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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, 2000
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)
(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 26, 2000, 3,901,431 shares of Common Stock, par value
$.001 per share, were outstanding.
Transitional Small Business Disclosure Format: Yes |_| No |X|
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<PAGE>
MEDJET INC.
(A Development Stage Company)
Condensed Interim Balance Sheet
September 30, 2000
(Unaudited)
ASSETS
<TABLE>
<S> <C>
Current Assets:
Cash and cash equivalents $ 61,066
Prepaid expenses 69,296
---------------
Total Current Assets 130,362
---------------
Property and Equipment - less accumulated depreciation of $357,520 80,248
Patents and Trademarks - less accumulated amortization of $25,659 229,418
Deferred tax asset 267,063
Security deposits 6,237
---------------
Total Assets $ 713,328
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 143,952
---------------
Total Liabilities 143,952
---------------
Stockholders' Equity:
Common stock, $.001 par value, 30,000,000 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, 10,400 shares
designated as Series B Convertible Preferred issued and outstanding 104
Additional paid-in capital 7,365,932
Accumulated deficit (including deficit accumulated during development
stage of $8,303,565 of which $1,556,204 was applied to additional
paid-in capital upon conversion from an "S" to a "C" corporation) (6,798,895)
Less: Treasury stock, 33,789 shares, at cost (1,700)
---------------
Total Stockholders' Equity 569,376
---------------
Total Liabilities and Stockholders' Equity $ 713,328
===============
</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, 2000 and 1999
And The Period From December 16, 1993 (Date of Inception) to September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Period from
September 30, September 30, December 16,
--------------------------- ---------------------------- 1993 (Inception) to
2000 1999 2000 1999 September 30, 2000
------------ ------------ ------------ ------------ --------------------
<S> <C> <C> <C> <C> <C>
Revenues:
License fee income $ 525,000 $ -- $ 525,000 $ 175,000 $ 1,200,000
------------ ------------ ------------ ------------ ------------
Total revenues 525,000 -- 525,000 175,000 1,200,000
------------ ------------ ------------ ------------ ------------
Expenses:
Research, development,
general and administrative 344,065 355,675 1,058,003 1,086,846 10,376,211
------------ ------------ ------------ ------------ ------------
Total expenses 344,065 355,675 1,058,003 1,086,846 10,376,211
------------ ------------ ------------ ------------ ------------
Income (Loss) from Operations 180,935 (355,675) (533,003) (911,846) (9,176,211)
Other Income (Expense):
Net interest income (expense) 1,429 (2,618) 15,345 1,587 279,927
------------ ------------ ------------ ------------ ------------
Income (Loss) Before Income Tax 182,364 (358,293) (517,658) (910,259) (8,896,284)
Income tax -- -- 240 200 (592,719)
------------ ------------ ------------ ------------ ------------
Net Income (Loss) 182,364 (358,293) (517,898) (910,459) (8,303,565)
Dividends on Preferred Stock -- -- -- -- 184,923
------------ ------------ ------------ ------------ ------------
Net Income (Loss) Attributable to
Common Shareholders $ 182,364 $ (358,293) $ (517,898) $ (910,459) $ (8,488,488)
============ ============ ============ ============ ============
Net Income (Loss) Per Share $ 0.05 $ (0.09) $ (0.13) $ (0.23) $ (2.64)
============ ============ ============ ============ ============
Weighted average common
shares outstanding 3,901,431 3,901,431 3,901,431 3,891,555 3,217,694
============ ============ ============ ============ ============
</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, 2000 and 1999
And The Period From December 16, 1993 (Date of Inception) to September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended Period from
September 30, December 16,
----------------------------- 1993 (Inception) to
2000 1999 September 30, 2000
------------ ------------- ------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities $ (736,257) $ (550,624) $ (8,035,617)
Cash Flows from Investing Activities (66,426) (6,520) (776,251)
Cash Flows from Financing Activities (200,000) 225,000 8,872,934
------------ ------------- ------------------
Net Increase (Decrease) in Cash and Cash Equivalents (1,002,683) (332,144) 61,066
Cash and Cash Equivalents - Beginning of Period 1,063,749 343,594 -
------------ ------------- ------------------
Cash and Cash Equivalents - End of Period $ 61,066 $ 11,450 $ 61,066
============ ============= ==================
Supplemental Disclosures of Cash Flow Information:
Cash paid for:
Income taxes $ 240 $ 200 $ (592,719)
============ ============= ===================
Interest expense $ 9,365 $ 2,867 $ 61,342
============ ============= ===================
</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, 2000 are not necessarily indicative of
results to be expected for the fiscal year ending December 31, 2000.
