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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, 2000
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
incorporation of organization) Identification Number)
825 North 300 West
Salt Lake City, Utah 84103
--------------------------
(Address of principal executive offices)
Registrant's telephone number:
------------------------------
(801) 521-9300
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 11, 2000 was 8,735,899 shares.
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
------
As of
March 31, 2000
(Unaudited)
-----------
CURRENT ASSETS:
Cash $ 12,058
Prepaid expenses 11,551
----------
Total current assets 23,609
EQUIPMENT AND FURNITURE,
at cost, less accumulated
depreciation of $252,435 554
OTHER ASSETS 2,196
----------
Total assets $ 26,359
==========
See notes to condensed consolidated financial statements.
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<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET (Continued)
LIABILITIES AND STOCKHOLDERS' DEFICIT
As of
March 31,
2000
------
(Unaudited)
CURRENT LIABILITIES:
Consulting fee payable to
related parties $ 115,992
Notes payable to
related parties 180,581
Accounts payable 28,101
Accrued payroll 792
Notes payable 10,800
Dividend payable 2,282
Total current liabilities 338,548
----------
STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value;
20,000,000 shares authorized,
8,735,899 issued and outstanding 8,736
Preferred stock, 10,000,000
shares authorized; Series A
preferred stock, cumulative and
convertible, $4.50 par value,
1,000,000 shares
designated, 25,356 shares
issued and outstanding 114,102
Additional paid-in capital 6,867,035
Accumulated deficit (7,302,062)
----------
Total stockholders'
deficit (312,189)
----------
Total liabilities and
stockholders' deficit $ 26,359
==========
See notes to condensed consolidated financial statements.
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<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three
Months Ended
March 31,
2000 1999
-------- --------
(Unaudited)
TOTAL OPERATING REVENUES $ -0- -0-
-------- --------
OPERATING EXPENSES:
General and
administrative 61,410 37,789
Research and
development 4,061 2,002
--------- -----
Total operating expenses 65,471 39,791
--------- ------
LOSS FROM OPERATIONS (65,471) (39,791)
--------- -------
OTHER INCOME (EXPENSE):
Miscellaneous income 4 146
Interest expense (4,045) (3,172)
-------- -------
Total other expense (4,041) (3,026)
-------- -------
NET LOSS (69,512) ( 42,817)
PREFERRED STOCK DIVIDEND (2,282) (2,282)
------- ------
NET LOSS APPLICABLE TO
COMMON SHARES $ (71,794) $( 45,099)
========== =========
Net loss per common share
(basic and diluted) $ (.01) $ (.01)
======== =========
Weighted average number
of common shares outstanding 8,735,899 8,660,899
========= ========
See notes to condensed consolidated financial statements.
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<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
For the Three
Months Ended
March 31,
2000 1999
----------- ----------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (69,512) $( 42,817)
Adjustments to reconcile net
loss to net cash used in
operating activities-
Depreciation 152 217
Change in assets and liabilities-
Decrease in royalties receivable 57,120 45,920
Decrease in prepaid expenses 4,500 4,750
Increase in consulting fee payable
to related party 10,000 12,999
Decrease in accounts payable (10,207) (29,011)
Decrease in accrued payroll (164) (276)
Decrease in notes payable (3,600) -
Increase in related-party
payable 23,769 -
-------- -------
Net cash provided by (used in)
operating activities 12,058 ( 8,218)
---------- --------
See notes to condensed consolidated financial statements.
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<PAGE>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
INCREASE (DECREASE) IN CASH
For the Three
Months Ended
March 31,
2000 1999
---------- -------
(Unaudited)
NET INCREASE (DECREASE) IN CASH 12,058 (10,500)
CASH AT BEGINNING OF PERIOD - 38,565
------- --------
CASH AT END OF PERIOD $ 12,058 $ 28,065
======= =======
See notes to condensed consolidated financial statements.
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<PAGE>
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 only of normal
recurring adjustments) considered necessary for fair presentation have been
included. Operating results for the three-month period ended March 31, 2000 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2000. For further information, refer to the consolidated
financial statements included in the Company's Form 10-KSB for the year ended
December 31, 1999.
Royalties received from the Johnson and Johnson agreement are presently the
Company's sole source of revenue and the royalty is expected to terminate during
2000. The Company generated a net loss from operations of $69,512 during the
period ended March 31, 2000 and as of March 31, 2000, the Company had an
accumulated deficit of $7,302,062 and negative working capital of $314,939.
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. 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.
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<PAGE>
Item 2. 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
from royalty income received from Johnson and Johnson Medical, Inc. ("JJMI").
This income is expected to terminate during 2000. InMedica continues to look for
other funding sources but as of the date of this filing, it has no commitments.
Due to the Company's revenue recognition policy, no operating revenues were
recognized during the three months ended March 31, 2000 (See "Results of
Operations").
The royalty agreement with JJMI has been pledged to secure repayment of the
$145,000 related party note payable. Funds expended to develop other potential
assets of the Company such as a hematocrit device have been expensed as incurred
as research and development. The ability of the Company to use the hematocrit
device as a means of securing funding for the Company is totally dependent upon
the success of further research and development efforts in producing a viable
device suitable for commercialization.
Results of Operations
The Company's revenue recognition policy requires sales information upon
which royalties are calculated to have been received from JJMI and that cash
receipts be assured prior to recording revenue. For that reason no revenues were
recognized during the first quarter of 2000, although the Company expects to
receive some revenues during 2000 from the JJMI contract. See Liquidity and
Capital Resources. InMedica has a stockholders' deficit of $ 312,189 and an
accumulated deficit of $7,302,062 as of March 31, 2000. In order for InMedica to
continue research and development activities, it will require additional
financing, for which it has no commitments.
The loss from operations of $65,471 for the quarter ended March 31, 2000
compared to $39,791 for the quarter ended March 31, 1999 resulted from general
and administrative expenses ($61,410) and research and development expenses
($4,061) being incurred while at the same time there were no revenues. Research
and development expense was minimal as the decline in royalty income limited
available cash during the quarter. General and administrative expense increased
compared to the same period of the prior year, primarily due to additional
employee expense.
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<PAGE>
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: None
Item 6. Exhibits and Reports on Form 8-K:
Exhibits: 1 Financial Data Schedule
Form 8-K: None
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<PAGE>
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 12, 1999
- --------------------
By /s/ Ralph Henson
-------------------
Ralph Henson, CEO
By /s/ Richard Bruggeman
------------------------
Richard Bruggeman, Treasurer
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<PAGE>
EXHIBITS
Exhibits filed with the Form 10-QSB of InMedica Development Corporation, SEC
File No. 0-12968:
Exhibit No. SB Item No. Description
- ----------- ----------- -----------
1 (27) Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 12058
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 23609
<PP&E> 252989
<DEPRECIATION> (252435)
<TOTAL-ASSETS> 26359
<CURRENT-LIABILITIES> 338548
<BONDS> 0
0
114102
<COMMON> 8736
<OTHER-SE> (435027) <F1>
<TOTAL-LIABILITY-AND-EQUITY> 26359
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 65471
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4045
<INCOME-PRETAX> (69512)
<INCOME-TAX> 0
<INCOME-CONTINUING> (69512)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (69512)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
<FN>
<F1>
Additional paid in capital and retained earnings
</FN>
</TABLE>
