<PAGE> 1
- - --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
----------------------------------
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended March 31, 1996
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
------ -------
Commission File Number: 0-11586
----------------------------------
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 23-0350710
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
810 Lombard Street
Philadelphia, Pennsylvania 19147
(Address of principal executive offices)
(215) 923-6850
(Registrant's telephone number including area code)
------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities 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
--- ---
As of May 13, 1996, there were outstanding 12,760,140 shares of the
Registrant's Common Stock, $.005 par value.
- - --------------------------------------------------------------------------------
Page 1 of 10 pages
Exhibit Index is on Page 9
<PAGE> 2
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets:
March 31, 1996 and December 31, 1995 2
Consolidated Statements of Loss:
Three Months Ended March 31, 1996 and 1995 3
Consolidated Statements of Accumulated Deficit:
Three Months Ended March 31, 1996 and 1995 4
Consolidated Statements of Cash Flows:
Three Months Ended March 31, 1996 and 1995 5
Note to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 6. Exhibits and Reports on Form 8-K 8
Signatures
</TABLE>
<PAGE> 3
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------
Assets
Unaudited
MARCH, 31 DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
Current assets
Cash $ 75,692 $ 84,156
Accounts receivable (net of allowance for doubtful
accounts of $6,000 at 3/31/96 and 12/31/95) 19,028 21,013
Note Receivable 20,000 20,000
Inventory 67,309 70,084
Prepaid expenses and other current assets 11,574 13,819
------------ ------------
Total current assets 193,603 209,072
Property, equipment, furniture and leaseholds, net
of accumulated depreciation and amortization 23,676 25,011
Deposits 8,431 8,431
------------ ------------
Total assets $ 225,710 $ 242,514
============ ============
Liabilities and Shareholders' Deficit
Current liabilities
Note payable $ 638,900 $ 654,900
Accounts payable and accrued expenses 2,100,083 1,981,066
Proceeds for bonds unissued 187,000 187,000
Proceeds from common stock unissued 462,761 462,761
------------ ------------
Total current liabilities 3,388,744 3,285,727
------------ ------------
Shareholders' deficit
Common stock - $.005 par value, 50,000,000
shares authorized 12,760,140 shares
issued and outstanding 63,801 63,801
Capital in excess of par value 7,632,047 7,632,047
Accumulated deficit (10,858,882) (10,739,061)
------------ ------------
Total shareholders' deficit (3,163,034) (3,043,213)
------------ ------------
Total liabilities and
shareholders' deficit $ 225,710 $ 242,514
============ ============
- - ------------------------------------------------------------------------------------------
</TABLE>
The accompanying note is an integral part of these financial statements.
2
<PAGE> 4
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF LOSS
(UNAUDITED)
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31,
1996 1995
--------- ---------
<S> <C> <C>
Revenue
Sale of medical devices $ 17,516 $ 10,595
--------- ---------
Direct expenses
Costs of goods - medical devices 3,055 6,977
--------- ---------
Gross profit 14,461 3,618
--------- ---------
Other expenses
Expenses of development stage subsidiary
Professional fees 23,621 41,485
Research and development costs 0 1,384
Other development stage expenses 90,447 115,853
--------- ---------
Total expenses of development
stage subsidiary 114,068 158,722
General and administrative expenses 20,289 43,447
--------- ---------
Total other expenses 134,357 202,169
--------- ---------
Investment and other income (expense)
Investment income - 159
Other income 75 5,181
--------- ---------
Total other income 75 5,340
--------- ---------
Net loss $(119,821) $(193,211)
========= =========
Loss per common share outstanding $ (.0087) $ (.0151)
========= =========
- - --------------------------------------------------------------------
</TABLE>
The accompanying note is an integral part of these financial statements.
3
<PAGE> 5
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF ACCUMULATED DEFICIT
(UNAUDITED)
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31,
1996 1995
------------ ------------
<S> <C> <C>
BALANCE - BEGINNING OF THE PERIOD $(10,739,061) $(10,282,226)
NET LOSS FOR THE PERIOD (119,821) (193,211)
------------ ------------
BALANCE - END OF THE PERIOD $(10,858,882) $(10,475,437)
============ ============
- - --------------------------------------------------------------------------------
</TABLE>
The accompanying note is an integral part of these financial statements.
4
<PAGE> 6
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31,
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net loss $(119,821) $(193,211)
--------- ---------
Adjustments to reconcile net loss to net cash used in
operating activities
Depreciation and amortization 1,335 1,384
Change in
Accounts receivable 1,985 (6,689)
Inventory 2,775 914
Prepaid expenses and other current assets 2,245 2,813
Accounts payable and accrued expenses 109,017 87,406
--------- ---------
Total adjustments 117,357 85,828
--------- ---------
Net cash used in operating activities (2,464) (107,383)
--------- ---------
Cash flows from investing activities
Capital expenditures (-) (21,918)
--------- ---------
Net cash used in investing activities (-) (21,918)
--------- ---------
Cash flows from financing activities
Proceeds from issuance of notes payable - -
Principal payments of notes payable (6,000) -
Proceeds for common stock unissued - 1,600
Proceeds from issuance of Preferred Stock
of consolidated subsidiary - -
--------- ---------
Net cash provided by financing activities 6,000 1,600
--------- ---------
Net increase (decrease) in cash and cash equivalents (8,464) (127,701)
Cash and cash equivalents, beginning 84,156 174,374
--------- ---------
Cash and cash equivalents, ending $ 75,692 $ 46,673
========= =========
- - -------------------------------------------------------------------------------------------
</TABLE>
The accompanying note is an integral part of these financial statements.
