SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1998
Commission file number 33-56574
DIASENSOR.COM
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1605848
(State of other jurisdiction (IRS Employer
of incorporation or organization) Identification no.)
2275 Swallow Hill Road, Bldg. 2500; Pittsburgh, PA 15220
(Address of principal executive offices) ( Zip Code)
(412) 279-9740
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
As of December 31, 1998, 22,980,051 shares of Diasense,
Inc. common stock, par value $.01 were outstanding.
<PAGE>1
DIASENSE, INC.
(A Development Stage Company)
Consolidated Balance Sheets
December 31, September 30,
ASSETS 1998 1998
(Unaudited) (Note)
----------- -----------
Current assets
Cash and cash equivalents $ 6,285 $ 41,811
Prepaid expenses 3,802 5,792
Due from BICO (notes A and E) - -
----------- -----------
Total current assets 10,087 47,603
Property and equipment - at cost(notes A,C, and J)
Building and improvements 222,296 222,296
Furniture and fixtures 42,750 42,750
----------- -----------
265,046 265,046
Less accumulated depreciation 72,915 69,553
------------ -----------
192,131 195,493
----------- -----------
Other Assets
Due from BICO (notes A and E) 2,167,773 2,197,433
Due from Petrol Rem 2,000 -
Notes Receivable-related parties (note E) 125,000 125,000
Interest Receivable-related parties (note E) 11,870 9,272
Allowance for doubtful account (note E) (2,282,479) (2,282,479)
----------- ----------
24,164 49,226
----------- ----------
TOTAL ASSETS $ 226,382 $ 292,322
=========== ==========
LIABILITIES and STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 71,042 $ 23,606
Accrued payroll and withholdings 104,898 68,721
----------- -----------
Total current liabilities 175,940 92,327
Committments and Contingencies (notes B and F)
Stockholders' equity
Preferred stock, 1,000,000 shares authorized,
none issued Common stock, 40,000,000 shares of
$.01 par value authorized; issued and outstanding
22,980,051 at Dec. 31, 1998 and 22,980,051 at
Sep. 30, 1998 229,801 229,801
Additional paid-in capital 26,892,071 26,892,071
Warrants 17,953,223 17,953,223
Deficit accumulated during the
development stage (45,024,653) (44,875,100)
----------- -----------
50,442 199,995
TOTAL LIABILITIES AND ----------- -----------
STOCKHOLDERS' EQUITY $ 226,382 $ 292,322
=========== ===========
[FN]
The accompanying notes are an integral part of this financial statement.
<PAGE>2
DIASENSE, INC.
(A Development Stage Company)
Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the For the From July 5, 1989
three months ended three months ended (inception) through
December 31, 1998 December 31, 1997 December 31, 1998
-------------------- ------------------ -----------------
<S> <C> <C> <C>
Research and development expenses $ - $ - $ 10,556,405
General and administrative expenses 162,784 168,212 14,363,328
Warrant extensions - 25,000 17,912,908
Technology and patent rights acquired - - 2,650,000
Interest expense _ - 10,529
Other income (13,231) (21,783) (535,922)
Other expense - - 37,405
-------------- ------------- --------------
Net loss $ (149,553) $ (171,429) $ (44,994,653)
============== ============== ==============
Net loss per common share $ (0.01) $ (0.01) $ (2.39)
=============== ============== ==============
See notes to the financial statements.
</TABLE>
<PAGE>3
<TABLE>
DIASENSE, INC.
