U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1999
Commission File No. 0-12968
INMEDICA DEVELOPMENT CORPORATION
Utah 87-0397815
- ------------------------ -----------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
825 North 300 West
Salt Lake City, Utah 84103
(801) 521-9300
Securities Registered Pursuant to Section 12(g) of the Act:
Name of Each Exchange
Title of Each Class on which Registered
- ------------------- -------------------
Common Stock, $.001 par value None
Check whether the issuer (1) filed all reports required to be filed by Section
13 or Section 15(d) of the Exchange Act during the past 12 months, and (2) has
been subject to such filing requirements for the past 90 days. [X] yes [ ] no
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation SB contained in this form, and no disclosures will be contained, to
the best of registrant's knowledge, in any definitive proxy or information
statement incorporated by reference in Part III of this Form 10-KSB or any
amendments to this Form 10-KSB [X]
Issuer's revenues for its most recent fiscal year: $ 105,480
The aggregate market value of voting stock held by nonaffiliates of the
registrant as of March 22, 2000 was approximately $2,221,129.(1) The number of
shares outstanding of the issuer's common stock, $.001 par value, as of March
20, 2000 was 8,735,899.
DOCUMENTS INCORPORATED BY REFERENCE: None
(1) Based on 4,963,417 non-affiliate shares at $.45 per share, which was the
average of the bid and asked price on that date.
1
<PAGE>
Item 1. Business General. InMedica Development Corporation ("InMedica") was
incorporated as a Utah corporation on June 16, 1983. During the last three
fiscal years, InMedica's primary activity has been the operation of the business
of MicroCor, Inc. ("MicroCor"), a wholly owned subsidiary. MicroCor was acquired
effective December 31, 1985. MicroCor has engaged in the development or sale of
certain medical technology products. However, royalty income received by
MicroCor from the development and sale of technology pursuant to a contract with
Johnson & Johnson Medical, Inc. is now minimal (See "Results of Operations") and
Johnson & Johnson Medical, Inc. is phasing out the product line on which the
royalty is paid.
Effective December 1, 1999 InMedica appointed Ralph Henson to replace Larry
E. Clark as President and Chief Executive Officer of the Company. Mr. Clark
continued as Chairman of the Board. In connection with the change, the Company
entered an employment contract with Mr. Henson, agreeing to pay him $5,833.33
per month for a period of six months. If the Company is successful in raising
$150,000 in capital, then the employment agreement automatically extends for an
additional six months. In addition, the Company issued Mr. Henson 75,000 shares
of restricted common stock, effective December 1, 1999 and Larry E. Clark
transferred an additional 25,000 shares of restricted common stock to Mr.
Hensen. InMedica also agreed to pay Mr. Henson a bonus of 1.5% of the net
acquisition price of the Company in any acquisition or 2.5% of the net amount of
any capital raised during the six months following the date of the agreement. In
connection with the foregoing transactions, Mr. Henson was appointed to be a
member of the Board of Directors of the Company. John Merendino and David
Dingman resigned as Directors of the Company in November, 1999.
Preferred Stock. See Note 5 to the Consolidated Financial Statements for
information regarding the preferred stock of the Company. The Company has five
preferred stockholders holding an aggregate of 25,356 shares of the Series A
Preferred Stock which is 8% cumulative convertible preferred stock. Total
aggregate dividends payable on the preferred stock outstanding is $9,128 per
year.
2
<PAGE>
Principal Products. During the years 1986 and 1987, MicroCor developed,
manufactured and marketed a portable electrocardiograph ("ECG") monitor. About
450 units were manufactured and sold. In July 1989, MicroCor signed a research
and development contract with Critikon (predecessor to Johnson & Johnson
Medical, Inc.) to develop a medical instrument which would incorporate and
enhance the technologies already developed in the MicroCor portable ECG monitor
and combine them with technologies developed by Critikon. The research and
development portion of the contract was completed in July 1990, and resulted in
the design of a new product line. The product line was successfully marketed by
Johnson & Johnson Medical, Inc. during the 1990's, providing royalty income to
InMedica, but the product line is now being phased out and the Company does not
expect the royalty income to extend past the year 2000.
Product Development. For the past 10 years, the Company has conducted
research or engaged in fund raising to support development of a method for
measuring hematocrit non-invasively (without drawing blood) and has applied for
patents covering this technology. Hematocrit is the percentage of blood volume
made up by red blood cells and is a common laboratory test currently performed
invasively by drawing a blood sample from the patient. For several years, the
Company conducted research and development in-house, under the direction of Dr.
Allan Kaminsky, former president of the Company. Subsequently, the Company
engaged outside consultants to work on the project including Paul W. Ruben and
the Northern Ireland Bio-Engineering Centre.
During May 1997, the Company employed Dr. Gail Billings, a bio-medical
researcher and, effective August 29, 1997, the Company engaged Medical Physics,
Inc., a biomedical research company located in Salt Lake City, Utah to conduct
further research and development on the project. The researchers engaged in
additional research through 1998.
During 1999, the researchers completed production of a transportable
prototype device for use in demonstrating the technology. During the current
year, the company plans to use the prototype and its intellectual property
rights in an attempt to secure additional funding through direct investment, or
to enter into development, distribution or licensing agreements with industry
partners for the development of the technology, although it has no commitments
at the present time.
Government Regulation. Medical products may be subject to regulation by the
Food and Drug Administration (the "FDA") pursuant to the Federal Food, Drug and
Cosmetic Act and other federal and state laws regarding the regulation,
manufacture and marketing of products in which InMedica may be involved. The
laws of foreign nations may also apply to any international marketing of such
products. To the extent InMedica has acquired or developed an interest in
medical products or the companies manufacturing such products, InMedica's
business may be indirectly affected by such regulation. Testing of the Company's
non-invasive hematocrit technology is subject to prior approval and supervision
of an Internal Review Board of a medical facility overseeing the testing.
Marketing of any new product line which might be developed based on the
Company's non-invasive hematocrit device would be subject to prior approval by
the FDA.
