Item 1. The Business
General
Medical Monitors, Inc. (the "Registrant"), is a corporation organized under Delaware law in February, 1975. The Registrant previously developed an automated electronic blood pressure measuring device that can be used by individuals to measure their own blood pressure without training or assistance. The Registrant has experienced significant operating losses since inception, and at February 28, 1993 had an accumulated deficit of $1,960,211. The Registrant has been without any material funds to develop and expand its business since the Fall of 1981 when management determined that the Registrant should remain in an inactive status pending the development of an improved AES Unit. No such improve of the AES Unit was undertaken by the Registrant and the has been no active business operations. Since that time, Harry Shuster, the sole officer and director of the Registrant has personally financed the maintenance of the Registrant by making non-interest bearing loans to the Registrant. There can be no assurance that Mr. Shuster will be willing or able to continue personally finance the Registrant's operations or maintenance of the Registrant in the future.
At present, the Registrant has no active business. The Registrant proposes to combine with an existing, privately-held Registrant which is profitable and, in management's view, has growth potential (irrespective of the industry in which it is engaged). A combination may be structured as a merger, consolidation, exchange of the Registrant's Common Stock for stock or assets or any other form which will result in the combined enterprise's being a publicly-held corporation. The Registrant will pursue a combination with a Registrant or business enterprise that satisfies its combination suitability standards by advertising in one or more newspapers or magazines to establish contact with, or by otherwise contacting, selected privately-held companies which are profitable and are believed to have growth potential. There are no assurances that management of the Registrant will be able to locate a suitable combination partner or that a combination can be structured on terms acceptable to the Registrant.
Pending negotiation and consummation of a combination, the Registrant anticipates that it will have limited business activities, will have no significant sources of revenue and will incur no significant expenses or liabilities. If expenses are incurred and funds are necessary the Registrant may undertake a private placement of its common stock or borrow the necessary capital from its officers and directors. Should necessary funds be available, the Registrant will engage attorneys, accountants and/or other consultants to evaluate and assist in completing a potential combination.
Capital Expenditures
The Registrant plans no significant expenditures.
Employees
The Company currently has one employee, Harry Shuster, who is the sole officer and director of the Company. The Company is not a party to any collective bargaining agreement.
Item 2.
Item 2. Properties
The Company owns no real property or other materially important physical facilities. The Company uses offices maintained personally by Harry Shuster, the sole officer and director of the Company, at no cost to the Company.
Item 3.
Item 3. Legal Proceedings
There are no material pending legal proceedings to which the Company is a party or of which any of its property is subject.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders of the Company during the fourth quarter of the fiscal year ended February 28, 1993 through the solicitation of proxies, or otherwise.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The Common Stock, $.01 par value, or the Company is very thinly traded in over-the-counter market with the bid and ask ranging between $.01 and $.02.
There were approximately 1,746 holders of record of the Common Stock, $.0l par value, of the Company as of February 28, 1993.
The Company has paid no cash dividends on its Common Stock, $.001 par value, in the past and does not contemplate paying dividend in the foreseeable future. Future declaration of dividends, if any, will be determined by the Board of Directors in its discretion and will depend upon conditions then existing, including the availability of funds, requirements for working capital expenditures and debt retirement, general business condition and prospects, and other factors. The General Corporation Law of the State of Delaware provides that dividends may be declared and paid only out of surplus, as defined in such statute, or it there is no such surplus, only out of net profits for the fiscal year in which the dividend is paid and/or the preceding fiscal year. The Company has no surplus, as defined in the statute, and has not had any net profits in either of its last two fiscal years. Accordingly, any future dividends can only be declared and paid out of current earnings, if any.
Item 6.
Item 6. Selected Financial Data
See the Financial Statements of the Registrant in Item 8.
Item 7.
Item 7. Management's Discussion And Analysis Of Financial Condition and Results Of Operations.
