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 QUARTERLY PERIOD ENDED: JUNE 30, 1997
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: 1-14190
INTELLIGENT MEDICAL IMAGING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 65-0136178
(STATE OR OTHER JURISDICTION (IRS EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
4360 NORTHLAKE BOULEVARD, SUITE 214, PALM BEACH GARDENS, FLORIDA 33410
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (561) 627-0344
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 AUGUST 4, 1997, THERE WERE OUTSTANDING 10,961,977 SHARES OF COMMON STOCK,
PAR VALUE $.01, OF THE REGISTRANT.
<PAGE>
INTELLIGENT MEDICAL IMAGING, INC.
QUARTER ENDED JUNE 30, 1997
INDEX
PAGE
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 3
BALANCE SHEETS AS OF JUNE 30, 1997 AND 3
DECEMBER 31, 1996
STATEMENTS OF OPERATIONS FOR THE THREE AND SIX 4
MONTHS ENDED JUNE 30, 1997 AND 1996
STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS 5
ENDED JUNE 30, 1997 AND 1996
NOTES TO FINANCIAL STATEMENTS 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 7
CONDITION AND RESULTS OF OPERATIONS
PART II - OTHER INFORMATION 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 12
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTELLIGENT MEDICAL IMAGING, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------------- ---------------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $278,469 $288,001
Investments available-for-sale 15,260,801 24,793,872
Accounts and notes receivable 1,604,999 177,096
Accrued interest receivable 161,021 159,427
Inventory 5,157,495 3,541,993
Prepaid expenses 367,174 52,425
----------------- ---------------------
Total current assets 22,829,959 29,012,814
Property and equipment, net 2,934,442 1,666,957
Other assets 280,835 52,252
----------------- ---------------------
$26,045,236 $30,732,023
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $1,042,334 $1,062,979
Accrued salaries and benefits 573,613 319,217
Other accrued liabilities 44,346 421,132
Contingent settlement liability 1,013,071 2,062,000
----------------- ---------------------
Total current liabilities 2,673,364 3,865,328
Stockholders' equity
Preferred stock, $.01 par value-authorized 2,000,000 shares;
no shares issued or outstanding 0 0
Common stock, $.01 par value-authorized 30,000,000 shares;
issued and outstanding, 10,921,155 shares at June 30, 1996
and 10,898,054 at December 31, 1996 109,212 108,981
Additional paid-in capital 42,457,475 42,425,306
Deferred compensation (274,878) (321,504)
Net unrealized investment gains 77,363 58,027
Accumulated deficit (18,997,300) (15,404,115)
----------------- ---------------------
Total stockholders' equity 23,371,872 26,866,695
----------------- ---------------------
$26,045,236 $30,732,023
See accompanying notes
</TABLE>
<PAGE>
INTELLIGENT MEDICAL IMAGING, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months Three months Six months Six months
ended ended ended ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
<S> <C> <C> <C> <C>
Sales $1,570,338 $889,879 $2,412,043 $3,066,082
Cost of sales 888,978 485,205 1,295,221 1,709,411
------------- ---------- ----------- ----------
681,360 404,674 1,116,822 1,356,671
Operating expenses:
Selling, general and 2,077,318 712,118 3,571,957 1,256,457
administrative
Research and development 1,086,827 645,012 1,803,011 897,689
------------ ---------- ----------- -----------
Total operating expenses 3,164,145 1,357,130 5,374,968 2,154,146
------------ ---------- ----------- -----------
Loss from operations (2,482,785) (952,456) (4,258,146) (797,475)
Other income (expense):
Other 0 0 0 76,475
Investment and interest income 358,104 393,650 664,961 410,682
Interest expense 0 (25,598) 0 (129,969)
------------ ---------- ----------- -----------
