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 September 30, 2000
Commission File No. 0-12968
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
(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
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The number of shares outstanding of the registrant's only class of common stock,
par value $.001 per share, as of November 1, 2000 was 8,835,899 shares.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
As of September 30,
2000
(Unaudited)
CURRENT ASSETS:
Cash $ 10,367
Prepaid expenses 2,551
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Total current assets 12,918
EQUIPMENT AND FURNITURE,
at cost, less accumulated
depreciation of $252,587 250
OTHER ASSETS 2,196
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Total assets $ 15,364
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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 September 30,
2000
(Unaudited)
CURRENT LIABILITIES:
Notes payable to related parties $ 189,183
Consulting fee payable to
related parties 147,992
Accrued payroll 792
Note payable 13,500
Accounts payable 40,197
Dividends payable 6,846
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Total current liabilities 398,510
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STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value;
20,000,000 shares authorized,
8,835,899 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
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designated, 25,356 shares
outstanding 114,102
Additional paid-in capital 6,896,935
Accumulated deficit (7,403,019)
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Total stockholders'
deficit ( 383,146)
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Total liabilities and
stockholders' deficit $ 15,364
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See notes to condensed consolidated financial statements.
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INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
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2000 1999 2000 1999
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(Unaudited) (Unaudited)
ROYALTY REVENUES $ 15,680 $ 16,800 $ 46,880 $ 44,320
--------- ---------- ---------- ---------
OPERATING EXPENSES:
General and
administrative 65,511 28,046 173,025 103,174
Research and
development 5,738 10,689 25,561 50,851
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Total operating expenses 71,249 38,735 198,586 154,025
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LOSS FROM OPERATIONS (55,569) (21,935) (151,706) (109,705)
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OTHER (EXPENSE) INCOME:
Miscellaneous Income -- 746 -- 4,040
Interest income 3 4 13 218
Interest expense (6,093) (3,242) (14,212) (9,899)
--------- ---------- ---------- ---------
Total other expense (6,090) ( 2,492) (14,199) (5,641)
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NET LOSS (61,659) (24,427) (165,905) (115,346)
PREFERRED STOCK DIVIDENDS ( 2,282) (2,283) (6,846) (6,847)
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NET LOSS APPLICABLE
TO COMMON SHARES $ (63,941) $ (26,710) $ (172,751) $(122,193)
========= ========== ========== =========
Net loss per common sha
(basic and diluted) $ (.01) $ (.00) $ (.02) $ (.01)
========= ========== ========== =========
Weighted average number
of common shares
outstanding 8,835,899 8,660,899 8,769,965 8,660,899
========= ========== ========== =========
See notes to condensed consolidated financial statements.
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INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
DECREASE IN CASH
For the Nine Months Ended
September 30,
2000 1999
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(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (165,905) $ (115,346)
Adjustments to reconcile net
loss to net cash used in
operating activities-
Depreciation 456 649
Change in assets and liabilities-
Decrease in royalties receivable 57,120 45,920
Decrease in prepaid expenses 13,500 14,250
Increase in consulting fees payable
to related party 42,000 46,997
Increase (decrease)in accounts
payable 1,889 (29,098)
Decrease in accrued payroll (164) (276)
Decrease in note payable (1,462) --
Net cash used in
operating activities 52566 (36,904)
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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 Nine Months Ended
September 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 32,371 11,250
Principal payments on notes payable (900) --
Preferred stock dividends paid -- (6,847)
Net cash provided from
financing activities 61,471 (4,403)
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NET INCREASE (DECREASE) IN CASH 10,367 (32,501)
CASH AT BEGINNING OF THE PERIOD -- 38,565
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CASH AT END OF THE PERIOD $ 10,367 $ 6,064
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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 accounting principles generally accepted in the
United States 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 accounting principles generally
accepted in the United States for complete financial statements. These
consolidated statements include the accounts of InMedica Development Corporation
and its wholly owned subsidiary, MicroCor, Inc. ("MicroCor"). All material
inter-company 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 nine month periods ended September
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 from operations of $55,569 during the
period ended September 30, 2000 and as of September 30, 2000, the Company had an
accumulated deficit of $7,403,019 and negative working capital of $385,592.
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 $383,146 and an accumulated deficit
of $7,403,019 as of September 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 $165,905 for the nine months ended September 30, 2000 was
$50,559 greater than for the nine months ended September 30, 1999. The change
resulted because general and administrative expenses increased by $71,851
compared to the same period in 1999, while research and development expenses
decreased by $27,290. The increase in general and administrative expenses during
the nine months ended September 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
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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Richard Bruggeman, Treasurer
Date: November 12, 2000
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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
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