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EX-31.1 - 302 CERTIFICATION OF CEO - WINDGEN ENERGY, INC.p1106_ex31-1.htm
EX-31.2 - 302 CERTIFICATION OF CFO - WINDGEN ENERGY, INC.p1106_ex31-2.htm
EX-32.1 - 906 CERTIFICATION OF CEO - WINDGEN ENERGY, INC.p1106_ex32-1.htm
EX-32.2 - 906 CERTIFICATION OF CFO - WINDGEN ENERGY, INC.p1106_ex32-2.htm
EX-10.1B - PROXY - WINDGEN ENERGY, INC.p1106_ex10-1b.htm
EX-10.1A - OPTION TO PURCHASE COMMON STOCK - WINDGEN ENERGY, INC.p1106_ex10-1a.htm
 

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
 
þ  
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the quarterly period ended September 30, 2009
     
o
 
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the transition period from __________ to __________
 
Commission file number:  0-12968
 
INMEDICA DEVELOPMENT CORPORATION
(Exact name of registrant as specified in its charter)
 
Utah
 
87-0397815
(State or other jurisdiction of
 
(IRS Employer Identification No.)
incorporation or organization)
 
 
 
3104 E. Camelback Road, Suite 242
Phoenix, Arizona 85016
 (Address of principal executive offices)
 
   (480) 991-9500
(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  þ No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):
 
Large accelerated filer    o Accelerated filer    o
Non-accelerated filer    o Small reporting company    þ
 
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).  Yes  No þ
 
As of November 10, 2009, 28,551,160 shares of the issuer’s common stock were outstanding.
 

 
INMEDICA DEVELOPMENT CORPORATION
 
Table of Contents
 
 
     Page
     
Forward-Looking Statements 3
   
PART I.  FINANCIAL INFORMATION  
   
Item 1.
Financial Statements
4
     
 
Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008
4
     
 
Consolidated Statements of Income for the Three Months and Nine Months ended September 30, 2009 and 2008
5
     
 
Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2009 and 2008
6
     
 
Notes to the Consolidated Financial Statements
7
     
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
10
     
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
13
     
Item 4T.
Controls and Procedures
13
     
PART II.  OTHER INFORMATION  
     
Item 1.
Legal Proceedings
14
     
Item 1A.
Risk Factors
14
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
14
     
Item 3.
Defaults Upon Senior Securities
14
     
Item 4.
Submission of Matters to a Vote of Security Holders
14
     
Item 5.
Other Information
14
     
Item 6.
Exhibits
15
     
Signatures
16
     
 
2

 
INMEDICA DEVELOPMENT CORPORATION
 
FORWARD-LOOKING STATEMENTS
 
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and should be read in conjunction with the Financial Statements of InMedica Development Corporation (the “Company” or “InMedica”).  Such statements are not historical facts and reflect our current views regarding matters such as operations and financial performance. In general, forward-looking statements are identified by such words or phrases as “expects,” “anticipates,” “believes,” “could,” “approximates,” “estimates,” “may,” “intends,” “predicts,” “projects,” “plans,” or “will,” or the negative of those words or other terminology. These statements are not guarantees of future performance and involve certain  known and unknown inherent risks, uncertainties and other factors that are difficult to predict; our actual results could differ materially from those expressed in these forward-looking statements, including those risks and other factors described elsewhere in this Quarter Report.  The cautionary factors, risks and other factors presented should not be construed as exhaustive.   Other risks not presently known to us, or that we currently believe are immaterial, could also adversely affect our business, financial condition or results of operations.
 
Each forward-looking statement should be read in context with, and with an understanding of, the various disclosures concerning our business made elsewhere in this Quarterly Report, as well as other public reports filed by us with the United States Securities and Exchange Commission. Readers should not place undue reliance on any forward-looking statement as a prediction of actual results of developments. Except as required by applicable law or regulation, we undertake no obligation to update or revise any forward-looking statement contained in this Quarterly Report.
 
