-----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, H0sLShKMVBLWNLw3YlnaFgWOv1aMmaB5A4+hHDiuxapjpyx8Uzs8wBNo+EcfC0SS 9FvIMBS4FFqproSh+hlGxg== 0000932440-02-000332.txt : 20020712 0000932440-02-000332.hdr.sgml : 20020711 20020711161148 ACCESSION NUMBER: 0000932440-02-000332 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020711 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDJET INC CENTRAL INDEX KEY: 0000932265 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 223283541 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11765 FILM NUMBER: 02701166 BUSINESS ADDRESS: STREET 1: 1090 KING GEORGE POST RD STREET 2: STE 301 CITY: EDISON STATE: NJ ZIP: 08837 BUSINESS PHONE: 7327383990 MAIL ADDRESS: STREET 1: 1090 KING GEORGES POST ROAD STREET 2: SUITE 301 CITY: EDISON STATE: NJ ZIP: 08837 10QSB/A 1 medjet10qsbajuly02.txt FORM 10-QSB/A ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB/A (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2002 OR |_| 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: 1-11765 MEDJET INC. (Name of Small Business Issuer as Specified in its Charter) DELAWARE 22-3283541 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 1090 KING GEORGES POST ROAD, SUITE 301 EDISON, NEW JERSEY 08837 (Address of Principal Executive Offices) (732) 738-3990 (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 |_| As of April 30, 2002, 3,901,431 shares of Common Stock, par value $.001 per share, were outstanding. Transitional Small Business Disclosure Format: Yes |_| No |X| ================================================================================ Part l - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS MEDJET INC. (A Development Stage Company) Condensed Interim Balance Sheet March 31, 2002 (Unaudited) ASSETS
(RESTATED) ---------- Current Assets: Cash and cash equivalents $ 386,719 Prepaid expenses 40,603 -------------- Total Current Assets 427,322 -------------- Property and Equipment - less accumulated depreciation of $364,037 73,784 Patents and Trademarks - less accumulated amortization of $53,107 258,866 Security deposits 8,661 -------------- Total Assets $ 768,633 ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued liabilities $ 182,112 Notes payable - Officer 160,000 Capital Lease Obligation 5,133 Deferred Revenue 138,044 Deferred income-merger option 187,500 -------------- Total Liabilities 672,789 -------------- Stockholders' Equity: Common stock, $.001 par value, 30,000,000 shares authorized, 3,935,220 shares issued and 3,901,431 shares outstanding 3,935 Preferred stock, $.01 par value, 1,000,000 shares authorized, 10,400 shares designated as Series B Convertible Preferred issued and outstanding 104 Additional paid-in capital 7,981,932 Deferred Charge (231,000) Accumulated deficit (including deficit accumulated during development stage of $9,162,107 of which $1,556,204 was applied to additional Paid-in capital upon conversion from an "S" to a "C" corporation) (7,657,427) Less: Treasury stock, 33,789 shares, at cost (1,700) -------------- Total Stockholders' Equity 95,844 -------------- Total Liabilities and Stockholders' Equity $ 768,633 ==============
See notes to the condensed interim financial statements. MEDJET INC. (A Development Stage Company) Condensed Interim Statements of Operations For The Three Months Ended March 31, 2002 and 2001 And The Period From December 16, 1993 (Date of Inception) to March 31, 2002 (Unaudited)
Three Months Ended Period from March 31, December 16, ---------------------------- 1993 (Inception) to 2002 2001 March 31, 2002 -------------- ---------- -------------------- (RESTATED) (RESTATED) ---------- ---------- Revenues: Revenues $ 654,956 $ - $ 2,887,456 Total revenues $ 654,956 $ - $ 2,887,456 -------------- ---------- -------------------- Expenses: Research, development, general and administrative 806,636 295,938 13,384,533 -------------- ---------- -------------------- Total expenses 806,636 295,938 13,384,533 -------------- ---------- -------------------- Loss from Operations (151,680) (295,938) (10,497,077) Other Income (Expense): Other Income - - 5,285 Merger Option 125,000 - 312,500 Interest Income 1,372 1,435 347,734 Interest Expense (2,320) (3,827) (92,120) -------------- ---------- -------------------- 124,042 (2,392) 573,399 -------------- ---------- -------------------- Loss Before Income Tax (27,628) (298,330) (9,923,678) Income tax - - (761,571) -------------- ---------- -------------------- Net Loss (27,628) (298,330) (9,162,107) Dividends on Preferred Stock - - 184,923 -------------- ---------- -------------------- Net Loss Attributable to Common Shareholders $ (27,628) $ (298,330) $ (9,347,030) ============== ========== ==================== Loss Per Share $ (0.01) $ (0.08) $ (2.91) ============== ========== ==================== Weighted average common shares outstanding 3,901,431 3,901,431 3,217,256
