<PAGE> 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, 1996
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)
495 East 4500 South, Suite 230
Salt Lake City Utah 84107
(Address of principal executive offices)
Registrant's telephone number: (801) 261-5657
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 10, 1996 was
7,679,522 shares.
<PAGE> 2
PART I - FINANCIAL INFORMATION Page 1 of 2
Item 1. Financial Statements
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1996
ASSETS
<TABLE>
<CAPTION>
March 31,
1996
-------------
(Unaudited)
<S> <C>
CURRENT ASSETS:
Cash $ 200,442
Prepaid expenses 20,039
-------------
Total current assets $ 220,481
EQUIPMENT AND FURNITURE,
at cost, less accumulated
depreciation of $249,268 5,222
OTHER ASSETS 2,196
----------
Total assets $ 227,899
===========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 3
Page 2 of 2
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1996
LIABILITIES AND STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
March 31,
1996
------------
(Unaudited)
<S> <C>
CURRENT LIABILITIES:
Current portion of note
payable $ 50,000
Accounts payable and
accrued interest 10,642
Related-party notes
payable 113,026
-----------
Total current liabilities 173,668
-----------
NOTE PAYABLE, less
current portion 410,000
-----------
STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value;
20,000,000 shares authorized,
7,648,064 issued and outstanding 7,648
Preferred stock, 10,000,000
shares authorized; Series A
preferred stock, cumulative
and convertible, $4.50 par
value, 1,000,000 shares
designated, 83,884 shares
issued and outstanding 377,478
Additional paid-in capital 6,145,403
Accumulated deficit (6,886,298)
-----------
Total stockholders'
deficit (355,769)
Total liabilities and -----------
stockholders' deficit $ 227,899
==========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 4
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three
Months Ended
March 31,
1996 1995
(Unaudited) (Unaudited)
------------------------
<S> <C> <C>
OPERATING REVENUE:
Royalties $ -0- $ -0-
Sales -0- -0-
------------------------
Total operating revenue -0- -0-
------------------------
OPERATING EXPENSES:
General and
administrative 36,716 45,532
Research and
development 22,029 -0-
-----------------------
Total operating expenses 58,745 45,532
-----------------------
LOSS FROM OPERATIONS (58,745) (45,532)
-----------------------
OTHER INCOME (EXPENSES):
Miscellaneous income -0- 590
Interest expense (14,954) (42,206)
-----------------------
Total other expense (14,954) (41,616)
-----------------------
NET LOSS (73,699) (87,148)
=========== ===========
Less redeemable preferred
stock dividends 7,550 -0-
----------- -----------
LOSS APPLICABLE TO COMMON
SHARES $ (81,249) $ (87,148)
========== ========
Net loss
per common share $ (.01) $ (.01)
========= =========
Weighted average number
of common share outstanding 7,485,707 7,474,403
========== =========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 5
Page 1 of 2
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
<TABLE>
<CAPTION>
For the Three
Months Ended
March 31,
1996 1995
(Unaudited) (Unaudited)
-------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (73,699) (87,148)
Adjustments to reconcile net
loss to net cash provided by
operating activities-
Depreciation 223 6,666
Change in assets and liabilities-
Decrease in royalties receivable 227,520 301,375
Decrease in prepaid
expenses 6,677 7,031
Decrease in accounts payable (3,004) (16,311)
and accrued liabilities (4,318) (157,245)
Decrease in related party
payable (25,500) -0-
--------- ----------
Net cash provided by
operating activities 130,903 70,679
------------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment and
furniture (1,375) -0-
------------- ----------
Net cash used in
investing activities (1,375) -0-
------------- ------------
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 6
Page 2 of 2
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
<TABLE>
<CAPTION>
For the Three
Months Ended
March 31,
1996 1995
(Unaudited) (Unaudited)
------------ -----------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on
convertible debentures $(22,768) $(61,059)
Preferred Stock Dividends Paid (7,550) -0-
Principal payments of note payable (12,500) -0-
----------- -----------
Net cash used in financing activities (42,818) (61,059)
----------- -----------
NET INCREASE IN CASH 86,710 9,620
CASH AT BEGINNING OF PERIOD 113,732 3,080
---------- ----------
CASH AT END OF PERIOD $200,442 $12,700
======== =======
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 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 of normal
recurring adjustments) considered necessary for fair presentation
have been included. Operating results for the three-month period
ended March 31, 1996 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1996. For
further information, refer to the consolidated financial statements
included in the Company's Form 10-KSB for the year ended December
31, 1995.
