<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
/xx/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
-----------------------------------
or
/ / 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: 33-2205-D
-----------------------------------------
NeuroCorp., Ltd.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 22-2813990
--------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
45 Knollwood Road, Elmsford, New York 10523
-----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(914) 345-2057
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
section 13 or 15 (d) of the Exchange Act 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 /xx/ No / /
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: 11,731,672 shares as of July 31, 2000.
Transitional Small Business Disclosure Format (Check one):
Yes / / No /xx/
<PAGE>
NEUROCORP, LTD. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PART 1 - FINANCIAL INFORMATION:
ITEM I - CONSOLIDATED FINANCIAL STATEMENTS
Page
number
------
Consolidated Balance Sheets at June 30, 2000 (unaudited)
and December 31, 1999 1
Consolidated Statements of Operations (unaudited)
for the three months ended June 30, 2000 and 1999 2
Consolidated Statements of Operations (unaudited)
for the six months ended June 30, 2000 and 1999 3
Consolidated Statement of Stockholders' Equity (unaudited)
for the six months ended June 30, 2000 4
Consolidated Statements of Cash Flows (unaudited)
for the six months ended June 30, 2000 and 1999 5
Notes to consolidated financial statements 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10
PART II - OTHER INFORMATION 13
<PAGE>
PART I
Item 1. Consolidated Financial Statements
NEUROCORP, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 348,419 $ 1,003,180
Accounts receivable, net of allowance for doubtful
accounts of $14,000 in 2000 and $37,600 in 1999 60,953 38,352
Prepaid expenses and other current assets 28,643 52,742
------------ ------------
Total current assets 438,015 1,094,274
------------ ------------
PROPERTY AND EQUIPMENT, net 587,825 625,462
OTHER ASSETS 22,320 24,750
------------ ------------
$ 1,048,160 $ 1,744,486
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 206,006 $ 307,201
Accrued expenses 161,000 199,401
Deferred revenue 2,705 38,980
Current portion of obligation under capital lease 3,176 3,309
Stockholder demand notes payable 300,000 300,000
------------ ------------
Total current liabilities 672,887 848,891
------------ ------------
OBLIGATION UNDER CAPITAL LEASE, less current portion 4,549 5,773
STOCKHOLDERS' EQUITY
Cumulative, convertible preferred stock, Class B, Series C,
$.001 par value, 20,000,000 shares authorized 17,314 17,071
Cumulative, non-convertible preferred stock, Class B, Series 1,
no par value, 5,000,000 shares authorized 150,000 150,000
Common stock, $.001 par value, 100,000,000 shares authorized 11,731 11,731
Additional paid-in-capital 11,142,676 11,150,419
Deficit (10,950,997) (10,439,399)
------------ ------------
370,724 889,822
------------ ------------
$ 1,048,160 $ 1,744,486
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-1-
<PAGE>
NEUROCORP, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
2000 1999
------------ ------------
NET SALES $ 193,081 $ 150,827
COST OF SALES 15,987 42,081
------------ ------------
Gross profit 177,094 108,746
GENERAL AND ADMINISTRATIVE EXPENSES 466,171 513,031
------------ ------------
Loss from operations (289,077) (404,285)
OTHER INCOME (EXPENSE)
Interest income 3,663 4,575
Other Income -- 2,516
Interest expense (3,162) (6,229)
------------ ------------
501 862
------------ ------------
Net loss $ (288,576) $ (403,423)
============ ============
LOSS PER COMMON SHARE $ (0.02) $ (0.04)
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 11,731,672 11,230,605
============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
-2-
<PAGE>
NEUROCORP, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
2000 1999
------------ ------------
NET SALES $ 433,304 $ 198,783
COST OF SALES 80,919 94,801
------------ ------------
Gross profit 352,385 103,982
GENERAL AND ADMINISTRATIVE EXPENSES 867,299 1,094,169
------------ ------------
Loss from operations (514,914) (990,187)
OTHER INCOME (EXPENSE)
Interest income 10,070 5,827
Other Income -- 2,516
Interest expense (6,754) (10,857)
------------ ------------
3,316 (2,514)
------------ ------------
Net loss $ (511,598) $ (992,701)
============ ============
LOSS PER COMMON SHARE $ (0.04) $ (0.09)
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 11,731,672 11,230,605
============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
-3-
<PAGE>
NEUROCORP, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Preferred Stock Preferred Stock
Class B, Series C Class B, Series 1 Common Stock Additional
--------------------------- --------------------------- --------------------------- Paid-in-
Shares Amount Shares Amount Shares Amount Capital
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1999 17,071,593 $ 17,071 150,000 $ 150,000 11,731,672 $ 11,731 $ 11,150,419
Preferred stock dividends 243,047 243 -- -- -- -- (7,743)
