10QSB 1 edform10-q.txt FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB (Mark One) X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ---- ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002 __ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO _____________ Commission File Number 2-93277-D MEDIZONE INTERNATIONAL, INC. (Exact name of small business issuer as specified in its charter) Nevada 87-0412648 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 144 Buena Vista P.O. Box 742 Stinson Beach, CA 94970 (Address of principal executive offices, Zip Code) (415) 868-0300 (Registrant'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 the past 90 days. Yes [X] No [ ] At July 31, 2002, there were 157,265,387 shares of the registrant's common stock issued and outstanding. Transitional Small Business Disclosure Format (Check one): Yes __ No X ---- 1 MEDIZONE INTERNATIONAL, INC. FORM 10-QSB INDEX June 30, 2002 Page Number Part I -- Financial Information Item 1 -- Financial Statements Consolidated Balance Sheets: June 30, 2002 (Unaudited) and December 31, 2001.......................3 Consolidated Statements of Operations (Unaudited): For the Three Months and Six Months Ended June 30, 2002 and 2001......4 Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2002 and 2001.......................5 Notes to Consolidated Financial Statements............................6 Item 2--Management's Discussion and Analysis or Plan of Operation..............9 Part II -- Other Information Item 1--Legal Proceedings.....................................................10 Item 2-- Changes in Securities and Use of Proceeds............................11 Item 6-- Exhibits and Reports on Form 8-K.....................................11 2 MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Consolidated Balance Sheets
ASSETS June 30, December 31, 2002 2001 --------------------- -------------------- (Unaudited) CURRENT ASSETS Cash $ 4,344 $ - ------------ ------------ Total Current Assets 4,344 - ------------ ------------ PROPERTY AND EQUIPMENT (Net) 7,851 10,226 ------------ ------------ OTHER ASSETS Receivable from affiliate, net - - ------------ ------------ Total Other Assets - - ------------ ------------ TOTAL ASSETS $ 12,195 $ 10,226 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Bank overdraft $ - $ 8 Accounts payable 410,555 397,722 Advances from shareholders 905 855 Accrued expenses 831,876 743,794 Notes payable 303,491 303,491 ------------ ------------ Total Current Liabilities 1,546,827 1,445,870 ------------ ------------ Total Liabilities 1,546,827 1,445,870 ------------ ------------ STOCKHOLDERS' EQUITY (DEFICIT) Common stock, 250,000,000 shares authorized of $0.001 par value,157,265,387 and 155,338,019 shares issued and outstanding, respectively 157,265 155,338 Additional paid in capital 15,646,030 15,455,220 Deficit accumulated during the development stage (17,337,927) (17,046,202) ------------ ------------ Total Stockholders' Equity (Deficit) ( 1,534,632) ( 1,435,644) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 12,195 $ 10,226 ============ ============
The accompanying notes are an integral part of these consolidated financial statements. 3 MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Consolidated Statements of Operations (Unaudited)
For the For the Inception Three Months Ended Six Months Ended 1/31/86 June 30, June 30, Through 6/30/02 2002 2001 2002 2001 ------------- ------------- ------------- ------------- --------------- REVENUES $ - $ - $ - $ - $ 133,349 ------------- ------------- ------------- ------------- ------------- EXPENSES Cost of sales - - - - 103,790 Research and development - 44,542 21,152 67,095 2,666,338 General and administrative 136,149 187,627 256,370 330,015 12,993,560 Expense on extension of warrants - - - - 1,866,857 Bad debt expense - - - - 48,947 Depreciation and amortization 1,187 1,196 2,375 2,710 40,145 ------------- ------------- ------------- ------------- ------------- Total Expenses 137,336 233,365 279,897 399,820 17,719,637 ------------- ------------- ------------- ------------- ------------- Loss from Operations (137,336) (233,365) (279,897) (399,820) (17,586,288) ------------- ------------- ------------- ------------- ------------- OTHER INCOME (EXPENSES) Minority interest in loss - - - - 26,091 Other income - - - - 19,780 Gain on sale of subsidiary - - - - 208,417 Interest expense (5,914) (5,610) (11,828) (11,220) (900,665) ------------- ------------- ------------- ------------- ------------- Total