UNITED STATES
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 QUARTERLY PERIOD ENDED JUNE 30, 2003
OR
/X/ 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 0-49824
INAMCO INTERNATIONAL, CORP.
(Exact name of small business issuer as specified in its charter)
DELAWARE 72-1359595
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
801 Montrose Ave., South Plainfield, NJ 07080
(ADDRESS OF PRINCIPAL (ZIP CODE)
EXECUTIVE OFFICES)
(908) 754-4880
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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 issuer's classes of
common stock, as of the latest practicable date.
COMMON STOCK, $0.00001
PAR VALUE 27,600,000 SHARES
------------------------------ -----------------------------------
Class Outstanding as of August 20, 2003
INAMCO INTERNATIONAL, CORP.
INDEX
PAGE
NO.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Condensed Balance Sheets--As of June 30, 2003 and December 31, 2003 3
Condensed Statements of Operations--Six and Three Month Periods Ended June 30, 4
2003 and 2002
Condensed Statements of Cash Flows--Six Month Periods Ended June 30, 2003 and 2002 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of 8
Operations
Item 3. Controls and Procedures 10
PART II. OTHER INFORMATION
Item 4. Exhibits and Reports on Form 8-K 11
Signatures 12
Certification 13
Exhibit 99.1 14
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Inamco International, Corp.
Condensed Balance Sheets
June 30, December 31,
2003 2002
------------------ --------------------
(unaudited) (Note)
ASSETS
Current assets:
Cash $ 137 $ 927
------------------ --------------------
Total Current Assets 137 927
Other Assets $ 213 $ 213
------------------ --------------------
Total Assets $ 350 $ 1,140
================== ====================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable and accrued expenses $ 8,457 $ 5,615
--------------------------------------
Total Current liabilities 8,457 5,615
Due to Officers/Shareholders 13,868 8,069
--------------------------------------
Total Liabilities 22,325 13,684
Stockholders' Deficiency:
Common stock, $0.00001 par value;
Authorized: 50,000,000 shares
Issued and Outstanding: 27,600,000 shares 276 276
Additional paid-in capital 22,804 22,804
Deficit Accumulated in the Development Stage (45,055) (35,624)
================== ====================
Total Stockholders' Deficiency (21,975) (12,544)
------------------ --------------------
Total liabilities and stockholders' equity $ 350 $ 1,140
================== ====================
Note: These balance sheets have been derived from unaudited financial
statements and do not include all of the information and footnotes
required by accounting principles generally accepted in the Unites
States for complete financial statements.
See accompanying notes to condensed financial statements.
3
Inamco International, Corp.
Condensed Statements of Operations
(Unaudited)
Three months ended
June 30,
-------------------------------------
2003 2002
------------------ ------------------
Revenues
Total revenues $ -- $ --
Cost and Expenses
Bank Charges and Miscellaneous 45 500
Professional and Consulting Fees 7,767 --
------------------ ------------------
Total operating expenses 7,812 500
Net Loss $ (7,812)$ (500)
================== ==================
Net (loss) per share $ (0.00)$ (0.00)
================== ==================
Weighted Average Number of Shares Outstanding 27,600,000 27,600,000
================== ==================
Six months ended
June 30,
-------------------------------------
2003 2002
------------------ ------------------
Revenues
Total revenues $ -- $ --
Cost and Expenses
Bank Charges and Miscellaneous 90 500
Professional and Consulting Fees 9,342 --
------------------ ------------------
Total operating expenses 9,432 500
Net Loss $ (9,432)$ (500)
================== ==================
Net (loss) per share $ (0.00)$ (0.00)
================== ==================
Weighted Average Number of Shares Outstanding 27,600,000 27,600,000
================== ==================
4
Inception (January
17, 1993) to June
30,
------------------
2003
------------------
Revenues
Total revenues $ --
Cost and Expenses
Bank Charges and Miscellaneous 263
Professional and Consulting Fees 44,792
------------------
Total operating expenses 45,055
Net Loss $ (45,055)
==================
Net (loss) per share $ (0.00)
==================
Weighted Average Number of Shares Outstanding 27,600,000
==================
Condensed Cash Flow Statements (Unaudited)
Six months ended June 30,
--------------------------------------
2003 2002
-------------------- -----------------
Cash Flows from Operating Activities
Net income (loss) $ (9,432) $ (500)
Adjustments to reconcile net loss to net cash used
in operating activities: --
Change in accrued expenses 2,842 (1,668)
-------------------- -----------------
Net cash used for operating activities (6,590) (2,168)
Cash Flows from Investing Activities
Change in other assets -- --
Net cash used for investing activities -- --
Cash Flows from Financing Activities
Loans from officer/shareholder, net of repayments 5,800 2,168
Restricted common stock issued in payment of
expenses -- --
-------------------- -----------------
Net cash provided by financing activities 5,800 2,168
NET INCREASE (DECREASE) IN CASH (790) --
Cash at beginning of period 927 38
-------------------- -----------------
Cash at end of period $ 137 $ 38
==================== =================
See accompanying notes to condensed financial statements.
