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, 1999
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.
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(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.)
900 Third Avenue, Suite 201, New York, NY 10022
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(Address of Principal Executive Office) (Zip Code)
(212) 610-2778
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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 [X] No [ ]
The number of shares of registrant's Common Stock, $.00001 par value,
outstanding as of February 11, 2000 was 281,400,000 shares.
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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, 1999 (unaudited) and
September 30, 1999 (audited)................................ 3
Statements of Operations - Three months
ended December 31, 1999 and 1998 (unaudited)................ 4
Statements of Cash Flows - Three months ended December 31,
1999 and 1998 (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
Item 1. Legal Proceedings................................... 8
Item 6. Exhibits & Reports on Form 8-K...................... 8
SIGNATURES........................................................ 8
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MEDTECH DIAGNOSTICS, INC.
BALANCE SHEETS
DECEMBER 31, 1999 AND SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
(Unaudited) (Audited)
ASSETS December 31, 1999 September 30, 1999
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 28,706 $ 47,677
Loan receivable (Note 2) 1,000 1,000
$ 29,706 $ 48,677
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 12,094 $ 27,579
STOCKHOLDERS' EQUITY
Common stock, $.00001 par value;
500,000,000 shares authorized;
281,400,000 shares issued and
outstanding 2,814 2,814
Capital in excess of par value 1,436,745 1,436,745
Accumulated deficit (1,421,947) (1,418,461)
Total stockholders' equity 17,612 21,098
$ 29,706 $ 48,677
</TABLE>
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MEDTECH DIAGNOSTICS, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
DIVIDEND AND INTEREST INCOME $ 456 $ 4,487
OPERATING EXPENSES
General and administrative 3,942 108
NET INCOME (LOSS) ($ 3,486) $ 4,379
NET INCOME (LOSS) PER COMMON SHARE -
BASIC AND DILUTED Nil Nil
WEIGHTED AVERAGE NUMBER OF SHARES 281,400,000 281,400,000
OUTSTANDING
</TABLE>
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MEDTECH DIAGNOSTICS, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($ 3,486) $ 4,379
Adjustment to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Decrease in accounts payable and accrued expenses (15,485) --
Net cash provided by (used in) operating activities,
representing the net increase (decrease) in cash and
cash equivalents for the period (18,971) 4,379
CASH AND CASH EQUIVALENTS - BEGINNING OF
PERIOD 47,677 223,398
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 28,706 $227,777
</TABLE>
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MEDTECH DIAGNOSTICS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. 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 periods
ended December 31, 1999 and 1998 are not necessarily
indicative of the results that may be expected for the year
ending September 30, 2000. 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, 1999.
The balance sheet at September 30, 1999, has been derived from
the Company's audited balance sheet at that date.
NOTE 2. LOAN RECEIVABLE
The Company made two advances, evidenced by a loan receivable,
totaling $170,000 to Abtech Industries, Inc. ("Abtech"), an
intended merger target. The loans are unsecured, bear interest
at 10% per annum, and had a scheduled maturity on or before
March 31, 2000, unless cancelled in connection with the merger
agreement.
Subsequent to September 30, 1999, the merger agreement was
cancelled. Abtech has defaulted under the loan agreement, and
the Company is vigorously seeking recovery of the loan. The
Company has reduced the carrying value of the receivable to
$1,000 as of September 30, 1999.
<PAGE>
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 together with the Company's financial statements and the notes to
financial statements, which are included in this report.
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, 1999 and 1998, the Company had no revenue from
operations. Given the virtual suspension of the Company's operations, except for
necessary administrative matters, the Company's sole officer has waived current
compensation. The Company utilizes a portion of the premises occupied by a
related party as its corporate office and is also provided with administrative
services by such related party, at no charge to the Company.
During the three months ended December 31, 1999, the Company earned interest and
dividends of $456 as compared to $4,487 of interest and dividends earned in the
three months ended December 31, 1998, a decrease of $4,031. This decrease is due
to the fact that the Company loaned a third party $170,000 in connection with an
agreement regarding a potential merger with that third party. Merger
negotiations between the Company and the third party have been terminated and
the third party has failed to repay the loan. On November 22, 1999, the Company
commenced a legal action to recover the $170,000 from the third party. There can
be no assurances that the Company will recover any part the monies loaned to the
third party. As such, the Company has recorded an adjustment to its financial
statements of $169,000 as a provision for the loan to the third party.
LIQUIDITY AND CAPITAL RESOURCES
During three months ended December 31, 1999, the Company satisfied its working
capital needs from cash on hand at the beginning of the year and cash generated
from interest income during the year. As of December 31, 1999, the Company had
working capital of $28,706. This working capital may not be sufficient to
provide the Company with sufficient capital while it seeks a merger, acquisition
or other arrangement by and between the Company and a viable operating entity.
The Company may need additional funds in order to effectuate a merger,
acquisition or other arrangement by and between the Company and a viable
operating entity, although there is no assurance that the Company will be able
to obtain such additional funds, if needed. Even if the Company is able to
obtain additional funds there is no assurance that the Company will be able to
effectuate a merger, acquisition or other arrangement by and between the Company
and a viable operating entity.
As noted above, in August 1999, the Company negotiated an agreement regarding a
potential merger with a third party. In accordance with that agreement the
Company loaned such third party $170,000, with interest accruing at the rate of
10% per annum. Merger negotiations between the Company and the third party have
been terminated and the third party has defaulted on the loan. The Company has
commenced a lawsuit to recover the $170,000 from the third party, with interest.
There are no assurances that the Company will be able to recover any of the
moneys loaned to the third party. Accordingly, the Company has recorded an
adjustment on its financial statements, for bad debts, and valued the $170,000
loan receivable at $1,000.00.
<PAGE>
The Company's management is continuing to seek 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.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In connection with an agreement with a third party, who was a potential merger
candidate, the Company made unsecured loans to the third party totaling
$170,000, which bear interest at the rate of 10% per annum. The agreement, as
amended, between the Company and the third party is annexed as an Exibit to the
Company's Form 10-KSB for the year ended September 30, 1999 and is expressly
incorporated herein by reference. The merger negotiations have been cancelled
and the third party has failed to repay the loans as required by the agreement.
On or about November 22, 1999, the Company commenced a lawsuit to recover the
$170,000 loaned to the third party. The action is entitled: MedTech Diagnostics,
Inc. v. Abtech Industries, Inc. and is pending in the New York State Supreme
Court, New York County and has been assigned Index No. 99-605288. There is no
assurance that the Company will be able to recover any of the moneys loaned to
the third party.
The Company is not a party to any other material legal proceedings.
Item 6. Exhibits And Reports On Form 8-K
a. Exhibits
None
b. Reports on Form 8-K
The Company disclosed in a Form 8-K, dated December 29, 1999, that the
Company dismissed Grant Thornton LLP as its independent accountants and engaged
Kaufman, Rossin & Co. as its new independent accountants, effective on December
8, 1999. The Company's Form 8-K, dated December 29, 1999 is incorporated herein
by reference.
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.
February 14, 2000
MEDTECH DIAGNOSTICS, INC.
By: /s/ Steven N. Bronson
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Steven N. Bronson, President
(Principle Executive Officer),
as Registrant's duly
authorized officer
