-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JhwYHE3g3jk1HDt/7e2QISkz5lXZNI20jf/mIYmg86i1ufs2U2IjKPznTUQutZQM QaAzUmaXdtKrCRARswlN9g== 0000717197-97-000004.txt : 19970417 0000717197-97-000004.hdr.sgml : 19970417 ACCESSION NUMBER: 0000717197-97-000004 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970416 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERWEST MEDICAL CORP CENTRAL INDEX KEY: 0000717197 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 751864474 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-11881 FILM NUMBER: 97582364 BUSINESS ADDRESS: STREET 1: 3221 HULEN ST STE C STREET 2: ARLINGTON HEIGHTS PROFESSIONAL OFF BLDG CITY: FORT WORTH STATE: TX ZIP: 76107-6193 BUSINESS PHONE: 8177312743 MAIL ADDRESS: STREET 1: 3221 HULEN STREET STREET 2: STE C CITY: FORT WORTH STATE: TX ZIP: 76107-6193 FORMER COMPANY: FORMER CONFORMED NAME: SURGERY CENTERS CORP DATE OF NAME CHANGE: 19850808 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K (Mark One) [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 1996. 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 No. 0-11881 INTERWEST MEDICAL CORPORATION (Exact name of registrant as specified in its charter) Oklahoma 75-1864474 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 3221 Hulen Street, Suite C Fort Worth, Texas 76107-6193 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (817) 731-2743 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: NONE 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 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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. As of March 19, 1997, the aggregate market value of the 12,822,036 shares of voting Common Stock held by non-affiliates of the Company was approximately $1,442,479 based on the average bid and asked price on that date. APPLICABLE ONLY TO CORPORATE REGISTRANTS Indicate the number of shares outstanding of each of registrant's classes of Common Stock, as of the latest practicable date. Shares Outstanding Class as of March 19, 1997 Common Stock, 17,117,036 $0.001 Par Value DOCUMENTS INCORPORATED BY REFERENCE (a) Prospectus dated June 6, 1983 - incorporated by reference in Part I. (b) Exhibits to the Registration Statement No. 2-82655 on Form S-18 - Part IV. (c) Form 8-K, dated July 2, 1990. FORM 10-K INTERWEST MEDICAL CORPORATION PART I Item 1. Business. InterWest Medical Corporation (the "Company") was incorporated under the laws of the State of Oklahoma on March 3, 1983. The principal office and place of business of the Company is located at Suite C, 322l Hulen Street, Fort Worth, Texas 76107-6193. Its telephone number is (817) 731-2743. The Company was organized to engage in the business of developing, operating and owning surgery centers itself and in association with others. The Company did not, however, develop any surgery centers. In April, 1984, the Company commenced efforts to develop nursing homes in an effort to diversify its efforts. The Company built and sold to an unrelated purchaser a 187-bed skilled nursing home in Vista, California. The Company presently owns and operates a 156-bed skilled nursing home in Colton, California. The Company does not at this time have any plans to develop other nursing homes. The Company has invested funds in nursing homes, in residential real estate developments and in the oil business. All of the industries in which the Company has invested are extremely competitive in all phases. Many of its competitors, both public and private, possess and employ financial and personnel resources substantially greater than those which are currently available to the Company. Item 2. Properties. Nursing Home Business The Company owns and operates a 156-bed skilled nursing home located on a 9 acre parcel of land in Colton, California. At December 31, 1996, the Company had a cost of $3,407,508 in such facility. In 1996, the facility had an operating income of $1,003,417. Residential Development The Company purchased a 2 acre parcel of land in Modesto, California at a cost of $243,558 for the location of a nursing home. The Company decided not to build such nursing home but to develop the land for 12 residential lots. Two houses were built on this tract. Ten lots and both houses have been sold. The Company acquired a 148.73 acre tract of land in Miami County, Kansas at a cost of $176,328, for the purpose of developing 14 residential lots. Thirteen of the lots have been sold. The Company, through a joint venture, acquired a 50% interest in 370 acres in Douglas County, Kansas, for the purpose of developing 33 residential lots, at a cost of $175,000. Twenty-nine lots have been sold. Oil Business The Company has acquired oil and gas leases and properties in the states of Texas, Oklahoma, Mississippiand Louisiana. At December 31, 1996, the Company had a cost of $997,083 in such properties. (a) Oil and Gas Revenues. A description of the Company's net quantity of oil and gas reserves is contained in the unaudited Supplemental Information of the accompanying financial statements. Estimates of reserves are not presented as being based on estimates prepared or reviewed by independent consultants. All such estimates were made in accordance with regulations promulgated by the Securities and Exchange Commission. The referenced reserve reports are available for examination at the corporate headquarters. The Company has no long-term supply or similar agreements with foreign governments or authorities. No major discovery or other favorable or adverse event has caused a significant change in the estimated proved reserves. The Company has not filed with or included in reports to any federal authority or agency, other than the SEC, any estimate of total proved net oil and gas reserves. All of the Company's production, acreage and drilling activity is located in the United States. The changes in proved developed reserves for 1994, 1995 and 1996 were as follows: Petroleum Natural Liquids Gas (bbls) (MCF) Reserves at December 31, 1993 9,097 1,044,140 Extensions and discoveries 225 12,662 Purchases of reserves-in-place 26,345 - Sale of reserves-in-place ( 131) ( 3,616) Production ( 3,525) ( 180,696) Revision of estimates ( 1,331) ( 207,800) Reserves at December 31, 1994 30,680 664,690 Production ( 6,654) ( 121,967) Revision of estimates ( 19,086) 97,677 Reserves at December 31, 1995 4,940 640,400 Sales of reserves in place ( 30) ( 2,930) Production ( 1,070) ( 119,380) Revision of estimates ( 480) ( 101,080) Reserves at December 31, 1996 3,360 417,010 The standardized measure of discounted estimated future net cash flows, and changes therein, related to proved oil and gas reserves are as follows (thousands of dollars) for 1996, 1995 and 1994: 1996 1995 1994 Future cash inflows $ 975 $1,251 $1,416 Future development and production costs 587 621 907 Future income tax expense - - - Future net cash flows $ 388 $ 630 $ 509 10% annual discount 60 159 111 Standardized measure of discounted future cash flows $ 328 $ 471 $ 398 Primary changes in standardized measure of discounted future net cash flow: 1996 1995 1994 Net changes in prices and production costs $ 88 $ 218 ($ 594) Extensions, discoveries and improved recovery - - 29 Purchases of reserves-in-place - - 47 Sale of reserves-in-place ( 1) - ( 2) Sales of oil and gas, net of production costs ( 78) ( 118) ( 138) Net change in income taxes - - - Revision of estimates ( 158) ( 12) ( 101) Accretion of discount 39 40 100 Other ( 33) ( 55) 53 ($ 143) $ 73 ($ 606) See the unaudited Supplemental Information in the accompanying financial statements for additional information. (b) Past Production and Average Sales Price. Sales Price (1) Net oil and gas production (in barrels and MCF, respectively) from registrant's properties in the United States, was as follows: Oil Gas Year Ended ( Bbls ) ( MCF ) December 31, 1994 3,525 180,696 December 31, 1995 6,654 121,967 December 31, 1996 1,823 97,034 (2) Average sales price and production costs: Average Average Sales Price Production Costs Year Ended ( Bbls ) ( MCF ) (Bbls) ( MCF ) December 31, 1994 $17.15 $1.60 $ 6.90 $0.85 December 31, 1995 $16.84 $1.71 $13.60 $0.78 December 31, 1996 $22.19 $1.80 $12.01 $1.06 (c) Productive Wells and Producing Acres. Registrant's interest in gross and net productive wells located on its properties as of December 31, 1996, was as follows: Developed Acres Wells Gross Net Gross Net Oil -0- -0- -0- -0- Gas 15 3.30 7,965.93 l,289.69 (d) Undeveloped Acreage. Gross and net acres covered by registrant's undeveloped properties as of December 31, 1996, were as follows: Acres: Gross: 6,915.764 Net: 6,427.324 (e) Productive and Dry Net Wells Drilled During 1996. Exploratory Wells Development Wells Production Dry Productive Dry 1996 -0- 1 -0- -0- (f) Wells drilling at December 31, 1996: Gross: -0- Net: -0- Item 3. Legal Proceedings. In the opinion of management, all litigation pertaining to the Company's long-term health care operations and oil and gas business is considered to be ordinary routine litigation incidental to its business and that the disposition of all outstanding legal actions will not have a material adverse effect on the Company. Item 4. Submission of Matters to a Vote of Security Holders. No matters were submitted to a vote of security holders during the fourth quarter of 1996, except for the election of directors. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. The Company's Common Stock is traded in the national over-the- counter market and is listed in the pink sheets. The high and low bid prices quoted for each quarter in the past two calendar years were as follows: Period Low Bid High Bid 1st Quarter, 1995 $0.10000 $0.1250 2nd Quarter, 1995 $0.10000 $0.1250 3rd Quarter, 1995 $0.10000 $0.1250 4th Quarter, 1995 $0.10000 $0.1250 1st Quarter, 1996 $0.10000 $0.1250 2nd Quarter, 1996 $0.10000 $0.1250 3rd Quarter, 1996 $0.10000 $0.1250 4th Quarter, 1996 $0.10000 $0.1250 As of March 19, 1997, the approximate number of holders of Common Stock was 2,044. No cash dividends had been paid as of December 31, 1996, and the Company does not currently anticipate paying cash dividends in the foreseeable future. Item 6. Selected Financial Data. The following table sets forth certain summary financial information concerning the Company. Year Ended December 31, 1996 1995 1994 1993 1992 Operating Revenues $9,283,774 $9,102,349 $8,505,792 $8,105,469 $6,845,977 Net income (loss) ($ 49,282) ($ 47,877) ($ 53,452) ($ 458,122) $319,025 Total Assets $8,333,614 $8,580,878 $8,690,373 $9,417,999 $9,204,914 Long-term debt $4,545,653 $4,559,472 $4,571,857 $4,582,958 $4,592,908 Per common share: Net income (loss) ($0.00) ($0.00) ($ 0.00) ($ 0.02) $ 0.02 Cash dividends declared $0.00 $0.00 $ 0.00 $ 0.00 $ 0.00 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. (a) Liquidity and Capital Resources: During the year 1994, the Company's cash decreased from $2,080,523 at the beginning of the period to $1,807,951 at the end of the period. Accordingly, there was a net decrease in cash of ($272,572), composed of net cash provided by operating activities of $l4,585, net cash used in investing activities of ($185,388) and net cash used in financing activities of ($101,769). During the year 1995, the Company's cash increased from $1,807,951 at the beginning of the period to $2,096,886 at the end of the period. Accordingly, there was a net increase in cash of $288,935. This was attributable to an increase in cash provided by operating activities. During the year 1996, the Company's cash decreased from $2,096,886 at the beginning of the period to $2,094,563 at the end of the period. Accordingly, there was a net decrease in cash of ($2,323). This was attributable to a decrease in net cash provided by operating activities. The Company is not aware of any known trends or any known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in the registrant's liquidity increasing or decreasing in any material way. In the Company's view, its short-term liquidity and short-term capital resources will be sufficient to cover its cash needs up to 12 months into the future. The Company does not presently anticipate material capital expenditures. The Company does not have any significant balloon payments. The Company's long-term