3

 
PART I.
FINANCIAL INFORMATION
 
Item 1.
Financial Statements
 
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
 
CONSOLIDATED BALANCE SHEETS
At September 30, 2009
 
   
September 30,
   
December 31,
 
   
2009
   
2008
 
   
(Unaudited)
       
ASSETS
           
Current Assets
           
Cash and Cash Equivalents
    6,069       1,794  
Prepaid Expenses and Other
    200       1,100  
Total Current Assets
    6,269       2,894  
                 
Fixed Assets
               
Equipment and Furniture, at Cost, Less Accumulated Less Accumulated Depreciation of $255,221 and $255,221, respectively
           
                 
TOTAL ASSETS
    6,269       2,894  
                 
LIABILITIES AND STOCKHOLDER'S EQUITY
               
Current Liabilities
               
Related Party Consulting Fee's Payable
    22,500        
Accounts Payable
    26,451       6,665  
Accrued Interest
    40,903       34,351  
Related Party Royalty Payable
    143,333       113,333  
Related Party Note Payable
    170,555       187,385  
Note Payable
    34,657       21,509  
Preferred Stock Dividends Payable
    62,418       56,743  
Current Portion of Long-Term Debt
    160,000       160,000  
Total Current Liabilities
    660,817       579,986  
                 
Long-Term Convertible Promissory Note
    72,633       72,633  
                 
TOTAL LIABILITIES
    733,450       652,619  
                 
MINORITY INTEREST
    (309,365 )     (291,211 )
                 
STOCKHOLDERS' EQUITY (DEFICIT)
               
Preferred Stock, 10,000,000 shares authorized; Series A Cumulative convertible preferred stock,  8% cumulative, $4.50 par value, 1,000,000 shares designated, 21,016 shares outstanding (aggregate liquidatio preference of $151,316)
    94,573       94,573  
Common Stock, $.001 par value: 40,000,000 shares authorized, 28,551,160 and 18,629,493 shares outstanding, respectively
    28,551       18,629  
Addional Paid-In Capital
    8,635,739       8,571,249  
Accumulated Deficit
    (9,176,679 )     (9,042,965 )
                 
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)
    (417,816 )     (358,514 )
TOTAL LIABILITIES AND EQUITY
    6,269       2,894  
 
The accompanying notes are an integral part of these financial statements.
4

 
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
   
For the Three Months Ended
September 30,
   
For the Nine Months Ended
September 30,
 
   
2009
   
2008
   
2009
   
2008
 
   
(Unaudited)
   
(Unaudited)
 
                         
ROYALTY REVENUES
  $     $     $     $  
                                 
OPERATING EXPENSES
                               
General and Administrative
    71,204       42,040       137,911       153,343  
Research and Development
                       
Total Operating Expense
    71,204       42,040       137,911       153,343  
                                 
INCOME (LOSS) FROM OPERATIONS
    (71,204 )     (42,040 )     (137,911 )     (153,343 )
                                 
OTHER INCOME (EXPENSE)
                               
Interest Expense
    (2,817 )     (4,647 )     (8,283 )     (13,161 )
Total Other Income (Expense), Net
    (2,817 )     (4,647 )     (8,283 )     (13,161 )
                                 
INCOME (LOSS) BEFORE MINORITY INTEREST
    (74,021 )     (46,687 )     (146,194 )     (166,504 )
                                 
MINORITY INTEREST
    6,401       23,857       18,154       74,891  
                                 
NET INCOME (LOSS)
    (67,620 )     (22,830 )     (128,040 )     (91,613 )
                                 
PREFERRED STOCK DIVIDENDS
    (1,891 )     (1,891 )     (5,674 )     (5,674 )
                                 
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS
  $ (69,511 )   $ (24,721 )   $ (133,714 )   $ (97,287 )
                                 
NET INCOME (LOSS) PER COMMON SHARE (BASIC AND DILUTED)
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
                                 
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
                         
BASIC
    24,265,327       18,629,493       20,622,703       18,629,493  
DILUTED
    29,375,184       18,661,017       25,732,560       18,661,017  

