========================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 10-QSB
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
Commission File Number: 1-11765
MEDJET INC.
(Exact name of Small Business Issuer as Specified in its Charter)
DELAWARE 22-3283541
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1090 King Georges Post Road, Suite 301
Edison, New Jersey 08837
(Address of Principal Executive Offices)
(908) 738-3990
(Registrant's Telephone Number, Including Area Code)
________________________________________________________________________
(Former Name, Former Address and Former Fiscal Year, if Changed Since
Last Report)
Check whether the issuer (1) has 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. / X / Yes / / No
Common Stock, par value $.001 per share, outstanding as of
November 1, 1996: 3,682,455 shares
Units, each consisting of one share of Common Stock (included above
in the number of shares of Common Stock outstanding) and one warrant to
purchase one share of Common Stock, outstanding as of November 1, 1996:
1,232,143 Units
## CT01/SHERC/90225.31<PAGE>
Transitional Small Business Disclosure format: / / Yes / X / No-
========================================================================
<PAGE>
## CT01/SHERC/90225.31<PAGE>
MEDJET INC.
INDEX
PART I. FINANCIAL INFORMATION Page
No.
------------------------------ -----
---
ITEM 1. Financial Statements
Condensed Interim Balance Sheet as of
September 30, 1996 (Unaudited) . . . . . . . . . . .
Condensed Interim Statements of Operations for the
Three and Nine Months Ended September 30, 1996
and 1995 and the Period From December 16, 1993
(Date of Inception) to September 30, 1996
(Unaudited) . . . . . . . . . . . . . . . . . . . . .
Condensed Interim Statements of Cash Flows for the
Nine Months Ended September 30, 1996 and 1995
and the Period from December 16, 1993 (Date of
Inception) to September 30, 1996 (Unaudited) . . . .
Notes to Condensed Interim Financial Statements . . .
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . .
PART II. OTHER INFORMATION
---------------------------
ITEM 6. Exhibits and Reports on Form 8-K . . . . . . . . .
SIGNATURES
## CT01/SHERC/90225.31<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
MEDJET INC.
(A Development Stage Company)
Condensed Interim Balance Sheet
September 30, 1996
(Unaudited)
ASSETS
<S> <C>
CURRENT ASSETS:
--------------
Cash and cash equivalents $4,940,788
Accounts receivable 2,083
Prepaid expenses 61,204
----------
5,004,075
----------
PROPERTY, PLANT & EQUIPMENT:
---------------------------
Less accumulated depreciation of $72,641 94,719
----------
ORGANIZATION COSTS
------------------
Less accumulated amortization of $18,269 19,118
----------
PATENTS AND TRADEMARKS
----------------------
Less accumulated amortization of $1,628 41,567
----------
SECURITY DEPOSITS 5,437
----------------- ----------
Total Assets $5,164,916
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
-------------------
Accounts payable $ 157,030
## CT01/SHERC/90225.31<PAGE>
Accrued interest payable 12,617
Notes payable - officer 315,000
----------
Total Liabilities 484,647
---------
STOCKHOLDERS' EQUITY:
------------------------------
Common stock, $.001 par value,
7,000,000 shares authorized, 3,682,455 shares
issued and outstanding 3,682
Preferred stock, $.01 par value, 1,000,000
shares authorized, no shares issued --
Additional paid-in capital 4,870,880
Retained earnings (deficit) (194,293)
-----------
Total Stockholders' Equity 4,680,269
-----------
Total Liabilities and Stockholders'
Equity $5,164,916
============
</TABLE>
See Notes to the Condensed Interim Financial
Statements.
<PAGE>
## CT01/SHERC/90225.31<PAGE>
<TABLE>
<CAPTION>
MEDJET INC.