5
<PAGE> 7
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
- - --------------------------------------------------------------------------------
Note 1 - The unaudited financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and note disclosures required
by generally accepted accounting principles. These statements
should be read in conjunction with the financial statements and
notes thereto included in the Company's Form 10-K for the year
ended December 31, 1995. In the opinion of management, these
financial statements include all adjustments, consisting only of
normal recurring adjustments, necessary to summarize fairly the
Company's financial position and results of operations. The
results of operations for the three month period ended March 31,
1996 may not be indicative of the results that may be expected for
the year ending December 31, 1996.
- - --------------------------------------------------------------------------------
6
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
The Company is essentially a holding company. Except for certain management
services provided to Biosonics, Inc. ("Biosonics"), a subsidiary of the Company,
the Company presently conducts no business of its own. Aside from the officer's
salary and certain overhead expenses, substantially all of the consolidated
results of operations relate to the operations of Biosonics.
As a holding company, the Company does not have any substantial assets other
than common stock of Biosonics.
Biosonics' primary source of funds to date has been proceeds from the sale of
its securities, investment income on such proceeds and loans. Biosonics will
require additional funds in the immediate future to continue its operations.
Biosonics may receive a portion of such funds from sales of the SALITRON System.
Biosonics is considering obtaining funds through venture capital or other
private or public financing, joint venture or merger transactions and research
and development partnership financing. Biosonics has engaged a consultant to
find an underwriter to conduct a secondary offering of its Common Stock. There
is no assurance that any such offering or other financing will be completed. In
addition, Biosonics may consider a merger with another entity or the sale of
various assets to obtain funding.
Biosonics does not have any material commitments for capital expenditures,
although Biosonics may make capital expenditures during 1996 or in connection
with the manufacture of the SALITRON and CYSTOTRON System, if funds are
available. The extent of the development or testing, if any, of Biosonics' other
devices will depend on the availability of funds.
Results of Operations
Biosonics' development stage expenses for the three months ended March 31,
1996 ($114,068 ) were lower than those for the comparable periods of the prior
year ($158,722 ) due to a decrease in funds being spent on advertising and
training of tele-marketers relating to the discontinuation of Biosonics's
marketing program. Biosonics' professional fees for the three months ended March
31, 1996 ($23,621 ) were lower than those for the comparable period of the prior
year ($41,485 ) due to office staff performing daily accounting procedures and
current filing requirements with the SEC. Other development stage expenses
include primarily salaries, rent, supplies, transfer agent fees, manufacturing,
marketing, public relations and travel expenses. Biosonics' sales for the three
months ended March 31, 1996 were $17,516 as compared to $10,595 for the same
periods of the prior year. These increases in sales resulted primarily from a
change in Biosonics' approach to marketing its SALITRON System.
7
<PAGE> 9
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Henry Brenman filed a lawsuit against Biosonics and Jack Paller,
on March 6, 1996, in the United States District Court for the Eastern District
of Pennsylvania, Docket No. 96-CV-1755. In the lawsuit, Mr. Brenman claimed that
Biosonics and Mr. Paller were obligated to provide Mr. Brenman with
documentation releasing the restriction on the transfer of Mr. Brenman's shares
under Rule 144 promulgated under the Securities Act of 1933. Mr. Brenman also
asserted that he had suffered a monetary loss as a result and sought damages in
excess of $50,000. The lawsuit provided no documentation to support any loss
suffered by Mr. Brenman This matter was settled by the parties and the lawsuit
was dismissed by the court on May 9, 1996. Neither Biosonics nor Mr. Paller
incurred any obligations or liabilities in connection with the settlement.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None.
(b) Reports on Form 8-K:
None.
8
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunder duly authorized.
INTERNATIONAL MANAGEMENT &
RESEARCH CORPORATION
Date: May 13, 1996 By: /s/ Jack Paller
--------------------------------------
Jack Paller, President, Chairman
(Principal Executive Officer), Principal
Financial Officer and Principal
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000740892
<NAME> INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 75,692
<SECURITIES> 0
<RECEIVABLES> 25,028
<ALLOWANCES> 6,000
<INVENTORY> 67,309
<CURRENT-ASSETS> 193,603
<PP&E> 254,806
<DEPRECIATION> 231,130
<TOTAL-ASSETS> 225,710
<CURRENT-LIABILITIES> 3,388,744
<BONDS> 638,900
0
0
<COMMON> 63,801
<OTHER-SE> 3,163,034
<TOTAL-LIABILITY-AND-EQUITY> 225,710
<SALES> 17,516
<TOTAL-REVENUES> 17,591
<CGS> 3,055
<TOTAL-COSTS> 90,447
<OTHER-EXPENSES> 43,910
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,790
<INCOME-PRETAX> (119,821)
<INCOME-TAX> 0
<INCOME-CONTINUING> (119,821)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (119,821)
<EPS-PRIMARY> .009
<EPS-DILUTED> .009
</TABLE>
