<PAGE>
================================================================================
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, 1999
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 Incorporation (I.R.S. Employer
or Organization) Identification No.)
1090 King Georges Post Road, Suite 301
Edison, New Jersey 08837
(Address of Principal Executive Offices)
(732) 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) 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 October 31, 1999, 3,901,431 shares of Common Stock, par value $.001
per share, were outstanding.
Transitional Small Business Disclosure Format: Yes [_] No [X]
================================================================================
<PAGE>
MEDJET INC.
(A Development Stage Company)
Condensed Interim Balance Sheet
September 30, 1999
(Unaudited)
ASSETS
<TABLE>
<S> <C>
Current Assets:
Cash and cash equivalents $ 11,450
Prepaid expenses 54,933
Total Current Assets ----------
66,383
----------
Property and Equipment - less accumulated depreciation of $307,258 127,988
Patents and Trademarks - less accumulated amortization of $26,216 163,034
Deferred tax asset 594,209
Security deposits 4,837
----------
Total Assets $ 956,451
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 441,458
Deferred revenues 175,000
Notes payable - Officer 225,000
Income taxes payable 150
----------
Total Liabilities 841,608
----------
Stockholders' Equity:
Common stock, $.001 par value, 7,000,000 shares authorized, 3,935,220
shares issued and 3,901,431 shares outstanding 3,935
Preferred stock, $.01 par value, 1,000,000 shares authorized,
no shares issued -
Additional paid-in capital 6,066,036
Accumulated deficit (including deficit accumulated during development stage
of $7,458,098 of which $1,556,204 was applied to additional paid-in
capital upon conversion from an "S" to a "C" corporation) (5,953,428)
Less: Treasury stock, 33,789 shares, at cost (1,700)
Total Stockholders' Equity ----------
114,843
----------
Total Liabilities and Stockholders' Equity $ 956,451
==========
</TABLE>
See Notes to the Condensed Interim Financial Statements.
<PAGE>
MEDJET INC.
(A Development Stage Company)
Condensed Interim Statements of Operations
For The Three and Nine Months Ended September 30, 1999 and 1998
And The Period From December 16, 1993 (Date of Inception) to September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Period from
Three Months Ended Nine Months Ended December 16,
September 30, September 30, 1993 (Inception) to
--------------------------- ----------------------------
1999 1998 1999 1998 September 30, 1999
------------ ----------- ----------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Revenues:
License fee income $ - $ 500,000 $ 175,000 $ 500,000 $ 675,000
---------- ----------- ----------- ----------- ------------
Total revenues - 500,000 175,000 500,000 675,000
---------- ----------- ----------- ----------- ------------
Expenses:
Research, development,
general and administrative 355,675 821,210 1,086,846 2,270,235 8,994,900
---------- ----------- ----------- ----------- ------------
Total expenses 355,675 821,210 1,086,846 2,270,235 8,994,900
---------- ----------- ----------- ----------- ------------
Loss from Operations (355,675) (321,210) (911,846) (1,770,235) (8,319,900)
Other Income (Expense):
Net interest income (expense) (2,618) 16,326 1,587 45,444 268,443
---------- ----------- ----------- ----------- ------------
Loss Before Income Tax (358,293) (304,884) (910,259) (1,724,791) (8,051,457)
Income tax - - 200 - (593,359)
---------- ----------- ----------- ----------- ------------
Net Loss (358,293) (304,884) (910,459) (1,724,791) (7,458,098)
Dividends on Preferred Stock - 182,512 - 182,512 184,923
----------- ----------- ----------- ----------- ------------
Net Loss Attributable to
Common Shareholders $ (358,293) $ (487,396) $ (910,459) $(1,907,303) $ (7,643,021)
========== =========== =========== =========== ============
Net Loss Per Share $ (0.09) $ (0.13) $ (0.23) $ (0.52) $ (2.45)
========== =========== =========== =========== ============
Weighted average common
shares outstanding 3,901,431 3,686,280 3,891,555 3,682,891 3,125,360
========== =========== =========== ============ ============
</TABLE>
See Notes to the Condensed Interim Financial Statements.
