SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarterly Period Ended June 30, 1999
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from_________________ to___________________.
Commission file No. 33-75236
LONGPORT, INC.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 23-2715528
- ------------------------------- -------------------------------
(State or other jurisdiction of IRS Employer Identification No.
Incorporation or organization)
791 South Chester Rd. Swarthmore, Pa. 19081
-------------------------------------------
(Address of principal executive offices)
610-328-5006
------------
(Issuers telephone number)
Check whether the issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act 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 June 30, 1999, 17,570,449 shares of common stock were outstanding.
<PAGE>
LONGPORT, INC.
FORM 10-QSB
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheet
as of June 30, 1999 1-2
Consolidated Condensed Statements of
Operations for the three months and six months
ended June 30, 1999 and 1998 3-4
Consolidated Condensed Statements of Cash
Flows for the six months ended June 30, 1999
and 1998 5-6
Notes to Consolidated Condensed Financial Statements 7
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 8-12
Part II. Other Information and Signatures 13-15
<PAGE>
LONGPORT, INC. AND SUBSIDIARY JUNE 30, 1999
CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS:
CASH $ 1,746,691
ACCOUNTS RECEIVABLE:
TRADE, NET OF ALLOWANCE FOR DOUBTFUL
ACCOUNTS OF $3,600 127,500
INTEREST AND OTHER 3,062
PREPAID EXPENSES 33,811
INVENTORIES 31,071
NOTE RECEIVABLE 3,750
-----------
TOTAL CURRENT ASSETS 1,945,885
-----------
PROPERTY AND EQUIPMENT, AT COST:
MEDICAL EQUIPMENT 116,638
COMPUTER EQUIPMENT 10,305
OFFICE FURNITURE AND EQUIPMENT 7,901
-----------
134,844
LESS ACCUMULATED DEPRECIATION (73,504)
-----------
NET PROPERTY AND EQUIPMENT 61,340
-----------
OTHER ASSETS:
ACCOUNTS RECEIVABLE 787,500
INTANGIBLE ASSETS, NET OF ACCUMULATED
AMORTIZATION OF $40,833 9,167
DEPOSIT 1,175
-----------
TOTAL OTHER ASSETS 797,842
-----------
TOTAL ASSETS $ 2,805,067
===========
The accompanying notes are an integral part of these
consolidated condensed financial statements
1
<PAGE>
LONGPORT, INC. AND SUBSIDIARY JUNE 30, 1999
CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
- --------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
ACCRUED EXPENSES:
SALARIES AND PAYROLL TAXES 12,728
-----------
TOTAL CURRENT LIABILITIES 12,728
-----------
COMMITMENTS AND CONTINGENCIES --
STOCKHOLDERS' EQUITY:
PREFERRED STOCK: $.001 PAR VALUE
1,000,000 SHARES AUTHORIZED, NONE ISSUED
OR OUTSTANDING --
COMMON STOCK: $.001 PAR VALUE
25,000,000 SHARES AUTHORIZED,
17,570,449 SHARES ISSUED AND OUTSTANDING 17,570
PAID IN CAPITAL 6,329,023
ACCUMULATED DEFICIT (3,549,254)
-----------
2,797,339
LESS TREASURY STOCK, AT COST (30,000 COMMON SHARES) (5,000)
-----------
TOTAL STOCKHOLDERS' EQUITY 2,792,339
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,805,067
===========
The accompanying notes are an integral part of these
consolidated condensed financial statements
2
<PAGE>
FOR THE THREE MONTHS
LONGPORT, INC. AND SUBSIDIARY ENDED JUNE 30,
-----------------------------
CONSOLIDATED CONDENSED STATEMENTS OF 1999 1998
OPERATIONS (UNAUDITED) (UNAUDITED)
- --------------------------------------------------------------------------------
NET REVENUES:
MEDICAL SUPPLY SALES $ 1,952 $ 4,408
MEDICAL EQUIPMENT RENTALS 2,400 3,525
MANAGEMENT FEES 48,000 29,000
LICENSE FEES 93,000 45,429
SCANNER ENHANCEMENT REVENUE 30,000 --
LICENSE PURCHASE OPTION 30,000 --
-----------------------------
TOTAL REVENUES 205,352 82,362
-----------------------------
OPERATING EXPENSES:
COST OF MEDICAL SUPPLY SALES 1,082 697
COST OF MEDICAL EQUIPMENT RENTALS 1,000 2,625
