-----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, S0rYQqpQHe7TBOasSqzpOT/tEUnLepBP6h3BfGxOK4Nvow+vkG1VLJSyHbNLa1dg NxbDMSnKMBph1vNiqzTLJQ== 0000931731-99-000207.txt : 19990514 0000931731-99-000207.hdr.sgml : 19990514 ACCESSION NUMBER: 0000931731-99-000207 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INMEDICA DEVELOPMENT CORP CENTRAL INDEX KEY: 0000726037 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 870397815 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-12968 FILM NUMBER: 99619679 BUSINESS ADDRESS: STREET 1: P O BOX 27557 STREET 2: 495 EAST 4500 SOUTH SUITE 230 CITY: SALT LAKE CITY STATE: UT ZIP: 84127 BUSINESS PHONE: 8012639190 MAIL ADDRESS: STREET 1: P O BOX 27557 STREET 2: 495 EAST 4500 SOUTH SUITE 230 CITY: SALT LAKE CITY STATE: UT ZIP: 84127 FORMER COMPANY: FORMER CONFORMED NAME: INMED DEVELOPMENT CORP DATE OF NAME CHANGE: 19840815 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION --------------------------------------- Washington, D.C. 20549 ---------------------- Form 10 - QSB ------------- Quarterly Report Under Section 13 or 15 (d) ------------------------------------------- of the Securities Exchange Act of 1934 -------------------------------------- For the Quarterly Period Ended March 31, 1999 --------------------------------------------- Commission File No. 0-12968 --------------------------- INMEDICA DEVELOPMENT CORPORATION -------------------------------- (Exact name of small business issuer as specified in its charter) ----------------------------------------------------------------- Utah 87-0397815 - ------------------------------- -------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification incorporation of organization) Number) 825 North 300 West Salt Lake City, Utah 84103 (Address of principal executive offices) Registrant's telephone number: ------------------------------ (801) 521-9300 1 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 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 [ ] The number of shares outstanding of the registrant's only class of common stock, par value $.001 per share, as of May 1, 1999 was 8,660,899 shares. 2 PART I - FINANCIAL INFORMATION - ------------------------------ Item 1. Financial Statements INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEET ASSETS March 31, ----------- 1999 (Unaudited) CURRENT ASSETS: Cash $ 28,065 Prepaid expenses 12,037 ----------- Total current assets 40,102 EQUIPMENT AND FURNITURE, at cost, less accumulated depreciation of $251,635 1,354 OTHER ASSETS 2,196 ----------- Total assets $ 43,652 =========== See notes to condensed consolidated financial statements. 3 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEET (Continued) LIABILITIES AND STOCKHOLDERS' DEFICIT March 31, ----------- 1999 (Unaudited) CURRENT LIABILITIES: Consulting fee payable to related party $ 64,995 Note payable to related party 145,000 Accounts payable 87 Accrued payroll 792 ---------- Total current liabilities 210,874 ---------- STOCKHOLDERS' DEFICIT: Common stock, $.001 par value; 20,000,000 shares authorized, 8,660,899 issued and outstanding 8,661 Preferred stock, 10,000,000 shares authorized; Series A preferred stock, cumulative and convertible, $4.50 par value, 1,000,000 shares designated, 25,356 shares issued and outstanding 114,102 Additional paid-in capital 6,835,840 Accumulated deficit (7,125,825) ---------- Total stockholders' deficit (167,222) ---------- Total liabilities and stockholders' deficit $ 43,652 ========== See notes to condensed consolidated financial statements. 4 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended March 31, --------------------- 1999 1998 ------- ------- (Unaudited) TOTAL OPERATING REVENUES $ -0- -0- ---------- ---------- OPERATING EXPENSES: General and administrative 37,789 70,964 Research and development 2,002 66,358 ---------- ---------- Total operating expenses 39,791 137,322 ---------- ---------- LOSS FROM OPERATIONS (39,791) (137,322) ---------- ---------- OTHER INCOME (EXPENSE): Miscellaneous income 146 595 Interest expense (3,172) (3,214) ---------- ---------- Total other expense (3,026) (2,619) ---------- ----0----- NET LOSS (42,817) (139,941) PREFERRED STOCK DIVIDEND (2,282) (2,282) ---------- ---------- NET LOSS APPLICABLE TO COMMON SHARES $ (45,099) $ (142,223) ---------- ---------- Net loss per common share (basic and diluted) $ (.01) $ (.02) ---------- ---------- Weighted average number of common shares outstanding 8,660,899 8,550,899 ========== ========= See notes to condensed consolidated financial statements. 5 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS INCREASE (DECREASE) IN CASH For the Three Months Ended March 31, ------------------ 1999 1998 ------ ------ (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (42,817) $(139,941) Adjustments to reconcile net loss to net cash used in operating activities- Depreciation 217 216 Expense related to stock options issued as compensation for services - 22,250 Change in assets and liabilities- Decrease in royalties receivable 45,920 67,200 Decrease in prepaid expenses 4,750 5,000 Increase in consulting fee payable to related party 12,999 12,999 Decrease (increase)in accounts payable (29,011) 6,495 Decrease in accrued payroll (276) (6,152) Decrease in interest payable - (1,538) Decrease in related-party payable - (25,000) --------- -------- Net cash used in operating activities (8,218) (58,471) --------- -------- See notes to condensed consolidated financial statements. 