<PAGE>
MEDJET INC.
(A Development Stage Company)
Condensed Interim Statements of Cash Flows
For The Nine Months Ended September 30, 1999 and 1998
And The Period From December 16, 1993 (Date of Inception) to September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Period from
For the Nine Months Ended December 16,
September 30, 1993 (Inception) to
---------------------------
1999 1998 September 30, 1999
---------- ------------ ------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities $ (550,624) $ (1,493,574) $ (7,108,971)
Cash Flows from Investing Activities (6,520) (153,938) (677,513)
Cash Flows from Financing Activities 225,000 1,117,748 7,797,934
---------- ------------ ------------------
Net Increase (Decrease) in Cash and Cash Equivalents (332,144) (529,764) 11,450
Cash and Cash Equivalents - Beginning of Period 343,594 1,491,040 -
---------- ------------ ------------------
Cash and Cash Equivalents - End of Period $ 11,450 $ 961,276 $ 11,450
========== ============ ==================
Supplemental Disclosures of Cash Flow Information:
Cash paid for:
Income taxes $ 200 $ - $ 975
========== ============ ==================
Interest expense $ 1,298 $ 487 $ 38,691
========== ============ ==================
</TABLE>
See Notes to the Condensed Interim Financial Statements.
<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") was incorporated in the State of Delaware
on December 16, 1993, and is in the development stage. The Company is
engaged in research and development of medical technology, with a
current emphasis on ophthalmic surgical technology and equipment.
(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 as permitted by such rules
and regulations.
The Condensed Interim Financial Statements included herein reflect, in
the opinion of management, all adjustments (consisting 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, 1999 are not necessarily indicative
of results to be expected for the entire year ending December 31,
1999.
NOTE B - NET LOSS PER SHARE:
Net loss per share, in accordance with the provisions of Financial
Accounting Standards No. 128, "Earnings Per Share," is computed by
dividing net loss by the weighted average number of shares of Common
Stock outstanding during the period. Common Stock equivalents have
not been included in this computation as the effect would be anti-
dilutive.
NOTE C - LICENSE AGREEMENT:
In July 1998, the Company entered into an agreement with Nestle S.A.
("Nestle") granting Nestle and its wholly-owned subsidiary, Alcon
Laboratories, Inc. ("Alcon"), an exclusive, worldwide license for the
use
<PAGE>
of the Company's proprietary microjet technology for corneal
refractive surgery. Under the terms of the agreement, Alcon will
register, manufacture, promote and market certain refractive microjet
devices and consumables developed by the Company.
In connection with the execution of the agreement, a payment in the
amount of $500,000 was made by Nestle to the Company. The agreement
provides for future payments based on the attainment of certain
milestones, minimum royalties, and royalties based upon sales by Alcon
of the licensed products.
Item 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION
This Quarterly Report on Form 10-QSB, including any documents that are
incorporated by reference, 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. Generally, such
statements are indicated by words or phrases such as "anticipate," "expect,"
"intend," "management believes" and similar words and phrases. Such statements
are based on the Company's current expectations and are subject to risks,
uncertainties and assumptions. Certain of these risks are described or referred
to below and in the introduction to Part I of the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1998 on file with the
Securities and Exchange Commission and are incorporated herein by this
reference. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, expected, intended or believed.
GENERAL
The Company is engaged in research and development of medical technology, with a
current emphasis on ophthalmic surgical technology and equipment, and has
developed a proprietary technology and derivative devices for corneal surgery
based on microjets. The Company expects, during the remainder of 1999, to
continue its research and development activities, focusing principally on
ophthalmic surgical technology and equipment, and to commence clinical work on
dental applications of its microjet technology. It also expects to begin
exploratory work on cosmetic surgery using microjets. The Company is a
development stage company.