3
<PAGE>
Patents. As of December 12, 1995, the Company's application for a patent
entitled "Method and Apparatus for Non-Invasively Determining Hematocrit," was
allowed by the U.S. Patent Office and the Patent issued on June 18, 1996 with a
term of 17 years. The Company has filed an application for an additional patent
which claims priority from October 4, 1990, the date of filing of the Company's
"Method and Apparatus for Non-Invasively Determining Hematocrit". The second
patent has been allowed and is expected to issue in due course. The patent term
is expected to run from October 4, 1990 for a period of 17 years. As of December
21, 1999, the Company received a first office action notice of allowance on a
third patent "System and Method for Invivo Hematocrit Measurement Using
Impedence and Pressure Plethysmography."
Raw Materials. Materials and electronic components used in the production
and development of ECG monitors and like products are components readily
available through various suppliers.
Competition. InMedica is not presently a significant factor in the medical
products industry and does not presently compete directly in the medical
products field. The medical products industry is dominated by large and well
established corporations with vastly greater financial and personnel resources
than those of InMedica. There can be no assurance that the companies and
products in which InMedica has an interest will be able to compete profitably in
the marketplace. Further, there is no assurance that the Company will be able to
complete research, development and marketing of its hematocrit technology in
advance of any competitors who may be developing competing technologies.
Research and Development Costs. Research and development costs for the two
years ended December 31, 1999 and 1998, were $66,818 and $224,618, respectively.
None of the expenses were incurred on customer-sponsored research activities
relating to the development of new products.
Employees. InMedica and MicroCor had one full time and two part time
employees as of December 31, 1999.
Item 2. Properties
----------
Office. The Company presently uses facilities provided by Medical Physics,
Inc., at no cost, for its offices.
Item 3. Legal Proceedings
-----------------
There are not any pending legal proceedings. Information as to previously
threatened legal proceeding follows;
4
<PAGE>
During the third quarter of 1996, a former officer of the Company, Allan L.
Kaminsky, threatened to bring legal proceedings affecting the Company or a proxy
contest to obtain control of the Company. Among other things, Dr. Kaminsky
objected to the number of options issued to officers, directors, employees and
consultants of the Company. At a board meeting held July 31, 1996, the Company
voluntarily reduced the number of options by 25% effective August 1, 1996,
reducing the total options granted from 1,100,000 to 825,000. Dr. Kaminsky
thereafter offered to continue to be associated with the Company on terms which
were subsequently rejected by the Board of Directors after due consideration. On
September 17, 1996, Dr. Kaminsky advised the Company that his offer to negotiate
had expired, that he had no further association (employment, consulting or
advisory) with InMedica/MicroCor, other than being a passive shareholder and
that his action was permanent and irreversible.
At the Company's annual shareholder meeting held August 29, 1997, Company
personnel advised the shareholders that they believed notice of meeting had been
inadequate due to inadvertent failure to mail notice to beneficial owners of
stock held in street name, although there appeared to be sufficient shares
present to constitute a quorum and ballots were accepted at the meeting. The
following week the Company mailed a letter to shareholders advising them that
the meeting would be rescheduled.
Following the mailing, Dr. Kaminsky demanded through his attorney that the
Company disclose the results of the tallies of the August 29, 1997 ballots and
proxies under threat of litigation. He also claimed the meeting was valid and
that proper notice had been given. After reviewing the matter, the Company
disclosed the results of the meeting and concluded that the incumbent Board of
Directors had been re-elected at the meeting by a plurality of the shares
present and voting at the meeting. Dr. Kaminsky continues to be a principal
shareholder of the Company (see "Security Ownership of Certain Beneficial Owners
and Management").
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
There were no matters submitted during the fourth quarter of the fiscal
year covered by this report to a vote of security holders.
5
<PAGE>
PART II
Item 5. Market for the Registrant's Common Stock and Related Security Holder
- --------------------------------------------------------------------------------
Matters.
- --------
(a) Price Range of Common Stock.
---------------------------
The Common Stock of InMedica is traded in the over-the-counter market
and is quoted on the "NASD OTC Bulletin Board". The following table sets forth,
for the calendar quarters indicated, the high and low closing bid prices for the
InMedica Common Stock as reported by the NASD OTC Bulletin Board. These
quotations represent prices between dealers without adjustment for retail
markups, markdowns or commissions and may not represent actual transactions.
Bid Price
Quarter Ended High Low
------------- ---- ---
March 31, 1998 $ .72 $ .25
June 30, 1998 1.00 .56
September 30, 1998 .75 .31
December 31, 1998 .44 .22
March 31, 1999 $ .34 $ .28
June 30, 1999 .81 .28
September 30, 1999 .35 .19
December 31, 1999 .34 .21
As of March 20, 2000, there were approximately 510 record holders of
InMedica Common Stock. Such record holders do not include individual
participants in securities position listings. The Company also has five holders
of its Series A Preferred Stock. There is no public market for the Series A
Preferred Stock (see "Preferred Stock").
InMedica has not paid any cash dividends on its Common Stock since
organization. For the foreseeable future, InMedica expects that earnings, if
any, will be retained for use in the business or be used to retire obligations
of the Company. For information as to the Company's obligation to pay dividends
on Preferred Stock, see "Preferred Stock."
6
<PAGE>
Item 6. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations.
- --------------
Liquidity and Capital Resources
For the years ended December 31, 1999 and 1998, liquidity was generated
primarily from royalty income received from Johnson & Johnson Medical, Inc.
("JJMI") and borrowing from affiliates. This income source is not expected to be
sufficient to provide future liquidity needs, retire debt when it comes due and
fund continued research and development. InMedica continues to look for other
funding sources, however to date it has no commitments.
The Company's royalty agreement with JJMI has been pledged to secure
repayment of the $145,000 debt owed to the Company's Chairman. Funds invested to
develop the hematocrit device have been expensed as research and development.