The accompanying notes are an integral part of these financial statements.
5

 
INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
For the Nine Months Ended
 
   
September 30,
 
   
2009
   
2008
 
   
(Unaudited)
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net Loss
  $ (128,040 )   $ (91,613 )
Adjustments to reconcile Net loss
               
to net cash used in operating activities:
               
Depreciation and amortization
          274  
Minority interest in losses
    (18,154 )     (74,891 )
Consulting fee payable to related party
    22,500       18,000  
Prepaid Rent
    900        
Accounts Payable
    19,786       19,878  
Accrued Interest payable
    6,552       13,161  
Accrued payroll and related taxes
          36,000  
Royalty payable to Related party
    30,000       30,000  
Net cash used in Operating Activities
    (66,456 )     (49,191 )
                 
CASH FLOWS FROM INESTING ACTIVITIES:
               
Net cash provided by Investing Activities
           
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from sale of stock
    74,413        
Proceeds from notes payable
    13,148       32,017  
Proceeds from related party loan
          18,000  
Payments on notes related party loan
    (16,830 )      
Net cash provided by Financing Activities
    70,731       50,017  
                 
NET INCREASE (DECREASE) IN CASH
    4,275       826  
CASH AT BEGINNING OF PERIOD
    1,794       2,706  
CASH AT END OF PERIOD
    6,069       3,532  
 
The accompanying notes are an integral part of these financial statements.
6

 
INMEDICA DEVELOPMENT CORPORATION
 
Notes to Consolidated Financial Statements (Unaudited)
 
NOTE 1  BASIS  OF PRESENTATION
 
The accompanying unaudited consolidated financial statements of InMedica Development Corporation and its subsidiary (collectively the “Company”) have been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities that might be necessary should the Company be unable to continue as a going concern.  The Company generated a net loss of ($133,714) and ($97,287) for the nine-month periods ended September 30, 2009 and 2008, respectively, and negative cash flows from operations of ($66,456) and ($49,191) for the nine-month periods ended September 30, 2009 and 2008, respectively.  As of September 30, 2009, the Company had an accumulated deficit of ($9,176,679).  At September 30, 2009, the Company had a stockholders’ deficit of ($417,816).  These conditions raise substantial doubt as to the Company’s ability to continue as a going concern.  The Company’s continued existence is dependent upon its ability to execute its operating plan and to obtain additional debt or equity financing.  There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.  
 
The accompanying consolidated financial statements of the Company are unaudited. However, in management’s opinion, all adjustments, consisting only of normal recurring adjustments necessary for fair presentation of results for the interim periods shown, have been made. Results for interim periods are not necessarily indicative of those to be expected for the full year.  These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.
 
NOTE 2  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Principles of Consolidation
 
The consolidated financial statements include the accounts of InMedica, and its majority owned subsidiary, MicroCor, Inc. ("MicroCor").  All material inter-company accounts and transactions have been eliminated.
 
Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
 
7

 
INMEDICA DEVELOPMENT CORPORATION
 
Notes to Consolidated Financial Statements (Unaudited)
 
 
NOTE 2  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Patents  
 
The Company has three patents covering various aspects of its hematocrit technology, which expire from 2010 to 2013.   

Research and Development
 
Research and development costs are expensed as incurred.
 
Net Loss Per Common Share
 
Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the year.  Diluted net loss per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other common stock equivalents were exercised or converted into common stock.  At September 30, 2009 and December 31, 2008, respectively, there were 5,109,857 and 20,031,524 potentially dilutive common stock equivalents.  The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net loss per common share.
 