(A Development Stage Company)
Consolidated Statement of Cash Flows
(Unaudited)
<CAPTION>
For the For the From July 5, 1989
three months ended three months ended (Inception) through
December 31, 1998 December 31, 1997 December 31, 1998
------------------ ------------------ ----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (149,553) $ (171,429) $ (44,994,653)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation 3,362 3,396 72,915
Stock in exchange for services - - 138,950
Stock issued for License and Marketing Agreement - - 80,000
Warrant extensions - 25,000 17,912,908
Inventory Deposit - BICO - - (1,000,000)
(Increase) decrease in prepaid expenses 1,990 5,758 (3,802)
Increase in payable due to BICO - - 10,500,000
Increase (decrease) in accounts payable 47,436 (1,120) 71,042
Increase (decrease) in accrued liabilites 36,177 (30) 104,898
------------------ ------------------ ------------------
Net cash used in operating activities (60,588) (138,425) (17,117,742)
Cash flows from investing activities:
Purchase of property and equipment - - (279,413)
Increase in Notes Receivable - (125,000) (125,000)
Increase in Interest Receivable 2,598 (1,558) (6,674)
------------------ ------------------ ------------------
Net cash used in investing activities 2,598 (126,558) (411,087)
Cash flows from financing activities:
Advances to BICO (1,022,704) (1,649,070) (7,986,230)
Repayment of advances to BICO 52,364 1,127,089 6,385,043
Proceeds from issuance of common stock - - 10,971,834
Proceeds from issuance of common stock to BICO - 3,500 4,200,000
Proceeds from warrants exercised - - 118,066
Proceeds from treasury stock - - (35,000)
Proceeds from Regulation S - - 288,751
Proceeds from issuance of notes payable - - 303,000
------------------ ------------------ ------------------
Net cash provided by financing activities (970,340) (518,481) 14,245,464
------------------ ------------------ ------------------
Net increase (decrease) in cash & equivalents (35,526) (783,464) (3,283,365)
Cash and cash equivalents at beg. of period 41,811 1,871,070 -
------------------ ------------------ ------------------
Cash and cash equivalents at end of period $ 6,285 $ 1,087,606 $ (3,283,365)
================== ================== ==================
See notes to the financial statements.
</TABLE>
DIASENSE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - Basis of Presentation
The accompanying financial statements of Diasense, Inc.
(the "Company") have been prepared in accordance with
generally accepted accounting principles for interim
financial information, and with the instructions to Form 10-
Q and Rule 10-O Regulation S-X. 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. For further information, refer to the financial
statements and footnotes included in the Company's annual
report on Form 10-K for the fiscal year ended September 30,
1998.
NOTE B - Organization
The Company was incorporated on July 5, 1989 as a
wholly owned subsidiary of Biocontrol Technology, Inc.
(BICO). BICO owns 52% of the stock of the Company as of
December 31, 1998. Diasense is currently developing a
noninvasive glucose sensor (Sensor). The sensor would use
electromagnetic technology to measure blood without
requiring the user to take a blood sample.
NOTE C - Net Loss Per Common Share
Net loss per common share is based on the weighted
average number of outstanding common shares which amounted
to 22,980,051 and 22,979,134 for the periods ended December
31, 1998 and December 31, 1997, respectively. The loss per
share does not include common stock equivalents since the
effect would be anti-dilutive.
From July 5, 1989 (inception) to December 31, 1998, net
loss per common share is based on the weighted average number
of common shares outstanding and the number of common shares
issuable on the exercise of 1,708,000 warrants issued in
1992; reduced by 488,000 common shares that were assumed to
have been purchased with the proceeds from the exercise of
the warrants at an assumed price of $3.50 per share. The
inclusion of the warrants in the loss per share calculation
is required by the rules of the Securities and Exchange
Commission relative to the initial registration statement
which included the Company's financial statements through the
period ended March 31, 1993. The registration statement
became effective July 19, 1993. The weighted average number
of common shares including the effect of the conversion of
the warrants amounted to 18,811,244 for the period from July
5, 1989 (inception) to December 31, 1998.
Management's Discussion and Analysis of Financial Condition
and Cash Flows
Liquidity and Capital Resources
Cash decreased from $41,811 at September 30, 1998, to
$6,285 at December 31, 1998. This decrease was primarily
attributable to the Company's $60,588 net cash flow used by
operations and $1,022,704 net advances to BICO.
Results of Operations
There were no research and development expenses
during the three month period ended December 31, 1998 and
1997 due to the agreed-upon suspension of billings by
Diasense and BICO pursuant to the Research and Development
Agreement.
General and Administrative expenses decreased during
the first quarter from $168,212 for the three month period
ended December 31, 1997 to $162,784 for the three month
period ended December 31, 1998. The decrease was primarily
due to reductions in administrative overhead .
Other income during the first quarter decreased from
$21,783 for the three month period ended December 31, 1997
to $13,231 for the three month period ended December 31,
1998. This decrease was due to the Company having lower
cash reserves to invest for the period ending December 31,
1998 than during the period ending December 31, 1997.
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
On January 20, 1999 Diasense, Inc. changed its
name to Diasensor.com.
Item 6. Reports on Form 8-K
None.
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 on this 15th day of February, 1999.
DIASENSE, INC.
By /s/ Fred E. Cooper
Fred E. Cooper
President and Director
(principal executive officer,
principal financial officer and
principal accounting officer)
