-----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, Pn5ayKseO/3NkFfa0Wn/N+ReG4zgKktsM7ovOSWmCA3lLmXeuXN3Fb0c8a6PBNLe J8Ewsh4mwShh7bKQUKyLYw== 0000807732-00-000002.txt : 20000202 0000807732-00-000002.hdr.sgml : 20000202 ACCESSION NUMBER: 0000807732-00-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVANCED MEDICAL PRODUCTS INC CENTRAL INDEX KEY: 0000807732 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 161284228 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-16341 FILM NUMBER: 505903 BUSINESS ADDRESS: STREET 1: 6 WOODCROSS DR CITY: COLUMBIA STATE: SC ZIP: 29212 BUSINESS PHONE: 8034073044 MAIL ADDRESS: STREET 1: 6 WOODCROSS DR CITY: COLUMBIA STATE: SC ZIP: 29212 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (mark one) __X___Quarterly report under Section 13 or 15 of the Securities Exchange Act of 1934. For the quarterly period ended December 30, 1999. ______Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from ______ to ______ Commission file number 0-16341 Advanced Medical Products, Inc. (Exact name of small business issuer as specified in its charter) 6 Woodcross Drive, Columbia, South Carolina 29212 (Address of principal executive offices) (Zip code) (803) 407-3044 (Issuer's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) 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 ______ APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 5,962,495 at January 10, 2000. . PART 1 - FINANCIAL INFORMATION Item 1 - Financial Statements Advanced Medical Products Inc. Balance Sheet Dec. 31, 1999 June 30, 1999 (unaudited) CURRENT ASSETS: Cash $ 1,155 $ 64,073 Total Current Assets 1,155 64,073 Total Assets 1,155 64,073 LIABILITIES AND STOCKHOLDERS' EQUITY: Current Liabilities: -0- -0- Total Current Liabilities -0- -0- Liabilities Subject to Compromise 24,030 86,948 Total Liabilities 24,030 86,948 Stockholders' Equity: Common Stock, $0.01 par value; authorized 7,000,000 shares, 5,962,495 shares issued and outstanding at September 30, 1999 and at June 30, 1999. 59,625 59,625 Additional Paid-In Capital 4,813,468 4,813,468 Accumulated Deficit (4,895,968) (4,895,968) Total Stockholders' Equity (Deficit) (22,875) (22,875) Total Liabilities and Stockholders Equity $ 1,155 $ 64,023 The accompanying notes are an integral part of these financial statements. Advanced Medical Products Inc. Statement of Operations and Accumulated Deficit Three Months Ended Dec. 31, 1999 Dec. 31, 1998 (unaudited) (unaudited) Net Sales $ -0- $ 694,448 Cost of Sales -0- 423,171 Gross Profit -0- 271,277 Selling, General and Administrative -0- 410,123 Allowance for Doubtful Accounts -0- 160,686 Research and Development -0- 43,892 Interest Expenses -0- 29,749 Income Before Income Taxes -0- (373,173) Provision For Income Taxes -0- -0- Net Income -0- (373,173) Accumulated Deficit - Beginning of Period $(4,895,968) (5,293,812) Accumulated Deficit - End of Period $(4,895,968) $(5,666,985) Net Income (Loss) Applicable to Common Shares $ -0- $( 373,173) Earnings Per Share Data: (Note 8) Net Income (Loss) $ -0- $( 0.06) Weighted Average Number of Common Shares Outstanding 5,962,495 5,962,495 The accompanying notes are an integral part of these financial statements. Advanced Medical Products Inc. Statement of Operations and Accumulated Deficit Six Months Ended Dec. 31, 1999 Dec. 31, 1998 (unaudited) (unaudited) Net Sales $ -0- $ 1,369,730 Cost of Sales -0- 782,541 Gross Profit -0- 587,189 Selling, General and Administrative -0- 734,494 Allowance for Doubtful Accounts -0- 166,636 Research and Development -0- 84,181 Interest Expenses -0- 50,613 Income Before Income Taxes -0- (448,735) Provision For Income Taxes -0- -0- Net Income -0- (448,735) Accumulated Deficit - Beginning of Period $ (4,895,968) $ (5,218,251) Accumulated Deficit - End of Period $ (4,895,968) $ (5,666,986) Net Income (Loss) Applicable to Common Shares $ -0- $ (448,735) Earnings Per Share Data: Net Income (Loss) (Note 8) $ -0- $ (0.08) Weighted Average Number of Common Shares Outstanding 5,962,495 5,962,495 The accompanying notes are an integral part of these financial statements. Advanced Medical Products Inc. Statement of Cash Flows Six Months Ended Dec. 31, 1999 Dec. 31, 1998 (unaudited) (unaudited) Cash flows from operating activities: Net income (loss) $ -0- $ ( 448,735) Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization -0- 76,313 Allowance for doubtful accounts -0- 166,686 Change in assets and liabilities: Accounts receivable -0- (280,968) Inventory -0- ( 373) Other assets -0- 20,371 Accounts payable (62,918) 169,342 Other current liabilities -0- 54,938 Total adjustments (62,918) 206,309 Net cash provided (used) by operating activities 62,918 (242,426) Cash flows used by investing activities: Capital expenditures -0- -0- Proceeds from sale of equipment -0- -0- Capitalization of software costs -0- ( 9,044) Net cash used by investing activities -0- ( 9,044) Cash flows provided (used) by financing activities: Net proceeds from sale of common stock -0- -0- Net proceeds (payments) on short term debt -0- 258,140 Payments on long-term debt -0- ( 19,940) Net cash provided (used) by financing activities -0- 238,200 Net increase (decrease) in cash (62,918) ( 13,270) Cash, beginning of period 64,073 82,087 Cash, end of period $ 1,155 $ 68,817 Supplemental disclosures of cash flow information: Cash paid during the period for interest: $ -0- $ 36,040 Supplemental schedule of non-cash investing and financing activities: (Note 7) Sale of inventory -0- $ 125,132 Elimination of accrued dividends -0- $ (162,981) Additional paid in capital -0- $ 2,327,259 Reduction of Preferred Stock -0- $(2,289,710) The accompanying notes are an integral part of these financial statements. Advanced Medical Products Inc. Notes to Financial Statements 1. Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principals for interim financial information and with the instructions to Form 10-QSB and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principals for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. 2. Per Share Earnings Earnings per common share were computed by dividing net income by the weighted average number of common shares outstanding during the period. Earnings per share did not include the impact of outstanding options since it was not significant. 3. Bankruptcy On March 23, 1999, after reporting that, for the quarter ended December 31, 1998 the Company had net losses of $373,173 of which $130,000 was as a result of the distributor in Europe, Kontron Instruments Ltd. filing for Administrative Receivership, Advanced Medical Products, Inc. filed a motion with the Federal Bankruptcy Court, District of South Carolina, for an order authorizing the sale of all assets, including equipment, inventory, and accounts receivable, outside the ordinary course of business, free and clear of all liens and encumbrances, pursuant to 11 U.S.C. Section 363 of the bankruptcy code. Advanced Medical Products, Inc. continued to operate as debtor in possession, pending sale of the assets. Emergent Asset Based Lending, L.L.C., Advanced Medical's principle secured lender whose loan agreement had been in default since December 1998, agreed to continue to lend against receivables and inventory only if Biosensor Corporation would guarantee the debt. As of March 22, 1999, $ 253,446 was borrowed by Advanced Medical under this agreement. As of September 30, 1999 Advanced Medial had no obligation to Emergent under this agreement, as the loan was assumed by Biosensor on May 11, 1999. On May 3, 1999, the United State Bankruptcy Court for the District of South Carolina entered an order approving the Disclosure Statement filed on March 23, 1999, fixing June 11, 1999 as the last day for filing ballots accepting or rejecting the Plan of Reorganization, and setting June 21, 1999 as the date of the hearing on the confirmation of the Plan. On May 11, 1999, pursuant to a court order entered on May 10, 1999 in the Federal Bankruptcy Court for the District of South Carolina, Advanced Medical Products, Inc. sold all assets, including equipment, inventory, and accounts receivable, outside the ordinary course of business, free and clear of all liens and encumbrances and other interests, pursuant to 11 U.S.C. Section 363 of the bankruptcy code. Biosensor Corporation, the Company's majority shareholder, purchased the assets and assumed all of the secured debt, employee and commission liabilities, and all customer warranty and service liabilities of Advanced Medical Products, Inc. In addition, Biosensor made a payment of $68,000 for certain priority claims and administrative expenses, and for distribution to outside unsecured creditors. Biosensor and its subsidiaries agreed not to participate in distribution of payments toward unsecured claims, although their claims exceeded unsecured claims by all non-affiliated creditors combined. The assets and liabilities of Advanced Medical purchased by Biosensor were consolidated with the operating assets and liabilities of Biosensor, and the assets and liabilities of Diagnostic Monitoring, purchased by Biosensor from Cardiac Science Inc. on December 31, 1998, into Advanced Biosensor, Inc., a new wholly owned subsidiary of Biosensor, which also agreed to assume Advanced Medical's lease obligations and to continue to operate the business at the present Columbia, SC location. At a hearing held on June 21, 1999 the Plan of Reorganization, as amended, was confirmed. The Plan had previously been approved by all classes of creditors. On June 29, 1999 the United State Bankruptcy Court for the District of South Carolina entered an order confirming the Plan of Reorganization. The Chapter 11 bankruptcy estate of Advanced Medical Products, Inc. has been fully administered. The Company filed the Final Report in Chapter 11 Proceeding with the Court on October 5, 1999, and the Final Decree closing the bankruptcy case was issued by the Court on November 9, 1999. 