FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1995
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 O-13176
NON-INVASIVE MONITORING SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-2007840
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification number)
1840 West Avenue
Miami Beach, Florida 33139
(Address of principal executive offices)
(Zip Code)
(305) 534-3694
(Registrant's telephone number, including area code)
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 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
Number of shares of the registrant's common stock outstanding as of
June 8, 1995 is 12,439,729.
NON-INVASIVE MONITORING SYSTEMS, INC.
Index
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed consolidated balance sheets -- July 31, 1994
and April 30, 1995.
Condensed consolidated statements of operations--Three
and Nine Months Ended April 30, 1994 and 1995.
Condensed consolidated statements of cash flows--Nine
Months Ended April 30, 1994 and 1995.
Notes to condensed consolidated financial
statements--April 30, 1995.
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
PART I - FINANCIAL INFORMATION
NON-INVASIVE MONITORING SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
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July 31, April 30,
1994 1995
(Note) (Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 297,088 $ 255,219
Restricted Certificate of
Deposit 2,000,000 -
Accounts and royalties
receivable 76,167 114,606
Inventories 686,021 614,615
Prepaid expenses and other
current assets 17,178 35,039
TOTAL CURRENT ASSETS 3,076,454 1,019,479
PLANT AND EQUIPMENT
Furniture and equipment 546,665 603,033
Leasehold improvements 15,730 15,730
562,395 618,763
Less accumulated depreciation
and amortization 438,607 492,922
178,421 125,841
OTHER ASSETS
Patent costs, net of accumulated
amortization of $79,171 in
April and $89,095 in July 240,830 255,037
Deferred software production
costs, net of accumulated
amortization of $335,204 in
April and $267,704 in July 217,606 150,106
458,436 405,143
$ 3,658,678 $ 1,550,463
</TABLE>
NON-INVASIVE MONITORING SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS--Continued
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
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July 31, April 30,
1994 1995
(Note) (Unaudited)
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES
Notes payable $ 1,965,000 $ -
Customer deposit 201,630 12,983
Accounts payable 111,870 116,658
Accrued expenses 168,030 137,474
TOTAL CURRENT LIABILITIES 2,446,530 267,115
SHAREHOLDERS' EQUITY
Convertible Preferred Stock,
$1.00 par value, 1,000,000
shares authorized:
Series B: (liquidation
preference of $100 per
share, aggregating
$10,000) 100 100
Series C: 62,048 shares
issued and outstanding 62,048 62,048
Common Stock, $.01 par value,
100,000,000 shares authorized,
12,439,729 issued and
outstanding 124,398 124,398
Additional Paid-in capital 10,693,126 10,693,126
Accumulated deficit (9,667,524) (9,596,324)
1,212,148 1,283,348
$ 3,658,678 $ 1,550,463
</TABLE>
Note: The balance sheet at July 31, 1994 has been derived from
the audited financial statements at that date.
See notes to condensed consolidated financial statements.
NON-INVASIVE MONITORING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
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Three Months Ended Nine Months Ended
April 30, April 30,
1994 1995 1994 1995
Net sales $ 471,121 $ 318,508 $ 693,567 $1,408,656
Cost of goods sold 370,479 133,190 573,204 656,327
Amortization of
software production
costs 22,500 22,500 67,500 67,500
78,142 162,818 52,863 684,829
Operating expenses:
Selling and dis-
tribution 49,132 40,307 172,190 122,555
General and adminis-
trative 126,989 81,301 339,113 243,853
Research and devel-
opment 77,402 91,255 319,248 249,818
253,523 212,863 830,551 616,226
PROFIT (LOSS) FROM
OPERATIONS (175,381) (50,045) (777,688) 68,603
Other (expense) income:
Interest expense (20,212) (177) (56,595) (20,883)
Interest income 15,319 1,473 44,253 14,043
Royalties 25,325 4,900 34,325 16,900
Other income
(expense) 4,667 (9,160) 21,913 (7,463)
25,099 (2,964) 43,896 (2,597)
NET PROFIT (LOSS) $(150,282) $(53,009) (733,792) 71,200
AVERAGE COMMON SHARES
OUTSTANDING 10,689,729 12,439,729 10,689,729 12,439,729
PROFIT (LOSS) PER
COMMON SHARE $ (0.01) $ 0.00 $ (0.07) $ 0.01
See notes to condensed consolidated financial statements.
