MEDICAL INTERNATIONAL TECHNOLOGY INC - FORM 10-Q - August 22, 2011

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EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT - MEDICAL INTERNATIONAL TECHNOLOGY INCf10q0611ex31i_medicalintern.htm
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
 
(Mark One)
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the period from ______________ to ______________
  
 000-31469
(Commission file number)

Medical International Technology, Inc.
(Exact name of small business issuer as specified in its charter)
 
    Colorado
  
84-1509950
(State or other jurisdiction
of incorporation or organization) 
  
(IRS Employer Identification No.)
 
1872 Beaulac
Ville Saint-Laurent
Montrйal, Quйbec, Canada H4R 2E7
(Address of principal executive offices)

(514) 339-9355
(Issuer's telephone number)


(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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o                                                                                                Accelerated filer o
 
Non-accelerated filer o                                                                                                  Smaller reporting company x
(Do not check is a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares outstanding of each of the issuer's classes of common equity as of June 30, 2011: 71,478,627 shares of common stock.
 
 
 
 

 
MEDICAL INTERNATIONAL TECHNOLOGY, INC.

FORM 10-Q

June 30, 2011
 
TABLE OF CONTENTS


PART I.    FINANCIAL INFORMATION
  
   
Item 1.       Consolidated Financial Statements
3
   
Consolidated Balance Sheet
3
   
Consolidated Statements of Operations,
5
   
Consolidated Statements of Cash Flows
6
   
Consolidated Statements of Comprehensive Loss
7
   
Consolidated Statement of Stockholders’ (Deficit)
8
   
Notes to Unaudited Consolidated Financial Statements
9
   
Item 2.       Management's Discussion and Analysis of Financial Condition and Results of Operations
13
   
Item 3.       Quantitative and Qualitative Disclosures About Market Risk
18
   
Item 4.       Controls and Procedures
18
   
Part II. OTHER INFORMATION
  
   
Item 1        Legal Proceedings
19
   
Item 1A.    Risk Factors
19
   
Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds
19
   
Item 3.       Defaults upon Senior Securities
19
   
Item 4.       (Removed and Reserved)
19
   
Item 5.       Other Information
19
   
Item 6.       Exhibits
19
   
SIGNATURES
20
   
 
 
 
 
 
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

CERTAIN TERMS USED IN THIS REPORT

When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Medical International Technology, Inc. and its subsidiaries. “SEC” refers to the Securities and Exchange Commission.
 
 
 
 
 
PART 1 - FINANCIAL INFORMATION
 
Item 1. Financial Information
 
CONSOLIDATED BALANCE SHEET
 
            
  
June 30,
2011
    
September 30,
2010
  
   
(Unaudited)
    
(Audited)
  
Assets
            
Current Assets
            
Cash and cash equivalents
  
$
52,193
    
$
26,716
  
Accounts receivable
    
16,395
      
12,809
  
Inventories
    
360,217
      
224,223
  
Prepaid expenses
    
39,212
      
20,200
  
                 
Total Current Assets
    
468,017
      
283,948
  
                 
                 
Long Term Investment
                
Investment in MIT China Joint Venture
    
266,632
      
     348,434
  
                 
Property and Equipment
                
Tooling and machinery
    
420,065
      
301,995
  
Furniture and office equipment
    
151,187
      
141,600
  
Leasehold improvements
    
31,104
      
29,132
  
     
602,356
      
472,727
  
                 
Less accumulated depreciation
    
(485,051
)
    
(451,779
)
     
117,306
      
20,948
  
Other Assets
                
Patents (net of accumulated amortization of $3,986 and $7,922)
    
25,998
      
14,834
  
     Total assets
  
$
877,954
    
$
668,164
  

The accompanying notes are an integral part of these consolidated financial statements
 
 
 
3
 
 
 
 
CONSOLIDATED BALANCE SHEET
 
   
June 30 
2011
    
September 30
 2010
  
   
(Unaudited)
    
(Audited)
  
Liabilities and Stockholders' Equity (Deficit)
            
