<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
For the transition period from __ to__
Commission file number 0-25852
THE MED-DESIGN CORPORATION
Delaware 77-0404919
-------- ----------
(State of Incorporation) (IRS Employer ID Number)
2810 Bunsen Avenue, Ventura, CA 93003
-------------------------------------
(805) 339-0375
--------------
Check whether 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 |_|
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common Stock - 10,481,767 shares of Common Stock, $.01 par value,
outstanding as of November 10, 2000.
Transitional Small Business Disclosure Format (check one):
Yes |_| No |X|
<PAGE>
THE MED-DESIGN CORPORATION
INDEX TO FORM 10-QSB
<TABLE>
<CAPTION>
Page Number
PART 1 - FINANCIAL INFORMATION
<S> <C> <C>
Item 1- Financial Statements
Consolidated Balance Sheets as of September 30, 2000 (unaudited) and as of
December 31, 1999 .............................................................. 3
Consolidated Statements of Operations (unaudited) for the three and
nine months ended September 30, 2000 and 1999............................... 4
Consolidated Statements of Comprehensive Loss (unaudited) for the three and
nine months ended September 30, 2000 and 1999................................... 5
Consolidated Statements of Cash Flows (unaudited) for the nine months ended
September 30, 2000 and 1999 .................................................... 6
Notes to Consolidated Financial Statements (unaudited) ......................... 7-9
Item 2- Management's Discussion and Analysis of Financial Condition and Results
of Operation.................................................................... 10-12
PART II - OTHER INFORMATION
Item 1- Legal Proceedings .............................................................. 13
Item 2- Changes in Securities .......................................................... 13
Item 3- Defaults upon Senior Securities ................................................ 13
Item 4- Submission of Matters to a Vote of Security Holders ............................ 13
Item 5- Other Information .............................................................. 13
Item 6- Exhibits and Reports on Form 8-K ............................................... 14
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
THE MED-DESIGN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
(Unaudited)
------------ -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $339,703 $682,120
Available-for-sale securities 4,562,580 4,180,262
Prepaid expenses and other current assets 410,828 172,680
----------- -----------
Total current assets 5,313,111 5,035,062
Property, plant, and equipment, net of accumulated depreciation
of $990,979 and $843,598 at September 30, 2000 and
December 31, 1999, respectively 553,409 698,571
Patents, net of accumulated amortization of $250,994
and $132,276 at September 30, 2000 and December 31,
1999, respectively 1,611,642 1,110,013
Debt issue costs, net of accumulated amortization of $151,560 413,640
----------- -----------
Total Assets $7,478,162 $7,257,286
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ -- $250,000
Current maturities of long-term debt and capital lease obligations 10,243 12,251
Accounts payable 206,403 277,031
Accrued expenses 193,831 191,650
Licensing Fee Advance 1,500,000
----------- -----------
Total current liabilities 410,477 2,230,932
Long-term debt and capital lease obligations, less current maturities 13,126 1,073,797
----------- -----------
Total liabilities 423,603 3,304,729
----------- -----------
Commitments and Contingencies
Stockholders' equity
Preferred stock, $.01 par value, 5,000,000 shares authorized;
300,000 shares issued and outstanding as of December 31, 1999 -- 3,000
Common stock, $.01 par value, 20,000,000 shares authorized;
10,058,100 and 8,604,437 shares issued and outstanding as of
September 30, 2000 and December 31, 1999 respectively 100,581 86,045
Additional paid-in capital 31,330,275 26,165,377
Accumulated deficit (24,406,285) (22,331,825)
Accumulated other comprehensive income 29,988 29,960
----------- -----------
Total stockholders' equity 7,054,559 3,952,557
----------- -----------
Total Liabilities and Stockholders' Equity $7,478,162 $7,257,286
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
THE MED-DESIGN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- --------------------------
2000 1999 2000 1999
------------ --------- ----------- ------------
<S> <C> <C> <C> <C>
Revenue:
Licensing Revenue -- -- $4,000,000 --
------------ --------- ----------- -----------
Total Revenue -- -- $4,000,000 --
