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 March 31, 1999
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 March 31, 1999, 22,980,051 shares of
Diasensor.com, Inc. common stock, par value $.01 were
outstanding.
DIASENSOR.COM, INC.
(A Development Stage Company)
Consolidated Balance Sheets
March 31, September 30,
ASSETS 1999 1998
(Unaudited)
----------- -----------
Current assets
Cash and cash equivalents $ 9,677 $ 41,811
Prepaid expenses 21,013 5,792
----------- -----------
Total current assets 30,690 47,603
Property and equipment-at cost (note A)
Building and improvements - 222,296
Furniture and fixtures 42,750 42,750
----------- -----------
42,750 265,046
Less accumulated depreciation 25,277 69,553
------------ -----------
17,473 195,493
----------- -----------
Other assets
Due from BICO (note A) 2,087,982 2,197,433
Due from Petrol Rem 2,000 -
Notes receivable - related parties 125,000 125,000
Interest receivable - related parties 14,414 9,272
Allowance for doubtful account (2,228,243) (2,282,479)
---------- ---------
1,153 49,226
---------- ---------
TOTAL ASSETS $ 49,316 $ 292,322
=========== ===========
LIABILITIES and STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 11,107 $ 23,606
Accrued payroll and withholdings 105,033 68,721
----------- -----------
Total current liabilities 116,140 92,327
Commitments and Contingencies (note B)
Stockholders' equity (deficit)
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 Sept. 30, 1998 and
22,980,051 at Mar. 31, 1999 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 (45,141,919) (44,875,100)
----------- -----------
(66,824) 199,995
TOTAL LIABILITIES AND ----------- -----------
STOCKHOLDERS' EQUITY $ 49,316 $ 292,322
=========== ===========
The accompanying notes are an integral part of this statement.
DIASENSOR.COM, INC.
(A Development Stage Company)
<TABLE>
Consolidated Statement of Operations
(Unaudited)
<CAPTION>
For the six months ended For the three months ended From July 5, 1989
March 31, March 31, (inception) through
1999 1998 1999 1998 March 31, 1999
------------------------- -------------------------- -------------------
</CAPTION>
<S> <C> <C> <C> <C> <C>
Research and development expenses $ - $ - $ - $ - $ 10,556,405
General and administrative expenses 242,489 303,946 81,390 141,234 14,444,718
Warrant extensions - 25,000 - - 17,912,908
Technology and patent rights acquired 49,237 13,080 47,552 7,580 2,697,552
Interest expense 1,499 - 1,499 - 12,028
Other income (26,406) (35,673) (13,175) (13,890) (549,097)
Other expense - - - - 37,405
-------------------------- -------------------------- -------------------
Net loss $ (266,819) $ (306,353) $ (117,266) $ (134,924) $(45,111,919)
=========== =========== =========== =========== ===================
Net loss per common share $ (0.01) $ (0.01) $ (0.01) $ (0.01) $ (2.38)
=========== =========== =========== =========== ===================
See notes to the financial statements.