Current Liabilities
            
        Bank loan
  
 $
41,473
    
 $
-
  
        Deferred income
    
1,190,101
      
1,078,009
  
        Accounts payable and accrued expenses
    
110,037
      
312,303
  
        Amounts due to related parties
    
152,576
      
178,767
  
        Current portion of long-term debts
    
16,412
          
     
1, 510,599
      
1, 569,079
  
 Long-Term Debts
    
          65,648
          
                 
Total Liabilities
    
1, 576,247
      
1, 569,079
  
                 
Stockholders' Equity (Deficit)
                
Preferred stock, $.0001 par value; 3,000,000 shares authorized; None issued and outstanding as of December 31, 2007
                
                 
Common stock, $.0001 par value; 100,000,000 shares authorized; 71,478,627 and 66,260,295 shares issued and Outstanding, respectively
    
7,118
      
6,626
  
                 
Additional paid-in capital
    
12,454,085
      
11,931,996
  
Deficit
    
(12,754,057
)
    
(12,418,732
)
Other comprehensive income (loss)
    
(405,440
)
    
(420,805
)
                 
Total Stockholders' Equity (Deficit)
    
(698,294
)
    
(900,915
)
                 
                 
Total Liabilities and Stockholders' Equity (Deficit)
  
$
877,953
    
$
668,164
  
                 
The accompanying notes are an integral part of these consolidated financial statements
 
 
 
4
 
 
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
   
Three-Months Period
Ended June 30,
    
Nine-Months Period
 Ended June 30,
  
   
2011
(Unaudited)
    
2010
(Unaudited)
    
2011
(Unaudited)
    
2010
(Unaudited)
  
Sales
  
$
89,248
    
$
161,773
    
$
290,503
    
$
514,893
  
Cost of sales
    
(33,909
)
    
(65,392
)
    
(99,915
)
    
(163,971
)
Gross profit (loss)
    
55,339
      
96,381
      
190,588
      
350,922
  
                                 
Research and development costs
    
-
      
(65,194
)
    
-
      
(141,678
)
Selling, general, and administrative expenses
    
(433,588
)
    
(100,257
)
    
(631,234
)
    
(897,458
)
     
(433,588
)
    
(165,451
)
    
(631,234
)
    
(1,039,136
)
                                 
 Loss from operations
    
(378,249
)
    
(69,070
)
    
(440,646
)
    
(688,214
)
                                 
Other Income (Expense)
Equity earnings (loss) on MIT China Joint Venture
    
(60,968)
      
(18,814)
      
(81,802
)
    
(68,891
)
Interest income/loss
    
-
      
-
      
-
      
-
  
Interest expense
    
(24,647
)
    
(1,622
)
    
(31,867
)
    
(8,098
)
     
(85,615
)
    
(20,436
)
    
(113,669
)
    
(76,989
)
                                 
                                 
                                 
Net Loss
  
$
(463,864
)
  
$
(89,506
)
  
$
(554,315
)
  
$
(765,203
)
                                 
Basic (loss) per share
  
$
(0.003
)
  
$
(0.001
)
  
$
(0.004
)
  
$
(0.01
)
                                 
Basic weighted average shares outstanding
    
71,478,627
      
62,297,795
      
71,478,627
      
62,297,795
  
                                 

The accompanying notes are an integral part of these consolidated financial statements
 
 
 
5
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
Nine-Month Period Ended
  
   
June 30,
    
June 30,
  
   
2011
    
2010
  
Cash flows from operating activities:
            
Net loss
   $ (554,315 )   $ (765,203 )
Adjustments to reconcile net loss to net cash
                
  provided by (used in) operating activities:
     218,991       -  
    Warrant expense
                
    Equity loss from MIT China Joint Venture
     81,802       68,891  
    Depreciation and amortization expense
     27,232       16,456  
                 
    Common stock issued for services
     31,000       333,400  
    Related party payables settle by common stock
     -       -  
    Capitalization of related party debts
             3,403,981  
                 
Changes in:
                
    Accounts receivable
     (3,586 )     (6,535 )
                 
    Inventories
     (135,994 )     (16,529 )
    Prepaid expenses
     (19,013 )     (952 )
    Accounts payable and accrued liabilities
     (202,266 )     (223,971 )
                 
    Deferred income
     112,092       (120,528 )
         Net cash used by operating activities
     (444,057 )     2,689,010  
                 
Cash flows from investing activities:
                