5
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
1. Basis of Presentation
In the opinion of management, all adjustments, consisting only of
normal recurring adjustments necessary for a fair statement of (a) results of
operations for the six and three month periods ended June 30, 2003 and 2002 (b)
the financial position at June 30, 2003, and (c) the statements of cash flows
for the six month period ended June 30, 2003 and 2002 have been made. The
results of operations for the six and three months ended June 30, 2003 are not
necessarily indicative of the results to be expected for the full year.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all the information and footnotes
required by generally accepted accounting principles for financial statements.
For further information, refer to the audited financial statements and notes
thereto for the year ended December 31, 2002 included in the Company's Form
10-KSB filed with the Securities and Exchange Commission on April 15, 2003.
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect amounts reported in the condensed
financial statements and related footnotes. Changes in the estimates may affect
amounts reported in future periods.
The Company's financial statements have been presented on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has no significant
assets, no revenues and has had losses since inception. The Company can only
become a viable going concern if it obtains additional capital and acquires a
viable operating company.
2. Net Loss Per Share
In accordance with SFAS No. 128, Earnings Per Share basic and diluted net
loss per share are computed by dividing the net loss for the period by the
weighted average number of common shares outstanding during the period.
3. Comprehensive Loss
Comprehensive loss for all periods presented is the same as net loss.
4. Deferred Stock Compensation
For the six months ended June 30, 2003 and 2002, in connection with advisory
and consultation to second party firms, the Company recorded no deferred stock
compensation.
5. Non-cash Preferred Stock Charge
For the six months ended June 30, 2003 and 2002, the Company recorded no
sale of any forms of Preferred Stock.
6
6. Capital Purchase of Common Stock by a Privately Held Business
On October 26, 1999, the Company, which was previously known as Omni Assets,
Inc. (a "non-operating" public shell), sold 22,273,890 of its common shares of
stock to Inamco International Corp. (a privately held corporation). The
acquisition was deemed to be a capital purchase, by privately held corporations,
of the majority amount of common shares owned by Omni Assets, Inc. In January
2000, Omni then purchased the name of "Inamco International Corp.", and in
February 2000, the Company changed it name from "Omni Assets, Inc." to "Inamco
International Corp.". The listing symbol was changed from "OMNA" to "IICO" . The
Company currently has a total number of shares outstanding equal to Twenty Seven
Million Six Hundred Thousand (27,600,000).
The following table provides information pertaining to owners of more than five
percent of any class of the Company's common stock.
- -------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
Title of Class Name and Address Amount and Nature Percentage of
of Beneficial Owner of BeneficialOwner Ownership
- -------------------------------------------------------------------------------------------------------------
Common A Inamco Services Corp.* 12,947,487 46.91%
801 Montrose Ave.
South Plainfield, NJ 07080
Common A Advanced Diagnostics Inc.* 8,326,403 30.17%
801 Montrose Ave.
South Plainfield, NJ 07080
Security ownership of management.
