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 September 30, 1996
[ ] Transition report pursuant to section 13 or 15(d) of the Exchange Act
of 1934
For the transition period from to
--------------------- -----------------------
Commission file No. 33-75236
LONGPORT, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-2715528
-------- ----------
(State or other jurisdiction of IRS Employer ID No.
Incorporation or organization)
791 South Chester Rd. Swarthmore, Pa. 19081
------------------------------------------------------
(Address of principal executive offices)
610-328-5006
------------------------------------------------------
(Registrants telephone number, including area code)
Check whether the issuer (1) 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 X No
--- ---
As of September 30, 1996, 12,430,141 shares of common stock were outstanding.
<PAGE>
LONGPORT, INC.
FORM 10-QSB
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet
as of September 30, 1996 1-2
Consolidated Statements of
Operations for the three months
and nine months ended September 30,
1996 and 1995 3-4
Consolidated Statements of Cash
Flows for the nine months ended
September 30, 1996 and 1995 5-6
Notes to Financial Statements 7
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 8-11
Part II. Other Information and Signatures 12-14
<PAGE>
LONGPORT, INC.
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
ASSETS
CURRENT ASSETS:
CASH $ 20,023
ACCOUNTS RECEIVABLE:
TRADE 70,630
INTEREST AND OTHER 1,189
PREPAID EXPENSES
INVENTORIES 6,880
NOTE RECEIVABLE 43,500
--------
TOTAL CURENT ASSETS 142,222
PROPERTY AND EQUIPMENT, AT COST:
MEDICAL EQUIPMENT 264,793
COMPUTER EQUIPMENT 49,493
OFFICE FURNITURE AND EQUIPMENT 43,137
RESEARCH EQUIPMENT 41,965
--------
399,388
LESS ACCUMULATED DEPRECIATION (292,454)
--------
NET PROPERTY AND EQUIPMENT 106,934
OTHER ASSETS:
DEPOSITS 579
INTANGIBLE ASSETS, NET OF ACCUMULATED
AMORTIZATION OF $82,520 41,979
--------
TOTAL OTHER ASSETS 42,558
TOTAL ASSETS $291,714
========
The accompanying notes are an integral part of these
consolidated financial statements.
1
LONGPORT, INC.
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $ 54,059
ACCRUED EXPENSES:
SALARIES AND PAYROLL TAXES 9,516
INTEREST 1,053
OTHER 980
NOTES PAYABLE 50,000
CURRENT PORTION OF LONG-TERM DEBT 3,215
----------
TOTAL CURRENT LIABILITIES 118,823
----------
LONG-TERM DEBT, NET OF CURRENT PORTION 4,465
----------
COMMITMENTS AND CONTINGENCIES --
STOCKHOLDERS' EQUITY:
PREFERRED STOCK: $.001 PAR VALUE, 1,000,000
SHARES AUTHORIZED, NONE ISSUED OR
OUTSTANDING --
COMMON STOCK: $.001 PAR VALUE, 25,000,000
SHARES AUTHORIZED, 12,430,141 SHARES
ISSUED AND OUTSTANDING 12,430
PAID IN CAPITAL 2,297,619
ACCUMULATED DEFICIT (2,141,623)
----------
TOTAL STOCKHOLDERS' EQUITY 168,426
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $291,714
==========
The accompanying notes are an integral part of these
consolidated financial statements.