NOTE 3  PREFERRED STOCK
 
The Company is authorized to issue 10,000,000 shares of preferred stock.  The Company’s Board of Directors designated 1,000,000 shares of this preferred stock as Series A Cumulative Convertible Preferred Stock (“Series A Preferred”) with a par value of $4.50 per share.  Holders of the Series A Preferred receive annual cumulative dividends of 8%, payable quarterly, which dividends are required to be fully paid or set aside before any other dividend on any class or series of stock of the Company is paid.  As of September 30, 2009, cumulative preferred stock dividends are due and payable in the amount of $62,418.  Holders of the Series A Preferred receive no voting rights but do receive a liquidation preference of $4.50 per share, plus accrued and unpaid dividends.  Series A Preferred stockholders have the right to convert each share of Series A Preferred into the Company’s common stock at a rate of 1.5 common shares to 1 preferred share.
 
8

 
INMEDICA DEVELOPMENT CORPORATION
 
Notes to Consolidated Financial Statements (Unaudited)
 
 
NOTE 3  PREFERRED STOCK (Continued)
 
On January 30, 2009, the Company entered into an agreement with MicroCor, its subsidiary (the “MicroCor Agreement”).  The MicroCor Agreement provides for the Company to create a Series B class of preferred stock, without dividend or voting rights (the “Series B Preferred”), which will receive 100% of any future benefit from the sale, spin-off, merger or liquidation of MicroCor or the commercialization of its hematocrit technology.  The shares of the Series B Preferred will be distributed as a dividend, subject to compliance with federal and state securities laws and regulations, to the Company’s common stockholders, as of January 30, 2009.  The creation of the Series B Preferred will prevent any holder of the Company’s common stock after January 30, 2009 from sharing in any future benefit of or to MicroCor through the expiration date of January 30, 2011.  The Series B Preferred Stock will not be issued to the common shareholders of record at January 30, 2009 until the future benefit, if any, of the hematocrit technology is available to be distributed to the Series B Preferred Stock shareholders.
 
NOTE 4  EARNINGS PER SHARE
 
The following data show the amounts used in computing earnings per share and the effect on income and the weighted average number of shares of dilutive potential common stock:
 
   
For the Quarters Ended
 
   
September 30,
 
   
2009
   
2008
 
             
Net Income (Loss)
  $ (67,620   $ (22,830
Less: preferred dividends
    (1,891      (1,891
                 
Income (Loss) available to common stockholders used in basic EPS
  $  (69,511   $  (24,721 )
                 
Convertible preferred stock
     1,891        1,891  
Convertible notes payable
             
Income (Loss) available to common stockholders after assumed
               
     conversion of dilutive securities
  $ (67,620   $ (22,830
                 
Weighted average number of common shares used in basic EPS
     24,265,327       18,629,493  
Effect of dilutive securities:
               
     Convertible preferred stock
    31,524        31,524  
     Convertible notes payable
     –        –  
     Options
     5,078,333        –  
Weighted average number of common shares and dilutive potential
               
     common stock used in diluted EPS
     29,375,184       18,661,017   
 
9

 
INMEDICA DEVELOPMENT CORPORATION
 
 
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
Overview
 
The following is a discussion of the financial condition of the Company as of September 30, 2009 and December 31, 2008, and results of operations of the Company as of and for the periods ended September 30, 2009 and 2008.  This discussion should be read in conjunction with the Financial Statements of the Company and the related notes included in the Company’s Annual Report on Form 10-K for fiscal year ended December 31, 2008. 
 
General
 
InMedica Development Corporation (“InMedica” or the “Company”) was incorporated as a Utah corporation on June 16, 1983. In 1985, the Company acquired MicroCor, Inc., a Utah corporation (“MicroCor”), engaged in the development of certain medical technology products. During 2008, MicroCor, a 57% owned subsidiary of the Company, continued to engage in research and development on MicroCor’s hematocrit technology (a method for measuring hematocrit non-invasively without drawing blood) pursuant to the Joint Development Agreement (the “Agreement”) with Wescor, Inc. (“Wescor”). Wescor assumed day-to-day management of MicroCor as of September 7, 2004; however, Wescor breached the Agreement in 2008 by ceasing to fund additional research, and the day-to-day management was transferred to three of MicroCor’s directors: Larry Clark, Ralph Henson and Richard Bruggeman.  The Company intends to attempt to formally terminate the Agreement with Wescor in the near future.
 