See notes to the condensed interim financial statements. 2 MEDJET INC. (A Development Stage Company) Condensed Interim Statements of Cash Flows For The Three Months Ended March 31, 2002 and 2001 And The Period From December 16, 1993 (Date of Inception) to March 31, 2002 (Unaudited)
For the Three Months Ended Period from March 31, December 16, --------------------------- 1993 (Inception) to 2002 2001 March 31, 2002 -------------- ----------- --------------------- (RESTATED) (RESTATED) ---------- ---------- Cash Flows from Operating Activities $ 204,409 $ (191,709) $ (8,202,933) Cash Flows from Investing Activities (31,167) (9,866) (914,891) Cash Flows from Financing Activities - 19,500 9,504,543 -------------- ----------- --------------------- Net Increase (Decrease) in Cash and Cash Equivalents 173,242 (182,075) 386,719 Cash and Cash Equivalents - Beginning of Period 213,477 183,665 - -------------- ----------- --------------------- Cash and Cash Equivalents - End of Period $ 386,719 1,590 $ 386,719 -------------- ----------- --------------------- Supplemental Disclosures of Cash Flow Information: Cash paid for: Income taxes $ - $ - $ 600 ============== =========== ===================== Interest expense $ 2,320 $ 3,827 $ 65,628 ============== =========== =====================
See notes to the condensed interim financial statements. 3 MEDJET INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS NOTE A - NATURE OF ORGANIZATION AND BASIS OF PRESENTATION: (1) NATURE OF ORGANIZATION: ---------------------- Medjet Inc. (the "Company") was incorporated in the State of Delaware on December 16, 1993, and is in the development stage. The Company is engaged in research and development of medical technology, with a current emphasis on ophthalmic surgical technology and equipment. (2) BASIS OF PRESENTATION: --------------------- The Condensed Interim Financial Statements included herein have been prepared by the Company, 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 as permitted by such rules and regulations. The Condensed Interim Financial Statements included herein reflect, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the results for the interim periods. The results of operations for the three-month period ended March 31, 2002 are not necessarily indicative of results to be expected for the fiscal year ending December 31, 2002. NOTE B - NET LOSS PER SHARE: Net loss per share, in accordance with the provisions of Financial Accounting Standards No. 128, "Earnings Per Share," is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the period. Common Stock equivalents for the three months ended March 31, 2002 and 2001, and for the period from December 16, 1993 (inception) to March 31, 2002, have not been included in the computation of dilutive loss per share as the effect would be anti-dilutive. NOTE C - RESTATEMENT: Subsequent to the originally filed Form 10-QSB for the quarterly period ended March 31, 2002, management reevaluated the method of accounting used for the three year warrants to purchase 1,320,000 shares of the 4 Company's Common Stock issued to VISX, Inc. in connection with the execution of an agreement and plan of merger and reorganization and a separate research and development agreement with VISX. Previously, no value was attributed to these warrants. A restatement has been reflected in the accompanying financial statements to value these warrants, as of the issuance date of August 17, 2001, at $616,000 using the Black-Scholes pricing model, and to amortize this cost ratably over the one-year period corresponding to the one-year term of the research and development agreement. Management also reevaluated, subsequent to the originally filed Form 10-QSB for the quarterly period ended March 31, 2002, the method used for revenue recognition of the $500,000 payment received in 2001 in connection with the execution of the merger agreement with VISX in consideration for VISX's right to elect whether or not to proceed with the merger during the one-year period following the date of execution of the merger agreement. Previously, the entire $500,000 payment was recognized as income on the date it was received, August 17, 2001. A restatement has been reflected in the accompanying financial statements to amortize this payment to income ratably over the one-year option period. The effect of the two restatements described above resulted in a reduction of net income of $29,000 ($0.01 per share) for the three months ended March 31, 2002; previously reported net income of $1,372 ($0.00 per share), restated as a net loss of $(27,628) ($0.01 per share). 