    Acquisition of patents
     (10,579 )     (10,169 )
    Investment in MIT China joint venture
     -       (10,437 )
    Tooling and machinery
     (97,625 )     -  
        Net cash used by investing activities
     (108,204 )     (20,606 )
                 
Cash flows from financing activities:
                
   Bank loans
     123,533       -  
   Proceeds from issuance of stock, net
     491,581       100,000  
   Increase in amounts due to related parties
     (26,191 )     (3,156,564 )
   Issuance of notes payable
     -       -  
   Repayment on notes payable
     -       (5,406 )
        Net cash provided from financing activities
     588,923       (3,061,970 )
                 
Effect of exchange rates
     (11,185 )     425,997  
                 
                 
Increase (decrease) in cash
     25,477       32,431  
Cash, beginning of period
     26,716       77,461  
Cash, end of period
   $ 52,193     $ 109,892  
Supplemental disclosure of cash flow information:
                
    Cash paid for interest
   $ 31,867     $ 8,099  
    Cash paid for federal income taxes
   $ -     $ -  
Supplemental disclosure of non-cash transactions
                
   Common stock issued for debt reductions
   $ -     $ -  

 The accompanying notes are an integral part of these consolidated financial statements
 
 
6
 
 
 
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
 
   
Nine Months ending
June 30,
2011
    
Nine Months ending
June 30,
2010
  
Net loss
  
$
(554,315
)
  
$
(765,203
)
Other comprehensive income (loss)
                
Foreign currency translation adjustment
    
(15,365)
      
426,501
  
                 
       Net comprehensive income (loss)
  
$
(569,680
)
  
$
(338,702
)
 
The accompanying notes are an integral part of these consolidated financial statements
 
 
 
7
 
 
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ (DEFICIT)
 
   
Common Stock
    
Additional Paid in
  
   
Shares
    
Amount
    
Capital
    
Deficit
  
                         
Balance – September 30, 2010
    
66,260,295
    
$
6,626
    
$
11,931,996
    
$
(12,418,733
)
                                 
Shares issued for debts
    
-
      
-
      
-
      
-
  
Shares issued for services
    
10,000
      
1
      
999
      
-
  
Shares issued for additional capital
    
1,760,000
      
147
      
176,601
      
-
  
                                 
Net loss for the period ended December 31, 2010
    
-
      
-
      
-
      
(71,587
)
Balance – December 31, 2010
    
68,030,295
    
$
6,774
    
$
12,109,596
    
$
(12,490,320
 )
                                 
Net loss for the period ended March 31, 2011
    
-
      
-
      
-
      
(18,864)
  
Balance – March 31, 2011
    
68,030,295
    
$
6,774
    
$
12,109,596
    
$
(12,509,184)
  
                                 
Shares issued for debts
    
365,000
      
36
      
36,464
      
-
  
Shares issued for services
    
300,000
      
30
      
29,970
      
-
  
Shares issued for additional capital
    
2,783,332
      
278
      
278,055
      
-
  
Warrant expense
                    
218,991
          
                                 
Net loss for the period ended  June  30, 2011
    
-
      
-
      
-
      
(463,864)
  
Balance – June 30, 2011
    
71,478,627
      
7,118
      
12,673,076
      
(13,217,921
)

The accompanying notes are an integral part of these consolidated financial statements
 
 
 
8
 
 
 
Notes to Financial Statements

(Unaudited)

Note 1 – Basis of Presentation
 
Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements of Medical International Technology, Inc. (the “MIT”) and its subsidiary (collectively referred to as the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America, pursuant to the rules and regulations of the Securities and Exchange Commission.  All significant intercompany balances and transactions have been eliminated. These financial statements do not include all information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. It is recommended that these interim unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2010.
 
In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months period ended June 30, 2011 are not necessarily indicative of the results which may be expected for any other interim periods or for the year ending September 30, 2011. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Note 2 – Unearned income
 
On November 1st, 2007, the Company received a Non-Refundable deposit of $1,300,000 for the worldwide rights to market and sells all Medical International Technology Inc.’s present and future Needle-Free Jet-Injectors for the human and animal markets. This deposit is part of an agreement under negotiation, which was finalized in January 2009.  The Company has recorded the deposit as unearned income until a final agreement was reached, at which time the deposit will be earned as income over the estimated contractual life of the final agreement. As of June 30, 2011, the Company had earned $ 325,000.
 