Note B--Retirement/Conversion of Debentures
During March and April, 1996, the Company received notice of
conversion of debentures to common stock from the remaining three
debenture holders, effective March 31, 1996. The conversion
notices resulted in the issuance of an aggregate of 164,161 shares
of common stock in satisfaction of $123,121 in remaining debenture
debt. All outstanding debentures of the Company have now been
retired by refinancing, payment or conversion to common stock.
Note C -- Subsequent Event
During April, 1996, a Preferred Stockholder converted 5,243 Series
A Preferred shares of Stock to 31,458 shares of Common Stock of the
Company. The conversion ratio was six shares of Common Stock per
share of Preferred Stock or $.75 per share of Common Stock.
Following the conversion, the Company had outstanding 78,641 shares
of Series A Preferred Stock.
<PAGE> 8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
For the three months ended March 31, 1996, no operating
revenues were recognized due to the revenue recognition policy of
the Company and the timing of the receipt of revenues. The
Company's sole source of revenue is a royalty payment received from
J & J Medical, Inc., which is paid to the Company on a quarterly
basis. Royalty revenues being received by the Company may be
insufficient to sustain research and development costs, fund
operations and retire indebtedness when it comes due. InMedica
consequently intends to continue to look for funding sources.
InMedica achieved profitable operations during the fiscal
years ended December 31, 1994 and 1995. Profitable operations
resulted from increased royalty receipts coupled with expense
reductions and the suspension of research and development efforts
in 1994 and an extraordinary gain in 1995. However, the Company
has a total shareholders' deficit of $355,769 and an accumulated
deficit of $6,886,298 as of March 31, 1996. In order for InMedica
to continue its research and development activities and meet its
obligations, it must secure additional financing, for which it has
no commitments. It is impossible to estimate the amount of the J
& J Medical, Inc. royalties which may be received in the future.
Such income is dependent upon the continued sales of the product
line by J & J Medical Inc. which includes the Company's base
technology and upon which the royalty is paid.
The Company's President, Larry E. Clark, worked without cash
compensation during his first year with the Company. In
consideration of his continued work for InMedica, the Company has
agreed to compensate him in the sum of $7,500 per month commencing
April 16, 1996. Mr. Clark's compensation is expected to accrue
rather than be paid at the present time.
Results of Operations
See "Liquidity and Capital Resources" for an explanation as to
the lack of revenues during the quarter ended March 31, 1996. The
net loss from operations of $73,699 for the quarter consequently
resulted as compared to the net loss of $87,148 during the
comparable period of the prior year. The decrease in net loss
resulted primarily from the decrease in interest expense during the
current year as debenture debt of the Company was converted to
preferred stock or refinanced at a lower interest rate.
<PAGE> 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:
On May 9, 1996 the Company announced the completion of a
second round of clinical data gathering for the use in
calibration of the Company's non-invasive hematocrit
device. The performance of InMedica's device on the
aggregate test set correlated closely to the measurements
of traditionally drawn blood (0.93 correlation
coefficient). The Company intends to commence
construction of second level prototypes and to enter into
formal clinical validation studies. Continued progress
is subject to the need for additional fund raising or
development of strategic alliances for the funding of the
project, to FDA approvals, and to continued research
and development progress.
Item 6. Exhibits and Reports on Form 8-K:
Exhibits:
(1) Converstion Agreement between InMedica Development
Corporation and Clinton B. Newman dated April 23, 1996.
(2) Financial Data Schedule
Form 8-K: None
<PAGE> 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, 1996
By /s/ Larry E. Clark
-----------------------
Larry E. Clark, CEO
By /s/ Richard Bruggeman
----------------------------
Richard Bruggeman, Treasurer
<PAGE> 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 (10) Conversion Agreement between
InMedica Development Corporation
and Clinton B. Newman dated April
23, 1996.
