-----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, ANJ1fSTf44Y+bM5lvEAk2lv3mjTrZ+/xYgpg3Uyuw8fDkDrg7C35g7wDpiHcXu1V HblTXbG52uumHFM/HiP+5w== 0001077357-99-000083.txt : 19990817 0001077357-99-000083.hdr.sgml : 19990817 ACCESSION NUMBER: 0001077357-99-000083 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SURGICAL SAFETY PRODUCTS INC CENTRAL INDEX KEY: 0001063530 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090] IRS NUMBER: 650565144 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-24921 FILM NUMBER: 99690315 BUSINESS ADDRESS: STREET 1: 2018 OAK TERRACE CITY: SARASOTA STATE: FL ZIP: 34231 BUSINESS PHONE: 9419277874 MAIL ADDRESS: STREET 1: 2018 OAK TERRACE CITY: SARASOTA STATE: FL ZIP: 34231 10QSB 1 QUARTERLY REPORT U.S. Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 1999 Commission file no. 0-24921 Surgical Safety Products, Inc. -------------------------------------------- (Name of small business issuer in its charter) New York 65-0565144 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2018 Oak Terrace Sarasota, Florida 34231 - -------------------------- ---------- (Address of principal executive offices) (Zip Code) Issuer's telephone number (941) 927-7874 Securities registered under Section 12(b) of the Exchange Act: Name of each exchange on Title of each class which registered None - ----------------------------- ------------------------- Securities registered under Section 12(g) of the Exchange Act: Common Stock, $.001 par value ----------------------------------- (Title of class) Copies of Communications Sent to: Mercedes Travis, Esq. Mintmire & Associates 265 Sunrise Avenue, Suite 204 Palm Beach, FL 33480 Tel: (561) 832-5696 Fax: (561) 659-5371 Indicate by Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of June 30, 1999, there are 11,798,373 shares of voting stock of the registrant issued and outstanding. PART I Item 1. Financial Statements Condensed Balance Sheets as of June 30, 1999 and December 31, 1998 F-2 Condensed Statements of Operations for the Three and Six Months Ended June 30, 1999 and 1998 F-3 Statements of Cash Flows for the Six Months Ended June 30, 1999 and 1998 F-4-5 Notes to the Condensed Financial Statements F-6
SURGICAL SAFETY PRODUCTS, INC. CONDENSED BALANCE SHEETS ------------------------------------------------------------------------------ Assets (Unaudited) Current Assets June 30, 1999 December 31, 1998 ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ Cash $ 188,000 $ 41,191 Accounts receivable 9,981 1,941 Deposits 0 58,700 Inventory 6,119 6,555 ----------- ----------- Total current assets 204,100 108,837 ----------- ----------- ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ Property and equipment, net 221,524 112,772 ----------- ----------- ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ Other Assets Intangible assets, net 45,551 49,232 Software development costs, net 129,451 92,873 Other assets 10,250 10,250 ---------- ----------- Total other assets 185,252 152,355 ---------- ----------- ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ Total Assets $ 610,876 $ 373,514 ============ ============ ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ Liabilities and Stockholders' Equity ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ Current Liabilities Line of credit $ 100,000 $ 0 Notes payable - related parties 77,500 0 Accounts payable and accrued expenses 69,829 55,331 ------------- ----------- Total current liabilities 247,329 55,331 ------------- ----------- ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ Stockholders' Equity Common stock, $.001 par value, 20,000,000 shares authorized; 11,798,373 shares issued and outstanding in 1999 and 10,786,973 in 1998 11,799 10,787 Additional paid-in capital 2,422,420 1,998,242 (2,070,672) Accumulated deficit -------------- (1,690,846) 363,547 ---------------- Total stockholders' equity -------------- 318,183 ---------------- ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ Total Liabilities and Stockholders' $ 610,876 $ 373,514 Equity ========= ======== ------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. F-2
SURGICAL SAFETY PRODUCTS, INC. CONDENSED STATEMENTS OF OPERATIONS THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (UNAUDITED) ---------------------------------------------------------------------- Six Months Ending June 30 Three Months Ending June 1999 1998 1999 1998 - -------------------------------------------------------------------------------------- Revenue $ 52,734 $ 19,139 $ 13,157 $ 3,159 - -------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------- Costs and expenses Cost of medical products sold 8,135 1,278 7,874 1,125 Operating expenses 396,900 290,946 257,916 227,672 Research and development 20,085 9,771 13,418 4,633 expenses 7,440 13,825 5,919 12,482 Interest expense ----------- ----------- ----------- ---------- 432,560 315,820 285,127 245,912 Total costs ----------- ----------- ----------- ---------- (379,826) (296,681 (271,970) (242,753) Net loss before income taxes 0 0 0 0 Provision for income taxes ----------- ----------- ----------- ---------- - -------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------- Net loss $ (379,826) $ (296,681) $(271,970) $(242,753) ======== ======= ======== ======= - -------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------- Net loss per share $ (0.04) $ (0.03) $ (0.02) $ (0.02) ======== ======= ======== ======= - --------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. F-3
SURGICAL SAFETY PRODUCTS, INC. STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (UNAUDITED) --------------------------------------------------------------------- 1999 1998 ----- ----- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Cash Flows From Operating Activities Net loss $ (379,826) $ (346,682) ---------------- ----------- Adjustments to reconcile net loss to cash used in operating activities Depreciation and amortization 58,013 23,345 Common stock issued for services 41,303 141,875 Stock option compensation expense (91,113) Decrease (increase) in operating assets Receivables (8,040) 248,740 Inventory 436 (2,869) Increase (decrease) in operating liabilities Accounts payable and accrued expenses 14,498 (11,926) -------------- ------------- Total adjustments (15,097) 399,165 -------------- ------------ Net cash used in operating activities (364,729) 52,483 -------------- ------------ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Cash Flows From Investing Activities Furniture and equipment purchased (92,039) (31,971) Software development additions (48,923) (36,270) Patent and trademark costs ----------- ----------- Net cash used in investing activities (140,962) (68,241) ----------- ----------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Cash Flows From Financing Activities Proceeds from related party loans 77,500 Advances (repayments) on line of credit, net 100,000 (100,000) Repayment of stockholder loans (233,720) Proceeds from issuance of common stock 475,000 939,000 ------------ ------------- Net cash provided by financing activities 