NOTE B - NET INCOME (LOSS) PER SHARE:
Net income (loss) per share, in accordance with the provisions of
Financial Accounting Standards No. 128, "Earnings Per Share," is
computed by dividing net income (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 for the three-month period ended September 30,
2000.
<PAGE>
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 of the Company's proprietary microjet technology for corneal
refractive surgery. Under the terms of the agreement, Alcon was to make
a best effort to obtain regulatory clearance or approval, manufacture,
promote and market certain refractive microjet devices and consumables
developed by the Company.
Among other things, the agreement provided for future payments based on
the attainment of certain milestones, minimum royalty payments starting
in the year 2000, royalties upon sales by Alcon of the Company's
products and payments to the Company to cover the cost of the transfer
to Alcon of the Company's technology, some of which payments were to be
credited against future royalties owed to the Company. The Agreement
was terminable on three months' notice and, on December 13, 1999, the
Company received notice of Alcon's termination of the Agreement. On
July 20, 2000 the Company and Alcon reached an agreement on the terms
of the termination with Alcon paying part of the year 2000 minimum
royalty.
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 OR IN THE INTRODUCTION TO PART I OF THE COMPANY'S ANNUAL REPORT ON FORM
10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, 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.
<PAGE>
GENERAL
The Company is engaged in research and development for manufacture 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
2000, assuming the appropriate regulatory clearances are obtained, to continue
its research and development activities, focusing principally on ophthalmic
surgical technology and equipment, and to offer for sale its first microjet
microkeratome product. It also expects to commence exploratory work on dental
applications of microjet technology during 2001. 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, 2000 or
the comparable periods in 1999. In connection with a settlement agreement dated
July 20, 2000 between the Company and Alcon, the license agreement was
terminated, each party agreed to drop all claims against each other arising out
of the license agreement and a payment in the amount of $350,000 was made by
Alcon to the Company during the three months ended September 30, 2000. In
addition, payments totaling $175,000 previously made by Alcon to the Company
which were to be credited against future royalties owed to the Company were
retained by the Company. Both amounts have been reflected as License Fee Income
in the accompanying Condensed Interim Financial Statements.
Total expenses during the three months ended September 30, 2000 decreased by
$11,610 (3.3%) to $344,065 from $355,675 for the comparable period of 1999. This
was primarily due to a decrease in legal fees, principally related to the
reduced activities in the NJIT litigation (see "Legal Proceedings"), offset in
part by increased purchases for materials, testing and analysis and other costs
associated with continuing development activities.
During the nine months ended September 30, 2000, total expenses decreased by
$378,843 (41.54%) to $533,003 from $911,846 for the comparable period of 1999,
generally for the same reasons as during the three-month period.
Other income/expense consists of interest income, interest expense and finance
charges. Net interest income for the three months ended September 30, 2000 was
$1,429 compared to net interest expense of ($2,618) for the comparable period of
1999. This increase resulted principally from income earned on the Company's
short-term investments, which were higher in the 2000 period, reflecting the
funds received through the Company's issuance of preferred stock, the sale of
its New Jersey State tax credits and the funds received from Alcon. See
"Liquidity and Capital Resources" below.
For the nine months ended September 30, 2000, net interest income increased by
$13,758 to $15,345 from $1,587 for the comparable period of 1999 for the same
reasons as during the three-month period.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2000, the Company's working capital was $61,066. A Line of
Credit, from Dr. Eugene I. Gordon for $250,000 is available to be drawn on when
needed.
Throughout the second half of 1998 and into 1999, the Company sought additional
capital to finance its 1999 and 2000 business plans. Pending obtaining
additional financing, the Company made the decision to curtail several
operational activities as well as to downsize its employee base in order to
husband and stretch its existing capital to the next financing. In October and
November 1998, the Company dismissed 9 of its 19 employees and also
significantly reduced the 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.