Other Income (Expenses) (5,914) (5,610) (11,828) (11,220) (646,377) ------------- ------------- ------------- ------------- ------------- LOSS BEFORE EXTRAORDINARY ITEMS (143,250) (238,975) (291,725) (411,040) (18,232,665) ------------- ------------- ------------- ------------- ------------- EXTRAORDINARY ITEMS Restitution receipt - - - - 415,000 Debt forgiveness - - - - 479,738 ------------- ------------- ------------- ------------- ------------- Total Extraordinary Items - - - - 894,738 ------------- ------------- ------------- ------------- ------------- NET LOSS $ (143,250) $ (238,975) $ (291,725) $ (411,040) $(17,337,927) ============= ============= ============= ============= ============= BASIC INCOME (LOSS) PER SHARE Loss from operations $ (0.00) $ (0.00) $ (0.00) $ (0.00) Extraordinary Items 0.00 0.00 0.00 0.00 ------------- ------------- ------------- ------------- Basic Income (Loss) Per Share $ (0.00) $ (0.00) $ (0.00) $ (0.00) ============= ============= ============= ============= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 157,107,643 154,860,242 156,260,868 155,338,019 ============= ============= ============= =============
The accompanying notes are an integral part of these consolidated financial statements. MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended Inception June 30, 1/31/86 ------------------------------------ Through 2002 2001 6/30/02 ----------------- --------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (291,725) $ (411,040) $(17,337,927) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,375 2,710 40,145 Stock issued for services - - 3,015,916 Expense for extension of warrants below market value - - 1,866,857 Bad debt expense - - 48,947 Minority interest in loss - - (26,091) Loss on disposal of assets - - 693,752 Gain on settlement of debt - - (188,510) Gain on lawsuit settlement - - (415,000) Changes in assets and liabilities: (Increase) decrease in prepaid expenses and deposits - - (48,947) Increase (decrease) in accounts payable 55,283 23,751 828,085 Increase (decrease) in accrued expenses 108,082 137,979 1,254,898 ------------------ --------------- --------------- Net Cash Used by Operating Activities (125,985) (246,600) (10,267,875) ------------------ --------------- --------------- CASH FLOWS FROM INVESTING ACTIVITIES: Organization costs - - (8,904) Purchase of fixed assets - - (39,090) ----------------- ---------------- --------------- Net Cash Used by Investing Activities - - (47,994) ----------------- ---------------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES: Bank overdraft (8) - - Proceeds from restitution settlement - - 415,000 Principal payments on notes payable - - (192,774) Cash received from notes payable - - 1,129,518 Advances from shareholders 5,337 - 6,192 Capital contributions - - 421,847 Stock issuance costs - - (105,312) Increase in minority interest - - 14,470 Issuance of common stock for cash 125,000 254,981 8,631,272 ----------------- --------------- --------------- Net Cash Provided by Financing Activities 130,329 254,981 10,320,213 ----------------- --------------- --------------- NET INCREASE IN CASH 4,344 8,381 4,344 CASH AT BEGINNING OF PERIOD - 2,368 - ----------------- --------------- --------------- CASH AT END OF PERIOD $ 4,344 $ 10,749 $ 4,344 ================= =============== =============== SUPPLEMENTAL CASH FLOW INFORMATION CASH PAID FOR: Interest $ - $ - $ 26,483 Income taxes $ - $ - $ - NON-CASH FINANCING ACTIVITIES Stock issuance for services $ - $ - $ 3,015,916 Stock issued for conversion of debt $ - $ - $ 4,071,493 Stock issued for license agreement and patent $ - $ - $ 693,752
The accompanying notes are an integral part of these consolidated financial statements. 5 MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Notes to the Consolidated Financial Statements June 30, 2002 and December 31, 2001 NOTE 1 - BASIS OF PRESENTATION The financial information included herein is unaudited and has been prepared consistent with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, these financial statements do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. These statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 2001. In the opinion of management, these financial statements contain all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim period presented. The results of operations for the three months and six months ended June 30, 2002 and 2001 are not necessarily indicative of the results to be expected for the full year. NOTE 2 - LOSS PER SHARE Following is a reconciliation of the numerators of the basic and diluted loss per share for the three months and six months ended June 30, 2002 and 2001:
