-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cx+Ssx1SZo7srVf044FOIodn9pYixKhZsbF2czUguEx7j5NcsChgBvUD1sP8iQd2 Vi+y59LgflfBJbv0rsf8yw== 0000950144-96-003400.txt : 19960614 0000950144-96-003400.hdr.sgml : 19960614 ACCESSION NUMBER: 0000950144-96-003400 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960613 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NON INVASIVE MONITORING SYSTEMS INC /FL/ CENTRAL INDEX KEY: 0000720762 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 592007840 STATE OF INCORPORATION: FL FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13176 FILM NUMBER: 96580313 BUSINESS ADDRESS: STREET 1: 1840 W AVE CITY: MIAMI BEACH STATE: FL ZIP: 33139 BUSINESS PHONE: 3055343694 MAIL ADDRESS: STREET 1: 1840 WEST AVE CITY: MIAMI BEACH STATE: FL ZIP: 33140 FORMER COMPANY: FORMER CONFORMED NAME: BIRDFINDER CORP DATE OF NAME CHANGE: 19891116 10QSB 1 NON-INVASIVE MONITORING SYSTEMS FORM 10QSB 4-30-96 1 FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 1996 -------------- 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 0-13176 ------- NON-INVASIVE MONITORING SYSTEMS, INC. ------------------------------------- (Exact name of registrant as specified in its charter) FLORIDA 59-2007840 ------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification number) 1840 West Avenue Miami Beach, Florida 33139 -------------------------- (Address of principal executive offices) (Zip Code) (305) 534-3694 -------------- (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 --- --- Number of shares of the registrant's common stock outstanding as of June 12, 1996 is 12,439,729. 1 2 NON-INVASIVE MONITORING SYSTEMS, INC. Index PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Condensed consolidated balance sheets -- July 31, 1995 and April 30, 1996. Condensed consolidated statements of operations--Three and Nine Months Ended April 30, 1995 and 1996. Condensed consolidated statements of cash flows--Nine Months Ended April 30, 1995 and 1996. Notes to condensed consolidated financial statements--April 30, 1996. Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations PART II. OTHER INFORMATION Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K Signatures 2 3 PART I - FINANCIAL INFORMATION NON-INVASIVE MONITORING SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
July 31, April 30, 1995 1996 (Note) (Unaudited) ------ ----------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 189,769 $ 63,794 Accounts and royalties receivable 108,752 212,976 Inventories 623,575 720,614 Prepaid expenses and other current assets 42,539 16,678 ---------- ---------- TOTAL CURRENT ASSETS 964,653 1,014,062 PLANT AND EQUIPMENT Furniture and equipment 608,070 615,191 Leasehold improvements 15,730 15,730 ---------- ---------- 623,800 630,921 Less accumulated depreciation and amortization 509,925 557,097 ---------- ---------- 113,875 73,824 OTHER ASSETS Patent costs, net of accumulated amortization of $120,512 in April and $107,537 in July 238,066 254,641 Deferred software production costs, net of accumulated amortization of $425,204 in April and $357,704 in July 127,606 60,109 ---------- ---------- 365,672 314,750 ---------- ---------- $1,444,182 $1,402,636 ========== ==========
3 4 NON-INVASIVE MONITORING SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS--Continued LIABILITIES AND SHAREHOLDERS' EQUITY
July 31, April 30, 1995 1996 (Note) (Unaudited) ------ ----------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Customer deposits 12,983 220,000 Accounts payable 63,604 182,929 Accrued expenses 99,110 102,163 Royalties payable to related party 45,267 66,103 ----------- ------------- TOTAL CURRENT LIABILITIES 220,964 571,195 SHAREHOLDERS' EQUITY Convertible Preferred Stock, $1.00 par value, 1,000,000 shares authorized: Series B: (liquidation preference of $100 per share, aggregating $10,000) 100 100 Series C: 62,048 shares issued and outstanding 62,048 62,048 Common Stock, $.01 par value, 100,000,000 shares authorized, 12,439,729 issued and outstanding 124,398 124,398 Additional Paid-in capital 10,693,126 10,693,126 Accumulated deficit (9,656,454) (10,048,231) ----------- ------------ 1,223,218 831,441 ----------- ------------ $ 1,444,182 $ 1,402,636 =========== ============
Note: The balance sheet at July 31, 1995 has been derived from the audited financial statements at that date. See notes to condensed consolidated financial statements. 4 5 NON-INVASIVE MONITORING SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended April 30, April 30, 1995 1996 1995 1996 ---- ---- ---- ---- Net sales $ 318,508 $ 236,638 $ 1,408,656 $ 686,740 Cost of goods sold 133,190 134,722 656,327 409,008 Amortization of software production costs 22,500 22,500 67,500 67,500 ----------- ----------- ----------- ---------- 162,818 79,416 684,829 210,232 Operating expenses: Selling and distribution 40,307 2,554 122,555 33,035 General and administrative 81,301 107,484 243,853 341,398 Research and development 91,255 109,067 249,818 265,353 ----------- ----------- ----------- ---------- 212,863 219,105 616,226 639,786 LOSS FROM OPERATIONS (50,045) (139,689) (68,603) (429,554) ----------- ----------- ----------- ---------- Other (expense) income: Interest expense (177) -0- (20,883) -0- Interest income 1,473 124 14,043 1,356 Royalties 4,900 3,600 16,900 12,140 Other income (expense) (9,160) 6,640 (7,463) 22,510 ----------- ----------- ----------- ---------- (2,964) 10,364 (2,597) 36,006 ----------- ----------- ----------- ---------- NET INCOME (LOSS) $ (53,009) $ (129,323) $ 71,200 $ (393,548) =========== =========== =========== ========== AVERAGE COMMON SHARES OUTSTANDING 12,439,729 12,439,729 12,439,729 12,439,729 PROFIT (LOSS) PER COMMON SHARE $ 0.00 $ (0.01) $ 0.01 $ (0.03) =========== =========== =========== ==========
