-----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, HDRX9y+w0OY78WEGNMxzXXkeUxygxqNB9gMQnyqgxXv10ulzwX49NNUM4y9QHAv6 Bv00D7N4mzeUXZBhhEI7nQ== 0000950148-00-000198.txt : 20000215 0000950148-00-000198.hdr.sgml : 20000215 ACCESSION NUMBER: 0000950148-00-000198 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 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: 540121 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 March 31, 1999 [ ] 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, 9,073,370 shares issued and outstanding as of March 31, 1999. 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 March 31, 1999 3 Statements of Operations (unaudited) for the Three months Ended March 31, 1999 and 1998 4 Statements of Cash Flows (unaudited) for the Three months Ended March 31, 1999 and 1998 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) Mar 31, 1999 Current Assets ____________ Cash $ 37,868 Accounts receivable 6,840 Prepaid expenses & Other Current Assets 12,655 ____________ Total current assets 51,806 Furniture & Equipment, net 138,486 Capitalized Product Development Costs 1,470,875 Other Assets 31,780 ____________ Total assets $ 1,692,947 Current Liabilities Accounts Payable & Accrued Expenses 339,750 Notes Payable to Bank 130,000 Current Portion of Leases Payable 34,520 ____________ Total Current Liabilities 504,270 Non Current Liabilities Convertible Debenture Loans 167,000 Loans from Shareholder 39,000 Capital Leases Payable 10,018 Notes Payable 25,000 ____________ Total liabilities 745,288 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 9,073,370 and 8,323,037 issued and outstanding 6,375,435 Paid in capital 145,000 Deficit accumulated during development stage (5,572,776) ____________ Total Shareholders' Equity 947,659 ____________ Total Liabilities & Shareholders' Equity $ 1,692,947 The accompanying notes are an integral part of these financial statements. 4 Myo Diagnostics, Inc. (A Development Stage Company) STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended March 31, 1999 and from January 5, 1987 (Inception) to March 31, 1999 For the Period From Three Months Ended Inception to March 31, March 31, 1999 1998 1999 __________ __________ __________ Revenues $ 24,796 $ - $ 133,692 Operating Expenses Research & Development 17,227 123,265 1,091,673 Technical Services 23,890 32,636 586,642 Sales & Marketing 15,428 43,909 527,236 General & Administrative 100,550 246,273 3,325,592 __________ __________ __________ Total Operating Expenses 157,095 446,083 5,531,143 __________ __________ __________ Loss from Operations (132,299) (446,083) (5,397,451) Other Income (Expenses) Interest Expense (14,234) (7,483) (253,442) Miscellaneous (4,138) (632) (10,613) Interest Income - 223 103,786 __________ __________ __________ Total Other Income (Expenses) (18,372) (7,892) (160,269) Provision for Income Taxes 7,949 1,172 15,051 __________ __________ __________ Net Loss $ (158,620) $ (455,147)$(5,572,771) __________ __________ __________ Basic Loss Per Share ($0.02) ($0.05) ($0.98) __________ __________ __________ Diluted Loss Per Share ($0.02) ($0.05) ($0.98) __________ __________ __________ Weighted Average Common Shares 8,994,870 8,223,037 5,667,699 __________ __________ __________ See accompanying notes and accountant's report. 5 Myo Diagnostics, Inc. (A Development Stage Company) STATEMENTS OF CASH FLOWS (Unaudited) For the Three Months Ended March 31, 1999 & 1998 and from January 5, 1987 (Inception) to March 31, 1998 For the Three Months Ended Period From March 31, Inception to 1999 1998 Mar 31, 1998 __________ __________ __________ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ (158,620) $ (455,147)$(5,572,771) Adjustments to Net Income (Loss): Depreciation & Amortization - 15,672 67,011 Bad Debt Expense - - 26,394 Stock Options Issued for Services Rendered - - 24,000 Common Stock Issued in Consideration for Extension of Repayment Terms for Notes Payable to Related Parties - - 75,600 Common Stock Issued for Services Rendered - - 12,527 (Increase)/Decrease in: Accounts Receivables (4,545) 67,500 (13,784) Other Receivables - - 67,683 Prepaid Expenses - 821 (76,880) Other Assets - 300 (30,995) Increase/(Decrease) in: Accounts Payable (58,573) 68,882 235,493 Other Current Liabilities (104,889) - 64,251 __________ __________ __________ Net Cash Provided (Used) by Operating Activities (326,627) (301,972) (4,821,471) __________ __________ __________ CASH FLOWS FROM INVESTING ACTIVITIES: Investment in Fixed Assets - (34,240) (403,378) Software Development Costs - - (1,470,875) __________ __________ __________ Net Cash Provided (Used) by Investing Activities - (34,240) (1,874,253) See accompanying notes and accountant's report. 