2
<PAGE>
LONGPORT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
SEPTEMBER 30,
1996 1995
(UNAUDITED) (UNAUDITED)
----------- -----------
NET REVENUES:
MEDICAL SUPPLY SALES & COMMISSIONS $ 3,559 $ 29,715
WOUND CLINIC REVENUES -- 3,707
MEDICAL EQUIPMENT RENTALS 19,700 11,032
MANAGEMENT FEES 25,500 17,250
SCANNERS 10,000 20,000
LESS: CONTRACTUAL ALLOWANCES -- (18,924)
---------- ---------
TOTAL REVENUES 58,759 62,780
OPERATING EXPENSES:
COST OF MEDICAL SUPPLY SALES 580 0
COST OF WOUND CLINIC REVENUE -- 19,940
COST OF MEDICAL EQUIPMENT RENTALS 1,000 4,978
GENERAL AND ADMINISTRATIVE 66,016 192,601
RESEARCH AND DEVELOPMENT EXPENSE -- 20,000
---------- ---------
TOTAL OPERATING EXPENSES 67,596 237,519
OPERATING INCOME (LOSS) (8,837) (174,739)
---------- ---------
OTHER INCOME (EXPENSE):
INTEREST INCOME 650 1,200
OTHER INCOME 16,162 210
GAIN/(LOSS) ON DISPOSAL OF ASSETS (139,405) 10,707
INTEREST EXPENSE 3,806 (15,800)
---------- ---------
TOTAL OTHER INCOME (EXPENSE) (118,787) (3,683)
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES (127,624) (178,422)
PROVISION FOR INCOME TAXES (1,011) 0
---------- ---------
NET INCOME (LOSS) ($126,613) ($178,422)
========== =========
NET LOSS PER SHARE OF COMMON STOCK ($ 0.01) ($ 0.03)
========== =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 11,835,406 6,174,173
========== =========
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE>
LONGPORT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
1996 1995
(UNAUDITED) (UNAUDITED)
----------- -----------
NET REVENUES:
MEDICAL SUPPLY SALES & COMMISSIONS $ 12,085 $285,409
WOUND CLINIC REVENUES -- 124,215
MEDICAL EQUIPMENT RENTALS 40,620 85,838
MANAGEMENT FEES 86,500 17,251
SCANNERS 10,500 20,000
LESS: CONTRACTUAL ALLOWANCES -- (41,177)
---------- ----------
TOTAL REVENUES 149,705 491,536
OPERATING EXPENSES:
COST OF MEDICAL SUPPLY SALES 2,644 96,717
COST OF WOUND CLINIC REVENUE -- 132,930
COST OF MEDICAL EQUIPMENT RENTALS 3,500 23,355
GENERAL AND ADMINISTRATIVE 232,575 544,319
RESEARCH AND DEVELOPMENT EXPENSE 670 20,000
---------- ----------
TOTAL OPERATING EXPENSES 239,389 817,321
OPERATING INCOME (LOSS) (89,684) (325,785)
---------- ----------
OTHER INCOME (EXPENSE):
INTEREST INCOME 18,133 3,602
OTHER INCOME 23,245 874
GAIN/(LOSS) ON DISPOSAL OF ASSETS (131,702) 10,707
INTEREST EXPENSE (54,241) (42,688)
---------- ----------
TOTAL OTHER INCOME (EXPENSE) (144,565) (27,505)
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES (234,249) (353,290)
PROVISION FOR INCOME TAXES (141) 0
---------- ----------
NET INCOME (LOSS) ($234,108) ($353,290)
========== ==========
NET LOSS PER SHARE OF COMMON STOCK ($ 0.02) ($ 0.06)
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 12,229,717 6,065,037
========== ==========
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
LONGPORT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
1996 1995
(UNAUDITED) (UNAUDITED)
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) ($234,109) ($353,290)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH (USED) BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 53,562 100,039
LOSS ON ASSET DISPOSAL 131,702
ISSUANCE OF COMMON STOCK FOR SERVICES
AND TECHNOLOGY 3,000 97,000
CHANGES IN ASSETS AND LIABILITIES:
(INCREASE) IN ACCOUNTS RECEIVABLE 49 (100,346)
(INCREASE) DECREASE IN OTHER RECEIVABLES (903) (1,247)
(INCREASE) IN PREPAID EXPENSES 4,813 (1,014)
(INCREASE) IN INVENTORIES (84) 5,638
(INCREASE) IN DEPOSITS 0 10,593
INCREASE IN ACCOUNTS PAYABLE AND
ACCRUED EXPENSES (394,445) 145,406
--------- ---------
NET CASH (USED) BY OPERATING ACTIVITIES (436,415) (97,221)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
CAPITAL EXPENDITURES (15,000) (4,524)
PROCEEDS FROM ASSET DISPOSAL 12,546 --
DECREASE IN NOTES RECEIVABLE 2,500 --
--------- ---------
NET CASH (USED) BY INVESTING ACTIVITIES 46 (4,524)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM BORROWING 58,000
PRINCIPAL PAYMENTS ON NOTES PAYABLE (85,726) (14,814)
ISSUANCE OF COMMON STOCK AND WARRANTS 541,692 55,500
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 455,966 98,686
--------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 19,597 (3,059)
CASH AND CASH EQUIVALENTS AT
BEGINING OF PERIOD 426 6,307
--------- ---------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 20,023 $ 3,248