</TABLE>
NON-INVASIVE MONITORING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Nine Months Ended
April 30
1994 1995
OPERATING ACTIVITIES
Net profit (loss) $ (733,792) $ 71,200
Adjustments to reconcile
net profit (loss)
to net cash provided by
operating activities:
Depreciation and
amortization 159,204 111,891
Amortization of deferred
compensation - -
Issuance of Common
Stock for services
rendered - -
Changes in operating assets
and liabilities:
Decrease in restricted CD - 2,000,000
Decrease (increase) in
accounts and royalties
receivable 285,147 (38,439)
(Increase) decrease in
inventories 174,965 71,406
Decrease (increase)
prepaid expenses and
other current assets 20,774 (17,861)
Increase (decrease) in
accounts payable and
accrued expenses 71,998 (25,768)
Decrease in customer
deposits - (188,647)
NET CASH USED IN
OPERATING ACTIVI-
TIES $ (21,704) $ 1,983,782
INVESTING ACTIVITIES
Sale (purchase) of marketable
securities 42,000 -
Purchases of plant and
equipment (33,152) (56,368)
Patent costs (31,580) (4,283)
Deferred software production
costs
NET CASH USED IN INVESTING
ACTIVITIES $ (22,732) $ (60,651)
FINANCING ACTIVITIES
Net proceeds from (payments
of) notes payable 126,500 (1,965,000)
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES $ 126,500 $ (1,965,000)
(DECREASE) INCREASE IN CASH $ 82,064 $ (41,869)
CASH AT BEGINNING OF PERIOD $ 34,527 $ 297,088
CASH AT END OF PERIOD $ 116,591 $ 255,219
See notes to condensed consolidated financial statements.
</TABLE>
NON-INVASIVE MONITORING SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
April 30, 1995
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 Article 10 of regulation S-B.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the three and nine month periods ended April 30, 1995
are not necessarily indicative of the results that may be expected
for the year ended July 31, 1995. For further information, refer
to the consolidated financial statements and footnotes thereto
included in the Company's Annual Report on Form 10KSB for the
fiscal year ended July 31, 1994.
NOTE B--INVENTORIES
Inventories consist of the following:
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July 31, 1994 April 30, 1995
Raw materials $ 96,126 $ 158,708
Work-in-process 386,268 294,410
Finished Goods 203,627 161,497
$ 686,021 $ 614,615
</TABLE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESULTS OF OPERATIONS
The Company's net loss for the three month period ended April 30,
1995 was approximately $53,000 as compared to a net loss of
approximately $150,000 for the three month period April 30, 1994.
The Company had net income of approximately $71,000 for the nine
month period ended April 30, 1995 as compared to a net loss of
approximately $734,000 for the same period in 1994. This decrease
in net loss for the three and nine month periods is due to higher
gross margins, a decrease in operating expenses described below and
increased sales during the first and second quarters of fiscal
1995.
Net sales for the three month period ended April 30, 1995 were
approximately $319,000 as compared to approximately $471,000 for
the three month period ended April 30, 1994: net sales for the nine
month period ended April 30, 1995 were approximately $1,409,000 as
compared to approximately $694,000 for the nine month period ended
April 30, 1994. The decrease in net sales for the three month
period were a result of reduced sales to the Collaborative Home
Infant Monitoring Evaluation (CHIME) study which is supported by
the National Institute of Child Health and Human Development as
compared to the same period last year while the increase in net
sales for the nine month period were a result of product delivery
on the direct sale by the Company of it's Respitrace PT monitors to
the CHIME study and additional sales of the Respitrace Plus and
Respiband Plus products to SensorMedics Corporation ("SMC") who
undertook exclusive marketing of the Company's products (excluding
the Respitrace PT mentioned above) during the first quarter of
fiscal 1995. The Company has granted the exclusive domestic and
international marketing rights for its products to SMC pursuant to
a one year marketing agreement as of August 1, 1994. Sales to
CHIME amounted to approximately $32,000 and $424,000, respectively,
for the three and nine month periods ending April 30, 1995 while
sales to SMC amounted to approximately $281,000 and $683,000,
respectively, for the same three and nine month periods.