RESULTS OF OPERATIONS
The Company has not yet initiated sales of its products and, consequently, had
no sales revenues during the three or nine months ended September 30, 1999.
Under the terms of the license agreement with Nestle (as described under
"License Agreement" in Note C of
<PAGE>
Notes to the Condensed Interim Financial Statements), a total of $350,000 was
paid by Nestle to the Company during the nine months ended September 30, 1999.
This amount has been reflected as license fee income and deferred revenues in
the accompanying condensed interim financial statements.
Total expenses during the three months ended September 30, 1999 decreased by
$465,535 (56.7%) to $355,675 from $821,210 for the comparable period of 1998.
This was primarily due to a net decrease in staff (to seven full-time employees
and one part-time employee from seventeen full-time and two part-time employees)
and a decrease in consulting and professional fees as the Company continued to
curtail several operational activities in order to husband and stretch its
existing capital. (See "Liquidity and Capital Resources" below). Expenses were
also higher during the 1998 period due to increased purchases for materials,
testing and analysis and other higher costs associated with the higher level of
activity.
During the nine months ended September 30, 1999, total expenses decreased by
$1,183,389 (52.1%) to $1,086,846 from $2,270,235 for the comparable period of
1998, generally for the same reasons as during the three-month period.
Other income/expense consists of interest income, interest expense and finance
charges. For the three months ended September 30, 1999, net interest expense
amounted to $2,618 compared with net interest income of $16,326 for the
comparable period of 1998. This overall decrease in net interest income
principally resulted from income earned on the Company's short-term investments,
which were lower in the 1999 period reflecting the utilization of these funds to
continue the Company's research and development activities, and the interest
expense incurred on funds borrowed during the 1999 period.
For the nine months ended September 30, 1999, net interest income decreased by
$43,857 (96.5%) to $1,587 from $45,444 for the comparable period of 1998 for the
same reasons as during the three-month period.
LIQUIDITY AND CAPITAL RESOURCES
In April 1998, the Company sold and issued 110,000 shares of its Series A
Convertible Preferred Stock for an aggregate price of $1,100,000, the net
proceeds of which were added to the Company's working capital. On October 9,
1998, these shares were converted in full into 182,724 shares of Common Stock
and the Company paid the applicable dividend on the Convertible Preferred Stock
by issuing a total of 12,154 additional shares of Common Stock.
Throughout the second half of 1998, the Company had been seeking additional
capital to finance its 1999 business plan. Pending obtaining additional
financing, the Company made the decision to curtail several operational
activities and to downsize its employee base in order to husband and stretch its
existing capital. In October and November 1998, the Company dismissed nine of
its nineteen employees. It also significantly reduced the
<PAGE>
salary of the management group, in some cases by up to 50%. The specific goal
was to reduce the Company's monthly expenditures by 60%, to approximately
$100,000. The Company currently is focused on fulfilling its commitments with
respect to the agreement with Nestle, although the Company may seek to license
the HydroBrush(TM) Keratome to a third party at some future date. The Company
will also consider submitting proposals to the government and to industrial
organizations to fund some of the costs of the study of other potential medical
applications of its technology platform. Finally, as its financial resources
permit, the Company will continue explorations and analyses of potential new
medical applications of its microjet technology.
In June 1999, the State of New Jersey enacted revised legislation allowing
emerging technology and/or biotechnology companies to sell their unused New
Jersey Net Operating Loss ("NOL") Carryover and Research and Development Tax
Credits ("R&D Credits") to corporate taxpayers in New Jersey. Through the 1998
tax year, the total NOL Carryover and R&D Credits available to the Company
amounted to approximately $792,000. The Company retained a third party broker
to identify a buyer for the Company's NOL Carryover and R&D Credits. The State
of New Jersey has approved certificates making the sale of these credits
possible. The anticipated net proceeds of this transaction ($594,209) have been
recorded as a non-current deferred tax asset in the accompanying condensed
interim financial statements. There can be no assurances, however, that this
proposed sale will occur. To the extent that the NOL Carryover and R&D Credits
are sold, they will be unavailable to the Company to offset future New Jersey
state taxes.
