<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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 23-0450710
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
260 New York Drive
Fort Washington, Pennsylvania 19034
(Address of principal executive offices) (Zip Code)
(215) 646-7100
(Registrant's telephone number including area code)
N/A
(Former name, former address and former fiscal year, if changed since last
report)
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
--- ---
Indicate the number of shares outstanding of each of the issuers shares of
common stock, as of the latest practicable date: As of September 30th 1996,
there were outstanding 12,760,140 shares of the Registrant's Common Stock, $.005
par value.
Page 1 of 9 pages
Exhibit Index is on Page 9
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INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets:
September 30,1996 and December 31, 1995 3
Consolidated Statements of Income (Loss):
Three and Nine Months Ended September 30,1996 and 1995 4
Consolidated Statements of Accumulated Deficit:
Nine Months Ended September 30,1996 and 1995 5
Consolidated Statements of Cash Flows:
Nine Months Ended September 30,1996 and 1995 6
Note to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 6. Exhibits and Reports on Form 8-K 9
Signatures
</TABLE>
<PAGE> 3
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
CONSOLIDATED BALANCE SHEETS
Assets
<TABLE>
<CAPTION>
Unaudited
SEPTEMBER 30 DECEMBER 31
1996 1995
---- ----
<S> <C> <C>
Current assets
Cash $ 3,373 $ 84,156
Accounts receivable (net of allowance for doubtful
accounts of $6,000 at 9/30/96 and 12/31/95) 0 21,013
Note Receivable 37,000 20,000
Inventory 0 70,084
Prepaid expenses and other current assets 0 13,819
----------- ------------
Total current assets 40,373 209,072
Property, equipment, furniture and leaseholds, net
of accumulated depreciation and amortization 0 25,011
Deposits 0 8,431
----------- ------------
Total assets $ 40,373 $ 242,514
=========== ============
Liabilities and Shareholders' Deficit
Current liabilities
Note payable $ 0 $ 654,900
Accounts payable and accrued expenses 394,198 1,981,066
Proceeds for bonds unissued 0 187,000
Proceeds from common stock unissued 0 462,761
----------- ------------
Total current liabilities 394,198 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 1,072,812 7,632,047
Accumulated deficit (1,490,438) (10,739,061)
----------- ------------
Total shareholders' deficit (353,825) (3,043,213)
----------- ------------
Total liabilities and
shareholders' deficit $ 40,373 $ 242,514
=========== ============
</TABLE>
The accompanying note is an integral part of these financial statements.
3
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INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue
Sale of medical devices $ 0 $ 45,716 $ 0 $ 23,190
------- --------- ------- ---------
Direct expenses
Costs of goods - medical devices 0 33,097 0 18,022
------- --------- ------- ---------
Gross profit 0 12,619 0 5,168
------- --------- ------- ---------
Other expenses
Expenses of development stage subsidiary
Professional fees 7,018 62,004 2,353 8,480
Research and development costs 0 13,267 0 5,943
Other development stage expenses 0 351,139 0 97,671
------- --------- ------- ---------
Total expenses of development
stage subsidiary 7,018 426,410 2,353 112,094
General and administrative expenses 79,756 91,858 11,735 27,817
------- --------- ------- ---------
Total other expenses 86,774 518,268 14,088 139,911
------- --------- ------- ---------
Investment and other income (expense)
Investment income 85,000 -- 85,000 (159)
Interest income 14,722 -- 3,320 --
Other income -- 5,279 -- 15
------- --------- ------- ---------
Total other income 99,722 5,279 88,320 (144)
------- --------- ------- ---------
Net income (loss) $12,948 ($500,370) $74,232 ($134,887)
======= ========= ======= =========
Loss per common share outstanding $ .0009 ($ .0392) $ .005 ($ .0106)
======= ========= ======= =========
</TABLE>
The accompanying note is an integral part of these financial statements.
4
<PAGE> 5
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF ACCUMULATED DEFICIT
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------
1996 1995
---- ----
<S> <C> <C>
BALANCE - BEGINNING OF THE PERIOD ($1,503,386) ($10,282,226)
NET (LOSS) GAIN FOR THE PERIOD 12,948 (500,370)
----------- ------------
BALANCE - END OF THE PERIOD ($1,490,438) ($10,782,596)
=========== ============
</TABLE>
The accompanying note is an integral part of these financial statements.
5
<PAGE> 6
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30 ,
--------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ 12,948 ($500,370)
--------- ---------
Adjustments to reconcile net loss to net cash used in
operating activities
Depreciation and amortization 0 13,267
Change in
Accounts receivable 0 (21,380)
Inventory 0 13,882
Prepaid expenses and other current assets 4,968 10,938
Accounts payable and accrued expenses 47,906 155,266
--------- ---------
Total adjustments 52,874 171,973
--------- ---------
Net cash provided by (used in) operating activities 65,822 (328,397)
--------- ---------
Cash flows from investing activities
Capital expenditures 0 ( 26,731)
Increase in notes receivable 60,085 0
Advances from affiliate 24,571 0
--------- ---------
Net cash provided by (used in) investing activities 84,656 ( 26,731)
--------- ---------
Cash flows from financing activities
Proceeds from issuance of notes payable 0 50,000
Principal payments of notes payable (231,000) (30,000)
Proceeds for common stock unissued 0 1,600
Proceeds from issuance of Preferred Stock
of consolidated subsidiary 0 200,000
--------- ---------
Net cash provided by (used in) financing activities (231,000) 221,600
--------- ---------
Net increase (decrease) in cash and cash equivalents 80,522 (133,527)
Cash and cash equivalents, beginning 83,895 174,374
--------- ---------
Cash and cash equivalents, ending $ 3,373 $ 40,847
========= =========
Schedule of noncash financing transactions:
In 1996, the company forgave notes and accrued
interest receivable from Biosonics, Inc. totaling
$379,968 in exchange for Biosonics, Inc.
assuming liability of the Company.