========= =========
The accompanying notes are an integral part of these
consolidated financial statements
5
<PAGE>
LONGPORT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
1996 1995
(UNAUDITED) (UNAUDITED)
----------- -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
CASH PAID DURING THE PERIOD FOR:
INTEREST $54,241 $15,800
INCOME TAXES 10,589 3,170
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
COMMON STOCK ISSUED FOR PURCHASE OF
RENTAL EQUIPMENT -- 25,000
COMMON STOCK ISSUED FOR PURCHASE OF
SCANNER MARKETING RIGHTS -- $50,000
STOCK ISSUED FOR DEBT 25,000 --
The accompanying notes are an integral part of these
consolidated financial statements.
6
<PAGE>
LONGPORT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying financial information of the Company is prepared in
accordance with the rules prescribed for filing condensed interim financial
statements and, accordingly, does not include all disclosures that may be
necessary for complete financial statements prepared in accordance with
generally accepted accounting principles. The disclosures presented are
sufficient, in management's opinion, to make the interim information
presented not misleading. All adjustments, consisting of normal recurring
adjustments, which are necessary so as to make the interim information not
misleading, have been made. Results of operations for the nine months ended
September 30, 1996 are not necessarily indicative of results of operations
that may be expected for the year ending December 31, 1996. It is
recommended that this financial information be read with the complete
financial statements included in the Company's Form 10-KSB dated December
31, 1995 previously filed with the Securities and Exchange Commission.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of operations
The three months ended September 30, 1996 vs. the three months ended
September 30, 1995.
Total Revenues for the three months ended September 30, 1996, were
$58,759, 6.41% lower than the Total Revenues for same period in 1995, $62,780.
The decrease in revenues was due to changes in the Company's operations, and
revenue sources, during the latter part of 1995. The figure for 1995 includes
residual income from the LMI and Montclair Wound Center operations. Both LMI and
the Montclair Wound Center were closed during the third quarter of 1995 and the
Company now generates a substantial portion of its revenues from management
fees, with equipment rental revenues being secondary to the management services
contracts. The Company's revenues from Management fees remain steady, totalling
$25,500 for the three month period, a 47.82% increase over the management fee
revenues for the same period of 1995 of $17,250. The revenues from the rental of
medical equipment for the three months ended September 30, 1996, $19,700,
exceeding the revenues from the rental medical equipment for the same period in
1995, $11,032, by 78.57%. This increase can be linked to an increase in patient
activity and Topical Hyperbaric Oxygen Chamber use at the Company's two clients,
West Jersey Health System and the West Hudson Hospital, along with some private
patient revenues. The Company expects revenues to continue increasing from these
clients and expects future clients to generate revenues beyond the management
fees.
During the three month period, ended September 30, 1996, the Company
incurred total operating expenses of $67,596, with a majority being General and
Administrative Expenses of $66,016. These numbers reflect a large decrease when
compared to the figures for the same period of 1995. For the period ended
September 30, 1995, total operating expenses were $237,519 and General and
Administrative Expenses were $192,601. The current period figures represent a
71.54% decrease in total operating expenses and a 65.72% decrease in General and
Administrative Expenses when compared to the figures from the same period for
1995. The decrease in expenses results mainly from the closing of the LMI and
Montclair Wound Center operations, affecting both expenses related to costs of
sales and general and administration. The decrease in General and Administrative
Expenses can also be attributed to the Company's continuing effort to reduce its
expenditures and streamline operations.
