<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] 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 0-27689
AMDL, Inc.
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(Exact name of small business issuer as specified in its charter)
Delaware 87-0188822
--------------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
2492 Walnut Avenue, Suite 100, Tustin, California 92780
-------------------------------------------------------
(Address of principal executive offices)
(714) 505-4460
---------------------------
(Issuer's telephone number)
Not Applicable
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(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 of 1934 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 [ ]
As of November 10, 2000, the Company had 1,882,224 shares of its $.001
par value common stock issued and outstanding.
<PAGE> 2
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART 1 - FINANCIAL INFORMATION...............................................................2
ITEM 1.Financial Statements
Balance Sheets at September 30, 2000 (unaudited) and December 31, 1999.......................2
Unaudited Statements of Operations for the three
and nine month periods ended September 30, 2000 and 1999 and cumulative
from July 10, 1987 (date of inception) to September 30, 2000...............................3
Unaudited Statements of Cash Flows for the
nine month periods ended September 30, 2000 and 1999 and cumulative
from July 10, 1987 (date of inception) to September 30, 2000...............................5
Notes to Condensed Consolidated Financial Statements.........................................7
ITEM 2. Management's Discussion and Analysis................................................10
PART II OTHER INFORMATION..................................................................11
</TABLE>
1
<PAGE> 3
AMDL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
(Unaudited) (Audited)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 24,568 $ 75,867
Accounts receivable, net of allowance for
doubtful accounts of $18,166 and $4,000
at September 30, 2000 and December 31,
1999, respectively 30,946 15,401
Other current assets 2,534 9,007
------------ ------------
Total current assets 58,048 100,275
Other assets 5,758 5,758
------------ ------------
$ 63,806 $ 106,033
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Notes payable $ 25,000 $ 25,000
Accounts payable and accrued expenses 463,857 325,845
Accrued payroll and related expenses 328,701 124,318
Customer deposits 18,280 5,800
------------ ------------
Total current liabilities 835,838 480,963
------------ ------------
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $0.001 par value; 10,000,000
shares authorized; -- --
405 shares issued and outstanding:
Common stock, $0.001 par value; 50,000,000
shares authorized; 1,846,224 (including 55,100
not issued as of September 30, 2000) and 1,
651,124 shares issued and outstanding at September
30, 2000 and December 31, 1999, respectively 1,830 1,651
Additional paid in capital 13,572,669 13,144,252
Deficit accumulated during development stage (14,346,531) (13,520,833)
------------ ------------
Total stockholders' deficit (772,032) (374,930)
------------ ------------
$ 63,806 $ 106,033
============ ============
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 4
AMDL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
JULY 10, 1987
(DATE OF INCEPTION)
THREE MONTHS ENDED NINE MONTHS ENDED THROUGH
------------------------------- ----------------------------------- -------------------
SEPT 30, 2000 SEPT 30, 1999 SEPT 30, 2000 SEPT 30, 1999 SEPT 30, 2000
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues $ 44,953 $ 7,611 $ 56,783 $ 29,376 $ 337,089
Cost of sales 29,892 6,401 38,859 28,143 241,213
--------- --------- ----------- ------------ ------------
Gross profit (loss) 15,061 1,210 17,924 1,233 95,876
--------- --------- ----------- ------------ ------------
Operating expenses:
Research and development 64,136 56,969 196,699 230,569 7,084,870
General and administrative 208,529 227,127 634,467 824,067 9,216,627
--------- --------- ----------- ------------ ------------
272,665 284,096 831,166 1,054,636 16,301,497
--------- --------- ----------- ------------ ------------
Loss from operations (257,604) (282,886) (813,242) (1,053,403) (16,205,621)
--------- --------- ----------- ------------ ------------