Note 3 – Inventories
 
Inventories at June 30, 2011 and September 30, 2010 consist of the following:
 
   
June 30,
2011
    
September 30,
2010
  
Raw materials
  
$
221,710
    
$
166,611
  
Work in process
    
76,250
      
47,259
  
Finished goods
    
62,257
      
10,353
  
Total
  
$
360,217
    
$
224,223
  
 
 
 
9
 
 
 
Notes to Financial Statements

(Unaudited)
 
Note 4 – Property and Equipment
 
The cost of property and equipment is depreciated over the estimated useful lives of the related assets, which range from 5 to 7 years. Depreciation is computed on the straight-line method for financial reporting purposes and on the declining balance method for income tax reporting purposes. Depreciation expense for the nine months ended June 30, 2011 and 2010 was $22,144 and $13,272, respectively.
 
Note 5 – Intangible Assets
 
As of June 30, 2011 the Company has net intangible assets totaling $ 25,998. Amortization expenses for the nine months ended June 30, 2011 and 2010 was $5,087, and $ 5,761, respectively.  Intangible assets consist of the following:
 
   
Gross
Intangible
Assets
    
Accumulated Amortization
    
Net 
Intangible
Assets
  
Weighted
Average
Life
(Years)
Patents
  
$
33,920
    
$
7,922
    
$
25,998
  
8.5 through 16
 
 Note 6 – Bank Line

The Company, through a hypothec agreement, has an equipment line of credit up to a maximum of $350,000. The line is secured by account receivables, inventories, equipment and all other assets of the Company. At June 30, 2011, the Company had $41,473 outstanding under the agreement.

Note 7 – Related Party Transactions
 
Related party balances consist of the following at June 30, 2011 and September 30, 2010: 
 
   
June 30,
2011
    
September 30,
2010
  
Payable to 2849-674 Canada Inc
  
$
72,576
    
$
67,974
  
Payable to Pascal D'Onofrio
    
    -
      
         30,793
  
Payable to 9211-0766 Quebec Inc
    
80,000
      
         80,000
  
                 
   
$
152,576
    
$
178,767
  
 
The Company has borrowed from shareholders and corporations owned by shareholders. These loans are non-interest bearing and due upon demand. 

Note 8 – Notes Payable
 
Long-term debt consists of the following at June 30, 2011 and September 30, 2010:
 
   
June 30,
2011
    
September 30,
2010
  
Note payable to a bank, bearing interest at prime plus 3%, secured by equipment, due June 21, 2016
  
$
82,061
    
$
0
  
                 
Current portion of long-term debt
    
(16,412)
      
0
  
                 
Long-term debt
  
$
65 648
    
$
-
  
 
 
 
10
 

 
Notes to Financial Statements

(Unaudited)
 
Note 9 – Capital Stock

Common Stock
 
From time to time, the Company will issue common stock for services rendered, debt reductions or as part of private placement offerings. 

For the quarter ended December 31, 2010, the Company issued 10,000 shares of common stock under an S-8 filing for services valued at $1,000. The value of the services provided was $1,000, which represented the fair value of the services provided.  The Company also issued 1,760,000 common stock for investment proceeds of $176,748. 

For the quarter ended March 31, 2011, there was no common stock issuance.  
 
For the quarter ended June 30, 2011, the Company issued 300,000 shares of common stock under an S-8 filing for services valued at $30,000. The value of the services provided was $30,000, which represented the fair value of the services provided.  The Company also issued 365,000 common stock for debts of $36,500 and 2,783,332 common stock for investment proceeds of $278,333. 

Preferred Stock
 
As of June 30, 2011, there was no preferred stock outstanding. Dividend features and voting rights are at the discretion of the Board of Directors without the requirement of shareholder approval.
 
Outstanding Options
 
As of June 30, 2011, there were no outstanding stock options.
 
Outstanding Warrants
 
During the period ended June 30, 2011, the Company issued warrants to purchase an aggregate of 2, 815,000 common shares at an exercise price of $0.15 per share and 333,332 common shares at an exercise price of $0.20 per share. The warrants were issued in connection with private placements completed during 2011. The warrants vested immediately and have terms of one to two years that expire between March 28, 2012 and February 4, 2013. The Company estimated the fair value of the warrants using the Black-Scholes method with assumptions including: (1) term of 1 year to two years; (2) a computed volatility rate of 205%; (3) a discount rate of $0.45%; and (4) zero dividends. The fair value of the warrants was estimated to be $218,991. 
 
