-----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, VQjGj6JKJuEfViamPw6INuvsNAVn+bUEGrLFVYCOwiI/SXkvde/woeah2XYIWDsc T+LhooZTXkBfyHxebipkKg== 0000912057-96-025884.txt : 19961115 0000912057-96-025884.hdr.sgml : 19961115 ACCESSION NUMBER: 0000912057-96-025884 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUMED SURGICAL INC CENTRAL INDEX KEY: 0000921878 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HEALTH SERVICES [8000] IRS NUMBER: 341755390 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-24362 FILM NUMBER: 96660525 BUSINESS ADDRESS: STREET 1: 6505 ROCKSIDE RD STREET 2: STE 425 CITY: INDEPENDENCE STATE: OH ZIP: 44131 BUSINESS PHONE: 2165736522 MAIL ADDRESS: STREET 1: 6505 ROCKSIDE RD STREET 2: STE 425 CITY: INDEPENDENCE STATE: OH ZIP: 44131 10QSB 1 10QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-24362 NuMED SURGICAL, INC. (Exact name of small business issuer in its charter) STATE OF NEVADA 34-1755390 --------------- ----------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6505 ROCKSIDE ROAD SUITE 425, INDEPENDENCE, OH 44131 -------------------------------------------------------- (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code: (216) 573-6522 Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ---- ---- The number of shares outstanding of the Issuer's common stock at $.001 par value as of October 8, 1996, was 8,775,685. Form 10-QSB 1 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS NuMED SURGICAL, INC. BALANCE SHEETS
(UNAUDITED) ASSETS SEPTEMBER 30 MARCH 31 CURRENT ASSETS 1996 1996 -------------- ---------------- -------------- Cash and Cash Equivalents $8,904 $7,229 Accounts Receivable - Trade 34,018 43,687 Prepaid Expenses 19,127 300 Inventories 62,977 77,221 ---------------- -------------- TOTAL CURRENT ASSETS 125,026 128,437 PROPERTY AND EQUIPMENT, NET 118 1,842 OTHER ASSETS ------------ Intangible Assets, net of accumulated amortization of $114,371 and $129,815 respectively 49,630 65,074 Prototype Equipment, Net 1,176 1,689 ---------------- -------------- TOTAL OTHER ASSETS 50,806 66,763 ---------------- -------------- TOTAL ASSETS $175,950 $197,042 ---------------- -------------- ---------------- -------------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES ------------------- Accounts Payables $55,708 $39,095 Accrued Expenses 5,070 27,344 Short Term Borrowings 64,544 41,544 ---------------- -------------- TOTAL CURRENT LIABILITIES 125,322 107,983 ---------------- -------------- STOCKHOLDERS' EQUITY -------------------- Preferred Stock, Authorized 2,000,000, None Issued 0 0 Common Stock, $.001 Par Value, Authorized 48,000,000 Shares, 8,775,685 Issued and Outstanding 8,776 8,776 Paid in Capital 473,222 473,222 Accumulated Deficit (431,370) (392,939) ---------------- -------------- TOTAL STOCKHOLDERS' EQUITY 50,628 89,059 ---------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $175,950 $197,042 ---------------- -------------- ---------------- --------------
SEE NOTES TO FINANCIAL STATEMENTS FORM 10-QSB 2 NuMED SURGICAL, INC. STATEMENTS OF OPERATIONS
(UNAUDITED) THREE MONTHS ENDED SEPTEMBER 30 1996 1995 ---------------- -------------- Sales $106,024 $66,239 Cost of Sales 67,607 35,771 ---------------- -------------- GROSS PROFIT 38,417 30,468 GENERAL AND ADMINISTRATIVE EXPENSES - ----------------------------------- Salary and Benefits 30,701 56,128 Professional Fees 3,839 20,551 Travel and Entertainment 2,638 3,449 Occupancy 3,111 6,242 Advertising and Marketing 7,473 5,280 Shareholder Relations 609 947 Director's Fees 0 2,000 Office Expense 4,804 (1,024) Amortization and Depreciation 8,784 9,079 ---------------- -------------- TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 61,959 102,652 ---------------- -------------- OPERATING LOSS (23,542) (72,184) OTHER INCOME (EXPENSES) - ----------------------- Interest Income 1 0 Interest Expense (2,131) 106 ---------------- -------------- TOTAL OTHER INCOME (EXPENSES) (2,130) 106 ---------------- -------------- NET LOSS ($25,672) ($72,078) ---------------- -------------- ---------------- -------------- PER SHARE: Net Loss ($0.00) ($0.01) ---------------- -------------- ---------------- -------------- Shares Used in Computing Per Share Information 8,775,685 8,775,685
SEE NOTES TO FINANCIAL STATEMENTS FORM 10-QSB 3 NuMED SURGICAL, INC. STATEMENTS OF OPERATIONS
(UNAUDITED) SIX MONTHS ENDED SEPTEMBER 30 1996 1995 ---------------- -------------- Sales $231,015 $174,584 Cost of Sales 141,379 81,007 ---------------- -------------- GROSS PROFIT 89,636 93,577 GENERAL AND ADMINISTRATIVE EXPENSES - ----------------------------------- Salary and Benefits 62,736 100,830 Professional Fees 9,141 34,558 Travel and Entertainment 4,510 5,240 Occupancy 5,464 8,690 Advertising and Marketing 12,893 7,951 Shareholder Relations 1,467 1,722 Director's Fees 0 4,500 Office Expense 10,741 3,105 Amortization and Depreciation 17,569 18,159 ---------------- -------------- TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 124,521 184,755 ---------------- -------------- OPERATING LOSS (34,885) (91,178) OTHER INCOME (EXPENSES) - ----------------------- Interest Income 3 471 Interest Expense (3,549) (169) ---------------- -------------- TOTAL OTHER INCOME (EXPENSES) (3,546) 302 ---------------- -------------- NET LOSS ($38,431) ($90,876) ---------------- -------------- ---------------- -------------- PER SHARE: Net Loss ($0.00) ($0.01) ---------------- -------------- ---------------- -------------- Shares Used in Computing Per Share Information 8,775,685 8,775,685
