FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1998
OR
|_| 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: 33-131110-NY
MEDTECH DIAGNOSTICS, INC.
-------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 22-1895668
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
16 East 52nd Street, Suite 501, New York, NY 10022
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(Address of Principal Executive Office) (Zip Code)
(212) 872-1623
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(Registrant's telephone number including area code)
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 |_| No |X|
The number of shares of registrant's Common Stock, $.00001 par value,
outstanding as of August 19, 1999 was 281,400,000 shares.
1
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MEDTECH DIAGNOSTICS, INC.
INDEX
Page No.
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PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements............................... 3
Balance Sheets - December 31, 1998 and September 30, 1998
(unaudited) ................................................ 3
Statements of Operations - Three months ended December 31
1998 and 1997 (unaudited)................................... 4
Statements of Cash Flows - Three months ended December 31,
1998 and 1997 (unaudited)................................... 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...................................... 8
SIGNATURES....................................................... 9
2
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MEDTECH DIAGNOSTICS, INC.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
December 31, September 30,
1998 1998
----------- ------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 227,777 $ 223,398
=========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 3,500 $ 3,500
STOCKHOLDER'S EQUITY
Common stock, par value $.00001; authorized,
500,000,000 shares; 281,400,000 issued and
outstanding 2,814 2,814
Capital in excess of par value 1,436,745 1,436,745
Accumulated deficit (1,215,282) (1,219,661)
----------- -----------
224,277 219,898
----------- -----------
$ 227,777 $ 223,398
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
3
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MEDTECH DIAGNOSTICS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended December 31,
-------------------------------
1998 1997
------------ ------------
<S> <C> <C>
Interest income $ 4,487 $ 2,644
Costs and expenses
General and administrative 108 1,587
------------ ------------
Net income $ 4,379 $ 1,057
============ ============
Net earnings per common share - basic
and diluted -- --
Weighted average number of shares outstanding 281,400,000 281,400,000
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
4
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MEDTECH DIAGNOSTICS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended December 31,
1998 1997
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net income $ 4,379 $ 1,057
Adjustments to reconcile net income to net
cash provided by (used in) operating activities
Changes in operating assets and liabilities
Decrease in accounts payable and
accrued expenses -- (3,969)
--------- ---------
Net cash provided by (used in) operating
activities 4,379 (2,912)
--------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 4,379 (2,912)
Cash and cash equivalents at beginning of year 223,398 231,882
--------- ---------
Cash and cash equivalents at end of period $ 227,777 $ 228,970
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
5
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MEDTECH DIAGNOSTICS, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE A - ORGANIZATION AND BASIS OF PRESENTATION
Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB for
quarterly reports under section 13 or 15(d) of the Securities and Exchange
Act of 1934. 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 of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the
three-month period ended December 31, 1998 are not necessarily indicative
of the results that may be expected for the year ended September 30, 1999.
For further information, refer to the audited financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-KSB
for the year ended September 30, 1998.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has sustained
operating losses since inception, resulting in an accumulated deficit of
$1,215,282 at December 31, 1998. 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.
NOTE B - RELATED PARTY TRANSACTIONS
The Company utilizes a portion of premises occupied by a related party and
is also provided certain administrative services by such related party, at
no charge to the Company.
NOTE C - MERGER NEGOTIATIONS
In August 1999, the Company negotiated a letter of intent regarding a
potential merger with a third party. The terms of such merger have not yet
been finalized. In connection with such activities, the Company has made
loans to such third party aggregating $170,000 which bear interest at the
rate of 10% per annum, and which shall mature in March 2000, unless a
merger between such parties is consummated before that date. The Company
has incurred expenses in connection with such merger negotiations which,
as of the date of this report, aggregate approximately $20,000.
6
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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 to be 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 1991, the Company suspended all operations except for necessary
administrative matters and ceased to be an operating company. As such, for the
three-months ended December 31, 1998 and 1997, the Company had no revenue from
operations. Given the virtual suspension of the Company's operations, except for
necessary administrative matters, the Company's officers have waived current
compensation.
During the three-months ended December 31, 1998 and 1997, the Company received
interest income of $4,487 and $2,644, respectively. General and administrative
expenses for the three-months ended December 31, 1998 and 1997 were $108 and
$1,587, respectively.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 1998, the Company had working capital of $224,277. The
Company's 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.
In August 1999, the Company negotiated a letter of intent regarding a potential
merger with a third party. The terms of such merger have not yet been finalized.
In connection with such activities, the Company has made loans to such third
party aggregating $170,000 which bear interest at the rate of 10% per annum, and
which shall mature in March 2000, unless a merger between such parties is
consummated before that date. The Company has incurred expenses in connection
with such merger negotiations which, as of the date of this report, aggregate
approximately $20,000.
7
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PART II - OTHER INFORMATION
Item 6 - Exhibits And Reports On Form 8-K
a. Exhibits
The exhibit listed below is filed as part of this report.
Exhibit 27 Financial Data Schedule
b. Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter
for which this report has been filed.
8
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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.
August 23, 1999
MEDTECH DIAGNOSTICS, INC.
By: /s/ Steven N. Bronson
-------------------------------------
Steven N. Bronson, President (Principle
Executive Officer), as Registrant's duly
authorized officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet at December 31, 1998 and the Statement of Operations for the three months
then ended, as included in this Form 10-QSB, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 227,777
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 227,777
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 227,777
<CURRENT-LIABILITIES> 3,500
<BONDS> 0
0
0
<COMMON> 2,814
<OTHER-SE> 1,436,745
<TOTAL-LIABILITY-AND-EQUITY> 227,777
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 108
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (4,487)
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,379
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,379
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