Net loss -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------
Balance, June 30, 2000 17,314,640 $ 17,314 150,000 $ 150,000 11,731,672 $ 11,731 $ 11,142,676
============ ============ ============ ============ ============ ============ ============
<CAPTION>
Total
Stockholders'
Deficit Equity
------------ ------------
<S> <C> <C>
Balance, December 31, 1999 $(10,439,399) $ 889,822
Preferred stock dividends (7,500)
Net loss (511,598) (511,598)
------------ ------------
Balance, June 30, 2000 $(10,950,997) $ 370,724
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-4-
<PAGE>
NEUROCORP, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (511,598) $ (992,701)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 41,696 41,381
Bad debt (recoveries) expense (5,412) 2,659
Changes in operating assets and liabilities:
Increase in accounts receivable (17,189) (48,837)
Decrease (increase) in prepaid expenses and
other current assets 24,099 (46)
Decrease (increase) in other assets 2,430 (3,436)
Decrease in accrued expenses (45,901) (10,595)
Decrease (increase) in deferred revenue (36,275) 8,400
Decrease in accounts payable (101,195) (74,941)
----------- -----------
Net cash used in operating activities (649,345) (1,078,116)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (4,059) (4,235)
----------- -----------
Net cash used in investing activities (4,059) (4,235)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock -- 1,131,400
Payments on obligations under capital lease (1,357) --
----------- -----------
Net cash (used in)/provided by financing activities (1,357) 1,131,400
----------- -----------
NET INCREASE (DECREASE) IN CASH (654,761) 49,049
CASH AND CASH EQUIVALENTS, beginning of period 1,003,180 795,739
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 348,419 $ 844,788
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 2,254 $ 6,357
Income taxes 3,471 3,118
NON CASH INVESTING AND FINANCING ACTIVITIES
Preferred stock dividends 7,500 7,500
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-5-
<PAGE>
NEUROCORP, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The interim consolidated financial statements for the six
months ended June 30, 2000 and 1999 have been prepared by
NeuroCorp, Ltd. and subsidiaries (the "Company") pursuant to
the rules and regulations of the Securities and Exchange
Commission (the "SEC") for interim financial reporting. These
consolidated statements are unaudited and, in the opinion of
management, include all adjustments (consisting only of normal
recurring accruals) and disclosures necessary to present
fairly the consolidated balance sheets, consolidated
statements of operations, consolidated statement of changes in
stockholders' equity and consolidated statement of cash flows
for the periods presented in accordance with generally
accepted accounting principles. Certain information and
footnote disclosures normally included in the financial
statements prepared in accordance with generally accepted
accounting principles have been omitted in accordance with the
rules and regulations of the SEC. These consolidated financial
statements should be read in conjunction with the audited
consolidated financial statements, and accompanying notes,
included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1999.
CONSOLIDATION
The consolidated financial statements include the accounts of
NeuroCorp, Ltd. (NeuroCorp), and its wholly-owned
subsidiaries, HZI Research Center, Inc.(HZI) and Memory
Centers of America, Inc. (MCAI). All material intercompany
balances and transactions have been eliminated in
consolidation.
NATURE OF OPERATIONS
The Company has developed software programs that are used to
treat individuals suffering from memory disorders. The Company
is marketing these programs with other products and services,
which are packaged and licensed to customers. The Company
performs clinical research data analysis for health agencies,
research organizations, and pharmaceutical companies. In
addition, as an outgrowth of its research activities, the
Company also designs diagnostic testing software and equipment
for neuropsychiatric applications and performs neurological
testing services for hospitals and physicians. The Company
also manages a facility that diagnoses and treats memory
disorders and provides education and consultation to
individuals who suffer from memory impairment.
USE OF ESTIMATES
The preparation of consolidated financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the
consolidated financial statements. Actual results could differ
from those estimates.
-6-
<PAGE>
NEUROCORP, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
EARNINGS PER COMMON SHARE
The Company accounts for earnings per share in accordance with
Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings Per Share". Net loss per common share was computed
based upon 11,731,672 and 11,230,605 weighted average shares
outstanding during the six months ended June 30, 2000 and
1999, respectively. Diluted net loss per share was not
presented as the potentially dilutive convertible preferred
stock and stock purchase options are antidilutive.