The Company's Net Loss for the three months ended September 30, 1996,
was 29.72% lower than the Net Loss for the same period of 1995, $126,613 for
1996 compared to $178,422 for 1995. While this Net Loss is greater than the
reported Net Loss for the three month period ending June 30, 1996, this increase
has been caused by a one-time expense caused by the disposal of assets. The
Company incurred an expense of $139,405 for the three month period as a result
of settlements with two creditors to pay off debts of the Company. Each creditor
required the Company to turn over title to certain assets as a condition of the
settlement. See Part I. Item 2. Liquidity and Capital Resources below.
8
<PAGE>
The nine months ended September 30, 1996 vs. the nine months ended
September 30, 1995
The Company's Total Revenues for the nine month period ended September
30, 1996, were $149,705. This represents a 69.54% reduction from the Total
Revenues for the same period of 1995, $491,536. The difference can be attributed
to the loss of revenues generated through the Company's subsidiary, LMI, and the
Montclair Wound Center, in large part during the first six months of 1995. Both
LMI and the Montclair Center were closed during the third quarter of 1995. For
the nine month period of 1995, the Company reported revenues of $285,409 from
Medical Supply Sales and $124,215 from the Montclair Center, while the Company
generated $12,085 in medical supply sales for the same period in 1996, and no
Montclair Center related revenues. Due to the nature of the change in the
Company's business, and the makeup of the revenues generated from the business,
these revenue figures do not provide an adequate comparison by which to judge
the Company's overall performance. Also, the Company generated $86,500 in
revenues from Management fees through September 30, 1996, as compared to $17,251
in revenues from this category in 1995. However, these figures also do not
provide an adequate performance comparison due to the changes in the Company's
operations not occurring until the second half of 1995.
For the nine month period ended September 30, 1996, the Company
incurred Total Operation Expenses of $239,389 compared to $817,321 in Operating
Expenses for the same period in 1995. This figure represents a decrease of
70.71% for the nine month period from 1995 to 1996. The bulk of the decrease
again is a result of ceasing the operation of the LMI medical supply business
and the Montclair Wound Center, thus reducing operation expenses. Some of the
decrease, however, results from management's efforts to make the Company's
operations more cost effective, and generally reduce overhead. Overall, General
and Administrative Expenses has been reduced by 57.27% between the two periods,
from $544,319 for the nine month period in 1995 to $232,575 for the nine month
period in 1996.
The Company reduced its Operating Loss and Net Loss for the nine month
period ended September 30, 1996, when compared to the same period in 1995. The
Operating Loss for the period in 1996 was $89,684 as compared to $325,785 for
the same nine month period in 1995, a 72.47% reduction. The Net Loss for the
period in 1996 was $234,108, a 33.74% reduction from the Net Loss for the same
period in 1995, $353,290. As explained above, the Net Loss figure for the nine
month period ending September 30, 1996, includes a one-time expense of $139,405
caused by the disposal of assets that had to be given up due to settlements the
Company reached with certain creditors to settle debts. See Part I. Item 2.
Liquidity and Capital Resources below.
9
<PAGE>
Strategy to Achieve Profitable Operations
Management continues to anticipate lower Total Revenues for 1996, when
compared to 1995. However, the Company continues to experience good revenues
from the rental and sales of medical equipment, with the bulk of the new orders
coming from the Company's two Consulting Services clients. The Company
anticipates obtaining future consulting services clients, which may lead to
additional revenues from the rental and sales of equipment to those clients. The
Company continues to negotiate with other healthcare providers to provide
consulting services.