During March 1999, Eugene I. Gordon, Ph.D. (the Company's Chairman and Chief
Executive Officer), agreed to make available to the Company a loan of up to
$250,000. Under the terms of this arrangement, the Company has issued to Dr.
Gordon warrants to purchase a total of 50,000 shares of the Company's Common
Stock at a price per share of $1.00 and will pay interest on the amounts
borrowed at the rate of 8.27% per annum. Through September 30, 1999, Dr. Gordon
has advanced a total of $225,000 to the Company under this arrangement. Amounts
borrowed under this arrangement are due and payable on January 28, 2009 or
earlier, as otherwise agreed by the Company.
<PAGE>
The Company is in the final stages of preparing documentation for a private
placement (the "Private Placement") of $2,000,000 of equity securities. It is
anticipated that the Company will sell, to several private investors, units
comprising shares of a newly created Series B Convertible Preferred Stock and
warrants to purchase shares of Common Stock. The Series B Convertible Preferred
Stock would be convertible into Common Stock. A closing of the Private Placement
is expected to take place before the end of the year, however, there can be no
assurance it will be completed. In connection with the Private Placement, the
Company also expects to issue warrants to purchase Common Stock to investment
advisers or placement agents involved in the Private Placement.
The Company anticipates that its cash on hand, together with the payments to be
received by the Company in connection with the license agreement, the sale of
its New Jersey State NOL Carryover and R&D Credits, plus any net funds raised
through the Private Placement, if it is completed, will be sufficient to meet
the Company's working capital and planned capital expenditure requirements for
2000. If, however, the Company incurs unexpected expenses, or if the New Jersey
NOL Carryover and R&D Credits are not sold as anticipated, or if the Private
Placement does not yield the expected net funds, the Company may require
additional financing prior to the end of 2000 in order to maintain its current
operations. Assuming FDA marketing clearance is obtained, minimum royalty
payments under the license agreement are anticipated to begin in early 2000.
However, if the Company and Alcon fail to obtain FDA clearance of the Company's
HydroBlade(TM) Keratome device or Alcon's manufacturing and marketing of the
device is otherwise delayed, the Company will need to raise additional capital
to maintain operations beyond 2000. The Company has no other commitments or
arrangements for any capital or financing, and there can be no assurance whether
or on what terms it will be able to obtain any needed capital. If additional
financing is not available, the Company would be materially adversely affected
and be required to further curtail or cease altogether its current operations.
The Company's current strategy is to exclusively license its products. As of the
date of filing of this quarterly report on Form 10-QSB, the Company has entered
into one such license agreement, the agreement with Nestle, covering corneal
refractive surgery. Later, it may undertake the marketing and sale of its own
products. In such event, the Company would be subject to the risks and
uncertainties described under "Additional Factors That May Affect Future
Results--No Manufacturing Experience; Dependence on Third Parties," in the
Company's Annual Report on Form 10-KSB, which information is incorporated herein
by reference.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's current strategy is to selectively license its ophthalmology
products when appropriate. To date, the Company has entered into one such
agreement to license its proprietary microjet technology for corneal refractive
surgery only. If the Company is unable or elects not to enter into additional
license agreements with respect to its other products, it may undertake the
manufacture and marketing of such products directly. If manufactured
internally, the Company's proposed products must be produced in commercial
quantities in compliance with regulatory requirements at acceptable costs.
Production in clinical or commercial-scale quantities will involve scale-up
challenges for the Company. The Company currently has no volume manufacturing
capacity or experience in manufacturing medical devices or any other products.