The following table provides information pertaining to shares beneficially owned
by all directors and nominees.
- -------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
Title of Class Name and Address Amount and Nature Percentage of
of Beneficial Owner of BeneficialOwner Ownership
- -------------------------------------------------------------------------------------------------------------
Common A Varges George* 22,273,890 3.62%
President/Secretary
* It should be noted that Mr. Varges George is the sole shareholder of
Inamco Services Corp., and Advanced Diagnostics Inc., as described herein.
Accordingly, Mr. George has direct control of approximately 80.70% of Inamco
International, Corp. outstanding common shares of stock. He owns 1,000,000
shares directly in his name.
7. Follow-on Offering of Common Stock
For the six months ended June 30, 2003 and 2002, the Company has not
recorded and/or performed any secondary or private offering sale of securities.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This discussion and analysis should be read in conjunction with our financial
statements and accompanying notes included in this report and the financial
statements and notes thereto for the interim period ended December 31, 2002
included in the Company's Form 10, as amended, as well as Form 10-KSB filed with
the Securities and Exchange Commission on April 15, 2003.
Operating results are not necessarily indicative of results that may
occur in future periods.
This discussion and analysis contains forward-looking statements that
involve risks, uncertainties and assumptions. Inamco assumes no obligation to
update any forward-looking statement contained in this Form 10.The Company has
had no change in its financial condition as a result of any operations, nor is
there any liquidity, capital resources, results of operation, financial
statements for any interim periods, material changes in financial position, or
material changes from the result of operations.
Certain statements contained in this report on Form 10-QSB and other
public statements that are not historical facts, including those statements that
refer to our plans, goals, objectives, expectations, strategies, intentions and
beliefs, constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. In some cases, you can
identify forward-looking statements by terminology such as "will," "may,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue," or similar words. You should not place
undue reliance on these forward-looking statements. These statements involve
risks and uncertainties that may cause actual results or events to differ
materially from those expressed or implied in our forward-looking statements. We
assume no obligation to update these forward-looking statements as circumstances
change in the future.
Inamco at present is a company that is in search of a
merger/acquisition candidate in the generic pharmaceutical sector The Company is
still in the development stage, and has had no resources to date. Consequently,
the Company will need infusions of working capital either in the form of equity
investments, loans or otherwise, in order to merge and acquire a pharmaceutical
concern.
At present, the Company has yet to commence any operations and is
seeking a proper merger and acquisition candidate to operate within the
pharmaceutical drug sector. The proper candidate will be an established
pharmaceutical company that presently manufactures and distributes certain
generic over-the-counter ("OTC") drugs. The candidate will need to have the
ability to manufacture generic drugs whose equivalents are Actifed(R),
Allerest(R), Anacin(R), Co-Tylenol(R), Exlax(R), Sudafed(R), and NyQuil(R). The
candidate will also be in the position to produce other OTC drugs and/or
"grand-fathered" prescription medications.
Generic pharmaceuticals, as a whole, have the same chemical and
therapeutic properties as their brand-named counterparts. Although typically
less expensive, they are required to meet the same governmental standards as the
brand-name drug, and most must receive approval from the appropriate regulatory
authority prior to manufacture and sale. A manufacturer cannot produce or market
a generic pharmaceutical until all relevant patents (and any additional
government-mandated market exclusivity periods) covering the original brand-name
product have expired.
8
Once a merger and/or acquisition is consummated, Inamco plans to be in
a position to sell its products to distributors (both domestic and
international), hospitals, and large buying groups. The Food and Drug
Administration ("FDA") oversees the manufacture of both brand-name and generic
pharmaceuticals, and the production of these drugs is usually subject to:
(1) An approved New Drug Application ("NDA") which allows the medication to
state both its safety and effectiveness;
(2) Marketed under an NDA for safety only;
(3) Marketed without an NDA; or
(4) Marketed pursuant to over-the-counter monograph regulations.