Other income 358,104 368,052 664,961 357,188
Net loss ($2,124,681) ($584,404) ($3,593,185) ($440,287)
============ ========== =========== ===========
Loss per common share ($0.19) ($0.05) ($0.33) ($0.05)
============ ========== =========== ===========
Weighted average common
shares outstanding 10,911,612 10,687,173 10,907,213 9,000,278
============ ========== =========== ===========
See accompanying notes
</TABLE>
<PAGE>
INTELLIGENT MEDICAL IMAGING, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Six Months
ended ended
June 30, June 30,
1997 1996
<S> <C> <C>
Operating activities
Net loss ($3,593,185) ($440,287)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation 301,988 109,054
Services exchanged for common stock 46,626 33,227
Changes in operating assets and liabilities
Accounts receivable (1,427,903) (191,840)
Inventory (2,458,360) (454,322)
Prepaid expenses and accrued interest
receivable (316,343) (119,760)
Other assets (228,583) 42,101
Accounts payable (20,645) (509,038)
Accrued salaries and benefits 254,396 70,868
Accrued interest payable 0 (139,478)
Other accrued liabilities (376,786) (14,301)
Contingent settlement liability (1,048,929)
Due to related party 0 (867,897)
Customer advance 0 (150,000)
------------------ ------------------
Net cash used in operating activities (8,867,724) (2,631,673)
Investing activities
Purchases of property and equipment (726,615) (313,612)
Sales of investments available-for-sale 9,552,407 0
Purchases of investments available-for-sale 0 (12,591,813)
------------------ ------------------
Net cash provided by (used in) investing activities 8,825,792 (12,905,425)
Financing activities
Proceeds from long-term notes payable 0 60,000
Repayment of long-term notes payable and
capitalized lease obligations 0 (736,066)
Repayments of notes payable to related parties 0 (338,958)
Advance from factor 0 2,216,614
Repayments to factor 0 (2,216,614)
Proceeds from issuance of common stock 32,400 34,450,177
------------------ ------------------
Net cash provided by financing activities 32,400 33,435,153
Net (decrease) increase in cash and cash equivalents (9,532) 17,898,055
Cash and cash equivalents at beginning of period 288,001 75,821
------------------ ------------------
Cash and cash equivalents at end of period $278,469 $17,973,876
================== ==================
Supplemental information
Interest paid $0 $236,602
Notes payable and notes payable to related
parties converted to common stock $0 $300,000
Inventory transferred to property and equipment $842,858 $147,096
See accompanying notes
</TABLE>
<PAGE>
INTELLIGENT MEDICAL IMAGING, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. These
financial statements, footnotes and discussions should be read in conjunction
with audited financial statements and related footnotes included in Intelligent
Medical Imaging, Inc.'s ("IMI" or "the Company") annual report on Form 10-K for
the year ended December 31, 1996. Operating results for the three- and six-month
periods ended June 30, 1997 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1997.
2. INVESTMENTS AVAILABLE-FOR-SALE
Investments available-for-sale consist of asset backed securities, corporate
bonds and U.S. Government agency bonds. Management determines the proper
classifications of investments in obligations with fixed maturities and
marketable equity securities at the time of purchase and reevaluates such
designations as of each balance sheet date. At June 30, 1997, all securities
were designated as available for sale. Accordingly, these securities are stated
at fair market value, with unrealized gains and losses reported as a separate
component of stockholders' equity. Realized gains and losses on sales of
investments, as determined on a specific identification basis, are included in
the statements of operations.
