-----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, BQilI9YhnKJkWes2AaWZFIZgX7QbVZJic91r/4YTe4N/d2TQ3aA47blMrj2haaEc EBbD5IPW0afAwNjoL5C9MQ== 0000950112-96-002775.txt : 19960814 0000950112-96-002775.hdr.sgml : 19960814 ACCESSION NUMBER: 0000950112-96-002775 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMSCO INC /MA/ CENTRAL INDEX KEY: 0000924396 STANDARD INDUSTRIAL CLASSIFICATION: MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833] IRS NUMBER: 043021770 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-24520 FILM NUMBER: 96610535 BUSINESS ADDRESS: STREET 1: 40 BAYFIELD DR CITY: NORTH ANDOVER STATE: MA ZIP: 01845 BUSINESS PHONE: 5086892080 MAIL ADDRESS: STREET 1: 40 BAYFIELD DR CITY: NORTH ANDOVER STATE: MA ZIP: 01845 10QSB 1 IMSCO TECHNOLOGIES, INC. 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 June 30, l996 Commission file number 0-24520 IMSCO TECHNOLOGIES, INC. (Exact name of small business issuer as specified in its charter) Delaware 04-3021770 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 40 Bayfield Drive, North Andover, Massachusetts 01845 (Address of principal executive offices) (508) 689-2080 (Issuer's telephone number) IMSCO, INC. (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 |_|. State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 2,999,839. PART I - Financial Information Item 1. Financial Statements. See pages F-1 to F-4. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. RESULTS OF OPERATIONS FOR SIX MONTHS ENDING JUNE 30, l996; COMPARED WITH JUNE 30, l995. Net losses decreased from $237,691 for the six months ended June 30, l995 to $39,432 for the six months ending June 30, l995, an 83% deficit reduction. The Company had no revenues or operating income for the six months ended June 30, l995 and June 30, l996 from continuing operations. For the six months ended June 30, l996, the Company earned no interest on its interest bearing investment account. $525 was earned for the comparable period in l995. Total general, administrative and development expenses were $37,673 for 1996 in comparison to $238,216 for l995. The decrease in these costs from l995 to l996 was primarily due to decreased staffing and wages paid for research and development. The Company incurred costs in l995 as the Company performed and completed product research, development and refinement on its Decaffamatic separation technology. All research and development costs were expensed currently in the year incurred, rather than capitalized. This resulted in a loss per share of $.01 for the six months ended June 30, l996 in comparison to a loss per share of $.08 for the comparable six month period in l995. At June 30, l995, the Company had total assets of $58,184, total liabilities of $25,990, and total stockholders' equity of $32,194. At June 30, l996, the Company had total assets of $8,074, a decrease of 86% from the comparable period in l995, total liabilities of $67,869 an increase of $41,879 from l995, and a 2 stockholders' deficit of $59,795, in comparison to a stockholders' equity of $32,194 in the prior year. LIQUIDITY AND CAPITAL RESOURCES The Company had a positive working capital position as of June 30, l995 of $27,598 in comparison to a working capital deficit position as of June 30, l996 of $63,611. The Company had an accumulated deficit of $1,638,776 at the period ended June 30, l995 in comparison to an accumulated deficit of $1,886,794 at the period ended June 30, l996. The increase in the accumulated deficit is primarily related to continuing operating costs without any operating income. For the three months ended June 30, l996 the Company's cash requirements were satisfied from the cash reserves in its operating and investment accounts. The Company does not currently possess a bank source of financing. The Company cannot be certain that its existing sources of cash will be adequate to meet its liquidity requirements. Therefore, the Company is considering the following options to meet its liquidity requirements: (a) attempting to raise additional funds through the sale of equity securities to persons or entities who are not presently stockholders of the Company; (b) attempting to obtain a bank line of credit; and (c) should insufficient funds be available from the foregoing sources, reducing the Company's present rate of expenditures which might materially adversely affect the ability of the Company to produce competitive products and services and to market them effectively. 