------------ --------- ----------- -----------
Operating expense:
General and administrative $880,675 $612,253 2,588,434 $1,786,830
Research and development 298,352 296,877 930,003 920,313
Stock based compensation 534,581 -- 2,182,851 --
------------ --------- ----------- -----------
Total operating expenses 1,713,608 909,130 5,701,288 2,707,143
Loss from operations (1,713,608) (909,130) (1,701,288) (2,707,143)
Interest expense (274) (88,566) (31,431) (225,071)
Investment income 67,464 49,419 221,900 167,966
------------ --------- ----------- -----------
Net loss before extraordinary item (1,646,418) (948,277) (1,510,819) (2,764,248)
Extraordinary loss from
extinguishment of debt -- -- (413,640) --
------------ --------- ----------- -----------
Net loss (1,646,418) (948,277) (1,924,459) (2,764,248)
Dividends -- -- 150,000 --
------------ --------- ----------- -----------
Net loss applicable to
common shares ($1,646,418) ($948,277) ($1,774,459) ($2,764,248)
============ ========= =========== ===========
Basic and dilutive earnings per
common share
Loss before extraordinary item ($0.16) ($0.12) ($0.16) ($0.35)
Extraordinary item loss $0.00 $0.00 ($0.04) $0.00
Net loss applicable to common ($0.16) ($0.12) ($0.18) ($0.35)
shares
Weighted average common shares 10,038,544 7,951,703 9,600,084 7,951,603
outstanding
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4
<PAGE>
MED-DESIGN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE GAINS AND LOSSES
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- -----------------------------
2000 1999 2000 1999
----------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Net loss ($1,646,418) ($948,277) ($1,924,459) ($2,764,248)
Other comprehensive loss:
Unrealized holding gains and $19,341 (2,602) 28 (2,602)
losses on Securities
----------- --------- ----------- -----------
Comprehensive loss ($1,627,077) ($950,879) ($1,924,431) ($2,766,850)
=========== ========= =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
5
<PAGE>
THE MED-DESIGN CORPORATION AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months Ended
September 30,
-----------------------------
2000 1999
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($1,924,459) ($2,764,248)
Adjustments to reconcile net loss to operating
Cash flows:
Depreciation and amortization 278,729 201,858
Amortization of debt issue costs 73,380
Debt issue cost in connection with
private investor loan 24,401 74,580
Stock-based compensation 2,182,851 --
Extraordinary loss on extinguishment of debt 413,640 --
Changes in operating assets and liabilities:
Prepaid expenses and other current assets (238,148) (75,043)
Licensing Fee Advance (1,500,000) --
Accounts payable (70,628) 5,697
Accrued expenses 2,181 (52,339)
----------- -----------
Net cash used in operating activities (831,434) (2,536,115)
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment (14,851) (23,508)
Additions to patents (384,285) (149,334)
Investment in available for sale securities (2,500,000) --
Sale of available-for-sale-securities 2,117,710 3,470,304
----------- -----------
Net cash (used in) provided by investing activities (781,426) 3,297,462
----------- -----------
Cash flows from financing activities:
Capital lease payments (12,678) (10,309)
Warrants and stock options exercised 1,683,120 650
Repayment of short-term borrowings (250,000) --
Dividends paid (150,000) --
----------- -----------
Net cash provided by (used in) financing activities 1,270,443 (9,659)
----------- -----------
Increase (decrease) in cash (342,417) 751,688
Cash and cash equivalents, beginning of period 682,120 32,883
----------- -----------
Cash and cash equivalents, end of period $339,703 $784,571
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE>
MED-DESIGN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements include The
Med-Design Corporation (hereinafter, including its subsidiaries as the context
requires, the "Company" or "Med-Design") and its wholly-owned subsidiaries, MDC
Investment Holdings, Inc. ("MDC Holdings") and MDC Research Ltd. All significant
intercompany transactions and accounts are eliminated. The accompanying
consolidated financial statements have been prepared on a basis consistent with
that used as of and for the year ended December 31, 1999 and, in the opinion of
management, reflect all adjustments (principally consisting of normal recurring
accruals) considered necessary to present fairly the financial position of the
Company as of September 30, 2000 and the results of the Company's operations and
cash flows for the three month and nine month period ended September 30, 2000.