5 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION THIS QUARTERLY REPORT ON FORM 10-QSB, INCLUDING ANY DOCUMENTS THAT ARE INCORPORATED BY REFERENCE, CONTAINS 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. GENERALLY, SUCH STATEMENTS ARE INDICATED BY WORDS OR PHRASES SUCH AS "ANTICIPATES," "EXPECTS," "INTENDS," "BELIEVES" AND SIMILAR WORDS AND PHRASES. SUCH STATEMENTS ARE BASED ON THE COMPANY'S CURRENT EXPECTATIONS AND ARE SUBJECT TO RISKS, UNCERTAINTIES AND ASSUMPTIONS. CERTAIN OF THESE RISKS ARE DESCRIBED OR REFERRED TO BELOW OR IN PART I, ITEM 6 OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB/A2 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001, ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, AND ARE INCORPORATED HEREIN BY THIS REFERENCE. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE ANTICIPATED, EXPECTED, INTENDED OR BELIEVED. GENERAL The Company is engaged in research and development for manufacture of medical technology, with a current emphasis on ophthalmic surgical technology and equipment, and has developed a proprietary technology and derivative devices based on microjets. The Company expects, during the remainder of 2002, to continue its research and development activities, focusing principally on ophthalmic surgical technology and equipment for vision correction surgery. The Company is a development stage company. On August 17, 2001, the Company, VISX, Inc. and Orion Acquisition Corp., a wholly-owned subsidiary of VISX, entered into an Agreement and Plan of Merger and Reorganization, which provides, among other things, for the potential merger of Orion Acquisition Corp. with and into the Company, at VISX's option. Under the terms of the merger agreement, if VISX chooses to go forward with the merger and subject to other customary conditions to closing, each outstanding share of common stock of the Company would be canceled and extinguished and would be converted automatically into the right to receive $2.00 in cash at the effective time of the merger. Upon consummation of the merger, the Company would become a wholly-owned subsidiary of VISX. VISX has the option to terminate the merger agreement at any time during the one-year period following the date of its execution, but prior to the effective time of the merger, for any or no reason. In consideration for this one-year option to elect whether or not to proceed with the merger, VISX paid the Company $500,000 concurrently with the execution of the merger agreement. In connection with the execution of the merger agreement with VISX, the Company and VISX also entered into a separate one-year research and development agreement in August 2001 pursuant to which VISX has agreed to provide monthly funding to the Company in order to support research and development work associated with development of waterjet related technology and products, including a waterjet microkeratome. This agreement 6 provides for minimum payments of $150,000 per month for the first six months and $100,000 for the second six months. VISX agreed that it would provide the Company with funding pursuant to the research and development agreement regardless of whether the merger was completed. In return, the Company agreed to add a provision to the merger agreement providing for a grant to VISX of warrants to purchase 1,320,000 shares of the Company's common stock at an exercise price of $0.75 per share. These warrants were issued to VISX to provide it with an opportunity to make an additional equity investment in the Company if the proposed merger did not occur after VISX had provided significant research and development funding to the Company. The closing of the merger is contingent upon, among other things, the receipt of any necessary third party consents and other customary closing conditions. Notwithstanding the foregoing, VISX may elect not to consummate the merger even if all of the other conditions set forth in the merger agreement are satisfied by the Company. The merger agreement also provides for termination fees of $500,000 payable by one party to the other under various conditions of termination. Many of the Company's forward-looking statements and plans in this report are based on the assumption that VISX will exercise its option to complete the merger. If VISX elects not to proceed with the merger by August 2002, the termination fee payable by VISX to the Company is expected to provide the Company with the opportunity to evaluate its position and alternatives for future operations. RESULTS OF OPERATIONS The Company has not yet initiated sales of its products. The Company generated revenues of $654,956 during the three-month period ended March 31, 2002 and generated no revenues for the comparable period in 2001. The revenues generated during the first three months of fiscal 2002 resulted from payments from VISX under a research and development agreement pursuant to which VISX has agreed to provide funding to the Company through August 2002 to pursue waterjet related technologies and products, including the Company's waterjet microkeratome. Total expenses during the three months ended March 