2 (27) Financial Data Schedule
EXHIBIT 1
CONVERSION AGREEMENT
AN AGREEMENT made the 23rd day of April , 1996 by and
between the Preferred Stockholder (hereinafter "Holder") whose name
is subscribed below and InMedica Development Corporation, a Utah
corporation, with its principal place of business at 495 East 4500
South, Suite 230, Salt Lake City, Utah, (hereinafter, "InMedica" or
the "Company").
RECITALS
Whereas Holder owns 5,243 shares of the Series A Convertible
Preferred Stock, par value $4.50 per share, (the "Preferred Stock")
of InMedica; and
Whereas the Preferred Stock by its terms is presently
convertible to common stock of the Company at the conversion rate
of six shares of common stock per one share of Preferred Stock; and
Whereas the undersigned Holder has given notice of conversion
as required by the Articles of Incorporation of the Company and is
entitled to 31,458 shares of the Common Stock of the Company (the
"Shares") in exchange for the 5,243 Preferred shares presently held
by him; and
Whereas the undersigned Holder is knowledgeable regarding the
business, and affairs of the Company, has had opportunity to ask
and receive answers to questions regarding the Company, and has
reviewed or had opportunity to review disclosure documents
regarding the Company and now considers himself to be fully
informed and in possession of every material fact he deems
necessary in order consider the exercise of his conversion rights
with respect to the Preferred Stock;
NOW THEREFORE, in consideration of the mutual agreements
contained herein, the parties agree as follows:
1. Exchange. Holder hereby exhanges his 5,243 Preferred
shares for 31,458 restricted common shares of InMedica as permitted
by the Articles of Incorporation of the Company. Holder will
deliver a signed copy of this agreement and his Preferred Stock
Certificate endorsed in blank to the Company.
2. Issuance of Shares. Upon receipt by the Company of
this signed Agreement and the Preferred Stock certificate of the
Holder, the Company will issue to Holder 31,458 restricted common
shares, $.001 par value, of the Company.
3. Effective Date. Holder and the Company agree that
the exchange transaction contemplated by this Agreement, shall be
effective upon the acceptance by the Company of the Holders'
<PAGE> 13
Agreement, notwithstanding the actual date of delivery of the stock
certificate representing the Shares.
4. Conditions. The consummation of the exchange
transaction contemplated by this Agreement is expressly conditioned
upon the satisfaction or waiver of the following conditions
precedent and subsequent:
4.1 The full and due execution and delivery of this Agreement by
Holder and the Company;
4.2 The execution and delivery by Holder of the Questionnaire
attached to this Agreement as Exhibit "F" and made a part hereof;
4.3 The continued accuracy and validity of the representations and
warranties of Holder set forth in Section 5 and elsewhere in this
Agreement;
4.4 The approval of this Agreement by InMedica;
5. Representations and Warranties of Holder. Holder hereby
agrees, represents and, to the extent the context shall require,
warrants to the Company as set forth below and agrees that such
agreements, representations and warranties shall expressly survive
the consummation of the exchange transaction contemplated hereby
and shall be unaffected by any investigation made by any party at
any time:
5.1 Holder understands that the Preferred Stock is being exchanged
and the Shares are being issued without registration under the
Federal Securities Act of 1933, as amended (the "Federal Act"), in
reliance upon an exemption or exemptions available under the
Federal Act, including those available under Section 3(a)(9) and/or
Section 4(2) and/or Regulation D thereof. Holder further
understands that the Preferred Stock is being exchanged and the
Shares are being issued pursuant to an exemption from the
registration provisions of the applicable state laws and
understands that the availability of the exemption or exemptions
from registration and qualification under the Federal Act and the
state laws depend in part upon the accuracy of certain of the
representations, declarations and warranties contained herein, and
those which are made in the Questionnaire attached as Exhibit "F"
hereto, executed by Holder with the intent that the same may be
relied upon by the Company in determining Holder's suitability as
an investor in the Company. Holder further acknowledges that this
transaction has not been and will not be reviewed by the Securities
and Exchange Commission nor by the securities administrator of any
state.