The results of operations for the three month and nine month period ended
September 30, 2000 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2000. The financial statements included
herein have been prepared in accordance with generally accepted accounting
principles for interim financial information and the instructions to Form 10-QSB
and Rule 310 (b) of Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. The consolidated balance sheet at December
31, 1999 was derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles. These
consolidated financial statements should be read in conjunction with the
Company's audited financial statements for the year ended December 31, 1999,
which were included as part of the Company's Annual Report on Form 10-KSB.
2. Agreements with Becton Dickinson
On December 13, 1999, Med-Design signed an option agreement with Becton
Dickinson ("BD") related to certain of the Company's patented products (the
"Optioned Products"). Under the terms of the agreement Med-Design agreed to
extend the initial option agreement covering five products until January 25,
2000. The option gives BD the exclusive right to license, manufacture and sell
these five products. In connection with this agreement, Med-Design received a
payment of $1.5 million. On March 12, 2000, Med-Design signed a Binding Term
Letter (the "Letter") with BD that detailed the principal terms under which the
Optioned Products would be licensed to BD. The Letter also provided that the
parties would negotiate and prepare a license agreement consistent with the
terms set forth in the Letter.
The Letter was approved by the Board of Directors of Med-Design on March 24,
2000. Upon execution of the Letter, the $1.5 million option payment became
non-refundable and under the terms of the binding agreement, Med-Design has no
further obligations regarding this payment. Accordingly, the Company recognized
$1.5 million in revenue for the period ended March 31, 2000.
On May 11, 2000, Med-Design and BD entered into a license agreement under
which Med-Design licensed certain of the Optioned Products to BD. Under the
agreement, Med-Design received an additional up-front nonrefundable payment of
$2.5 million and the right to future royalty payments based on sales of the
licensed products by BD. Med-Design recognized the $2.5 million as revenue in
the second quarter of fiscal year 2000.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
3. Basic and Diluted Loss Per Share
The following table sets forth the computation of basic and diluted net loss per
share:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net loss before extraordinary item ($1,646,418) ($948,277) ($1,510,819) ($2,764,248)
Extraordinary loss from extinguishment of debt -- -- (413,640) --
----------- --------- ----------- -----------
Net loss (1,646,418) (948,277) (1,924,459) (2,764,248)
Dividends -- -- 150,000 --
----------- --------- ----------- -----------
Net loss applicable to common shares ($1,646,418) ($948,277) ($1,774,459) ($2,764,248)
=========== ========= =========== ===========
Basic and dilutive earnings per common share
Loss before extraordinary item ($0.16) ($0.12) ($0.16) ($0.35)
Extraordinary item loss $0.00 $0.00 ($0.04) $0.00
Net Loss applicable to common shares ($0.16) ($0.12) ($0.18) ($0.35)
Weighted average common shares outstanding 10,038,544 7,951,703 9,600,084 7,951,603
</TABLE>
Options and warrants to purchase 1,898,700 shares of common stock as of
September 30, 2000 and 1,718,000 as of September 30, 1999, were not included in
computing diluted earnings per share as the effect was antidilutive.
4. Patents
On February 18, 2000 Med-Design purchased from Dr. Edward Allard a safety
syringe patent initially issued to Dr. Allard in June 1989. In connection with
the purchase, Med-Design issued to Dr. Allard and Daniel Longmire, the
co-inventor, 14,416 shares of Company common stock and cash of $220,000. The
purchase price of the patent, $456,062, was capitalized on the balance sheet and
will be amortized on a straight-line basis over 6 years.
5. Debt Issue Costs
The Company completed a private placement of $1,550,000 principal amount of
4% convertible debentures due July 2003 and received proceeds of $1,474,000. The
debentures are collateralized by the Company's intellectual property and are
convertible into 1,240,000 shares of common stock, or a conversion price of
$1.25 per share. The Company recorded $565,200 in debt issue costs with respect
to this transaction. During the first quarter of 2000, the holders of $1,225,000
principal amount of the debentures converted them into 980,000 shares of common
stock. The remaining $325,000 principal amount of debentures was converted into
260,000 shares in the second quarter of 2000. As a result of the conversion, the
Company recognized $336,609 and $77,031 of debt issue costs as an extraordinary
loss in the first and second quarters of 2000, respectively. Prior to the
conversion, these costs were being amortized over the term of the debentures.