However, the Company plans to use the transportable prototype device
and its intellectual property rights to search for additional funding through
direct investment or through development, distribution or licensing agreements
with industry partners, although it has no commitments at the present time.
Results of Operations
InMedica incurred net losses in 1998 and 1999. The Company had an
accumulated deficit of $7,230,268 as of December 31, 1999.
Operating revenues have been derived only from royalties during the
two-year period ended December 31, 1999. During the years ended December 31,
1999 and 1998 royalty revenue totaled $105,480 and $247,400, respectively.
The net loss of $140,414 for the year ended December 31, 1999 compared
to the net loss of $241,188 for 1998, resulted primarily from a $141,920
decrease in royalty revenues. However, during 1999, the Company met its research
and development and administrative expenditure requirements from existing cash,
loan proceeds, royalty receipts and the issuance of stock. General and
administrative expense and research and development expense decreased as the
Company restricted expenditures due to restricted cash flow.
7
<PAGE>
Item 7. Financial Statements Beginning at Page
-------------------- -----------------
Report of Independent Public Accountants F-1
Consolidated Balance Sheet as of December 31, 1999 F-2
Consolidated Statements of Operations for the
years ended December 31, 1999 and 1998 F-3
Consolidated Statements of Stockholders' Deficit
for the years ended December 31, 1999 and 1998 F-4
Consolidated Statements of Cash Flows for the
years ended December 31, 1999 and 1998 F-5
Notes to Consolidated Financial Statements F-7
8
<PAGE>
INMEDICA DEVELOPMENT CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
AND FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998
TOGETHER WITH REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To InMedica Development Corporation:
We have audited the accompanying consolidated balance sheet of InMedica
Development Corporation (a Utah corporation) and subsidiary as of December 31,
1999, and the related consolidated statements of operations, stockholders'
deficit and cash flows for the years ended December 31, 1999 and 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of InMedica Development
Corporation and subsidiary as of December 31, 1999, and the results of their
operations and their cash flows for the years ended December 31, 1999 and 1998
in conformity with accounting principles generally accepted in the United
States.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company suffered net losses of $140,414
and $241,188 during 1999 and 1998, respectively, and there can be no assurance
of profitability in the future. The Company's sole source of revenue is a
royalty arrangement and the Company has been notified that the royalties are
expected to terminate in 2000. As of December 31, 1999, the Company had an
accumulated deficit of $7,230,268, a stockholders' deficit of $240,395 and
negative working capital of $243,297. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters also are discussed in Note 1. The consolidated
financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern.
By:/s/Arthur Andersen LLP
- -------------------------
ARTHUR ANDERSEN LLP
Salt Lake City, Utah
March 9, 2000
F-1
<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1999
ASSETS
CURRENT ASSETS:
Cash $ --
Royalties receivable 57,120
Prepaid expenses and other 16,051
-----------
Total current assets 73,171
EQUIPMENT AND FURNITURE, at cost,
less accumulated depreciation of
$252,283 706
OTHER ASSETS 2,196
-----------
Total assets $ 76,073
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Notes payable to related parties $ 156,812
Note payable 14,400
Consulting fees payable to related parties 105,992
Accrued payroll 956
Accounts payable 38,308
-----------
Total current liabilities 316,468
-----------
COMMITMENTS AND CONTINGENCIES (Notes 1, 6, 7 and 8)
Preferred stock, 10,000,000 shares authorized;
Series A convertible preferred stock, 8%
cumulative, $4.50 par value, 1,000,000 shares
designated, 25,356 shares outstanding
(aggregate liiquidation preference of
$114,102 114,102
Common stock, $.001 par value; 20,000,000 shares
authorized, 8,735,899 shares outstanding 8,736
Additional paid-in capital 6,867,035
Accumulated deficit (7,230,268)
-----------
Total stockholders' deficit (240,395)
-----------
Total liabilities and stockholders' deficit $ 76,073
===========
The accompanying notes to consolidated financial statements
are an integral part of this consolidated balance sheet.
F-2
<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
----------- -----------
ROYALTY REVENUES $ 105,480 $ 247,400
----------- -----------
OPERATING EXPENSES:
General and administrative 164,943 251,737
Research and development 66,818 224,618
----------- -----------
Total operating expenses 231,761 476,355
----------- -----------
LOSS FROM OPERATIONS (126,281) (228,955)
----------- -----------
OTHER INCOME (EXPENSE):
Interest, net (13,662) (11,594)
Other (471) (639)
----------- -----------
Total other expense, net (14,133) (12,233)
----------- -----------
NET LOSS (140,414) (241,188)
PREFERRED STOCK DIVIDENDS (9,128) (9,128)
----------- -----------
NET LOSS APPLICABLE TO
COMMON STOCKHOLDERS $ (149,542) $ (250,316)
=========== ===========
NET LOSS PER COMMON SHARE
(BASIC AND DILUTED) $ (.02) $ (.03)
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (BASIC AND DILUTED)
8,673,535 8,599,350
=========== ===========
The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.
F-3
<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Series A Additional Total
Preferred Stock Common Stock Paid-in Accumulated Stockholders'
Shares Amount Shares Amount Capital Deficit Deficit
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1997 25,356 $ 114,102 8,550,899 $ 8,551 $ 6,732,087 $(6,830,410) $ 24,330
Common stock issued for
services -- -- 110,000 110 48,171 -- 48,281
Common stock options
granted for services -- -- -- -- 55,582 -- 55,582
Preferred stock dividends -- -- -- -- -- (9,128) (9,128)
Net loss -- -- -- -- -- (241,188) (241,188)
----------- ----------- ----------- ----------- ----------- ----------- -----------
BALANCE, December 31, 1998 25,356 114,102 8,660,899 8,661 6,835,840 (7,080,726) (122,123)
Common stock issued for
services -- -- 75,000 75 23,370 -- 23,445
Deemed contribution
related to transfer of
common stock from
principal stockholder
to an employee for
services -- -- -- -- 7,825 -- 7,825
Preferred stock dividends -- -- -- -- -- (9,128) (9,128)
Net loss -- -- -- -- -- (140,414) (140,414)
----------- ----------- ----------- ----------- ----------- ----------- -----------
BALANCE, December 31, 1999 25,356 $ 114,102 8,735,899 $ 8,736 $ 6,867,035 $(7,230,268) $ (240,395)
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.