debt consists of a mortgage loan bearing interest at the rate of 11% and is payable in monthly installments of $42,890. It is anticipated that these payments will be made from revenues received by the operation of the Company's nursing home. During 1996, the Company purchased as treasury shares a total of 1,237,000 shares of its stock at an aggregate purchase price of $154,442. (b) Results of Operations: Operating profit for 1994 was $268,766, as compared to an operating loss of ($121,928) for 1993. Net loss was ($53,452) for 1994, as compared to net loss of ($458,122) for 1993. Operating profit for 1995 was $353,246, as compared to an operating profit of $268,766 for 1994. The increase in profit was attributed to larger revenues from the Company's long-term health care facility. Net loss was ($47,877) as compared to ($53,452) for 1994. Operating profit for 1996 was $360,059, as compared to an operating profit of $353,246 for 1995. The increase in profit was attributed to larger revenues from the Company's long-term health care facility. Net loss was ($49,282) in 1996 as compared to a loss of ($47,877) in 1995. The revenues derived from each segment of the Company's businesses are as follows: Long-term health care - $8,903,359; real estate development and construction - $104,533 and oil and gas - $275,882. (c) Effects of Inflation: The Company is of the view that inflation did not affect its operations in 1996 and should not in 1997. Item 8. Financial Statements and Supplementary Data. Page No. Independent Auditor's Report 12 Consolidated Balance Sheets December 31, 1996 and 1995 13 Consolidated Statements of Operations for Years Ended December 31, 1996, 1995 and 1994 15 Consolidated Statements of Stockholders Equity for Years Ended December 31, 1996, 1995 and 1994 16 Consolidated Statements of Cash Flows for Years Ended December 31, 1996, 1995 and 1994 17 Notes to Consolidated Financial Statements 19 Supporting Schedules 29 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. There have been no disagreements with accountants on any matter of accounting principles or practices or financial statement disclosures during the twenty-four (24) month period ended December 31, 1996. INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Shareholders InterWest Medical Corporation We have audited the accompanying consolidated balance sheets of InterWest Medical Corporation and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the years in the three year period ended December 31, 1996. Our audits also included the financial statement schedule II for each of the years in the three year period ended December 31, 1996. These consolidated financial statements and the financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and the financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of InterWest Medical Corporation and subsidiaries as of December 31, 1996 and 1995, and the consolidated results of their operations and their cash flows for each of the years in the three year period ended December 31, 1996 in conformity with generally accepted accounting principles. Also, in our opinion, the financial statement schedule II when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. WEAVER AND TIDWELL, L.L.P. Fort Worth, Texas March 7, 1997 INTERWEST MEDICAL CORPORATION (1 of 2) CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1996 AND 1995 1996 1995 ASSETS CURRENT ASSETS Cash, including interest bearing accounts, 1996 - $1,954,527; 1995 - $1,939,383 $2,094,563 $2,096,886 Accounts receivable - trade, net of allowance for doubtful accounts, 1996 - $51,178; 1995 - $43,638 1,631,439 1,428,778 Prepaid expenses and other receivables 73,335 50,334 Total current assets 3,799,337 3,575,998 REAL ESTATE DEVELOPMENT AND CONSTRUCTION COSTS 121,582 226,659 INVESTMENTS Investment in joint venture - 45,960 Common stock, at cost which approximates market - 28,750 - 74,710 PROPERTY AND EQUIPMENT, at cost Land 176,442 176,442 Buildings and improvements 3,786,294 3,784,989 Equipment and furniture 645,876 607,943 Oil and gas properties (successful efforts method of accounting) 997,083 1,231,776 5,605,695 5,801,150 Less accumulated depreciation and depletion 1,501,730 1,415,395 4,103,965 4,385,755 OTHER ASSETS Cash escrow accounts 34,975 35,829 Deferred financing costs, net 273,755 281,927 308,730 317,756 TOTAL ASSETS $8,333,614 $8,580,878 INTERWEST MEDICAL CORPORATION (2 of 2) CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1996 AND 1995 1996 1995 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 13,818 $ 12,385 Accounts payable 508,621 617,874 Accrued salaries 543,697 515,612 Other accrued liabilities 142,032 92,018 Total current liabilities 1,208,168 1,237,889 LONG-TERM DEBT 4,545,653 4,559,472 STOCKHOLDERS' EQUITY Common stock, par value $0.001, authorized 50,000,000 shares; issued 20,000,000 shares 20,000 20,000 Additional paid-in capital 4,798,745 4,798,745 Retained deficit ( 1,906,428) ( 1,857,146) 2,912,317 2,961,599 Less cost of shares held in the treasury, 1996 2,882,964; 1995 1,645,964 332,524 178,082 2,579,793 2,783,517 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $8,333,614 $8,580,878 INTERWEST MEDICAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 1996 1995 1994 REVENUES Net patient service revenue $8,903,359 $8,758,711 $7,993,949 Other revenue 380,415 343,638 511,843 Total revenue 9,283,774 9,102,349 8,505,792 COSTS AND EXPENSES Professional care of patients 4,796,723 4,497,782 4,234,478 General services 1,783,758 1,578,723 1,471,813 Administrative services 1,320,204 1,550,293 1,510,862 Other costs 731,981 737,377 586,488 Depreciation, depletion and amortization 291,049 384,928 433,385 Income from operations 360,059 353,246 268,766 OTHER INCOME (EXPENSES) Income from litigation settlement - - 6,706 Equity in joint venture operations 12,313 28,530 14,083 Gain on sale of assets - - 128,430 Interest income 80,638 73,705 33,003 Interest expense ( 502,292) ( 503,358) ( 504,440) Loss before taxes on income ( 49,282) ( 47,877) ( 53,452) Provision for income taxes - - - Net loss ($ 49,282) ($ 47,877) ($ 53,452) Net loss per share ($ 0.00) ($ 