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 245,147
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 245,147
<PP&E> 31,008
<DEPRECIATION> (31,008)
<TOTAL-ASSETS> 245,147
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 2,814
<OTHER-SE> 242,333
<TOTAL-LIABILITY-AND-EQUITY> 245,147
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,869
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,869)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,869)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