For the Three Months Ended June 30, -------------------------------------- 2002 2001 ------------------ ------------------ Net loss available to common shareholders $ (143,250) $ (238,975) ================= =================== Weighted average shares 157,107,643 154,860,242 Effect of dilutive securities - - ----------------- ------------------- 157,107,643 154,860,242 Basic loss per share (based on weighted average shares) $ (0.00) $ (0.00) ================= =================== For the Six Months Ended June 30, -------------------------------------- 2002 2001 ------------------ ------------------ Net loss available to common shareholders $ (291,725) $ (411,040) ================= =================== Weighted average shares 156,260,868 155,338,019 Effect of dilutive securities - - ----------------- ------------------- 156,260,868 155,338,019 Basic loss per share (based on weighted average shares) $ (0.00) $ (0.00) ================= ===================
6 MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Notes to the Consolidated Financial Statements June 30, 2002 and December 31, 2001 NOTE 3 - GOING CONCERN The Company's consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred significant losses from its inception through June 30, 2002, which have resulted in an accumulated deficit of $17,337,927 at June 30, 2002. The Company does have an established source of funds sufficient to cover its operating costs, has a working capital deficit of approximately $1,542,000, has relied exclusively on debt and equity financing, accordingly, there is substantial doubt about its ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining additional capital, obtaining the requisite approvals from the FDA and/or the EU for the marketing of ozone-related products and equipment, and ultimately, upon the Company's attaining profitable operations. The Company will require a substantial amount of additional funds to complete the development of its products, to establish manufacturing facilities, to build a sales and marketing organization and to fund additional losses, which the Company expects to incur over the next several years. Because ozone-generation for the purposes of interfacing with blood and blood products is regarded as a new drug delivery system, the Company is precluded from selling or distributing its drug or the Medizone Technology in the United States until after FDA approval has been granted. In order to obtain FDA approval, the Company will be required to submit a New Drug Application ("NDA") for review by the FDA and provide medical and scientific evidence sufficient to demonstrate that the drug and the Medizone Technology has been successfully used in pre-clinical studies followed by three phases of well-controlled clinical studies using human volunteer subjects. The FDA will not grant an NDA unless it contains sufficient medical evidence and data to permit a body of qualified and experienced scientists to conclude that the new drug product is safe and effective for its recommended and proposed medical uses. Historically, the FDA has held a strong bias against treating humans with ozone, due largely to issues of safety. In order to initiate the first phase (i.e., Phase I) of human clinical trials required as part of an NDA, an applicant must submit to the FDA an application for an Investigational New Drug Exemption ("IND"), which contains adequate information to satisfy the FDA that human clinical trials can be conducted without exposing the volunteer human subjects to an unreasonable risk of illness or injury. The Company submitted an IND application (assigned to the Company by its former president) to the FDA on October 6,1985, and requested FDA approval to commence human clinical trials using ozone-oxygen to inactivate HIV. The FDA deemed the IND application to be incomplete, and required the Company to conduct additional animal studies prior to commencing a large animal study and human trials. In September 1994, after not receiving responses to requests for information from the Company, the FDA inactivated the Company's IND. The Company has no present plans to commence a large animal study, which would require, as a precursor, additional small animal and laboratory