SEGMENT INFORMATION
Statement of Financial Accounting Standards (SFAS) No. 131,
"Disclosures About Segments of an Enterprise and Related
Information," was issued effective for fiscal years ending
after December 15, 1998. The Company measures its operations
on a consolidated basis and, therefore, has not adopted the
reporting requirements of this Statement.
NOTE 2 - CONCENTRATIONS OF CREDIT RISK
For the six months ended June 30, 2000 and 1999,
approximately 72% and 65% of net sales were derived from
three and three unrelated customers, respectively. As of
June 30, 2000 and December 31, 1999, approximately 86% and
74% of accounts receivable are due from five and four
unrelated customers, respectively.
NOTE 3 - PROPERTY AND EQUIPMENT
A summary of property and equipment is as follows:
June 30, December
2000 31, 1999
-------- ---------
Equipment $327,573 $323,511
Furniture and fixtures 212,466 212,466
Leasehold improvements 171,365 171,365
Land 102,000 102,000
------- -------
813,404 809,342
Less: accumulated depreciation
and amortization 225,579 183,880
-------- --------
$587,825 $625,462
======== ========
Depreciation and amortization expense totaled $41,696 and
$41,381 for the six months ended June 30, 2000 and 1999,
respectively.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
The Company and its subsidiaries have entered into lease
agreements for administrative offices and certain equipment
under noncancellable operating leases expiring in various
dates through December 2002. The administrative office leases
contain a provision for additional rent, which is equal to the
Company's pro rated share of future real estate taxes.
A schedule of future minimum rental payments is as follows:
-7-
<PAGE>
NEUROCORP, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
Year ended December 31,
-----------------------
2000 $ 130,647
2001 137,438
2002 130,274
2003 80,000
---------
$ 478,359
=========
Rent expense under all operating leases for the six months
ended June 30, 2000 and 1999 was $71,279 and $101,326,
respectively.
OBLIGATIONS UNDER CAPITAL LEASE
The Company has entered into a lease agreement for computer
equipment under a noncancellable lease. The lease is for three
years and contains a purchase option equal to the fair market
value at the end of the lease. The equipment cost is $9,867
and the amount financed totals $9,867 with interest payable at
12%. At June 30, 2000 accumulated amortization totals $1,477.
Future minimum lease payments on the capital lease for each of
the years succeeding December 31, 1999 are as follows:
Year ending December 31,
------------------------
2000 $3,309
2001 3,595
2002 2,178
-------
$9,082
=======
NOTE 5 - STOCKHOLDER DEMAND NOTES PAYABLE
The Company has a demand note payable to a shareholder for
$200,000. The note is non-interest bearing and was payable as
of December 15, 1999. The Company also has a demand note
payable to a shareholder for $100,000. This note bears
interest at 9% per annum and was due on December 15, 1999
As of June 30, 2000, the above loans remain outstanding
without extension.
NOTE 6 - GOING CONCERN
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern. The Company's ability to continue as a going concern
is currently dependent on its ability to successfully attain
profitability and positive cash flows from operations as well
as obtain capital or other financing to fund future losses and
intended expansion. These conditions indicate that the Company
may be unable to continue as a going concern. The consolidated
financial statements do not include adjustments that might
result from the outcome of this uncertainty. Management's
plans to mitigate the Company's financial problems are
outlined below.
The Company is continuing its ongoing marketing efforts to
generate Memory Center clients and obtain contracts for its
contract research division and has implemented several
-8-
<PAGE>
NEUROCORP, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
measures to reduce current expenses. Further reductions in
monthly expenses beyond current levels could have adverse
effects on the Company's ability to function as further
reductions would most likely occur in payroll costs which
could hamper the ability of the Company to develop and market
products and service customers. The Company expects that with
current cash and projected cash from operations there will be
sufficient cash available to fund its working capital
requirements for the next two to three months.
The Company's plans center on the following objectives: grow
the Memory Centers(TM) of America business which includes
sales of medical systems, software, and licensing revenues;
turn its Signature Memory Center into a profitable operation;
secure new contract research business and additional
consulting business.
The Company is pursuing a marketing strategy intended to
create awareness of Memory Centers and its services to
potential patients and large existing healthcare providers
such as, multi-specialty physician groups, hospital
consortiums, and large assisted living center organizations.
