-----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, GvpNeIODgv5j9tVZpfWDWidJBJgI4PA1yPaCny+6lChmmH8w70Wbmwine6UZL8qX 71mJIpv6ljV84qiJmG3COg== 0000892569-98-002369.txt : 19980817 0000892569-98-002369.hdr.sgml : 19980817 ACCESSION NUMBER: 0000892569-98-002369 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDICAL SCIENCE SYSTEMS INC CENTRAL INDEX KEY: 0001037649 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MEDICAL LABORATORIES [8071] IRS NUMBER: 943123681 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-23413 FILM NUMBER: 98690823 BUSINESS ADDRESS: STREET 1: 4400 MACARTHUR BLVD STREET 2: STE 980 CITY: NEWPORT BEACH STATE: CA ZIP: 92660-2031 BUSINESS PHONE: 7144409730 MAIL ADDRESS: STREET 1: 4400 MACARTHUR BLVD STREET 2: STE 980 CITY: NEWPORT BEACH STATE: CA ZIP: 92660-2031 10QSB 1 FORM 10QSB FOR THE PERIOD ENDED JUNE 30, 1998 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended: JUNE 30, 1998 Commission File Number: 333-37441 MEDICAL SCIENCE SYSTEMS, INC. (Name of Small Business Issuer in its Charter) TEXAS 94-3123681 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 100 N.E. LOOP 410, SUITE 1350 SAN ANTONIO, TEXAS 78216-4749 (Address of principal executive offices)(Zip Code) Issuer's Telephone Number: (210) 349-6400 Securities registered under Section 12(b) of the Exchange Act: (Title of each class) (Name of each exchange on which registered) COMMON STOCK, NO PAR VALUE BOSTON STOCK EXCHANGE Securities registered under Section 12(g) of the Exchange Act: (Title of each class) COMMON STOCK, NO PAR VALUE 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 ( ) Title of Each Class Outstanding at August 1, 1998 - ------------------- ----------------------------- Common stock, no par value 5,540,895 Transitional Small Business Disclosure Format (check one): Yes No X --- --- ================================================================================ 2 MEDICAL SCIENCE SYSTEMS, INC. Form 10-QSB INDEX
Page PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Balance Sheets (Unaudited) at June 30,1998....2 Condensed Consolidated Statements of Operations (Unaudited) as of the three-month and six-month periods ending June 30, 1998 and June 30, 1997........................... 3 Condensed Consolidated Statements of Cash Flows (Unaudited) for the three-month and six-month periods ending June 30, 1998 and June 30, 1997............................4 Notes to Condensed Consolidated Financial Statements (Unaudited).......................................................5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.........................................7 PART II. OTHER INFORMATION Item 1. Legal Proceedings...................................................10 Item 2. Changes in Securities...............................................10 Item 3. Default Upon Senior Securities......................................10 Item 4. Submission of Matters to a Vote of Security Holders.................10 Item 5. Other Information...................................................10 Item 6. Exhibits and Reports on Form 8-K....................................11
i 3 PART I FINANCIAL INFORMATION 1 4 MEDICAL SCIENCE SYSTEMS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 (UNAUDITED) ASSETS Cash and cash equivalents $ 3,206,999 Investments 4,112,749 Accounts receivable, net 58,473 Inventories 45,056 Prepaid expenses 153,147 ------------ Total current assets 7,576,424 Furniture and equipment, net 475,044 Patents, net of amortization 596,986 TOTAL ASSETS $ 8,648,454 ============ LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 280,951 Accrued expenses 542,693 Deferred income 199,894 Current portion of long-term debt 14,778 Current portion of capitalized lease obligations 81,202 ------------ Total current liabilities 1,119,518 Long-term debt, net 555,222 Capitalized lease obligations, net 120,603 ------------ Total liabilities 1,795,343 ------------ Preferred stock, no par value, 5,000,000 shares authorized, none issued and outstanding 0 Common stock, no par value, 10,000,000 shares authorized, 5,540,895 shares issued and outstanding 16,652,199 Retained earnings (Accumulated deficit) (9,799,088) Total shareholders' equity 6,853,111 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,648,454 ============
See accompanying notes to condensed consolidated financial statements. 2 5 MEDICAL SCIENCE SYSTEMS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ---------------------------- ---------------------------- 1998 1997 1998 1997 ----------- ----------- ----------- ----------- (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) Sales $ 102,616 $ 72,006 $ 161,510 $ 100,289 Cost of sales 84,005 94,046 114,092 104,596 ----------- ----------- ----------- ----------- Gross profit 18,611 (22,040) 47,418 (4,307) Research and development 349,810 137,279 866,732 647,443 Selling, general, and administrative expenses 2,035,447 861,877 3,820,965 1,151,503 ----------- ----------- ----------- ----------- Total expenses 2,385,257 999,156 4,687,697 1,798,946 ----------- ----------- ----------- ----------- Loss from operations (2,366,646) (1,021,196) (4,640,279) (1,803,253) Other income (expense): Interest income 106,691 38 252,340 38 Interest expense (23,135) (16,037) (47,420) (30,690) Other income 2,436 0 2,436 0 ----------- ----------- ----------- ----------- Total other income (expense) 85,992 (15,999) 207,351 (30,652) ----------- ----------- ----------- ----------- Loss before provision for income taxes (2,280,654) (1,037,195) (4,432,928) (1,833,905) Provision for taxes 0 (850) 850 0 ----------- ----------- ----------- ----------- NET LOSS $(2,280,654) $(1,036,345) $(4,433,778) $(1,833,905) =========== =========== =========== =========== Net loss per share (0.41) (0.29) (0.80) (0.53) Shares used in computing net loss per share 5,540,895 3,536,571 5,540,895 3,478,315