(A Development Stage Company)
Condensed Interim Statements of Operations
For The Three and Nine Months Ended
September 30, 1996 and 1995 and the Period From
December 16, 1993 (Date of Inception), to September 30, 1996
(Unaudited)
Three Months Ended
September 30,
-----------------------------
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
--------
Net Sales $ - $ -
Cost of Sales - -
----------- -----------
Gross Profit - -
----------- -----------
Expenses:
--------
Research, development,
general and administrative 331,922 180,212
----------- -----------
Total costs and expenses 331,922 180,212
----------- -----------
Loss from operations (331,922) (180,212)
Other Income (Expense):
----------------------
Interest income 28,478 -
Interest expense (10,821) (26)
----------- -----------
17,657 (26)
----------- -----------
LOSS BEFORE INCOME TAX (314,265) (180,238)
State income tax - -
----------- -----------
NET LOSS $ (314,265) $ (180,238)
=========== ===========
## CT01/SHERC/90225.31<PAGE>
Net Loss Per Share $ (0.10) $ (0.07)
=========== ===========
Weighted Average Common
Shares Outstanding 3,151,399 2,420,960
=========== ===========
Period from
December 16,
Nine Months Ended 1993
September 30, (Inception)
----------------------- to September
1996 1995 30, 1996
----------- ----------- -------------
Revenues:
--------
Net Sales $ - $ - $ -
Cost of Sales - - -
----------- ----------- ----------
Gross Profit - - -
----------- ----------- ----------
Expenses:
--------
Research, development,
general and administrative 787,455 537,140 1,769,619
----------- ----------- ---------
Total costs and expenses 787,455 537,140 1,769,619
----------- ----------- ----------
Loss from operations (787,455) (537,140) (1,769,619)
Other Income (Expense):
----------------------
Interest income 28,478 7,928 43,740
Interest expense (26,851) (28) (26,886)
----------- ----------- ----------
1,627 7,900 16,854
----------- ----------- ----------
## CT01/SHERC/90225.31<PAGE>
LOSS BEFORE INCOME TAX (785,828) (529,240) (1,752,765)
State income tax - - 250
----------- ----------- ----------
NET LOSS $ (785,828) $ (529,240) $(1,752,015)
=========== =========== ============
Net Loss Per Share $ (0.29) $ (0.22) $ (0.73)
=========== =========== ============
Weighted Average Common
Shares Outstanding 2,685,713 2,414,285 2,401,696
=========== =========== ============
</TABLE>
See Notes to the Condensed Interim Financial
Statements.
<PAGE>
## CT01/SHERC/90225.31<PAGE>
<TABLE>
<CAPTION>
MEDJET INC.
(A Development Stage Company)
Condensed Interim Statements of Cash Flows
For The Nine Months Ended September 30, 1996 and 1995
And The Period From December 16, 1993 (Date of Inception),
to September 30, 1996
(Unaudited)
For the Nine Months Ended September 30, Period from
---------------------------------------- December 16, 1993
1996 1995 (Inception) to
------- ------ September 30, 1996
-------------------
<S> <C> <C> <C>
Cash Flows from Operating
Activities $ (667,907) $(581,930) $(1,545,926)
Cash Flows from Investing
Activities (72,252) 277,496 (253,379)
Cash Flows from Financing
Activities 5,623,269 114,000 6,740,093
---------- ---------- ------------
Net Increase (Decrease) in
Cash and Cash Equivalents 4,883,110 (190,434) 4,940,788
Cash and Cash Equivalents
Beginning of Period 57,678 228,936 -
----------- ---------- ------------
Cash and Cash Equivalents
End of Period $ 4,940,788 $ 38,502 $ 4,940,788
============ ========== ============
Supplemental Disclosures of
Cash Flow Information:
Cash paid during the period
for income taxes $ - $ 125 $ 200
============ ========== ============
</TABLE>
See Notes to the Condensed Interim Financial
Statements.
<PAGE>
## CT01/SHERC/90225.31<PAGE>
MEDJET INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE
CONDENSED INTERIM FINANCIAL STATEMENTS
NOTE A - NATURE OF ORGANIZATION AND BASIS OF PRESENTATION:
(1) Nature of Organization:
----------------------
Medjet Inc. (the "Company") is a development stage company
incorporated in the State of Delaware on December 16, 1993.
The Company was organized to engage in the design,
development, production and sale of surgical technology and
equipment for use on the cornea.
(2) Basis of Presentation:
---------------------
The Condensed Interim Financial Statements included herein
have been prepared by the Company, without audit, pursuant to
the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures
normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and
regulations.
The Condensed Interim Financial Statements included herein
reflect, in the opinion of management, all adjustments
(consisting primarily only of normal recurring adjustments)
necessary to present fairly the results for the interim
periods. The results of operations for the three and nine
month
periods ended September 30, 1996 are not necessarily
indicative
of results to be expected for the entire year ending December
31,
1996.