 
11
 
 
Notes to Financial Statements

(Unaudited)

Note 9 – Contingencies
 
Legal Proceedings
 
From time to time, the Company is named in legal actions in the normal course of business. In the opinion of management, the outcome of these matters, if any, will not have a material impact on the financial condition or results of operations of the Company.
 
Note 10 –   Investment in MIT China Joint Venture

On May 6, 2009, the Company entered into a certain joint venture agreement (the “Joint Venture Agreement”) with Jiangsu Hualan Biotechnology Ltd. (China) (“Jiangsu Hualan”).   Pursuant to the Joint Venture Agreement, the parties established a joint venture company, Jiangsu Hualan MIT Medical Technology (MIT China) Ltd. (“MIT China” or the “Joint Venture”), focusing on research, production and sales of medical equipments, import and export of medical equipments and components products, especially Needle-Free Jet Injector products. The total investment by the Joint Venture shall amount to $2,000,000, and the registered capital shall amount to $1,400,000.  The Company invested cash of $426,678 and transferred the license rights to produce and sell the Company’s needle-free injectors products into the Joint Venture.  The license rights were valued at $280,000 under the agreement.  The contributions by the Company resulted in the Company owning 49% of the registered capital of the Joint Venture.  Jiangsu Hualan contributed cash of $714,000, and owns 51% of the registered capital.

Under the agreement, the Company appointed one member to the Board of Directors of the Joint Venture and Jiangsu Hualan appointed two members to the Board of Directors.  Profits of the Joint Venture will be paid based each parties investment in the registered capital.

The Company commenced operations in the first quarter of fiscal year 2010.
 
The Company accounts for its investment in MIT China in accordance with Financial Accounting Standards Board Accounting Standards Codification 323, “Investment — Equity Method and Joint Venture” (ASC 323), previously referred to as Accounting Principles Board Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock.” Accordingly, the Company adjusts the carrying amount of its investment in MIT China to recognize its share of earnings or losses. As of June 30, 2011, the Company’s recorded investment in the MIT China was $266,632. During the nine months ended June 30, 2011, the Company recorded an equity loss from its investment in MIT China of $81,802.
 
 
 
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Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q. The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.
 
Business Development

Expanding the product line:

Medical International Technology Inc. has been considerably expanding financial resources in R&D in the last 5 years, having spent several millions of dollars. MIT already has 5 products for the human market and 9 products for the animal market. The company will soon be unveiling two new additions to its human product line and one for its animal line.

MIT’s patented technology has received approval in several countries worldwide. These three new products are no exception.
 
The company is refocusing their efforts and will target FDA approval for 2 of its latest product line first; the Home use injector for diabetics and other treatments requiring daily injections, the second product will target the physicians in their clinics, for vaccination and other biological injection medications. The FDA approval for these 2 products will help the company’s credibility all over the world.

MIT products pipeline is already defined for 2010/2011; the realization of these new products design will be achieved by new finance to MIT and or a partnership with Medical and Pharmaceutical Companies.

New products for human diabetes, dentistry and poultry applications and their market potentials:

Diabetes
The International Diabetes Federation states that the diagnosis rate of diabetes has increased over the last two decades from 30 million to 246 million people with a disproportionate ratio coming from the United States, India, and China.

Medical International Technology Inc. is targeting this huge market with their newly developed Med-Jet model MIT-P-I within the next 6 to 12 month. “With our successful Chinese joint venture, MIT intends to introduce this new product in China first; thereafter we will have enough production capacity to sell all over the world”. The Med-Jet MIT-P-I is designed to be safe, precise, accurate, effective, easy to use and friendly to the environment.

 
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Dentistry
According to the World Health Organization (WHO) statistics, last updated 26 October 2004, the number of dentists in the world was numbered in the millions. There are 234,104 registered Dentist in the USA, 18,861 in Canada, 50,920 in China and it is estimated that 400,000 will be needed by 2030. Statistics show there is an estimated average of 6 to 10 dentists for every 10,000 people in Europe.