3 6 MEDICAL SCIENCE SYSTEMS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, ---------------------------- 1998 1997 ----------- ----------- (UNAUDITED) CASH FLOW FROM OPERATING ACTIVITIES Net loss $(4,433,778) $(1,833,905) Reconciling adjustments: Depreciation and amortization 71,907 15,999 Issuance of stock options for a reduction in salary 0 148,377 Accretion of investments (157,036) 0 (Increase) decrease in: Accounts receivable (21,358) (28,075) Inventories 5,156 0 Prepaid expenses (110,635) 0 Increase (decrease) in: Accounts payable 25,674 226,809 Accrued expenses 415,011 76,829 Deferred income 126,893 0 ----------- ----------- Net cash used in operating activities (4,373,076) (1,393,966) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of furniture and equipment (318,361) (25,023) Increases in patents (144,811) (67,005) Maturity of investments 2,052,000 0 ----------- ----------- Net cash provided by investing activities 1,588,828 (85,463) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Sale of common stock 0 1,371,380 Proceeds from capitalized lease obligations 79,454 0 Increase in deferred offering costs 0 (31,081) Borrowings on line of credit, net 0 146,277 Retirement of long-term debt (558,538) 0 Proceeds from long-term borrowings 570,000 0 Principal payments of long-term debt (73,762) (18,654) Principal payments of capitalized lease obligations (30,966) (14,477) ----------- ----------- Net cash provided by (used in) financing activities (13,812) (1,453,445) ----------- ----------- Net increase (decrease) in cash and equivalents (2,798,060) (25,984) Cash and equivalents, beginning of period 6,005,059 55,966 ----------- ----------- CASH AND EQUIVALENTS, END OF PERIOD $ 3,206,999 $ 29,982 =========== ===========
4 7 MEDICAL SCIENCE SYSTEMS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1998 (UNAUDITED) - -------------------------------------------------------------------------------- NOTE 1 - PRESENTATION OF INTERIM INFORMATION As contemplated by the Securities and Exchange Commission under Item 310(b) of Regulation S-B, the accompanying consolidated financial statements and footnotes have been condensed and therefore do not contain all disclosures required by generally accepted accounting principles. The interim financial data are unaudited; however, in the opinion of the management of Medical Science Systems, Inc. and subsidiary (the "Company"), the accompanying unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to make the interim financial information not misleading. Results for interim periods are not necessarily indicative of those to be expected for the full year. NOTE 2 - CASH AND CASH EQUIVALENTS The Company considers all highly-liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains cash deposits at one bank. Deposits at this bank are insured by the Federal Deposit Insurance Corporation up to $100,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. NOTE 3 - INVESTMENTS The Company's investments, which consist of United States treasury debt securities, are classified as held-to-maturity and are reported at amortized cost. These securities have original maturities ranging from six months to one year. The amortized cost is approximately equal to the fair market value at June 30, 1998. NOTE 4 - EARNINGS PER SHARE The Company computes earnings (loss) per share in accordance with Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share." SFAS No. 128 replaced the previously reported primary and fully diluted earnings per share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share excludes any dilutive effects of options, warrants, and convertible securities. Diluted earnings per share is very similar to the previously reported fully diluted earnings per share. Basic earnings per share is computed using the weighted-average number of common shares outstanding during the period. Common equivalent shares are excluded from the computation if their effect is anti-dilutive. Net loss per share amounts for all periods have been restated to conform to SFAS No. 128 requirements. Prior to SFAS No. 128, the Securities and Exchange Commission ("SEC") required that, even where anti-dilutive, common and common equivalent shares issued during the twelve-month period prior to the filing of an IPO be included in the calculation of earnings per share as if they were outstanding for all periods presented (using the treasury stock method and the IPO price). Because of new requirements issued in 1998 by the SEC for companies that recently completed an IPO and interpretation by FASB of the initial application of SFAS No. 128, the number of shares used in the calculation of basic net loss per share has changed to exclude common equivalent shares, even when anti-dilutive. Net loss per share for all periods presented has been restated to conform with SFAS No. 128 and Staff Accounting Bulletin No. 98. 