Other income (expense):
Interest expense (10,065) (1,500) (13,595) (1,500) (608,448)
Interest income 329 318 1,139 10,633 258,672
Other -- -- -- -- 1,708,936
--------- --------- ----------- ------------ ------------
(9,736) 1,182 (12,456) 9,133 1,359,160
--------- --------- ----------- ------------ ------------
Income before extraordinary item (267,340) (284,068) (825,698) (1,044,270) (14,846,461)
Extraordinary Item:
Gain on debt forgiveness
(Net of income taxes of $0) -- 499,930 -- 499,930 499,930
--------- --------- ----------- ------------ ------------
Net income (loss) $(267,340) $ 215,862 $ (825,698) $ (544,340) $(14,346,531)
========= ========= =========== ============ ============
</TABLE>
3
<PAGE> 5
AMDL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------- ------------------------------
SEPT 30, 2000 SEPT 30, 1999 SEPT 30, 2000 SEPT 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Basic Earnings Per Share:
Income before extraordinary item $ (0.16) $ (0.32) $ (0.50) $ (2.10)
Extraordinary Item -- $ 0.56 -- $ 1.00
------------- ------------- ------------- -------------
Net Income (Loss) $ (0.16) $ 0.24 $ (0.50) $ (1.10)
============= ============= ============= =============
Diluted Earnings Per Share:
Income before extraordinary item $ (0.16) $ (0.16) $ (0.50) $ (2.10)
Extraordinary item -- $ 0.29 -- $ 1.00
------------- ------------- ------------- -------------
Net Income (Loss) $ (0.16) $ 0.13 $ (0.50) $ (1.10)
============= ============= ============= =============
Weighted average shares
outstanding - basic 1,663,542 890,224 1,655,248 497,052
============= ============= ============= =============
Weighted average shares
outstanding diluted 1,663,542 1,720,992 1,655,248 497,052
============= ============= ============= =============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 6
AMDL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
JULY 10, 1987
NINE MONTHS ENDED (DATE OF INCEPTION)
----------------------------------- THROUGH
SEPT 30, 2000 SEPT 30, 1999 SEPT 30, 2000
------------- ------------- -------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(825,698) $(544,340) $(14,346,531)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization -- -- 497,743
Amortization of deferred interest -- -- 312,000
Common stock issued for services 58,437 -- 370,978
Warrants and options issued for:
services 79,369 71,499 837,239
interest 8,300 8,300
Equity loss in investment in SAM -- -- 7,500
Gain on forgiveness of debt -- (499,930) (499,930)
Changes in operating assets and
liabilities:
Accounts receivable, net (15,545) (407) (30,946)
Other current assets 6,473 -- (2,534)
Other assets -- (5,758) (5,758)
Accounts payable and accrued expenses 138,012 175,026 404,444
Accrued payroll and related expenses 204,383 166,999 1,194,059
Customer deposit 12,480 2,335 18,280
--------- --------- ------------
Net cash used in operating activities (333,789) (634,576) (11,235,156)
--------- --------- ------------
Cash flows from investing activities:
Purchase of equipment -- -- (225,930)
Expenditures for patents -- -- (154,682)
Investment in SAM -- -- (7,500)
--------- --------- ------------
Net cash used in investing activities -- -- (388,112)
--------- --------- ------------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 7
AMDL, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
JULY 10, 1987
NINE MONTHS ENDED (DATE OF INCEPTION)
----------------------------------- THROUGH
SEPT 30, 2000 SEPT 30, 1999 SEPT 30, 2000
------------- ------------- -------------------
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from issuance of common stock,
Net of offering costs of $14,760 $ 113,740 612,010 $ 11,479,580
Proceeds from issuance of preferred stock,
net of offering costs of $18,750 168,750 -- 168,750
Borrowings (repayments) under notes
payable, net -- -- 59,115
Repayments under capital lease
obligation -- -- (116,676)
Net effect of merger with CVI -- -- 57,067
--------- --------- ------------
Net cash provided by financing activities 282,490 612,010 11,647,836
--------- --------- ------------
Net change in cash (51,299) (22,566) 24,568
Cash at beginning of period 75,867 74,566 --
--------- --------- ------------
Cash at end of period $ 24,568 $ 52,000 $ 24,568
========= ========= ============
</TABLE>
See footnotes for supplemental disclosures of non-cash investing and financing
activities.
See accompanying notes to financial statements.