</TABLE>
The accompanying note is an integral part of these financial statements.
6
<PAGE> 7
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 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 annual report
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 nine-month period
ended September 30, 1996 may not be indicative of the results
that may be expected for the year ending December 31, 1996.
Note 2 - The 1996 consolidated financial statements include the accounts
of International Management & Research Corporation and its
wholly-owned subsidiary - IMRC Holdings, Inc. (IMRCH). In
accordance with guidelines established by the United States
Securities and Exchange Commission, the 1995 and 1994 financial
statements also include the accounts of Biosonics, Inc., which
the Company had majority ownership of until September 1996. All
intercompany balances and transactions have been eliminated.
7
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
During 1996, IMRCH converted its series B preferred stock of Biosonics Inc. into
7,000,000 shares of common stock of Biosonics Inc. Also, IMRCH transferred
550,000 shares of Biosonics' common stock held by it to two outside consultants
for certain advertising and public relations services provided to Biosonics.
During 1993 and 1994, IMRC borrowed an aggregate of $335,000, $120,000 of which
was pursuant to loans that were convertible into Biosonics common stock owned by
IMRCH, at $.01 and $.02 per share. With respect to $215,000 of the loans, IMRCH
agreed to issue to the lenders 3,000,000 shares of Biosonics common stock owned
by IMRCH. These shares were issued by IMRCH in 1996. In addition, during 1994,
IMRCH raised $190,161 through the sale of Biosonics common stock owned by IMRCH
at a range of $.02 to $.05 per share. In 1996, Biosonics assumed the obligations
of the IMRC loans totaling $335,000. In addition, Biosonics assumed IMRC's
obligation in connection with the $190,161 raised by IMRC for the sale of
Biosonics stock. Biosonics also assumed $68,207 in loans and accrued interest
owed to family members of the Company's president by IMRC. These obligations
were then settled by Biosonics through the conversion of these liabilities into
15,368,820 shares of Biosonics common stock.
During the period ending September 30, 1996, Biosonics increased its authorized
shares and issued new shares to numerous individuals, primarily in exchange for
debt, and from the conversion of preferred stock, IMRCH's ownership of common
stock of Biosonics decreased to less than 50%. The Company through its wholly
owned subsidiary IMRCH owned 110,138,930 shares or 38.26% of Biosonics, Inc.
common stock. Accordingly IMRC is no longer able to consolidate with Biosonics'
financial statements. Financial statements prior to the period of September 30,
1996 include consolidated financial statements with Biosonics, Inc.
The Company is essentially a holding company. Except for certain management
services provided to Biosonics, the company presently conducts no business of
its own. Aside from payment of salary to an officer of the Company and certain
overhead expenses, substantially all of the consolidated results of operations
in 1995 and 1994 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 sources of funds to date have been proceeds from the sale of
its securities and investment income on such proceeds. In 1989, Biosonics
borrowed $250,000 from Jack Paller and his late spouse. Biosonics issued to the
Pallers a demand note bearing interest at the prime rate plus 1 1/2% and granted
the Pallers a security interest in all of its assets to secure the loan. The
Pallers had obtained the amount loaned to Biosonics on the same date pursuant to
a personal bank loan on a demand basis at the same interest rate. The Pallers
granted the bank a mortgage on their home to secure repayment of the loan.
During 1989, Biosonics issued 1,250 shares of its Preferred Stock - Series B
(which was converted to common stock in 1996) to the Pallers in satisfaction of
$125,000 of the loan.
Results of Operations
The Company had no operating activities except for certain services provided in
connection with IMRCH's holding of Biosonics' common stock.
IMRCH transferred certain shares of Biosonics common stock holdings which
resulted in a gain of $85,000.
8
<PAGE> 9
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
*3.1 Articles of Incorporation (Exhibit to Registrant's Registration
Statement on Form 10 ["Form 10"]).
*3.5 By-laws of Registrant, as amended. (Exhibit to Registrant's Form
10)
27. Financial Data Schedule
(b) Reports on Form 8-K:
The Registrant did not file any reports on Form 8-K during the quarter
ended September 30, 1996.
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: June 20, 1997 By:/s/Jack Paller
---------------------------------------
Jack Paller, President, Chairman
(Principal Executive Officer), Principal
Financial Officer and Principal
Accounting Officer and Sole Director
9
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000740892
<NAME> INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 3,373
<SECURITIES> 0
<RECEIVABLES> 37,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 40,373
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 40,373
<CURRENT-LIABILITIES> 394,198
<BONDS> 0
0
0
<COMMON> 63,801
<OTHER-SE> (353,825)
<TOTAL-LIABILITY-AND-EQUITY> 40,373
<SALES> 0
<TOTAL-REVENUES> 99,722
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 86,774
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 12,948
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,948
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
