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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to _______.
Commission File Number: 0-11586
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-0350710
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
260 New York Drive
Fort Washington, Pennsylvania 19034
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(Address of principal executive offices) (Zip Code)
(215) 646-7100
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(Registrant's telephone number including area code)
N/A
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(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days . Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuers shares of
common stock, as of the latest practicable date: As of September 30th 1996,
there were outstanding 12,760,140 shares of the Registrant's Common Stock,
$.0001 par value.
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Page 1 of 9 pages
Exhibit Index is on Page 9
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
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INDEX
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Page
Number
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PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets:
September 30,1996 and December 31, 1995 3
Consolidated Statements of Loss:
Three and Nine Months Ended September 30,1996 and 1995 4
Consolidated Statements of Accumulated Deficit:
Nine Months Ended September 30,1996 and 1995 5
Consolidated Statements of Cash Flows:
Nine Months Ended September 30,1996 and 1995 6
Note to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 6. Exhibits and Reports on Form 8-K 9
Signatures
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
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CONSOLIDATED BALANCE SHEETS
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Assets
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Unaudited
SEPTEMBER 30 DECEMBER 31
1996 1995
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Current assets
Cash $ 3,634 $ 84,156
Accounts receivable (net of allowance for doubtful
accounts of $6,000 at 9/30/96 and 12/31/95) 22,682 21,013
Note Receivable 20,000 20,000
Inventory 65,080 70,084
Prepaid expenses and other current assets 4,853 13,819
----------- ------------
Total current assets 116,249 209,072
Property, equipment, furniture and leaseholds, net
of accumulated depreciation and amortization 21,006 25,011
Deposits 8,431 8,431
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Total assets $ 145,686 $ 242,514
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Liabilities and Shareholders' Deficit
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Current liabilities
Note payable $ 243,000 $ 654,900
Accounts payable and accrued expenses 2,076,146 1,981,066
Proceeds for bonds unissued 187,000 187,000
Proceeds from common stock unissued 0 462,761
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Total current liabilities 2,506,146 3,285,727
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Shareholders' deficit
Common stock - $.005 par value, 50,000,000
shares authorized 12,760,140 shares
issued and outstanding 63,801 63,801
Capital in excess of par value 8,955,764 7,632,047
Accumulated deficit ( 11,380,025) ( 10,739,061)
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Total shareholders' deficit (2,360,460) ( 3,043,213)
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Total liabilities and
shareholders' deficit $ 145,686 $ 242,514
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The accompanying note is an integral part of these financial statements.
3
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
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CONSOLIDATED STATEMENTS OF LOSS
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(UNAUDITED)
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NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30 ,
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1996 1995 1996 1995
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Revenue
Sale of medical devices $ 34,911 $ 45,716 $ 5,786 $ 23,190
-------- ------------ --------- --------
Direct expenses
Costs of goods - medical devices 23,116 33,097 6,950 18,022
------- -------- -------- -------
Gross profit 11,795 12,619 ( 1,164) 5,168
--------- -------- --------- ---------
Other expenses
Expenses of development stage subsidiary
Professional fees 116,710 62,004 75,045 8,480
Research and development costs 0 13,267 0 5,943
Other development stage expenses 438,688 351,139 229,853 97,671
-------- --------- ------- -------
Total expenses of development
stage subsidiary 555,398 426,410 304,898 112,094
General and administrative expenses 97,436 91,858 59,415 27,817
------- -------- --------- -------
Total other expenses 652,834 518,268 364,313 139,911
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Investment and other income (expense)
Investment income - - - (159)
Other income 75 5,279 - 15
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Total other income 75 5,279 - (144)
------------ --------- ------------- ----------
Net loss ($ 640,964) ($500,370) ($ 365,477) ($ 134,887)
=========== ========== =========== ==========
Loss per common share outstanding ($.0502) ($.0392) ($.0286) ($.0106)
======== ======== ====== =======
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The accompanying note is an integral part of these financial statements.
4
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
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CONSOLIDATED STATEMENTS OF ACCUMULATED DEFICIT
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(UNAUDITED)
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NINE MONTHS ENDED
SEPTEMBER 30 ,
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1996 1995
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BALANCE - BEGINNING OF THE PERIOD ($ 10,739,061) ($ 10,282,226)
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NET LOSS FOR THE PERIOD ( 640,964) ( 500,370)
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BALANCE - END OF THE PERIOD ($ 11,380,025) ($ 10,782,596)
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The accompanying note is an integral part of these financial statements.