0.00) ($ 0.00) INTERWEST MEDICAL CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 Common Stock Additional Number of Par Paid-in Retained Treasury Shares Value Capital Deficit Stock Balance, December 31, 1993 20,000,000 $20,000 $4,798,745 ($1,755,817) ($59,755) Net loss ( 53,452) Purchase of 828,000 shares of common stock ( 91,819) Balance, December 31, 1994 20,000,000 20,000 4,798,745 ( 1,809,269) (151,574) Net loss ( 47,877) Purchase of 217,000 shares of common stock ( 26,508) Balance, December 31, 1995 20,000,000 20,000 4,798,745 (1,857,146) (178,082) Net loss ( 49,282) Purchase of 1,237,000 shares of common stock (154,442) Balance, December 31, 1996 20,000,000 $20,000 $4,798,745 ($1,906,428) ($332,524) INTERWEST MEDICAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 1996 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers/patients $9,045,079 $9,244,777 $8,553,846 Interest received 80,638 73,705 33,003 Litigation settlement - - 6,706 Cash paid to suppliers and employees ( 8,220,967) ( 7,975,413) ( 8,074,242) Interest paid ( 502,292) ( 503,358) ( 504,728) Net cash provided by operating activities 402,458 839,711 14,585 CASH FLOWS FROM INVESTING ACTIVITIES: Collections of notes receivable - - 14,543 Purchase of property and equipment ( 352,675) ( 586,159) ( 557,899) Proceeds from sale of property 55,595 - 290,782 Purchase of investments - - ( 10,000) Mortgage escrow deposits, net 854 ( 13,808) ( 12,804) Received from escrow accounts - - 36,990 Receipts from joint ventures 58,273 86,799 53,000 Net cash used in investing activities ( 237,953) ( 513,168) ( 185,388) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on debt ( 12,386) ( 11,100) ( 9,950) Purchase of treasury stock ( 154,442) ( 26,508) ( 91,819) Net cash used in financing activities ( 166,828) ( 37,608) ( 101,769) Net increase (decrease) in cash ( 2,323) 288,935 ( 272,572) Cash, beginning of period 2,096,886 1,807,951 2,080,523 Cash, end of period $2,094,563 $2,096,886 $1,807,951 INTERWEST MEDICAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 1996 1995 1994 RECONCILIATION OF NET LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Net loss ($ 49,282) ($ 47,877) ($ 53,452) Adjustments to reconcile net loss to net cash provided by operating activities: Gain on sale of property ( 36,034) - ( 128,430) Depreciation and amortization 291,049 384,928 433,385 Abandonments 332,027 394,319 149,423 Equity in joint venture operations ( 12,313) ( 28,530) ( 14,083) (Increase) decrease in accounts receivable ( 202,661) 142,428 48,054 (Increase) decrease in prepaid expenses and other receivables 5,749 ( 15,127) 30,065 Decrease in real estate development costs 105,077 23,580 122,028 Decrease in other investments - 10,000 - Decrease in accounts payable ( 109,253) ( 139,631) ( 814,290) Increase (decrease) in accrued liabilities 78,099 115,621 241,885 Net cash provided by operating activities $402,458 $839,711 $ 14,585 NONCASH INVESTING AND FINANCING ACTIVITIES: Included in prepaid expenses and other receivables at December 31, 1996 is $28,750 due from the president of the Company on the sale of common stock investments. NOTE 1. SIGNIFICANT ACCOUNTING POLICIES The accounting policies relative to property and equipment and investment in common stock are shown on the accompanying balance sheets. Other significant accounting policies are as follows: Basis of Presentation The consolidated financial statements include the accounts of InterWest Medical Corporation and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. Investments in joint ventures are accounted for on the equity basis of accounting. Reclassifications Certain reclassifications have been made to 1995 and 1994 captions to conform to the 1996 presentation. Depreciation Depreciation of long-term health care property and equipment is provided principally on the straight-line method over the estimated useful lives of the depreciable assets. Estimated useful lives of depreciable assets are as follows: Buildings and improvements 31 years Equipment and furniture 7 years Oil and Gas Property and Equipment The Company utilizes the "successful efforts" method of accounting for costs incurred in the exploration and development of oil and gas properties. Accordingly, costs incurred in the acquisition and exploratory drilling of oil and gas properties are accumulated and subsequently either expensed, if the properties are determined not to have proved reserves or capitalized as a depletable asset if proved reserves are discovered. Costs of drilling development wells are capitalized. Geological, geophysical and carrying costs are charged to expenses as incurred. Acquisition costs relating to producing oil and gas properties are amortized on a prospect by prospect basis using the units-of-production method based on engineers' estimates of proven oil and gas reserves. Depletion and depreciation of producing oil and gas properties (other than acquisition costs) are amortized by prospect using the units-of-production method based on estimated proved developed reserves. NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - continued Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. Financial Instruments Financial instruments of the Company consist of cash, accounts receivable, investments and debt. Recorded values of cash and accounts receivable approximate fair values due to the short maturities of the instruments. The fair value of debt is estimated as the discounted amount of future cash flows using a current incremental borrowing rate of 9.5% for similar liabilities. Carrying Fair Amount Value Long-term debt - 1996 $4,559,471 $5,198,252 Long-term debt - 1995 $4,571,857 $5,210,638 Investments at December 31, 1995 consisted of ownership interests in privately held entities with no quoted market prices. An estimate of fair value cannot be made without incurring excessive costs. Revenue Patient service revenue is reported at the estimated net realizable amounts from patients, third-party payors, and others for service rendered. Revenue under third-party payor agreements is subject to audit and retroactive adjustment. Provisions for