Investment securities available for sale at June 30, 1997, are summarized as
follows:
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
Unrealized Market Unrealized Market
Cost Gains (Losses) Value Cost Gains (Losses) Value
------------- ------------- ----------- ----------- ---------------- --------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $246,863 $ 0 $246,863 $5,389,564 $2,950 $5,392,514
U.S. Government agency bonds and
mortgages $8,175,179 $41,452 $8,216,631 $7,525,683 $18,169 $7,543,852
U.S. Corporate bonds and asset backed
securities $6,761,396 $35,911 $6,797,307 $11,820,598 $36,908 $11,857,506
------------- ---------- ----------- ----------- ------- -----------
Total investments available for sale $15,183,438 $77,363 $15,260,801 $24,735,845 $58,027 $24,793,872
============= ========== =========== =========== ======= ===========
</TABLE>
3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------------- -----------------
<S> <C> <C>
Furniture, fixtures and office
equipment $1,474,609 $461,690
Computer and development
equipment 2,392,093 1,835,539
----------------- -----------------
3,866,702 2,297,229
Accumulated depreciation (932,260) (630,272)
----------------- -----------------
$2,934,442 $1,666,957
================= =================
</TABLE>
4. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted in December 1997. At
that time, the Company will be required to change the method currently used to
compute earnings per share and to restate all prior periods. Under the new
requirements for calculating primary earnings per share, the dilutive effect of
stock options will be excluded. Statement 128 would not have an impact on the
periods ended June 30, 1997 and 1996.
5. COMMITMENTS AND CONTINGENCIES
On June 17, 1997, the Company notified DiaSys Corporation ("DiaSys"), that it
was terminating the Product Integration Agreement dated November 1, 1996 (the
"DiaSys Agreement"), between the Company and DiaSys, due to DiaSys' material
breaches of the DiaSys Agreement. The Company also rejected all goods delivered
by DiaSys to the Company as non-conforming. DiaSys has expressed its
disagreement with the Company's position regarding the conformity of DiaSys'
products and the Company's termination of the DiaSys Agreement. The Company
believes that it had a valid basis to terminate the DiaSys Agreement and is thus
relieved from the minimum purchase requirements set forth in the DiaSys
Agreement.
In the second quarter of 1997, the Company paid Coulter Corporation ("Coulter")
$3,600,000 in exchange for the return of 26 of Coulter's used inventory of
Micro21 Systems and reimbursement to Coulter for certain costs incurred in
connection with the sale and marketing of the Micro21 Systems in accordance with
the terms of a settlement agreement ("Settlement Agreement") executed on March
27, 1997. In the Settlement Agreement, the Company also agreed to pay Coulter
approximately $1,000,000, subject to certain offsets, in exchange for: (i) the
return of certain spare parts and equipment and (ii) the assignment of four of
Coulter's customer contract accounts receivable. As of June 30, 1997, spare
parts and equipment with a carrying value of approximately $180,000 have been
returned and none of Coulter's customer contract accounts receivable have been
assigned to the Company.
Contingent Settlement Liability includes approximately $900,000 of Micro 21
Systems which were not part of the Coulter Settlement Agreement. The Company is
in negotiations with Coulter Corporation and anticipates this contingency will
be resolved by December 31, 1997.
On May 22, 1997, the Board of Directors authorized the Company to loan the
President and Chief Executive Officer up to $500,000 on a secured recourse
basis. The terms are subject to the approval of the Compensation Committee of
the Board of Directors. At June 30, 1997, approximately $174,000 has been
advanced with no stated interest rate or repayment and is classified as accounts
receivable.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The Company has developed and is marketing the MICRO21(TM) System, an
intelligent, automated microscope system, for diagnostic use in hospital,
commercial reference and physician group laboratories. The MICRO21 System is
designed to automate a broad range of manual microscopic procedures, potentially
enabling the clinical laboratory to reduce costs and exposure to liabilities,
enhance analytical accuracy and consistency, increase the productivity of
medical technologists and improve patient care.