5.2 Holder is a resident and domiciliary, not a temporary or
<PAGE> 14
transient resident, of the State shown as part of Holder's address
in Holder's Questionnaire.
5.3 Holder is acquiring the Shares to be issued for investment and
not with a view to the public resale or distribution thereof. The
undersigned has no contract, undertaking, agreement or arrangement
with any person to sell, transfer or pledge to such person or
anyone else the Shares or any portion thereof or interest therein,
and the undersigned has no present plans to enter into such
contract, undertaking, agreement or arrangement.
5.4 Holder acknowledges that the certificate evidencing the
Shares, and any and all replacements thereof, shall bear and be
subject to legends in substantially the following form affecting
the transferability of the Shares and that the Company will place
appropriate stop transfer orders with its transfer agent:
"The shares of stock evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended, and have
been issued in reliance upon one or more exemptions from the
requirements for such registration including an exemption for non-public
offerings. Accordingly, the sale, transfer, pledge, hypothecation or other
disposition of the shares evidenced hereby or any portion thereof or
interest therein may not be accomplished in the absence of an effective
registration statement under that act, or an opinion of counsel satisfactory
in form and substance to the Company to the effect that such a registration
is not required."
5.5 Holder further understands and agrees that if he desires to
make any transfer of the Shares, the Company is in a position to
impede such transfer through prior stop orders placed with its
transfer agent or otherwise and that the Company will promptly
remove such impediments placed by it only when:
(i)The Company has received a satisfactory opinion of counsel to
the effect that the proposed transfer does not require registration
or qualification pursuant to the Federal Act or the state laws by
reason of an exemption provided thereunder and a representation and
agreement of the proposed transferee in form and substance
satisfactory to the Company, and the Company shall have advised
Holder that such opinion, representation and agreement are
satisfactory to the Company; or
(ii) The Company has received a satisfactory opinion of counsel to
the effect that the proposed transfer complies with the provisions
of Rule 144 under the Federal Act and the Company shall have
advised the Holder that such counsel and such opinion are
satisfactory to the Company; or
(iii) A Registration statement covering the proposed transfer has
been filed with the Securities and Exchange Commission and has been
declared effective.
<PAGE> 15
5.6 Holder agrees that, in any event, Holder will not attempt to
dispose of the Shares or any portion or interest therein, unless
and until the Company has determined to its satisfaction that the
proposed disposition does not violate the registration or
qualification requirements of the Federal Act or applicable state
laws.
5.7 Holder understands that the Company has no obligation or
intention to register or qualify the Shares in order to permit
sales thereof in accordance with the registration or qualification
provisions of the Federal Act or the applicable state laws.
5.8 Holder hereby agrees to indemnify the Company and its
officers, directors, agents and attorneys and to hold the Company
and such persons harmless from any liability, costs or expenses
(including reasonable attorneys' fees) arising as a result of the
sale or distribution of the Shares or any portion thereof or
interest therein by him in violation of the Federal Act or
applicable state laws.
5.9 Holder agrees to indemnify the Company and its officers and
directors, agents and attorneys and to hold the Company and such
persons harmless from and against any and all loss, damage,
liabilities, costs or expenses (including reasonable attorneys'
fees) to which they may be put or which they may have incurred by
reason of or in connection with any misrepresentation made by
Holder, for any breach of any of Holder's warranties or Holder's
failure to fulfill any of Holder's covenants or agreements under
this Agreement.
5.10 Holder hereby confirms that all statements in the Holder's
Questionnaire attached as Exhibit "F" hereto were and remain true
and correct and undertakes to immediately notify the Company of any
material changes occurring thereto prior to consummation of this
exchange transaction.