GENERAL AND ADMINISTRATIVE 175,117 199,049
RESEARCH AND DEVELOPMENT EXPENSE 17,468 --
-----------------------------
TOTAL OPERATING EXPENSES 194,667 202,371
-----------------------------
OPERATING INCOME (LOSS) 10,685 (120,009)
-----------------------------
OTHER INCOME:
INTEREST INCOME 594 --
-----------------------------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES 11,279 (120,009)
PROVISION FOR INCOME TAXES -- --
-----------------------------
NET INCOME (LOSS) $ 11,279 $ (120,009)
=============================
NET INCOME (LOSS) PER COMMON SHARE:
BASIC $ 0.00 $ (0.01)
DILUTED $ 0.00 $ (0.01)
COMMON EQUIVALENT SHARES:
BASIC 17,219,829 15,387,326
DILUTED 18,011,484 15,387,326
The accompanying notes are an integral part of these
consolidated condensed financial statements
3
<PAGE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
LONGPORT, INC. AND SUBSIDIARY ENDED JUNE 30,
-------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF 1999 1998
OPERATIONS (UNAUDITED) (UNAUDITED)
- --------------------------------------------------------------------------------
<S> <C> <C>
NET REVENUES:
MEDICAL SUPPLY SALES $ 9,922 $ 5,751
MEDICAL EQUIPMENT RENTALS 3,200 5,925
MANAGEMENT FEES 96,000 54,500
LICENSE FEES 171,000 83,429
TERRITORIAL LICENSE FEES 1,100,000 --
SCANNER ENHANCEMENT REVENUE 30,000 --
LICENSE PURCHASE OPTION 30,000 --
-------------------------------
TOTAL REVENUES 1,440,122 149,605
-------------------------------
OPERATING EXPENSES:
COST OF MEDICAL SUPPLY SALES 5,833 3,404
COST OF MEDICAL EQUIPMENT RENTALS 1,000 2,925
GENERAL AND ADMINISTRATIVE 387,854 434,926
RESEARCH AND DEVELOPMENT EXPENSE 23,217 --
-------------------------------
TOTAL OPERATING EXPENSES 417,904 441,255
-------------------------------
OPERATING INCOME (LOSS) 1,022,218 (291,650)
-------------------------------
OTHER INCOME:
INTEREST INCOME 595 --
-------------------------------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES 1,022,813 (291,650)
PROVISION FOR INCOME TAXES -- --
-------------------------------
NET INCOME (LOSS) $ 1,022,813 $ (291,650)
===============================
NET INCOME (LOSS) PER COMMON SHARE:
BASIC $ 0.06 $ (0.02)
DILUTED $ 0.06 $ (0.02)
COMMON EQUIVALENT SHARES:
BASIC 16,678,396 15,172,193
DILUTED 17,262,018 15,172,193
The accompanying notes are an integral part of these
consolidated condensed financial statements
4
<PAGE>
FOR THE SIX MONTHS
ENDED JUNE 30,
-----------------------------
LONGPORT, INC. AND SUBSIDIARY 1999 1998
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (UNAUDITED)
- --------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $ 1,022,813 $ (291,650)
ADJUSTMENTS TO RECONCILE NET INCOME
(LOSS) TO NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 14,150 12,000
CHANGES IN ASSETS AND LIABILITIES:
(INCREASE) IN ACCOUNTS RECEIVABLE (904,122) (1,620)
(INCREASE) DECREASE IN OTHER RECEIVABLES (3,062) 1,200
(INCREASE) DECREASE IN PREPAID EXPENSES (3,860) 14,000
(INCREASE) IN INVENTORIES (5,604) (1,200)
INCREASE (DECREASE) IN ACCOUNTS PAYABLE
AND ACCRUED EXPENSES (23,663) 7,120
----------------------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 96,652 (260,150)
----------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
CAPITAL EXPENDITURES (36,314) (9,000)
PAYMENTS RECEIVED ON NOTES RECEIVABLE -- 7,500
----------------------------
NET CASH (USED) BY INVESTING ACTIVITIES (36,314) (1,500)
----------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
ISSUANCE OF COMMON STOCK 1,558,500 229,000
-----------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,558,500 229,000
-----------------------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,618,838 (32,650)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 127,853 36,397
-----------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,746,691 $ 3,747