In August 1995, the Company entered into an exclusive sales and distribution
agreement (the "Coulter Agreement") with Coulter for worldwide sales, marketing
and service of the MICRO21 system. The Company terminated the Coulter Agreement
in the fourth quarter of 1996 because of Coulter's revocation of its commitment
to purchase $5,500,000 of MICRO21 systems during the third and fourth quarters
of 1996 and other breaches of the Coulter Agreement by Coulter. Coulter disputed
the Company's termination of the Coulter Agreement and claimed the Coulter
Agreement remained in effect. The parties submitted the dispute to arbitration,
but settled the dispute as of March 27, 1997. The dispute between the Company
and Coulter has had an adverse effect on sales and marketing and has been a
factor in the return of some MICRO21 systems placed with customers by Coulter
for evaluation. The Settlement Agreement provides for the Company to pay Coulter
approximately $4,600,000, subject to offsets, in exchange for: (i) the return of
twenty-six (26) of Coulter's used inventory of MICRO21 systems and certain spare
parts and equipment; (ii) the assignment of four (4) of Coulter's customer
contract receivables; and (iii) reimbursement to Coulter for certain costs
incurred in connection with the sale and marketing of the MICRO21 system. The
Company believes that many of the customers who returned systems under
evaluation will order a MICRO21 system for evaluation, purchase or lease now
that the dispute with Coulter is resolved. In the second quarter of 1997, the
Company paid Coulter $3,600,000 in exchange for the return of 26 of Coulter's
used inventory of Micro21 Systems.
In June 1997, the Company established a new division in The Netherlands - IMI
Europe. IMI Europe will perform sales and marketing functions in the European
market.
RESULTS OF OPERATIONS
Product sales were $1,570,338 for the second quarter of 1997 compared with
$889,879 for the second quarter of 1996, an increase of $680,459. Product sales
were $2,412,043 for the six months ended June 30, 1997 compared with $3,066,082
for the six months ended June 30, 1996, a decrease of $654,039. The increase for
the quarter was primarily due to the Micro21 System gaining acceptance in the
marketplace and sales into foreign markets through distributors. The overall
decrease in sales for the six months ended June 30, 1997 compared to June 30,
1996 was primarily due to the time required to build up the Company's internal
sales and service organizations following the termination of the Coulter
Agreement in October 1996.
Cost of sales was $888,978 for the second quarter of 1997 compared with $485,205
for the second quarter of 1996, an increase of $403,773. Cost of sales was
$1,295,221 for the six months ended June 30, 1997 compared with $1,709,411 for
the six months ended June 30, 1996, a decrease of $414,190. The increase in cost
of sales for the quarter was primarily due to increased sales of the Micro21
System.
Selling, general and administrative expenses were $2,077,318 for the second
quarter of 1997 compared with $712,118 for the second quarter of 1996, an
increase of $1,365,200. Selling, general and administrative expenses have
continued to increase because of the continued growth of the Company and the
need for additional personnel. Selling, general and administrative expenses were
$3,571,957 for the six months ended June 30, 1997 compared with $1,256,457 for
the six months ended June 30, 1996, an increase of $2,315,500. The increase was
primarily due to increases in staffing and business development expenses and
legal fees.
Research and development expenses were $1,086,827 for the second quarter of 1997
compared with $645,012 for the second quarter of 1996, an increase of $441,815.
Research and development expenses were $1,803,011 for the six months ended June
30, 1997 compared with $897,689 for the six months ended June 30, 1996, an
increase of $905,322. Research and development expenses have increased due to
resources being utilized in the development of new procedures, technologies and
products. Research and development expenses are expected to continue to increase
as new procedures, technologies and products are developed.
Other income was $0 for the six months ended June 30, 1997 compared with $76,475
for the six months ended June 30, 1996, a decrease of $76,475. The decrease was
due to a gain recognized in 1996 in connection with a discount negotiated on a
note payable to a third party.
Interest income was $358,104 for the second quarter of 1997 compared with
$393,650 for the second quarter of 1996, a decrease of $35,546. The decrease for
the quarter was primarily due to the sale of investment securities to fund
operations. Interest income was $664,961 for the six months ended June 30, 1997
compared with $410,682 for the six months ended June 30, 1996, an increase of
$254,279. The increase was due to interest income earned on the proceeds from
the Company's initial public offering which closed on March 27, 1996.