652,500 605,280 ------------ ------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Net increase (decrease) in cash 146,809 589,522 Cash at beginning of year 41,191 - -------------- ------------ Cash at end of year $188,000 $ 589,522 ======== ======= - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Supplemental Cash Flow Information: $ 4,647 $ 31,492 Cash paid for interest ======== ====== - --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. F-4 For the purposes of the statement of cash flows, management considers all deposits and financial instruments with original maturities of less than three months to be cash and cash equivalents. Material non-cash transactions not reflected in the statement of cash flows include: For the Six Months Ended June 30, 1999 The Company received fixed assets in the amount of $ 58,700 for which it had recorded deposits of such amount at December 31, 1998. For the Six Months Ended June 30, 1998 The Company issued common stock for prepaid media consulting services in the amount of $ 22,500. The accompanying notes are an integral part of these financial statements. F-5 Notes to the Condensed Financial Statements Note 1 - Account Policies Basis of Presentation The condensed financial statements of Surgical Safety Products, Inc. (Company) have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the financial statement and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1998. The results of operations for the six month period ended June 30, 1999 are not necessarily indicative of the results to be expected for any other period or for the full year. In the opinion of Company's management the accompanying unaudited financial statements contain all adjustments, consisting of only normally recurring adjustments, necessary to present fairly the financial position as of June 30, 1999, the results of operations and cash flows for the three and six months ended June 30, 1999 and June 30, 1998. Net Loss Per Share Net loss per share has been computed in accordance with Statement of Financial Accounting Standards (FASB) no. 128, "Earnings Per Share," by dividing net loss by the weighted average number of shares outstanding during the period. Common stock equivalents have not been include in the computation of weighted average number of shares outstanding since the effect would have been anti-dilutive. Reclassifications Certain reclassifications have been made in the prior year's financial statements to conform to the current period presentations. Note 2 - Stock Compensation Expense During fiscal year 1998, the Company issued stock options with an exercise price that was below market to certain of its employees. Accordingly, the Company recorded $91,113 of compensation expense related to the issuance for the year ended December 31, 1998. In the first quarter of 1999, the Company canceled these stock options and issued options with an exercise price above that of market. Accordingly, the Company decreased its payroll expenses by $91,113 for the cancellation of these options for the six months ended June 30, 1999. In addition, during the three and six months ended June 30, 1999, the Company issued common stock valued at $39,053 to certain of it's employees in lieu of cash compensation for services. The common stock was valued based on the fair market value for the shares on the dates the compensation would have been paid F-6 Item 2. Management's Discussion and Analysis of Results of Operations. General In April 1999, the Company attended the AORN convention where it experienced more acceptance from potential content providers and users partly because of the commencement of the arrangement with US Surgical. In the April-June period, the Company completed the installation and internet connection of another unit at the University of Washington in Seattle and completed the preliminary preparation for additional units under the US Surgical agreement at two California Pacific Medical Center sites in San Francisco. The Company expects to complete the installation of the last three (3) US Surgical sites in 1999's third calendar quarter. In April 1999 the Company commenced a self-directed private placement offering of the Company's restricted Common Stock and warrants for an aggregate of $500,000 in proceeds. The offering was concluded on June 30, 1999. This offering was conducted pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "Act") and Rule 506 promulgated under Regulation D of the Act to not more than thirty-five (35) non accredited investors; Section 517.061(11) of the Florida Code, Section 10-5-9(13) of the Georgia Code, Regulation 130.293 to the Illinois Code, Section292.410(h) of the Kentucky Code and Section 201.[70 P.S. 1-201] of the Pennsylvania Code. No memorandum was being used in connection with this offering since the Company relied upon its filing with the Securities and Exchange Commission. The basis for reliance upon the Section 4(2) exemption in connection with this offering is (i) the sale of the shares of Common Stock and warrants does not constitute a public offering and (ii) investors are or will be sophisticated investors who have access to the information on the Company necessary to make an informed investment decision by virtue of the Company's Registration Statement on Form 10-SB, as amended, filed with the Securities and Exchange Commission (the "SEC") and the Company's Form 10-KSB filed with the SEC. The Company was required to file a Form D. The Company received gross proceeds of $475,000 under this offering for a total of 950,000 shares of the Company's restricted Common Stock and the issuance of warrants to purchase a total of 475,000 shares of the Company's Common Stock at an exercise price of $1.00 within five (5) years. Directors Sam Norton, Dr. William Saye and David Swor each purchase 50,000 shares of Common Stock and 25,000 warrants. The basis for reliance upon Section 517.061(11) of the Florida Code in connection with this offering is (i) sales of the shares of restricted Common Stock and warrants has been or will be made to not more than thirty-five (35) persons; (ii) neither the offer nor the sale of any of the shares has been or will be accomplished by the publication of any advertisement; (iii) all of the purchasers either have or had a pre-existing personal or business relationship with one or more of the executive officers and directors of the Company or, by reason of their business or financial experience, could be reasonably assumed to have the capacity to protect their own interest in connection with the transaction; (iv) each purchaser has or will represent that he was purchasing for his own account and not with a view to or for sale in connection with any distribution of shares; and (v) prior to sale, each purchaser had or will have reasonable access to or was furnished all material books and records of the Company, all material contracts and documents relating to the Company, and had an opportunity to question the executive officers of the Company. The basis for reliance upon Section 10-5-9(13) of