F-4
<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
Increase (Decrease) in Cash
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(140,414) $(241,188)
Adjustments to reconcile net loss to net cash
used in operating activities-
Depreciation and amortization 865 864
Compensation on issuance of common stock and
stock options for services 31,270 103,863
Changes in assets and liabilities-
(Increase) decrease in royalties receivable (11,200) 21,280
Decrease in prepaid expenses and other 736 1,676
Increase in accounts payable 9,210 28,067
Decrease in accrued payroll (112) (5,876)
Decrease in accrued interest -- (4,752)
Increase in consulting fees payable
to related party 53,996 30,330
--------- ---------
Net cash used in operating activities (55,649) (65,736)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings on note payable and notes
payable to related 26,212 --
Principal payments on note payable to related parties -- (25,000)
Preferred stock dividends (9,128) (9,128)
--------- ---------
Net cash provided by (used in)
financing activities 17,084 (34,128)
--------- ---------
NET DECREASE IN CASH (38,565) (99,864)
CASH AT BEGINNING OF THE YEAR 38,565 138,429
--------- ---------
CASH AT END OF THE YEAR $ -- $ 38,565
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest $ 13,884 $ 17,657
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.
F-5
<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
InMedica Development Corporation ("InMedica") and its wholly owned subsidiary,
MicroCor, Inc. ("MicroCor") (collectively, the "Company") historically have
engaged in the research, development and sale of medical technology and fund
raising to support such activity. During the years 1986 and 1987, MicroCor
developed and marketed a portable electrocardiograph ("ECG") monitor and
manufactured and sold about 450 units. In July 1989, MicroCor signed a research
and development contract with a predecessor of Johnson and Johnson Medical, Inc.
("Johnson and Johnson"), for further development of the ECG technology. As a
result of the agreement, Johnson and Johnson now manufactures and markets a
product line under the name of Dinamap Plus(TM) which incorporates the Company's
ECG technology. Royalties received from Johnson and Johnson are presently the
Company's sole source of revenue. The Company has been advised that the
royalties from Johnson and Johnson are expected to terminate in 2000.
Since 1989, the Company has engaged in research and development of a device to
measure hematocrit non-invasively (the "Non-Invasive Hematocrit Technology").
During 1996, the Company was issued patent No. 5526808 related to certain
aspects of its Non-Invasive Hematocrit Technology. Additionally, a patent
application was allowed in November 1996 related to this technology. Hematocrit
is the percentage of red blood cells in a given volume of blood. At the present
time, the test for hematocrit is performed invasively by drawing blood from the
patient and testing the blood sample in the laboratory. Commercialization of the
Non-Invasive Hematocrit Technology is dependent upon favorable testing, Food and
Drug Administration approval, financing of further research and development and,
if warranted, financing of manufacturing and marketing activities.
The Company generated net losses of $140,414 and $241,188 during 1999 and 1998,
respectively, and there can be no assurance of profitability in the future. As
of December 31, 1999, the Company had an accumulated deficit of $7,230,268, a
stockholders' deficit of $240,395 and negative working capital of $243,297.
These conditions raise substantial doubt as to the Company's ability to continue
as a going concern. The Company's continued existence is dependent upon its
ability to achieve a viable operating plan and to obtain additional debt or
equity financing.
Management's operating plan includes continuing to search for financing
alternatives, including the formation of strategic alliances or partnerships to
continue research and, if warranted, the manufacture and sale of products
developed from the Non-Invasive Hematocrit Technology. However, at present, the
Company has no commitments related to these matters.
F-6
<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Principles of Consolidation
The consolidated financial statements include the accounts of InMedica and
MicroCor. All material intercompany accounts and transactions have been
eliminated.
Revenue Recognition
Royalty revenues are recognized as sales information is received from Johnson
and Johnson and cash receipts are assured.
Equipment and Furniture
Equipment and furniture are recorded at cost and depreciated using the
straight-line method over the estimated useful lives of the assets. The asset
cost and accumulated depreciation for property retirements and disposals are
eliminated from the respective accounts, and any gain or loss is included in the
determination of net loss. The costs of major additions and improvements are
capitalized while the cost of maintenance and repairs are charged to expense as
incurred.
Equipment and furniture consisted of the following at December 31, 1999.
Equipment $ 242,260
Furniture 10,729
---------------
252,989
Less accumulated depreciation (252,283)
---------------
$ 706
===============
Depreciation has been computed using the straight-line method over the three to
five year useful lives of the related assets.
Net Loss Per Common Share
The net loss per common share computation is based on the weighted average
number of shares of common stock outstanding during each year. Preferred stock
dividends are deducted from net loss in calculating net loss per common share.
Basic net loss per common share ("Basic EPS") excludes dilution and is computed
by dividing net loss by the weighted average number of common shares outstanding
during the year. Diluted net loss per common share ("Diluted EPS") reflects the
potential dilution that could occur if stock options or other common stock
equivalents were exercised or converted into common stock. The computation of
Diluted EPS does not assume exercise or conversion of securities that would have
an antidilutive effect on net loss per common share.
At December 31, 1999 and 1998, there were outstanding options to purchase
849,000 shares of common stock, which were not included in the computation of
Diluted EPS because they would be anti-dilutive.
F-7
<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Income Taxes
The Company accounts for income taxes using the liability method. Deferred taxes
are determined based on the estimated future tax effects of differences between
the financial reporting and tax reporting bases of assets and liabilities given
the provisions of currently enacted tax laws.
Pervasiveness 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 those estimates.
Fair Value of Financial Instruments
The book value of the Company's financial instruments approximates fair value.
The estimated fair values have been determined using appropriate market
information and valuation methodologies.
