SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
[ ] 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 0-22934
IMATEL HOLDINGS, INC.
(Exact Name of Small Business Issuer as specified in its Charter)
Washington 91-1268870
(State or other Jurisdiction of
I.R.S. Employer
Incorporation or Organization
Identification Number)
14 Quai du Seujet, Geneva, Switzerland
CH-1201
(Address of principal executive offices)
(Zip Code)
(011) 4122-9081598
(Issuer's telephone number)
Check whether the Issuer (1) 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 issuer's classes of Common Equity, as of the latest
practicable date.
Common Stock, no par value 3,370,108
Title of Class Number of Shares outstanding
at June 30, 1998
No exhibits included.
IMATEL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
June 30, December 31,
1998 1997
ASSETS
Current assets:
Cash
$ 638 $ 8,596
Interest receivable
0 13,275
Other receivable (Note 1&2)
55,342 250,000
Loan Receivable Related Party
0 295,862
Marketable Securities (Note 3)
0 371,046
Total current assets
55,980 938,779
INVESTMENTS, Net (Note 1) 3,438,719
4,971,962
PROPERTY & EQUIPMENT, less Accum. Deprec.
$20,815 & $19,360 respectively 23,333 29,414
ORGANIZATION COSTS, less Accum. Amort..
$17,461 & $11,602 respectively
0 5,859
OTHER ASSETS
0 6,967
Total assets $ 3,518,032 $ 5,952,981
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Checks excess bank funds (Note 5)
$ 0 $ 935,572
Accounts payable
39,951 38,412
Accrued payroll taxes
0 459
Other accrued liabilities (Note 7)
365,100 316,000
Deferred Dividend Income (Note 2)
44,165 0
Total Current Liabilities
$ 449,216 $ 1,290,443
MINORITY INTEREST 2,000 2,000
Shareholders' equity:
Preferred Stock, no par value; 1,000,000
shares authorized, 1,500 shares issued
and outstanding
1,500 1,500
Common Stock, no par value; 50,000,000
shares authorized; 3,370,168 shares
issued and outstanding (both periods)
12,252,597 12,252,597
Cumulative translation adjustment (Note 4)
(133,228) (193,082)
Retained (deficit)
(9,054,053) (7,400,477)
Total shareholders' equity
3,066,816 4,660,538
Total Liabilities and Equity
$ 3,518.032 $ 5,952,981
The accompanying notes are an integral part of these
financial statements
IMATEL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
For the three and Six Months Ended June 30, 1998 and 1997
3 Months Six months Ended
4-1/6-30-98 June June
1998 1997
Revenues:
Commissions and consulting fees
$ 0 $ 0 $ 0
Dividend Income (Note 2)
34,194 56,427 543
Total revenues
$ 34,194 $ 56,427 $ 543
General and administrative expense (Note 6&8)
$ 173,743 $298,561 $ 483,803
INCOME (LOSS) FROM OPERATIONS
$ (139,549) $(242,134) $(483,260)
Other income (expense):
Unrealized (loss) marketable securities
0 0 (2,116)
Interest income
(1,067) 9,961 24,084
Writedown of Investments (Note 1)
(1,139,603) (1,139,603) (2,884,818)
Foreign currency transaction gain (loss)
0 0 (619)
Total Other (Expense)
(1,140,670) (1,129,642) (2,863,469)
Gain (loss) from Continuing operations
(1,280,219) (1,371,776) (3,346,729)
Gain (loss) from Discontinued operations
(281,800) (281,800) (14,098)
Net income (loss)
$ (1,562,019)$ (1,653,576) $(3,360,827)
Per share information:
Basic (loss) per common share:
Continuing operations
$ (.38)$ (.41) $ (.99)
Discontinued operations
$ (.08)$ (.08) $ (Nil)
Basic Weighted average number of
common stock shares outstanding
3,370,168 3,370,168 3,394,668
Diluted (loss) per common share:
Continuing operations
$ (.36)$ (.38) $ (.93)
Discontinued operations
$ (.00)$ (.00) $ (Nil)
Diluted weighted average number of
common stock shares outstanding
3,603,502 3,603,502 3,628,002
The accompanying notes are an integral part of these
financial statements
IMATEL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Month Periods Ended March 31, 1998 and 1997
And the Six Month Periods Ended June 30, 1998 and 1997
Three Months Ended Six Months Ended
March 31, June 30,
1998 1997 1998 1997
Cash flows from operating activities:
Net income (loss)
$ (1,560,019)$(138,268)$(1,653,576)$(3,360,827)
Transactions not requiring cash:
Depreciation and amortization
9,250 1,800 12,550 3,600
Unrealized (gain) loss/marketable securities
0 0 0 0
Foreign currency transaction (gain) loss
0 0 0 0
Writedown Pemp/Gestion Guychar, Inc.& IMA
Purchase Technology Investments (Note 1)
1,139,603 0 1,139,603 2,884,818
Changes in current assets and current liabilities:
Receivable, marketable securities and other
current assets (Increases)/Decreases (Note 3)
316,390 214,547 609,110 205,038
Check drawn excess bank funds, accounts payable,
accrued liabilities, other current liabilities
(Decreases)/Increases
100,154 (62,531) (512,190) 326,192
NET CASH (USED) PROVIDED BY
OPERATING ACTIVITIES
3,378 15,548 (404,503) 58,821
INVESTING ACTIVITIES
Changes in loan and contract receivable
related party, net
0 0 0 0
Net sale/disposal (purchase) property & equipment
(2,992) 0 2,087 0
NET CASH (USED) PROVIDED IN
INVESTING ACTIVITIES
(2,992) 0 2,087 0
FINANCING ACTIVITIES
Proceeds from issuance of common stock
0 0 0 0
TRANSLATION (INCREASE) ADJUSTMENT
CHANGES TO CASH (Note 4)
(2,807) (16,928) 59,854 (90,439)
INCREASE (DECREASE) IN CASH
(2,421) (1,380) 322,561) (31,618)
CASH, BEGINNING OF PERIOD
3,059 3,901 323,199 34,139
CASH, END OF YEAR
$ 638 $ 2,521 $ 638 $ 2,521
The accompanying notes are an integral part of these
financial statements
IMATEL HOLDINGS, INC.
