Annual Report
Management's Discussion and Analysis or Plan of Operations
Overview Medical International Technology, Inc. (MIT) is receiving revenues from sales. The company has maintained operations from these revenues and through equity and debt financing. The company has been dependent on advances from related parties to maintain operations. There are no agreements, assurances or commitments to continue providing these advances. Products are currently developed, assembled and shipped from our facility. Component manufacturing is subcontracted to various suppliers and machine shops. Distribution agreements are being sought worldwide for the company's products. Financial Condition and Results of Operations During the fiscal year ending September 30, 2007 the Company experienced a net loss of $898,376, primarily comprised of selling, general and administrative expenses of $830,363 and research and development costs of $134,294. For the prior fiscal year 2006 the Company experienced a net loss of $1,509,633 where selling, general and administrative expenses totaled $1,125,042. And research and development costs were $442,916. Net comprehensive loss, after adjustment for foreign currency translation, for fiscal year 2007 was $730,952.
For the twelve-months ended September 30, 2007 the Company experienced an increase in sales of $68,074 compared to sales for the same period last year. Gross profit for the twelve-months ended September 30, 2007 was $216,652 or approximately 18% of sales as compared to a decrease of 24% for the same period last year. Costs of sales continue to be increased by the need to customize many of the items ordered to fit the particular needs of clients utilizing our products in new applications. Liquidity and Capital Resources During the fiscal year ending September 30, 2007 the Company's cash position increased by $184,616. Net cash used in operating activities was $115,573; $190,287 was gained from financing activities; the effect of exchange rates on cash was an increase of $183,544. The Company has reported a net liability position of $652,757 and has accumulated operation losses since inception of $6,971,531.which raises substantial doubt about the Company's ability to continue as a going concern. 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. Medical International Technology, Inc. expects that revenues from existing and developing sales may not meet its liquidity requirements for the next 12-month period at its current level of operations. The company has been dependent on advances from related parties to maintain operations. There are no agreements, assurances or commitments to continue providing these advances. The company continues to rely on management to develop the business and work to develop sales. Management has and may continue to supplement cash flows from sales with additional equity and debt financing. Substantially, expanded operations are expected to require additional capital, either from a future offering of equity or the company pursuing other methods of financing, as appropriate. Management Plan of Operations Medical International Technology, Inc. is based in Montreal, Canada; specializing in the research, development, marketing and sale of needle-free jet injector products designed for humans and animals, for single and mass injections. Needle-free jet injector technology and products provide advantages over traditional needle injection techniques and products, including; efficiency, handling security, biological waste elimination, and patient stress reduction. Medical International Technology's intends to concentrate its activities in the medical and veterinary sectors, in particular, in the field of Equipment and instrumentation. The company's strategy is to build good, reliable and cost effective products, seek and establish strategic alliances with different pharmaceutical companies and manufacturers to ensure good distribution channels for its products. MIT promotes its products in many countries including the United States of America. MIT is exerting every effort and using its resources to promote its products and to open markets for its technology. As we continue to market our products, we hope to gain broader acceptance of the needle-free injection technology. MIT is continually researching and developing its products to the market needs. Medical International Technology, Inc. will continue to seek additional funding to expand operations and develop sales revenue to a volume sufficient to sustain operations.
Forward-Looking Statements Certain statements concerning the Company's plans and intentions included herein may constitute forward-looking statements for purposes of the Securities Litigation Reform Act of 1995 for which the Company claims a safe harbor under that Act. There are a number of factors that may affect the future results of the Company, including, but not limited to, (a) the ability of the company to obtain additional funding for operations, (b) the continued availability of management to develop the business plan, (c) regulatory acceptance of our products in diverse localities and (d) successful development and market acceptance of the company's products. This annual report may contain both historical facts and forward-looking statements. Any forward-looking statements involve risks and uncertainties, including, but not limited to, those mentioned above. Moreover, future revenue and margin trends cannot be reliably predicted.
Page Report of Independent Registered Public Accounting Firm 18 Financial Statements
To The Board of Directors and Stockholders of Medical International Technology, Inc. We have audited the accompanying consolidated balance sheet of Medical International Technology, Inc. and subsidiaries as of September 30, 2007 and 2006, and the related consolidated statements of operations, comprehensive loss, stockholders' deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Medical International Technology, Inc. and subsidiary as of September 30, 2005, were audited by other auditors whose report dated November 28, 2005, on those statements included an explanatory paragraph describing conditions that raised substantial doubt about the Company's ability to continue as a going concern as discussed in Note 2 to the financial statements. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the 2007 and 2006 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Medical International Technology, Inc. and subsidiary as of September 30, 2007 and 2006, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. /s/ PS STEPHENSON & CO., P.C. Wharton, Texas |