The Company anticipates the Memory Center business to generate
significant revenue growth and cash flows and also expects the
contract research division to produce revenues and cash flows
sufficient to support the Company's overhead in the short
term.
The Company believes the Tele-Map(TM) business can be marketed
and provide a consistent growing revenue stream. The Company
is pursuing several options for the purpose of expanding its
Tele-Map business including joint venture opportunities.
The Company is negotiating with its two largest shareholders
for additional funding. It is anticipated that the financing
will consist of short-term convertible debt in the amount of
approximately $600,000, secured by the assets of the Company.
The proceeds will be used to fund the Company's current
working capital requirements. The Company anticipates
completing this financing not later than September 30, 2000.
-9-
<PAGE>
Cautionary Statement Regarding Forward Looking Information
The Private Securities Litigation Reform Act of 1995 provides
a safe harbor for forward-looking information made on behalf
of the Company. Certain statements in this quarterly report on
Form 10-QSB are "forward-looking statements". These
forward-looking statements include, but are not limited to,
statements about our plans, objectives, expectations and
intentions and other statements contained in the annual report
on Form 10-KSB for the year ended December 31, 1999 and this
current report that are not historical facts. When used in
this annual report, the words "expect," "anticipate,"
"intend," "plan," "believe," "seek," "estimate," and similar
expressions are generally intended to identify forward-looking
statements. Because these forward-looking statements involve
risks and uncertainties, there are important factors that
could cause actual results to differ materially from those
expressed or implied by these forward-looking statements,
including our plans, objectives, expectations, and intentions
and other factors discussed in this report. We assume no
obligation to update such forward-looking statements
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
The Company reported a net loss of $288,576 for the three
months ended June 30, 2000 as compared to a net loss of
$403,423 for the three months ended June 30, 1999.
Revenues for the three months ended June 30, 2000 and 1999
amounted to $193,081 and $150,827 respectively. Revenues
increased by $42,254 or 28% for the three months ended June
30, 2000 as compared to the three months ended June 30, 1999.
Gross profit for the three months ended June 30, 2000 and 1999
amounted to $177,094 and $108,746, respectively or a net
increase of $68,348.
The increase in sales and gross profit is due to an increase
in contract research work for HZI. For the three months ended
June 30, 2000 HZI contributed $91,710 in revenues as compared
to $12,098 for the three months ended June 30, 1999.
General and administrative expenses for the three months ended
June 30, 2000 were $466,171 as compared to the three months
ended June 30, 1999 of $513,031 or a decrease of $46,860 or
9%. The decrease in general and administrative expenses for
the three months ended June 30, 2000 is due to a Company
restructuring which included a reduction in facility leases,
employee staffing and other cost reduction strategies. General
and administration expenses include overhead, administration
salaries, selling and consulting costs.
Interest income for the three months ended June 30, 2000 and
1999 amounted to $3,663 and $4,575, respectively, a decrease
of $912. Interest expense for the three months ended June 30,
2000 and 1999 amounted to $3,162 and $6,229, respectively, a
decrease of $3,067
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
The Company reported a net loss of $511,598 for the six months
ended June 30, 2000 as compared to a net loss of $992,701 for
the six months ended June 30, 1999.
-10-
<PAGE>
Revenues for the six months ended June 30, 2000 and 1999
amounted to $433,304 and $198,783 respectively. Revenues
increased by $234,521 or 118% for the six months ended June
30, 2000 as compared to the six months ended June 30, 1999.
Gross profit for the six months ended June 30, 2000 and 1999
amounted to$352,385 and $103,982, respectively or a net
increase of $248,403.
The increase in sales and gross profit is attributable to the
Company focusing its efforts on developing the Memory Center
business and increased contract research work by HZI. For the
six months ended June 30, 2000 MCAI sold and installed two
Memory Center systems and contributed $155,462 in revenues as
compared to $35,546 for the six months ended June 30, 1999.
The Company also realized $150,880 from consulting contracts
for the six months ended June 30, 2000 as compared to $110,333
for the six months ended June 30, 1999. For the six months
ended June 30, 2000 HZI contributed $126,962 in revenues as
compared to $26,764 for the three months ended June 30, 1999.
General and administrative expenses for the six months ended
June 30, 2000 were $867,299 as compared to the six months
ended June 30, 1999 of $1,094,169 or a decrease of $226,870 or
21%. The decrease in general and administrative expenses for
the six months ended June 30, 2000 is primarily due to a
Company restructuring which included a reduction in employee
staffing and other cost reduction strategies.