In December 1999, the Company commenced a private placement of its Series B
Convertible Preferred Stock at a price of $125 per share. The Preferred is
convertible into 100 shares of Common Stock for each share of Preferred, subject
to adjustment for any stock splits, stock dividends, recapitalizations,
reclassifications and similar events. At the closing for this private placement,
held on December 6, 1999, the Company sold and issued 16,000 shares of Preferred
for an aggregate price of $2,000,000. In addition, the investors received
five-year warrants to purchase 1,600,000 shares of Common Stock at an exercise
price of $3.50 per share. The Company also entered into an investment banking
agreement with a New York firm affiliated with certain of the investors, and
issued the firm 500,000 warrants with the same terms.
On January 28, 2000, the Company returned $700,000 of the $2,000,000 aggregate
price received from the sale of the Series B Preferred pursuant to an agreement,
dated January 28, 2000, under which the Company received a return of a
proportionate number of the Series B Preferred and Series B Warrants issued in
the private placement. In connection with this agreement, the investment banking
agreement entered into by the Company at the time of the original investment
also was cancelled.
In January 1998, the State of New Jersey enacted 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. During 1999, the Company entered
into an agreement under which it retained a third party broker to identify a
buyer for the Company's NOL Carryover and R&D Credits. The total anticipated net
proceeds of this transaction ($594,209) were recorded as a non-current deferred
tax asset in the accompanying financial statements. Due to limitations placed by
the State of New Jersey on the total amount of NOL Carryover and R&D Credits
eligible to be sold in any one year, the sale of only a portion of the Company's
NOL Carryover and R&D Credits ($327,000) was completed in 1999. The receipt of
these funds, on December 16, 1999, was recorded as a reduction to the
non-current deferred tax asset in the accompanying financial statements. Based
on current practice the sale of the remaining balance of the Company's NOL
Carryover and R&D Credits is anticipated by the end of the fourth
<PAGE>
quarter of 2000. 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 agreement, the Company issued to Dr. Gordon
warrants to purchase up to 50,000 shares of the Company's Common Stock and
agreed to pay a market interest rate on amounts borrowed. During 1999, amounts
advanced under this agreement totaled $250,000. At December 31, 1999, $100,000
of this amount, plus accrued interest, had been repaid. At September 30, 2000,
the balance of the loan, plus accrued interest, had been repaid. The Company
will be reactivating the line of credit in mid October, to support cash flow
until the arrival of the sale of the remaining balance of NOL R & D tax credits
from the Company.
The Company anticipates that its cash on hand, plus the loan available from Dr.
Gordon and the sale of its New Jersey State NOL Carryover and R&D Credits, will
be sufficient to meet the Company's 2000 working capital and planned capital
expenditure requirements. If, however, the Company incurs unexpected expenses,
or if the remaining New Jersey NOL Carryover and R&D Credits are not sold as
anticipated, the Company may require additional financing prior to the end of
2000 in order to maintain its current operations. The Company currently has no
commitment or arrangement for any capital, and there can be no assurance whether
or on what terms it will be able to obtain any needed capital. If additional
financing were not available, the Company would be materially adversely affected
and be required to further curtail or cease altogether its current operations.
During the remainder of 2000, the Company intends to seek additional funding in
order to accelerate its product development efforts and augment its working
capital.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company has been in the development stage and has not sold any products. To
date, the Company's research and development activities on vision correction
have been limited to constructing and testing experimental versions of
microkeratomes for eye surgery and conducting a limited number of feasibility
studies using enucleated porcine, rabbit and human cadaver eyes and live rabbits
to prove that the beam of water can smoothly incise and shape the anterior
surface of the cornea and that the cornea will heal properly after the surgery.
The Company has constructed and successfully tested and demonstrated a handheld
microkeratome and associated pump and sterilization system. The uniformity,
smoothness and accuracy greatly exceeds what is currently achieved with blade
type microkeratomes Human blind eye trials are anticipated to begin in the first
half of 2001. Assuming success in these trials, the Company plans to introduce a
microkeratome hinged flap microkeratome product in the fall of 2001.