4. Related Party Transactions Biosensor Corporation, the Company's majority shareholder, purchased all of the Company's assets, free and clear of all liens and encumbrances, and assumed all of the secured debt, employee and commission liabilities, and all customer warranty and service liabilities of Advanced Medical Products, Inc. In addition, Biosensor made a payment of $68,000 for certain priority claims and administrative expenses, and for distribution to outside unsecured creditors. Biosensor and its subsidiaries agreed not to participate in distribution of payments toward unsecured claims, although their claims exceeded unsecured claims by all non-affiliated creditors combined. The assets and liabilities of the Company, effective May 12, 1999, were consolidated with the operating assets and liabilities of Biosensor, and the assets and liabilities of Diagnostic Monitoring purchased by Biosensor from Cardiac Science Inc. on December 31, 1998, into Advanced Biosensor, Inc., a new wholly owned subsidiary of Biosensor, which also agreed to assume Advanced Medical's lease obligations and to continue to operate the business at the present Columbia, SC location. 5. Capital Stock Transactions On January 12, 1996 Carolina Medical, Inc., a privately held medical device manufacturing company located in King, North Carolina, purchased 750,000 shares of Advanced Medical Products, Inc.'s authorized but un-issued common stock for $150,000. Biotel International, Inc., a holding company (which was subsequently acquired by Carolina Medical) purchased an additional 1,400,000 shares of Advanced Medical's common stock on March 29, 1996 for $280,000. On October 20, 1997 the Company entered into a Stock Purchase Agreement with Carolina Medical, Inc., selling an additional 850,000 shares of common stock of Advanced Medical Products, Inc. to Carolina Medical, Inc. for $263,500. Of this amount, $183,500 was paid to the Company in November and the balance was structured as a note, which was paid by April 30, 1998. This stock purchase increased Carolina Medical's ownership in the Company to 3,000,000 shares or 50.3 percent of the 5,962,495 issued and outstanding common stock shares. Registrant has 4,000 shares of authorized Class A Preferred Stock, no par value, of which no shares are currently issued and outstanding. A total of 2,377 Class A Preferred Stock shares had been issued by the Company between 1992 and 1996. The terms of the Class A Preferred Stock entitled the holder thereof to cash dividends at the rate of $50.00 per annum per share. Dividends on such shares are cumulative. Such dividends are payable annually in arrears. Since December 31, 1997 the Company had been in violation of its preferred stock agreements with Nishimoto-Sangyo Company, Ltd. and SCANA Corporation, the Company's two preferred stockholders. These two preferred stock agreements required that an annual dividend of $50 per $1,000 of the face value of the preferred stock be declared and paid at the end of each calendar year. However, the Company had deficits in both retained earnings and stockholders equity at December 31, 1997 and therefore under Delaware law could not legally declare a dividend. Nishimoto-Sangyo was unwilling to convert unpaid dividends into additional common or preferred shares of Advanced Medical, as they had done in prior years, but in May 1998 Nishimoto sold their common and preferred stock in the Company in exchange for shares of Carolina Medical, Inc. This transaction brought Carolina Medical's ownership in the Company to 55.3% of the common stock and 93.3% of the preferred stock of the Company issued and outstanding. In June 1998 Carolina Medical purchased from SCANA the remaining 160 shares of preferred stock in the Company. As of June 30, 1998, dividends on the preferred stock of $162,981 were owed to Carolina Medical by the Company. In July 1998, the Company's board approved a plan to sell the Company's MICROS QV product line to Carolina Medical in exchange for all of the 2,377 shares of Preferred Stock in the Company (having a face value, at original cost, of $2,377,000), and the unpaid dividends of $162,981. In October 1998 the exchange of the product line for all of the shares of the Company's Preferred Stock issued and outstanding was completed and the shares were retired. Carolina Medical Inc., a North Carolina corporation, was merged with and into CMI of Minnesota, ("CMI"), a Minnesota corporation. CMI also owned Braemar, Inc., a North Carolina corporation operating in Minneapolis, MN that develops, manufactures and markets tape recording devices for ambulatory ECG monitoring devices, digital Holter monitors and event recorders. On July 23, 1998, Biosensor Corporation, a Minneapolis corporation, acquired all of the outstanding shares of CMI of Minnesota, pursuant to a Plan of Reorganization and Agreement by and between CMI and Biosensor. On May 23, 1999 stockholders of Biosensor Corporation voted to change the name of Biosensor Corporation to BIOTEL Inc., the company that now owns 55.3% of the common stock of the Company. The Company has been advised that since October 1999, BIOTEL, Inc. has had discussions with several parties regarding the possibility of BIOTEL selling its 3,300,000 common stock shares of the Company, or voting its majority shares in the Company in favor of a reverse merger. Management of the Company has entered into discussions with several potential merger partners. No agreement has been reached with any party at the time of this filing, however BIOTEL intends to continue to pursue the possibility of selling