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, 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 December 31, 1999, 22,980,051 shares of
Diansensor.com, Inc. common stock, par value $.01 were
outstanding.
<PAGE>1
DIASENSOR.COM,INC.
(A Development Stage Company)
Consolidated Balance Sheets
December 31, September 30,
ASSETS 1999 1999
(Unaudited) (Note)
----------- -----------
Current assets
Cash and cash equivalents (note A) $ 10,732 $ 6,525
Prepaid expenses - 130
----------- -----------
Total current assets 10,732 6,655
Property and equipment - at cost(note A)
Furniture and fixtures 42,750 42,750
Less accumulated depreciation 29,857 28,331
------------ -----------
12,893 14,419
----------- -----------
Other Assets
Due from BICO (note A) 1,093,900 1,458,809
Allowance for doubtful account (1,093,900) (1,458,809)
Security Deposit 17,250 17,250
----------- ----------
17,250 17,250
----------- ----------
TOTAL ASSETS $ 40,875 $ 38,324
=========== ==========
LIABILITIES and STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 8,204 $ -
Accrued payroll and withholdings 91,214 91,214
----------- -----------
Total current liabilities 99,418 91,214
Committments and Contingencies (note A)
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, 1999 and 22,980,051 at
Sep. 30, 1999 229,801 229,801
Additional paid-in capital 26,892,071 26,892,071
Warrants 18,454,942 18,453,839
Deficit accumulated during the development stage(45,635,357) (45,628,601)
----------- -----------
(58,543) (52,890)
TOTAL LIABILITIES AND ----------- -----------
STOCKHOLDERS' EQUITY $ 40,875 $ 38,324
=========== ===========
[FN]
The accompanying notes are an integral part of this financial statement.
<PAGE>2
DIASENSOR.COM,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, 1999 December 31, 1998 December 31, 1999
-------------------- ------------------ -----------------
<S> <C> <C> <C>
Research and development expenses $ - $ - $ 10,556,405
General and administrative expenses 371,665 162,784 13,643,796
Provision for (recovery of) doubtful accounts (364,909) - 1,093,900
Warrant extensions - - 18,184,986
Technology and patent rights acquired - - 2,650,000
Interest expense _ - 10,529
Other income - (13,231) (571,664)
Other expense - - 37,405
-------------- ------------- --------------
Net loss $ (6,756) $ (149,553) $ (45,605,357)
============== ============== ==============
Net loss per common share $ (0.00) $ (0.01) $ (2.36)
=============== ============== ==============
See notes to the financial statements.
</TABLE>
<PAGE>3
<TABLE>
DIASENSOR.COM,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, 1999 December 31, 1998 December 31, 1999
------------------ ------------------ ----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (6,756) $ (149,553) $ (45,605,357)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation 1,526 3,362 77,153
Provision for (recovery of) doubtful accounts (364,909) - 1,093,900
Impairment loss - - 14,367
Stock in exchange for services - - 138,950
Stock issued for License and Marketing Agreement - - 80,000
Warrants issued for services 1,103 - 229,641
Warrant extensions - - 18,184,986
Inventory Deposit - BICO - - (1,000,000)
(Increase) decrease in prepaid expenses 130 1,990 -
Increase in payable due to BICO 37,394 - 10,537,394
Increase (decrease) in accounts payable 8,204 47,436 8,204
Increase in accrued payroll and withholdings - 36,177 91,214
Increase in other assets - - (17,250)
------------------ ------------------ ------------------
Net cash used in operating activities (323,308) (60,588) (16,166,798)
Cash flows from investing activities:
Disposal of property and equipment - - 175,000
Purchase of property and equipment - - (279,413)
Increase in Notes Receivable - - (125,000)
Increase in Interest Receivable - 2,598 (13,538)
------------------ ------------------ ------------------
Net cash used in investing activities - 2,598 (242,951)
Cash flows from financing activities:
Advances to BICO (985) (1,022,704) (7,061,949)
Repayment of advances to BICO 328,500 52,364 7,635,779
Proceeds from issuance of common stock - - 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 327,515 (970,340) 16,420,481
------------------ ------------------ ------------------
Net increase (decrease) in cash & equivalents 4,207 (35,526) 10,732
Cash and cash equivalents at beg. of period 6,525 41,811 -
------------------ ------------------ ------------------
Cash and cash equivalents at end of period $ 10,732 $ 6,285 $ 10,732
================== ================== ==================
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
Diansensor.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,
1999.
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, 1999. Diansensor.com, Inc. 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 December
31, 1999 and December 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 December 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 19,328,754 for the period from July 5,
1989 (inception) to December 31, 1999.
DIANSENSOR.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
NOTE D - Legal Proceedings
In 1998, the Company and its affiliates were served
with subpoenas by the U.S. Attorneys' office; the Company
has produced documents 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.
NOTE E - Subsequent Events
In January 2000, the Company acquired a ten percent
(10%) interest in MicroIslet, Inc. for an investment of
$500,000. MicroIslet is a Calfornia company which has
licensed several diabetes research technologies from Duke
University with a specific focus on optimizing
microencapsulated islets for transplantation.
Management's Discussion and Analysis of Financial Condition and Cash Flows
Liquidity and Capital Resources
Cash increased from $6,525 at September 30, 1999, to
$10,732 at December 31, 1999. This increase was primarily
attributable to BICO's repayment of prior advances.
Results of Operations
There were no research and development expenses during
the three month period ended December 31, 1999 and 1998 due
to the agreed-upon suspension of billings by Diansensor.com
and BICO pursuant to the Research and Development Agreement.
General and Administrative expenses increased during
the first quarter from $162,784 for the three month period
ended December 31, 1998 to $371,665 for the three month
period ended December 31, 1999. The increase was primarily
due to increase in administrative overhead .
Other income during the first quarter decreased from
$13,231 for the three month period ended December 31, 1998
to $0 for the three month period ended December 31, 1999.
This decrease was due to a reduction in rental income and
the Company having lower cash reserves to invest for the
period ending December 31, 1999 than during the period
ending December 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 February, 2000.
DIANSENSOR.COM, INC.
By /s/ Fred E. Cooper
Fred E. Cooper
President and Director (principal
executive officer, principal financial
officer and principal accounting
officer)