For generic pharmaceuticals being manufactured for both safety and
effectiveness, prior to marketing, these drugs must undergo and pass an
Abbreviated New Drug Application ("ANDA"). The Company realizes that in order to
get approval from the FDA via an ANDA, all drug product applications will need
to include: data relating to product formulation, raw material suppliers,
stability information, manufacturing techniques, packaging, labeling, and
quality control information. Those drugs subject to an ANDA under the Drug Price
Competition and Patent Term Restoration Act of 1984 (the "Waxman-Hatch Act")
must also contain bio-equivalency data. Generics can also be marketed by
adhering to FDA enforcement policies, or be subject to an over-the-counter drug
review monograph process.
If a successful merger and acquisition is consummated, it is the
Company's belief that all OTC medicines being produced will have prior FDA
approvals, which will give the Company the ability to spend a minimal amount of
time and capital on research and development before raw materials reach the
manufacturing stage.
Inamco will have also identified many different sourcing chemical
companies where raw materials will be purchased in bulk for the manufacture of
their generic pharmaceuticals. All raw chemicals needed are readily available;
however, it will be the Company's intention to always be conscious of pricing,
for certain chemical companies will give discounts when buying in bulk and
placing continual orders. Inamco will benefit from the fact that the
pharmaceutical industry is non-cyclical and the need for quality OTC drugs is
always present.
If a merger and acquisition is consummated, the Company plans to have
its good manufacturing procedures ("GMP") certification issued by the FDA. This
certification will allow Inamco to produce a complete retail line of OTC
pharmaceuticals for immediate sale to its clientele. Coinciding with the
expected revenues generated, Inamco will also submit several different ANDA
applications to the FDA, so that it may manufacture certain prescription
medication and add considerable profit potential to its entire pharmaceutical
operation.
It will be Inamco's intention not to have a single customer or group of
customers comprising more than 20% of its revenue stream. The Company will
continue to add to its client base by tendering offers through certain buying
groups, municipalities, government agencies, and hospital and retail
distributors. This will ensure enough of a customer base, so that the loss of
any one client will not significantly affect the Company's revenue stream.
Since the Company has yet to begin any operations, it has no backlogged
orders or government contracts subject to renegotiation or termination. It is
contemplated, that if a merger and acquisition is successful, the Company will
have competition with other manufacturers of generic pharmaceuticals. These
competitors will probably have substantially greater capital resources than
Inamco, as well as seasoned sales and marketing teams in place. It is the
Company's belief that its primary competition will come from Alpharma, Inc.,
Barr Laboratories, Inc., and Geneva Pharmaceuticals, Inc. However, the generic
market is currently estimated to account for approximately 11% of all global
pharmaceutical sales, based on published reports included herein, and this
figure is anticipated to rise dramatically as branded drugs come off-patent
within the next decade. It will also be one of Inamco's commitments to bring
niche products to market that its competition currently finds to burdensome to
manufacture.
9
Inamco has not spent any monies on company-sponsored research and
development activities, and there are no plans to do so in the foreseeable
future. Once a merger and acquisition is consummated, the Company will be in
compliance with all federal, state and local provisions with respect to the
manufacture of generic pharmaceuticals. The FDA will oversee and enforce
compliance for good manufacturing practices, and the Company's facility will be
located in a properly zoned manufacturing area. And, although the Company
presently has no employees, it is estimated that a minimum of 3 doctors of
pharmacology and 10 technicians will be employed.
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2003 AND 2002
Revenues
None. For the six and three months ended June 30, 2003 and 2002, the Company
has had no revenue.
Research and Development
None. For the six and three months ended June 30, 2003 and 2002 , the
Company has performed no research and development whatsoever.