=============================
The accompanying notes are an integral part of these
consolidated condensed financial statements
5
<PAGE>
FOR THE SIX MONTHS ENDED
JUNE 30,
---------------------------
LONGPORT, INC. AND SUBSIDIARY 1999 1998
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (UNAUDITED)
- -------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR:
INTEREST $ -- $ --
INCOME TAXES -- --
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
COMMON STOCK ISSUED FOR MEDICAL EQUIPMENT $ -- $ 62,500
The accompanying notes are an integral part of these
consolidated condensed financial statements
6
</TABLE>
<PAGE>
LONGPORT, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying financial information of the Company is prepared in
accordance with the rules prescribed for filing condensed interim financial
statements and, accordingly, does not include all disclosures that may be
necessary for complete financial statements prepared in accordance with
generally accepted accounting principles. The disclosures presented are
sufficient, in management's opinion, to make the interim information
presented not misleading. All adjustments, consisting of normal recurring
adjustments, which are necessary so as to make the interim information not
misleading, have been made. Results of operations for the six months ended
June 30, 1999 are not necessarily indicative of results of operations that
may be expected for the year ending December 31, 1999. It is recommended
that this financial information be read with the complete financial
statements included in the Company's Form 10-KSB dated December 31, 1998
previously filed with the Securities and Exchange Commission.
2. Basic earnings per common share is calculated by dividing net income (loss)
for the period by the weighted-average number of common shares outstanding
during the period. Diluted earnings per share is calculated by dividing net
income (loss) for the period by the weighted average number of common
shares outstanding during the period, increased by the dilutive potential
common shares ("dilutive securities") that were outstanding during the
period. Dilutive securities include outstanding stock options and warrants.
Dilutive securities relating to stock options and warrants are included in
the calculation of diluted earnings per share using the treasury stock
method.
The schedule below summarizes the elements included in the calculation of
basic and diluted net income (loss) per common share for the periods ended
June 30, 1999 and 1998. For the period ended June 30, 1999, warrants to
purchase 1,185,714 common shares were excluded from the calculation of
diluted net income per share, as their effect would have been antidilutive.
For the period ended June 30, 1998 options and warrants to purchase
1,379,714 common shares were excluded from the calculations of diluted net
(loss) per share, as their effect would have been antidilutive.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ -----------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) $ 11,279 $ (120,009) $ 1,022,813 $ (291,650)
============ ============ ============ ===========
Weighted-average common shares outstanding:
Weighted average common shares outstanding -
Basic 17,219,829 15,387,326 16,678,396 15,172,193
Dilutive securities 791,655 -- 583,622 --
------------ ------------ ------------ -----------
Weighted-average common shares outstanding -
Diluted 18,011,484 15,387,326 17,262,018 15,172,193
============ ============ ============ ===========
Net income (loss) per common share:
Basic $ 0.00 $ (.01) $ .06 $ (.02)
Diluted $ 0.00 $ (.01) $ .06 $ (.02)
7
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of operations
The three months ended June30, 1999 vs.
the three months ended June 30, 1998.