2. INCOME TAXES
As of December 31, 1999, deferred income tax assets consisted of the following:
Net operating loss carryforwards $ 1,006,636
Future deductible temporary
differences related to
compensation, reserves and
accruals 205,317
Less: valuation allowance (1,211,953)
-------------
Net deferred income tax assets $ -
=============
At December 31, 1999, the Company has consolidated net operating loss
carryforwards ("NOLs") for federal income tax purposes of approximately
$2,689,929. These NOLs expire at various dates beginning in 2005 through
December 31, 2019. An NOL generated in a particular year will expire for federal
tax purposes if not utilized within 20 years. Additionally, the Internal Revenue
Code contains other provisions which could reduce or limit the availability and
utilization of NOLs. For example, limitations are imposed on the utilization of
NOLs if certain ownership changes have taken place or will take place. A
valuation allowance is provided when it is more likely than not that all or some
portion of the deferred income tax assets will not be realized. Due to the
uncertainty with respect to ultimate realization, the Company has established a
valuation allowance for all deferred income tax assets.
3. COMMON STOCK TRANSACTIONS
During 1998, the Company authorized the issuance of 110,000 shares of restricted
common stock to consultants and to one employee for research and development
F-8
<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
services rendered during 1998. As of December 31, 1999 and 1998, 45,000 of these
shares were issued and the Company was obligated to issue the remaining 65,000
shares. Accordingly, the 65,000 shares have been reflected as outstanding in the
1999 and 1998 financial statements even though they will not be physically
issued until 2000. During 1998, the Company recognized $48,281 in expense
related to these shares, which represented the market price of the stock at the
dates of performance.
During 1999, the Company authorized the issuance of 75,000 shares of restricted
common stock to an employee for services rendered. The Company recognized
$23,445 in compensation expense related to these shares, which represented the
market value of the stock at the date of grant.
During 1999, a principal stockholder of the Company transferred 25,000 shares of
his common stock to an employee for services rendered. The Company, has
recognized $7,825 in expense related to this transfer, which represented the
market value of the stock on the date of transfer.
4. STOCK OPTIONS
With respect to employees and directors, the Company accounts for its stock
incentive plan, formula stock option plan and certain options granted outside
the plans under APB Opinion No. 25. Had compensation cost for these plans been
determined consistent with Statement of Financial Accounting Standards ("SFAS")
No. 123, the Company's pro forma net loss and pro forma basic and diluted EPS
would have been as follows:
1999 1998
----------------- -----------------
Net loss applicable to
common stockholders:
As reported $ (149,542) $ (250,316)
Pro forma (136,582) (250,316)
Basic and Diluted EPS:
As reported $ (.02) $ (.03)
Pro forma (.02) (.03)
The Company did not grant options to employees during 1999 and 1998. The 1999
difference between reported and pro forma is due to options forfeited.
Stock Incentive Plan
The Company has in place an incentive stock option plan (the "Stock Incentive
Plan") for eligible directors and key employees of the Company, covering
1,350,000 shares of the Company's common stock. Under the terms of the Stock
Incentive Plan, the options granted may be either incentive stock options as
defined in the Internal Revenue Code or nonqualified stock options. A committee
composed of disinterested members of the Board of Directors has authority to
determine, among other matters, which eligible key employees and directors are
to receive options, the price at which the nonqualified options will be granted,
the period in which the options are exercisable and the type of options to be
granted. The exercise price for the incentive stock options may not be less than
F-9
<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
100 percent of the fair market value of the common stock on the date of the
grant. The Stock Incentive Plan contains antidilution provisions which provide
for adjustments to option prices or quantities in the event of certain changes
in the number of outstanding shares of common stock or the capitalization of the
Company.
Under the stock incentive plan at December 31, 1999, 31,500 shares were under
option with exercise prices of $.60 per share and remaining contractual lives of
3.5 years. There were no options granted, exercised, or forfeited during the
years ended December 31, 1999 and 1998. At December 31, 1999, options for the
purchase of 980,769 shares were available for granting under the Stock Incentive
Plan.
Formula Stock Option Plan
The Company has in place a formula stock option plan (the "Formula Plan") for
eligible directors of the Company, covering 100,000 shares of common stock. A
committee of the Board of Directors has the authority to determine, among other
matters, the term of the options and the period during which the options are
exercisable. Under the terms of the Formula Plan, each member of the committee
which administers the Stock Incentive Plan is eligible to receive nonqualified
stock options pursuant to a formula set forth in the Formula Plan. The exercise
price for options granted shall be 30 percent of the fair market value of the
common stock on the date of the grant. The Formula Plan contains antidilution
provisions which provide for adjustments to option prices or quantities in the
event of certain changes in the number of outstanding shares of common stock or
the capitalization of the Company.
There were no options granted or exercised under the Formula Plan during the
years ended December 31, 1999 and 1998. At December 31, 1999, there were no
shares under option under the Formula Plan and options for the purchase of
95,500 shares were available for granting.
Other Stock Options
During 1995, the Company granted nonqualified options for the purchase of
1,050,000 shares of common stock at prices ranging from $.30 to $.39 with a
weighted average exercise price of $.32. The options were granted to officers,
directors, employees and consultants to the Company. A total of 500,000 of these
nonqualified options were issued to the Company's president and chief executive
officer in consideration of collateral provided by him with respect to a Company
bank loan described in Note 6. All options granted during 1995 vested
immediately upon granting and are exercisable through 2005. During 1996, these
option grants were reduced to 788,500 by resolution of the board of directors of
the Company. During 1997, 450,000 options were exercised at $.30 per share and
the Company received $135,000. During 1999, 150,000 options were forfeited. At
December 31, 1999, 188,500 options were outstanding and exercisable with
exercise prices ranging from $.30 to $.39, with a weighted average exercise
price of $.33 and a weighted average remaining contractual life of 6.8 years.