the Georgia Code in connection with this offering is that (i) there were 15 or less purchasrs in the state in a 12-month period, (ii) there was no form of general solicitation or advertising, (iii) any certificate or other document representing the security bears the Georgia restrictive legeng, and (iv) each investor confirmed in writing that they were purchasing with investment intent. The basis for reliance upon Regulation 130.293 to is that Illinois does not required registration of federally exempted Rule 506 securities. The basis for reliance upon Section 292.410(h) of the Kentucky Code in connection with this offering is (i) neither the offer nor the sale of any of the shares has been or will be accomplished by any form of general solicitation; (ii) the Company has received or will receive a written representation from the purchaser that he is acquiring the securities for his own investment and is aware of any and all restrictions imposed on transferability and that the certificates and warrants do and shall bear a restrictive legend; (iii) sales of the shares of restricted Common Stock and warrants has been or will be made to not more than fifteen (15) persons in Kentucky all of whom will be or are accredited investors; and (iv) there are no commissions, finders fees or other remuneration being paid in connection with the sales. The basis for reliance upon Section 201.[70 P.S. 1.201] is that Pennsylvania does not require registration of federally exempted Rule 506 securities. In April, 1999, the Company executed a Consulting and Assistance Agreement with Koritz Group LLC, a Connecticut limited liability company ("Koritz"). The company exercised its right to cancel the agreement on July 30, 1999. Under the terms of this agreement, Koritz had been engaged to identify sources of capital or potential business relationships and to assist the Company in (i) raising equity or debt financing in the amount of $15,000,000 (ii) arranging for trade financing for production, sale, lease, rental or other disposal of the Company's products; and (iii) arranging for the sale, merger, or consolidation of the Company or for joint ventures or strategic alliances with other appropriate business. This agreement is non-exclusive. In the event Koritz was successful, the Company was to pay compensation to Koritz equal to 2.5% for any trade financing and 10% of the value of each business arrangement. In the event Investment Financing was secured, the Company was to pay compensation equal to 10% for any investment financing to the person or entity placing such investment; provided such person or entity was qualified to receive such compensation in the state of residence of the investor. The Company was free to reject any offered financing or arrangements; however, in the event that the Company entered any arrangement within 180 days of its written rejection, on terms less favorable to the Company, Koritz was to receive a flat fee of $100,000. In addition to the cash compensation, in the event the Company secured investment financing, then the qualified, placing person or entity was to receive warrants to purchase the Company's Common Stock exercisable for 36 months after the closing at the same price as the investment financing source received, the number of which warrants would be equal to the amount of the financing divided by the exercise price. Such warrants were to have anti-dilution and piggy-back registration rights. In the event the Company "shopped" any offer of financing presented to it to other potential sources and accepted such other financing, the Koritz was entitled to a success fee. Koritz was to be reimbursed pre-approved disbursements and expenses. The agreement provided for confidentiality and cross-indemnification . The agreement was subject to cancellation by either party with five (5) days written notice. It was under this provision that the Company terminated this agreement on July 30,1999. Any disputes under the agreement were required to be submitted to arbitration, with costs payable by the losing party. In April 1999, the Company entered into an agreement with KJS Investment Corporation of Tampa Florida ("KJS") to provide consulting services. The agreement is on a non-exclusive basis and has no defined term. The agreement provides for such services to be performed in two phases. Under phase one, KJS is to assist in the development of a comprehensive business plan and assist the Company in positioning such plan with the capital markets with a view towards finding potential business combinations, mergers and compressed time tables for the Company's business strategy. The estimated cost of this phase is $5,000. Under phase two, KJS is to identify appropriate financial institutions and distribute the plan, analyze the initial feedback, arrange meetings, evaluate all proposals, provide management with each proposal and assist in the negotiations. Upon execution, the Company was required to commit to pay a $5,000 retainer to cover the estimated phase one costs. KJS agreed to accept 7,000 shares of the Company's common stock valued at the current bid price of $.50 towards such retainer and the balance of $1,500 to be paid in cash at such time as KJS introduces the Company to five institutional funding sources. Phase two compensation will be paid in the form of common stock equal to 1.5% of the funds raised from the capital markets in the form of a spin-off of the OASiS division and 10% of any mezzanine financing from any source introduced by KJS. In May 1999, the Company entered into an agreement with Ten Peaks Capital Corp. of Berkeley, California ("Ten Peaks") to pay a finder's fee for successfully securing specifically defined financing for the Company. Such financing includes finding a strategic partner and/or financial partner who secures equity in the Company or a stake in future revenues. Ten Peaks is to provide advice on long-term business, financial and strategic decisions. The term of the agreement is for three (3) months from the execution date and it expired on August 13, 1999. Upon execution of the agreement, the Company was required to commit to pay a retainer of $4,000 to cover all anticipated out of pocket expenses during the term. Ten Peaks agreed to accept 6,000 shares of the Company's common stock in lieu of such retainer provided such stock has a fair market value as reported on Bloomberg, LLP on the date of execution of not less than $.66. In the event the Company's shares were trading for less, the difference between $4,000 and the value of the shares was to be paid in cash. In the event the Company receives gross proceeds of up to $2,000,000, Ten Peaks is to receive an amount equal to 5% of such proceeds in the form of cash, equity or some combination thereof. Thereafter, Ten Peaks will receive a sliding scale equal to 4% of the next million, 3% of the fourth million, 2% of the fifth million and 1% for each additional million. In the event the Company enters into a transaction as a result of this agreement, it shall enter into a consulting agreement