It is estimated that 150,000 U.S. dentists could administer about 250 million doses of local Anaesthetics per year for the gums, for a total market of about $3.5 billion.

Medical International Technology Inc. is targeting this lucrative market with their Med-Jet model MIT-H-VI within the next 12 to 16 month. MIT intends to introduce this new product in China first; other countries will follow shortly after. In the Dental Office, painful needle injections are enough to make even the most rational person skip dental visits. The Med-Jet MIT-H-VI will finally bring an end to traumatic dental visits.

Poultry Vaccinations
MIT’s newly designed Agro-Jet model MIT-XII will help prevent the spread of deadly diseases by providing a needle-free alternative to the vaccination of billions of day-old baby chicks yearly. This high speed vaccinator will be able to inject thousands of birds per hour safely, precisely, accurately, effectively, with ease of use and friendly to the environment.

Projected Sales and Market Breakdown

Based on the actual financial crisis and market situation worldwide, the company has revised its total sales forecast and believes it will grow revenues gradually to $25,000,000 within the next three years. The following information will outline market expectations by category and timeframe:
 
Human applications:
 
Our initial target market for the first year is cosmetic Dermatology, Plastic surgery, and General Practitioner for single and mass injections, using Med-Jet models MIT MBX and MIT-H-III. The second year, in addition to the previous models, the introduction of model MESO-JET a new product for the injections on the face for all cosmetic dermatology procedures, in the third and forth and fifth year we will introduce MIT-H-IV-1 and MIT-H-IV-5 will target private clinics and hospitals, also the injector for Diabetics, MIT P-I, and the Dental injector, MIT-H-VI, will be introduced and will drastically increase sales to achieve its forecast.

Animal applications:
 
Our initial target market for the first year is the pork, cattle, and poultry markets, using our existing and newly redesigned products for mass animal vaccination. The second year in addition to the previous models, MIT will introduce and market its day-old baby chicken injector, a highly-requested product by farmers around the world. During the third year, MIT will present 2 more new products expected to drastically increase sales to achieve its forecast.
 
 
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China joint venture
 
The creation of MIT China in June of 2009 has given MIT a unique advantage to expand its production operations and increase its sales and profits in the multi-billion dollar worldwide needle-free injector market. Furthermore, MIT China venture will help Medical International Technology Inc. supply large production volumes in lesser time, which will attract large medical and pharmaceutical partners.
 
The introduction of our Agro-Jet needle-free injector for animal application is going very well; our veterinary staffs are doing an excellent job training our Distributors in the different provinces. These efforts will result in sales growth for the coming months and years.
 
The construction of a class 10,000 clean room lab, recommended by the SFDA, was completed on January 29, 2010. Having received certification for our production facilities in February 2011 brings us a step closer to our goal of beginning production of our Med-Jet line of products and all the disposable accessories in China for the Chinese market.

Our goal was to complete our clinical trials of Med-Jet models MIT-MBX and MIT-H-III in June of 2010 and start marketing and selling in July 2010, we had to complete a second trial and we have finally received our SFDA certification for our Med-Jet products on February 3rd 2011.
 
Based on the results obtained in two separate pivotal clinical trials over the past six months, the Chinese SFDA authorities have approved and issued to our Joint Venture Corporation the official license to sell MED-JET® products.
 
Our President and CEO, Mr. Karim Menassa believes that upon obtaining the above official certification, MIT can now execute our business plan, which forecasts multi million dollars of sales in different niche markets as well as hospitals and clinics across all Chinese provinces.
 
Dr. Francis Bellido, Vice-President and Chief Strategy Officer of Medical International Technologies Canada, Inc. (the “”MIT Canada”) believes that access to the Chinese market, with its growing middle class population demanding more quality healthcare, could be instrumental for MIT due to the huge volume of needle-free injectors needed to satisfy the staggering Chinese demand.

MIT China is expecting to receive the price index for its products from Jiangsu province during the coming month and start supplying our products to the Hospitals.

Our objective is to ensure that our injectors become an indispensable, environmentally friendly product for doctors, dentists, veterinarians and home users around the world.

We will continue providing a safe and effective means to help prevent the spread of deadly diseases to both humans and animals through the use of the Med-Jet® and Agro-Jet® needle-free injection system.
 