5.11 Holder acknowledges that Holder and/or Holder's professional
advisor have had the opportunity to ask questions of, and receive
answers from the Company, and has/have had access to all
information concerning the terms and conditions of this exchange
and the financial and operating condition of the Company and to
obtain additional information to verify the accuracy of such
information. Further, Holder has reviewed the disclosure materials
included herewith, including the financial statements contained
therein and is familiar with their contents and further
acknowledges that Holder has had the opportunity and access to
obtain further information from the Company regarding such
financial, business and management information. Disclosure
materials attached hereto are as follows:
<PAGE> 16
Form 10-KSB for the Year Ended 12/31/95 ..........Exhibit A
Articles of Incorporation of InMedica Development
Corporation, including Series "A" Preferred Stock
Amendment.........................................Exhibit B
Bylaws of InMedica Development Corporation........Exhibit C
Additional Material Information...................Exhibit D
Risk Factors......................................Exhibit E
Questionnaire.....................................Exhibit F
5.12 Holder understands that, as indicated above, the Shares to be
issued will be restricted securities and, as such, and in addition
to the other restrictions described above, the Shares may be
subsequently transferred only in accordance with the provisions of
Rule 144 under the Federal Act which requires, among other things,
that the Shares be held for not less than two years, known as the
"holding period", including the tacking of any prior holding period
permitted by Rule 144.
5.13 Holder understands that by its terms, this exchange is made
at the option of the Holder, and the Holder, is free to accept or
reject this Exchange Agreement.
5.14 The number of shares of the Preferred Stock held by Holder as
of the date shown, is accurate and represents the full number of
shares of the Preferred Stock held by the Holder and that all
dividends owning on the Preferred Stock have been paid in full and
Holder waives and forever relinquishes any dividends on the
Preferred Stock accruing during the second quarter of 1995 and
thereafter.
5.15 Holder understands that the Company's Chief Executive Officer
purchased from Allan L. Kaminsky, then CEO of the Company,
1,000,000 shares of the Company's common stock for $100,000 ($.10
per share) during April, 1995 and that other transactions or
exchanges in the securities of the Company have occured in which
the common stock of the Company was valued at substantially less
than the arbitrary $.75 per share conversion ratio utilized in this
transaction (see Exhibit A, Form 10-KSB for the year ended December
31, 1995, "Preferred Stock," "Debentures" and "Price Range for
Common Stock").
5.16 Holder acknowledges that the Company makes no representations
or assurances as to the federal or state income tax implications,
either to the Holder or the Company, of this Exchange Agreement.
The Company has offered no opinion or advice in this respect and
Holder acknowledges that the Company and its management have urged
Holder to consult with his professional advisors with respect to
any such tax implications.
<PAGE> 17
5.17 Holder acknowledges that no representations or assurances
have been given to Holder by the Company or anyone acting in its
behalf as to the continued operations of the Company or the
financial or other success thereof and Holder recognizes that the
Shares represent a speculative investment and involve risk factors
including, but not limited to, those set forth in the Exhibits
hereto including the risk of loss of Holder's entire investment in
the Company.
5.18 Holder has not assigned or transferred the Preferred Stock or
any interest therein and the exchange thereof by Holder under this
Agreement, to the knowledge of Holder, will not result in any
breach of any of the terms, conditions or provisions of, or
constitute a default under, or result in the creation of any lien,
charge or encumbrance on, the Preferred Stock or the Shares
pursuant to any agreement, contract or other instrument to which
the Holder or the Preferred Stock is or may be bound.
5.19 Holder acknowledges that the conversion ratios for the
Exchange of the Preferred Stock for the Shares has been arbitrarily
determined by the Company and bears no relationship to book value,
present or future tangible or intangible assets of the Company or
earnings of the Company or any usual investment criteria.
6. Loss of Priority. Holder acknowledges that under the terms of
the Preferred Stock, conversion is at the option of the Preferred
Stockholder. If the Holder does not convert and execute this
Exchange Agreement, then the Preferred Stock will continue to pay
or accrue dividends at the rate of 8% per annum and the Preferred
Stock would have a preference in any liquidation of the Company
over the common stockholders. If the Holder exchanges the Holder's
Preferred Stock, the Holder forever relinquishes any priority the
Holder would have had as compared to the common shareholders in a
liquidation of the Company.