3 The Company's ability to continue in business as a going concern depends upon its ability to generate licensing fees and royalties from the sale of its technology and products, to conserve liquidity by setting marketing and other priorities and reducing expenditures, to obtain bank financing and to obtain additional funds through the placement of its common stock. The Company's ability to obtain bank financing will require significantly improved operating results over the Company's results for its past twelve months, the likelihood of which the Company presently cannot assure. In any event, there is no assurance that any expenditure reductions, financings or other measures that the Company may be able to effect will enable it to meet its working capital requirements without licensing fees and royalties. Any such reductions of expenditures might materially adversely affect the ability of the Company to produce competitive products and services and to market these effectively. The Company's long term capital expenditure requirements will depend upon numerous factors, including the progress of the Company's research and development programs, the resources that the Company devotes to the development of self-funded products, proprietary manufacturing methods and advanced technologies, the ability of the Company to obtain licensing arrangements, and the demand for its products if and when approved. The Company intends to rely on third-party licensees to fund the advanced portions of its development costs, obtain regulatory approvals, manufacture and market the Company's products. In the event the Company decided to self-fund product development, obtain regulatory approvals, manufacture and market its products on its own behalf, it would require significant additional funds. No assurance can be given that such funds would be available on terms satisfactory to the Company, it at all. The Company believes that its existing cash and cash equivalents, together with the net proceeds from an anticipated private placement and anticipated cash flow from operations will be sufficient to meet its operating expenses and capital expenditures requirements for at least the next 6 months. However, if such private placement efforts are unsuccessful, there can be no 4 assurance that the Company will have sufficient capital resources to be able to continue as a going concern. PART II - Other Information Not Applicable. 5 INDEX TO FINANCIAL STATEMENTS Balance Sheet at June 30, l995 (unaudited) and June 30, l996 (unaudited)........................... F-1 Statement of Income (Loss) for the six months ended June 30, l995 and l996 (unaudited)..................... F-2 Statement of Cash Flows for the six months ended June 30, 1995 and 1996 (unaudited)..................... F-3 Statement of Stockholders' Equity (Deficit) for the six months ended June 30, 1995 and 1996 (unaudited)..................... F-4 IMSCO, INC. a development stage enterprise BALANCE SHEET AT JUNE 30, 1996 AND JUNE 30, 1995 June 30, June 30, 1996 1995 ------- -------- ASSETS Cash and equivalents $ 4,258 $ 53,588 Stock subscription receivable 0 0 - - TOTAL CURRENT ASSETS 4,258 53,588 FIXED ASSETS - Note 1 Property and Equipment 76,672 76,772 Leasehold Improvements 4,900 4,900 Accumulated Depreciation (78,246) (78,246) --------- -------- NET FIXED ASSETS 3,326 3,426 --------- -------- ORGANIZATION COSTS net of amortization 100 100 DEPOSITS 390 540 DUE FROM OFFICERS 0 530 --------- -------- TOTAL ASSETS $ 8,074 $ 58,184 ========= ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable $ 49,927 $ 22,299 Loan from Officer 9,570 0 Accrued Expenses 8,372 0 Accured Payroll Taxes 0 3,691 --------- -------- TOTAL CURRENT LIABILITIES 67,869 25,990 STOCKHOLDERS' EQUITY (DEFICIT) Common Stock- authorized 3,000,000 shares at $.001 par value; 2,999,839 and 2,866,869 shares issued and outstanding at June 30, 1996 and 1995 3,000 2,867 respectively Additional paid-in capital 1,823,999 1,668,103 Deficit Accumulated: Development Stage (1,265,886) (1,017,868) Discontinued Operations (620,908) (620,908) TOTAL STOCKHOLDER' EQUITY (DEFICIT) (59,795) 32,194 -------- ------- TOTAL LIABILITIES AND STOCKHOLDER' EQUITY (DEFICIT) $ 8,074 $ 58,184 ======== ======== The following notes are an integral part of these statements. FS-1 IMSCO, INC. a development stage enterprise STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 AND CUMULATIVE AMOUNTS FROM JULY 9, 1992 (inception of the current development stage) TO JUNE 30, 1996 Cumulative amounts from current 1996 1995 development stage ---- ---- ----------------- DEVELOPMENT EXPENSES $10,218 $23,351 $ 153,243 SALARIES AND WAGES 0 50,000 203,762 OFFICER SALARIES 0 73,200 271,694 PAYROLL TAXES 0 10,446 45,264 OUTSIDE LABOR 0 0 120,350 PROFESSIONAL SERVICES 2,500 53,881 227,562 RENT 7,225 7,225 64,754 INSURANCE 6,828 6,832 39,322 TRAVEL AND BUSINESS MEETINGS 3,012 6,414 34,332 AUTO EXPENSE 683 1,511 21,259 TELEPHONE AND UTILITIES 2,970 2,503 27,468 OFFICE EXPENSES 2,100 2,853 16,442 EQUIPMENT RENTAL 0 0 3,462 CONTRIBUTIONS 375 0 410 CORPORATE FEES 1,762 0 35,871 ------ ------- --------- TOTAL GENERAL, ADMINISTRATIVE