 
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Results of Operations
 
Results of Operations for the Nine-Months ended June 30, 2011 and 2010

For the nine-month period ended June 30, 2011, the Company experienced a net loss from operations of $335,324 which was primarily due to selling, general and administrative expenses of  $412,243. Gross profits for the period were $190,588.

For the nine-month period ended June 30, 2010, the Company experienced a net loss from operations of  $765,203 which was primarily due to research and development costs of  $141,678 and selling, general and administrative expenses of  $897,458. Gross profits for the period were $350,922.

The reduced net loss between the comparable quarters was due to reduced research and development costs and general and administrative costs. Sales for the nine-month period ending June 30, 2011 were $290,503 compared to sales of $514,893 for the same period last year. Gross profits for the period ending June 30, 2011 represented 65% of sales, where gross profits for the same period last year represented 68% of sales. 
 
Liquidity and Capital Resources

For the nine-month period ending June 30, 2011, the Company’s cash position increased $25,477. Net cash used in operating activities was $444,057, primarily as a result of the Company’s net loss Financing activities provided $588,923which was primarily as a result of increases in cash received of $491,581 from issuance of common stock.  Cash used by investing activities was $108,204, which was additional capital invested in acquisitions of new patent rights and tooling and machinery. The effect of exchange rates on cash decreased cash balances by $11,185.

For the nine month period ending June 30, 2010, the Company’s cash position increased  $32,431. Net cash provided by operating activities was $2,689,010, primarily due to the capitalization of related party debts. Financing activities used $3,061,970, entirely from capitalization of borrowings from related parties. The effect of exchange rates on cash increased cash balances by $425,997.

Plan of Operations

We are 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.

The creation of a multi-functional Advisory Board, composed of individuals from diverse backgrounds, is serving to strengthen the management of Medical International Technology Inc. in support to the President and Chief Executive Officer Mr. Karim Menassa. Our goal is to increase efficiency and take further advantage of the opportunities ahead in the global market of needle-free jet-injector for human and animal applications.

We will continue to seek additional funding to expand operations, develop sales revenue, conduct presentation to Medical and Pharmaceutical Companies, achieve sales to a volume sufficient to sustain operations and yield a good return to our shareholders.
 
 
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Product Development

As per our previous fillings 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 struck 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, we 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 (H1N1) to humans, will be the Med-Jet-H III, 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.

Off Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.
 
 
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Item 3.   Quantitative and Qualitative Disclosures About Market Risk

Smaller reporting companies are not required to provide the information required by this item.

Item 4.   Controls and Procedures

(a) Evaluation of disclosure controls and procedures.
 
The principal executive officer and principal financial officer have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2011.  Based on this evaluation, they have concluded that our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosure.
 
(b) Changes in internal controls.
 
No change in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three month period ended June 30, 2011 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
 
 
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PART II OTHER INFORMATION
 
Item 1.   Legal Proceedings
 
From time to time, the Company is named in legal actions in the normal course of business. In the opinion of management, the outcome of these matters, if any, will not have a material impact on the financial condition or results of operations of the Company.

We are currently involved in litigation with one of our distributors over a contract termination clause in which we plan to vigorously defend.  We do not believe this matter will have a material adverse effect on our financial condition or results of operations.
 
Item 1A. Risk Factors

Smaller reporting companies are not required to provide the information required by this item.
 
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.   Defaults upon Senior Securities

None.

Item 4.   (Removed and Reserved)

Item 5.   Other information
 
None.

Item 6.   Exhibits

Exhibits
  
31.1           Certification of Principal Executive Officer and Principal Accounting Officer pursuant to Rule 13a-14(a)/15(d)-14(a).
 
32.1           Certification of Principal Executive Officer and Principal Accounting Officer pursuant to 18U.S.C. Section 1350.
 
101            Interactive Data File (the Registrant will be furnishing Exhibit 101 within 30 days of the filing date of this Form 10-Q, as permitted under the rules of the Securities and Exchange Commission.)
 
* In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.
 
 
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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
Medical International Technology, Inc.
  
       
Date: August 22, 2011     
By:
/s/ Karim Menassa  
  
   
Karim Menassa
  
   
President and Principal Executive Officer
  
   
Interim Secretary and Chief Financial Officer
(Duly Authorized Officer, Principal Executive Officer and
Principal Financial and Accounting Officer)
  
 
 
 
 
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