If the Company elects to manufacture certain of its potential products, it would
be required to establish its own manufacturing capabilities, which would require
significant scale-up expenses and
<PAGE>
additions to facilities and personnel. There can be no assurance that the
Company would be able to obtain the necessary regulatory approvals on a timely
basis, or at all, and delays in receipt of, or failure to receive such
approvals, or loss of previously received approvals, would have a material
adverse effect on the Company. There can be no assurance that the Company will
be able to enter into agreements with third parties with respect to the
manufacture of any products or develop its own manufacturing capability at an
acceptable cost.
The Company's dependence on third parties for the manufacture of its products
may adversely affect the Company's profit margins and its ability to develop and
deliver such products on a timely basis. Moreover, there can be no assurance
that such third parties will perform adequately, and any failures by third
parties may delay the submission of products for regulatory approval, impair the
Company's ability to deliver products on a timely basis, or otherwise impair the
Company's competitive position and any such failure could have a material
adverse effect on the Company.
If the Company does not enter into additional license or distribution
arrangements with respect to its products other than those related to its
proprietary microjet technology for corneal refractive surgery, it may undertake
the marketing and sale of its own products. In such event, the Company intends
to market and sell its products in the United States and certain foreign
countries, if and when regulatory approval is obtained, through a direct sales
force or a combination of a direct sales force and distributors. The Company
currently has no marketing organization and has never sold a product.
Establishing sufficient marketing and sales capabilities will require
significant resources. There can be no assurance that the Company will be able
to recruit and retain skilled sales management, direct salespersons or
distributors, or that the Company's marketing or sales efforts will be
successful. To the extent that the Company enters into distribution arrangements
for the sale of its products, the Company will be dependent on the efforts of
third parties. There can be no assurance that such efforts will be successful.
OTHER MATTERS
The Company has been assessing its "Year 2000" computer readiness and exposure
to Year 2000 issues. In connection with such assessment, the Company initiated a
review of all information technology systems utilized by the Company. The
Company uses no internally-developed systems, only those available from
commercial software vendors. As part of its review, the Company has received
confirmation from its principal software vendors that such systems are Year 2000
compliant. Based on its review to date, the Company believes there are no major
Year 2000 compliance issues with respect to its information technology systems,
and, therefore, the Company has not and does not intend to prepare a contingency
plan for these systems. The Company anticipates that the total cost for its Year
2000 compliance efforts will not exceed $5,000.
In addition, although the Company has not yet initiated commercial production of
any of its products, the list of component parts used in those products was
reviewed and it was
<PAGE>
determined that multiple vendors, parts suppliers or contract manufacturers are
available to the Company for all of the critical component parts of these
products. Although there are no vendors currently engaged by the Company for
products to be manufactured, when engaging vendors, the Company will ascertain
that they are compliant. Based on its review to date, the Company believes, in
the most likely worst case scenario, that Year 2000 issues would have only a
minimal impact on the Company.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
New Jersey Institute of Technology
On April 21, 1998, the Company was served with a complaint by the New Jersey
Institute of Technology ("NJIT") commencing a lawsuit in the United States
District Court for the District of New Jersey ("U.S. District Court"). Each of
the Company, Eugene I. Gordon, Ph.D. (the Company's Chairman and Chief Executive
Officer), a former employee of the Company, certain patent law firms and an
individual patent attorney were named as defendants. The complaint alleged that
the defendants, with deceptive intent, failed to name an NJIT professor and/or
NJIT research associate as a co-inventor on the Company's U.S. Patent No.
5,556,406 on the "Lamellar Surgical Device and Procedure" (the "Patent") and
breached fiduciary duties and contractual obligations owed to NJIT. The
complaint sought monetary damages from the Company and an order directing that
the Company's Patent (and corresponding foreign patents and patent applications)
be assigned and transferred to NJIT. It further sought an order that NJIT has
not infringed any claims of such Patent and a declaratory judgment that all of
the Company's claims under such Patent are invalid and unenforceable against
NJIT.