5 8 NOTE 5 - STOCK OPTIONS During the quarter ended June 30, 1998, the Company issued 40,000 incentive stock options and 35,000 non-qualified stock options to certain employees and consultants. The options entitle the holder to purchase shares of the Company's common stock at prices from $3.88 to $6.00 per share and expire ten years from the date of issuance. Incentive stock options generally are granted with a 4-year vesting schedule. NOTE 6 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS The FASB issued SFAS No. 130, "Reporting Comprehensive Income." This statement requires companies to classify items of other comprehensive income by their nature in a financial statement and display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of a statement of financial position. SFAS No. 130 is effective for financial statements issued for fiscal years beginning after December 15, 1997. Management believes that SFAS No. 130 will not have a material effect on the Company's financial statements. The FASB also issued SFAS No. 131, "Disclosure About Segments of an Enterprise and Related Information." This statement establishes additional standards for segment reporting in the financial statements and is effective for fiscal years beginning after December 15, 1997. Management believes that SFAS No. 131 will not have an effect on the Company's financial statements. 6 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL - ------- OVERVIEW Medical Science Systems, Inc. is dedicated to the development and commercialization of genetic susceptibility tests for common diseases that are treatable and preventable. The Company has initially concentrated on four disease areas: periodontal disease (gum disease), osteoporosis (bone disease), coronary artery disease (heart disease), and diabetic retinopathy (blindness associated with diabetes). Recently the Company announced a new program in asthma (lung disease). Additional discovery and development work is focused on identifying markers and therapeutic targets for other chronic inflammatory diseases in which genetics plays an important role. The Company has followed a strategy of working with strategic partners at the fundamental discovery stage. This strategy has given the Company access to discoveries while reducing up-front research expenses. Since 1994, the Company has had a strategic alliance with the Section of Molecular Medicine at Sheffield University in the United Kingdom, now known as the Department of Molecular and Genetic Medicine ("MGM"). Under this alliance, MGM has provided to the Company the fundamental discovery and genetic analysis from MGM's research laboratories and the Company has focused on product development, including clinical trials, and the commercialization of these discoveries. The Company has entered into multiple joint development and commercialization project agreements with MGM, and anticipates entering into additional collaborative arrangements with MGM and other parties during the year. In October 1997, the Company commercially launched its first genetic susceptibility test in the US. The test is for periodontal disease, and is known as PST(R). PST(R) is the first in a series of genetic susceptibility tests that the Company plans to bring to market during the next several years. Management is pleased to report indications of growing acceptance for PST(R) tests during the quarter. Such indications include purchases of PST(R) tests by new dentists and increased interest from managed healthcare organizations. The improvement is reflected in the $102,616 in revenues from 623 tests processed during the second quarter compared to revenue of $58,840 from 355 tests during the previous quarter, a 174% increase in revenue. In addition, during the second quarter of 1998 the Company reported "pre-paid" revenue of $200,000 from 1,697 tests or a 4.6% increase over the $191,194 from 1,558 tests "pre-paid" for the previous quarter ended March 31, 1998. Pre-paid revenue represents orders placed in preparation for the doctors to commence testing patients. Such pre-paid revenue is reported as a liability until tests are actually performed, at which time revenue is recognized by the Company. In December 1997, the Company entered into an agreement with Medicadent, a French corporation ("Medicadent"), to market and sell PST(R). Medicadent will act as exclusive independent sales representative for sales of PST(R) in the territory of France. The Company anticipates that the commercial introduction of PST(R) through Medicadent will commence in France during the second quarter of 1998. The Company anticipates additional international agreements later in the year. The Company has been awarded three patents, and has eleven patents pending. The U.S. Patent & Trademark Office awarded patents to the Company for its osteoporosis and periodontal disease susceptibility tests. The Company has also received a patent award for its biologic modeling technology called BioFusion(R), which is used by the Company in the discovery, development and commercialization process. In November 1997, the Company completed its initial public offering of Common Stock raising gross proceeds of $16.2 million. The Company is using the proceeds of the offering predominantly to fund sales, marketing 7 10 and commercial operations for its genetic susceptibility testing business and continued development of new genetic susceptibility tests. RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1998 VERSUS THREE MONTHS ENDED JUNE 30, 1997 Gross revenue for the three months ended June 30, 1998 was $102,616 as compared to $72,006 for the same period ended June 30, 1997, representing an increase of $60,610 or 69%. The increases in revenue are primarily attributable to the introduction of the Company's first genetic test. Cost of sales was $84,005 for the three months ended June 30, 1998 as compared to $94,046 for 1997, representing a decrease of 11%. The decrease in cost of sales is attributable primarily to volume discounts with outside vendors for lab charges for genetic susceptibility tests. For the three months ended June 30, 1998, the Company had R&D expenses of $349,810 as compared to $137,279 for the second quarter of 1997, an increase of 155%. This increase is due to the addition of key scientists for our coronary artery disease and osteoporosis genetic susceptibility tests, as well as for new clinical trials which have commenced for the same two tests. Selling, general and administrative expenses increased significantly in the second quarter of 1998 to $2,035,447 from $861,877, an increase of $1,173,570 or 136%. Such increase was anticipated by the Company and is primarily attributable to building the infrastructure to support commercial operations and the increased marketing and sales efforts required to support the Company's genetic susceptibility testing business. Additionally, general and administrative expenses increased to support the research and development efforts of the Company, as well as to provide the reports and other activities required of a reporting company. The Company has increased its number of full time (or equivalent) employees from 32 as of December 31, 1997 to 45 at June 30, 1998. During the second quarter of 1998, the Company consolidated its corporate headquarters from Newport Beach, California into the Company's San Antonio Research Facility. As a result of this relocation, the Company amended its existing lease in San Antonio to extend the term and expand its premises. The amended lease expires on May 31, 2003 and extends its square footage from approximately 1,961 square feet to 8,131 square feet. Also, as a result of the move from California, the Company has subleased its leased office space in Newport Beach. The sublease expires on the same date of the Company's lease, April 30, 2001. Interest income from the second quarter of 1998 increased to $106,691 from $38 in the second quarter of 1997. Such increase is attributable entirely to the interest income generated by the unused net proceeds of the initial public offering. Interest expense of $23,135 was incurred during the period ended June 30, 1998, an increase of 44% on $16,037 over the same period in 1997. Such increase is attributable to the added interest expense incurred on new equipment leases for computer and office equipment. Total losses increased to $2,280,654 for the second quarter of 1998, as compared to $1,036,345 for the second quarter of 1997, an increase of $1,244,309 or 120%. Such increased loss is a result of the increased expenses of building the infrastructure to support commercial operations and of marketing and selling the periodontal disease genetic test. The Company anticipates that it will continue to experience losses resulting from such expenses. LIQUIDITY AND CAPITAL RESOURCES The Company believes that its cash and cash equivalents and investments are the most significant indicators of the Company's liquidity position. As of June 30, 1998, the Company had cash and cash equivalents of $3,206,999 and investments of $4,112,749 for a total of $7,319,748. The Company's investments consisted predominantly of short-term U.S. Treasury Notes and other securities the Company believes to be highly liquid and relatively low-risk. Such investments generated interest income of $106,691 in the second quarter of 1998. The Company does not have any commitments for material long-term capital expenditures, but anticipates that it will continue to enter into new capital and operating leases for computer and office equipment. The Company's obligation at June 30, 1998 for such leases totaled $201,805, of which long term debt is $120,603 and short term debt is $81,202. 8 11 During the second quarter of 1998 the Company changed the terms of its long-term bank loan with the Bank of America NT&SA. The two existing loans were combined into a single term loan which matures in June 2005, representing a three-year extension from the previous loans. The principal balance on this loan at June 30, 1998 was $570,000, of which $555,222 is long term debt and $14,778 is short term debt. Three officers of the Company who had served as guarantors on the two previous loans were removed as guarantors on the new loan. The Company has provided a $570,000 certificate of deposit as security for this loan. The Company believes that all long-term obligations will be paid and payable from the cash and cash equivalents and investments available to the Company. The Company anticipates that the existing cash and investments, together with interest income anticipated thereon and anticipated revenue, will be sufficient to conduct its operations as planned through 1998. However, the Company's future capital requirements are anticipated to be substantial, and the Company does not have commitments for additional capital at this time. Such capital requirements are expected to arise from the commercial launch of additional genetic tests, continued marketing and sales efforts for PST(R), continued research and development efforts, the