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 March 31, 2001 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 ---------------------------------- (Exact name of registrant as specified in its charter) New Jersey 22-2325136 ---------- ---------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) PO Box 5310, Parsippany, NJ 07054 --------------------------- ----- (Address of principal executive (Zip Code) offices) (973) 952-9000 -------------- (Registrant's telephone number, including area code) Not applicable -------------- (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 May 9, 2001 ----- -------------------------- Common Stock, $.01 par value 3,740,000 Page 1 of 10 PERSONAL DIAGNOSTICS, INCORPORATED Index Page No. ----- -------- Part I Financial Information Item 1. Financial Statements: Balance Sheets - March 31, 2001 and September 30, 2000 3 Statements of Income - For the Three and Six Months Ended March 31, 2001 and 2000 4 Statements of Cash Flows - For the Six Months Ended March 31, 2001 and 2000 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II Other Information Item 6. Exhibits and Reports on Form 8-K 9 Page 2 of 10 PERSONAL DIAGNOSTICS, INCORPORATED BALANCE SHEETS

~~Index~~March ~~Page~~31, ~~No.~~September 30, 2001 2000 ------------ ------------ ~~Part~~(UNAUDITED) IASSETS ~~Financial~~CURRENT ~~Information~~ASSETS: ~~Item~~Cash 1.and ~~Financial~~equivalents ~~Statements:~~$ ~~Balance~~1,205,000 ~~Sheets~~$ -6,082,000 ~~December~~Trading 31securities $ 5,450,000 ~~2000~~$ ~~and~~-- ~~September~~Other 30current assets -- 1,000 ~~2000~~------------ 3------------ ~~Statements~~Total ofCurrent ~~Operations~~Assets 6,655,000 6,083,000 ------------ ~~For~~------------ ~~the~~TOTAL ~~Three~~ASSETS ~~Months~~$ ~~Ended~~6,655,000 ~~December~~$ 316,083,000 ~~2000~~============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and ~~1999~~accrued 4expenses ~~Statements~~$ of39,000 ~~Cash~~$ ~~Flows~~44,000 Accrued compensation 470,000 -- ~~For~~------------ ~~the~~------------ ~~Three~~Total ~~Months~~Current ~~Ended~~Liabilities ~~December~~509,000 3144,000 ~~2000~~------------ ~~and~~------------ ~~1999~~STOCKHOLDERS' 5EQUITY: ~~Notes~~Common toStock,$.01 ~~Financial~~par ~~Statements~~value; 6authorized, ~~Item~~25,000,000 2.shares; ~~Management's~~issued ~~Discussion~~and outstanding, 3,740,000 shares and ~~Analysis~~4,864,000 ofshares, ~~Financial~~respectively ~~Condition~~37,000 ~~and~~48,000 ~~Results~~Capital 7in excess of ~~Operations~~par ~~Part~~value II11,914,000 ~~Other~~13,302,000 ~~Information~~Accumulated ~~Item~~deficit (5,805,000) (5,912,000) ------------ ------------ 6.,146,000 ~~Exhibits~~7,438,000 ~~and~~Less: ~~Reports~~Treasury onstock ~~Form~~1,124,000 8shares, at cost -K- 9(1,399,000) ------------ ------------ Total Stockholders' Equity 6,146,000 6,039,000 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,655,000 $ 6,083,000 ============ ============

See accompanying notes to financial statements. Page 3 of 10 PERSONAL DIAGNOSTICS, INCORPORATED STATEMENTS OF INCOME (UNAUDITED)

~~December~~Three Months Ended Six Months Ended March 31, ~~September~~March 3031, ~~2000 2000~~ ------------ ------------- ~~(UNAUDITED) ASSETS CURRENT ASSETS: Cash and equivalents .......................................... $ 6,635,000 $ 6,082,000 Other current assets ..........................................~~ -- ~~1,000~~ ------------ ---------~~---~~ ~~Total~~2001 ~~Current~~2000 ~~Assets~~2001 ~~.......................................~~2000 ~~6,635,000 6,083,000~~ ---------- ---------- ---------- ---------- ~~TOTAL~~INCOME: ~~ASSETS~~Interest $ 665,~~635,~~000 $ 673,~~083,~~000 ~~============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses .........................~~ $ 66135,000 $ 44140,000 ~~Accrued~~Trading ~~compensation~~gains ~~..........................................~~25,000 ~~426~~585,000 520,000 300,000 -- -------- ---------- ---------- ---------- ~~Total~~90,000 ~~Current~~658,000 ~~Liabilities .................................. 492~~655,000 44440,000 ---------- ---------- ---------- ---------- ~~STOCKHOLDER'S EQUITY~~EXPENSES: ~~Common~~General ~~Stock,$.01 par value; authorized, 25,000,000 shares; issued~~ and ~~outstanding,~~administrative 387,~~740,~~000 ~~shares and 4~~296,~~864,~~000 ~~shares~~548, ~~respectively ............ 37,~~000 48369,000 ~~Capital~~---------- in---------- ~~excess~~---------- of---------- ~~par~~INCOME ~~value~~BEFORE ~~.................................~~INCOME 11TAXES 3,~~914,~~000 13362,~~302,~~000 ~~Accumulated deficit ............................................ (5~~107,~~808,~~000) (571,~~912,~~000) ---------- ---------- ---------- ---------- ~~6,143,000~~PROVISION ~~7,438,000~~FOR ~~Less:~~INCOME ~~Treasury~~TAXES ~~stock~~-- ~~1,124,000~~-- ~~shares, at cost .................~~ -- ~~(1,399,000)~~ -- ---------- ------------ ~~Total Stockholders' Equity ................................. 6,143,000 6,039,000~~ ------------ ------------ ~~TOTAL~~NET ~~LIABILITIES~~INCOME ~~AND~~$ ~~STOCKHOLDERS'~~3,000 ~~EQUITY~~$ 362,000 $ 6107,~~635~~000 $ 71,000 ========== ========== ========== ========== BASIC AND DILUTED NET INCOME PER SHARE $ 6-- $ 0.09 $ 0.03 $ 0.02 ========== ========== ========== ========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: BASIC 3,~~083~~740,000 4,080,000 3,740,000 4,080,000 ========== ========== ========== ========== DILUTED 3,798,973 4,080,000 3,780,572 4,080,000 ========== ========== ========== ==========