SEE NOTES TO FINANCIAL STATEMENTS FORM 10-QSB 4 NuMED SURGICAL, INC. STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
COMMON STOCK ADDITIONAL ------------ PAID-IN ACCUMULATED SHARES DOLLARS CAPITAL DEFICIT TOTAL --------- ---------- --------------- ------------- ----------- BALANCE AT APRIL 1, 1994 5,175,685 5,176 183,674 (72,895) 115,955 Private Placement of Common Stock, Net of Commissions and Fees 3,600,000 3,600 288,048 291,648 Net Loss (124,781) (124,781) --------- ---------- --------------- ------------- ----------- BALANCE AT MARCH 31, 1995 8,775,685 8,776 471,722 (197,676) 282,822 --------- ---------- --------------- ------------- ----------- Write-off of Agent Fees 1,500 1,500 Net Loss (195,263) (195,263) --------- ---------- --------------- ------------- ----------- BALANCE AT MARCH 31, 1996 8,775,685 8,776 473,222 (392,939) 89,059 --------- ---------- --------------- ------------- ----------- --------- ---------- --------------- ------------- ----------- Net Loss (38,431) (38,431) --------- ---------- --------------- ------------- ----------- BALANCE AT SEPTEMBER 30, 1996 8,775,685 $8,776 $473,222 ($431,370) $50,628 --------- ---------- --------------- ------------- ----------- --------- ---------- --------------- ------------- -----------
SEE NOTES TO FINANCIAL STATEMENTS FORM 10-QSB 5 NuMED SURGICAL, INC. STATEMENTS OF CASH FLOWS
(UNAUDITED) SIX MONTHS ENDED SEPTEMBER 30 1996 1995 ---------------- ---------------- CASH FLOWS FROM OPERATING ACTIVITIES Net Loss ($38,432) ($90,876) Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activies: Depreciation and Amortization 17,569 18,159 (Decrease) Increase in Cash Due to Net Changes in Operating Assets and Liabilities: Accounts Receivable 9,669 (1,707) Inventories 14,244 (19,889) Prepaid Expenses and Other Assets (18,827) (5,489) Accounts Payable 16,613 7,623 Accrued Expenses (22,274) (1,805) ---------------- -------------- NET CASH USED IN OPERATING ACTIVITIES (21,438) (93,984) ---------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Property and Equipment 113 (1,153) ---------------- -------------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 113 (1,153) ---------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Short-Term Borrowings 23,000 0 Payments on Short-Term Borrowings 0 (12,000) ---------------- -------------- NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES 23,000 (12,000) ---------------- -------------- Increase (Decrease) in Cash and Cash Equivalents 1,675 (107,137) Cash and Cash Equivalents at Beginning of Period 7,229 123,289 ---------------- -------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $8,904 $16,152 ---------------- -------------- ---------------- --------------
SEE NOTES TO FINANCIAL STATEMENTS FORM 10-QSB 6 NuMED SURGICAL, INC. NOTES TO FINANCIAL STATEMENTS - (UNAUDITED) SEPTEMBER 30, 1996 NOTE A - BASIS OF PREPARATION GENERAL The accompanying interim financial statements are unaudited, but reflect all adjustments which are, in the opinion of the Company's management necessary to present fairly the financial position as of September 30, 1996, and the results of operations and cash flows for the six months ended September 30, 1995 and 1996. The results for the six months ended September 30, 1996, are not necessarily indicative of results to be expected for the full year. References should be made to the Company's Form 10-KSB for the year ended March 31, 1996, for additional disclosures. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. INTRODUCTION The following is an analysis of the operations of NuMED Surgical for the three and six months ended September 30, 1996 and 1995 and should be read in conjunction with the Company's financial statements that appear elsewhere in this report. RESULTS OF OPERATIONS: Net revenues for the three and six months ended September 30, 1996 were $106,024 and $231,015 as compared to $66,239 and $174,584 for the same periods one year ago. This represents an increase of $39,785 and $56,431 or 38% and 24% over the same periods one year ago. This increase was due mainly to the introduction of two new products; Liftmate and Infinity Stirrups. The Company expects this growth to continue despite the fact that pressure remains on controling hospital and healthcare budgets. The gross profit for the three and six months ended September 30, 1996, were $38,417 and $89,636 or 36% and 39% of revenues as compared to $30,468 and $93,577 or 46% and 54% the same periods one year ago. The decreases for the three and six month periods in gross profit as a percentage of