NJIT had submitted a patent application relating to a different refractive
corrective procedure based on the use of an isotonic waterjet to the U.S. Patent
and Trademark Office. That patent has recently issued. The three inventors of
the subject of such patent application, one of which was Dr. Gordon, had
assigned such patent application to NJIT as part of a dispute settlement in
which NJIT agreed to grant an exclusive license to the Company of the patent
rights under such patent application. That license was terminated by the Company
based on its evaluation of the patent potential. In its U.S. District Court
pleas, NJIT claims that the Company's Patent emanates from the earlier
invention. Prior to being served with the complaint by NJIT, the Company and Dr.
Gordon filed a complaint, on March 27, 1998, against NJIT in the Superior Court
of the State of New Jersey, Middlesex County ("State Court"), seeking a
declaratory judgment that NJIT had no ownership or other interest in the rights
to the Company's Patent and seeking payment for damages. NJIT removed the
Company's lawsuit to the U.S. District Court, seeking to have it consolidated
with its lawsuit. The Company moved to have its suit remanded to the State
<PAGE>
Court and to have the NJIT lawsuit dismissed on the grounds that the federal
court lacked jurisdiction over either action.
During October 1998, the lawsuit brought in U.S. District Court by NJIT was
dismissed on jurisdictional grounds. In addition, the U.S. District Court also
held that NJIT improperly removed the Company's state court action and ordered
that action remanded to the state court. NJIT appealed the remand action and
appealed the dismissal of its lawsuit brought in U.S. District Court. These
appeals have been dismissed. On April 26, 1999, NJIT commenced a second action
in U.S. District Court. NJIT alleged that the defendants failed to name a NJIT
professor and/or a NJIT research associate as co-inventors of the Patent and
breached fiduciary duties and contractual obligations owed to NJIT. As in the
first federal court action, NJIT sought monetary damages, an order directing
that the Company's Patent, foreign patents and patent applications be assigned
and transferred to NJIT, a declaratory judgment that all of the claims of the
Company's Patent are invalid and unenforceable against NJIT and an order
amending the named inventors of the Company's Patent to include the NJIT
professor and/or the NJIT research associate. Briefing to the federal court on
the motion to dismiss the action against the Company, Dr. Gordon and the former
employee of the Company is complete and a ruling is expected shortly.
With respect to the Company's lawsuit against NJIT, NJIT has asserted similar
counterclaims and/or third party claims against each of the Company, Dr. Gordon,
a former employee of the Company and certain patent law firms. The state court
action is still in the discovery and deposition phase, which by court order is
to be completed by December 23, 1999. The Company believes that its Patent is
valid and enforceable and that the Company has substantial and valid defenses to
each of NJIT's counterclaims. The Company believes the probability of an
unfavorable outcome is unlikely and therefore no amounts have been accrued with
respect to this lawsuit.
Other
On April 16, 1999, the Company was served with a complaint commencing a lawsuit
in the United States District Court for the District of New Jersey by Robert G.
Donovan, a former officer and director, seeking payment of $129,500 for services
alleged to have been performed by Mr. Donovan as a temporary Co-President for
the Company. A compensation package approved by the Company's Board of Directors
and offered by the Company previously had been rejected by Mr. Donovan. Since
Mr. Donovan is unable to name or document services performed for the Company as
Co-President, the Company believes the probability of a significant unfavorable
outcome is remote. This matter is currently in the preliminary stages and no
prediction can be made of the ultimate outcome.
<PAGE>
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On November 6, 1999, the Class A Warrants which were issued in connection with
the Company's initial public offering and which cover 1,232,153 shares of the
Company's Common Stock, expired by their terms.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's annual meeting of stockholders was held on July 16, 1999. All
proposals submitted by the Board of Directors to the stockholders for
consideration were approved.
