-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LBIQmwhn0A7yLYG74waEf1YoUJYQ4hlk+t07Gkwey2S3AVAA2U8hVCWqyKMIv15u uTUEto9yZJjPAvLml4vuwQ== 0000950148-00-000195.txt : 20000215 0000950148-00-000195.hdr.sgml : 20000215 ACCESSION NUMBER: 0000950148-00-000195 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 20000214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MYO DIAGNOSTICS INC CENTRAL INDEX KEY: 0001029312 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 954089525 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 333-19285 FILM NUMBER: 540064 BUSINESS ADDRESS: STREET 1: 3710 S ROBERTSON BLVD CITY: CULVER CITY STATE: CA ZIP: 90232 BUSINESS PHONE: 3105595500 MAIL ADDRESS: STREET 1: 3710 S ROBERTSON CITY: CULVER CITY STATE: CA ZIP: 90232 10QSB 1 FORM 10QSB 1 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 June 30, 1998 [ ] 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 333-19285 MYO DIAGNOSTICS, INC. - ------------------------------------------------------------------------------- (Exact Name of Small Business Issuer as Specified in its Charter) California - ------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation or Organization) 95-4089525 - ------------------------------------------------------------------------------- (I.R.S. Employer Identification No.) 3710 South Robertson Boulevard Culver City, California 90232 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) 310-559-5500 - ------------------------------------------------------------------------------- (Issuer's Telephone Number, Including Area Code) 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 past 90 days. Yes [ ] No [X] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common Stock, no par value, 8,406,370 shares issued and outstanding as of August 1, 1998. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] 2 MYO DIAGNOSTICS, INC. INDEX TO FORM 10-QSB PART I FINANCIAL INFORMATION Page Item 1. Financial Statements: Balance Sheet (unaudited) as of June 30, 1998 3 Statements of Operations (unaudited) for the six months Ended June 30, 1998 and 1997 4 Statements of Cash Flows (unaudited) for the Six months Ended June 30, 1998 and 1997 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II OTHER INFORMATION Item 1. Legal Proceedings 9 Item 2. Changes in Securities 9 Item 3. Defaults Upon Senior Securities 9 Item 4. Submission of Matters to a Vote of Security Holders 9 Item 5. Other Information 9 Item 6. Exhibits and Reports on Form 8-K. 9 3 PART I FINANCIAL INFORMATION Item 1. Financial Statements MYO DIAGNOSTICS, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET (Unaudited) Jun 30, 1998 Current Assets ____________ Cash $ - Accounts receivable - Prepaid expenses and other current assets 11,983 ____________ Total current assets 11,983 Fixed assets 170,412 Other assets 32,501 ____________ Total assets $ 214,895 Current Liabilities Accounts payable and accrued expenses 436,387 Notes payable to bank 270,000 Current portion of leases payable 15,888 ____________ Total current liabilities 722,275 Non Current Liabilities Convertible debenture loans - Loans from shareholders - 25,500 Capital leases payable 64,752 Notes payable 25,000 ____________ Total liabilities 837,527 Shareholders' Equity (Deficit) Preferred stock, no par value 10,000,000 shares authorized No shares issued and outstanding - Common stock, no par value 50,000,000 shares authorized 8,406,379 and 8,323,037 issued and outstanding 5,729,971 Paid in capital 145,000 Deficit accumulated during development stage (6,497,603) ____________ Total shareholders' deficit (622,632) ____________ Total liabilities and shareholders' deficit $ 214,895 The accompanying notes are an integral part of these financial statements. 4 MYO DIAGNOSTICS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS (Unaudited) Three Months Six months ended June 30, ended June 30, 1998 1997 1998 1997 _________ _________ _________ _________ Revenues $ - $ 5,574 $ - $ 5,445 Operating Expenses: Research and Development 101,404 89,567 223,694 182,414 Technical Services 27,183 46,365 61,264 122,744 Sales and Marketing 28,240 18,248 72,149 39,724 General and Administrative 167,205 163,692 422,272 374,882 _________ _________ _________ _________ Total Operating Expenses 324,032 317,872 779,379 719,764 _________ _________ _________ _________ Loss from Operations (324,032) (312,298) (779,379) (714,319) Other Income (Expenses) Interest Expense (9,490) (14,802) (16,973) (25,088) Miscellaneous - - - - Interest Income - 28,984 233 31,898 __________ _________ ________ _________ Total Other Income (Expenses) (9,490) 14,182 (16,750) 6,810 Loss before provision for income taxes (333,522) (298,116) (796,129) (707,509) Provision for income taxes 743 628 1,543 1,680 __________ __________ _________ _________ Net loss $ (455,147) $(298,744) $(797,672) $(709,189) __________ __________ _________ _________ Net loss per share $ (0.04) $ (0.04) $ (0.09) $ (0.09) Weighted average number of 8,364,704 8,133,367 8,364,704 7,939,775 shares outstanding The accompanying notes are an integral part of these financial statements. 5 MYO DIAGNOSTICS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS (Unaudited) Six Months ended June 30, 1998 1997 ____________ ____________ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (797,672) $ (709,189) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 31,404 23,962 Changes in operating assets and liabilities: (Increase) decrease in assets: Accounts receivable 67,500 (6,416) Prepaid expenses 1,193 (3,911) Other assets 600 (821) Increase (decrease) in liabilities: Accounts payable and accrued expenses 150,834 (28,932) ____________ ____________ Net Cash Used in Operating Activities (546,141) (725,307) ____________ ____________ CASH FLOWS FROM INVESTING ACTIVITIES: Equipment purchases (34,240) - ____________ ____________ Net Cash Used in Investing Activities (34,240) - ____________ ____________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from bank overdraft 83,552 - Proceeds from notes payable 50,500 - Net proceeds from issuance of common stock 290,833 1,200,000 (Repayments) borrowings of obligations under capital lease 4,990 (17,490) ____________ ____________ Net Cash Provided by Financing Activities 429,875 1,182,510 ____________ ____________ Net (Decrease) in Cash (150,508) 457,203 CASH -- Beginning of Period 150,508 606,144 ____________ ____________ CASH -- End of Period $ - $ 1,063,347 6 MYO DIAGNOSTICS, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation and Significant Accounting Policies The financial statements included herein have been prepared by Myo Diagnostics, Inc. (the "Company"), without audit, according to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures that are made are adequate to make the information presented not misleading. Further, the financial statements reflect, in the opinion of management, all adjustments necessary to state fairly the financial position and results of operations as of and for the periods indicated. These financial statements should be read in conjunction with the Company's December 31, 1997 audited financial statements and notes thereto. The financial statements have been prepared on the basis of the continuation of the Company as a going concern. However, during the six months ended June 30, 1998, the Company incurred a net loss of $797,672. The Company is also in the development stage at June 30, 1998, and recovery of the Company's assets is dependent upon future events, the outcome of which is indeterminable. Successful completion of the Company's development program and its transition to the attainment of profitable operations is dependent upon obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company's cost structure. In view of these matters, realization of a major portion of the assets in the accompanying balance sheet is dependent upon the Company's ability to meet its financing requirements and the success of its plans to sell its products. Further, the results of operations for the six months ended June 30, 1998 are not necessarily indicative of results to be expected for the full fiscal year ending December 31, 1998. The Company is a development stage company as defined in Statement of Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by Development Stage Enterprises." The Company is devoting substantially all of its present efforts to establish a new business and its planned principal operations have not yet commenced. All losses accumulated since inception have been considered as part of the Company's development stage activities. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Company is a development stage company that has yet to realize any material revenues. The Company is ready to bring its product to market, but needs additional funding to implement its marketing plan. Forward Looking Statements The Company may from time to time make "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. When used in this discussion, the words "estimate", "project", "anticipate" and similar expressions are subject to certain risks and uncertainties, such as changes in general economic conditions, competition, changes in federal regulations, as well as uncertainties relating to raising additional financing and acceptance of the Company's product and services in the marketplace, including those discussed below that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date hereof. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 7 Results of Operations Six Months Ended June 30, 1998 as Compared to Six Months Ended June 30, 1997. The Company incurred net losses of $797,672 for the six months ended June 30, 1998 and $709,189 for the six months ended June 30, 1997. The Company's operating expenses increased to $709,379 during the six months ended June 30, 1998 from $719,764 during the six months ended June 30, 1997. During the six months ended June 30, 1998 compared to the six months ended June 30, 1997, research and development expenses increased $41,280 primarily as a result of product development. Technical service expenses decreased $61,480 as a result of refinements made to the MYO D hardware system. Sales and marketing expenses for the six months ended June 30, 1998 increased $32,425 compared to the six months ended June 30, 1997 due to an increase in marketing efforts. During the six months ended June 30, 1998 compared to the six months ended June 30, 1997, general and administrative expenses increased to $422,272 from $344,882 respectively. This increase was principally as a result of an increase in consulting fees. Financial Condition The Company has funded its operating expenses principally through equity and debt financings, as the Company has had no material cash flows from operations. During the six months ended June 30, 1998, the Company funded its operations principally from the $145,833 received from the issuance of 83,333 shares of Common Stock for $1.75 per share upon exercise of the Series B Warrants. The Company currently has four revolving lines of credit from a commercial bank pursuant to which the Company may from time to time borrow up to an aggregate of $270,000 at interest rates equal to the bank's prime rate of interest plus .75% to 1.50%. These lines, which were fully utilized at June 30, 1998, mature at various times through June 10, 1999. The Company presently has funds to continue operations at its present level only through July of 1998. The Company expects very little or no revenues during this period, and is attempting to raise additional capital. If the Company does not obtain additional capital by the end of July 1998, it will be forced to severely curtail operations and, if additional capital is not obtained shortly thereafter, the Company may be forced to cease operations. 8 PART II OTHER INFORMATION Item 1. Legal Proceedings N/A Item 2. Changes in Securities In May 1998 the Company issued to the Ontario Municipal Employees Retirement Board, Ontario, Canada ("OMERB"), a shareholder of the Company, 83,333 shares of Common Stock for $1.75 per share (aggregate proceeds of $145,833) upon exercise of Series B Warrants issued to OMERB in 1994. No underwriting discounts or brokerage commissions were paid in connection with this issuance. The issuance of these securities was exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) of the Securities Act, as a transaction not involving a public offering, and pursuant to Regulation S as an off-shore transaction with an investor which is not a U.S. Person. Item 3. Defaults Upon Senior Securities N/A Item 4. Submission of Matters to a Vote of Security Holders N/A Item 5. Other Information N/A Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: Exhibit 27.1 Financial Data Schedule (b) Reports on Form 8-K. None. 9 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MYO DIAGNOSTICS, INC. Date: February 11, 2000 By: /s/ GERALD D. APPEL ------------------------------------------- Gerald D. Appel, President, Chief Executive Officer and Chairman of the Board [Principal Financial and Accounting Officer] EX-27.1 2 EXHIBIT 27.1
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED FINANCIAL STATEMENTS OF MYO DIAGNOSTICS, INC. DATED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 0 0 0 0 0 11,983 11,983 31,404 214,895 722,275 0 0 0 5,874,971 (214,895) (6,497,603) 0 0 0 0 779,379 0 16,973 (796,129) 0 0 0 0 0 (797,672) (0.09) (0.09)
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