with Ten Peaks for a term of six months under which Ten Peaks will receive $5,000 in cash or equity. Other than the initial retainers, no other payments have been made to either KJS or Ten Peaks. Since execution of the KJS agreement the Company has been advised that fees and commissions related to transactions in securities may only be paid to those legally qualified to receive such payments in accordance with regulations under Federal and state securities laws. The Company is in the process of modifying this agreement such that only appropriate payments will be made in the event of place of any equity in the Company from sources identified by KJS. The Ten Peaks agreement expired without any additional payments. In April 1999, the Company issued 2,000 shares each to two consultants of the Company for services relating to their production of a CD-Rom disc to be used promote OASiS in lieu of cash. Such 4000 shares were valued at $2,250 which was based upon the closing price for the shares on the dates the salaries would have been paid. Such offering was made in reliance to Section 4(2) of the Act and Rule 506 and Section 517.061(11) of the Florida Code. The basis for reliance on these sections is the same as that set forth under the April 1999 offering described above. In May and June 1999, the Company issued a total of 57,400 shares of its Common Stock to officers and employees in lieu of salaries due and owing. Under this arrangement, Mr. Clark, the Company's President received 12,000 shares and Mr. Collins, the Company's Acting Chief Financial Officer received 34,000 shares. Such shares were valued at $39,053.00 which was based upon the closing price for the shares on the dates the salaries would have been paid. Such offering was made in reliance to Section 4(2) of the Act and Rule 506 and Section 517.061(11) of the Florida Code. The basis for reliance on these sections is the same as that set forth under the April 1999 offering described above. Discussion and Analysis The Company was founded in 1992 to combat the potential spread of bloodborne pathogenic infections such as HIV and hepatitis. It has broadened its mission to research, develop, manufacturing, marketing and selling medical products and services to the healthcare community. The Company was in the development stage until 1993 when it began commercial shipments of SutureMate(R), its first product. From inception in June, 1992 through December 31, 1998, the Company generated revenues of approximately $1,100,000 from a limited number of customers. Since inception through December 31, 1998, the Company has generated cumulative losses of approximately $1,690,000. Although the Company has experienced a significant percentage growth in revenues from fiscal 1992 to fiscal 1998, the Company does not believe prior growth rates are indicative of future operating results, especially in light of the contract with US Surgical to assist in the introduction of OASiS. Due to the Company's operating history and limited resources, among other factors, there can be no assurance that profitability or significant revenues on a quarterly or annual basis will occur in the future. Moreover, the Company expects to continue to incur operating losses through at least the first half of 2000, and there can be no assurance that losses will not continue after such date. With the implementation of its agreement with US Surgical and in the event of the reactivation of its various distribution agreements and/or with the establishment of one or more strategic alliances in addition to US Surgical, the Company expects to experience a period of growth, which requires it to significantly increase the scale of its operations. This increase will include the hiring of additional personnel in the areas of (i) customer service to provide technical support for the hospitals where installations are located and (ii) technical staff to make changes requested by those hospitals. This will result in significantly higher operating expenses. The increase in operating expenses is expected to be partially funded by an increase in revenues. However, the Company's net loss may continue to increase. Expansion of the Company's operations may cause a significant strain on the Company's management, financial and other resources. The Company's ability to manage recent and any possible future growth, should it occur, will depend upon a significant expansion of its sales and marketing, research and development, accounting and other internal management systems and the implementation and subsequent improvement of a variety of systems, procedures and controls. There can be no assurance that significant problems in these areas will not occur. Any failure to expand these areas and implement and improve such systems, procedures and controls in an efficient manner at a pace consistent with the Company's business could have a material adverse effect on the Company's business, financial condition and results of operations. As a result of such expected expansion and the anticipated increase in its operating expenses, as well as the difficulty in forecasting revenue levels, the Company expects to continue to experience significant fluctuations in its revenues, costs and gross margins, and therefore its results of operations. The Company's plan of operations for the next twelve months is to focus on building revenue from the installation of the OASiS system in the ten (10) hospitals designated by US Surgical and to install additional OASiS systems in hospitals not under the US Surgical agreement but with whom the Company has begun negotiations and in some cases reached a commitment. Additionally, the Company intends to install the inservice modules from US Surgical and other medical product manufacturers at both the US Surgical and the other hospitals. The Company also is aggressively seeking strategic alliances with targeted industry partners such as manufacturers of devices, manufacturers of pharmaceuticals, professional organizations such as nursing associations and hospital group purchasing organizations and integrated health networks. The Company estimates that if it is successful in consummating new strategic alliances, the agreements will provide for infusion of sufficient capital to fund ongoing operations for the balance of the year. The Company estimates revenues from an expanded base of content providers and individual installations may grow to the level where they can support ongoing operations. The Company estimates that revenues will be sufficient to fund ongoing operations at the current level when the number of OASiS installations reaches approximately 100 to 125 and the total number of inservice modules reaches approximately 150. The Company has purchased 20 OASiS units from Kiosk Information Systems, Inc., 8 of which were installed under the US Surgical agreement, 3 of which were installed at St. Francis Hospital, and the balance of which are dedicated to its commitment to US Surgical for hospitals it has ready for installation and to other hospitals which are committed