estimated third-party payor settlements are provided in the period the related services are rendered. Differences between the estimated amounts accrued and interim and final settlements are reported in operations in the year of settlement. NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - continued Income Taxes The Company provides for deferred taxes resulting from temporary differences between the basis of assets and liabilities for financial and tax reporting purposes. Such differences result principally from the use of the direct write-off method for bad debts for tax reporting purposes and nondeductible write-downs of real estate development costs to net realizable value. Net Income (Loss) Per Common Share Net income (loss) per common share was computed based on the weighted average number of common shares outstanding for the period. Common stock equivalents have not been included since the effect of inclusion would be antidilutive. Cash Flows Presentation For purposes of the statement of cash flows, the Company considers cash to include unrestricted cash and all highly liquid investments with initial maturities of ninety days or less from the date of purchase. Amortization Costs of obtaining financing are amortized over the term of the financing. Credit Risk The Company regularly maintains cash in bank deposit and brokerage accounts which exceed FDIC/SPIC insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Stock-based Compensation The Company recognizes compensation costs for stock-based compensation plans based on the difference, if any, between the quoted market price of the stock and the amount an employee must pay to acquire the stock. Dates that quoted market prices are determined may vary depending on whether the terms of an award are fixed or variable. NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - continued Stock-based Compensation - continued The Financial Accounting Standards Board has issued Statement No. 123 establishing a fair value based method of accounting for stock - -based compensation plans. As permitted under Statement No. 123, the Company does not intend to adopt the recognition or accounting requirements of the statement. No awards have been granted in 1996, 1995 or 1994. NOTE 2. CAPITAL STOCK The Company has adopted a Stock Option Plan which provides for the granting of options to officers and other key employees for the purchase of common stock of the Company. The Plan reserves 1,500,000 shares of common stock for the granting of such options. Options are subjected to adjustment upon any change in the capital structure of the Company such as a stock dividend, stock split or other similar events. Options may be granted at not less than 100% of the fair market value of the Company stock at the date of grant, and are exercisable during a term of ten years from the date of grant at any time in whole or in part, and are subject to continued employment and other conditions as set forth in the option agreement. Options are exercisable only by the participants and are not assignable during their lifetime and must be exercised within one year of the death of the participant by his legal representatives. No options are outstanding at December 31, 1996. NOTE 3. RELATED PARTY TRANSACTIONS During the years ended December 31, 1996, 1995 and 1994, Arch B. Gilbert, a professional corporation, whose sole stockholder is president of the Company, was paid $9,000 , $21,500, and $26,550, respectively, for legal services rendered. NOTE 3. RELATED PARTY TRANSACTIONS - continued During the years ended December 31, 1996, 1995 and 1994, the above corporation was reimbursed $47,068 , $56,056, and $51,168, respectively, for expenses incurred on behalf of the Company. Included in other receivables at December 31, 1996 is $28,750 due from the Company's president from the sale of common stock investments to the president. No gain or loss was recognized from the sale. NOTE 4. FEDERAL INCOME TAXES The Company adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," effective January 1, 1995. Adoption of this standard did not materially impact the Company's consolidated financial statements. The Company had no income tax provision in 1996, 1995 or 1994, and no significant differences between the tax provisions and the amounts computed using statutory rates. At December 31, 1996, the Company had unused operating loss carryforwards available to offset future income for tax reporting purposes of approximately $1,795,000 which ultimately expires in 2011. All income (loss) since inception relates to domestic activity. The tax effects of net operating loss carryforwards and temporary differences at December 31, 1996 and 1995 that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows: 1996 1995 Deferred tax assets Net operating loss carryforwards $ 610,386 $ 585,868 Real estate valuations 17,480 28,159 Other 17,400 14,838 645,266 628,865 Deferred tax liabilities - - Valuation allowance ( 645,266) ( 628,865) Total deferred taxes, net $ - $ - NOTE 4. FEDERAL INCOME TAXES - continued During 1996 and 1995, the valuation allowance increased $16,401 and $16,207, respectively. NOTE 5. LONG-TERM DEBT Long-term debt consisted of the following at December 31: 1996 1995 Mortgage loan for financing of a nursing home constructed in Colton, California. The mortgage loan bears interest at 11%, is due in monthly installments of $42,890 (principal and interest), matures in June, 2030 and is secured by real estate $4,559,471 $4,571,857 Less current maturities 13,818 12,385 $4,545,653 $4,559,472 Aggregate maturities of long-term debt for each of the succeeding five years and thereafter is as follows: 1997 13,818 1998 15,417 1999 17,201 2000 19,192 2001 21,412 2002 and thereafter 4,472,431 NOTE 6. LITIGATION SETTLEMENT In April, 1991, the Company reached an agreement pursuant to litigation in connection with the sale of a skilled nursing facility in Vista, California in January 1990. The agreement specified that the Company receive $350,000 plus interest in settlement of all claims asserted. The settlement is recognized in the accompanying financial statement