Debt issue costs are presented as an extraordinary item on the Company's
Consolidated Statement of Operations.
8
<PAGE>
6. Debt
The Company obtained a loan from a director of the Company, in the amount of
$250,000 on May 29, 1998. The entire principal and accrued interest of $5,142 on
the loan was paid on February 29, 2000.
7. Preferred Stock
Med-Design signed a license, option and equity agreement with BD on December
11, 1998. Under the terms of this agreement, BD invested $1.5 million in
Med-Design through the purchase of 300,000 shares of Series A Convertible
Preferred Stock. The Series A Convertible Preferred Stock was convertible into
Med-Design common stock at the rate of one share of common stock for each share
of preferred stock converted. BD converted the preferred stock into 300,000
shares of common stock on March 28, 2000.
Dividends on the preferred stock were payable semi-annually at a rate of 8%
per annum in cash or in additional shares of preferred stock (at the option of
Med-Design). A dividend of $150,000, related to Series A preferred stock
converted in March 2000, was paid in June 2000.
8. Stock Based Compensation
During the first quarter of 2000, the Company extended the expiration period
for outstanding warrants and options for certain directors, officers, employees
and consultants of the Company as described below. In accordance with FASB 123,
Accounting for Stock-Based Compensation, and APB 25, Accounting for Stock Issued
to Employee, the Company assessed the nature and structure of each transaction
and recorded compensation expense as follows:
The Company extended to February 29, 2000 the expiration date for stock
options to purchase 59,000 shares of common stock for an officer of the Company
as part of a separation package. In connection with this transaction, the
Company recorded a compensation expense of $811,250.
The Company extended to February 29, 2000 the expiration date for stock
options to purchase 1,000 shares of common stock for an employee of the Company
as part of a separation package. In connection with this transaction, the
Company recorded a compensation expense of $13,750.
The Company extended to August 31, 2000 the expiration date on a warrant
issued to a consultant to purchase 100,000 shares of common stock. In connection
with this transaction, the Company recorded a compensation expense of $832,270.
The Company issued stock, stock options and warrants to officers of the
Company during the year 2000. The stockholders approved the issuance of these
instruments August 7, 2000 at the annual meeting. The Company recorded
compensation expense in the amount of $522,101 with respect to these
transactions in the third quarter 2000.
The Company issued a warrant to Edward Allard for consulting services on
February 19, 2000. The Company recorded compensation expense in the amount of
$12,480 with respect to this warrant.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 relating to, among other
things, Med-Design's plans to advance concept development and modeling of
products not currently subject to licensing agreements, plans to seek to license
these products to third parties or enter into joint ventures relating to these
products, the building of prototypes to support these plans, the hiring of
additional personnel, the adequacy of its funds, the effects of the inability to
enter into new licensing agreements or generate revenues from existing
agreements, and factors affecting capital expenditures. These forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those reflected in these
forward-looking statements. Factors that might cause such a difference include,
but are not limited to, demand and market acceptance for licensed products, the
impact of competitive products and pricing, engineering and production
difficulties, inability to enter into additional license agreements,
unanticipated cost overruns in building prototypes and the risk factors
described in the Company's registration statement Form S-3, March 6, 2000 filed
with the Securities and Exchange Commission.
Results of Operations
Results of Operations for the Three Month Periods Ended September 30, 2000
and 1999
Loss from operations for the three months ended September 30, 2000 was
$1,713,608 an increase of $804,478 compared to a loss from operations of
$909,130 for the corresponding period in 1999. The increase in loss from
operations was due primarily to the recording of a $534,581 charge in connection
with the issuance of stock, stock options and warrants. The charge has been
recorded as stock based compensation and did not have an impact on the Company's
cash position.