to proceed, which installations are scheduled on or before September 30, 1999. Based upon potential additional commitments, the Company believes that if it were to order 20 more units, that all such units would be placed by the end of 1999. The Company already has 32 inservice modules under the US Surgical agreement and is in discussion with various manufacturers interested in using OASiS to inservice more than 50 of their products. The Company believes that each of the initial installations should have a position as to long term acceptance within three (3) to six (6) months and that this initial time is the test period to determine the potential for market acceptance at that hospital. In the case of US Surgical hospitals, this period will be for nine (9) months by contract. At the end of such test period, the Company believes it will be in a position to execute three (3) year leases and finance such leases through a leveraged leasing arrangement with Rockford or a similar funding source. In the short term, to fund operations through the fourth quarter, 1999, the Company will be required to seek additional funds from strategic alliances with potential clients its shareholders, from a limited number of accredited investors in a private placement of its restricted securities, from additional third party financing or seek third party debt or equity financing other than those planned by the current anticipated private placement. In the event no such funding is available or only partial funding is available, the Company will be required to scale back operations and to reduce its breakeven point by such measures as salary reductions, staffing cuts, or the licensing or sale of some of the Company's assets or product lines to third parties. Provided such funding or scale back is successful, the Company believes that it can meet its capital needs through the testing period and until such time as the Company has sufficient additional long-term capital to expand. There can be no assurance that the Company will be successful in these efforts. Once the testing period is over, the Company will require between $2 and $5 million in additional capital in the form of debt or equity to fund the continued expansion of the OASiS system and its development to meet increased demand and to implement its plans for increased marketing of its medical device products. The Company has met with several venture capital firms, investment bankers, factoring companies and traditional lending sources, each of whom have expressed early interest and many of whom are awaiting the conclusion of the testing period. The Company has accepted no definite offer. There can be no assurance that such long-term financing will be available to the Company or that it will be on terms that the Company may seek. Results of Operations for the Three and Six Months Ended June 30, 1999 and 1998 Overview From its inception, the Company has incurred losses from operations. As of June 30, 1999, the Company had cumulative net losses totaling approximately $2,070,000. Through fiscal 1997, the Company focused primarily on the design and development of its propriety products, as well as providing consulting services. During fiscal 1998, management shifted its focus to aggressively marketing its proprietary products. Financial Position Working capital as of June 30, 1999 was a deficit of $43,229, as compared to working capital of $53,056 at December 31, 1998. This decrease is primarily due to additional borrowings on the Company's line of credit and increases in Notes payable-related parties, the transfer of deposits to property and equipment, reduced by an increase in cash on hand from the receipts of the securities sold in the private placement. Revenues For the three months ended June 30, 1999 and 1998, the Company had total revenues of $13,157.00 and $3,159.00, respectively. For the three months ended June 30, 1999, revenues were comprised primarily of fees received for Oasis unit rentals and production fees for inservice modules. For the six months ended June 30, 1999, total revenues were $52,734.00 compared to $19,139.00 in the same period last year. The increase of $33,595.00 or176% is due to revenue from the 1999 launch of Oasis. In 1998, Oasis was still under development. Selling, General, and Administrative Expenses For the three months ended June 30, 1999, operating expenses increased by $30,244 or 13% from $227,672 for the three months ended June 30, 1998. This increase is primarily related to marketing support expenditures to sustain the launch of the Company's Oasis system. In accordance with the Company's marketing plan for fiscal 1999, expenses related to promotion, trade shows, and conventions were increased to enhance the industry awareness of the company's products and services. In the past, the Company has focused on the design and development of proprietary products. For fiscal 1999, the Company has launched an aggressive marketing plan that is designed to increase worldwide sales of its products. Surgical believes that the increased operating expenses incurred during the six []months ended June 30, 1999 will position the Company to generate increased revenue in the fourth quarter of the 1999 fiscal year and throughout 2000. Liquidity and Capital Resources The Company's operations are being funded primarily from the $475,000 proceeds of the private placement and from cash flow of $177,500 from shareholder loans and advances on the line of credit during the six months ended June 30, 1999. This allowed the Company to purchase capital assets, enhance its OASiS software and fund current operations. At June 30, 1999, the Company has a $188,000 cash position. The Company has a line of credit in the amount of $100,000 that expires in May 2017 and is guaranteed by Dr. Swor and his wife. The line of credit also has been used to fund operations on a short-term basis and $100,000 is currently outstanding. Net cash used for investing for the six months ended June 30, 1999 was approximately $140,962, representing primarily OASiS units purchased and costs related to the new version of OASiS which have been capitalized. Revenue of $13,157 for the quarter ended June 30, 1999 has been generated primarily from the leasing of OASiS units to various hospitals pursuant to the Agreement with US Surgical. For the quarter ended June 30, 1998, revenue totaled $3,159. It is the Company's intention to pursue additional debt and or equity financing in the range of $2,000,000 to $5,000,000 during the remainder of fiscal 1999, however, there can be no assurance that they will be successful in their efforts. Surgical believes that cash flows generated from operations and borrowing capacity, combined with proceeds from future debt or equity financing and equipment financing support from either potential future strategic alliances or firms that specialize in equipment financing will provide adequate flexibility for funding the Company's working capital obligations. Impact of the Year 2000 Issue The Year 2000 Issues is the result of potential problems