Form 10QSB for MEDICAL INTERNATIONAL TECHNOLOGY INC
Thursday, August 14th 2008
Quarterly Report
Note 9 - Management Plan of Operations
Medical International Technology, Inc. ("MIT") is engaged in the business of research, development, marketing and sales of needle-free jet injector technology and products for humans and animals, for single and mass injections. We continue to market our product in all available markets, seek regulatory approvals to expand those market opportunities and improve our products for application to new markets.
Medical International Technology, Inc. has recently completed several rounds of financing resulting in net proceeds to the company of approximately $1,287,520 and continues efforts to secure additional funding to support and expand operations. Funds from sales of our common stock are being used to fund continued operations, develop and seek regulatory approvals for our products and market those products worldwide. Medical International Technology, Inc. will continue to seek additional funding to expand operations and develop sales revenue to a volume sufficient to sustain operations.
The continuation of the Company is dependent upon the continuing financial support of creditors and stockholders and upon obtaining the capital requirements for the continuing operations of the Company. Management believes actions planned and presently being taken provides the opportunity for the Company to continue as a going concern. However, there can be no assurance that management's plans as described above will be successfully implemented or that the Company will continue as a going concern.
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Medical International Technology, Inc. Quarterly Financial Report
Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operations
This Quarterly Report on Form 10-Q contains certain 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, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the ability of the Company to successfully implement its turnaround strategy, changes in costs of raw materials, labor, and employee benefits, as well as general market conditions, competition and pricing. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as representation by the Company or any other person that the objectives and plans of the Company will be achieved. In assessing forward-looking statements included herein, readers are urged to carefully read those statements. When used in the Quarterly Report on Form 10-Q, the words "estimate," "anticipate," "expect," "believe," and similar expressions are intended to be forward-looking statements.
Application of Critical Accounting Policies
We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact and any associated risks related to these policies on our business operations is discussed throughout Management's Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported and expected financial results.
In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective, and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Revenue Recognition
The Company's policy is to prepare its financial statements on the accrual basis of accounting in accordance with generally accepted accounting principles. The Company recognizes revenue when the related product is shipped to the respective customer provided that: title and risk of loss have passed to the customer; persuasive evidence of an arrangement exists; the sales price is fixed or determinable; and collectability is deemed probable.
Research and Development
Research and development expenditures are charged to operations as incurred.
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Medical International Technology, Inc. Quarterly Financial Report
Financial Summary
Results of Operations for the Nine-Months ended June 30, 2008 and 2007
For the nine-month period ended June 30, 2008, the Company experienced a net loss of $701,034. Gross profit for the period totaled $169,074 on sales of $306,060. Loss from operations was $696,361, comprised primarily of research and development expenses and selling, general and administrative expenses aggregating $763,372.
For the nine-month period ended June 30, 2007, the Company experienced a net loss of $598,996. Gross profit for the period totaled $92,479 on sales of $150,630. Loss from operations was $542,184, comprised primarily of research and development expenses and selling, general and administrative expenses aggregating $508,407.
For the three-months ended June 30, 2008, the Company experienced an increase in sales compared to sales for the same period last year. Sales for the three-month period ending June 30, 2008 were $140,553 compared to sales of $43,020 for the same period last year. Gross loss for the period ending June 30, 2008 represented 73 % of sales, where gross profits for the same period last year represented 87% of sales.
Liquidity and Capital Resources
For the nine-month period ending June 30, 2008, the Company's cash position increased $11,507. Net cash provided by operating activities was $617,133, offset by cash used in financing activities of $326,052 and the effect of exchange rates on cash of $276,151.
For the nine-months period ended June 30, 2007 the Company's cash position decreased by $1,793. Net cash used in operating activities was $38,115 offset by cash provided by financing activities of $165,112 and the effect of exchange rates on cash of $0.
Management Plan of Operations
Medical International Technology, Inc. ("MIT") is engaged in the business of research, development, marketing and sales of needle-free jet injector technology and products for humans and animals, for single and mass injections.