6 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) INCREASE (DECREASE) IN CASH For the Three Months Ended March 31, ---------------------- 1999 1998 ------ ------ (Unaudited) CASH FLOWS FROM FINANCING ACTIVITIES: Preferred stock dividends paid $ (2,282) $ (2,282) -------- ------- Net cash used in financing activities (2,282) (2,282) -------- ------- NET DECREASE IN CASH (10,500) (60,753) CASH AT BEGINNING OF PERIOD 38,565 138,429 -------- ------- CASH AT END OF PERIOD $ 28,065 $ 77,676 ======== ======= See notes to condensed consolidated financial statements. 7 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note A--Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310b of Regulation SB. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These consolidated statements include the accounts of InMedica Development Corporation and its wholly owned subsidiary, MicroCor, Inc. ("MicroCor"). All material intercompany accounts and transactions have been eliminated. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the three-month period ended March 31, 1999 are not necessarily indicative of the results that may be expected for the year ending December 31, 1999. For further information, refer to the consolidated financial statements included in the Company's Form 10-KSB for the year ended December 31, 1998. Royalties received from the Johnson and Johnson agreement are presently the Company's sole source of revenue and the royalty is expected to terminate during 1999. The Company generated a net loss from operations of $39,791 during the period ended March 31, 1999 and as of March 31, 1999, the Company had an accumulated deficit of $7,125,825 and negative working capital of $170,772. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The Company's continued existence is dependent upon its ability to achieve a viable operating plan. The Company has presently scheduled several demonstrations of its technology to potential strategic partners, although it has no commitments to partner in the development of the technology. 8 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources For the years ended December 31, 1998 and 1997, liquidity was generated from royalty income received from Johnson and Johnson Medical, Inc. ("JJMI"). This income is expected to terminate during 1999. InMedica continues to look for other funding sources but as of the date of this filing, it has no commitments. For the three months ended March 31, 1999, no operating revenues were recognized. The Company's revenue recognition policy requires sales information upon which the royalties are calculated to have been received from JJMI and that cash receipts are assured prior to recording revenue. The royalty agreement with JJMI has been pledged to secure repayment of the $145,000 related party note payable. Funds expended to develop other potential assets of the Company such as a hematocrit device have been expensed as incurred as research and development. The ability of the Company to use the hematocrit device as a means of securing funding for the Company is totally dependent upon the success of further research and development efforts in producing a viable device suitable for commercialization. Results of Operations InMedica has a stockholders' deficit of $ 167,222 and an accumulated deficit of $7,125,825 as of March 31, 1999. In order for InMedica to continue research and development activities, it will require additional financing, for which it has no commitments. See Liquidity and Capital Resources for an explanation of why no revenues were recognized in the first quarter of 1999. The loss from operations of $39,791 for the quarter ended March 31, 1999 compared to $137,322 for the quarter ended March 31, 1998 resulted from general and administrative expenses ($37,789) and research and development expenses ($2,002) being incurred while at the same time there were no revenues. Research and development expense was minimal as the decline in royalty income limited available cash during the quarter. General and administrative expense decreased by 47% compared to the same period o the prior year, which had included $22,250 of expense related to stock options issued as non-cash compensation. The Company does not expect that its own operations will be directly affected by the Year 2000 computer issue ("Y2K"), however the Company is unable to forecast any indirect adverse effect of computer or other device malfunction related to Y2K on the medical technology industry and the business of potential strategic partners. The Company has contacted JJMI and Medical Physics and has been assured that they are acting responsibly to avoid any adverse impact on their ability to conduct their operations due to the Y2K issue. 9 PART II - OTHER INFORMATION --------------------------- Item 1. Legal Proceedings: None Item 2. Changes in Securities: None Item 3. Defaults Upon Senior Securities: None Item 4. Submission of Matters to a Vote of Security Holders: None Item 5. Other Information: None Item 6. Exhibits and Reports on Form 8-K: Exhibits: 1 Financial Data Schedule Form 8-K: None 10 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. INMEDICA DEVELOPMENT CORPORATION Dated: May 13, 1999 By /s/Larry E. Clark ----------------------------- Larry E. Clark, CEO By /s/Richard Bruggeman ----------------------------- Richard Bruggeman, Treasurer 11 EXHIBITS Exhibits filed with the Form 10-QSB of InMedica Development Corporation, SEC File No. 0-12968: Exhibit No. SB Item No. Description - ---------------------------------------------- 1 (27) Financial Data Schedule 12 EX-27 2 FDS --
5 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 28605 0 0 0 0 40102 252989 (251635) 43652 210874 0 0 114102 8661 (289985) 43652 0 0 0 39791 0 0 3172 (42817) 0 (42817) 0 0 0 (42817) (.01) (.01) Additional paid in capital and retained earnings.
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