all or part of its holdings in the Company to a third party, or approving a reverse merger, and the Company intends to continue discussions with interested potential merger partners. Potential buyers of the majority position in the Company's stock have also indicated that their interest is in merging a privately held company into the Company in a "reverse merger. The Board of Directors of Advanced Medical Products Inc. has approved and recommended certain changes in the Company's Certificate of Incorporation to better position the Company to seek a reverse merger with a privately held company in an attempt to recover some value for the Advanced Medical Products, Inc. stockholders. An information Statement filed on December 27, 1999 with the Securities and Exchange Commission in connection with corporate actions authorized by written consent, without a meeting, by holders of a majority of the outstanding Common Stock of the Company entitled to vote thereon, included: 1.) a Name Change to ADVA International Inc., 2.) a 1 share for 10 shares Reverse Stock Split, 3.) Authorization of Additional Common, and 4.) a New Class B Preferred Stock. Notice of the Information Statement was mailed to shareholders on or about January 7, 2000. There can be no assurances, however, that the foregoing effects will occur or that the market price of the Common Stock immediately after implementation of the proposed Reverse Stock Split will be maintained for any period of time, or that such market price will approximate ten times the market price before the proposed Reverse Stock Split, or that a suitable reverse merger partner can be timely located, or that a suitable reverse merger transaction can be successfully negotiated or completed. All of the current Directors of the Company have agreed to resign if their resignation is requested in order to facilitate a possible reverse merger that could create value for the Company's stockholders. ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS Forward Looking Statements This and other sections of this report contain "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which represent the Company's expectations concerning future events, including whether changes in the Company's Certificate of Incorporation will occur, or that the market price of the Common Stock immediately after implementation of the proposed Reverse Stock Split will be maintained for any period of time, or that such market price will approximate ten times the market price before the proposed Reverse Stock Split, or that a suitable reverse merger partner can be timely located, or that a suitable reverse merger transaction can be successfully negotiated or completed. By their very nature, forward- looking statements are subject to known and unknown risks and uncertainties relating to the Company's and other parties' future performance that may cause actual results to differ materially from those expressed or implied in such forward- looking statements. The Company does not undertake and assumes no obligation to update any forward-looking statement that may be made herein or from time to time by or on behalf of the Company. The following discussion should be read in conjunction with the accompanying Financial Statements, including the notes thereto, appearing elsewhere herein. Results of Operations The Company has ceased operations and had no operations and no sales for the three months or six months ended December 31, 1999. There were no selling, general and administrative expenses and no research and development costs, and there was no profit or loss. The Company's gross profit margin for the three months ended December 31, 1998 was 39 % of net sales. Selling, general and administrative expenses, not including bad debt writeoffs, for the three months ended December 31, 1998 were 59.3% of net sales. Research and development costs for the quarter ended December 31, 1998 were 6.3% of sales. Net loss applicable to common shares for the quarter ended December 31, 1998 was $0.06. During the first three months ended December 31, 1999, cash decreased by $62,918 and liabilities decreased by $62,918 as administrative expenses and priority claims were paid by the debtor in possession. Liquidity and Capital Resources The Company ceased operations on May 11, 1999. The cash available on December 31, 1999 of $1,155 was insufficient to meet remaining priority claims totaling approximately $ 24,030. No capital resources are presently available to the Company, and there is no liquidity. PART II - OTHER INFORMATION ITEM 6: Exhibits and Reports on Form 8-K (a) Exhibits - None (b) Reports on Form 8-K - A report was filed on Form 8-K on October 18, 1999 regarding the US 11 363 sale of the Company's assets through the U.S. Bankruptcy Court, District of South Carolina. SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. Advanced Medical Products, Inc. (Registrant) By: GEORGE L. DOWN George L. Down, President Dated: January 10, 2000 EX-27 2
5 6-MOS JUN-30-1999 DEC-31-1999 1,155 0 0 0 0 1,155 0 0 1,155 0 0 0 0 59,625 0 1,155 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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