<PAGE>
In July 1998, the Company entered into an agreement with Nestle S.A. ("Nestle")
pursuant to which the Company granted Nestle and its wholly owned subsidiary,
Alcon Laboratories, Inc. ("Alcon"), an exclusive, worldwide license for the use
of the Company's proprietary microjet technology for corneal refractive surgery.
Under the terms of the license agreement ("Agreement"), Alcon was to make a best
effort to register, manufacture, promote and market refractive microjet devices
and consumables developed by the Company. Among other things, the Agreement
provided for future payments based on the attainment of certain milestones,
minimum royalty payments starting in the year 2000, royalties upon sales by
Alcon of the Company's products and payments to the Company to cover the cost of
the transfer to Alcon of the Company's technology, some of which payments were
to be credited against future royalties owed to the Company. The Agreement was
terminable on three months' notice and, on December 13, 1999, the Company
received notice of Alcon's termination of the Agreement. In connection with a
settlement agreement dated July 20, 2000 between the Company and Alcon, the
Agreement was terminated, each party agreed to drop all claims against each
other arising out of the Agreement and a payment in the amount of $350,000 was
made by Alcon to the Company. In addition, payments totaling $175,000 previously
made by Alcon to the Company which were to be credited against future royalties
owed to the Company were retained by the Company.
Following the termination the Company has developed a handheld waterjet
microkeratome for clinical use. This is a fully functional, self-contained
device. It has demonstrated the ability to safely and accurately produce uniform
thickness hinged flaps for the LASIK procedure. Although the Company currently
intends to undertake the manufacture and marketing of its microjet products, it
continues to have discussions with several potential strategic partners. These
discussions are in the early stages, and no formal understanding or agreement
has been reached with any potential strategic partner. The Company's objective
in entering into any such arrangements would be to obtain adequate funding to
support development of other products, in addition to their manufacture,
promotion and marketing. 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.
The Company has filed a patent application that has been allowed and is
evaluating the potential use of waterjets for treatment of dental caries.
Initial feasibility tests have been promising and the Company believes this
development program may yield a product with significant market potential.
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
<PAGE>
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 distribution arrangements with respect to its
products, 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.
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 judgement 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 and a related divisional patent have 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
<PAGE>
effectiveness of the device. In its U.S. District Court pleas, NJIT claimed 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 judgement 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 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 were dismissed. On April 26, 1999, NJIT commenced a second action in
U.S. District Court. NJIT alleging 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 judgement 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. On June 30, 2000, the motion by
the Company to dismiss the action against the Company, Dr. Gordon and the former
employee of the Company was granted by the U.S. District Court. On July 13,
2000, NJIT appealed the June 30, 2000 order dismissing the second federal action
in the Federal Circuit Court of Appeals. NJIT's appeal does not alter the
Company's position that the June 30, 2000 order was correct.
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 patent attorney for the Company, a former employee of the Company and
certain patent law firms. A Motion for Summary Judgement in favor of the former
patent attorney and the law firms was previously granted and, on May 22, 2000,
the Superior Court of New Jersey granted the Company's Motion for Summary
Judgement, dismissing NJIT's claims to ownership of the Patent. On June 30,
2000, NJIT filed a Motion for Reconsideration of the judge's ruling arguing
primarily that the lawsuit should be heard in U.S. District Court but also
questioning the judge's decision to dismiss the lawsuit. The US District Court
lawsuit was dismissed. The Motion for reconsideration in the State court was
also dismissed. The Company subsequently filed a second Motion for Summary
Judgement to dismiss additional claims that the company, Dr. Gordon and the
third party defendants, among other things, breached fiduciary duties. This
Motion was based on the ruling by the judge overturning NJIT's claims of
ownership. That Motion
<PAGE>
was heard by a new judge who decided to await the outcome of NJIT's appeal of
the US District Court's dismissal.
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. Mr. Donovan had rejected a compensation package approved by the
Company's Board of Directors and offered by the Company previously. The Company
believes the probability of a significant unfavorable outcome is remote.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
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 Financial Data Schedule
(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: October 26, 2000 MEDJET INC.
/s/ Eugene I. Gordon
------------------------------------
Eugene I. Gordon, Ph.D.
Chairman of the Board and
Chief Executive Officer
/s/ Cheryl A. Blake
-----------------------------------
Cheryl A. Blake
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 Financial Data Schedule
