UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2002 Commission File Number 0-109659
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CITA BIOMEDICAL, INC.
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(Exact name of registrant as specified in its charter)
COLORADO 93-0962072
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9025 Wilshire Blvd. Suite 301, Beverly Hills, CA 90211
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(Address of principal executive offices) (Zip code)
(310) 550-4965
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(Registrant's telephone number, including area code)
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(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 _________
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $.01 par value 45,702,273
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Class Number of shares outstanding at March 31, 2002
PART I. Item 1. FINANCIAL INFORMATION
CITA BIOMEDICAL, INC.
Condensed Consolidated Balance sheet
(Unaudited)
March 31, 2002
Assets
Current assets:
Cash......................................................... $ 194,922
Employee advances............................................ -
Prepaid expenses............................................. -
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Total current assets 194,922
Property and equipment, net........................................ 19,820
Intangible assets, net............................................. 38,344
Deposits........................................................... 15,662
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$ 268,749
Liabilities and Shareholder's Deficit
Current liabilities:
Accounts payable and accrued liabilities..................... $2,054,998
Line of credit............................................... -
Short-term loans............................................. 109,436
Advances payable to officer (Note B)......................... 181,676
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Total current liabilities $2,346,110
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Shareholder's deficit (Note E):
Preferred stock.............................................. -
Common stock................................................. 457,023
Additional paid-in capital................................... 8,267,351
Stock options................................................ 183,770
Deferred compensation........................................ (103,324)
Accumulated deficit.......................................... (10,882,181)
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Total shareholder's deficit ( 2,077,361)
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$ 268,749
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See accompanying notes to consolidated financial statements
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CITA BIOMEDICAL, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
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2002 2001
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Revenues, net .................................................... $ 99,908 $ 57,453
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Operating expenses:
Cost of revenues ........................................... 49,188 38,325
General and administrative ................................. 650,297 570,183
Depreciation and amortization .............................. 5,948 109,828
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Total operating expenses 705,433 718,336
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Loss from operations (605,525) (660,883)
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Interest expense ................................................. - (1,703)
Interest income .................................................. 1,082 7,146
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Loss before income taxes (604,443) (655,440)
Provision for income taxes (Note C) .............................. - -
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Net loss $ (604,443) $ (655,440)
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Basic and diluted loss per common share .......................... $ (0.01) $ (0.03)
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Basic and diluted weighted average
Common Shares outstanding .................................. 42,960,272 25,915,578
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See accompanying notes to consolidated financial statements
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CITA BIOMEDICAL, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
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2002 2001
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Net cash used in operating activities $(127,327) $(471,534)
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Cash flows from investing activities:
Payments for web site development ............................... - (18,162)
Equipment purchases ............................................. - (1,207)
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Net cash used in investing activities - (19,369)
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Cash flows from financing activities:
Proceeds from sale of common stock .............................. 128,000 372,406
Repayment of officer's advances (Note B) ........................ (19,500) (39,000)
Proceeds from working capital advances .......................... - -
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Net cash provided by financing activities 108,500 333,406
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Net change in cash .................................................... ( 18,827) (157,497)
Cash, beginning of period ............................................. 213,749 472,885
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Cash, end of period $ 194,922 $ 315,388
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Supplemental disclosure of cash flow information: Cash paid during the period
for:
Interest...................................................... $ - $ -
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Income taxes.................................................. $ - $ -
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See accompanying notes to consolidated financial statements
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CITA BIOMEDICAL, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note A: Basis of presentation
The condensed consolidated financial statements presented herein have
been prepared by the Company in accordance with the accounting policies in its
annual 10-KSB report dated December 31, 2001 and should be read in conjunction
with the notes thereto.
In the opinion of management, all adjustments (consisting only of
normal recurring adjustments) which are necessary to provide a fair presentation
of operating results for the interim period presented have been made. The
results of operations for the periods presented are not necessarily indicative
of the results to be expected for the year.
Interim financial data presented herein are unaudited.
Note B: Related party transactions
During the three months ended March 31, 2002, the Company repaid an
officer $19,500 related to working capital previously advanced to the Company.
As of March 31, 2002, the remaining balance owed to the officer totaled
$181,676, which is included in the accompanying condensed consolidated balance
sheet as advances payable to officer.
Note C: Income taxes
The Company records its income taxes in accordance with Statement of
Financial Accounting Standard No. 109, "Accounting for Income Taxes". Any
deferred income tax asset due to net operating losses is fully allowed for as
there is no assurance that the Company will have future net income to utilize
the operating losses.