work. Accordingly, there can be no assurance that the Company's IND application will ever be reopened. Until an NDA had been granted to the Company, it may not distribute ozone-generating devices, except to researchers who agree to follow FDA guidelines, and provided the devices are labeled as "Investigational Devices." Because ozone has been used to treat humans in Europe for at least 30 years, the EU is more accepting of human clinical trials of ozone therapies being conducted than is the United States. Accordingly, management believes that the Company should pursue the option of conducting human clinical trials in Europe, using stringent protocols that will meet EU standards, with a view to utilizing the results of such a trial in an effort to obtain EU approval, to market the product in Europe and to reopen the Company's FDA file. 7 MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Notes to the Consolidated Financial Statements June 30, 2002 and December 31, 2001 NOTE 3 - GOING CONCERN (Continued) The management of the Company intends to seek additional funding which will be utilized to fund additional research and continue operations. The Company recognizes that, if it is unable to raise additional capital, it may find it necessary to substantially reduce or cease operations. The ability of the Company to continue as a going concern is dependent on its ability to successfully accomplish the plan described in the preceding paragraphs and eventually attain profitable operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of these uncertainties. NOTE 4 - STOCK TRANSACTIONS During the six months ended June 30, 2002, the Company issued 1,250,000 shares of common stock at $0.10 per share for total proceeds of $125,000. The Company also granted the investors warrants to purchase 1,250,000 shares of stock at $0.10 per share, exercisable over a two-year term. The market price of the common stock was $0.10 per share on the date of the issuance of the shares and grant of the warrants. Also during the six months ended June 30, 2002, the Company issued a total of 677,368 shares of common stock for services rendered and repayment of outstanding debt at $0.10 per share for a total of $67,737. Subsequent to June 30, 2002, the Company issued a total of 480,000 shares of common stock, pursuant to an S-8 registration, for services rendered and repayment of outstanding debt at $0.10 per share for a total of $48,000. NOTE 5 - COMMITMENTS AND CONTINGENCIES The Company is subject to certain claims and lawsuits arising in the normal course of business. In the opinion of management, uninsured losses, if any, resulting from the ultimate resolution of these matters will not have a material effect on the Company's financial position, results of operations, or cash flows. 8 Item 2 - Management's Discussion and Analysis or Plan of Operation The following discussion and analysis of financial condition and results of operations should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and Notes thereto appearing elsewhere in this Quarterly Report on Form 10-QSB. Medizone International, Inc., a Nevada corporation ("Medizone") organized in 1986, is a development stage company. To date the principal business of Medizone has been limited to (1) seeking regulatory approval for its drug, a precise mixture of ozone and oxygen called MEDIZONE(R), and its process of inactivating lipid enveloped viruses for the intended purpose of decontaminating blood and blood products and assisting in the treatment of certain diseases; and (2) developing or acquiring the related technology and equipment for the medical application of its products, including its drug production and delivery system. Results of Operations General From its inception in January 1986, Medizone has been a development stage company primarily engaged in research into the medical uses of ozone. We have not generated, and cannot predict when or if we will generate revenues or sufficient cash flow to fund our continuing operations. Three Months Ended June 30, 2002 compared to the Three Months Ended June 30, 2001 There were no sales during the quarters ended June 30, 2002 or 2001. We made no expenditures for research and development in the second quarter of 2002, compared to $44,542 during the second quarter of 2001. Since inception we have spent a total of $2,666,338 for research and development. General and administrative expenses in the second quarter of 2002 were $136,149 compared to $187,627 during