CONSOLIDATED FINANCIAL NOTES
PERIOD ENDING SIX MONTHS JUNE 30, 1998
General
The condensed consolidated financial statements of
Imatel Holdings Inc., (formerly Development Bancorp, Ltd.)
included herein, have been prepared without audit pursuant to
the rules and regulations of the Securities and Exchange
Commission. Although certain information normally included in
financial statements prepared in accordance with generally
accepted accounting principles has been condensed or
omitted, Imatel Holdings, Inc's management believes that the
disclosures are adequate to make the information presented not
misleading. The condensed financial statements for the six
months ended June 30 1998 and the three months ended March 31,
1998 should be read in conjunction with the financial statements
and notes thereto included in this report and Imatel Holdings,
Inc.'s annual report on Form 10-KSB for the fiscal year ended
December 31, 1997.
The condensed consolidated financial statements included
herein reflect all normal recurring adjustments that, in the
opinion of management, are necessary for a fair presentation.
The results for the interim period are not necessarily
indicative of trends or of results to be expected for a full year.
Note 1 - Prior year quarter ending June 30, 1997 has been
restated to incorporate the Pemp/Gestion Guychar, Inc.
writedown of $2,884,818 which was adjusted at the fiscal year
end December 31, 1997 audit to $2,816,335 reflecting a net
investment amount of $889,603 at December 31, 1997, and
$4,082,359 in SFP Bank Stocks (recorded at cost). During the
quarter ending June 30, 1998 the $889,603 balance of the
Pemp/Gention Guychar Inc. Investment was written off and so was
the $250,000 balance of the IMA purchase of technology.
Note 2 - The applicable accounts include an accrual of a
100,000 (Canadian Dollars) Dividend Receivable from
Pemp/Guychar, Inc. for the period ending October 1, 1998 which
has been converted to $67,500 (US Dollars) based on the
March 31, 1998 foreign currency rates. The $67,500 will be
taken into income over the first 3 quarters of 1998 at $22,233
per quarter.
Note 3 - Marketable (Debt) Securities consisting of Foreign
Bonds held by Imatel's Geneva Operations were sold during the 1st
quarter of 1998 amounting to $370,072 (U.S. Dollars)
Note 4 - The Balance Sheet Cumulative Translation/Remeasurement
account reflected a 2nd quarter 98 increase of $2,807.
Note 5 - The investment in SFP Bank stock is partially on
margin.
Note 6 - Interest expense (for both 1998 and 1997 2nd quarter)
is attributable to the Bank Service Charges (Interest and Fees)
on the foreign bank accounts overdraft at Geneva.
Note 7 - Other accrued liabilities increased by approximately
$20,000; quarterly accrual of Officers/Directors salary for
$30,000 and $4,000 for fiscal 1998 year end audit fees, offset by
the final payment of the 1997 year end audit fees.
Note 8. Six months 1998 year to date G& A expenses are lower than
prior six months 1997 by $185,242 due to lower coporate salaries
and overall downsizing expense reductions at the US corporate
offices.
ITEM 2. Management's Discussion and Analysis
See Notes to financial statements for a discussion
of factors in changes in operating line items.
The accompanying selected information is an
integral part of the financial statements.
PART II. OTHER INFORMATION
Note Applicable.
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.
Date: September 18, 1998 By:/s/ Dempsey K. Mork
Dempsey K. Mork
(Chief accounting and
financial officer
and duly authorized
officer)
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<PERIOD-END> JUN-30-1998
<CASH> 638
<SECURITIES> 4,082,359
<RECEIVABLES> 337,142
<ALLOWANCES> 0
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<PP&E> 44148
<DEPRECIATION> (20815)
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<COMMON> 12,252,597
<OTHER-SE> (8,903,481)
<TOTAL-LIABILITY-AND-EQUITY> 4,443,472
<SALES> 0
<TOTAL-REVENUES> 34,194
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,314,413
<LOSS-PROVISION> 0
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<INCOME-PRETAX> 1,280,219
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<EXTRAORDINARY> 0
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<NET-INCOME> (1,280,219)
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