See notes to condensed consolidated financial statements. 5 6 NON-INVASIVE MONITORING SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended April 30 1995 1996 ----------- --------- OPERATING ACTIVITIES Net profit (loss) $ 71,200 $(393,548) Adjustments to reconcile net profit (loss) to net cash provided by operating activities: Depreciation and amortization 111,891 127,919 Changes in operating assets and liabilities: Restricted certificate of deposit 2,000,000 -0- Accounts and royalties receivable (38,439) (104,224) Inventories 71,406 (97,309) Prepaid expenses and other current assets (17,861) 25,861 Accounts payable and accrued expenses (25,768) 144,980 Customer deposits (188,647) 207,017 ----------- --------- NET CASH PROVIDED IN OPERATING ACTIVITIES $ 1,983,782 $ (89,304) INVESTING ACTIVITIES Purchases of plant and equipment (56,368) (7,121) Patent costs (4,283) (29,550) ----------- --------- NET CASH USED IN INVESTING ACTIVITIES $ (60,651) $ (36,671) FINANCING ACTIVITIES Net proceeds from (payments of) notes payable (1,965,000) -0- ----------- --------- NET CASH PROVIDED USED IN FINANCING ACTIVITIES $(1,965,000) $ -0- ----------- --------- (DECREASE) INCREASE IN CASH $ (41,869) $(125,975) CASH AT BEGINNING OF PERIOD $ 297,088 $ 189,769 ----------- --------- CASH AT END OF PERIOD $ 255,219 $ 63,794 ----------- ---------
See notes to condensed consolidated financial statements. 6 7 NON-INVASIVE MONITORING SYSTEMS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) April 30, 1996 NOTE A--BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Article 10 of regulation S-B. 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. Operating results for the three and nine month periods ended April 30, 1996 are not necessarily indicative of the results that may be expected for the year ended July 31, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10KSB for the fiscal year ended July 31, 1995. NOTE B--INVENTORIES Inventories consist of the following:
July 31, 1995 April 30, 1996 ------------- -------------- Raw materials $217,353 $250,369 Work-in-process 266,324 223,648 Finished Goods 139,898 246,597 -------- -------- $623,575 $720,614 -------- --------
7 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. The following discussion contains, in addition to historical information, forward looking statements with respect to Non-Invasive Monitoring Systems, Inc. (the "Company") that involve risks and uncertainties. The Company's actual results could differ materially. Factors that could cause or contribute to such difference include, but not limited to, history of operating losses and accumulated deficit; possible need for additional financing; dependence on distributors; competition; dependance on management; risk related to proprietary rights; and government regulation; and other factors discussed in the Company's filings with the Securities and Exchange Commission. Results of Operations The Company's net loss for the three month period ended April 30, 1996 was approximately $129,000 as compared to a net loss of approximately $53,000 for the three month period April 30, 1995. The net loss for the nine month period ended April 30, 1996 was approximately $394,000 as compared to a net income of approximately $71,000 for the same period in 1995. This increased loss for the three and nine month periods was primarily due to decreased sales and lower gross margins as described below. Net sales for the three month period ended April 30, 1996 were approximately $236,000 as compared to approximately $319,000 for the three month period ended April 30, 1995: net sales for the nine month period ended April 30, 1996 were approximately $686,000 as compared to approximately $1,409,000 for the nine month period ended April 30, 1995. Net sales for both the three and nine month period ended April 30, 1995 included sales to the National Institutes of Health (NIH) CHIME Study, which did not recur in both the three and nine periods ending April 30, 1996. Sales were further negatively impacted due to extended vendor delivery schedules and delays in new product approvals by the U.S. Food and Drug Administration (the "FDA") more fully described below. The Company principally sells its products through SensorMedics Corporation ("SMC") pursuant to a marketing agreement which expires in August 1997. Under the terms of the agreement, the Company has granted SMC exclusive world-wide distribution rights (as defined) for certain products. In return, SMC must purchase minimum quantities of the Company's products to maintain these exclusive distribution rights. Pursuant to the marketing agreement, SMC purchases at a discount of 30% to 50% of the Company's published list price. Sales to CHIME amounted to approximately $15,000 and $88,000, respectively, for the three and nine month periods ending April 30, 1996 while sales to SMC amounted to