the second quarter of 2001. These expenses include payroll, insurance costs and professional fees. The reduction in these expenses reflects the reduction in employees and the limited business conducted by the company during the quarter as efforts to obtain financing continued. Interest expense accrued during the three months ended June 30, 2002 was $5,914, compared to $5,610 in the three months ended June 30, 2001. Six Months Ended June 30, 2002 compared to the Six Months Ended June 30, 2001: There were no sales during the six months ended June 30, 2002 or 2001. We made expenditures for research and development of $21,152 in the six months ended June 30, 2002, compared to $67,095 during the six months ended June 30, 2001. General and administrative expenses in the first six months of 2002 were $256,370 compared to $330,015 during the first six months of 2001. The reduction in these expenses reflects the reduction in employees and the limited business conducted by the company during the quarter as efforts to obtain financing continued. Interest expense accrued during the six months ended June 30, 2002 was $11,828, compared to $11,220 in the six months ended June 30, 2001. Liquidity and Capital Resources At June 30, 2002, we had a working capital deficiency of $1,542,483 and stockholders' deficiency of $1,534,632. At December 31, 2001, we had a working capital deficiency of $1,445,870 and stockholders' deficiency of $1,435,644. Net cash used in operating activities was $125,985 for the six months ended June 30, 2002. Cash of $125,000 was provided during the first six months of 2002 from the issuance of common stock. During the six months ended June 30, 2001, net cash used in operating activities was $246,600. Cash of $254,981 was provided in the first six months of 2001 by the sale of common stock through the exercise of outstanding stock purchase warrants. The company continues to require additional funding to enable it to operate and to fund research necessary to make the appropriate regulatory application and continue operations. We expect that these funds will be provided by the sale of 9 our securities. We recognize that, if we are unable to raise additional capital, we may find it necessary to substantially reduce, or cease operations. Forward-Looking Statements and Risks Affecting the Company The statements contained in this Report on Form 10-QSB that are not purely historical are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act. These statements regard our expectations, hopes, beliefs, anticipations, commitments, intentions and strategies regarding the future. They may be identified by the use of the words or phrases "believes," "expects," "anticipates," "should," "plans," "estimates," and "potential," among others. Forward-looking statements include, but are not limited to, statements contained in Management's Discussion and Analysis of or Plan of Operation regarding our financial performance, revenue and expense levels in the future and the sufficiency of existing assets to fund future operations and capital spending needs. Actual results could differ materially from the anticipated results or other expectations expressed in such forward-looking statements for the reasons detailed in our Annual Report on Form 10-KSB for the year ended December 31, 2001 under the headings "Description of Business" and "Risk Factors." The fact that some of the risk factors may be the same or similar to past reports filed with the Securities and Exchange Commission means only that the risks are present in multiple periods. We believe that many of the risks detailed here and in our SEC filings are part of doing business in the industry in which we operate and compete and will likely be present in all periods reported. The fact that certain risks are endemic to the industry does not lessen their significance. The forward-looking statements contained in this report are made as of the date of this Report and we assume no obligation to update them or to update the reasons why actual results could differ from those projected in such forward-looking statements. Among others, risks and uncertainties that may affect our the business, financial condition, performance, development, and results of operations include: o Rigorous government scrutiny and regulation of our products and planned products; o Potential effects of adverse publicity regarding ozone and related technologies or industries; o Failure to sustain or manage growth including