As to the election of directors, the number of votes cast in favor of each
nominee was as follows:
Eugene I. Gordon, Ph.D. 3,078,117 votes for and 8,075 votes withheld
Edward E. David, Jr., Sc.D. 3,078,117 votes for and 8,075 votes withheld
William C. Hittinger 3,074,867 votes for and 11,325 votes withheld
Ronald B. Odrich, D.D.S. 3,076,167 votes for and 10,025 votes withheld
Elias Snitzer, Ph.D. 3,074,867 votes for and 11,325 votes withheld
As to the proposal to amend the Company's 1994 Stock Option Plan to increase the
number of shares of Common Stock available for issuance thereunder from 449,688
to 700,000: 1,951,967 votes for; 25,425 votes against; 55,888 votes abstaining;
1,052,912 not voting.
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11 Statement regarding computation of per share earnings
27.1 Financial Data Schedule
27.2 Financial Data Schedule (Restated)
(b) Reports on Form 8-K
None
<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 12, 1999 MEDJET INC.
/s/ Eugene I. Gordon
-----------------------------------
Eugene I. Gordon, Ph.D.
Chairman of the Board and
Chief Executive Officer
/s/ Thomas M. Handschiegel
-----------------------------------
Thomas M. Handschiegel
Vice President - Finance and
Human Resources
(Principal financial and accounting officer)
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
11 Statement regarding computation of per share earnings
27.1 Financial Data Schedule
27.2 Financial Data Schedule (Restated)
<PAGE>
Exhibit 11
COMPUTATION OF NET LOSS PER COMMON SHARE
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET LOSS PER SHARE
Loss from Operations applicable to
Common Stock $ (358,293) $ (487,396) $ (910,459) $(1,907,303)
========== ========== ========== ===========
Weighted Average Common and
Equivalent Shares Outstanding 3,901,431 3,686,280 3,891,555 3,682,891
---------- ---------- ---------- -----------
Net Loss Per Share $ (0.09) $ (0.13) $ (0.23) $ (0.52)
========== ========== ========== ===========
NET LOSS PER SHARE -
ASSUMING DILUTION (See "NOTE")
Loss from Operations applicable to
Common Stock $ (358,293) $ (487,396) $ (910,459) $(1,907,303)
========== ========== ========== ===========
Weighted Average Common and
Equivalent Shares Outstanding 3,901,431 3,686,280 3,891,555 3,682,891
Add: (A) Assuming Exercise of Stock Options 66,921 22,380 77,450 39,150
(B) Assuming Exercise of Warrants 12,687 51,674 15,455 55,808
---------- ---------- ---------- -----------
Weighted Average Common Shares
Outstanding - As Adjusted 3,981,038 3,760,334 3,984,460 3,777,849
========== ========== ========== ===========
Net Loss Per Share - Assuming Dilution $ (0.09) $ (0.13) $ (0.23) $ (0.50)
========== ========== ========== ===========
</TABLE>
NOTE:
The calculation for Net Loss Per Common Share - Assuming Dilution is submitted
in accordance with Securities Exchange Act of 1934 Release No. 9083 although not
required by Financial Accounting Standards Board No. 128 "Earnings Per Share"
("FASB 128") since the results are anti-dilutive.
(A) - For 1999, the dilutive options (i.e., the average market price is greater
than the exercise price), assume that options are exercised and proceeds
realized as indicated below. Next, using the treasury stock method with the
average market price per share during each period and the total shares assumed
to be reacquired as of the beginning of each period, the additional shares
included as outstanding are indicated below.