approximately $200,000 and $529,000, respectively, for the same three and nine month periods. Cost of goods sold expressed as a percentage of net sales was approximately 57% during the three month period ended April 30, 1996 compared to approximately 42% for the three month period ending April 30, 1995. Cost of goods sold was approximately 59% during the nine month period ended April 30, 1996 compared to approximately 47% for the same period last year. The 8 9 decrease in this percentage for both the three and nine month periods ending April 30, 1996 resulted from higher margin due to product mix. Operating expenses increased slightly from approximately $213,000 for the three month period ended April 30, 1995 to approximately $219,000 for the three month period ended April 30, 1996 and from approximately $616,000 for the nine month period ended April 30, 1995 to approximately $639,000 for the nine month period ended April 30, 1996. In February 1996, the Company received FDA permission to market two new products, the Respitrace PT recorder and the RespiEvents software package. Nims began shipping Respitrace PT, under the name SomnoStar PT, and RespiEvents to its sole distributor, SMC, in mid April 1996. The RespiEvents contains a method, whose US patent application recently issued, for quality control over validity of arterial oxygen saturation values measured with pulse oximetry. It acts by automatically eliminating erroneous oxygen values caused by movement of the oxygen sensor, a shortcoming of this widely utilized technology in sleep disorders. The Company believes that such patent will enhance the marketability of the two new products. In May 1996, the Company received verification from Underwriters Laboratories, Inc that the RespiTrace PT and the RespiTrace Plus comply with the emissions and immunity requirements of the Electromagnetic Compatibility ("EMC") Directive (89/336/EEC) issued by the European Community ("EC") requiring all electrical and electronic equipment to demonstrate compliance prior to export to the European marketplace. The Company believes this compliance will enhance product acceptance in Europe while providing a positive step towards gaining CE Mark on these products. Liquidity and Capital Resources The Company's primary source of working capital is revenues from operations. Working capital was approximately $443,000 at April 30, 1996 as compared to approximately $745,000 at July 31, 1995. The decrease in working capital is due to a net loss generated during the nine month period. During the three month period ended April 30, 1996 the Company continued to limit research and development activities to projects which have the potential for generating revenues in the short term. As a result of working capital constraints, the Company continues to focus its resources on the following areas of activity. These areas include; 1) Company participation in regulatory standards development aimed at gaining new product clearance to market, 2) in connection with the CHIME study vendor of choice technical involvement and participation as a non-voting member to CHIME Steering Committee meetings when requested, 3) servicing the product marketing agreement with SMC as described above, 4) planning further submissions of 510(k) applications to the Food & Drug Administration (FDA) for permission to market certain additional products including an upgrade of 9 10 RespiEvents. The Company expects to continue efforts in these areas of activity during fiscal 1996. If sales do not continue at levels sufficient to fund working capital requirements, the Company may require further financing to continue operations beyond the end of fiscal 1996 and in any event may require additional capital to fund its research and development efforts. Although the Company is exploring various potential sources of financing, the Company has no commitments in this regard. Failure to secure necessary financing might result in the further reduction and curtailment of operations. 10 11 PART II OTHER INFORMATION Item 1. Legal Proceedings Not applicable Item 2. Changes in Securities Not applicable Item 3. Defaults Upon Senior Securities Not applicable Item 4. Submission of Matters to a Vote of Security Holders Not applicable Item 5. Other Information Not applicable Item 6. Exhibits and Reports on Form 8-K A. Exhibits Exhibits 27 - Financial Data Schedule (for SEC use only). B. Not applicable 11 12 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 thereto duly authorized. NON-INVASIVE MONITORING SYSTEMS, INC. Registrant Date June 13, 1996 By: /s/Marvin A. Sackner -------------------- ---------------------------------------- Marvin A. Sackner, as Chairman and Principal Executive Officer Date June 13, 1996 By: /s/Richard L. Dougherty -------------------- ---------------------------------------- Richard L. Dougherty, as President and Principal Operating, Financial and Accounting Officer 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF NON-INVASIVE MONITORING SYSTEMS, INC. FOR THE NINE MONTHS ENDED APRIL 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JUL-31-1996 APR-30-1996 63,794 0 212,976 0 720,614 1,014,062 630,921 557,097 1,402,636 571,195 0 100 62,048 124,398 644,895 1,402,636 686,740 686,740 409,008 639,786 36,006 0 0 (393,548) 0 0 0 0 0 0 0 0
-----END PRIVACY-ENHANCED MESSAGE-----