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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 March 31, 1997
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 April 30, 1997:
3,648,666 shares
Transitional Small Business Disclosure format: |_| Yes |X| No
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<PAGE>
MEDJET INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
- ------------------------------ --------
ITEM 1. Financial Statements
Condensed Interim Balance Sheet as of March 31, 1997
(Unaudited) ........................................................ 3
Condensed Interim Statements of Operations for the
Three Months Ended March 31, 1997 and 1996 and the
Period From December 16, 1993 (Date of Inception)
to March 31, 1997 (Unaudited) ...................................... 4
Condensed Interim Statements of Cash Flows for the
Three Months Ended March 31, 1997 and 1996 and the
Period from December 16, 1993 (Date of Inception)
to March 31, 1997 (Unaudited) ...................................... 5
Notes to Condensed Interim Financial Statements .................... 6
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ................................ 7
PART II. OTHER INFORMATION
- --------------------------
ITEM 6. Exhibits and Reports on Form 8-K ................................... 8
SIGNATURES
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
MEDJET INC.
(A Development Stage Company)
Condensed Interim Balance Sheet
March 31, 1997
(Unaudited)
ASSETS
CURRENT ASSETS:
- ---------------
Cash and cash equivalents $3,616,893
Prepaid expenses 27,668
-----------------
3,644,561
-----------------
PROPERTY, PLANT & EQUIPMENT -
- -----------------------------
Less accumulated depreciation of $120,290 188,854
-----------------
ORGANIZATION COSTS -
- --------------------
Less accumulated amortization of $22,006 15,381
-----------------
PATENTS AND TRADEMARKS -
- ------------------------
Less accumulated amortization of $3,327 52,784
-----------------
SECURITY DEPOSITS 7,650
- ----------------- -----------------
DEFERRED TAX ASSET 139,500
- ------------------ -----------------
Total Assets $4,048,730
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 87,345
Accrued interest payable 10,380
Income taxes payable 150
Notes payable - officer 165,000
-----------------
Total Liabilities 262,875
-----------------
STOCKHOLDERS' EQUITY:
- --------------------
Common stock, $.001 par value, 7,000,000
shares authorized, 3,682,455 shares issued
and 3,648,666 shares outstanding 3,682
Preferred stock, $.01 par value, 1,000,000 shares
authorized, no shares issued -
Additional paid-in capital 4,870,880
Accumulated deficit (including deficit accumulated
during development stage of $2,643,218 of which
$1,556,211 was applied to additional paid in capital
upon conversion from an "S" to a "C" corporation) (1,087,007)
Less: Treasury stock, 33,789 shares, at cost (1,700)
-----------------
Total Stockholders' Equity 3,785,855
-----------------
Total Liabilities and Stockholders' Equity $4,048,730
=================
See Notes to the Condensed Interim Financial Statements.
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<PAGE>
<TABLE>
<CAPTION>
MEDJET INC.
(A Development Stage Company)
Condensed Interim Statements of Operations
For The Three Months Ended March 31, 1997 and 1996
And The Period From December 16, 1993 (Date of Inception), to March 31, 1997
(Unaudited)
Three Months Ended Period from
March 31, December 16,
------------------------------- 1993 (Inception)
to
1997 1996 March 31, 1997
-------------- -------------- -----------------
<S> <C> <C> <C>
REVENUES:
- ---------
Net Sales $ - $ - $ -
Cost of Sales - - -
--------------- --------------- ----------------
Gross Profit - - -
--------------- --------------- ----------------
EXPENSES:
- ---------
Research, development,
general and administrative 589,937 166,956 2,897,837
--------------- --------------- ----------------
Total costs and expenses 589,937 166,956 2,897,837
--------------- --------------- ----------------
Loss from operations (589,937) (166,956) (2,897,837)
OTHER INCOME (EXPENSE):
- -----------------------
Interest income 49,140 - 151,105
Interest expense (3,268) (5,368) (35,336)
--------------- --------------- ----------------
45,872 (5,368) 115,769
--------------- --------------- ----------------
LOSS BEFORE PROVISION FOR
(BENEFIT FROM) INCOME TAX (544,065) (172,324) (2,782,068)
Provision for (benefit from) income tax (139,500) 401 (138,850)
--------------- --------------- ----------------
NET LOSS $ (404,565) $ (172,725) $(2,643,218)
=============== =============== ================
Net Loss Per Share $ (0.11) $ (0.07) $ (1.01)
=============== =============== ================
Weighted Average Common
Shares Outstanding 3,648,666 2,450,312 2,607,780
=============== =============== ================
See Notes to the Condensed Interim Financial Statements.