as income upon receipt of the settlement amount. Under terms of the agreement, the Company received $75,000 at the settlement date and received monthly payments of $10,000 until the balance plus interest had been paid. NOTE 7. SEGMENTED INFORMATION The Company's operations are classified into three principal industry segments: Long-term Health Care - Operation of convalescent centers involving skilled nursing care in southern California Real Estate Development and Construction - Construction and sale of single family housing Oil and Gas - Oil and gas exploration and development Following is a summary of segmented information for 1996, 1995, and 1994: 1996 Real Estate Long-term Development Health and Oil and Care Construction Gas Consolidated Sales to unaffiliated customers $8,903,359 $104,533 $275,882 $9,283,774 Operating income (loss) $1,003,417 ($ 40,375) ($387,787) $ 575,255 Other income 92,951 General corporate expenses ( 215,196) Interest expenses ( 502,292) Loss before income taxes ($ 49,282) Identifiable assets $5,356,666 $121,582 $731,961 $6,210,209 Corporate assets 2,123,405 Total Assets at 12/31/96 $8,333,614 Capital expenditures $ 85,867 $ - $266,808 $ 352,675 Depreciation, depletion and amortization $ 222,625 $ - $ 68,424 $ 291,049 NOTE 7. SEGMENTED INFORMATION - continued 1995 Real Estate Long-term Development Health and Oil and Care Construction Gas Consolidated Sales to unaffiliated customers $8,758,711 $ 22,091 $321,547 $9,102,349 Operating income (loss) $1,143,251 ($ 9,844) ($549,500) $ 583,907 Other income 102,235 General corporate expenses ( 230,661) Interest expenses ( 503,358) Loss before income taxes ($ 47,877) Identifiable assets $5,318,673 $ 272,619 $863,795 $6,455,087 Corporate assets 2,125,791 Total Assets at 12/31/95 $8,580,878 Capital expenditures $ 33,865 $ - $552,294 $ 586,159 Depreciation, depletion and amortization $ 219,323 $ - $165,605 $ 384,928 NOTE 7. SEGMENTED INFORMATION - continued 1994 Real Estate Long-term Development Health and Oil and Care Construction Gas Consolidated Sales to unaffiliated customers $7,993,949 $ 162,012 $349,831 $8,505,792 Operating income (loss) $ 799,018 $ 34,505 ($205,192) $ 628,331 Other income 53,792 General corporate expenses ( 231,135) Interest expenses ( 504,440) Loss before income taxes ($ 53,452) Identifiable assets $5,579,515 $ 354,468 $919,503 $6,853,486 Corporate assets 1,836,887 Total Assets at 12/31/94 $8,690,373 Capital expenditures $ 111,358 $ - $446,541 $ 557,899 Depreciation, depletion and amortization $ 208,913 $ - $224,472 $ 433,385 The Company did not have any intersegment sales. Operating loss is total revenues less operating expenses for each segment and excludes general corporate expenses, interest expense and other income of a corporate nature. Identifiable assets by segment are those assets that are used in the Company's operations within that industry. Corporate assets consist principally of cash. NOTE 8. CONTINGENCIES The Company is involved in litigation pertaining to its long-term health care operations. It is the Company's opinion that any loss incurred would be adequately covered by insurance and the ultimate liability, if any, should not have a material adverse effect on the Company's consolidated financial position. NOTE 9. EMPLOYEES RETIREMENT PLAN The Company has a retirement plan, established in 1995, covering substantially all of its employees. Contributions to the plan in 1996 and 1995 totaled $21,216 and $13,866, respectively. INTERWEST MEDICAL CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS Column A Column B Column C Column E Column F Additions Charged Balance Balance at to Costs Charged at End Beginning and to Other of of Period Expenses Accounts Deductions Period Allowance for doubtful accounts Year ended December 31, 1994 $ 59,600 $ 19,499 $ - $ 38,826 $ 40,273 Year ended December 31, 1995 $ 40,273 $ 40,496 $ - $ 37,131 $ 43,638 Year ended December 31, 1996 $ 43,638 $ 14,348 $ - $ 6,808 $ 51,178 INTERWEST MEDICAL CORPORATION SUPPLEMENTAL INFORMATION The SEC defines proved oil and gas reserves as those estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed oil and gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. Estimates of petroleum reserves have not been made by independent engineers. The valuation of proved reserves may be revised in the future on the basis of new information as it becomes available. Estimates of proved reserves are inherently imprecise. All of the reserves of the Company represent proved developed reserves. Estimated quantities of oil and gas reserves of the Company (all of which are located in the United States) are as follows: Petroleum Natural Liquids Gas (bbls) (MCF) December 31, 1994 - proved developed reserves 30,680 664,690 December 31, 1995 - proved developed reserves 4,940 640,400 December 31, 1996 - proved developed reserves 3,360 417,010 INTERWEST MEDICAL CORPORATION SUPPLEMENTAL INFORMATION The changes in proved developed reserves for 1994, 1995 and 1996 were as follows: Petroleum Natural Liquids Gas (bbls) (MCF) Reserves at December 31, 1993 9,097 1,044,140 Extensions and discoveries 225 12,662 Purchases of reserves-in-place 26,345 - Sale of reserves-in-place ( 131) ( 3,616) Production ( 3,525) ( 180,696) Revision of estimates ( 1,331) ( 207,800) Reserves at December 31, 1994 30,680 664,690 Production ( 6,654) ( 121,967) Revision of estimates ( 19,086) 97,677 Reserves at December 31, 1995 4,940 640,400 Sales of reserves-in-place ( 30) ( 2,930) Production ( 1,070) ( 119,380) Revision of estimates ( 480) ( 101,080) Reserves at December 31, 1996 3,360 417,010 The standardized measure of discounted estimated future net cash flows, and changes therein, related to proved oil and gas reserves (thousands of dollars) for 1996, 1995 and 1994 are as follows: 1996 1995 1994 Future cash inflows $ 975 $1,251 $1,416 Future development and production costs 587 621 907 Future income tax expense - - - Future net cash flows 388 630 509 10% annual discount 60 159 111 Standardized measure of discounted future cash flows $ 328 $ 471 $ 398 INTERWEST MEDICAL CORPORATION SUPPLEMENTAL INFORMATION Primary changes in