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
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