The Company continues to experience cash flow problems and has little
working capital, but has been able to again reduce its overall debt through
negotiations. Management intends to continue working on the reduction of debt
and expects to continue reducing the Company's debts. Management cannot yet
determine the effect the Supra Medical lawsuit will have on the Company's
financial picture or ability to achieve profitable operations, but the expenses
incurred in defending the lawsuit has affected the Company's negotiations with
certain creditors and the Company has had to give up assets to settle some of
its debts. See Liquidity and Capital Resources and Part II. Legal Proceedings.
Overall, the Company anticipates continued growth in revenues through
the end of 1996 and Management will continue to work on reducing the Company's
expenses and total debt. The Company continues to explore the possibility of
additional debt or equity financing, but can make no assurances that financing
can be effectuated.
Liquidity and Capital Resources
The Company's cash flow problems and low working capital continues to
affect the Company's ability to pay its debts. Through September 30, 1996, the
Company has had to sell shares of its Common Stock to private investors, convert
unsecured notes to shares of restricted Common Stock, and/or convert trade debt
and accounts into shares of restricted Common Stock, to reduce the Company's
debts. Management expects to continue these practices to further reduce the
Company's debts, when deemed in the best interest of the Company and its
shareholders. Through these practices, Management has been able to reduce the
Company's current liabilities from $818,825 as of September 30, 1995, to
$231,450 as of June 30, 1996, and to $118,823 as of September 30, 1996. The
Company has also been able to reduce its long term debt from $255,799 as of
December 31, 1995 to $4,465 as of September 30, 1996. The Company anticipates
further reductions through the end of 1996 and does not expect to incur any
significant short-term or long-term debts within the next twelve months.
There were two specific debt payoffs Management considers significant
because the transactions required the Company to turn over the title to certain
assets to the creditors as part of the debt settlement. These transactions
caused the Company to incur a one-time expense of $139,405 on the disposal of
the assets, as disclosed in the Consolidated Statement of Operations.
10
<PAGE>
The first matter involved the mortgage on the Company's office building
in Swarthmore, PA. The Company was unable to meet its monthly mortgage payments,
in significant part because of having to pay attorney's fees in the recently
filed lawsuit Supra Medical Corp. v. James R. McGonigle, et al., Civil Case No.
96-3737 in the Federal District Court for the Eastern District of Pennsylvania.
Because of the Company's inability to make its monthly mortgage obligation, the
mortgage holder gave the Company two options; the initiation of a foreclosure
proceeding by the mortgage holder or returning the title to the original owner.
The Company opted to amicably return the title to the original owner, in
exchange for the forgiveness of all past due mortgage amounts, and forgiveness
of the remaining mortgage amount due. Management, however, was able to negotiate
a lease with the owner, a six-month automatic renewal lease whereby the Company
will be able to remain at the office. The lease requires the Company to pay $625
per month as rent.
The second transaction that involved property of the Company was the
settlement of the debt owed to a creditor of the now closed Longport Medical
subsidiary. While the debt amount was in dispute, the Company did not have the
funds available to negotiate a cash settlement with the creditor. Instead, the
Company was forced to turn over to the creditor title to nine Low Air Loss
Mattress systems, in possession of the creditor, along with a cash payment of
$3,500. These transactions, in large part, caused the Company's Assets to drop
from $607,942 as of June 30, 1996, to $291,714 as of September 30, 1996.
The Company was able to raise some capital through the private sale of
stock to current shareholders and non-affiliated individuals during the period.
In August and September two current shareholders of the Company purchased a
total of 260,000 shares of the Company's restricted Common Stock. The shares
were sold at the price of twelve ($.12) cents per share, netting the Company
$31,000. Also during the month of August, the Company issued shares to three
current shareholders as payment on debt owed to each. The Company issued 125,596
shares valued at fifteen ($.15) cents per share, as payment of a debt and
interest in the amount of $18,839.44, and issued 60,000 shares valued at twelve
($.12) cents per share, as payment on two shareholder's debts totalling $7,200.
The Company also sold 400,000 shares of its restricted Common Stock to three
non-affiliated individuals at the rate of twelve ($.12) cents per share, netting
the Company $48,000.