NOTE B - INITIAL PUBLIC OFFERING:
On August 14, 1996, the Company consummated its initial public
offering (the "Offering") and, accordingly, issued and sold to
the public 1,071,429 Units (the "Units"), each Unit consisting
of one share of common stock, $.001 par value of the Company
(the "Common Stock"), and one redeemable Common Stock Purchase
Warrant (the "Warrants") to purchase one share of Common Stock
at $10.00 for a period of 24 months commencing on November 6,
1996. The Common Stock and the Warrants will become separable
on November 6, 1996, or earlier as may be agreed to by the
## CT01/SHERC/90225.31<PAGE>
Company and Patterson Travis, Inc., the underwriter of the
Offering (the "Underwriter").
In conjunction with an option granted to the Underwriter to
purchase additional Units solely to cover over-allotments from
the Offering, the Company issued and sold an additional
160,714
Units on September 13, 1996.
The proceeds from these transactions (amounting to
approximately $6 million) were used, in part, to repay
outstanding indebtedness of approximately $400,000 (including
indebtedness of $100,000 incurred during the three months
ended
September 30, 1996) and legal, accounting and other expenses
(totaling approximately $500,000) associated with the
Offering;
the balance (to be used to fund future operations, research
and
development) was invested in short-term money market
instruments.
In connection with the Offering, the Company increased the
number of shares of Common Stock it is authorized to issue to
7,000,000 and, immediately prior to the Offering, effected a
1.987538926-to-1 stock split of the then outstanding Common
Stock.
NOTE C - NET LOSS PER SHARE:
Net loss per share is computed by dividing net loss by the
weighted average number of shares of Common Stock outstanding
during the period, after giving effect to the 1.987538926-to-
1 stock split of the Common Stock explained above. Common
Stock equivalents have not been included in this computation
as the effect would be anti-dilutive.
<PAGE>
## CT01/SHERC/90225.31<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Medjet Inc. (the "Company"), formed in December, 1993, is engaged in the
research and development of medical technology, with an emphasis on
corneal surgical technology and equipment. The Company is a development
stage company.
RESULTS OF OPERATIONS
The Company has not yet initiated sales of its products and,
consequently, had no revenues during the three months or nine months
ended September 30, 1996.
Total costs and expenses during the three months ended September 30,
1996 increased by $151,710 (84%) to $331,922 from $180,212 for the
comparable period of 1995. This was primarily due to the net increase
in staff (from six full-time and two part-time employees to twelve full-
time and one part-time employees) and an increase in professional fees
and consultant costs as the Company continued its research and
development activities. Expenses were also higher during the 1996
period due to higher occupancy costs (reflecting additional office and
laboratory space assumed on April 1, 1996) and increased purchases for
materials, testing and analysis.
During the nine months ended September 30, 1996, total costs and
expenses increased by $250,315 (47%) to $787,455 from $537,140 for the
comparable period of 1995, generally for the same reasons as during the
three-month period.
Other income and expense for the three months ended September 30, 1996
shows net interest income of $17,657 compared to a $26 expense for the
comparable period of 1995. This reflects interest income earned on the
Company's short-term investments, reduced by interest charges on short-
term loans made to the Company during 1996. These loans were
substantially repaid during the three months ended September 30, 1996
(more fully described under the caption, "Initial Public Offering"
below).
For the nine months ended September 30, 1996, other income and expense
shows net interest income of $1,627 compared to net interest income of
$7,900 for the comparable period of 1995, for the same reasons as during
the three-month period.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company's liquidity requirements have been met
through private sales of the Company's common stock. During the fourth
quarter of 1995, in order to continue to fund its operations, the
## CT01/SHERC/90225.31<PAGE>
Company obtained five loans from its president in the aggregate amount
of $150,000. Additional loans were obtained during 1996 from two of the
Company's current directors ($50,000 from each such director during the
first quarter), from the Company's president ($165,000 during the second
quarter), and, in connection with the Offering (as defined below), from
an affiliate of the underwriter of the Offering ($100,000 during each of
the first and second quarters). During the third quarter of 1996, prior
to the Offering, an additional $100,000 was borrowed from a stockholder
of the Company. Except for the loans made by the Company's president,
all loans were repaid during the third quarter of 1996, following the
Offering.
As a result of the Offering, the Company's liquidity position has
improved significantly. The Company anticipates that its current cash
and cash equivalents, as well as projected cash flows from operations,
will be sufficient to cover working capital and capital equipment needs
through 1998.