Cost of goods sold expressed as a percentage of net sales was
approximately 42% during the three month period ended April 30,
1995 compared to approximately 79% for the three month period
ending April 30, 1994. Cost of goods sold was approximately 47%
during the nine month period ended April 30, 1995 compared to
approximately 83% for the same period last year. The reduction of
the cost of goods sold for both the three and nine month periods
ending April 30, 1995 was due to higher gross margin and the
combination of reduced production costs and increased sales
revenue.
Operating expenses decreased from approximately $254,000 for the
three month period ended April 30, 1994 to approximately $213,000
for the three month period ended April 30, 1995 and from
approximately $831,000 for the nine month period ended April 30,
1994 to approximately $616,000 for the nine month period ended
April 30, 1995. The decrease in both the three and nine month
periods is a result of continued downsizing of operations due to
cash constraints as described in "Liquidity and Capital Resources"
below along with a decrease in selling and distribution expenses
which are a result of the SMC marketing agreement mentioned above.
Interest expense decreased approximately $11,000 for the three
month period ended April 30, 1995 and approximately $36,000 for the
nine month period ended April 30, 1995 as compared to the same
periods in the prior fiscal year. These decreases are due to lower
outstanding debt.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary source of working capital is revenues from
operations.
Working capital was approximately $752,000 at April 30, 1995 as
compared to approximately $630,000 at July 31, 1994. The increase
in working capital is due to net income generated during the nine
month period. During the three month period ended April 30, 1995
the Company continued to further downsize operations by
implementing operational reductions and has limited research and
development activities to projects which have the potential for
generating revenues in the short term.
The Company continues to focus its resources into several areas of
activity. These include; 1) Company participation in regulatory
standards development aimed at gaining new product clearance to
market, 2) in connection with the CHIME study vendor of choice
technical involvement and participation as a non-voting member to
CHIME Steering Committee meetings when requested, 3) servicing the
product marketing agreement with SMC as described above, 4) the
submission of a 510K application to the Food & Drug Administration
(FDA) for permission to market products developed in connection
with the CHIME project mentioned above. The Company expects to
continue efforts in these areas of activity during fiscal 1995.
If sales do not continue at the present level, the Company may
require further financing to continue operations beyond the end of
fiscal 1995 and in any event may require additional capital to fund
its research and development efforts. Although the Company is
exploring various potential sources of financing, the Company has
no commitments in this regard. Failure to secure necessary
financing might result in the further reduction and curtailment of
operations.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits - None
B. Not applicable
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereto duly authorized.
NON-INVASIVE MONITORING SYSTEMS, INC.
Registrant
Date: June 12, 1995 By:/s/Marvin A. Sackner
Marvin A. Sackner, as Chairman and
Principal Executive Officer
Date: June 12, 1995 By:/s/Richard L. Dougherty
Richard L. Dougherty, as President
and Principal Operating, Financial
and Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Schedule for 3rd Quarter 10-Q for Non-Invasive Monitoring, Inc.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1994
<PERIOD-END> APR-30-1995
<CASH> 255,214
<SECURITIES> 0
<RECEIVABLES> 114,606
<ALLOWANCES> 0
<INVENTORY> 614,615
<CURRENT-ASSETS> 1,019,479
<PP&E> 618,763
<DEPRECIATION> 492,922
<TOTAL-ASSETS> 1,550,463
<CURRENT-LIABILITIES> 267,115
<BONDS> 0
<COMMON> 124,398
100
62,048
<OTHER-SE> 1,096,802
<TOTAL-LIABILITY-AND-EQUITY> 1,550,463
<SALES> 1,408,656
<TOTAL-REVENUES> 1,408,656
<CGS> 656,327
<TOTAL-COSTS> 616,226
<OTHER-EXPENSES> (2,597)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (20,883)
<INCOME-PRETAX> 71,200
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 71,200
<EPS-PRIMARY> .01
<EPS-DILUTED> 0
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