General
The Company has experienced severe working capital shortages during most of the period since 1976, primarily because of its prolonged experience in its research and development stage and its subsequent inability to obtain delivery of product from its manufactured. The Registrant had been primarily a one product company, engaged in the development of its automated electronic blood pressure measuring device known as the AES Unit. Since February 28, 1985, the Company has had no active business operations of any kind. All risk inherent in new and inexperienced enterprises are inherent the Company's business.
The Company has not made a formal study of the economic potential of any business. At the present, the Company has not identified any assets or business opportunities for acquisition.
As of February 28, 1993 the Company has no liquidity and no presently available capital resources, such as credit lines, guarantees, etc. and should a merger or acquisition prove unsuccessful, it is possible that the Company may be dissolved by the State of Delaware for failing to file reports, at which point the Company would no longer be a viable corporation under Delaware law and would be unable to function as a legal entity. Should management decide not to further pursue its acquisition activities, management may abandon its activities asked the shares of the Company would become worthless. However, the Company's officers, directors and majority shareholder, have made an oral undertaking to make loans to the Company in amounts sufficient to enable it to satisfy its reporting requirements and other obligations incumbent on it as a public company, and to commence, on a limited basis, the process of investigating possible merger and acquisition candidates. The Company's status as a publicly-held corporation may enhance its ability to locate potential business ventures. The loans will be interest free and are intended to be repaid at a future date, or when the Company shall have received sufficient funds through any business acquisition. The loans are intended to provide for the payment of filing fees, professional fees, printing and copying fees and other miscellaneous fees.
Based on current economic and regulatory conditions, Management believes that it is possible. if not probable, for a company like the Company, without assets or liabilities, to negotiate a merger or acquisition with a viable private company. The opportunity arises principally because of the high legal and accounting fees and the length of time associated with the registration process of "going public". However, should any of these conditions change, it is very possible that there would be little or no economic value for anyone taking over control of the Company.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page
Balance Sheets - for the Years ended February 28, 1993 and 1992.......... 6 Statement of Operations and Accumulated Deficit.......................... 7 Statement of Cash Flows.................................................. 8 Notes to Financial Statements............................................ 9-10
All other schedules are not submitted because they are not applicable or not required or because the information is included in the financial statements or notes thereto.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
MEDICAL MONITORS BALANCE SHEETS FEBRUARY 28, 1993 AND 1992
See accompanying Notes to Financial Statements.
MEDICAL MONITORS STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT FOR THE YEARS ENDED FEBRUARY 28, 1993 AND 1992
See accompanying Notes to Financial Statements.
MEDICAL MONITORS STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED FEBRUARY 28, 1993 AND 1992
See accompanying Notes to Financial Statements.
MEDICAL MONITORS NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1993 AND 1992 (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
Description of Business - Medical Monitors, Inc. (the "Company") was incorporated in Delaware in February 1975. Initially, its purpose was to develop and market blood pressure measuring devices. In April 1980, the Company raised $884,000 from the initial public offering of its common stock. Because the Company was unable to raised additional capital to continue developing and marketing its product, in the Fall of 1981, it ceased its operations. In 1986, the Company ceased making the required public filings under the Securities and exchange Act of 1934, as amended. The Board of Directors of the Company is currently investigating the possibility of a new business direction and searching for viable acquisition or merger candidates which would enable the Company to maximize value to its shareholders.
Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Income Taxes - Income taxes are provided using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis (i.e., temporary differences).
Net Income (Loss) Per Share - Net Income (loss) per share is calculated using the weighted average number of common shares outstanding. Common share equivalents are included to the extent they are dilutive.
2. GOING CONCERN.
The Company ceased its operations in the Fall of 1981. The Company's ability to continue as a going concern will be dependent upon obtaining a viable business through merger or acquisition. There can be no assurance that the Company will be able to find a business to acquire or merge with.