LI Agreement and SNG Agreement
 
On December 8, 2008, the Company entered into a stock purchase option agreement with Law Investments CR, S.A., a Costa Rica corporation (“LI”). The agreement with LI is hereinafter referred to as (the “LI Agreement”). Pursuant to the terms of the LI Agreement, the Company granted to LI a one-year option to purchase up to 15,000,000 restricted shares of the Company’s common stock at a purchase price of $0.0075 per share (the “LI Option”). The LI Agreement is transferable by LI. The LI Agreement provides that the first $75,000 received from the purchase of Company’s common stock pursuant to the LI Agreement shall be distributed to Company’s wholly-owned subsidiary, ValuMobile, as a contribution to capital. The LI Agreement further provides that LI and any of its affiliates shall not collectively acquire more than 88% of the outstanding common stock of the Company until such time as the Company or ValuMobile has been funded with at least $1,500,000. The LI Option expires on December 31, 2009. Ronald Conquest, the Chairman of the Board and Chief Executive Officer of the Company, is a director and President of LI.
 
10

 
INMEDICA DEVELOPMENT CORPORATION
 
On December 8, 2008, the Company entered into a stock purchase option agreement with SNG Consulting, LLC, an Arizona limited liability company (“SNG”). The agreement with SNG is hereinafter referred to as (the “SNG Agreement”). Pursuant to the terms of the SNG Agreement, the Company granted to SNG a one-year option to purchase up to 5,000,000 restricted shares of Company’s common stock at a purchase price of $0.01 per share (the “SNG Option”). As consideration for the SNG Agreement, SNG transferred to the Company 100% ownership of ValuMobile, LLC, a Nevada limited liability company (“ValuMobile”). ValuMobile was newly formed at the time the SNG Agreement was entered into by the Company. The SNG Option would expire on December 31, 2009. The sole member of SNG is Ashley Conquest, the daughter of Ronald Conquest. Mr. Conquest is the Chairman of the Board and Chief Executive Officer of the Company.  Ashley Conquest and Ronald Conquest served as the co-managers of ValuMobile.
 
Effective April 10, 2009, the Company and SNG agreed to rescind and cancel the transaction in which the SNG Option was granted, with no shares being issued under such option.  The Company assigned its 100% interest in ValuMobile to SNG effective as of April 10, 2009.  Pursusant to the terms of the cancellation of the SNG Option and the assignment of ValuMobile to SNG, funds received from the first $75,000 received from the purchase of Company’s common stock pursuant to the LI Agreement shall be used for the Companys general corporate purposes.
 
Agreement with MicroCor, Inc.
 
On January 30, 2009, the Company entered into an agreement with MicroCor and LI (the “MicroCor Agreement”).  The MicroCor Agreement provides for the Company to create a class of preferred stock, without dividend or voting rights, which will receive 100% of any future benefit from the sale, spin off, merger or liquidation of MicroCor or the commercialization of its hematocrit technology (the “Series B Preferred Stock”).  The shares of the Series B Preferred Stock will be distributed as a dividend, subject to compliance with federal and state securities laws and regulations, to the Company’s common stockholders, as of the record date of January 30, 2009.  The Series B Preferred Stock will not be issued to the common shareholders of record at January 30, 2009 until the future benefit, if any, of the hematocrit technology is available to be distributed to the Series B Preferred Stock shareholders.
 
The MicroCor Agreement also provides that the MicroCor Board of Directors shall have sole discretion to reach agreements and settlements with creditors and shareholders of MicroCor, including the Company, without the consent of the Company’s Board of Directors as then constituted.  These settlements and agreements may be in the best interest of MicroCor and the holders of the Series B Preferred Stock, and not necessarily the Company.  The term of the MicroCor Agreement and the Series B Preferred Stock is the later of:  (i) two years commencing on January 30, 2009; (ii) the resolution of the MicroCor Board to abandon further development of the hematocrit technology; or (iii) the spin off, merger or liquidation of MicroCor or its hematocrit technology.
 