6
<PAGE> 8
AMDL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD JULY 10, 1987 (DATE OF INCEPTION)
THROUGH SEPTEMBER 30, 2000
NOTE 1 - MANAGEMENT'S REPRESENTATION
The financial statements included herein have been prepared by AMDL, Inc. (the
"Company"), without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information normally included in the
financial statements prepared in accordance with generally accepted accounting
principles has been omitted pursuant to such rules and regulations. However, the
Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that the financial statements be read
in conjunction with the audited financial statements and notes for the fiscal
year ended December 31, 1999 included in the Company's Annual Report on Form
10-KSB. The interim results are not necessarily indicative of the results for
the full year.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company is in the development stage and has not generated significant
revenues from operations and has no assurance of any future revenues. The
Company will require substantial additional funding for continuing research and
development, obtaining regulatory approval, and for the commercialization of its
products.
Management has taken action to address these matters. They include:
- Retention of experienced management personnel with particular skills in the
commercialization of similar products;
- Attainment of technology to develop additional diagnostic products for
detecting cancer and other diseases; and
- Raising additional funds through the sale of equity securities at terms below
market price quotations.
The Company's products, to the extent they may be deemed medical devices or
biologics, are governed by the Federal Food, Drug and Cosmetics Act and by the
regulations of state agencies and various foreign government agencies. The
Company's proposed diagnostic test systems for use with humans are subject to
certain clearance procedures administered by the above regulatory agencies.
There can be no assurance that the Company will receive the regulatory approvals
required to market its proposed products elsewhere or that the regulatory
authorities will review the product within the average period of time, however,
the Company has begun marketing DR-70, its cancer detection product, under a
labeling exemption for research use only and has already received full approval
to market the Pylori Probe test.
The Company hopes to obtain revenues from product sales. The Company currently
has commitments from customers for the purchase of the Company's products to be
market in the United States, the United Kingdom, Australia and Asia. In the
absence of significant sales and profits, the Company is seeking to raise
additional funds to meet its working capital needs principally through the
additional sales of its securities. However, there is no assurance that the
Company will be able to obtain sufficient additional funds when needed, or that
such funds, if available, will be obtainable on terms satisfactory to the
Company.
These circumstances raise doubt about the Company's ability to continue as a
going concern. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
NEW ACCOUNTING PRONOUNCEMENTS
The FASB issued Statement of Financial Accounting Standards No. 133 ("SFAS
133"), "Accounting for Derivative Instruments and Hedging Activities." SFAS133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities on the balance sheet at their fair value. This
statement is effective for financial statements for all fiscal quarters of all
fiscal years beginning after June 15, 2000 (as amended by SFAS 137). The Company
does not expect the adoption of this standard to have a material impact on its
result of operations, financial position or cash flows as it currently does not
engage in any derivative or hedging activities.
In March 2000, the Emerging Issues Task Force reached a consensus on Issue No.
00-2, "Accounting for Web Site Development Costs," ("EITF 00-2") to be
applicable to all web site development costs incurred for the quarter beginning
after
7
<PAGE> 9
AMDL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD JULY 10, 1987 (DATE OF INCEPTION)
THROUGH SEPTEMBER 30, 2000
June 30, 2000. The consensus states that for specific web site development
costs, the accounting for such costs should be accounted for under Statement on
Position 98-1 ("SOP 98-1"), "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use." The Company does not expect the
adoption of EITF 00-2 to have a material effect on its financial statements.
In March 2000, the FASB issued FASB Interpretation No. 44 "FIN 44" Accounting
for Certain Transactions involving Stock Compensation, an interpretation of APB
Opinion 25 FIN 44 clarifies the application of Opinion 25 for (a) the definition
of employee for purposes of applying Opinion 25, (b) the criteria for
determining whether a plan qualifies as a noncompensatory plan, (c) the
accounting consequence for various modifications to the terms of a previously
fixed stock option or award, and (d) the accounting for an exchange of stock
compensation awards in a business combination. FIN 44 is effective July 1, 2000,
but certain provisions cover specific events that occur after either December
15, 1998, or January 12, 2000. The adoption of certain other provisions of FIN
44 prior to March 31, 2000 did not have a material effect on the financial
statements. The Company does not expect that the adoption of the remaining
provisions will have a material effect on the financial statements.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin "SAB" 101, "Revenue Recognition", which outlines the basic criteria
that must be met to recognize revenue and provides guidance for presentation or
revenue and for disclosure related to revenue recognition policies in financial
statements filed with the Securities and Exchange Commission. The effective date
of this pronouncement is the fourth quarter of the fiscal year beginning after
December 15, 1999. The Company believes that adopting SAB 101 will not have a
material impact on its financial position and results of operations.