the failure to continue to develop new products; and o The ability to obtain needed financing. Part II--Other Information Item 1. Legal Proceedings During the quarter ended June 30, 2002, the following developments occurred in litigation involving the company. Killian vs. Medizone International, Inc., Civil No. C014525, in the United States District Court, Northern District of California. This action was brought against the company by five individuals who alleged that they were patients of Dr. William Hitt in Mexico and that they were defrauded and injured by Hitt as a result of treatments received there. Four of the plaintiffs are unknown to the company. Other defendants named in the complaint are Dr. Hitt, Jane Hitt, The Hitt Clinic, and Jill Marshall. The company and Mrs. Marshall deny all of the allegations and also deny any liability for any injury or harm these persons may have suffered. Dr. Hitt, through his counsel, has also denied any liability. Counsel in California filed an answer on behalf of the company and Mrs. Marshall on February 22, 2002. On March 26, 2002, plaintiff's counsel and counsel for the company met and conferred to discuss alternative dispute resolution alternatives, discovery and initial disclosure. A Case Management Conference was held on April 22, 2002. The deadline for the Early Neutral Evaluation is November 15, 2002. Medizone International, Inc. vs. Nathaniel Bottomly, Ross Bottomly, Jeff Pace et al., Civil No. CO2 1659CRB (United States District Court, Northern District of California). The company filed this lawsuit against the Bottomlys and Pace on April 5, 2002. The company's complaint alleges that the defendants have violated federal laws by using materially misleading and false statements to solicit the vote of shareholders to replace the company's current management. In addition to the Bottomlys and Pace, defendants to the company's lawsuit include Advocates of Medizone, an unincorporated entity founded by these individual defendants, and John Does 1 through 25. The defendants were served in May 2002 and the defendants filed no responsive pleadings. In June 2002, the company dismissed the lawsuit without prejudice as to defendants Nathaniel Bottomly, Ross Bottomly, and Jeff Pace and a default was entered on June 27, 2002 as to defendant AFM. The company may refile the lawsuit against the individual defendants at any time if it chooses to do so. AFM filed a Motion to 10 Dismiss For Lack of Personal Jurisdiction and Failure to State a Claim, Or Alternatively, To Transfer and a Motion to Set Aside Default Certificate. The company filed an Opposition to AFM's Motion to Dismiss and Motion to Set Aside Default Certificate on August 2, 2002. The court has scheduled a hearing on these motions for August 23, 2002. Bottomly vs. Medizone International, Inc., Civil No. 020900403, (Third Judicial District Court for Salt Lake County). Nathaniel and Ross Bottomly and Jeff Pace, who claim to be shareholders of Medizone, brought this action against the company. Other defendants named in the complaint are Ed and Jill Marshall. The plaintiffs allege that the company and the Marshalls have mismanaged the company's finances. The company and the Marshalls deny any wrongdoing and will vigorously defend themselves against the claims of these plaintiffs. The company and the Marshalls filed an answer with the court on February 25, 2002. The company believes the allegations made by the plaintiffs are false and distort the company's previous disclosures in the company's SEC filings. Rakas v. Medizone International, Inc., Index No. 08798/00 (Supreme Court of New York, Westchester County). A former consultant sued the company claiming failure to pay consulting fees under a consulting agreement. The company denied that it owed the fees. In September 2001, the parties agreed to settle the matter for $25,000. The company's lack of funds prevented it from consummating the settlement and the plaintiff moved the court to enter a default judgment in the amount of $143,000 in January 2002. On May 8, 2002, the court vacated the default judgment and requested that the company post a bond of $25,000 to cover the settlement previously entered into by the parties. The company has not been in a position to post the bond as of the date of this report and there is no assurance that it will be able to do so in the near term unless additional financing is made available to the company. Item 2. Changes in Securities and Use of