The creation of the Series B Preferred Stock, as discussed above, will modify the rights of those who become holders of the Company’s common stock after January 30, 2009.  All financial benefits from MicroCor’s hematocrit technology, if any, will be distributed to the holders of the Series B Preferred Stock after payment of all MicroCor’s debts and no MicroCor assets will be distributed to the Company’s common stockholders.
 
11

 
INMEDICA DEVELOPMENT CORPORATION
 
 
Wind Sail Receptor, Inc. License
 
On April 17, 2009, the Company entered into a license agreement (the “License”) with Wind Sail Receptor, Inc. of Boulder City, Nevada (“WSR”), pursuant to which the Company was granted the exclusive license to sell WSR’s wind sail receptor wind generation systems using blades of 15 feet in length or less in the United States, Canada and the United Kingdom.  Under the License, the Company must acquire 100 blades from WSR during the year after WSR is able to manufacture the receptors.  WSR is hopeful of commencing manufacture of the blades in 2009.  The Company will market WSR’s wind receptor blades through its new division called WindGen Energy.  The Company is currently negotiating with WSR to add additional exclusive territory to the License and, in addition, amending the License to allow the Company to manufacture and/or assemble the WSR wind generation systems.
 
Chi Lin Agreement
 
On September 10, 2009, Chi Lin Technologies Co., Ltd. (Chi Lin), an entity of the Republic of China, granted an option through January 8, 2010 to Synergistic Equities Ltd., a Belize corporation (Synergistic), to purchase 6,043,704 issued and outstanding shares of common stock of the Company currently owned by Chi Lin and 425,000 shares of common stock currently owned by Chi Lin in MicroCor, Inc., a Utah corporation (“MicroCor”), for the aggregate sum of $114,500 US (the “Synergistic Option”).  The agreement with Chi Lin is hereinafter referred to as (the Chi Lin Agreement). The Company owns 57% of the issued and outstanding stock of MicroCor.  If all 6,043,704 shares of common stock of the Company were purchased pursuant to the Synergistic Option, Synergistic would own 21.2% of the Company’s issued and outstanding shares of common stock.
 
In connection with the grant of the Synertistic Option, on September 10, 2009, Chi Lin granted an unrestricted proxy to vote the Shares through January 8, 2010 to Larry Clark and Richard Bruggeman, former officers and directors of InMedica (the "Proxy") and current officers and directors of MicroCor, a subsidiary of the Company. Pursuant to the Proxy, Mr. Bruggeman and Mr. Clark have the power to vote or to direct the vote of the 6,043,704 shares of common stock beneficially owned by Chi Lin. The Synergistic Option expires on January 8, 2010.
 
Results of Operations
 
The Company had an accumulated deficit of $9,176,679 as of September 30, 2009.  No revenues from operations were received in the third quarter of 2009, 2008 or 2007.  The Company had a net loss from operations of  $69,511 for the quarter ended September 30, 2009, compared to a net loss from operations of $24,721 for the quarter ended September 30, 2008.  
 
The Company had a net loss from operations of $133,714 for the nine months ended September 30, 2009, compared to a net loss from operations of $97,287 for the nine months ended September 30, 2008.  The increase in net loss from operations resulted primarily from the impact of the minority interest in MicroCor.
 
12

 
INMEDICA DEVELOPMENT CORPORATION
 
 
Liquidity and Capital Resources
 
During 2008, the minimum royalty payments, and loans from the Company’s officers and directors provided minimum operating capital to the Company.  These royalty payments and loans ended in 2008.
 
The Company raised a total of $64,288 from its private placement during the quarter ended September 30, 2009.  See "Part II, Item 2, Unregistered Sale of Equity Securities and Use of Proceeds" below.  The Company is hopeful of raising substantial additional sums during the remainder of 2009 to fund its working capital needs.
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
 
Not applicable.
 
Item 4T.
Controls and Procedures.
 
