SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
February 18, 1998
PARADIGM MEDICAL INDUSTRIES, INC.
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(Exact name of registrant as specified in this Charter)
Utah 0-28498 87-0459536
- ---------------------- ----------- -------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1127 West 2320 South, Suite A, Salt Lake City, Utah 84119
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
Including Area Code: (801) 977-8970
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Does Not Apply
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(Former name or former address, if changed since last report)
<PAGE>
ITEM 7. Financial Statements and Exhibits
(b) The following pro forma statements of Paradigm Medical
Industries, Inc. are included herein:
Pro Forma Condensed Consolidated Balance Sheet as of
December 31, 1997 (unaudited)
Condensed Consolidated Statement of Operations
for the month ended December 31, 1997 (unaudited)
Condensed Consolidated Statement of Operations
for the quarter ended December 31, 1997 (unaudited)
<PAGE>
PARADIGM MEDICAL INDUSTRIES, INC.
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
Pro forma as of
December 31, December 31, 1997
1997 (Unaudited)
(Unaudited) (See Notes A & B
------------- -----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents $ 880,169 $ 880,119
Trade accounts
receivable 102,017 102,017
Inventories 974,766 974,766
Prepaid expenses 148,297 148,297
----------- -----------
Total current
assets 2,105,249 2,105,249
Deferred charges,
net 309,396 309,396
Property and
equipment, net 116,572 116,572
----------- -----------
Total assets $2,531,217 $ 2,531,217
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts
payable $ 212,001 $ 212,001
Accounts payable -
related parties 412,155 412,155
Accrued expenses 327,939 327,939
Note payable to
bank - current 3,277 3,277
Purchase deposit 42,000 42,000
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Total current
liabilities 997,372 997,372
Note payable,
less current portion 11,699 11,699
12% Convertible Redeemable
Notes due 12/08/2000 1,070,000 100,000
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Total liabilities 2,079,071 1,109,071
========== ===========
Stockholders' equity:
Preferred stock, $.001
par value, authorized:
5,000,000 shares
Series A, $.001 par
value, authorized:
500,000 shares;
issued and outstanding:
122,764 shares at
December 31, 1996
and 50,122 shares at
December 31, 1997
(aggregate liquidation
preference of $200,488
at December 31, 1997) 50 50
Series B, $.001 par
value, authorized:
500,000 shares; issued
and outstanding:
448,398 shares at
December 31, 1996
and 45,381 shares at
December 31, 1997
(aggregate liquidation
preference of $181,524
at December 31, 1997 45 45
Additional paid-in capital,
preferred stock 76,186 1,046,176
Series C, $.001 par value
authorized 30,000 shares
($100 stated value) issued
and outstanding 9,700 shares 10
Common stock, $.001
par value, authorized:
20,000,000 shares;
issued and outstanding:
3,194,061 shares at
December 31, 1996 and
3,798,939 shares at
December 31, 1997 3,799 3,799
Additional paid-in
capital, common stock 8,195,501 8,195,501
Treasury stock, 2,600
shares, at cost (3,777) (3,777)
Unearned compensation (6,314) (6,314)
Accumulated deficit (7,813,344) (7,813,344)
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Total stockholders'
equity 452,146 1,422,146
----------- -----------
Total liabilities
and stockholders'
equity $ 2,531,217 $ 2,531,217
=========== ===========
</TABLE>
Note A: Private Placement Financing
On January 23, 1998, Nasdaq's staff determined that the
private placement of Series C Convertible Preferred Stock would
be accepted as equity and could be included in the calculation
for determining compliance with Nasdaq's capital and surplus
requirement. As a result, the private placement memorandum was
rewritten and distributed to accredited investors on February 2,
1998. The Company is offering for sale a minimum of 10,000
shares ($1,000,000) and a maximum of 18,000 shares ($1,800,000)
of Series C Convertible, non-cumulative 12% dividend Preferred
Stock $.001 par value at $100 per share. Since the Company sold
$1,070,000 of 12% Convertible, Redeemable Promissory Notes prior
to this offering, the Company is now offering noteholders the
right to exchange their Notes for Shares of Series C Preferred
Stock at the exchange rate of 500 shares of Preferred Stock for
each $50,000 Note.
Note B:
As of February 18, 1998, Noteholders converted $970,000 of
the 12% Convertible, Redeemable Promissory Notes due 12/8/00 into
9,700 shares of Series C Convertible Preferred Stock. The
Company and the Placement Agent expect to close the minimum
offering no later than February 23, 1998. As of February 18,
1998, $608,000 was held in an escrow account, another $150,000
was pending waiting for check clearance with $250,000 additional
sums expected to be wire transferred before February 23, 1998.
<PAGE>
PARADIGM MEDICAL INDUSTRIES, INC.
STATEMENT OF OPERATIONS
For the Month Ended December 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
One Month Ended
December 31, 1997
--------------------
(Unaudited)
<S> <C>
Sales $ 29,466
Cost of sales 6,816
Amortization of deferred charges 6,188 (a)
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Net cost of sales 13,004
Gross profit $ 16,462
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Gross margin 56%
Operating expenses:
Marketing and selling 46,902
General and administrative 115,537
Research and development 18,944
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Total operating expenses 181,298 (a)
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Operating loss $ (164,836)
Interest income 3,096
Interest expense 8,178
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Total other income (expense) (5,082)
Net Loss $ (169,918) (b)
============
Net loss attributable to common
shareholders $ (0.04)
Shares used in computing net loss
per common share 3,798,939
Note (a) Non-cash items
Amortization of deferred charges $ 6,188
Deferred officers salaries 19,257
Depreciation 2,358
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Total non-cash items $ 27,803
========
(b) Cash burn rate for December $ 142,115
</TABLE>
<PAGE>
PARADIGM MEDICAL INDUSTRIES, INC.
STATEMENT OF OPERATIONS
For the Quarter Ended December 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31, 1997
--------------------
(Unaudited)
<S> <C>
Sales $ 240,811
Cost of sales 81,644
Amortization of deferred charges 18,564 (a)
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Net cost of sales 100,208
Gross profit $ 140,603
------------
Gross margin 58%
Operating expenses:
Marketing and selling 157,468
General and administrative 350,406
Research and development 71,554
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Total operating expenses 579,428 (a)
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Operating loss $ (438,825)
Interest income 5,375
Interest expense 8,262
------------
Total other income (expense) (2,887)
Net Loss $ (441,712) (b)
============
Net loss attributable to common
shareholders $ (0.12)
Shares used in computing net loss
per common share 3,798,939
Note (a) Non-cash items
Amortization of deferred charges $ 18,564
Deferred officers salaries 57,771
Depreciation 7,074
--------
Total non-cash items $ 83,409
========
(b) Cash burn rate for Quarter
Ended 12/31/97 $ 358,303
</TABLE>
<PAGE>
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 hereunto duly authorized.
PARADIGM MEDICAL INDUSTRIES, INC.
(Registrant)
Date: February 18, 1998 By: John W. Hemmer
Treasurer and Chief Financial
Officer