INITIAL PUBLIC OFFERING
On August 14, 1996, the Company consummated its initial public offering
(the "Offering") and, accordingly, issued and sold to the public
1,071,429 Units (the "Units"), each Unit consisting of one share of
common stock, $.001 par value of the Company (the "Common Stock"), and
one redeemable Common Stock Purchase Warrant (the "Warrants") to
purchase one share of Common Stock at $10.00 for a period of 24 months
commencing on November 6, 1996. The Common Stock and the Warrants will
become separable on November 6, 1996, or earlier as may be agreed to by
the Company and Patterson Travis, Inc., the underwriter of the Offering
(the "Underwriter").
In conjunction with an option granted to the Underwriter to purchase
additional Units solely to cover over-allotments from the Offering, the
Company issued and sold an additional 160,714 Units on September 13,
1996.
The proceeds from these transactions (amounting to approximately $6
million) were used, in part, to repay outstanding indebtedness of
approximately $400,000 (including indebtedness of $100,000 incurred
during the three months ended September 30, 1996) and legal, accounting
and other expenses (totaling approximately $500,000) associated with the
Offering; the balance (to be used to fund future operations, research
and development) was invested in short-term money market instruments.
In connection with the Offering, the Company increased the number of
shares of Common Stock it is authorized to issue to 7,000,000 and,
immediately prior to the Offering, effected a 1.987538926-to-1 stock
split of the then outstanding Common Stock.
## CT01/SHERC/90225.31<PAGE>
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits
--------
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No Report on Form 8-K was filed during the quarter
for which this Quarterly Report on Form 10-QSB is
filed.
## CT01/SHERC/90225.31<PAGE>
<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 thereunto duly authorized.
Dated: November 5, 1996
MEDJET INC.
--------------------------------
(Registrant)
/s/ Eugene I. Gordon
--------------------------------
Eugene I. Gordon
President and Chief Executive Officer
/s/ Thomas M. Handschiegel
--------------------------------
Thomas M. Handschiegel
Chief Financial Officer and
Chief Accounting Officer
<PAGE>
Exhibits Index
--------------
Exhibit
Number Description Page
Number
------- ----------- --------
---
27 Financial Data Schedule
## CT01/SHERC/90225.31
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
Exhibit No. 27
FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted from the
September 30, 1996 (unaudited) financial statements of Medjet Inc. and
is qualified in its entirety by reference to such financial statements.
<CAPTION>
September 30, 1996
ITEM NUMBER ITEM DESCRIPTION (Unaudited)
----------- ----------------- -------------
<S> <C> <C>
5-02(1) Cash and cash items $4,940,788
5-02(2) Marketable securities --
5-02(3)(a)(1) Notes and accounts receivable -- trade 2,083
5-02(4) Allowance for doubtful accounts --
5-02(6) Inventory --
5-02(9) Total current assets 5,004,075
5-02(13) Property, plant and equipment 94,719
5-02(14) Accumulated depreciation 72,641
5-02(18) Total assets 5,164,916
5-02(21) Total current liabilities 484,647
5-02(22) Bonds, mortgages and similar debt 315,000
5-02(28) Preferred stock--mandatory redemption --
5-02(29) Preferred stock--no mandatory redemption --
5-02(30) Common stock 3,682
5-02(31) Other stockholders' equity 4,676,587
5-02(32) Total liabilities and stockholders'
equity 5,164,916
5-03(b)1(a) Net sales of tangible products --
5-03(b)1 Total revenues --
5-03(b)2(a) Cost of tangible goods sold --
5-03(b)2 Total costs and expenses applicable
to sales and revenues --
5-03(b)3 Other costs and expenses 787,455
5-03(b)5 Provision for doubtful accounts
and notes --
5-03(b)(8) Interest and amortization of
debt discount 26,851
5-03(b)(10) Income before taxes and other
items (785,828)
5-03(b)(11) Income tax expense --
5-03(b)(14) Income/loss continuing operations (785,828)
5-03(b)(15) Discontinued operations --
5-03(b)(17) Extraordinary items --
5-03(b)(18) Cumulative effect -- changes in
## CT01/SHERC/90246.31<PAGE>
accounting principles --
5-03(b)(19) Net income or loss (785,828)
5-03(b)(20) Earnings per share -- primary (.29)
5-03(b)(20) Earnings per share -- fully diluted (.29)
## CT01/SHERC/90246.31
</TABLE>