3. NOTES PAYABLE.
Notes payable consisted of the following at February 28, 1993 and 1992:
1993 1992 ----------- ---------- Non-interest bearing advances payable To H. Shuster $ 84,865 $ 84,865
Non-interest bearing notes payable to Loma Vista, Ltd. 379,833 379,833
Non-interest bearing note payable to European Diamond trading Corporation 20,750 20,750 ----------- --------- $ 485,448 $485,448 =========== =========
A portion of the notes payable to Loma Vista, Ltd. In the amount of $304,000 is secured by all assets of the Company. Harry Shuster, the President of the Company, is the sole general partner of Loma Vista, Ltd.
Harry Shuster is an officer and majority shareholder of European Diamond Trading Corporation.
All of the above notes are in default.
4. ACCRUED OFFICER'S SALARIES.
Accrued officer's salaries consisted of amounts due Harry Shuster under his employment agreement which expired in December 1981.
PART III
Item 10.
Item 10. Directors and Executive officers of the Registrant.
The following table sets forth certain information concerning the Directors and executive officers of the Company.
A Age Principal Occupation and all Director Name Positions With the Company Since - ------------------------------------------------------------------------------- Harry Shuster Director and Chief Executive Officer 1975 President, Secretary and Chief Financial Officer 1986
Harry Shuster is a founder of the Company and has been its Chairman of the Bard, President and a Director since its inception in February, 1975. Mr. Shuster was also Treasurer of the Company until August, 1981. In 1967, Mr. Shuster founded Lion Country Safari, Inc. a publicly-held corporation whose Common Stock is registered under Section 12(g) of the Securities Exchange Act of 1934, which operates an African wildlife preserve and theme amusement park in Irvine, California. Mr. Shuster has served as Lion Country Safari, Inc.'s chief executive officer and a director since 1967, in which capacity he has directed the marketing and promotional efforts relating to the Lion Country Safari operations. Since March, 1976, Mr. Shuster has served under a consulting agreement which does not require his full-time services in such capacities for Lion Country Safari, Inc. It is estimated that approximately 20% of Mr. Shuster's business working hours were devoted to his position as Chief Executive Officer of the Company during the fiscal year ended February 28, 1985. Since the Company moved into an inactive status in late 1981, Mr. Shuster has only spent so much of his time on the business and affairs of the Company as his duties as Chief Executive Officer have required. Accordingly, Mr.. Shuster's services to Lion Country Safari Inc. have occupied more and more of his working time and, from time-to-time will likely continue to restrict the amount of time which Mr. Shuster can make available to the Company's business. See "Management Compensations" and "Certain Relationships and Related Transactions" in items 11 and 13, respectively, of this Annual Report on Form 10-K. Mr. Shuster is an attorney admitted to the Supreme Court of South Africa.
The present term of each Director will expire at the time of the next Annual Meeting of Stockholders of the Company. Executive officers are elected each year at the Annual Meeting of the Board of Directors held immediately following the Annual Meeting of Stockholders and hold office until the next Annual Meeting of the Board of Directors or until their successors are duly elected and qualified. The Company has held no Annual Meeting of Shareholders since August 26, 1980.
There are no arrangements or understandings known to the Company between any of the Directors or executive officers of the Company and any other person pursuant to which any of such persons was or is to be selected as a Director or an executive officer. There are no family relationships between any Director or executive officer and any other Director or executive officer of the Company.
The Board of Directors has held no formal meetings since 1983. The Company has no standing audit, nominating or compensation committees of the Board of Directors.
Item 11.
Item 11. Management Compensation
Management Compensation
No officer or Director of the Company either received or had accrued on the books of the Company any remuneration with respect to the fisca1 year ended February 28, 1993.