standardized measure of discounted future net cash flow: 1996 1995 1994 Net changes in prices and production costs $ 88 $ 218 ($ 594) Extensions, discoveries and improved recovery - - 29 Purchases of reserves-in-place - - 47 Sale of reserves-in-place ( 1) - ( 2) Sales of oil and gas, net of production costs ( 78) ( 118) ( 138) Net change in income taxes - - Revision of estimates ( 158) ( 12) ( 101) Accretion of discount 39 40 100 Other ( 33) ( 55) 53 ($ 143) $ 73 ($ 606) Estimated future cash inflows are computed by applying year end prices of oil and gas to year end quantities of proved developed reserves. Estimated future development and production costs are determined by estimating the expenditures to be incurred in developing and producing the proved oil and gas reserves in future years, based on year end costs and assuming continuation of existing economic conditions. Estimated future income tax expenses are calculated by applying year end statutory tax rates (adjusted for permanent differences, tax credits and tax carryforwards) to estimated future pretax net cash flows related to proved oil and gas reserves, less the tax basis of the properties involved. These estimates are furnished and calculated in accordance with requirements of the Financial Accounting Standards Board and the SEC. Because of unpredictable variances in expenses and capital forecasts, crude oil and natural gas price changes, and the fact that the bases for such estimates vary significantly, management believes the usefulness of these projections is limited. Estimates of future net cash flows do not necessarily represent management's assessment of future profitability or future cash flow to the Company. INTERWEST MEDICAL CORPORATION SUPPLEMENTAL INFORMATION The aggregate amounts of capitalized costs relating to oil and gas producing activities and the related accumulated depletion and depreciation as of December 31, 1996, 1995 and 1994 were as follows (thousands of dollars): 1996 1995 1994 Proved properties $ 488 $ 656 $1,198 Unproved properties, including wells in progress 509 576 302 Accumulated depletion and depreciaton ( 301) ( 406) ( 666) Net capitalized costs $ 696 $ 826 $ 834 The costs, both capitalized and expensed, incurred in oil and gas producing activities during the three years ended December 31, 1996, 1995 and 1994 were as follows (thousands of dollars): 1996 1995 1994 Property acquisition costs $ 240 $ 431 $ 413 Exploration costs 43 170 85 Development costs - - - Results of oil and gas operations in the aggregate for the three years ended December 31, 1996, 1995 and 1994 were as follows: 1996 1995 1994 Revenues $216,072 $321,547 $349,831 Production costs 138,120 203,803 211,927 Exploration expense 332,027 501,639 166,321 Depreciation and depletion 68,424 165,605 224,472 Income taxes - - - Other 65,288 - ( 47,697) 603,859 871,047 555,023 Net oil and gas loss ($387,787) ($549,500) ($205,192) INTERWEST MEDICAL CORPORATION SUPPLEMENTAL INFORMATION Past Production and Average Sales Price: (a) Net oil and gas production (in barrels and MCF, respectively) from Registrant's properties in the United States was as follows: Oil Gas (Bbls) (MCF) Year Ended December 31, 1994 3,525 180,696 December 31, 1995 6,654 121,967 December 31, 1996 1,823 97,034 (b) Average sales price and production costs: Average Average Sales Price Production Costs (Bbls) (MCF) (Bbls) (MCF) Year Ended December 31, 1994 $17.15 $1.60 $ 6.90 $ .85 December 31, 1995 $16.84 $1.71 $13.60 $ .78 December 31, 1996 $22.19 $1.80 $12.01 $1.06 PART III Item 10. Directors and Executive Officers of the Registrant. (a) Identification of Directors: The directors of the Company are elected annually to serve until the next Annual Meeting and until their successors are elected and qualified. Year First Became a Director of Name Age Company Position Arch B. Gilbert 63 1983 (1) President, Secretary, Treasurer & Director Terry M. Gallagher, M.D. 58 1983 (1) Director (1) Date of incorporation (b) Identification of Executive Officers: Name Position Age Arch B. Gilbert President, 63 Secretary, Treasurer Officers serve at the discretion of the Board of Directors. Arch B. Gilbert received his B.A. and LL.B. degrees from the University of Oklahoma in 1955 and 1957 respectively. He also received his LL.M. degree from Southern Methodist University in 1963. Since August 1, 1979, Mr. Gilbert has been a member of the law firm of Arch B. Gilbert, A Professional Corporation. From February 1, 1962 to August 1, 1979, Mr. Gilbert was a member of the law firm of Brooks, Tarlton, Gilbert, Douglas & Kressler, Fort Worth, Texas. Terry M. Gallagher, M.D. received his M.D. degree from the University of Michigan Medical School in 1964 and his Master of Science degree from Rackham Graduate School in 1969. He did his residency at the University of Michigan Hospital in 1970. From 1970 to 1972, he was a medical officer in the Air Force. In 1971, he received his Board Certification from the American Board- Otolaryngology. From 1972-1974, he was an Assistant Professor of Surgery (Otolaryngology) at the University of Missouri Medical School, Columbia, Missouri. Since 1974, he has been in private practice (Otolaryngology) in Fort Worth, Texas. He is a diplomat of American Board-Otolaryngology, Head and Neck Surgery, a Fellow of American College of Surgeons and a Clinical Assistant Professor of Surgery (Otolaryngology) at the University of Texas Medical School, San Antonio, Texas. He is a member of the Tarrant County Medical Association, Texas Medical Association and American Medical Association. He is an organizer and member of the Fort Worth Day Surgery Center. There is no family relationship between any director or executive officer of the Company. No personal meetings of the directors took place in 1996. All resolutions of the directors were taken by written consent. (c) Compliance With Section 16(a) of The Exchange Act. Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors, executive officers and persons who own more than 10% of the Company's outstanding Common Stock to file with the Securities and Exchange Commission reports of changes in ownership of the Common Stock of the Company held by such persons. Officers, directors and greater than 10% shareholders are also required to furnish the Company with copies of all forms they file under this regulation. To the Company's knowledge, based solely on a review of the copies of such reports furnished to the Company, during the two fiscal years ended December 31, 1995, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% shareholders were complied with. Item 11. Executive Compensation. During the fiscal year ended December 31, 1996, Arch B. Gilbert received cash compensation of $80,000. All executive officers as a group (2 persons) received cash remuneration in fiscal year 1996 of $80,000. This does not include legal fees paid to the law firm of the President or reimbursement of expenses paid to it. See Item 13. Directors do not receive any compensation for their services as directors. The Company has established an Incentive Stock Option Plan (the "Plan") which reserved 1,500,000 shares of Common Stock for the exercise of options which may be granted to directors, officers, employees and others. No options are presently outstanding. Item 12. Security Ownership of Certain Beneficial Owners and Management. (a) The following table sets forth, as of March 19, 1997, certain information regarding all persons known to the Company to be the beneficial owners (as determined in accordance with the Rules under the Securities Exchange Act of 1934) of more than 5% of the Company's Common Stock: Name and Address Shares of Beneficially Beneficial Owner Owned Percent Arch B. Gilbert 4,295,000 (1) 23.13% 3221 Hulen Street, Suite C Fort Worth, Texas 76107 (1) Includes 100,000 shares owned by Arch B. Gilbert, A Professional Corporation. Includes 6,000 shares owned by Jo Anne Gilbert, Mr. Gilbert's wife. Does not include 252,000 shares owned by Shannon Gilbert, Mr. Gilbert's adult daughter and 252,000 shares owned by Devon Gilbert, Mr. Gilbert's adult daughter, which beneficial ownership Mr. Gilbert disclaims. (b) The following table sets forth as of March 19, 1997 certain information concerning shares beneficially owned by all directors and all directors and officers of the registrant as a group: Amount and Name of Nature of Beneficial Beneficial Percent Title of Class Owner Ownership of Class Common Stock Arch B. Gilbert 4,295,000 23.13% $0.001 Par Value Common Stock Terry M. Gallagher, M.D. -0- 0.00% $0.001 Par Value Common Stock All Officers and 4,295,000 23.13% $0.001 Par Value Directors as a Group (2 persons) Item 13. Certain Relationships and Related Transactions. The Registrant shares the offices of Arch B. Gilbert, consisting of approximately 1,400 square feet, for which it paid total rent in the year 1996 of $15,600. The Registrant also reimbursed Mr. Gilbert for 50% of his office and administrative expenses for the year ending December 31, 1996 and for direct out-of-pocket expenses incurred on behalf of the Company. The total amount of such reimbursement was $31,468. For the year 1996, Arch B. Gilbert, A Professional Corporation, whose sole stockholder is the President of the Company, was paid $9,000 for legal services rendered. In 1997, Mr. Gilbert may perform legal services on behalf of the Registrant although there are no present plans, agreements or understandings in regard to any such legal services. If any such legal services are performed by Mr. Gilbert on behalf of the Company, he will be compensated at his usual hourly rates. In 1996, Mr. Gilbert's wife performed consulting services for the Company for which she received total cash compensation of $36,000. The Company is not informed as to whether payments made to Mr. Gilbert and his wife were on terms as favorable as the Registrant might have obtained from unaffiliated parties. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. (a) 1. Financial Statements. The following financial statements of the Company are included in Part II, Item 8: Independent Auditor's Report Consolidated Balance Sheets December 31, 1996 and 1995 Consolidated Statements of Operations for the Years Ended December 31, 1996, 1995 and 1994 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1996, 1995 and 1994 Consolidated Statements of Cash Flows for the Years Ended December 31, 1996, 1995, and 1994 Notes to Consolidated Financial Statements Supporting Schedules 2. Financial Statement Schedules. Financial Statement Schedule II is included in Part II, Item 8. All other schedules are omitted because they are not applicable, not required or because the required information is included in the financial statements or the notes thereto. 3. Exhibits. The exhibits listed in the accompanying index to exhibits on Page 10 are filed as part of this report. (b) Reports on Form 8-K. No reports on Form 8-K were filed during the last quarter of the period covered by this report. INTERWEST MEDICAL CORPORATION INDEX TO EXHIBITS ITEM 14(a) Exhibit Description Page 3 Articles of Incorporation, Bylaws * 4 Instruments defining the right of securities holders, including debentures * 10 Material contracts * *Pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, the Registrant hereby incorporates by reference its Registration Statement No. 2-82655 on Form S-18 and Exhibits to such Registration Statement, and which contains these documents which are also required to be filed as Exhibits to this Form 10-K. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. INTERWEST MEDICAL CORPORATION By: Arch B. Gilbert, President, Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer Date: Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By: Arch B. Gilbert, Director Date: By: Terry M. Gallagher, Director Date: 1 12The Notes to Consolidated Financial Statements are an integral part of these statements.18INTERWEST MEDICAL CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS41 EX-27 2
5 12-MOS DEC-31-1996 DEC-31-1996 2094563 0 1682617 51178 0 3799337 5605695 1501730 8333614 1208168 0 20000 0 0 2559793 8333614 9283774 9283774 7312462 8932715 (92951) 0 502292 (49282) 0 (49282) 0 0 0 (49282) 0 0
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