AND DEVELOPMENT EXPENSE $37,432 238,216 1,265,194 ------- ------- --------- OTHER INCOME (EXPENSE): DIVIDEND AND INTEREST INCOME 0 525 3,070 INTEREST EXPENSE (1,759) 0 (3,306) LOSS BEFORE INCOME TAXES (39,432) (237,691) (1,265,194) PROVISION FOR INCOME TAX 0 0 (456) NET LOSS FROM DEVELOPMENT (39,432) (237,691) (1,265,886) ------ ------- --------- LOSS FROM DISCOUNTINUED OPERATIONS (Note 1) NET LOSS (39,432) (237,691) (1,265,886) ====== ======= ========= LOSS PER SHARE (Note 1) $(.01) $(.08) $ (.42) The accompanying notes are an integral part of these statements. FS-2 IMSCO, INC. a development stage enterprise STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 AND CUMULATIVE AMOUNTS FROM JULY 9, 1992 (inception of the current development stage)
Cumulative amounts from current 1996 1995 development stage -------- -------- ------------------ Cash flows from operating activities: Cash received from dividends and interest $ 525 $3,070 Cash received from customers 57,004 Cash received from research and testing 8,187 Cash received from unemployment taxes 170 Cash received from travel reimbursements and other rebates 938 Cash paid to suppliers and employees ($43,946) (201,632) (1,088,048) -------- ------- --------- Net cash provided by operating activities ($43,946) (201,107) (1,018,679) Cash flows from investing activities: Prepaid research testing (7,734) Purchase of Fixed Assets (2,548) --------- Net cash provided by financing activities 0 0 (10,282) Cash flows from financing activities: Cash flow for non-deductible expenses (1,087) Interim loan financing from officer 9,570 94,570 Proceeds from issuance of common stock 30,000 92,500 952,756 ------ ------- --------- Net cash provided by financing activities 39,570 91,413 1,047,326 Net Increase in cash and cash equivalents (4,376) (109,694) 18,365 Cash and cash equivalents at beginning of year 8,634 163,282 (14,107) Cash and cash equivalents at end of year $4,258 $53,588 $4,258 ====== ======= ========= RECONCILIATION OF NET LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net Loss ($39,432) ($237,691) ($1,265,886) Decrease in Due from officers 530 (120) Depreciation and Amortization 2,613 Stock isued to retire debt services 69,541 223,483 Increase (Decrease) in Accounts Payable (3,000) (23,205) (14,524) Increase (Decrease) in Accrued Payroll Taxes (2,044) (9,752) 0 Increase (Decrease) in Accrued Expenses 8,372 Decrease in Utility Deposits 4,285 Decrease in Accounts Receivable 2,998 Decrease in Inventory and Assets 20,100 ----------- Total adjustments (4,514) 36,584 247,207 Net cash provided by operating activities ($43,946) ($201,107) ($1,018,679)
The following notes are an integral part of these statements. FS-3 IMSCO, INC. a development stage enterprise STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) FOR THE YEAR ENDED DECEMBER 31, 1995 AND THE SIX MONTHS ENDED JUNE 30, 1996
Total Stock Additional holders' Common Paid-in Acumulated Equity Stock Capital Deficit (Deficit) ----- ------- ------- --------- Balance at December 31, 1994 $2,751 $1,525,235 ($1,441,276) ($86,710) Issuance of 82,44 shares of $.001 par valued for $1.25 per share 83 102,417 102,500 Issuance of shares of $.001 par value for $1.25 per share 14 17,986 18,000 Issuance of shares of $.001 par Value for contract services performed 119 106,894 107,013 Issuance of shares of $.001 par value for $1.55 par share 11 16,989 17,000 Issuance of shares of $.001 par value for $1.50 per share 17 24,483 24,500 Loss from development for the year ended December 31, 1996 (406,086) (406,086) ----- --------- --------- ------ Balance at Decembeer 31, 1995 2,995 1,794,004 (1,847,362) (50,363) ===== ========= ========= ====== Issuance of DPI Additional Paid in Capital for $2.00 per share $20,000 $20,000 Loss from development for the period January 1 through March 31,1996 (23,599) (23,599) Balance at March 31, 1996 2,995 1,814,004 (1,870,961) (53,962) Issuance of shares of $.001 par value for $2,00 5 9,995 10,000 Loss from development for the period April 1 through June 30, 1996 (15,833) (15,833) Balance at June 30, 1996 $3,000 $1,823,999 ($1,886,794) ($59,795)
The accompanying notes are an integral part of these statements. FS-4 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. August 12, l996 IMSCO, Inc. /s/ Sol L. Berg -------------------------------- Sol L. Berg President (Principal Financial Officer and Principal Accounting Officer) 7 EX-27 2
5 6-MOS 6-MOS DEC-31-1996 DEC-31-1995 JUN-30-1996 JUN-30-1995 4,258 53,588 0 0 0 0 0 0 0 0 4,258 53,588 0 0 0 0 8,074 58,184 67,869 25,990 0 0 0 0 0 0 3,000 2,867 (62,795) 35,061 8,074 58,184 0 0 0 525 0 0 0 0 37,432 238,216 0 0 1,759 0 (39,432) (237,691) 0 0 (39,432) (237,691) 0 0 0 0 0 0 (39,432) (237,691) (.01) (.08) (.01) (.08)
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