The Company anticipates continued growth from sales of its products
along with the addition of other management contracts for the opening and
managing of wound centers over the next twelve months. These Wound Centers would
be owned and funded by entities other than the Company, thus reducing the
necessity of cash outlays to purchase start-up materials and operate the center.
In addition, the Company continues to explore the possibility of debt financing
and public or private placements of its common stock, but cannot provide any
assurances that any such financing can be secured.
11
<PAGE>
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
The Statements made under the Management's Discussion and Analysis of
Financial Condition and Results of Operations, and other statements within this
document, that are not based on historical facts, are forward looking statements
that involve risks and uncertainties, including but not limited to, market
acceptance risks, the effect of economic conditions, the impact of competition
and pricing, product development, commercialization and technology difficulties,
the results of financing efforts, and other risks detailed in the Company's
Securities and Exchange Commission filings.
Part II
Other Information
Item 1. Legal Proceedings
There have been no material changes in the matter Longport, Inc. v.
Supra Medical Corp. et al., civil action number 95-14754, as reported in Form
10-KSB for the period ended December 31, 1995.
On May 30, 1996, Longport, Inc. was served with a Complaint and Summons
filed by Supra Medical Corp., entitled Supra Medical Corp. v. James R.
McGonigle, et al., civil action no. 96-3737. The Complaint was filed in the
United States District Court for the Eastern District of Pennsylvania and names
the Company, one of its Directors, James R. McGonigle, and one of its former
Directors, Phillip E. Loori, as defendants. The Complaint also names United
Medical and Dental Schools of Guy's and St. Thomas' Hospitals, Mary Dyson, David
Morton, Hugh Lewis d/b/a Square Wave Systems, Ltd., and Supra Medical
International, Inc., all of whom are residents of the United Kingdom. See the
Company's 10-QSB for the period ended June 30, 1996 for a further description of
the allegations within the complaint.
The Company obtained counsel to defend this matter and has filed a
motion to dismiss the entire complaint, alleging that the Plaintiff's Complaint
failed to state a claim upon which relief can be granted, among other procedural
reasons for a dismissal. The Company seeks a dismissal of the entire matter,
with prejudice. Plaintiff filed a response to the Company's Motion to Dismiss on
or about October 7, 1996, pursuant to a Court Order. The Company's counsel filed
a response and has requested a decision on the Motion from the Court. As of the
present date no decision has been rendered by the Court. Management maintains
its position that the Plainitff's Complaint is baseless and frivolous. Also,
Management plans to review its options concerning any legal action the Company
may have against the Plaintiff's and their attorneys, should the matter be
dismissed on substantive grounds. The Company has suffered damages as a result
of defending this matter. Due to the expenses incurred with its counsel, the
Company did not have enough capital to meet the demands of certain creditors and
has turned over assets to certain creditors, including its office building in
Swarthmore, and medical equipment. See Liquidity and Capital Resources above.
12
<PAGE>
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>
SIGNATURE
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.
Longport, Inc.
Dated: November 11, 1996 /s/ James R. McGonigle
-------------------------------
James R. McGonigle
President/Chief Accounting Officer
/s/ Peter E. Cavanaugh
-------------------------------
Peter E. Cavanaugh
Vice President
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 20,023
<SECURITIES> 0
<RECEIVABLES> 70,630
<ALLOWANCES> 0
<INVENTORY> 6,880
<CURRENT-ASSETS> 142,222
<PP&E> 399,388
<DEPRECIATION> (292,454)
<TOTAL-ASSETS> 291,714
<CURRENT-LIABILITIES> 118,823
<BONDS> 0
0
0
<COMMON> 12,430
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 291,714
<SALES> 3,559
<TOTAL-REVENUES> 58,759
<CGS> 580
<TOTAL-COSTS> 67,596
<OTHER-EXPENSES> (118,787)
<LOSS-PROVISION> (127,624)
<INTEREST-EXPENSE> 3,806
<INCOME-PRETAX> (127,624)
<INCOME-TAX> (1,011)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (126,613)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> 0
</TABLE>