31, 2002 increased by $510,698 (173%) to $806,636 from $295,938 for the comparable period of 2001. This increase was primarily due to an increase in purchases for materials, testing and analysis and other costs associated with continuing development activities. Total expenses for the three months ended March 31, 2002 also included a $154,000 charge resulting from the amortization of the value of the warrant to purchase 1,320,000 shares of the Company's Common Stock issued to VISX in connection with the execution of the merger agreement and the research and development agreement. The total deferred charge of $616,000 in connection with the issuance of this warrant is being amortized over the one-year period corresponding to the one-year term of the research and development agreement. 7 Other income (expense) for the three months ended March 31, 2002 included $125,000 of merger option income based on the $500,000 payment by VISX to the Company made concurrently with the execution of the merger agreement in August 2001. This $500,000 payment is being recognized over the one-year period during which VISX has the option to elect whether or not to proceed with the merger. This payment was made by VISX in consideration for this option. Net interest expense for the three months ended March 31, 2002 was $(948) compared to $(2,392) for the comparable period of 2001. This decrease resulted principally from decreased interest expense relating to the loan provided by the Company's Chief Executive Officer due to lower interest rates and a lower outstanding principal balance on the loan in the three months ended March 31, 2002 compared to the three months ended March 31, 2001. 8 LIQUIDITY AND CAPITAL RESOURCES As of March 31, 2002, the Company's cash and cash equivalents was $386,719 and its working capital was $(245,467). During March 1999, Eugene I. Gordon, Ph.D., the Company's Chairman and Chief Executive Officer, agreed to make available to the Company an unsecured loan of up to $250,000. Under the terms of this agreement, the Company issued to Dr. Gordon warrants to purchase up to 50,000 shares of the Company's unregistered Common Stock and agreed to pay a market interest rate on amounts borrowed. Through March 31, 2002, amounts advanced under this agreement totaled $160,000. As of March 31, 2002, the amount owed to Dr. Gordon is $160,000 with interest paid monthly. Principal amounts outstanding under this loan are due and payable on January 26, 2009. In connection with the execution of the merger agreement with VISX, the Company and VISX also entered into a one-year research and development agreement in August 2001 pursuant to which VISX has agreed to provide monthly funding to the Company in order to support research and development work associated with development of waterjet related technology and products, including a waterjet microkeratome. This agreement provides for minimum monthly payments of $150,000 for the first six months and $100,000 for the second six months. In 1998, the State of New Jersey enacted legislation allowing emerging technology and/or biotechnology companies to sell their unused New Jersey net operating loss carryover ("NOLs") and research and development tax credits ("R&D Credits") to corporate taxpayers in New Jersey. Under this program, the New Jersey Department of Taxation certifies annual NOLs and R&D Credits which may be sold to third parties. Generally, corporations operating in New Jersey are subject to a 9% tax on net operating profits. Companies meeting certain criteria and that had NOLs may apply for certificates for 9% of their cumulative state certified NOLs and 3% of their R&D Credits. The total value of the certificates for all companies applying is limited to a fixed amount, as established by statute. As a result, the value of the certificates issued is usually less than the total NOLs and R&D Credit amounts for which applications are submitted, depending on the number of companies applying for such certificates and the amounts claimed. Any remaining amounts of NOLs and R&D Credits exceeding the face value of the certificates issued can be carried over into subsequent years. Whatever certificates are received may be sold for a percentage of their face value, typically between 80% and 85%. The buyers of these certificates are then entitled to use these certificates at 100% of their face value to reduce their own New Jersey state income tax payments. The Company is permitted to apply for such certificates beginning in June with respect to NOLs and R&D Credits relating to prior fiscal years. The New Jersey Department of Taxation generally takes about six months to process these applications and issue the certificates. As a result, the Company generally does not sell its eligible NOLs and R&D Credits relating to a given year until near the end of the following year. To the extent that the NOLs and R&D Credits are sold, they will be unavailable to the Company to offset future New Jersey state income taxes. 