5
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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(UNAUDITED)
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NINE MONTHS ENDED
SEPTEMBER 30,
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1996 1995
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Cash flows from operating activities
Net loss ($640,964) ($500,370)
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Adjustments to reconcile net loss to net cash used in
operating activities
Depreciation and amortization 4,005 13,267
Common stock issued for services from Consolidated Subsidiary 167,750 0
Change in
Accounts receivable (1,669) (21,380)
Inventory 5,004 13,882
Prepaid expenses and other current assets 8,966 10,938
Accounts payable and accrued expenses 112,386 155,266
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Total adjustments 296,442 171,973
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Net cash used in operating activities (344,522) (328,397)
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Cash flows from investing activities
Capital expenditures ( - ) (26,731)
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Net cash used in investing activities ( - ) (26,731)
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Cash flows from financing activities
Proceeds from issuance of notes payable - 50,000
Principal payments of notes payable (241,000) (30,000)
Proceeds for common stock unissued - 1,600
Proceeds from issuance of Preferred Stock
of consolidated subsidiary 505,000 200,000
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Net cash provided by financing activities 264,000 221,600
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Net increase (decrease) in cash and cash equivalents (80,522) (133,527)
Cash and cash equivalents, beginning 84,156 174,374
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Cash and cash equivalents, ending $ 3,634 $ 40,847
=========== ==========
Schedule of noncash financing transactions:
Issuance of subsidiary common stock
for various items:
Common stock unissued 462,761 -
Notes payable 160,900 -
Accounts payable and accrued expenses 27,306 -
Less: subsidiary common stock issued (650,967) -
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Cash proceeds 0 -
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The accompanying note is an integral part of these financial statements.
6
INTERNATIONAL MANAGEMENT & RESEARCH CORPORATION
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NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
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SEPTEMBER 30, 1996
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Note 1 - The unaudited financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principles. These statements should be
read in conjunction with the financial statements and notes thereto
included in the Company's Form 10-K annual report for the year ended
December 31, 1995. In the opinion of management, these financial
statements include all adjustments, consisting only of normal
recurring adjustments, necessary to summarize fairly the Company's
financial position and results of operations. The results of
operations for the nine-month period ended September 30, 1996 may
not be indicative of the results that may be expected for the year
ending December 31, 1996.
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7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
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The Company is essentially a holding company. Except for certain management
services provided to Biosonics, Inc. ("Biosonics"), a subsidiary of the Company,
the Company presently conducts no business of its own. Aside from the officer's
salary and certain overhead expenses, substantially all of the consolidated
results of operations relate to the operations of Biosonics.
As a holding company, the Company does not have any substantial assets other
than common stock of Biosonics.
Biosonics' primary source of funds to date has been proceeds from the sale of
its securities, investment income on such proceeds and loans. Biosonics will
require additional funds in the immediate future to continue its operations, pay
accrued expenses, including salary, rent and lease payments, to develop further
its products and to market its products. Biosonics may receive a portion of such
funds from sales of the SALITRON System. Biosonics is considering obtaining
funds through venture capital or other private or public financing, joint
venture or merger transactions, the sale of certain assets and research and
development partnership financing. Biosonics has engaged a consultant to assist
in obtaining additional funding. There is no assurance that any such funding or
other financing will be completed, or that funding to carry out these activities
will be on terms acceptable to Biosonics.
Biosonics does not have any material commitments for capital expenditures,
although Biosonics may make capital expenditures during 1996 or in connection
with the manufacture of the SALITRON and CYSTOTRON Systems, if funds are
available. The extent of the development or testing, if any, of Biosonics' other
devices will depend on the availability of funds.
Results of Operations
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Biosonics' development stage expenses for the nine and three months ended
September 30, 1996 ($501,091 and $280,853 respectively) were higher than those
for the comparable periods of the prior year ($371,989 and $104,786
respectively) due to funds spent on the Special Shareholders meeting and the
hiring of a Public Relations company. Other development stage expenses include
primarily salaries, rent, supplies, transfer agent fees, manufacturing,
marketing, public relations and travel expenses. Biosonics' professional fees
for the nine and three months ended September 30, 1996 ($109,691 and $72,691
respectively) were higher than those for the comparable period of the prior year
($62,004 and $8,480 respectively) due to legal and accounting expenses incurred
for the Special Shareholders meeting and a retainer paid to the attorney for
special filing requirements to the Securities and Exchange Commission.
Biosonics' sales for the nine and three months ended September 30, 1996 were
$34,911 and $5,786 respectively as compared to $45,716 and $23,190 respectively
for the same periods of the prior year. The decrease in sales resulted primarily
from not having available funds to continue the marketing program for its
SALITRON System.
8
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
Reference is made to Part II Item 1 of the Company's Form 10-Q quarterly
report, for the period ending March 31, 1996.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
None.
(b) Reports on Form 8-K:
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunder duly authorized.
INTERNATIONAL MANAGEMENT &
RESEARCH CORPORATION
Date: November 6 , 1996 By: /s/ Jack Paller
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Jack Paller, President, Chairman
(Principal Executive Officer), Principal
Financial Officer and Principal
Accounting Officer and Sole Director
9