During 1996, the Company granted nonqualified options to consultants for the
purchase of 338,500 shares of common stock at prices ranging from $1.16 to $1.22
per share with a weighted average exercise price of $1.17. A total of 38,500 of
these nonqualified options vested immediately upon granting and are exercisable
through 2006. The remaining 300,000 of nonqualified options were issued in
consideration for engineering work related to the Company's Non-Invasive
Hematocrit Technology and are exercisable through 2001. A total of 175,000 of
F-10
<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the 300,000 originally granted options vested during 1998 and the remaining
175,000 unvested options were cancelled under the contract due to the consulting
firm not meeting specified deadlines. The weighted average remaining contractual
life of the outstanding 213,500 options is 3.2 years.
During 1997, the Company granted nonqualified options to consultants and one
employee for the purchase of a total of 154,000 shares of common stock with an
exercise price of $.73. A total of 100,000 of the 154,000 options vested
immediately upon granting and expire in August of 2000. The remaining 54,000
options become exercisable for a period of three years from the completion date
(not later than December 31, 1998) of satisfactory clinical trials related to
the Company's Non-Invasive Hematocrit Technology. As of December 31, 1998,
successful clinical trials were not completed, therefore these options expired.
The remaining options have a weighted average remaining contractual life of 0.7
years.
During 1998, the Company entered into an agreement whereby an existing option
holder agreed to transfer 37,500 options to another consultant. The options are
exercisable through 2000 with an exercise price of $1.22 per share. The Company
recorded $13,125 in expense related to these options.
5. PREFERRED STOCK
The Company is authorized to issue 10,000,000 shares of preferred stock. The
Company's board of directors designated 1,000,000 shares of this preferred stock
as Series A Cumulative Convertible Preferred Stock ("Series A Preferred") with a
par value of $4.50 per share. Holders of the Series A Preferred receive annual
cumulative dividends of eight percent, payable quarterly, which dividends are
required to be fully paid or set aside before any other dividend on any class or
series of stock of the Company is paid. Holders of the Series A Preferred
receive no voting rights but do receive a liquidation preference of $4.50 per
share, plus accrued and unpaid dividends. Series A Preferred stockholders have
the right to convert each share of Series A Preferred to the Company's common
stock at $3.00 per common share.
6. NOTES PAYABLE TO RELATED PARTIES
During 1997, the Company's president paid a $355,000 note payable owed by the
Company to a bank (on which the president was the co-obligor) and the Company
entered into a line of credit loan agreement (the "Agreement") with the
president, and borrowed an initial amount thereunder of $355,000. Borrowings
under the Agreement carry terms that are not less favorable than the terms of a
loan that the president has with a bank which loan was used by the president to
fund the advance under the Agreement to the Company. The president has an
agreement with the Company to lend up to a maximum amount not to exceed
$175,000. As of December 31, 1999, outstanding principal under the Agreement was
$145,000. All outstanding borrowings accrue interest at a bank's prime rate
(8.50 percent at December 31, 1999) plus .25 percent. The Agreement is secured
by the Company's royalty stream from the Johnson and Johnson agreement (see Note
1).
During 1999, the Company entered into note payable agreements with two board
members for $7,500 each due in four equal installments of $1,875 (with interest
at an annual rate of 10 percent) through March 31, 2000. As of December 31,
1999, outstanding principal and accrued interest under each agreement was
$5,906. The Company is currently unable to make principal payments on these
notes, however they continue to accrue interest at the appropriate rate.
F-11
<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. NOTE PAYABLE
During 1999, the Company entered into a note payable agreement with an Insurance
Company. The agreement provides for the repayment of the note in ten equal
installments of $1,890 (including 5 percent interest) from November 12, 1999 to
November 12, 2000. As of December 31, 1999, the outstanding balance (which
includes interest) under the note payable was $14,400.
8. RELATED-PARTY TRANSACTIONS
During 1999 and 1998, the Company incurred interest expense of $13,884 and
$12,905, respectively, on the related party notes payable described in Note 6.
The Company has a consulting arrangement with an entity owned by the Company's
president whereby the Company was to pay $4,333 per month during 1998 and 1999.
The arrangement can be terminated by either party at any time. As of December
31, 1999, approximately $94,000 was owed under the arrangement.
F-12
<PAGE>
Item 8. Disagreements With Accountants on Accounting and Financial Disclosures.
-----------------------------------------------------------------------
There have been no changes in or disagreements with accountants on
accounting and financial disclosures, as provided in Regulation S-B, Item 304.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
-----------------------------------------------------------------------
Compliance with Section 16(a) of the Exchange Act.
- --------------------------------------------------
Directors and Executive Officers of InMedica. The following table
furnishes information concerning the executive officers and directors of
InMedica and their business backgrounds for at least the last five years.
Name Age Director Since
---- --- --------------
Larry E. Clark 78 1995
Ralph Henson 55 1999
Richard Bruggeman 44 1995
LARRY E. CLARK - Chairman of the Board. Mr. Clark was president of
Clark-Knoll & Associates, Inc., a Denver, Colorado management consulting firm
specializing in mergers and acquisitions from 1963 to 1969. He served as
president of Petro-Silver, Inc., a small public company based in Salt Lake City,
Utah, which engaged in the oil and gas business from 1970 to 1975. From 1975 to
1981 Mr. Clark was president of Larry Clark & Associates, a private company
which engaged in a corporate mergers and acquisitions business. In 1981, Mr.
Clark formed Hingeline-Overthrust Oil & Gas, Inc., a Utah public company, which
merged with Whiting Petroleum Corporation of Denver, Colorado in December 1983.
Mr. Clark served as a director of Whiting Petroleum from 1983 until 1992 when
Whiting Petroleum merged with IES Industries and Mr. Clark returned to full time
employment as president of Larry Clark & Associates. Mr. Clark graduated from
the U.S. Merchant Marine Academy with a BS degree in Naval Science in 1943 and
received a degree in Business Administration from the University of Wyoming in
1948.
RALPH HENSON - Director, President and Chief Executive Officer. Mr.