NOTE 3 - STOCK ISSUANCE
The Company is authorized to issue 10,000,000 shares of $0.001 par value
preferred stock, of which the Board has designated 11,000 shares as Series A
Preferred Stock ("Preferred Stock"). On October 22, 1999 the board of directors
approved a private placement of the 11,000 shares of Series A Preferred Stock at
a price of $500 per share. Each share of the Preferred Stock is convertible at
the option of the shareholder into 250 shares of common stock and all shares of
Preferred Stock shall automatically convert at such time as the common stock is
listed for trading on the Nasdaq Small Cap Market or Nasdaq National Market
System and a registration statement covering the underlying common stock has
been declared effective by the SEC. The Preferred Stock will pay a dividend of
20 shares of common stock twice per year. These shares of common stock will be
considered "restricted securities". The Preferred Stock is redeemable at the
option of the Company at any time upon thirty days written notice at a
redemption price of 110% of the Liquidation Preference plus all accrued and
unpaid dividends. The Liquidation Preference of the Preferred Stock is $500 per
share. During the period ended September 30, 2000, the Company raised $168,750
(net of cash issuance costs of $18,750 of which $3,749 was accrued during the
three months ended September 30, 2000) from outside investors and issued 405
shares of preferred stock, including 30 shares of Series A Preferred stock
issued to consultants for finders' fees and is obligated to issue 3,750 shares
of common stock to consultants for finders' fees in connection with these
transactions (not yet issued but included in the outstanding shares amount at
September 30, 2000). The Company included the net proceeds in Additional Paid In
Capital on the accompanying Balance Sheet due to the par value of the Preferred
Stock issued being less than $1 The Company plans to make an exchange offer to
the holders of the Preferred Stock in the fourth quarter.
During the quarter ended June 30, 2000, the Company received $38,500 for the
purchase of the Company's stock without proper documentation. The Company
recorded the amount as a sale of 77 shares of Preferred stock as the Company was
in the process of selling its Preferred stock in connection with an open Private
Placement. Subsequent to September 30, 2000, the Company received documentation
from the investor stating their intent to purchase 38,500 shares of common stock
(not yet issued but included in the outstanding shares amount at September 30,
2000) in conjunction with the common stock Private Placement of August 17, 2000.
Hence, the Company has made the appropriate reclassification to equity in the
accompanying balance sheet.
On August 17, 2000, the board of directors approved a private placement of up to
1,000,000 shares of common stock at $1 per share. The Company has sold 128,500
shares of common stock (including 38, 500 purchased in the prior quarter and not
yet
8
<PAGE> 10
AMDL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD JULY 10, 1987 (DATE OF INCEPTION)
THROUGH SEPTEMBER 30, 2000
issued as of September 30, 2000) for $113,740 (net of issuance costs of $14,760)
from outside investors. In addition, the Company is obligated to issue 12,850
shares of common stock to consultants for finders' fees in connection with these
transactions (the shares are not yet issued but are included in the outstanding
shares at September 30, 2000).
On September 29, 2000, the Company issued 50,000 shares of common stock (valued
at $58,437 based on the market price on the date of grant) to consultants for
investor relations services.