9 In 2002, the Company intends to apply for certificates totaling approximately $97,000 which consists of tax benefits of approximately $88,000 for the year ended December 31, 2001 and $9,269 in tax benefits carried over from the prior year. Assuming the Company receives a certificate for the entire amount for which it applies, and assuming the Company sells such certificate for 84% of its face value, the Company expects to receive net proceeds of approximately $81,800 in late 2002 from the sale of its certificates. The Company anticipates that its cash on hand, the monthly research and development funding from VISX, and, to a lesser extent, the sale of its NOLs and R&D Credits, will be sufficient to meet the Company's working capital and planned capital expenditure requirements through 2002. If, however, the Company incurs unexpected expenses, or if the proposed merger with VISX is not completed, the Company may require additional financing prior to the end of 2002 in order to maintain its current operations. The Company has no current arrangements with respect to any additional financing and, pursuant to the terms of the merger agreement with VISX, is currently precluded from seeking such additional financing. Consequently, there can be no assurance that any additional financing will be available to the Company, on commercially reasonable terms, or at all. The failure to obtain any needed financing would have a material adverse effect on the Company, including causing a reduction in the Company's operations. SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES General The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to intangible assets, income taxes, contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Patents Costs incurred in connection with patent applications, principally legal and consulting fees, are capitalized. Once a patent is granted, these costs are amortized over the lesser of the life of the patent, generally 20 years, or the estimated future economic life of the technology underlying the patent. Once the amortization period begins, management continues to evaluate the estimated future economic life of the patents. Should it be determined that a shorter life is estimated than the original estimated future life, the amortization period is adjusted accordingly. Should a patent application be abandoned or not approved, the costs incurred in connection with the application are expensed. 10 Revenue Recognition The Company's revenues for the three months ended March 31, 2002 resulted from payments from VISX pursuant to the one-year research and development agreement that the Company and VISX executed in August 2001. Pursuant to this agreement, VISX provides monthly funding to the Company in order to finance costs to support research, development and experimental work incurred to develop the Company's microjet related technology and products. The monthly payments advanced by VISX are advanced at the beginning of each month against a budget of costs expected to be incurred during that month. Should the advanced funds exceed the amounts expensed at the end of the month, the excess funding would be recorded as deferred revenue until the costs are incurred. ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS The Company has been in the development stage and has not sold any products. To date, the Company's research and development activities on vision correction devices have been limited to constructing and testing experimental versions of microkeratomes and associated console for eye surgery and conducting a limited number of feasibility studies using enucleated porcine, rabbit and human eyes, and live rabbits to prove that the beam of water can smoothly incise and shape the anterior surface of the cornea, that there is no loss of tissue by erosion, and that the cornea will heal properly after the surgery. If the proposed merger with VISX is not completed, the Company will depend on third parties for the manufacture of components of its products. This may adversely affect the Company's profit margins and its ability to develop and deliver such products on a timely basis. Moreover, there can be no assurance that such third parties will perform adequately, and any failures by third parties may delay the submission of products for regulatory approval, impair the Company's ability to deliver products on a timely basis, or otherwise impair the Company's competitive position and any such failure could have a material adverse effect on the Company. If the proposed merger with VISX is not completed, the Company intends to undertake the assembly, test and marketing of its microjet products on a limited scale. However, it would need to pursue other possible arrangements for