FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2000
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 0-10128
PERSONAL DIAGNOSTICS, INCORPORATED
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(Exact name of registrant as specified in its charter)
New Jersey 22-2325136
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
PO Box 5310, Parsippany, NJ 07054
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(Address of principal executive (Zip Code)
offices)
(973) 952-9000
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(Registrant's telephone number, including area
code)
Not applicable
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (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 __
-
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at January 26, 2001
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Common Stock, $.01 par value 3,740,000
Page 1 of 10
PERSONAL DIAGNOSTICS, INCORPORATED
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Index Page No.
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Part I Financial Information
Item 1. Financial Statements:
Balance Sheets - December 31, 2000 and September 30, 2000 3
Statements of Operations - For the Three Months Ended
December 31, 2000 and 1999 4
Statements of Cash Flows - For the Three Months Ended December 31, 2000 and 1999 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results 7
of Operations
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K 9
Page 2 of 10
PERSONAL DIAGNOSTICS, INCORPORATED
BALANCE SHEETS
December 31, September 30,
2000 2000
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(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and equivalents .......................................... $ 6,635,000 $ 6,082,000
Other current assets .......................................... -- 1,000
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Total Current Assets ....................................... 6,635,000 6,083,000
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TOTAL ASSETS $ 6,635,000 $ 6,083,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses ......................... $ 66,000 $ 44,000
Accrued compensation .......................................... 426,000 --
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Total Current Liabilities .................................. 492,000 44,000
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STOCKHOLDER'S EQUITY:
Common Stock,$.01 par value; authorized,
25,000,000 shares; issued and outstanding,
3,740,000 shares and 4,864,000 shares, respectively ............ 37,000 48,000
Capital in excess of par value ................................. 11,914,000 13,302,000
Accumulated deficit ............................................ (5,808,000) (5,912,000)
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6,143,000 7,438,000
Less: Treasury stock 1,124,000 shares, at cost ................. -- (1,399,000)
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Total Stockholders' Equity ................................. 6,143,000 6,039,000
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,635,000 $ 6,083,000
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See accompanying notes to financial statements.
Page 3 of 10
PERSONAL DIAGNOSTICS, INCORPORATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
December 31,
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2000 1999
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INCOME:
Interest $ 70,000 $ 67,000
Trading gains (losses) 495,000 (285,000)
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565,000 (218,000)
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EXPENSES:
General and administrative 461,000 73,000
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INCOME (LOSS) BEFORE
INCOME TAXES 104,000 (291,000)
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PROVISION (BENEFIT)
FOR INCOME TAXES -- --
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NET INCOME (LOSS) $ 104,000 $ (291,000)
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BASIC AND DILUTED
NET INCOME (LOSS) PER SHARE $ 0.03 $ (0.07)
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WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
BASIC 3,740,000 4,080,000
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DILUTED 3,762,000 4,080,000
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See accompanying notes to financial statements.
Page 4 of 10
PERSONAL DIAGNOSTICS, INCORPORATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
December 31,
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2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 104,000 $ (291,000)
Adjustments to reconcile net income (loss) to net
cash flows from operating activities:
Changes in assets and liabilities:
Property held for development and sale -- (13,000)
Accounts payable and accrued liabilities 448,000 32,000
Other current assets 1,000 (2,000)
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Net cash flows from operating activities 553,000 (274,000)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Sale/(Proceeds) of investment securities -- --
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Net cash flows from investing activities -- --
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INCREASE (DECREASE) IN CASH AND EQUIVALENTS 553,000 (274,000)
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 6,082,000 5,694,000
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CASH AND EQUIVALENTS, END OF PERIOD $ 6,635,000 $ 5,420,000
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See accompanying notes to financial statements.
Page 5 of 10
PERSONAL DIAGNOSTICS, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The balance sheet at the end of the preceding fiscal year has been
derived from the audited balance sheet contained in the Company's Form 10-K and
is presented for comparative purposes. All other financial statements are
unaudited. In the opinion of management, all adjustments which include only
normal recurring adjustments necessary to present fairly the financial position,
results of operations and cash flows for all periods presented have been made.
The results of operations for interim periods are not necessarily indicative of
the operating results for the full year.
Footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been omitted in
accordance with the published rules and regulations of the Securities and
Exchange Commission. These financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's Form
10-K for the most recent fiscal year.