Revenues for 1999 were $205,352 compared to $82,362 for 1998. Revenues from
medical supplies and equipment sales and rentals decreased $3,581. Revenues
generated from wound center management fees increased 65.5%, from $29,000 to
$48,000. Licensing and marketing fees increased $47,571, from $45,429 to
$93,000. This change reflects the shift in the Company's business philosophy
from reliance on sales and rentals. The Company expects licensing and marketing
fees to increase in the future.
Total expenses decreased to $194,667 in 1999 from $202,371 in 1998. This
decrease is due to the Company's efforts to reduce General and Administrative
expenses. Additionally, approximately $30,000 in legal and accounting fees
related to the preparation of a Private Placement Memorandum for 500,000 shares
of redeemable preferred stock was incurred in 1999, and will not reoccur. On
June 23, 1999, the Company received 510K marketing clearance from the FDA to
market the Scanner. The Company expects research and development expenses
related to the Scanner to increase over time, as these expenses are necessary in
the preparation for marketing the Scanner.
The Company's operations have undergone a significant transformation as
management has become more focused on the development of the Scanner technology.
This has also been a driving force behind the Company's increased revenues from
licensing and marketing fees, which increased 104.7% from the three-month period
for 1998. The Company's revenues from Management Fees, through the wound centers
at West Jersey Health System's Camden hospital, West Hudson Hospital, and
Accelerated Care Plus, have been far eclipsed by the licensing fees that are
related to the Company's general wound healing programs, including the scanner
and the topical hyperbaric oxygen products. The Company's regular expenses, such
as salaries and general office expenses remain essentially unchanged from month
to month.
The Company's stability and focus can be seen in the comparison of
Stockholders' Equity. There has been an increase of over $2,654,000 from 1998 to
1999.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of operations
The six months ended June 30, 1999 vs.
the six months ended June 30, 1998
Comparison of the Company's operations for the six month period essentially
follows that of the three month period comparison described above. The Company
has increased revenues over nine times for the six-month period in 1999, as
compared to 1998, to $1,440,122, from $149,605. However, $1,100,000 of that
increase was the result of the sale of territorial licenses. The Company expects
that there will be additional sales of territorial licenses, but cannot predict
the revenue to be derived from such sales. Expenses for the six months ended
June 30, 1999 are lower than for 1998 by $23,351. This is a direct result of the
Company's efforts to reduce expenses. The Company expects to increase spending
on Research and Development of the Scanner, now that FDA 510K marketing
clearance has been obtained, and mass production of the Scanner is under
preparation.
9
<PAGE>
Strategy to Achieve Profitable Operations
Management expects the revenues for 1999 to continue to grow over and above
those for 1998, directly as a result of the licensing relationships it now
promotes. This will likely correspond with increasing expenses related to the
development of the Scanner. The Company received FDA Medical Device marketing
clearance on June 23, 1999. The Company anticipates obtaining future licensing
and consulting service clients, which should lead to additional revenues from
the rental and sales of equipment to those clients. The Company continues to
negotiate with other healthcare providers to provide consulting services.
Management continues negotiating for business relationships for the marketing of
the Scanner technology.
Cash flow problems for the Company no longer exist. The Company's revenues
currently permit it to meet its regular obligations, including salaries. The
Company seeks outside sources for additional capital as needed to fund research
projects or significant portions of the Scanner development projects. Otherwise,
the Company utilizes the cash remaining on a monthly basis to support ongoing
research and marketing activities. Management intends to negotiate future
relationships that will not damage the Company's current cash flow, or incur
significant expenses. See Liquidity and Capital Resources and Part II, Legal
Proceedings.
Overall, the Company anticipates growth in revenues in 1999. Management
looks to create new relationships that will increase revenues, while controlling
the Company's expenses and debt. The Company continues to explore the
possibility of additional equity financing to provide additional capital, for
the development of the Scanner technology and the expansion of the business, but
can make no assurances that financing can be obtained.
Liquidity and Capital Resources
The Company's current assets significantly exceed its current liabilities.
Management does not expect to incur significant liabilities in the near future.
As for the stockholders' equity, it has increased to $2,792,339 for 1999 versus
$138,187 for 1998.