Henson was previously employed from 1986 to 1999 as Director of Sales and acting
Director of Clinical Programs of In-line Diagnostics of Farmington, Utah. He was
also employed from 1987 to 1994 with Mallinckrodt Medical in sales and
marketing, including service as Export Sales and Marketing Manger for
Mallinckrodt Sensor Systems of Hannef, Germany. From 1994 to 1995 he was
national sales manager with HemoCue, Inc. of Mission Viejo, California.
9
<PAGE>
RICHARD BRUGGEMAN - Director and Secretary/Treasurer and Chief
Financial Officer of the Company. Since 1993, he has been employed as Controller
of Kitchen Specialties, Inc., a Salt Lake City firm distributing kitchen
appliances in the United States and Canada. From 1986 until 1993 he was employed
by the Company's subsidiary, MicroCor, Inc. as financial manager. During the
period 1983-1985, he was a sole practitioner in accounting and from 1981-1983 he
was employed by the Salt Lake City public accounting firm of Robison Hill & Co.
He graduated from the University of Utah in 1981 with a B.S. degree in
accounting.
Each director serves until the next annual meeting of shareholders or
until a successor is elected and qualified. Officers serve at the pleasure of
the board of directors.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of equity securities of the Company. Officers, directors
and greater than ten percent shareholders are required to furnish the Company
with copies of all Section 16(a) forms they file. To the Company's knowledge,
based solely on review of the copies of any such reports furnished to the
Company, during the fiscal year ended December 31, 1999 all Section 16(a) filing
requirements applicable to officers, directors and greater than ten percent
shareholders were complied with.
Item 10. Executive Compensation.
-----------------------
Executive Compensation. No executive officer of the Company has
received compensation during the three fiscal years ended December 31, 1999,
except as disclosed in the table below:
<TABLE>
<CAPTION>
Annual Compensation
Long Term
Compensation Awards
Name Year Salary Bonus Common Stock underlying Options Other
- ---- ---- ------ ----- ------------------------------- -----
<S> <C> <C> <C> <C> <C>
Ralph Henson (CEO) 1999 $ 5,833 - - $31,270#
Larry E. Clark (CEO) 1999 $ - - - $12,000*____
Larry E. Clark (CEO) 1998 $ - - - $51,996*
Larry E. Clark (CEO) 1997 $ - - - $51,996**
</TABLE>
# - Mr. Henson received 75,000 shares of restricted stock from the Company in
connection with his employment and an additional 25,000 restricted shares from
Larry Clark. * - consulting fees accrued for payment to a corporation owned by
Larry E. Clark.
** - includes consulting fees paid ($30,331) and consulting fees accrued
($21,665) for payment to a corporation owned by Larry E. Clark.
10
<PAGE>
Director Compensation. Directors may be compensated at the rate of $100
for attendance at each board meeting, but did not receive compensation for
meetings in 1999 and 1998.
Compensation Committee Interlocks and Insider Participation.
Compensation of officers and employees is determined by the Board of Directors.
Mr. Larry E. Clark, chief executive officer, is chairman of the Board of
Directors.
Other Compensation Plans. On December 6, 1991, the Company adopted a
stock incentive plan (the "Stock Incentive Plan") and a formula stock option
plan (the "Formula Plan"). On May 30, 1992, at the annual shareholder meeting,
the shareholders approved the Stock Incentive Plan and the Formula Plan.
The Stock Incentive Plan covers 1,350,000 shares of the Company's
common stock. Under the terms of the plan, the options granted to eligible key
employees and directors, shall be either incentive stock options as defined in
Section 422 of the Internal Revenue Code of 1986, as amended, or non-qualified
stock options. A committee composed of disinterested members of the Board of
Directors has authority to determine, among other matters, which eligible key
employees and directors are to receive options, the price at which the
non-qualified options will be granted, the period in which the options are
exercisable and the type of options granted. The exercise price for the
incentive stock options shall not be less than 100 percent of the fair market
value of the common stock on the date of the grant.
The Formula Plan covers 100,000 shares of common stock. Under the terms
of the plan each member of the committee which administers the Stock Incentive
Plan is eligible to receive non-qualified stock options pursuant to a formula
set forth in the plan. The exercise price for options granted shall be 30
percent of the fair market value of the common stock on the date of the grant. A
committee of the Board of Directors has the authority to determine, among other
matters, the term of options and the period during which the options are
exercisable.
The following tables show certain information regarding stock options
granted to and exercised by officers named in the executive compensation table:
OPTIONS GRANTED IN THE LAST FISCAL YEAR
% of Total
Options
Granted to Exercise
Options Employees in Price Expiration
Name Granted FY 1999 ($/Share) Date
---- ------- ------------ --------- ----
None
11
<PAGE>
AGGREGATED OPTIONS EXERCISED IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Value of Unexercissed
Number of In-The-Money
Unexercised Options Options at Fiscal
Shares at Fiscal Year End Year End
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
None
The Company presently has no plan for the payment of any annuity or
pension retirement benefits to any of its officers or directors, and no other
remuneration payments, contingent or otherwise, are proposed to be paid in the
future to any officer or director, directly or indirectly.
12
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management.
------------------------------------------------------------------
The following table furnishes information concerning the common stock
ownership of directors, officers, and principal shareholders as of March 20,
2000:
Nature of Number of
Name and Position Ownership Shares Owned Percent
Larry E. Clark Direct 1,528,000 17.5%
Allan L. Kaminsky Direct 798,875 9.1%
4602 S. Fortuna Way
S.L.C., Utah 84124
Principal Shareholder
Paul J. Diehl Direct and 719,230(2) 8.2%
2963 E. Fallentine Rd. Indirect
Sandy, Utah 84092
Principal Shareholder
J. Lynn Smith Direct and 452,048(3) 5.2%
5770 S. 250 East #115 Indirect
Murray, Utah 84107-8100
Principal Shareholder
Ralph Henson Direct 100,000 1.1%
President, Director
Chief Executive Officer
Richard Bruggeman Direct and 174,387(4) 2.0%
Director, Chief Indirect
Financial Officer Options 106,500 1.2%
---------
Total 280,887 3.2%
=========
All Executive Officers Direct and 1,802,387 20.6%
and Directors as a Indirect
group (3 persons) Options 106,500 1.2%
--------- -----
Total 1,908,887 21.6%
=========
(2) - Includes 639,599 shares held by the Paul J. Diehl, M.D.P.C.
profit sharing plan, one share held by Paul J. Diehl, P.C. and 79,630 shares
held by Dr. Diehl as custodian for his wife's daughter, Shanon.