larger-scale manufacturing, marketing and distribution. To the extent that the Company fails to enter into such arrangements, the Company would be subject to the risks and uncertainties described under "Additional Factors That May Affect Future Results - No Manufacturing Experience; Dependence on Third Parties," in the Company's Annual Report on Form 10-KSB/A, which information is incorporated herein by reference. If the Company does not enter into license or distribution agreements with respect to its products, it may undertake the marketing and sale itself. In such event, the Company intends to market and sell its products in the United States and certain foreign countries, if and when regulatory approval is obtained, through a direct sales force or a combination of a direct sales force and distributors. The Company currently has no marketing organization and has never sold a product. Establishing sufficient marketing and sales capabilities will require 11 significant resources. There can be no assurance that the Company will be able to recruit and retain skilled sales management, direct salespersons or distributors, or that the Company's marketing or sales efforts will be successful. To the extent that the Company enters into distribution arrangements for the sale of its products, the Company will be dependent on the efforts of third parties. There can be no assurance that such efforts will be successful. Acceptance of the Company's products is difficult to predict and will require substantial marketing efforts and the expenditure of significant funds by the Company. There can be no assurance that the products will be accepted by the medical community once they are permitted or approved. Market acceptance of the Company's products will depend in large part upon the Company's ability to demonstrate the operational advantages, safety and cost-effectiveness of its products compared to other comparable surgical techniques. Failure of the products to achieve market acceptance will have a material adverse effect on the Company's financial condition and results of operations. At present, the Company's only products (although still in development stage) are its microkeratomes, and the Company expects that its microkeratomes will be, if and when commercially available, its sole products for an indefinite period of time. The Company's present narrow focus on particular products makes the Company vulnerable to the development of superior competing products and changes in technology that could eliminate the need for the Company's products. There can be no assurance that significant changes in the foreseeable future in the need for the Company's products or the desirability of those products will not occur. PART II - OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10.1 Letter Agreement dated March 12, 2002 regarding Research Development and Experimental Cost Sharing Agreement, dated August 17, 2001, by and between VISX, Incorporated and Medjet Inc. (b) Reports on Form 8-K None 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: July 11, 2002 MEDJET INC. /S/ EUGENE I. GORDON, PH.D. ------------------------------- Eugene I. Gordon, Ph.D. Chairman of the Board and Chief Executive Officer /S/ CHERYL A. BLAKE -------------------------------- Cheryl A. Blake Vice President - Finance and Human Resources (Principal financial and accounting officer) 13 EX-10 3 medjet10qsbjuly02ex101.txt EXHIBIT 10.1 EXHIBIT 10.1 VISX, Incorporated 3400 Central Expressway Santa Clara, CA 95051 March 12, 2002 Dr. Eugene I. Gordon Chairman and Chief Executive Officer Medjet Inc. 1090 King Georges Post Road, Suite 301 Edison, NJ 08831 RE: RESEARCH, DEVELOPMENT AND EXPERIMENTAL COST SHARING AGREEMENT Dear Dr. Gordon: I am writing in reference to the Research, Development and Experimental Cost Sharing Agreement (the "R&D AGREEMENT"), dated as of August 17, 2001, by and between VISX, Incorporated ("VISX") and Medjet Inc. ("MEDJET"). Capitalized terms not otherwise defined in this letter shall have the meanings given to such terms in the R&D Agreement. This letter is to confirm the parties' understanding that the $2,500,000 figure set forth in Section 1.2 of the R&D Agreement is not a cap on VISX's expenditures pursuant to the R&D Agreement. Rather, the $2,500,000 figure refers to the parties' estimate (at August 27, 2001) of what VISX's maximum expenditure under the R&D Agreement would be. Please indicate your agreement with the foregoing by signing the enclosed counterpart of this letter and returning it to the undersigned. Sincerely, VISX, INCORPORATED /S/ DEREK A. BERTOCCI ------------------------------------------- Derek A. Bertocci Vice President, Controller Agreed to and accepted. MEDJET INC. /S/ EUGENE I. GORDON - ---------------------------------- Dr. Eugene I. Gordon Chairman and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----