revenues was due to a shift in product mix, penetration pricing strategy on the Infinity Stirrup, additional discounting to obtain sales, and a price increase from a major supplier. The price increase scheduled for fiscal first quarter 1997 was delayed due to market conditions. The price increase has been further delayed. Total general and administrative expenses as a percentage of revenues for the three and six months ended September 30, 1996 decreased to 58% and 54% as compared to 155% and 106% for the same periods one year ago. This is a decrease of $40,693 and $60,234 or 66% and 48% for the same periods one year ago. Expenditures for salaries and benefits for the three and six months ended September 30, 1996 were $30,701 and $62,736 as compared to $56,128 and $100,830 for the same periods one year ago. This represents a decrease of $25,427 and $38,094 or 83% and 61% as Form 10-QSB 7 compared to the same periods one year ago. This decrease was primarily due to the change in the Company's corporate management structure. Professional fees for the three and six months ended September 30, 1996 were $3,839 and $9,141 as compared to $20,551 and $34,558 for the same periods one year ago. This decrease is due to the cancellation of the management services contract for management, corporate funding, finance, accounting services and marketing. The operating loss decreased approximately 161% or $56,293 from ($91,178) to ($34,885). This decrease was primarily due to the change in the Company's corporate management structure and the cancelation of the management services contract and overall tighter controls on spending. As a result of the foregoing, the Company had a net loss of $38,430 for the six months ended September 30, 1996, as compared to a net loss of $90,876 for the six months ended September 30, 1995. The Company is working on its plan to increase sales on its two newly introduced products by developing strategic alliances with key players in the market, obtaining national contracts, and by being added to state bid lists. The Company will continue to develop plans to distribute the products through direct sales, through original equipment manufacturers, through dealers and catalog sales. Major manufacturer representative organizations have been contracted for national distribution coverage. A major amount of resources will be devoted to these products due to the immediate potential and a very positive customer response. FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES: The Company's cash and cash equivalents increased to $8,904 at September 30, 1996 from $7,229 at March 31, 1996, which is a net increase of $1,675 resulting mostly from short term borrowings. The Company financed operations using net proceeds raised in a private offering of common stock in mid 1994 and the line of credit. At September 30, 1996, the Company had $64,544 outstanding on its line of credit. The Company continues to experience negative cash flow from operating losses and the relatively long collection cycle for its receivables, resulting from sales subject to customer evaluation and acceptance. It is anticipated that the Company will begin to experience postive cash flows. If the Company is unable to fund its new product line, it may have to sell or lease certain tangible and intangible assets. Additionally, NuMED Surgical will have to cease product development and acquisition programs and devote funding to current operations until cash reserves are sufficient to continue product development and acquisition programs. If NuMED Surgical is not able to introduce the newly acquired products as planned or delays occur in production, it may be necessary to obtain additional bank financing, seek a joint venture, and/or issue additional stock in order to finance the commercialization of the two product lines. Over the long term it is anticipated that NuMED Surgical will fund operations through profits, if any, derived from acquired businesses, sales of internally developed products and sales from currently distributed products. There can be no assurance that the Company will achieve profitability, and additional funding through the sale of debt or equity securities may be necessary. While the Company believes that a ready market exists for its products, there are other companies that sell similar products, some of which are more adequately funded. Form 10-QSB 8 PART II: OTHER INFORMATION ITEM 1-5. NOT APPLICABLE ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits: None. b. Reports on Form 8-K: None. Form 10-QSB 9 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. DATE: OCTOBER 8, 1996 /s/ Michael J. Diroff ---------------------------------- Michael J. Diroff President, Chief Accounting Officer and Director Form 10-QSB 10 EX-27 2 EXHIBIT 27
5 6-MOS MAR-31-1996 JUL-01-1996 SEP-30-1996 8,904 0 34,018 0 62,977 125,026 118 0 175,950 125,322 0 0 0 8,776 50,628 175,950 231,015 231,015 141,379 141,379 124,521 0 3549 0 0 (38,431) 0 0 0 (38,431) 0.00 0.00
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