protection of the Company's intellectual property rights (including preparing and filing of patent applications), the negotiation of distribution and other collaborative arrangements for sales of the Company's products and operational, administrative and legal expenses. The Company believes that, because its future capital needs are significant, it will attempt to raise capital through equity and debt issuance when, and if, such capital is available to it. IMPACT OF THE YEAR 2000 ISSUE The Company has completed a review of its existing and planned computer software and hardware and has determined that the costs and/or consequences associated with the Year 2000 issue are not expected to have a material effect on the Company's business, operations or future financial results or future financial condition. CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS The Company believes that this report on Form 10-QSB contains certain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from these described in the forward-looking statements. The Company cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including, but not limited to, the following: difficulties inherent in developing genetic tests once genes have been discovered; the Company's limited marketing and sales experience and the risk that tests which the Company has or may develop may not be able to be marketed at acceptable prices or receive commercial acceptance in the markets that the Company is targeting or expects to target; uncertainty as to whether there will exist adequate reimbursement for the Company's services from government, private health care insurers and third-party payors; and uncertainties as to the extent of future government regulation of the Company's business. As a result, the Company's future development efforts involve a high degree of risk. For further information, refer to the more specific risks and uncertainties disclosed in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1997. 9 12 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not a party to, nor is its property the subject of, any pending legal proceeding. ITEM 2. CHANGES IN SECURITIES The following table sets forth the Company's use of proceeds from its initial public offering, from the closing of the offering until June 30, 1998: Direct or indirect payments to anyone other than directors, officers, persons owning ten percent or more of any class of equity securities of the Company, and affiliates of the Company (of which there were no such payments). - -------------------------------------------------------------------------------- Cash and investments $ 9,433,793 - -------------------------------------------------------------------------------- Research and development expenses $ 905,530 - -------------------------------------------------------------------------------- Marketing and sales expenses $ 2,329,686 - -------------------------------------------------------------------------------- General and administrative expenses $ 2,234,991 - -------------------------------------------------------------------------------- Total net proceeds: $ 14,904,000 - -------------------------------------------------------------------------------- ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company held its 1998 Annual Meeting of Stockholders on Tuesday, June 9, 1998, to vote on two proposals. Proxy statements were sent to all stockholders. The first proposal was for the election of directors, including Paul J. White, Michael G. Newman, Ronald A. LaRosa, Kenneth S. Kornman and Thomas A. Moore. All five directors were elected with the following votes tabulated as follows: Total Vote for Total Votes Total Vote Withheld Name of Director Each Director Against From Each Director - ---------------- -------------- ----------- ------------------- Mr. White 4,035,034 0 3,800 Mr. Newman 4,035,034 0 3,800 Mr. LaRosa 4,035,034 0 3,800 Mr. Kornman 4,035,034 0 3,800 Mr. Moore 4,035,034 0 3,800 The second proposal was for an amendment of the 1996 Equity Incentive Plan to increase the number of shares of the Company's common stock authorized for issuance under such Plan by an additional 300,000 shares. The amendment was approved with the following votes tabulated: FOR AGAINST ABSTAIN BROKER NON-VOTES 4,021,854 11,900 2,800 2,280 ITEM 5. OTHER INFORMATION None. 10 13 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. 27.1 Financial Data Schedule 27.2 Restated Financial Data Schedule (b) Reports on Form 8-K Not applicable 11 14 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MEDICAL SCIENCE SYSTEMS, INC. Date: August 13, 1998 By: /s/ U. Spencer Allen -------------------------------- U. Spencer Allen Chief Financial Officer and Treasurer 12 15 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------ ----------- 27.1 Financial Data Schedule 27.2 Restated Financial Data Schedule
EX-27.1 2 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 3,206,999 4,112,749 63,473 5,000 45,056 7,576,424 712,330 237,286 8,648,454 1,119,518 0 0 0 16,652,199 0 8,648,454 161,510 161,510 114,092 4,687,697 0 0 47,420 (4,432,928) 850 0 0 0 0 (4,433,778) (0.80) (0.80)
EX-27.2 3 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 29,982 0 40,434 0 0 70,416 208,641 116,740 414,598 863,253 0 0 0 1,691,257 0 414,598 100,289 100,289 104,596 1,798,946 0 0 30,690 (1,833,905) 0 0 0 0 0 (1,833,905) (0.53) (0.53)
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