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the small business issuer.  The Company’s Chief Executive Officer and Chief Financial Officer have concluded, based on an evaluation required by paragraph (b) of Section 240.13a-15 or 240.15d-15 of the Rules of the Securities Exchange Act of 1934 (the “Exchange Act”), conducted as of the end of the period covered by this Quarterly Report on Form 10-Q, that the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) or 240.15d-15(e)) have functioned effectively.   For purposes of this Item, the term “disclosure controls and procedures” means controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.   
 
There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Section 240.13a-15 or 240.15d-15 of the Rules of the Exchange Act, that occurred during the Company’s last fiscal quarter that have materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 
 
13

 
INMEDICA DEVELOPMENT CORPORATION
 
 
PART II.
OTHER INFORMATION
 
Item 1.
Legal Proceedings.  
 
None.
 
Item 1A.
Risk Factors.  
 
Not applicable.
 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.   
 
During the quarter ended September 30, 2009, the Company continued its private placement of restricted common stock sold upon the exercise of the options granted to Law Investments CR, S.A., a Costa Rica corporation (“LI”) pursuant to the terms of the December 8, 2008 stock purchase option agreement (the “LI Agreement”).  Pursuant to the terms of the LI Agreement, the Company granted to LI a one-year option to purchase up to 15,000,000 restricted shares of the Company’s common stock at a purchase price of $0.0075 per share (the “LI Options”).  As permitted by the LI Agreement, LI transferred the right to exercise portions of the LI Options to third parties who exercised the options with Company.
 
The Company sold 8,571,667 shares of restricted common stock to five "accredited investors" as defined by Regulation D, pursuant to Rule 506 of such regulation, for total gross proceeds of $64,288 making the total proceeds raised pursuant to such offering $74,413 as of September 30, 2009.   The Company expects more options will be exercised in the near future. The sales to these accredited investors were made without public solicitation. There were no underwriting discounts or commissions paid on these sales of securities.  The proceeds of the offering will be used by the Company for general corporate purposes.
 
Item 3.
Defaults Upon Senior Securities.   
 
None.
 
Item 4.
Submission of Matters to a Vote of Security Holders.   
 
None.
 
Item 5.
Other Information.  
 
None.
 
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INMEDICA DEVELOPMENT CORPORATION
 
 
Item 6.
Exhibits
 
Exhibit No.
 
Description
     
10.1a
 
Option to Purchase Common Stock between Synergistic Equities Ltd. and Chi Lin Technologies Co., Ltd., dated September 10, 2009 *
10.1b
 
Proxy dated September 10, 2009 between Chi Lin Technology Co., Ltd., Larry Clark and Richard Bruggeman *
10.2
 
Stock Purchase Option Agreement between Company and Law Investments CR, S.A., dated December 8, 2008 (1)
10.3
 
Agreement between InMedica Development Corporation, MicroCor, Inc., and Law Investments CR, S.A., dated January 30, 2009 (2)
10.4
  Exclusive License Agreement between InMedica Development Corporation and Wind Sail Receptor, Inc. dated April 17, 2009 (3)
31.1
 
Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act *
31.2
 
Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act *
32.1
 
Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act *
32.2
 
Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act *
__________________
Filed herewith.
(1) 
Incorporated by reference to Exhibit 2.2 of the Current Report on Form 8-K filed by the Company on February 9, 2009.
(2) 
Incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by the Company on February 9, 2009.
(3) 
Incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by the Company on April 23, 2009.

 

15

 
INMEDICA DEVELOPMENT CORPORATION
 
Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
  INMEDICA DEVELOPMENT CORPORATION  
       
       
Dated:   November 16, 2009
By:
/s/  Ronald Conquest  
   
Ronald Conquest
Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer)
 
       
 
Dated:   November 16, 2009
By:
/s/  Christopher R. Miller  
   
Christopher R. Miller
Secretary/Treasurer,
Chief Financial Officer and Director
(Principal Accounting Officer)
 
       
 
 
 
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