</TABLE>
<TABLE>
DIASENSOR.COM, INC.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
<CAPTION>
For the six months ended For the three months ended From July 5,1989
March 31, March 31, (Inception) thru
1999 1998 1999 1998 March 31, 1999
------------------------ -------------------------- ----------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net Loss $ (266,819) $ (306,353) $ (117,266) $(134,924) $(45,111,919)
Adjustments to reconcile net loss to net
cash used by operating activites:
Depreciation 3,020 6,791 (342) 3,395 72,573
Provision for doubtful accounts - - - - 2,282,479
Reduction in allowance for doubtful accounts (54,236) - (54,236) - (54,236)
Impairment loss - - - - 14,367
Stock in exchange for services - - - - 138,950
Stock issued for License and Marketing Agreement - - - - 80,000
Warrent extensions - 25,000 - - 17,912,908
Inventory Deposit-BICO - - - - (1,000,000)
(Increase)Decrease in prepaid expenses (15,221) 8,680 (17,210) 2,922 (21,013)
Increase in payable due to BICO - - - - 10,500,000
Increase (Decrease) in accounts payable (12,499) 22,439 (59,935) 23,559 11,107
Increase (Decrease) in accrued liabilities 36,312 (20) 135 10 105,033
------------ ----------- ------------ ------------ ----------------
Net cash used in operating activities (309,443) (243,463) (248,854) (105,038) (15,069,751)
Cash flows from investing activities:
Disposal of property and equipment 175,000 - 175,000 - 175,000
Purchase of property and equipment - - - - (279,413)
Note Receivable - (125,000) - - (125,000)
Interest Receivable (5,142) (3,225) (2,544) (1,667) (14,414)
------------ ------------ ------------ ------------- ------------
Net cash used in investing activities 169,858 (128,225) 172,456 (1,667) (243,827)
Cash flows from financing activities:
Advances to BICO (176,437) (2,724,903) (151,733) (1,075,833) (7,139,963)
Repayment of advances to BICO 283,888 1,247,007 231,523 119,918 6,616,567
Proceeds from issuance of common stock - 3,500 - - 10,971,834
Proceeds from issuance of common stock to BICO - - - - 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 107,451 (1,474,396) 79,790 (955,915) 15,323,255
-------------- -------------- ------------- ------------ -------------
Net increase (decrease) in cash and cash equiv. (32,134) (1,846,084) 3,392 (1,062,620) 9,677
Cash and cash equivalents at beginning of period 41,811 1,871,070 6,285 1,087,606 -
-------------- -------------- ------------- ------------ -------------
Cash and cash equivalents at end of period $ 9,677 $ 24,986 $ 9,677 $ 24,986 $ 9,677
============== ============== ============= ============ =============
See notes to the financial statements.
</TABLE>
DIASENSOR.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - Basis of Presentation
The accompanying financial statements of Diasensor.com,
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
March 31, 1999. Diasensor.com 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 22,980,051 for the periods ended March 31,
1999 and March 31, 1998, respectively. The loss per share
does not include common stock equivalents since the effect
would be anti-dilutive.
From July 5, 1989 (inception) to March 31, 1999,
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 18,950,660 for the period from July
5, 1989 (inception) to March 31, 1999.
DIASENSOR.COM, INC.
NOTE D - Legal Proceedings
In 1998, the Company and its affiliates were served with
subpoenas by the U.S. Attorneys' office; the Company is
currently in the process of copying documents for production
in response to such subpoenas. The class action suit which
names the Company as a defendant remains in the pre-trial
pleading stage pursuant to consent of all the parties.
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
$9,677 at March 31, 1999. This decrease was primarily
attributable to the Company's $309,443 net cash flow used by
operations and $176,437 net advances to BICO.
Results of Operations
There were no research and development expenses
during the six month period ended March 31, 1999 and 1998
due to the agreed-upon suspension of the Research and
Development Agreement between Diasensor.com and BICO.
General and Administrative expenses decreased during
the second quarter from $141,234 for the three month period
ended March 31, 1998 to $81,390 for the three month period
ended March 31, 1999 and decreased from $303,946 for the six
month period ended March 31, 1998 to $242,489 for the six
month period ended March 31, 1999. The decrease was
primarily due to reductions in administrative staff along
with administrative overhead.
Other income during the second quarter decreased from
$13,890 for the three month period ended March 31, 1998 to
$13,175 for the three month period ended March 31, 1999 and
decreased from $35,673 for the six month period ended March
31, 1998 to $26,406 for the six month period ended March 31,
1999. This decrease was due to the Company having lower
cash reserves to invest during the period ending March 31,
1999 than during the period ending March 31, 1998.
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. 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 May, 1999.
DIASENSOR.COM, INC.
By /s/ Fred E. Cooper
Fred E. Cooper
President and Director
(principal executive officer,
principal financial officer
and principal accounting
officer)