There was no health or life insurance provided to officers or Directors by the Company which discriminates in favor of officers or Directors and which is not available generally to all salaried employees of the Company. The Company has no employee incentive, bonus or benefit plans, profit sharing plans, retirement plans, deferred compensation plans or similar arrangements. No fees are paid Directors for attendance at meetings of the Board of Directors, although out-of-pocket expenses incurred in connection therewith are reimbursed.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information with respect to all persons, or groups of persons, known by the Company to own beneficially more than five percent of the Common Stock, $.01 par value, of the Company, its only outstanding class of voting securities, and as to the beneficial ownership thereof of the Directors of the Company, individually, and all Directors and officers as a group, all as at February 28, 1993.
Name and Address of Amount and Nature or Beneficial Owner (a) Beneficial Ownership Percentages(b) - -------------------- -------------------- -------------- Harry Shuster 1900 Westwood Blvd. Los Angeles, California 90025 16,082,088 32.16%
Loma Vista, Ltd. c/o Harry Shuster 1900 Westwood Blvd. Los Angeles, California 90025 3,318,985 (c) 6.64%(c)
Richard Weisman 16200 Ventura Blvd. Suite 201 Encino, California 91436 2,631,745 (d) 5.26%(d)
All officers and Directors as A Group (One person) 19,401,073 (e) 38.80%(e)
- ---------------- (a) Addresses are shown only for the beneficial owners of at least five-percent of the Common Stock of the Company.
(b) Percentages are determined on the basis of 50,000,000 shares of outstanding Common Stock.
(c) Loma Vista Ltd. is a limited partnership of which Harry Shuster, Chairman of the Board, President and Chief Executive Officer of the Company, is the general partner and through which Mr. Shuster has an interest in shares of the Company's Common Stock. A portion of the shares originally issued to Loma Vista, Ltd. were subsequently distributed to several of its limited partners. All of the shares now owned by Loma Vista, Ltd. are allocated to Mr. Shuster's general partner's interest in such limited partnership.
(d) Mr. Weisman, a former Director of the Company, holds 545,106 of these shares directly, 86,000 as executor of his father's estate, and a total of 800,151 shares as trustee for his adult sons. As to all of these shares, Mr. Weisman can be said to have sole investment and voting power. The remaining shares are owned by Mr. Weisman's wife, sister and mother and Mr. Weisman disclaims any beneficial ownership thereof.
(e) Includes shares owned by Loma Vista, Ltd.
PART IV.
Item 13.
Item 13. Certain Relationship and Related Transactions.
The following table outlines certain information with respect to obligations of the Company to its present principal stockholders and their affiliates as of February 28, 1993.
Accrued Purchase Loans for Total Due AES to the Services At End of Obligee Rights Company Rendered year - ------------------------------------------------------------------------------ Loma Vista, Ltd. $ 75,833(1) $304,000 (1) $ - $379,833 European Diamond Trading Corporation (2) 20,750 20,750 Harry Shuster 84,865 - 84,865 - ------------------------------------------------------------------------------ $ 75,833 $409,615 $283,464 $ 768,912 ======== ======== ======== ==========
(1) This note is secured by a pledge of all assets of the Company. These notes are presently in default, but payment "thereof has not been demanded by Loma Vista, Ltd. See Note 3 of "Notes to Financial Statements".
(2) These demand notes are payable to European Diamond Trading Corporation, a corporation controlled by Harry Shuster, Chairman of the Board, President and Chief Executive Officer of the Company.
All of the above notes are in default.
PART IV
Item 14.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as a part of this report:
(1) Financial Statements of the Registrant. set forth under Item 8 are filed as part of this report.
(2) The Financial Statement Schedules other than those listed above have been omitted because they are either not required, not applicable, or the information is otherwise included.
(b) Information filed as part of this report from Form 8-K:
(1) No reports on Form 8-K were filed during the last quarter of the period covered by this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
MEDICAL MONITORS, INC. (Registrant)
Date: March 12, 1998 /S/ Harry Shuster ------------------------------ By: Harry Shuster Its: President, Secretary and Chief Financial Officer