Interest expense was $0 for the second quarter of 1997 compared with $25,598 for
the second quarter of 1996, a decrease of $25,598. Interest expense was $0 for
the six months ended June 30, 1997 compared with $129,969 for the six months
ended June 30, 1996, a decrease of $129,969. The Company had no notes payable
outstanding during 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Settlement Agreement provides that the Company will pay to Coulter
approximately $4,600,000. $3,600,000 was paid in 1997. In addition, the
Settlement Agreement required Coulter to purchase four current model MICRO21
systems, to replace certain units returned, at a discounted purchase price.
These units were purchased in April 1997.
In March 1996, the Company completed its initial public offering, selling
3,450,000 shares of common stock at $11.00 per share, resulting in approximately
$34,000,000 in net proceeds to the Company. In 1996, the Company paid all
long-term notes payable, indebtedness and amounts due to related parties
totaling approximately $4,300,000. For the year ended December 31, 1996, cash,
cash equivalents and investments increased approximately $25,000,000, primarily
due to net cash provided by proceeds from the initial public offering.
In May 1996 the Company employed investment advisors to manage the cash assets
of the Company subject to specific restrictions and limitations. The advisors
are allowed to buy, sell, exchange and otherwise trade in any stocks, bonds and
other securities consistent with the Company's objectives. The specific
restrictions and limitations limit the advisors to investments characterized as
investment grade only and of maturities no longer than two years. These
investments are classified as available for sale.
Cash and cash equivalents consist of cash and liquid investments with a maturity
of 90 days or less. Investments available for sale consist of asset backed
securities, corporate bonds and U.S. Government agency bonds. Management
determines the appropriate classification of debt securities at the time of
purchase and re-evaluates such designation as of each balance sheet date.
Unrealized holding gains and losses on securities classified as available for
sale are reported as a separate component of stockholders' equity.
For the six months ended June 30, 1997, net cash used in operating activities of
$8,867,724 was primarily due to the Company's operating loss due to an increase
in overall expenses because of the increase in personnel and payment of
$3,600,000 to Coulter Corporation to repurchase Micro21 Systems as specified in
the Settlement Agreement.
For the six months ended June 30, 1997, net cash provided by investing
activities of $8,825,792 was primarily the result of sales of investments
available for sale, partially offset by purchases of computer equipment to be
used in research and development and leasehold improvements to the manufacturing
facility.
For the six months ended June 30, 1997, net cash provided by financing
activities of $32,400 was primarily the result of proceeds from the exercise of
common stock options.
At June 30, 1997 the Company had a net operating loss ("NOL") carryforward of
approximately $11,000,000 available for income tax purposes that expire through
the year 2011. Section 382 of the Internal Revenue Code, as amended, limits the
amount of federal taxable income that may be offset by pre-existing NOLs of a
corporation following a change in ownership ("Ownership Change") of the
corporation. A portion of the Company's NOLs are currently subject to these
limitations because the Company experienced an Ownership Change on June 30,
1995, due to the issuance of common stock.
The Company believes that cash, cash equivalents and investments held for sale,
together with projected cash flow from operations, will be sufficient to meet
the Company's liquidity and capital requirements for projected annual
expenditures through 1998, although no assurance exists that the Company will
not require additional capital prior to the end of such period.
Statements contained in this Form 10-Q that are not historical facts are
forward-looking statements that are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. The Company cautions
that a number of important factors could cause the Company's actual results for
1997 and beyond to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company.