General and Administrative
General and administrative expenses are minimal, and for the six and three
months ended June 30, 2003 were $9,432 and $7,812 respectively compared to $500
and $500 for the same periods in June 2002. General and administrative expenses
consist primarily of supporting administration of a public company and some
professional fees. We expect that our general and administrative expenses will
increase substantially once a merger and/or acquisition is consummated, in order
to support our growth and requirements as a public company.
Non-Cash Stock-Based Compensation Charges
None. For the six months ended June 30, 2003, the Company has not had any
non-cash stock based deferred compensation.
Other Income, net
None. For the six months ended June 30, 2003 and the year ended December 31,
2002, the Company has had no other income.
Research and Development
None. For the six months ended June 30, 2003 and the year ended December 31,
2002, the Company has performed no research and development whatsoever.
Non-Cash Stock-Based Compensation Charges
None. For the six months ended June 30, 2003 and the year ended December 31,
2002, the Company has not had any non-cash stock based deferred compensation.
Other Income, net
None. For the six months ended June 30, 2003 and 2002, the Company has had
no other income.
10
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2003, we have accumulated a deficit of $45,055. Our
accumulated deficit is the result of expenses incurred in connection with the
acquisition of the Company and general and administrative expenses. To date, we
have funded our operations solely through loans from the majority shareholder
and president of the Company, Mr. Varges George.
As of June 30, 2003, we had $137 in cash and cash equivalents compared to
$927 in cash and cash equivalents as of December 31, 2002.
Net cash used for operations during the six months ended June 30, 2003 was
$6,590 compared to $2,168 for the same quarter in 2002. Net cash provided by Mr.
Varges George was approximately $5,800 during the six months ended June 30, 2003
compared to $2,168 for the same quarter last year.
Our Company has had no business and/or operating history, and the success of
the Company depends, in part, upon the successful performance of the president
and chief operating officer, Mr. Varges George. The Company will continue to
seek out acquisition candidates, but there can be no assurances that the Company
will ever have any revenues or be profitable or achieve positive cash flow from
operations.
We are currently negotiating a merger which we contemplate will take place
in mid 2003. Our funding requirements may change at any time due to fees
associated with our acquisition negotiations as well as costs required to
complete such tasks. Our future capital requirements will also depend on
numerous other factors, including scientific progress, additional personnel
costs, progress in drug testing, the time and cost related to proposed
regulatory approvals, if any, and the costs of filing certain applications. We
cannot assure you that adequate funding will be available to us or, if
available, that such funding will be available on acceptable terms. Any
shortfall in funding could result in the curtailment of our developmental
efforts.
Item 3. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures.
Within the 90 days prior to the date of this report, Inamco International Corp.
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive and Principal
Accounting Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-14. Based upon that evaluation, the Chief Executive and Principal Accounting
Officer concluded that the Company's disclosure controls and procedures are
effective in timely alerting him to material information required to be included
in the Company's periodic SEC filings relating to the Company.
(b) Changes in Internal Controls.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these internal controls subsequent to
the date of my most recent evaluation.
PART II. OTHER INFORMATION
ITEM 4. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K None.
11
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.
INAMCO INTERNATIONAL, CORP.
Dated: August 20, 2003 By: /s/ VARGES GEORGE
----------------------------------
Name: Varges George
Title: President and Chief
Executive Officer
12
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL ACCOUNTING
OFFICER PURSUANT TO 18 U.S.C 1350, AS ADOPTED, AND
THE REQUIREMENTS OF SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Varges George, Chief Executive Officer and Principal Accounting
Officer of Inamco International, Corp. (the "Company") do hereby certify that:
1. I have reviewed this quarterly report on Form 10-QSB of the Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Company as of, and for, the period presented in this quarterly report.
4. I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the Company and have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the Company, is made known to me by
others within the Company, particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the Company's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report my conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the
Company's auditors and the audit committee of the Company's board of directors
(or persons performing the equivalent functions):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's internal
controls; and
6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
/s/ Varges George
------------------------------
Chief Executive Officer and
Principal Accounting Officer
August 20, 2003
13