As of June 30, 1999, the Company's working capital was $1,933,157.
Management anticipates that it will have to sell additional shares of restricted
Common Stock to fund any expansions of the business and the development of the
Scanner technology. Management does not expect to incur any significant
short-term or long-term debt within the next twelve months.
10
<PAGE>
The Company anticipates growth from additional license agreements,
management fees, and sales and rentals of equipment during 1999. New license
agreements and Wound Healing Center contracts will essentially mirror the
agreements the Company now has in place. The Company intends to continue its
practice of acting as a management consultant to healthcare providers, for a
fixed monthly fee.
In September 1997, the Company was notified of a Medicare Hearing Officer's
decision that the Company is liable for repayment of Medicare Benefit
overpayments of $269,120. The Overpayments are from calendar years 1994 and
1995. The Company appealed the Hearing Officer's decision, and an Administrative
Law Judge heard the Appeal on January 5, 1999. The Administrative Law Judge
reviewed fourteen cases out of approximately 500 cases in dispute. The
Administrative Law Judge rendered his decision on February 18, 1999 regarding
the fourteen cases as follows:
A. Five cases were dismissed.
B. Three cases were decided as partially unfavorable resulting in an
overpayment of $1,434 and two cases need to be recalculated.
C. Six cases were decided as unfavorable resulting in an overpayment of
$6,420.
The other cases were not reviewed and the Company does not know if they will be
reviewed by the Administrative Law Judge. The Company has the right to appeal
the Administrative Law Judge's decision with the Appeals Council. The Appeal
must be written and filed within sixty days. The Company appealed the
Administrative Law Judge's decision in April 1999. The Company is unable to
predict the outcome of the Appeal. However, Management believes that there were
no Medicare Benefit Overpayments in 1994 and 1995 and will vigorously defend its
position.
Payment of any judgement or settlement in connection with the Medicare Benefit
Overpayments Appeal together with the costs of defending the Appeal could
adversely affect the Company's results of operations and financial condition.
The Company raised capital through the private sale of stock to current and new
shareholders through June 30, 1999. Between April 1 and June 30, the Company
sold 1,409,500 shares, at an average price of $1.106 per share, for total
proceeds of $1,558,500.
To date, there have been no sales of the Company's convertible redeemable
preferred stock, which was made available through a Confidential Private
Placement Memorandum.
The Company entered into an agreement as of June 1, 1999 with HealthLink
International Inc. (HLI). HLI will provide $5,000,000 over the next five years
to fund research for biomedical technology developments to and for Longport's
digital scanner technologies. For its part, HLI will share in the proceeds from
the sale or lease of any new generation of probes and/or new application of the
LDS developed as a result of the research funded by HLI, as well as the sale
and/or lease of the LDS in its existing form by HLI personnel or associated
entities.
Computer Systems - The Year 2000 Issue
Many computers, software programs and other equipment with embedded computer
chips (systems) in use today utilize two digits to specify the year, such as
"98" for 1998 (the Y2K issue). As a result of the Y2K issue, such systems may
recognize a date using "00" as the year 1900 rather than the year 2000. In some
cases, the date "00" may cause system(s) failure(s) or miscalculations causing
disruptions of the Company's operations.
11
<PAGE>
In early 1998 the Company began formulating a comprehensive plan to assess the
Company's Y2K issues. The plan called for the identification of those systems,
both internal and external, which are critical to the Company's ability to
continue normal operations, the assessment of any required remediation
(including any upgrading, modification and replacement of computer hardware and
software and adequate testing to ensure Y2K compliance), and the resources
needed to bring those critical systems into Y2K compliance.
The internal systems under evaluation included the Company's point-of-sale,
accounting, data processing, telephone and other miscellaneous information
technology systems, as well as alarm systems, printers, fax machines and modems.
The Company believes that it has identified the internal systems that were
susceptible to failure or potential processing errors as a result of theY2K
issue. The Company concentrated its Y2K efforts on these systems. The Company
believes that its Y2K identification, assessment and remediation efforts for
critical internal systems are essentially complete. However, testing for Y2K
compliance will be an on-going process.