Proceeds During the six months ended June 30, 2002, the company sold 1,250,000 shares of common stock to accredited investors at $0.10 per share, or gross proceeds of $125,000. We also granted these investors warrants to purchase 1,250,000 shares of stock at $0.09 and $0.10 per share, exercisable over a two-year term. The purchasers of the common stock and warrants were accredited investors as that term is defined under the Securities Act of 1933 and the securities were sold in private transactions pursuant to an exemption from the registration requirements under the Securities Act, specifically the exemption under Section 4(2) of the Securities Act applicable to offers and sales made to accredited investors only and offers and sales that are not made in a public offering. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Required by Item 601 of Regulation S-B Number Description 2 Agreement and Plan of Reorganization dated March 12, 1986 (2) 3.1 Articles of Incorporation of Company (2) 3.2 Bylaws (2) 3.3 Articles of Amendment to Company's Articles of Incorporation (3) 10.1 Patent Agreement, dated February 26, 1987. (3) 10.2 Assignment of Distributor Agreement by Terrence O. McGrath to Medizone Delaware, dated February 4, 1986, and Distributor Agreement between Terrence O. McGrath and Dr. J. Hansler GmbH, dated September 25, 1985 (3) 10.3 Letter confirmation and Protocol, dated June 2, 1986, with regard to research to be conducted by the State University of New York at Syracuse (2) 10.4 Consulting Agreement between P.J. Watrous & Co., Inc. and Medizone (2) 10.5 Consulting Agreement between Jeffrey Freed, MD, PC and Medizone (2) 10.6 Consulting Agreement between Joseph Latino and Medizone (2) 11 10.7 Consulting Agreement between Susan Golden, RN and Medizone (2) 10.8 Stock Option of Joseph Latino (2) 10.9 Stock Option of Jeffrey Freed (2) 10.10 Stock Option of Susan Golden (2) 10.11 Stock Option of Hubert Weinberg (2) 10.12 Agreement dated June 16, 1987, between Company and Oliver Grace (5) 10.13 Agreement dated June 26, 1987, between Company and John Grace (5) 10.14 Agreement dated June 26, 1987, between Company and Oliver Grace (5) 10.15 Agreement dated June 30, 1987, by and among Company and John C. Black, Dr. Gerard V. Sunnen and Dr. Priyakant S. Doshi (5) 10.16 License Agreement with MCL Medizone Canada Ltd. dated November 18, 1987 (5) 10.17 Agreement dated October 1988 by and among Immunologics, Limited Partnership, John M. Kells, Y. C. Zee, David C. Bolton and Medizone International, Inc. (6) 10.18 Form of Stock Purchase Agreement between Company and individuals who purchased shares from Company (7) 10.19 Letter agreement between Company and Rebus Oil Co., Ltd. dated July 28, 1992 (8) 10.20 Letter of understanding between Company and the RMB Group of Boston dated August 10, 1992 (8) 10.21 Agreement between Company and Rebus Oil Company, Ltd., dated as of October 20, 1992 (9) 10.22 Letter agreement among Messrs. McGrath, Watrous, Melera, Chou, Kells, Handel and Pealer, dated as of November 10, 1992 (9) 10.23 Loan agreement with Messrs. McGrath and Watrous dated as of November 16, 1992 (9) 10.24 Settlement agreement with former consultant dated February 12, 1993 (9) 10.25 Consulting Agreement with Joseph S. Latino dated as of January 1, 1993 (9) 10.26 Consulting Agreement with Arthur P. Bergeron dated as of January 1, 1993 (9) 10.27 Employment Agreement with Katherine M. Kalinowski dated as of January 1, 1993 (9) 10.28 Consulting Agreement with Roger Shelley dated as of January 1, 1993 (9) 10.29 Consulting Agreement with Jeannette Arsenault dated as of January 1, 1993 (9) 10.30 Loan Agreements between Company and John Kells, George Handel and John Pealer, executed as of June 11, 1993 (and promissory notes) (9) 10.31 Promissory Note to Joseph S. Latino dated as of October 26, 1993 and Acceptance Form dated as of November 26, 1993 (9) 10.32 Letter Agreement dated March 23, 1993 between Company and the Italian Scientific Society (10) 10.33 Contract between Company and Capmed USA (10) 12 10.34 Agreement made as of May 18, 1994, among Medizone International, Inc., Medizone Canada Ltd., John M. Kells, George Handel, John Pealer, Joseph S. Latino, Terrence O. McGrath and Philip J. Watrous (11) 10.35 Agreement made as of January 1, 1995, between Medizone International, Inc. and Joseph S. Latino (11) 10.36 Agreement made as of January 1, 1995 between Medizone International, Inc. and Arthur P. Bergeron (11) 10.37 Agreement made