Interest income for the six months ended June 30, 2000 and
1999 amounted to $10,070 and $5,827, respectively, an increase
of $4,243. Interest expense for the six months ended June 30,
2000 and 1999 amounted to $6,754 and $10,857, respectively, a
decrease of $4,103.
The Company has not generated any taxable income the last four
years and therefore has not paid any federal income taxes for
this period. Utilization of the Company's net operating loss
carryforwards may be subject to certain limitations under
section 382 of the Internal Revenue Code. Due to uncertainties
regarding realizability of the deferred tax assets, the
Company has provided a valuation allowance on the deferred tax
asset in an amount necessary to reduce the net deferred tax
asset to zero.
LIQUIDITY AND CAPITAL RESOURCES
At June 30 2000 the Company had negative working capital of
$234,872 and at December 31, 1999 working capital of $245,383,
respectively. The Company's cash balance at June 30, 2000 and
December 31, 1999 amounted to $348,419 and $1,003,180,
respectively. The Company's net accounts receivable amounted
to $60,953 at June 30, 2000 and $38,352 at December 31, 1999,
an increase of $22,601. Prepaid expenses and other current
assets at June 30, 2000 and December 31, 1999 amounted to
$28,643 and $52,742, respectively, a decrease of 24,099.
As of June 30, 2000 and December 31, 1999 current liabilities
amounted to $672,887 and $848,891, respectively, a decrease of
$176,004. Included in these amounts is $300,000 in stockholder
demand notes payable. These demand notes payable were due
December 15, 1998. The Company has not made any payments
against the loans.
For the six months ended June 30, 2000 and 1999, the Company
used cash for operations of $649,345 and $1,078,116
respectively, resulting in decreased use of cash for
operations by $428,771.
For the six months ended June 30, 2000 and 1999 cash used by
investing activities amounted to $4,059 and $4,235,
respectively, or a net decrease in use of cash of $176.
-11-
<PAGE>
For the six months ended June 30, 2000 net cash used in
financing activities amounted to $1,357 as compared to the six
months ended June 30, 1999 net cash provided by financing
activities of $1,131,400, respectively. For the six months
ended June 30, 1999, 6,400 shares were issued in connection
with exercise of 6,400 warrants and 16,200,000 shares of the
Class B, Series C preferred stock and 500,000 shares of common
stock were issued
MANAGEMENT'S PLAN
The Company is continuing its ongoing marketing efforts to
generate Memory Center clients and obtain contracts for its
contract research division and has implemented several
measures to reduce current expenses. Further reductions in
monthly expenses beyond current levels could have adverse
effects on the Company's ability to function as further
reductions would most likely occur in payroll costs which
could hamper the ability of the Company to develop and market
products and service customers. The Company expects that with
current cash and projected cash from operations there will be
sufficient cash available to fund its working capital
requirements for the next two to three months.
The Company's plans center on the following objectives: grow
the Memory Centers(TM) of America business which includes
sales of medical systems, software, and licensing revenues;
turn its Signature Memory Center into a profitable operation;
secure new contract research business and additional
consulting business.
The Company is pursuing a marketing strategy intended to
create awareness of Memory Centers and its services to
potential patients and large existing healthcare providers
such as, multi-specialty physician groups, hospital
consortiums, and large assisted living center organizations.
The Company anticipates the Memory Center business to generate
significant revenue growth and cash flows and also expects the
contract research division to produce revenues and cash flows
sufficient to support the Company's overhead in the short
term.
The Company believes the Tele-Map(TM) business can be marketed
and provide a consistent growing revenue stream. The Company
is pursuing several options for the purpose of expanding its
Tele-Map business including joint venture opportunities.
The Company is negotiating with its two largest shareholders
for additional funding. It is anticipated that the financing
will consist of short-term convertible debt in the amount of
approximately $600,000, secured by the assets of the Company.
The proceeds will be used to fund the Company's current
working capital requirements. The Company anticipates
completing this financing not later than September 30, 2000.
-12-
<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:
a) Exhibits
None
b) Reports on Form 8-K
None
-13-
<PAGE>
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 thereunto duly authorized.
NEUROCORP, LTD. (Registrant)
Dated: September 7, 2000
By: /S/VERNON L. WELLS
------------------
Vernon L. Wells, President,
Chief Executive Officer, Acting Chief Financial
Officer (Principal Financial Officer) and
Director
/S/DONALD J. ALBERTIE
---------------------
Donald J. Albertie, Controller
(Principal Accounting Officer)