7. Further Assurances. Each party shall, at any time and from
time to time, at the other's request, execute, acknowledge and
deliver any instrument that may be necessary or proper to carry out
the provisions of this Agreement.
8. Time of the Essence. Time shall be of the essence in
satisfying the terms and conditions of this Agreement.
9. Attorneys' Fees. In the event a dispute arises with respect
to this Agreement, and such dispute is not resolved prior to final
judicial determination, the party prevailing in such dispute shall
be entitled to recover all expenses, including, without limitation,
reasonable attorneys' fees and expenses.
<PAGE> 18
10. Complete Agreement of the Parties. This Agreement supersedes
any and all other agreements, either oral or in writing, between
the parties with respect to the subject matter hereof and contains
all of the covenants and agreements between the parties with
respect to such subject matter in any manner whatsoever. Each
party to this Agreement acknowledges that no representations,
inducements, promises or agreements, oral or otherwise, have been
made by any party, or anyone herein, and that no other agreement,
statement or promise not contained in this Agreement shall be valid
or binding. This Agreement may be changed or amended only by an
amendment in writing signed by all of the parties or their
respective successors in interest.
11. Assignment. This Agreement and the rights and obligations of
Holder hereunder are personal to Holder and may not be transferred
or assigned without the prior written consent of the Company.
12. Binding. Subject to the provisions of Section 11 hereof, this
Agreement shall be binding upon and inure to the benefit of the
successors in interest, assigns and personal representatives of the
respective parties.
13. Number and Gender. Whenever the singular number is used in
this Agreement and when required by the context, the same shall
include the plural, and the masculine gender shall include the
feminine and neuter genders and the word "person" shall include
corporation, firm, partnership or other form of association.
14. Failure to Object Not a Waiver. The failure of either party
to this Agreement to object to, or to take affirmative action with
respect to, any conduct of the other which is in violation of the
terms of this Agreement, shall not be construed as a waiver of the
violation or breach or of any future violation, breach or wrongful
conduct.
15. Unenforceable Terms. Any provision hereof prohibited by law
or unenforceable under any applicable law of any jurisdiction shall
as to such jurisdiction be ineffective without affecting any other
provision of this Agreement. To the full extent, however, that the
provisions of such applicable law may be waived, they are hereby
waived to the end that this Agreement be deemed to be a valid and
binding enforceable agreement in accordance with its terms.
16. Miscellaneous Provisions. The various headings and numbers
herein and the groupings of provisions of this Agreement into
separate articles and paragraphs are for the purpose of convenience
only and shall not be considered a part hereof. The language in
all parts of this Agreement shall in all cases be construed in
accordance to its fair meaning as if prepared by all parties to the
Agreement and not strictly for or against any of the parties.
<PAGE> 18
EXECUTED AS OF THE DATE FIRST ABOVE WRITTEN
/s/ Clinton B. Newman INMEDICA DEVELOPMENT CORPORATION
(Holder Signature)
Clinton B. Newman /s/ Larry E. Clark
(Print Name) By Larry E. Clark, President
EXHIBIT 2
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMNTS OF INMEDICA DEVELOPMENT CORPORATION FOR THE PERIOD ENDED
MARCH 31, 1996.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-END> MAR-31-1996 MAR-31-1995
<CASH> 200,442 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 220,481 0
<PP&E> 254,490 0
<DEPRECIATION> 249,268 0
<TOTAL-ASSETS> 227,889 0
<CURRENT-LIABILITIES> 173,668 0
<BONDS> 0 0
0 0
337,478 0
<COMMON> 7,648 0
<OTHER-SE> (740,895) 0<F1>
<TOTAL-LIABILITY-AND-EQUITY> 227,899 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 58,745 45,532
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 14,954 42,206
<INCOME-PRETAX> (73,699) (87,148)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (73,699) (87,148)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (73,699) (87,148)
<EPS-PRIMARY> (.01) (.01)
<EPS-DILUTED> (.01) (.01)
<FN>
<F1>ADDITIONAL PAID IN CAPTIAL AND RETAINED EARNINGS.
</FN>
</TABLE>