(3) - Includes 186,048 shares held directly by Dr. Smith and 266,000
shares held by the J.Lynn Smith Family Limited Partnership.
(4) - Includes 400 shares held in individual retirement accounts and
4,620 shares held in a family trust of which Mr. Bruggeman is Trustee.
13
<PAGE>
Shares shown in the forgoing table as directly owned are owned beneficially and
of record, and such record shareholder has sole voting, investment, and
dispositive power. Calculations of the percentage of ownership of shares
outstanding in the foregoing table assumes the exercise of options, to which the
percentage relates. Percentages calculated for totals assume the exercise of
options comprising such totals.
Item 12. Certain Relationships and Related Transactions.
----------------------------------------------
The Company owes $145,000 to its Chief Executive Officer, Larry E.
Clark, for loans made by Mr. Clark in prior years. The Company pays interest at
the prime rate plus .25%. During 1999, interest payments to Mr. Clark totalled
$13,884. Repayment of the loan is secured by an assignment of the royalty
contract with Johnson & Johnson Medical, Inc. See also Note 6 to the Financial
Statements.
Item 13. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits
Exhibit No. S-K No. Description
(3) Articles of Incorporation and Bylaws
incorporated by reference to the exhibits to
Form 10-K for the year ended December 31,
1983
(3) Articles of Amendment to the Articles of
Incorporation of the Company changing the
Company's name to "InMedica Development
Corporation" incorporated by reference to
Exhibit 1 to Form 10-K for the year ended
December 31, 1984
(4) Articles of Amendment, dated June 16, 1995
to the Articles of Incorporation of the
Company adopting a class of Preferred Stock,
incorporated by reference to Exhibit 1 to
Form 10-QSB for the period ended September
30, 1995
(4) Articles of Amendment, dated September 25,
1995 to the Articles of Incorporation of the
Company adopting a Series A Preferred Stock,
incorporated by reference to Exhibit 2 to
Form 10-QSB for the period ended September
30, 1995
14
<PAGE>
(10) Agreement between MicroCor, Inc. and Johnson
& Johnson Medical, Inc. dated June 15, 1995,
incorporated by reference to Form 8-K dated
June 30, 1995
(10) Agreement dated September 3, 1996 between
InMedica Development Corporation and Paul
Ruben dba Ruben Engineering and Calvin
Ruben, incorporated by reference to the
Exhibits to Form 8-K dated September 20,
1996.
(10) Loan Agreement between Larry E. Clark and
the InMedica Development Corporation dated
June 23, 1997, incorporated by reference to
Exhibits of Form 10QSB for the Quarter ended
June 30, 1997.
(10) Hematocrit Development and Option Agreement
between InMedica Development Corporation and
Medical Physics, dated August 29, 1997
incorporated by reference to Exhibits of
Form 10QSB for the Quarter ended September
30, 1997.
(10) First Amendment to the Hematocrit
Development and Option Agreement between
InMedica Development Corporation and Medical
Physics, dated March 1, 1998.
(10) Agreement among InMedica Development
Corporation, David Wheeler, Nevada Cancer
Center and Chris Bringhurst dated April 16,
1998, incorporated by reference to Exhibits
of Form 10QSB for the Quarter ended March
31, 1998.
15
<PAGE>
(10) Employment Agreement, effective as of
December 1, 1999 between Ralph Henson and
the Registrant and Investment letter of
Ralph Henson, incorporated by reference to
the 8-K of the Registrant dated December 1,
1999.
(11) Statement regarding Computation of Per Share
Loss (see Consolidated Statements of
Operations for the years ended December 31,
1997 and 1996
(21) Subsidiaries of the Company (MicroCor, Inc.,
a Utah corporation)
1 (27) Financial Data Schedule
(b) A report on Form 8-K was filed during the fourth quarter of the year ended
December 31, 1999.
EXHIBITS
Exhibits filed with the Form 10-KSB of InMedica Development Corporation, SEC
File No. 0-12968, for the year ended 12/31/98:
Exhibit No. SB Item No. Description
- ----------- ----------- -----------
1 (27) Financial Data Schedule
16
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
INMEDICA DEVELOPMENT CORPORATION
By /s/ Ralph Henson
----------------
RALPH HENSON, President
Chief Executive Officer
/s/ Richard Bruggeman
---------------------
RICHARD BRUGGEMAN,
Date: March 28 ,2000 Chief Financial Officer
--------------
17
<PAGE>
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.
/s/ Larry E. Clark
------------------
March 28, 2000 LARRY E. CLARK
-------------- Director
/s/ Richard Bruggeman
---------------------
March 28, 1999 RICHARD BRUGGEMAN
-------------- Director
/s/ Ralph Henson
----------------
March , 2000 RALPH HENSON
- -------------- Director
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<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
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<RECEIVABLES> 57120
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 73171
<PP&E> 252989
<DEPRECIATION> 252283
<TOTAL-ASSETS> 76073
<CURRENT-LIABILITIES> 316468
<BONDS> 0
114102
0
<COMMON> 8736
<OTHER-SE> (363233)
<TOTAL-LIABILITY-AND-EQUITY> 76073
<SALES> 0
<TOTAL-REVENUES> 105480
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 231761
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13662
<INCOME-PRETAX> (140414)
<INCOME-TAX> 0
<INCOME-CONTINUING> (140414)
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> (140414)
<EPS-BASIC> (0.02)
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