<TABLE>
<CAPTION>
Period Ended September 30, 1999
Three Months Nine Months
------------ ---------
<S> <C> <C>
Options assumed exercised 207,550 247,550
Proceeds assumed realized $188,443 $243,243
Shares assumed reacquired:
- During three months ($188,443/$1.34) 140,629
- During nine months ($243,243/$1.43) 170,100
Net additional shares assumed outstanding 66,921 77,450
</TABLE>
COMPUTATION OF NET LOSS PER COMMON SHARE - CONTINUED
For 1998, the dilutive options (i.e., the average market price is greater than
the exercise price), assume that options are exercised and proceeds realized as
indicated below. Next, using the treasury stock method with the average market
price per share during each period and the total shares assumed to be reacquired
as of the beginning of each period, the additional shares included as
outstanding are indicated below.
<TABLE>
<CAPTION>
Period Ended September 30, 1998
Three Months Nine Months
------------ -----------
<S> <C> <C>
Options assumed exercised 254,050 398,693
Proceeds assumed realized $1,475,738 $2,448,489
Shares assumed reacquired:
- During three months ($1,475,738/$6.37) 231,670
- During nine months ($2,448,489/$6.81) 359,543
Net additional shares assumed outstanding 22,380 39,150
</TABLE>
(B) - For 1999, the dilutive warrants (i.e., the average market price is greater
than the exercise price), assume that warrants are exercised and proceeds
realized as indicated below. Next, using the treasury stock method with the
average market price per share during each period and the total shares assumed
to be reacquired as of the beginning of each period, the additional shares
included as outstanding are indicated below.
<TABLE>
<CAPTION>
Period Ended September 30, 1999
Three Months Nine Months
------------ -----------
<S> <C> <C>
Warrants assumed exercised 50,000 60,000
Proceeds assumed realized $50,000 $63,700
Shares assumed reacquired:
- During three months ($50,000/$1.34) 37,313
- During nine months ($63,700/$1.43) 44,545
Net additional shares assumed outstanding 12,687 15,455
</TABLE>
For 1998, the dilutive warrants (i.e., the average market price is greater than
the exercise price), assume that warrants are exercised and proceeds realized as
indicated below. Next, using the treasury stock method with the average market
price per share during each period and the total shares assumed to be reacquired
as of the beginning of each period, the additional shares included as
outstanding are indicated below.
<TABLE>
<CAPTION>
Period Ended September 30, 1999
Three Months Nine Months
------------ -----------
<S> <C> <C>
Warrants assumed exercised 115,661 115,661
Proceeds assumed realized $407,600 $407,600
Shares assumed reacquired:
- During three months ($407,600/$6.37) 63,987
- During nine months ($407,600/$6.81) 59,853
Net additional shares assumed outstanding 51,674 55,808
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
September 30, 1999 (unaudited) financial statements of Medjet Inc. and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 11,450
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 66,383
<PP&E> 435,246
<DEPRECIATION> 307,258
<TOTAL-ASSETS> 956,451
<CURRENT-LIABILITIES> 841,608
<BONDS> 0
0
0
<COMMON> 3,935
<OTHER-SE> 110,908
<TOTAL-LIABILITY-AND-EQUITY> 956,451
<SALES> 0
<TOTAL-REVENUES> 175,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,086,846
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,867
<INCOME-PRETAX> (910,259)
<INCOME-TAX> 200
<INCOME-CONTINUING> (910,459)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (910,459)
<EPS-BASIC> (.23)
<EPS-DILUTED> (.23)
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
September 30, 1998 (unaudited) financial statements of Medjet Inc. and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 961,276
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 988,917
<PP&E> 504,991
<DEPRECIATION> 244,277
<TOTAL-ASSETS> 1,374,887
<CURRENT-LIABILITIES> 392,968
<BONDS> 0
1,100
0
<COMMON> 3,720
<OTHER-SE> 977,099
<TOTAL-LIABILITY-AND-EQUITY> 1,374,887
<SALES> 0
<TOTAL-REVENUES> 500,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,770,235
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 487
<INCOME-PRETAX> (1,724,791)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,724,791)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,907,303)
<EPS-BASIC> (.52)
<EPS-DILUTED> (.50)
</TABLE>