2. TRADING SECURITIES
For the three months ending December 31, 2000 the Company realized a
gain of $495,000 on trading and investment activities compared with a loss of
$285,000 in the prior year period. There was no charge or credit to earnings
representing the change in the net unrealized holding loss on trading securities
during the quarter ending December 31, 2000 or during the comparable year
earlier period. The Company intends ultimately to acquire or develop an
operating business.
3. STATEMENT OF CASH FLOWS
Three Months Ended
December 31,
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2000 1999
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Supplemental disclosure of cash flows information-
Income taxes paid/(refunded) $-0- $-0-
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In October 2000, the Company retired all of its treasury stock, which
consisted of 1,124,000 shares that were carried at a cost of $1,399,000 at
September 30, 2000.
Page 6 of 10
PERSONAL DIAGNOSTICS, INCORPORATED
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
At December 31, 2000, the Company had a cash and cash equivalents
balance of $6,635,000, which represents a $553,000 increase from the $6,082,000
balance at September 30, 2000. This $553,000 increase results entirely from cash
flow from operations, which includes net income of $104,000 coupled with changes
in operating assets and liabilities of $449,000. The Company's working capital
position at December 31, 2000 was $6,143,000 as compared to a September 30, 2000
balance of $6,039,000.
During fiscal 2000 the Company repurchased a total of 340,000 shares of
its common stock at $1.35 per share from Company President John H. Michael at a
total cost of $459,000. The purchases were made at or below the market bid price
and about 15% below liquid net asset value per share. The Company may repurchase
additional shares either publicly or privately during the current fiscal year,
but it has no specific plans to do so. At December 31, 2000 the Company had a
total of 3,740,000 shares outstanding.
The Company has considered various business alternatives including the
possible acquisition of an existing business, but to date has found possible
opportunities unsuitable or excessively priced. The Company is also considering
developing a business itself, believing that start up costs may be preferable to
the premiums required to purchase a going concern. The Company does not
contemplate limiting the scope of its search to any particular industry.
Management has invested substantial time evaluating and considering numerous
proposals for possible acquisition or combination developed by management or
presented by investment professionals, the Company's advisors and others. During
the past four years the Company has limited its activities to relatively small
real estate projects and modest trading and investment activities. The Company
continues to consider acquisitions, business combinations, or start up
proposals, which could be advantageous to shareholders. No assurance can be
given that any such project, acquisition or combination will be concluded.
The Company intends to continue its investing and trading activities
and as a consequence the future financial results of the Company may be subject
to substantial fluctuations. Mr. Michael, the President of the Company is a
graduate of Harvard Business School (MBA). As part of the Company's investment
activities the Company may buy and sell a variety of equity, debt or derivative
securities including a market index options and future contracts. Such
investments often involve a high degree of risk and must be considered extremely
speculative. Futures Contracts are particularly risky since a relatively small
amount of capital controls a large nominal market value thus greatly
exaggerating the exposure to potential losses. During the fiscal quarter ended
December 31, 2000 the average nominal value of the Company's exposure to
derivatives was not significant.
At December 31, 2000, virtually all Company assets were held in U.S.
Government three (3) month Treasury Bills, Cash or other cash instruments. The
Company had no other investment or trading positions. It continues to be the
intention of management to acquire or develop an operating business.
Page 7 of 10
Results of Operations
Three Months Ended December 31, 2000
Net income (loss)
Net income (loss) consists of interest and trading gains and losses and
general and administrative expenses. The Company experienced income of $104,000
in the current three-month period versus a loss of $291,000 in the prior year
period. Interest income increased $3,000 to $70,000 primarily due to higher
interest rates. Trading gains of $495,000 were achieved in the current quarter
as compared to a loss of $285,000 in the prior year period. General and
administrative expenses of $461,000 were $388,000 higher than the prior year
period of $73,000. The increase of $388,000 was due primarily to a higher level
of compensation accrued to President John Michael of which a significant portion
was related to the increased level of trading profits achieved in the quarter.
During the current quarter the Company did not record an income tax
provision due to available tax loss carryforwards. During the prior year quarter
the Company did not record an income tax benefit because tax losses could not be
utilized.
Page 8 of 10
PERSONAL DIAGNOSTICS, INCORPORATED
PART II Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - None
Page 9 of 10
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.
PERSONAL DIAGNOSTICS, INCORPORATED
Registrant
Date: February 9, 2001 By: /s/ John H. Michael
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John H. Michael, Chairman
(on behalf of the registrant)
Page 10 of 10