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<PAGE>
MEDJET INC.
(A Development Stage Company)
Condensed Interim Statements of Cash Flows
For The Three Months Ended March 31, 1997 and 1996
And The Period From December 16, 1993 (Date of Inception), to March 31, 1997
(Unaudited)
For the Three Months Ended
March 31, Period from
-------------------------------------- December 16,
1993 (Inception) to
1997 1996 March 31, 1997
---------------- ----------------- --------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities $ (451,000) $(174,687) $(2,427,388)
Cash Flows from Investing Activities (174,092) (18,314) (549,792)
Cash Flows from Financing Activities - 200,000 6,594,073
--------------- ----------------- -------------------
Net Increase (Decrease) in Cash and Cash Equivalents (625,092) 6,999 3,616,893
Cash and Cash Equivalents - Beginning of Period 4,241,985 57,678 -
--------------- ----------------- ------------------
Cash and Cash Equivalents - End of Period $3,616,893 $ 64,677 $ 3,616,893
=============== ================= ==================
Supplemental Disclosures of Non-Cash Financing Activities:
Increase in Accounts Payable for
Accrual of Deferred Charges $ - $ 120,717 $ 156,980
================ ================= ==================
See Notes to the Condensed Interim Financial Statements.
</TABLE>
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<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 as a medical device company with the goal of
developing, manufacturing and selling new cutting, drilling, layer
removal and shaping tools for a variety of surgical procedures. The
core technology is based on small-diameter, fluid or ice jets moving
at high speeds. The Company believes that such jets will bring new
surgical capability and performance to the clinic or operating room.
The initial product area is devices for surgical use in
ophthalmology.
(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 months ended March 31, 1997 are not necessarily indicative
of results to be expected for the entire year ending December 31,
1997.
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 Units became
separable on November 6, 1996, and the Common Stock and the Warrants
began trading on November 8, 1996.
In conjunction with an option granted to the underwriter of the
Offering 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 $550,000 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.
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<PAGE>
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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS FORWARD-LOOKING STATEMENTS WITHIN
THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ACTUAL RESULTS,
EVENTS AND CIRCUMSTANCES COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN SUCH
STATEMENTS DUE TO VARIOUS FACTORS.
GENERAL
Medjet Inc. (the "Company"), formed in December 1993, is engaged in the research
and development of medical technology, with an initial 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 ended March 31, 1997.
Total costs and expenses during the three months ended March 31, 1997 increased
by $422,981 (253%) to $589,937 from $166,956 for the comparable period of 1996.
This was primarily due to the net increase in staff (from seven full-time and
one part-time employees to fifteen full-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 1997 period due to
increased purchases for materials, testing and analysis and higher occupancy
costs (reflecting additional office and laboratory space assumed on April 1,
1996).
Other income and expense for the three months ended March 31, 1997 shows net
interest income of $45,872 compared to a $5,368 expense for the comparable
period of 1996. 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," following).
LIQUIDITY AND CAPITAL RESOURCES
From its inception until its initial public offering (the "Offering"), the
Company's liquidity requirements were 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 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 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, 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. All loans
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<PAGE>
made by persons other than the Company's president were repaid during the third
quarter of 1996, following the Offering, and all loans except for two loans
(totalling $165,00) made by the Company's president were repaid during the
fourth quarter of 1996.
As a result of the Offering, the Company's liquidity position 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 for at least the next 12
months.
INITIAL PUBLIC OFFERING
On August 14, 1996, the Company consummated 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 Units became separable on November 6,
1996 and the Common Stock and the Warrants began trading on November 8, 1996.
In conjunction with an option granted to the underwriter of the Offering 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 $550,000
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.
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.
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<PAGE>
SIGNATURES
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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: May 9, 1997
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>
EXHIBIT INDEX
- -------------
Exhibit
NUMBER DESCRIPTION
------- -----------
27 Financial Data Schedule
-10-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1997 (UNAUDITED) FINANCIAL STATEMENTS OF MEDJET INC. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,616,893
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,644,561
<PP&E> 309,144
<DEPRECIATION> 120,290
<TOTAL-ASSETS> 4,048,730
<CURRENT-LIABILITIES> 262,875
<BONDS> 165,000
0
0
<COMMON> 3,682
<OTHER-SE> 3,782,173
<TOTAL-LIABILITY-AND-EQUITY> 4,048,730
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 589,937
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,268
<INCOME-PRETAX> (544,065)
<INCOME-TAX> (139,500)
<INCOME-CONTINUING> (404,565)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (404,565)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