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Note D: Shareholders' Equity
During the three months ended March 31, 2002, the Company sold 842,859 shares of
its $.01 par value common stock for $28,000 ($.033 per share). The stock sales
were conducted in reliance on the exemption from federal securities registration
requirements provided by Regulation S under Securities Exchange Act of 1934.
During the three months ended March 31, 2002, the Company sold 2,000,000 shares
of its $.01 par value common stock for $100,000 ($.05 per share) in reduction in
debt owed by the Company to the same entity. The stock sales were conducted in
reliance on the exemption from federal securities registrationrequirements
provided by Regulation S under Securities Exchange Act of 1934.
During the three months ended March 31, 2002, the Company issued 2,641,144
shares of its common stock for consulting services performed on behalf of the
Company. The market value of the common stock on the date of issuance was $.09
per share. The stock sales were conducted in reliance on the exemption from
federal securities registration requirements provided by Regulation S under
Securities Exchange Act of 1934.
Following is a schedule of changes in shareholders' equity for the three months
ended March 31, 2002.
Preferred Stock Common Stock Additional
--------------- ------------ Paid-in Stock Deferred Accumulated
Shares Amount Shares Par Value Capital Options Compensation Deficit Total
------ ------ ------ --------- ------- ------- ------------ ------- -----
Balance
January 1, 2002.. - - 40,218,270 $402,183 $7,955,513 $183,770 $(103,324) $(10,277,737) $(1,839,595)
Sale of common
stock ($.033 per - - 842,859 8,429 19,571 - - - 28,000
share)........
Common stock sold 2,000,000 20,000 80,000 100,000
for reduction
in debt
Common stock issued 2,641,144 26,411 212,266 238,677
in exchange for
services ($.__/share
Net loss for the
three months ended
March 31, 2001 - - - - - - - (604,443) (604,443)
------ -------- ----------- --------- ----------- --------- ----------- ----------- ------------
Balance
March 31, 2002 - - 45,702,273 $457,023 $8,267,350 $183,770 $ (103,324) $(10,882,180) $ (2,077,361)
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PART I. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2002 the Company had cash of $194,922. During the three
months ended March 31, 2002, the Company repaid an officer $19,500 related to
working capital previously advanced to the Company. The Company anticipates
financing its operations from net cash flow from operations and third party
financing. The Company intends to explore all options available to it with
respect to such potential financing.
RESULTS OF OPERATIONS
Revenue
The Company's revenues for the three months ended March 31, 2001 were
$99,909 compared to $57,453 for the three months ended March 31, 2001.
Essentially all of this revenue was derived from procedures performed by
licensees of CITA Americas, Inc. The increase in revenues was primarily due to
more patients being treated.
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Cost of Revenue
The Company's cost of revenues for the three months ended March 31,
2002 was $49,189 compared to $38,325 for the three months ended March 31, 2001.
This resulted in a gross profit of $51,802 for the three months ended March 31,
2002, or a gross profit margin of approximately 51 percent. The gross profit for
the three months ended March 31, 2001 was $19,128, or a gross profit margin of
approximately 33%.
Other Operating Expenses
General and administrative expenses for the three months ended March
31, 2002 were $650,297 compared to $570,183 for the three months ended March 31,
2001. The increase of $80,114 was primarily due to the consulting expenses
associated with the Company raising capital and for the licensing of certain
technologies from CITA S.L., a Spanish corporation.
The Company incurred depreciation and amortization expenses of $5,948
for the three months ended March 31, 2002 as compared to $109,828 for the three
months ended March 31, 2001. This decrease is due primarily to the impairment
loss of patents, UROD Rights, and Web-site development costs at year-end 2001.
The patents and web-site development costs were reduced to zero value. The UROD
rights were re-valued to their current estimated fair value.
The sum of the above resulted in a net loss of $604,443 for the three
months ended March 31, 2002 as compared to a net loss of $655,440 for the three
months ended March 31, 2001.
PART II - OTHER INFORMATION
Items 1 Through 5 - No response required.
Item 6 - Exhibits and reports on Form 8-K.
(a) No exhibits provided.
(b) The Company filed no reports on Form 8-K during the three months ended
March 31, 2002.
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SIGNATURES
The financial information furnished herein has not been audited by an
independent accountant; however, in the opinion of management, all adjustments
(only consisting of normal recurring accruals) necessary for a fair presentation
of the results of operations for the three months ended March 31, 2002 and 2001
have been included.
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CITA Biomedical, Inc.
(Registrant)
DATE: May 29, 2002 BY:/s/Joseph Dunn
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Joseph Dunn
Chairman, President, Chief Executive Officer
and Chief Financial Officer
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