General and administrative expenses for the three months ended
September 30, 2000 were $880,675, an increase of $268,442 as compared to
$612,253 for the corresponding period 1999. The increase is attributable to an
increase in legal and travel expenses as a result of increased business activity
of the Company to market its pipeline products.
Research and development expenses for the three months ended September
30, 2000 were $298,352, an increase of $1,475 as compared to $296,877 for the
corresponding period in 1999. Research and development expenses were essentially
flat but do represent some level of increase due to business activity to advance
the design concept of its pipeline products.
Results of Operations for the Nine Months Ended September 30, 2000 and 1999
Total revenues for the nine months ended September 30, 2000 were $4,000,000;
the Company had no revenues for the nine months ended September 30, 1999. The
revenue reflects licensing payments made by BD under the BD Agreement. Of this
amount $1.5 million was paid in December 1999, but was recognized as revenue
when the payment became non-refundable in connection with the execution of a
term letter with BD. See Note 2 to the Consolidated Financial Statements.
Loss from operations for the nine months ended September 30, 2000 was
$1,701,288 as compared to a loss from operations of $2,707,143 for the nine
months ended September 30, 1999. The decrease in loss from operations was due
principally to the $4,000,000 in licensing revenues described above partially
offset by increased general and administrative expenses.
General, administrative, research and development, and stock based
compensation expenses for the nine months ended September 30, 2000 were
$5,701,288 as compared to $2,707,143 for the nine months ended September 30,
1999. The increase in expense is due primarily to recording a charge of
$2,170,171 for stock based compensation for the issuance of stock, stock options
and warrants as compensation.
10
<PAGE>
Plan of Operation
Med-Design plans to focus on the following two areas of activity during the
next twelve months: the further development and licensing of additional products
and the development of incremental revenues related to design and development
and manufacturing agreements with licensing partners.
Med-Design plans to advance concept development and modeling of certain
other products that are not currently under licensing agreements. Med-Design
also plans to continue to seek to license these products to third parties or
enter into joint ventures related to these products. Med-Design will support
these efforts through measures such as the building of necessary prototypes with
currently available funds.
Med-Design is investigating opportunities with third parties to manufacture,
market and distribute Med-Design's products. Med-Design anticipates that
entering into alliances and licensing arrangements with third parties will
enable the Company to more quickly increase market penetration of its products.
The Company is also exploring the feasibility of manufacturing or having
manufactured certain of its products. In 1995, Med-Design completed the
construction of a research and development laboratory at its facility in
Ventura, California that is equipped with assembly and test equipment for
product development and feasibility testing. In addition, the Company completed
a machine shop equipped with machine tools for fabrication of new product parts
for concept modeling, assembly and test fixtures and a mold shop capable of
producing small cavitation molds. Med-Design also installed a Class 100,000
clean room at the Ventura facility which is currently used for the hand assembly
of prototypes of Med-Design's products and could be used in connection with the
pilot manufacturing of various Med-Design products on a semi-automated assembly
system or a fully automated robotic assembly system if Med-Design installs such
a system.
If the Company decides to manufacture its products using the present
facility, adequate funds would be required to acquire needed equipment and other
resources. Med-Design would anticipate obtaining the required funds through an
equity offering.
Med-Design is currently in negotiations with third parties to provide
additional design, development and manufacturing in furtherance of the
commercialization of Med-Design's products.
As of September 30, 2000, Med-Design employed 18 people on a full-time basis
and one person on a part-time basis. Med-Design anticipates that it will hire
additional personnel if it is able to license its early stage development
products, enter into joint ventures related to such products, or decides to
manufacture its products in accordance with its plan of operation.
For a discussion regarding Med-Design's ability to satisfy its cash
requirements for the next twelve months, see "Liquidity and Capital Resources"
below.
Liquidity and Capital Resources
At September 30, 2000, cash and cash equivalents and available-for-sale
securities totaled $4,902,283, as compared to $4,862,382 at December 31, 1999,
an increase of $39,901 or approximately 1%. This increase was partially due to
the $2,500,000 of licensing revenues described above, offset principally by the
repayment of short-term debt of $250,000, the purchase of the Allard patent of
$220,000 and the payment of preferred stock dividends of $150,000.