with computer systems or any equipment with computer chips that use dates where the date has been stored as just a two digits (e.g. 98 for 1998). On January 1, 2000, any clock or date recording mechanism including date sensitive software which uses only two digits to represent the year, may recognize the date using 00 as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruption of operations, including among other things, a temporary inability to process transactions, send invoices, or engage in similar activities. The Company determined that the Year 2000 impact is not material to Surgical and that it will not impact its business, operations or financial condition since all of the internal software utilized by the Company is being upgraded to support Year 2000 versions. Further, the Year 2000 will not impact upon the operation of the OASiS system since the software for this system does not rely on legacy applications or subsystems. OASiS is designed to handle dates in the form of two digit months and days and a four-digit year, thus avoiding the Year 2000 problem The Company believes that it has disclosed all required information relative to Year 2000 issues relating to its business and operations. However, there can be no assurance that the systems of other companies on which the Company's systems rely also will be timely converted or that any such failure to convert by another company would not have an adverse affect on the Company's systems. Forward-Looking Statements This Form 10-QSB includes "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. All statements, other than statements of historical facts, included or incorporated by reference in this Form 10-QSB which address activities, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), demand for the Company's products and services, expansion and growth of the Company's business and operations, and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results or developments will conform with the Company's expectations and predictions is subject to a number of risks and uncertainties, general economic market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this Form 10-QSB are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements. PART II Item 1. Legal Proceedings. The Company knows of no legal proceedings to which it is a party or to which any of its property is the subject, which are pending, threatened or contemplated or any unsatisfied judgments against the Company. Item 2.Changes in Securities and Use of Proceeds None Item 3.Defaults in Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders. No matter was submitted during the quarter ending June 30, 1999, covered by this report to a vote of the Company's shareholders, through the solicitation of proxies or otherwise. Item 5.Other Information None Item 6.Exhibits and Reports on Form 8-K (a) The exhibits required to be filed herewith by Item 601 of Regulation S-B, as described in the following index of exhibits, are incorporated herein by reference, as follows: Exhibit No. Description - ------------------------------------------ 3.(I).1 Articles of Incorporation of Surgical Safety Products, Inc., a Florida corporation filed May 15, 1992 3.(I).2 Articles of Amendment filed December 9, 1992 3.(I).3 Articles of Amendment filed July 19, 1994 3.(I).4 Articles of Amendment filed October 11, 1994 3.(I).5 Articles of Incorporation of Sheffeld Acres, Inc., a New York Corporation filed May 7, 1993 3.(I).6 Articles of Merger filed in the State of Florida October 12, 1994 3.(I).7 Certificate of Merger filed in the State of New York February 8, 1995 3.(I).8 Certificate to Do Business in the State of Florida filed April 11, 1995 3.(I).9 Certificate of Amendment filed May 1, 1998 3.(II).1 Bylaws of Sheffeld Acres, Inc., now known as Surgical Safety Products, Inc. 3.(II).2 Amended Bylaws of Surgical Safety Products, Inc. 10.1 Acquisition of Endex Systems, Inc. d/b/a/ InterActive PIE dated December 8, 1997 10.2 Prepaid Capital Lease Agreement with Community Health Corporation relative to Sarasota Medical Hospital OASiS Installation dated January 30, 1998 10.3 Letter of Intent with United States Surgical Corporation dated February 12, 1998 10.4 Form of Rockford Industries, Inc. Rental Agreement and Equipment Schedule to Master Lease Agreement 10.5 Ad-Vantagenet Letter of Intent dated June 19, 1998 10.6 Distribution Agreement with Morrison International Inc. dated September 30, 1996 10.7 Distribution Agreement with Hospital News dated August 1, 1997 10.8 Clinical Products Testing Agreement with Sarasota Memorial Hospital dated January 30, 1998 10.9 Real Estate Lease for Executive Offices effective June 1, 1998 10.10 Employment Agreement with Donald K. Lawrence dated April 1, 1997 10.11 Employment Agreement with G. Michael Swor dated June 15, 1998 10.12 Employment Agreement with Frank M. Clark dated June 15, 1998 10.13 Agreement for Consulting Services with Stockstowatch.com Inc. dated March 30, 1988 10.14 Form of Employee Option Agreement dated July 1994 10.15 Form of Employee Option Agreement dated 1998 10.16 Form of Consultants Option Agreement dated July 1994 10.17 Form of Consultants Option Agreement dated 1998 10.18 Confidential Private Offering Memorandum dated May 30, 1995 10.19 Supplement to Private Offering Memorandum dated October 30, 1995 10.20 Stock Option Agreement with Bay Breeze Enterprises LLC dated April 9, 1998 10.21 Revolving Loan Agreement, Revolving Note, Security Agreement with SouthTrust Bank dated May 2, 1997 10.22 Agreement between the Company and T. T. Communications, Inc. dated October 15, 1998 10.23 Agreement between the Company and U.S. Surgical Corporation dated October 28, 1998. 10.24 Collaborative Agreement between the Company and Dr. William B. Saye dated November 16, 1998. 10.25 Kiosk Information System, Inc. Purchase Order dated November 3, 1998 10.26 Surgical Safety Products 1999 Stock Option Plan adopted January 1999 10.27 Form of the Employee Option Agreement under the Surgical Safety Products 1999 Stock Option Plan dated January 1999 10.28 Form of the Director, Consultant and Advisor Option Agreement under the Surgical Safety Products 1999 Stock Option Plan dated January 1999 10.29 Verio, Inc. Access Service Agreement dated February 16, 1999. 10.30 Form of Investor Subscription Documents and Agreements relative to the April 1999 Self Directed Private Placement Offering under Rule 506 of Regulation D. 10.31 Form of the Warrant issued pursuant to the April 1999 Self Directed Private Placement Offering under Rule 506 of Regulation D. 10.32 Consulting Agreement dated April 1999 with Koritz Group, LLC. 10.33 * Agreement dated April 1999 with KJS Investment Corporation. 