Forward-looking statements involve a number of risks and uncertainties
including, but not limited to, the Company's history of operating losses;
uncertainty of profitability and uncertainty of widespread market acceptance for
the MICRO21 system; uncertainty, risks and costs associated with the Company's
need to expand and enhance its own sales and marketing organization to replace
Coulter; the anticipated loss of revenue and earnings during the period of
transition of sales, marketing and service responsibilities from Coulter to the
Company; the delays and impediments to customer acceptance associated with
industry and market perception of the historical dispute between the Company and
Coulter; the risk that expansion of sales in foreign markets may be possible
only through distributors, such as Coulter, at transfer prices too low for
favorable profitability; the inability of the Company to enter into an
alternative exclusive distribution arrangement due to certain rights granted to
Coulter under the Coulter Settlement Agreement; the delays and impediments
associated with the industry and market perception of the dispute, even if
amicably settled, between the Company and DiaSys, and the inability of the
Company to resolve its dispute with DiaSys amicably; potential delays and
technical problems in the development and commercial release of new products and
procedures such as the proposed MICRO21 Microscopic Workstation System; the
expense of product development and the related delay and uncertainty as to
receipt of any requisite FDA clearance or other governmental clearance or
approval for new products and new procedures for use on the MICRO21 system; the
uncertainty of profitability and sustainability of revenues and profitability;
the uncertainty of availability of capital for future capital needs, especially
in the event of further delays in anticipated market acceptance and market
penetration of MICRO21 systems; the Company's limited manufacturing experience;
fluctuations in operating results; the Company's ability to its protect trade
secrets and proprietary technology; competition and technical change in the
industry in which the Company is engaged; product liability and the ability of
the Company to obtain adequate insurance for product liability; uncertainty of
third party reimbursement and health care reform policies; and government
regulation. The Company cannot assure that it will be able to anticipate or
respond timely to any of the factors, or changes in any of the factors, listed
above, which could adversely affect the operating results in one or more fiscal
quarters. Results of operations in any past period should not be considered
indicative of the results to be expected for future periods. Fluctuations in
operating results may also result in fluctuations in the price of the Company's
common stock.
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders was held on May 22, 1997.
(b) Each of the persons named in the Proxy Statement as a nominee for
Director was elected.
(c) The following are the voting results on each of the matters which
were submitted to the stockholders:
<TABLE>
<CAPTION>
Withheld
or Broker
For Against Abstain Non-Votes
<S> <C> <C> <C> <C>
Election of Directors:
Tyce M. Fitzmorris 7,192,294 13,170
Gene M. Cochran 7,192,494 12,970
James E. Davis 7,192,594 12,870
R. Wayne Fritzsche 7,192,594 12,870
George Masters 7,199,194 6,270
James Skinner 7,199,194 6,270
William Whittaker 7,192,594 12,870
Resolutions:
To ratify the appointment of
Ernst & Young LLP as
independent auditors for 1997 7,202,563 200 2,701
</TABLE>
The text of the matters referred to under this Item 4 is set forth in the
Proxy Statement dated April 21, 1997 previously filed with the Commission and
incorporated herein by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
LIST OF EXHIBITS DESCRIPTION
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
<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.
INTELLIGENT MEDICAL IMAGING, INC.
Date: August 14, 1997 By: /S/ TYCE M. FITZMORRIS
----------------------------------
Tyce M. Fitzmorris, President and Chief
Executive Officer
Date: August 14, 1997 By: /S/ GENE M. COCHRAN
----------------------------------
Gene M. Cochran, Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 278,469
<SECURITIES> 15,260,801
<RECEIVABLES> 1,604,999
<ALLOWANCES> 0
<INVENTORY> 5,157,495
<CURRENT-ASSETS> 22,829,959
<PP&E> 3,866,702
<DEPRECIATION> (932,260)
<TOTAL-ASSETS> 26,045,236
<CURRENT-LIABILITIES> 2,673,364
<BONDS> 0
0
0
<COMMON> 109,212
<OTHER-SE> 23,371,872
<TOTAL-LIABILITY-AND-EQUITY> 26,045,236
<SALES> 2,412,043
<TOTAL-REVENUES> 2,412,043
<CGS> 1,295,221
<TOTAL-COSTS> 1,295,221
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,593,185)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,593,185)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,593,185)
<EPS-PRIMARY> (0.33)
<EPS-DILUTED> 0
</TABLE>