NOTE 4 - STOCK OPTIONS
Effective June 30, 1999, the Company adopted its 1999 Stock Option Plan (the
"Plan"). Under the Plan, incentive stock options and nonqualified options may be
granted to officers and employees of the Company for the purchase of up to
750,000 shares of the Company's common stock. The exercise price per share under
the incentive stock option plan shall not be less than 110% of the fair market
value per share on the date of grant. The exercise price per share under the
non-qualified stock option plan shall not be less than 85% of the fair market
value per share on the date of grant. Expiration dates for the grants may not
exceed 10 years from the date of grant. The Plan terminates on June 30, 2009. On
January 17, 2000 the Board of Directors increased the total number of shares
issuable under the plan to 1,000,000. In the first quarter of 2000, the Company
granted options to its president to purchase 300,000 shares of the Company's
common stock and to its outside directors options to purchase an aggregate of
45,000 shares of the Company's common stock. All of these options have an
exercise price equal to the fair market value at the date of grant (estimated by
the Company to be $1.75 at January 17, 2000), vest immediately and expire five
years from the date of grant. Pursuant to SFAS 123, total compensation expense
to be recognized over the vesting period for options issued to directors was
$63,900, all of which was recognized as of September 30, 2000. The Company also
recognized compensation expense of $5,156 and $15,468 for the three and nine
months ended September 30, 2000 pursuant to SFAS 123 for options previously
issued. On May 9 , 2000, the Board of Directors increased the total number of
shares issuable under the plan to 2,000,000.
NOTE 5 - WARRANTS
During the period ended September 30, 2000, the Company issued 10,000 warrants
in conjunction with the issuance of a short-term note which was paid in full
prior to September 30, 2000. Pursuant to SFAS 123, the warrants were valued at
$8,300 and charged to interest expense during the quarter ended September 30,
2000. (The Warrants vest immediately with an exercise price of $1.00 and expire
August, 2001.)
NOTE 6 - SUBSEQUENT EVENTS
Subsequent to September 30, 2000, the Company raised $9,000 (net of issuance
costs of 1,000, which have been accrued) and issued 10,000 shares of common
stock in accordance with the common stock offering. The Company is obligated to
issue an additional 1,000 shares of common stock to consultants for finders'
fees. An additional 25,000 shares of common stock (valued at $23,906 based on
the market price on the date of grant) were issued to consultants for investor
relations services and recorded as professional expense.
9
<PAGE> 11
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
GENERAL
Since inception, the Company has been in the development stage and has
devoted its resources to research and development, obtaining regulatory approval
and the raising of working capital. For the three months ended September 30,
2000, the Company generated $44,953 in revenues from the sale of its products.
Historically, the Company's income has come from the sale of licenses, royalties
and options to purchase marketing rights. The Company has incurred losses since
inception, including an operating loss of $825,698 for the nine months ended
September 30, 2000. From July 10, 1987 (inception) through June 30, 2000 the
Company has had a cumulative loss of $14,346,531. The Company has commenced
manufacturing of and has received orders for its products. The Company is
currently negotiating for the distribution of its products in several Asian,
South American, Central American and European countries. Additionally, the
Company is beginning marketing of its DR-70 cancer detection kits in the U.S.
under "research use" labeling.
LIQUIDITY AND CAPITAL RESOURCES
The Company requires significant funding for continued operations,
development of its test kits, clinical trials and other actions necessary to
obtain regulatory approvals and to engage in continued marketing and sales
activities. The amount of expenditures required to maintain operations and to
continue product development far exceeds existing cash, which was $24,568 at
September 30, 2000.
From December 31, 1999 to September 30, 2000, the Company's cash and
cash equivalents decreased $51,299. In addition, total outstanding indebtedness
of the Company, including accounts payable, was $835,838 at September 30, 2000.
As of November 10, 2000, minimum cash requirements are approximately $87,000 per
month. The Company is hopeful of obtaining additional revenues from product
sales. The Company has commitments for the purchase of the Company's products to
be marketed in the United States, the United Kingdom, Australia and Asia. In the
absence of significant sales and profits, the Company is seeking to raise
additional funds to meet its working capital needs principally through the sales
of its securities. The Company is negotiating to raise an additional $3,000,000
through the sale of common stock with independent third parties. However, there
is no assurance that the Company will be able to obtain sufficient additional
funds when needed, or that such funds, if available, will be available on terms
satisfactory to the Company.