10.34 * Agreement dated May 1999 with Ten Peaks Capital Corp. 23.2 Publisher's Consent and Article - Michael W. Bebbington, MD, MHSc and Mark J. Treissman, MD. The Use of a Surgical Assist Device to Reduce Glove Perforations in Postdelivery Vaginal Repair: A Randomized Controlled Trial. American Journal of Obstetrics and Gynecology, Vol. 175, No. 1, Part I, October 1996 23.3 Author's Consent and Abstract - Donna J. Haiduven, BSN, MSN, CIC and Maria D. Allo, MD. Evaluation of a One-Handed Surgical Suturing Device to Decrease Intraoperative Needlestick Injuries and Glove Perforations: Phases I & II, Conference on Prevention of Transmission of Bloodborne Pathogens in Surgery and Obstetrics Sponsored by the American College of Surgeons and the Center for Disease Control and Prevention, February 13-15, 1994, Atlanta, GA. 23.4 Publisher's Consents and Article - Mark S. Davis, MD. Sharps Management in Surgery. Infection Control & Sterilization Technology, Vol. 1, No. 4, April 1995. 27.1 * Financial Data Street - ---------------- (* Filed herewith, all other exhibits previously filed as exhibits to the Company's Form 10-SB, Form 10-SB Amendment No. 1 or its Form 10QSB for the quarter ended March 31, 1999.) (b) No Reports on Form 8-K were filed during the quarter ended March 31, 1999. SIGNATURES In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized. Surgical Safety Products, Inc. (Registrant) Date: August 13, 1999 By:/s/ Frank M. Clark Frank M. Clark, President and CEO By:/s/ Donald K. Lawrence Donald K. Lawrence Vice President and Secretary By:/s/ G. Michael Swor G. Michael Swor Treasurer By:/s/ David Collins David Collins Acting Chief Financial Officer [sign page SSP 10QSB 6.30.99] EX-10 2 MATERIAL CONTRACT EXHIBIT 10.33 KJS Investment Corporation 14010 Clubhouse Cir. Suite 1007 Tampa, Fl 33624 (813) 265-2243 April 29, 1999 Mr. Frank M. Clark President/CEO Surgical Safety Products, Inc. 2018 Oak Terrace Sarasota, Fl 34231 Dear Frank: I enjoyed meeting with you and your management team discussing the future potential of Surgical Safety Products, Inc. (the Company). I believe the existing business with a few strategic alterations will make for an exciting story to convey to the capital markets. In this regard, the following is an overview of my services and cost associates with the development of your comprehensive business plan, as well as accessing the capital markets for growth capital. Phase I Through extensive assistance with Company management, KJS Investment Corporation (KJS) will help direct Surgical Safety Products, Inc. moving forward. In this regard, KJS will make recommendations in positioning of the business plan for distribution to the capital markets. These recommendations will include but not be limited to possible business combinations, mergers, compressed timelines, etc. Phase II 1. KJSwill identify the appropriate financial institutions and distribute the final business plan accordingly. 2. KJSwill analyze all of the initial feedback received from the capital markets and will be instrumental in arranging meetings between the parties in which KJS representatives will attend. 3. KJSwill evaluate proposals received and provide management and analysis of each proposed transaction. KJS will also assist in the negotiations with these financial institutions as deemed appropriate. The cost of services will be based on developing and distributing the plan. We estimate the cost for professional hours to be incurred related to Phase I to approximate $5,000, plus any out-of-pocket travel expenses (with approval by the Company). This estimate was given based upon our discussions to date, and is also dependent upon your continued efforts in the process and receipt of comprehensive information as requested. However, if the Company=s strategic goals are modified throughout the process, Phase I cost may deviate accordingly. To offset the cost associated with Phase II of this engagement, KJS will receive an equity position in Surgical Safety Products, Inc. (based on current valuations) totaling 1.5% of the total dollars raised from the capital markets in the form of a spin-off IPO of the Company=s Oasis division. Further, KJS will take payment of 10% of any mezzanine financing done prior to the completion of the initial IPO of the Company by any source introduced by KJS. In order for us to start this process, we will require that you sign, date, and return one of the two originals along with a retainer of $5,000 which will be applied to cover expenses incurred in this engagement by KJS. To fulfill the retainer requirements, KJS will accept a partial payment of 7000 shares of the Company=s common stock trading under the ticker symbol of SURG with a current bid price of $.50. In addition, upon introduction of a minimum of five institutional funding sources KJS will receive the remaining retainer in cash ($1,500). As a condition precedent to this engagement, the undersigned specifically acknowledges and agrees that the work performed by KJS for the Company is for the exclusive use and benefit of the Company, and thereby does not constitute any representation, proposal or service for any person or entity other than the Company and that any information provided or services preformed by KJS are not to be relied on by any person or entity in dealing with the Company and shall not form the basis for any claim, including any possible claim for negligence or pursuant to any securities laws by anyone against KJS Investment Corporation. I look forward to working with you in completing this project. If you have any questions or require clarification, please feel free to contact me @ 813-265-2243. Sincerely, /s/ Kevin Sakser - ---------------- Kevin Sakser President/CEO KJS Investment Corp. Signed this 5 Day of _April____ 1998 Acknowledged: /s/ Frank Clark --------------- Title ___CEO____ EX-10 3 MATERIAL CONTRACT Exhibit 10.34 Ten Peaks Capital Corp. 2748 Adeline Street, Suite A Berkeley, CA 94703 Telephone: (510) 843-1842 Facsimile: (510) 843-0901 May 14, 1999 Mr. Frank M. Clark President and Chief Executive Officer Surgical Safety Products, Inc. 2018 Oak Terrace Sarasota, FL 34231 Via Facsimile: (941) 924-0315 Dear Frank: Please accept the fee schedule (the ASchedule@), and the miscellaneous provision (the AMiscellaneous Provisions@) to the Schedule (collectively, the Schedule and the Miscellaneous Provisions are referred to as the AAgreement@), as described herein below, as acknowledgment by Surgical Safety Products, Inc. and any of its affiliates (collectively, the ACompany@) of the compensation that shall be paid to Ten Peaks Capital Corp. and any of its affiliates (collectively, ATPC@), as a Finder=s Fee (The AFee@) for successfully securing financing for the Company as further described in sections 2,3 and 4 below, whether in the form of cash, equity or a combination thereof through direct investment or business combinations, including but not limited to an acquisition, merger, joint venture agreement, license agreement or partnership (a ATransaction@), for and on behalf of the Company from prospective investors or strategic partners identified by TPC (AIdentified Prospects@)1 and introduced by TPC to the Company in a meaningful way. The Fee may be paid to TPC in the form of cash, equity or any combination there of to be determined by good faith negotiations between TPC and the Company. During the term of the Agreement, TPC shall use its reasonable efforts to secure a Transaction for the Company. The Company will be under no obligation to consummate a Transaction with Identified Prospects. The following is the Schedule of the Fee to be paid by the Company to TPC both upon the execution of the Agreement (the "Execution Date") and upon consummation by the Company during the term of the Agreement and for a period of six months there after of a Transaction involving Identified Prospects. 