U.S. SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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Form 10 - QSB
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Quarterly Report Under Section 13 or 15 (d)
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of the Securities Exchange Act of 1934
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For the Quarterly Period Ended June 30, 2000
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Commission File No. 0-12968
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INMEDICA DEVELOPMENT CORPORATION
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(Exact name of small business issuer as specified in its charter)
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Utah 87-0397815
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
825 N. 300 West, Salt Lake City, Utah 84103
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(Address of principal executive offices)
Registrant's telephone number including area code (801) 521-9300
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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 preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days:
Yes [X] No [ ]
The number of shares outstanding of the registrant's only class of common stock,
par value $.001 per share, as of August 1, 2000 was 8,835,899 shares.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
As of June 30,
2000
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(Unaudited)
CURRENT ASSETS:
Cash $ 54,620
Prepaid expenses 7,051
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Total current assets 61,671
EQUIPMENT AND FURNITURE,
at cost, less accumulated
depreciation of $252,587 402
OTHER ASSETS 2,196
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Total assets $ 64,269
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See notes to condensed consolidated financial statements.
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INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET(CONTINUED)
LIABILITIES AND STOCKHOLDERS' DEFICIT
As of June 30,
2000
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(Unaudited)
CURRENT LIABILITIES:
Notes payable to related
parties $ 183,949
Consulting fee payable to
related parties 125,992
Accrued payroll 792
Note payable 12,938
Accounts payable 55,239
Dividends payable 4,564
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Total current liabilities 383,474
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STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value;
20,000,000 shares authorized,
8,835,899 shares issued and outstanding 8,836
Preferred shares, 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 114,102
Additional paid-in capital 6,896,935
Accumulated deficit (7,339,078)
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Total stockholders'
deficit (319,205)
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Total liabilities and
stockholders' deficit $ 64,269
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See notes to condensed consolidated financial statements.
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<TABLE>
<CAPTION>
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
2000 1999 2000 1999
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(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
ROYALTY REVENUES $ 31,200 $ 27,520 $ 31,200 $ 27,520
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OPERATING EXPENSES:
General and
administrative 46,104 37,339 107,514 75,128
Research and
development 15,762 38,160 19,823 40,162
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Total operating expenses 61,866 75,499 127,337 115,290
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LOSS FROM OPERATIONS (30,666) (47,979) (96,137) (87,770)
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OTHER INCOME (EXPENSE):
Other income -- 3,294 -- 3,294
Interest income 6 68 10 214
Interest expense (4,074) (3,485) (8,119) (6,657)
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Total other expense (4,068) (123) (8,109) (3,149)
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NET LOSS (34,734) (48,102) (104,246) (90,919)
PREFERRED STOCK DIVIDENDS (2,282) (2,282) (4,564) (4,564)
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NET LOSS APPLICABLE
TO COMMON SHARES $ (37,016) $ (50,384) $ (108,810) $ (95,483)
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NET LOSS PER COMMON SHARE
(BASIC AND DILUTED) $ (.00) $ (.01) $ (.01) $ (.01)
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WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 8,749,389 8,660,899 8,737,566 8,660,899
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</TABLE>
See notes to condensed consolidated financial statements.
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INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
For the Six Months Ended
June 30,
2000 1999
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(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(104,246) $ (90,919)
Adjustments to reconcile net
loss to net cash provided
by (used in) operating activities-
Depreciation 304 433
Change in assets and liabilities-
Decrease in royalties receivable 57,120 45,920
Decrease in prepaid expenses 9,000 9,500
Increase in consulting fees payable
to related party 20,000 29,998
Increase (decrease)in accounts
payable 16,931 (29,098)
Decrease in accrued payroll (164) (276)
Net cash used in
operating activities (1,055) (34,442)
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See notes to condensed consolidated financial statements.
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INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the Six Months Ended
June 30,
2000 1999
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(Unaudited)
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock $ 30,000 $ --
Proceeds from borrowings on notes
payable to related parties 27,137 11,250
Principal payments on notes payable (1,462) --
Preferred stock dividends paid -- (4,564)
Net cash provided from
financing activities 55,675 6,686
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NET INCREASE (DECREASE) IN CASH 54,620 (27,756)
CASH AT BEGINNING OF THE PERIOD -- 38,565
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CASH AT END OF THE PERIOD $ 54,620 $ 10,809
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See notes to condensed consolidated financial statements.
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INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1-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 and six month periods ended June 30,
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 of $34,734 during the 3 month period
ended June 30, 2000 and as of June 30, 2000, the Company had an accumulated
deficit of $7,339,078 and negative working capital of $321,803. 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.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
OPERATION
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.
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
InMedica had a stockholders' deficit of $319,205 and an accumulated deficit
of $7,339,078 as of June 30, 2000. In order for InMedica to continue research
and development activities, it will require additional financing, for which it
has no commitments.
The net loss of $104,246 for the six months ended June 30, 2000 was $13,327
greater than for the six months ended June 30, 1999. The change resulted because
general and administrative expenses increased by $32,386 compared to the same
period in 1999, while research and development expenses decreased by $20,339.
The increase in general and administrative expenses during the six months ended
June 30, 2000 reflected additional employee expense. Research and development
expense was restricted due to cash flow constraints.
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PART II - OTHER INFORMATION
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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
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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
By:/s/ Ralph Henson
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Ralph Henson, CEO
By:/s/ Richard Bruggeman
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Date: August 10, 2000 Richard Bruggeman, Treasurer
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EXHIBITS
Exhibits filed with the Form 10-QSB of InMedica Development Corporation,
SEC File No. 0-12968:
Exhibit No. SB Item No. Description
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1 (27) Financial Data Schedule