The Company can make no prediction as to when, if ever, it will be able
to conduct its operations on a profitable basis. The report of the Company's
independent accountants for the fiscal year ended December 31, 1999 states that
due to recurring losses from operations, the absence of significant operating
revenues and the Company's limited capital resources, there is substantial doubt
about the Company's ability to continue as a going concern.
Although the Company does not anticipate any significant changes in the
number of employees, the Company may not be able to retain its present employees
if additional financing is not obtained. The loss of the Company's key employees
could have a material adverse effect upon the operations of the Company.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1999.
During the three months ended September 30, 2000, the Company generated $44,953
from product sales compared to revenues for the three months ended September 30,
1999 of $7,611. The increase in revenues is due mainly to an additional number
of orders for OEM products. Total operating expenses for the three months ended
September 30, 2000 were $272,665 compared to total operating expenses for the
three months ended September 30, 1999 of $284,096. The decrease in expenses for
the three months ended September 30, 2000 is the result of the Company's
decision to curtail its marketing efforts and to focus its efforts on the
raising of working capital. In the three months ended September 30, 2000, the
Company's net loss was $267,340 compared to net income of $215,862 for the prior
year period due to an extraordinary gain on debt forgiveness in the prior year.
NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1999.
During the nine months ended September 30, 2000, the Company generated
revenues of $56,783 from product sales compared to revenues for the nine months
ended September 30, 1999 of $29,376. The increase is due mainly to an additional
number of orders for OEM products. Total operating expenses for the nine months
ended September 30, 2000 were $831,166 compared to total operating expenses for
the nine months ended September 30, 1999 of $1,054,636. The decrease in expenses
during the nine months ended September 30, 2000 is the result of the Company's
decision to curtail its marketing efforts and to focus its efforts on the
raising of working capital. In the nine months ended September 30, 2000, the
Company's net loss was
10
<PAGE> 12
$825,698, compared to a loss of $544,340 for the prior year period.
Total assets have decreased $42,227 from $106,033 at December 31, 1999
to $63,806 at September 30, 2000 mainly from the use of cash to maintain minimal
operations. Total liabilities have increased $354,875 from $480,963 at December
31, 1999 to $835,838 at September 30, 2000 resulting from increases in accrued
payroll and other liabilities due to the lack of funds to pay such obligations
in a timely manner.
FORWARD LOOKING STATEMENTS
This Form 10-QSB contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements made by the Company involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ materially from
the forward looking statements include, but are not limited to, risks associated
with lack of significant operating history, demand for the Company's products,
international business operations, dependence on licensees, governmental
regulations, technological changes, intense competition and dependence on
management. Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. The Company's management disclaims
any obligation to forward-looking statements contained herein to reflect any
change in the Company's expectation with regard thereto or any change in events,
conditions, circumstances or assumptions underlying such statements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Inapplicable.
Item 2. Changes in Securities.
On August 17, 2000, the board of directors approved a private placement
of up to 1,000,000 shares of common stock at $1 per share. The Company has sold
128,500 shares of common stock (including 38, 500 purchased in the prior quarter
and not yet issued as of September 30, 2000) for $113,740 (net of issuance costs
of $14,760) from outside investors. In addition, the Company is obligated to
issue 12,850 shares of common stock to consultants for finders' fees in
connection with these transactions (the shares are not yet issued but are
included in the outstanding shares at September 30, 2000).
On September 29, 2000, the Company issued 50,000 shares of common stock (valued
at $58,437 based on the market price on the date of grant) to consultants for
investor relations services.
Item 3. Defaults Upon Senior Securities.
Inapplicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Inapplicable.
Item 5. Other Information.
Inapplicable.
Item 6. Exhibits and Reports on Form 8-K.
Exhibit 27 Financial Data Schedule
None
11
<PAGE> 13
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMDL, Inc.
Dated: November 10, 2000 By: /s/ GARY L. DREHER
--------------------------------
GARY L. DREHER,
President
12
<PAGE> 14
EXHIBIT INDEX
Exhibit 27 Financial Data Schedule