1. Retainer fee. The Company shall pay to TPC the one-time fee of four thousand dollars ($4,000) upon the execution of the Agreement (the AExecution Date@) by the Company. The fee shall be paid to TPC to cover the up-front expenses incurred by TPC for the entire term of the Agreement in an effort to secure a Transaction for the Company. The Company shall pay the Retainer Fee in the following manner: the Company shall inform its transfer agent to lease to TPC up to six thousand (6,000) shares of the Company=s common stock, par value $0.001 (the ACommon Stock@). The shares shall be issued to TPC at the fair market value (the AFair Market Value=) of the Common Stock as of the Execution Date and as reported by Bloomberg, LLP on the Execution Date. However, if the Fair Market Value of the Common Stock is less than $0.66, then the Company shall pay the balance of the difference between the four thousand dollar ($4,000) Retainer Fee and the six thousand (6,000) shares of the Common Stock in cash. 2. For Total Gross Proceeds of $1,000,000 or Less. For any amount equal to or less than one million dollars ($1,0000,000), TPC shall be paid a sum equal to five percent (5%) of the total gross proceeds (the AGross Proceeds@), whether in the form of cash, equity or a combination thereof received by the Company. 3. For Total Gross Proceeds of greater than $1,000,00 and less than $2,000,000. For any amount greater than one million dollars $1,000,000) and less than two million dollars ($2,000,000), TPC shall be paid a sum equal to five percent (5%) of the Gross Proceeds. 4. For Total Gross Proceeds in Excess of $2,000,000. TPC shall be paid a sum equal to four percent (4%) of the next one million dollars ($1,000,000) raised in excess of the first two million dollars ($2,000,000) raised for the Company. After which, TPC shall be paid on a sliding scale; pursuant to which TPC shall receive an amount equal to the sum of three percent (3%) of the fourth one million dollars raised, two percent (2%) of the fifth one million dollars raised, and one percent (1%) for each additional one million dollars raised thereafter. Additionally, any fraction thereof shall be adjusted in accordance with the Schedule. For example, should the Company receive $1.5 million in a transaction, the Fee shall be equivalent to the sum of five percent (5%) of the first $1,000,000, plus five percent (5%) of the last $500,000 for a net value of the Fee equal to $75,000. 5. The Duties and Obligations (the "Duties and Obligations") of TPC pursuant to the Agreement. The Duties and Obligations of TPC shall include, but not be limited to the following: TPC shall provide the Company and its subsidiary with the necessary introductions to Identified Prospects, which shall include, but not be limited to, any individual person, company, partnership, or other entity that may provide the Company and the Company=s subsidiary with a financial and/or strategic opportunity; whereas, TPC shall seek an investment and or financial partner (the APartner@) for the Company and its subsidiary, which may include, but not be limited to the following: an outright financial investment by the Partner for the equity shares of the Company or its subsidiary, a financial investment by the Partner for a future stake in the revenues generated by the Company or its subsidiary; or a financial investment by the Partner for a combination of the Company=s and or its subsidiary=s equity and future revenue streams; TPC shall provide the Company strategic advice and consultation with respect to ways in which to increase the Company=s equity share price; TPC shall review, comment and edit both for content and structure all of the Company=s Securities and Exchange Commission filings, public releases (including all press releases), Aroad show@ materials, and that Company business plan and executive summary; TPC shall provide the Company with the necessary access to the investment community. Access may include meetings with the Atop-tier@ investment banks, hedge-fund managers, mutual fund managers and other similar institutions within both the Asell-side@ and Abuy-side@ investment communities, in a concerned effort to provide the Company with increased visibility which may result in additional coverage and sponsorship; and TPC shall provide the Company advice and consultation with regard to the Company=s day-to-day and long-term business, financial and strategic decisions. 5. Miscellaneous Provisions. 5.1 The Term of the Agreement. The Term of the Agreement shall be three (3) months from the Execution Date. Should the Company, within the Term of the Agreement, enter into meaningful discussions and/or negotiations with an Identified Prospect, then the Term shall be automatically extended for an additional three (3) month period.. 5.2 Consulting Arrangement. In the event that the Company, in its discretion, consummates a Transaction, then the Company and TPC shall enter into a separate consulting agreement (the "Consulting Agreement"), which shall be in accordance with the following terms: (2)1 The term of the Consulting Agreement (the ATerm@) shall be six (6) months from the date of consummation of the Transaction; and (2)2 The consulting fee (the AConsulting Fee@) shall be five thousand dollars ($5,000) per month, to be paid to TPC in the form of cash, equity or any combination thereof to be determined by good faith negotiations between TPC and the Company. Should you have any questions or comments please do not hesitate to contact us at (510) 843-1842. Thank you for your time concerning the above matter and we look forward to helping Surgical Safety Products, Inc. achieve its financial goals. Very truly yours, Ten Peaks Capital Corp. By:/s/ David A. Flake By:/s/ John T. McCamant ------------------- -------------------- David A. Flake, Esq. John T. McCamant ACCEPTED AND AGREED to this _14_ day of May 1999. By: /s/ Frank M. Clark ---------------------- Frank M. Clark Safety Surgical Products, Inc. Cc: David Collins - Chief Financial Officer Irwin Newman DAR/daf - -------- 1 "Identified Prospects" as defined above, shall include, but not be limited to, the following: any individual person; company, partnership, or any other entity which is recognized under the laws or statutes of the United States or any foreign jurisdiction. EX-27 4 FDS --
5 0001063530 Surgicial Safety Products, Inc. 1 U.S. Currency 6-mos Dec-31-1998 Jan-1-1999 Jun-30-1999 1 188,000 0 9,981 0 6,119 204,100 221,524 0 610,876 247,329 0 0 0 11,799 0 610,876 0 52,734 8,135 432,560 416,985 0 7,440 0 0 0 0 0 0 0 (0.04) 0
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