We continue to market our product in all available markets, seek regulatory approvals to expand those market opportunities and improve our products for application to new markets.
Medical International Technology, Inc. has recently completed several rounds of financing resulting in net proceeds to the company of approximately $1,287,520 and continues efforts to secure additional funding to support and expand operations. Funds from these sales of our common stock are being used to fund continued operations, develop and seek regulatory approvals for our products and market those products worldwide.
Medical International Technology, Inc. will continue to seek additional funding to expand operations and develop sales revenue to a volume sufficient to sustain operations.
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Medical International Technology, Inc. Quarterly Financial Report
Product Development
Medical International Technologies has filed for FDA approval for its needle-free injector - the MED-JET, designed specifically for human mass inoculations. The MED-JET is capable of delivering many types of medications such as vaccines, insulin and other types of injectables. Its low-pressure technology offers an advantage to alternative high pressure systems that can cause blowbacks and expose medical workers and patients alike to microscopic traces of blood.
According to the International Sharps Injury Prevention Society (http://www.isips.org), it has been estimated that one out of every seven workers is accidentally stuck by a contaminated sharp point each and every year. The Center for Disease Control (CDC: http://www.cdc.gov/niosh/2000-108.html#5) estimates that there are 600,000 to 800,000 needle stick injuries per year in the U.S. alone, and many are not reported. More than 20 types of infectious agents have been transmitted through needlesticks, including hepatitis B and C, tuberculosis, syphilis, malaria, herpes, diphtheria, gonorrhea, typhus and Rocky Mountain spotted fever. The MED-JET will eliminate this risk to our health care professionals and create a safer workplace. Other advantages include its light weight (0.5 kg) and an excellent medication absorption rate. Additionally, the system has the ability to increase or decrease the volume and pressure of injection. This technology is unique to MIT's MED-JET MBX Injector. The system is designed to inject up to 600 individuals an hour.
The approval process can be expensive and may take extended period of time. There can be no assurance that this system will receive approval from the FDA or if approved gain broad acceptance by the medical community or individual patients.
On December 15, 2005, Medical International Technologies, Inc announced that it has received full certification granted under the International Organization for Standardization, as well as the Canadian Medical Device Conformity Assessment System, for devices to be licensed by HEALTH CANADA. These certifications allow MIT to market the Med-Jet Needle-Free Injector for human use in all countries other than the U.S., at this point. The Med-Jet injector has been submitted for FDA approval which, if accepted, will allow MIT to sell the Med-Jet in the United States, making it a truly worldwide system.
MIT's Needle-Free Injection System, designed specifically to allow fast, accurate and safe injections, is rapidly moving toward establishing itself as a valuable instrument in the fight against disease in both humans and animals. Spurred on by growing fears of a world wide epidemic that could match or even exceed the deadly flu pandemic of 1918, which killed millions of people, the MIT team is focusing its efforts to make its Needle-Free Injection System available to the world.
Now that MIT is able to sell its Med-Jet in all countries, other than the U.S., it is working to complete two FDA filings. The first of these will be for use of the Med-Jet for injecting anesthesia in a variety of situations. The second, and most significant in light of the news coming out of Asia concerning the spread of Influenza A (H5N1) to humans, will be the Med-Jet-H, for mass vaccination in case of a pandemic, such as Avian Influenza, Polio, Tuberculosis, Malaria or HIV.
MIT is also pursuing increasing interest in its Agro-Jet needle-free injector. Having the same benefits as Med-Jet, Agro-Jet will become a valuable instrument in the fight against Avian Flu via its ability to mass inoculate animals at over 1000 injections per hour.
On December 22, 2005 we announced that as part of its continuing restructuring program MIT is forming two divisions. The Human Medical Technology Division will focus on the development, production, marketing and sale of needle-free injectors and other medical technologies for humans. The Animal Medical Technology Division will deal with all aspects of the development, production, marketing and sale of the needle-free injectors and other technologies for animal applications worldwide.
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