6 Myo Diagnostics, Inc. (A Development Stage Company) STATEMENTS OF CASH FLOWS (Unaudited) For the Three Months Ended March 31, 1999 & 1998 and from January 5, 1987 (Inception) to March 31, 1998 For the Three Months Ended Period From March 31, Inception to 1999 1998 Mar 31, 1998 __________ __________ __________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Bank Overdraft - 25,796 Issuance of Convertible Debentures - - 167,000 Net Increase (Decrease) in Notes Payables - - 295,000 Net Increase (Decrease) in Notes Payables to Related Parties - - 263,090 Repayment (Borrowings) on Obligations Under Capital Lease (22,366) 14,908 (53,350) Net Proceeds from Issuance of Common Stock 146,000 - 5,793,218 Increase (Decrease) in Paid-In Capital - 145,000 145,000 __________ __________ __________ Net Cash Provided (Used) from Financing Activities 123,634 185,704 6,609,958 __________ __________ __________ Prior Period Adjustment - - Net Increase (Decrease) in Cash (202,993) (150,508) Beginning Cash 240,861 150,508 __________ __________ __________ Ending Cash $ 37,868 - __________ __________ __________ 7 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, 1998 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 three months ended March 31, 1999, the Company incurred a net loss of $158,620. The Company is also in the development stage at March 31, 1999, 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 three months ended March 31, 1999 are not necessarily indicative of results to be expected for the full fiscal year ending December 31, 1999. 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. 8 Results of Operations During 1998, the Company adopted a change in the method of accounting for the costs associated with certain research and development costs related its product. Certain of these research and development costs are now being capitalized in accordance with SFAS No. 86, Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed. Previously, the Company had expensed all research and development costs. As a result of this change in accounting for research and development costs, the Company now capitalizes costs previously expensed. Three Months Ended March 31, 1999 as Compared to Three Months Ended March 31, 1998. The Company incurred net losses of $158,620 for the three months ended March 31, 1999 and $455,147 for the three months ended March 31, 1998. The Company's operating expenses decreased to $132,299 during the three months ended March 31, 1999 from $446,083 during the three months ended March 31, 1998 because of the change in the method of accounting for the costs associated with certain research and development costs relating to its product. During the three months ended March 31, 1999 compared to the three months ended March 31, 1998, research and development expenses decreased $106,038 due to lower product development costs and to the change in accounting. Technical service expenses decreased $8,746 as a result of completed research and development programs. Sales and marketing expenses for the three months ended March 31, 1999 decreased $28,481 compared to the three months ended March 31, 1998 due to a temporary reduction in the U.S. marketing program. During the three months ended March 31, 1999 compared to the three months ended March 31, 1998, general and administrative expenses decreased to $100,550 from $246,273 respectively, primarily as a result of the change in accounting. 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 three months ended March 31, 1999, the Company funded its operations principally from its cash reserves. At January 1, 1999 the Company had 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%. Approximately $140,000 of these lines matured during the first quarter and was repaid by the collateral backing the irrevocable letters of credit. The remaining lines were originally set to mature at various times through June 10, 1999 however the bank demanded payment of the balance during the first quarter of 1999. The Company is currently in the process of negotiating a settlement with the bank. The Company presently has funds to continue operations at its present level only through July of 1999. 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 1999, it will be forced to severely curtail operations and, if additional capital is not obtained shortly hereafter, the Company may be forced to cease operations. 9 PART II OTHER INFORMATION Item 1. Legal Proceedings N/A Item 2. Changes in Securities In February 1999, the Company issued 145,000 shares of Common Stock to W.M. Murphy & Co., a registered broker-dealer, as compensation for the preparation and filing of an application for a U.S. Business & Investment Loan. No underwriting discounts or brokerage commissions were paid in connection with this issuance. The issuance of these securities was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, as a transaction not involving any public offering. In February 1999, the Company issued 12,000 shares of Common Stock to Dr. Howard Fullman, a member of the Company's Medical Advisory Board, upon the exercise by Dr. Fullman of options granted for consulting services. The shares were issued at a price of $0.50 per share for an aggregate of $6,000. No underwriting discounts or brokerage commissions were paid in connection with this issuance. The issuance of these securities was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, as a transaction not involving any public offering. 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. 10 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 MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 37,868 0 6,840 0 0 51,806 7,098 0 1,692,947 504,270 0 0 0 6,375,435 947,659 1,692,947 24,796 24,796 0 446,083 0 0 14,234 (158,620) 0 0 0 0 0 (158,620) (0.02) (0.02)
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