See accompanying notes to financial statements. Page 4 of 10 PERSONAL DIAGNOSTICS, INCORPORATED STATEMENTS OF CASH FLOWS (UNAUDITED)

~~Three~~Six Months Ended ~~December~~March 31, ---------------------------- 2001 2000 ~~1999~~ ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income ~~(loss)~~ $ ~~104~~107,000 $ ~~(291~~71,000) Adjustments to reconcile net income ~~(loss)~~ to net cash flows from operating activities: Changes in assets and liabilities: Trading securities (5,450,000) -- Property held for development and sale -- (1337,000) Accounts payable and accrued liabilities ~~448~~465,000 32220,000 Other current assets 1,000 (2,000) ----------- ----------- Net cash flows from operating activities ~~553~~(4,877,000) ~~(274~~256,000) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Sale/(Proceeds) of investment securities -- -- ----------- ----------- Net cash flows from investing activities -- -- ----------- ----------- INCREASE (DECREASE) IN CASH AND EQUIVALENTS ~~553~~(4,877,000) ~~(274~~256,000) CASH AND EQUIVALENTS, BEGINNING OF PERIOD 6,082,000 5,694,000 ----------- ----------- CASH AND EQUIVALENTS, END OF PERIOD $ 61,~~635~~205,000 $ 5,~~420~~950,000 =========== ===========

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 March 31, 2001 the Company realized a gain of $25,000 on trading and investment activities compared with a gain of $585,000 in the prior year period. There was a credit to earnings of $25,000 representing the change in the net unrealized holding gains on trading securities during the quarter ending March 31, 2001 compared to no charge or credit to earnings during the comparable year earlier period. The Company intends ultimately to acquire or develop an operating business. 3. STATEMENT OF CASH FLOWS Six Months Ended March 31, --------- 2001 2000 ---- ---- Supplemental disclosure of cash flows information- Income taxes paid/(refunded) $-0- $-0- ==== ==== 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 March 31, 2001, the Company had a cash and equivalents balance of $1,205,000, which represents a $4,877,000 decrease from the $6,082,000 balance at September 30, 2000. This $4,877,000 decrease results entirely from cash flow from operations, which includes net income of $107,000 offset by changes in operating assets and liabilities of $4,984,000 consisting primarily of purchases of trading securities. The Company's working capital position at March 31, 2001 was $6,146,000 as compared to a September 30, 2000 balance of $6,039,000. 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. At March 31, 2001, the Company held marketable securities valued at $5,450,000. 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 March 31, 2001 Net income Net income consists of interest and trading gains and losses and general and administrative expenses. The Company realized income of $3,000 in the current three-month period versus a gain of $362,000 in the prior year period. Interest income decreased $8,000 to $65,000 primarily due to lower invested funds. Trading gains of $25,000 were achieved in the current quarter as compared to gains of $585,000 in the prior year period. General and administrative expenses of $87,000 were $209,000 lower than the prior year period of $296,000. The decrease of $209,000 was due primarily to a lower 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 prior year quarter. During the current and prior year quarter the Company did not record an income tax provision due to available tax loss carryforwards. Six Months Ended March 31, 2001 Net income Net income consists of interest and trading gains and losses and general and administrative expenses. The Company realized income of $107,000 in the current six-month period versus a gain of $71,000 in the prior year period. Interest income decreased $5,000 to $135,000 primarily due to lower invested funds. Trading gains of $520,000 were achieved in the current six-month period as compared to gains of $300,000 in the prior year period. General and administrative expenses of $548,000 were $179,000 higher than the prior year period of $369,000. The increase of $179,000 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 current six-month period. During the current and prior year period the Company did not record an income tax provision due to available tax loss carryforwards. 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: May 9, 2001 By: ------------------------------- John H. Michael, Chairman (on behalf of the registrant) Page 10 of 10

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