At September 30, 2000, Med-Design had a revolving line of credit totaling
$3,000,000 with a bank. This facility can be used to fund working capital needs
and finance capital equipment purchases. However, advances for capital equipment
financing may not exceed $600,000. There were no amounts outstanding under the
agreement at September 30, 2000. Any borrowings to meet working capital needs
will bear interest at LIBOR plus 2.25 basis points, while borrowings to finance
capital equipment purchases bear interest at prime plus 2.5%. Under the terms of
the facility, all borrowings must be fully collateralized by available-for-sale
securities, cash, cash equivalents, equipment financed, and general intangibles
which are substantially all of the assets of the Company. The facility expires
on May 30, 2002, and there is no assurance that Med-Design will be successful in
negotiating a continuation of the availability of the line of credit or the
terms which will be made available to Med-Design.
11
<PAGE>
During the period October 1, 2000 to the date of the filing of this report
The Med-Design Corporation received approximately $1.7 million from the exercise
of stock options and warrants. The exercise of these stock options and warrants
significantly increased Med-Design's cash position.
Management believes that Med-Design has sufficient funds to support its
planned operations and capital expenditure for at least the next twelve months.
The availability of longer-term capital resources will be dependent on
Med-Design's ability to enter into licensing and royalty agreements and to
receive royalty payments from its current and future strategic partners. If
Med-Design is unsuccessful in negotiating additional agreements, or if licensing
revenues are insufficient to support operations, Med-Design may be required to
reduce substantially or eliminate certain of its product development activities,
limit its operations significantly, or otherwise modify its business strategy.
Med-Design's capital requirements will depend on many factors, including but
not limited to, the progress of its research and development programs, the
development of regulatory submissions and approvals, pilot manufacturing
capability, and the costs associated with protecting its patents and other
proprietary rights.
There are no other material commitments at this time.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities.
None.
Item 3 - Defaults upon Senior Securities.
None.
Item 4 - Submission of Matters to a Vote of Security Holders.
The Company held its Annual Meeting of Stockholders (the "Meeting") on
August 7, 2000. The Company solicited proxies in connection with the Meeting. At
the record date of the Meeting (June 9, 2000), there were 9,114,637 shares of
Common Stock outstanding and entitled to vote. The following were the matter
voted upon at the Meeting.
1. Election of Directors. The following directors were elected at the
Meeting: James M. Donegan, Michael W. Simpson, Joseph N. Bongiovanni
III, Gilbert M. White, John F. Kelley, Pasquale L. Vallone, Vincent
J. Papa. The number of votes cast and withheld for each director are
as follows:
Director For Withheld
------------------- --------- -------------
James M. Donegan 7,533,664 509,575
Joseph N. Bongiovanni 7,546,371 496,868
Gilbert M. White 7,835,881 207,358
John F. Kelley 7,775,047 268,192
Pasquale L. Vallone 7,773,181 270,058
Vincent J. Papa 7,773,347 269,892
Michael W. Simpson 7,835,881 208,125
2. Proposal to issue equity to certain Officers, Directors and
Consultants of the Company.
For Against Abstain
--------- --------- ---------
3,366,061 1,192,432 72,131
3. Ratification of Independent Accountants
For Against Abstain
--------- --------- ---------
8,022,475 10,450 10,314
Item 5 - Other Information.
None.
13
<PAGE>
Item 6 - Exhibits and Reports on Form 8-K.
(a) List of Exhibits filed pursuant to Item 601 of Regulation S-B. The
following exhibits are filed with this Report on Form 10-QSB.
Exhibit
Number Description
------ -----------
27 Financial Data Schedule.
(b) No reports on Form 8-K have been filed during the quarter ended
September 30, 2000.
Electronic filing only.
14
<PAGE>
Signatures
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the
undersigned, thereunto duly authorized.
The Med-Design Corporation
Date: ___________________ /s/ James M. Donegan
------------------------------------
James M. Donegan
Chief Executive Officer
/s/ Lawrence D. Ellis
------------------------------------
Lawrence D. Ellis
Chief Financial Officer
15