as of January 1, 1995 between Medizone International, Inc. and Giacomo C. DiGiorgio, MD (11) 10.38 Lease Agreement between Medizone International, Inc. and Benabi Realty, made on September 27, 1991, as extended, January 17, 1995 (11) 10.39 Agreement for Sale and Purchase of Shares in Medizone New Zealand Limited between Richard G. Solomon and Medizone International, Inc., dated June 22, 1995 (12) 10.40 Shareholders' Agreement relating to Medizone New Zealand Limited between and among Solwin Investments Limited, Medizone International, Inc. and Medizone New Zealand Limited, dated June 22, 1995 (12) 10.41 Licensing Agreement between Medizone International, Inc. and MNZ, dated June 22, 1995 (12) 10.42 Managing Agent Agreement between Medizone International, Inc. and Medizone New Zealand Limited, dated June 22, 1995 (12) 10.43 Lease Agreement between Medizone International, Inc. and Linmar L.P., dated January 17, 1996 (13) 10.44 Agreement between Medizone International, Inc. and Multiossigen S.r.l., dated as of September 13, 1996 (14) 10.45 Agreement between Medizone International, Inc. and JRH Biosciences, Inc., dated April 17, 1997 (15) 10.46 Lease Agreement between Medizone International Inc. and Eagle Overlook, L.C., made on September 23, 1997 (16) 16 Funding commitment letter from Groundell Trust. (17) 99.1 Certification under Section 906 of the Sarbanes-Oxley Act. (1) Incorporated by reference to Medizone's annual report on form 10-K for the year ended December 31, 1998. (2) Incorporated by reference to Medizone's registration statement on Form S-18 (Registration No. 2-93277-D), effective May 14, 1985. (3) Incorporated by reference to Medizone's annual report on Form 10-K for the period ended December 31, 1986. (4) Incorporated by reference to Medizone's current report on Form 8-K, filed March 13, 1987. (5) Incorporated by reference to Medizone's annual report on Form 10-K for the period ended December 31, 1987. (6) Incorporated by reference to Medizone's annual report on Form 10-K for the period ended December 31, 1988. (7) Incorporated by reference to Medizone's annual report on Form 10-K for the period ended December 31, 1989. 13 (8) Incorporated by reference to Medizone's annual report on Form 10-K for the period ended December 31, 1990. (9) Incorporated by reference to Medizone's annual report on Form 10-K for the period ended December 31, 1992. (10) Incorporated by reference to Medizone's current annual report on Form 8-K dated September 8, 1993. (11) Incorporated by reference to Medizone's annual report on Form 10-K for the period ended December 31, 1994. (12) Incorporated by reference to Medizone's current annual report on Form 8-K, dated June 22, 1995. (13) Incorporated by reference to Medizone's annual report on Form 10-K for the period ended December 31, 1995. (14) Incorporated by reference to Medizone's current report on Form 8-K, dated October 17, 1996. (15) Incorporated by reference to Medizone's current report on Form 8-K, dated May 5, 1997. (16) Incorporated by reference to Medizone's current report on Form 8-K dated September 24, 1997. (17) Incorporated by reference to Medizone's annual report on Form 10-KSB for the year ended December 31, 2001. (b) Reports on Form 8-K None. 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. MEDIZONE INTERNATIONAL, INC. (Registrant) /s/ Edwin G. Marshall --------------------------- Edwin G. Marshall, Chairman and Chief Executive Officer (Principal Executive Officer) /s/ Steve M. Hanni ----------------------------------- Steve M. Hanni, Chief Financial Officer (Principal Accounting Officer) August 13, 2002 15 EXHIBIT 99.1 CERTIFICATION OF PERIODIC FINANCIAL REPORTS The undersigned hereby certify that to the best of their knowledge the Quarterly Report on Form 10-QSB of Medizone International, Inc. for the quarterly period ended June 30, 2002, as filed August 13, 2002 with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) of The Securities Exchange Act of 1934 (15 U.S.C. 78m) and that to the best of their knowledge the information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of Medizone International, Inc. Date: August 13, 2002 /s/ Edwin G. Marshall -------------------------------------------------- Edwin G. Marshall Chairman and Chief Executive Officer (Principal Executive Officer) Date: August 13, 2002 /s/ Steve M. Hanni -------------------------------------------------- Steve M. Hanni Chief Financial Officer (Principal Financial and Accounting Officer) 16