The Company believes that its computer hardware and related peripherals are
currently Y2K compliant based upon representations made by the providers of such
equipment. The Company also believes that its accounting and payroll software
systems are Y2K compliant, and testing to ensure such compliance is essentially
complete.
The Company is reviewing, and has initiated written communications with other
third parties providing goods or services, such as financial institutions and
utility companies, which may be critical to the Company's operations to; (i)
ascertain the extent to which the Company may be exposed to adverse affects for
any failure by such third parties to remediate their Y2K issues; and (ii)
resolve, to the extent practicable, such problems. However, the Company has no
control over and has only limited ability to influence such third parties Y2K
compliance. The failure of such third parties to achieve Y2K compliance in a
timely manner and the potential inability to replace such a third party
provider, could adversely impact the Company's operations.
The Company estimates that the total identifiable cost of its Y2K compliance
effort has not exceeded $10,000.00. As of June 30, 1999, the Company had
incurred approximately $10,000.00 to upgrade its computer hardware and software.
The Company does not track personnel costs associated with its Y2K compliance
effort. The Company has funded Y2K expenditures from internal sources.
Based on the progress made to date and its timetable for further progress in
attaining Y2K compliance, the Company does not currently anticipate any
significant risks associated with its Y2K issues. However, management believes
that it is not possible to determine with absolute certainty that all Y2K issues
pertaining to the Company have or will be identified and corrected. Because the
assessment of its Y2K issues is incomplete at this time, the Company has yet to
determine the most reasonably likely worst case scenario relating to Y2K issues,
and has yet to complete a comprehensive contingency plan with respect to its Y2K
issues. The Company anticipates completing the Y2K assessment and comprehensive
contingency plan by September 30, 1999.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
The Statements made under the Management's Discussion and Analysis of
Financial Condition and Results of Operations, and other statements within this
document, that are not based on historical facts, are forward looking statements
that involve risks and uncertainties, including but not limited to, market
acceptance risks, the effect of economic conditions, the impact of competition
and pricing, product development, commercialization and technology difficulties,
the results of financing efforts, and other risks detailed in the Company's
Securities and Exchange Commission filings.
12
<PAGE>
Part II
Other Information
Item 1. Legal Proceedings
The Company continues in its pursuit of recovery for damages against the
attorneys who brought the federal lawsuit against the Company on behalf of Supra
Medical Corp. There have been no significant events to report during this
three-month period.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of the shareholders was held on June 4, 1999. Three
directors, James McGonigle, Peter Cavanaugh, and William Mullin were elected.
The independent accounting firm, Angell & Deering, Certified Public Accountants,
was appointed to conduct the audit of the Company's financial statements for the
year ended December 31, 1999.
Item 5. Other Information
William Mullin joined the Company, as its President, on June 1, 1999.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits None.
b) Reports on Form 8-K None.
13
<PAGE>
SIGNATURE
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.
Longport, Inc.
/s/ James R. McGonigle
Dated: August 10, 1999 ------------------------------------
James R. McGonigle
Chief Executive Officer/Chief
Accounting Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10-QSB
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,746,691
<SECURITIES> 0
<RECEIVABLES> 918,600
<ALLOWANCES> 3,600
<INVENTORY> 31,071
<CURRENT-ASSETS> 1,945,885
<PP&E> 134,844
<DEPRECIATION> (73,504)
<TOTAL-ASSETS> 2,805,067
<CURRENT-LIABILITIES> 12,728
<BONDS> 0
0
0
<COMMON> 17,570
<OTHER-SE> 2,774,769
<TOTAL-LIABILITY-AND-EQUITY> 2,805,067
<SALES> 9,922
<TOTAL-REVENUES> 1,440,122
<CGS> 5,833
<TOTAL-COSTS> 417,904
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,022,813
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,022,813
<EPS-BASIC> .06
<EPS-DILUTED> .06
</TABLE>
