UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, DC. 20549
FORM 10-Q
(Mark One)
| x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period ended
April 30, 2015 |
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 000-13176
NON-INVASIVE MONITORING SYSTEMS, INC.
(Exact name of registrant as specified in
its charter)
| Florida |
|
59-2007840 |
| |
|
|
| |
|
|
(State or other jurisdiction of incorporation or
organization) |
|
(I.R.S. employer identification no.) |
4400 Biscayne Blvd., Suite 180, Miami,
Florida 33137
(Address of principal executive
offices) (Zip code)
Registrant’s telephone number, including
area code: (305) 575-4200
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 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.
| |
Large accelerated filer ¨ |
Accelerated filer ¨ |
Non-accelerated filer ¨ |
Smaller reporting company x |
Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
79,007,423 shares of the Company’s
common stock, par value $0.01 per share, were outstanding as of June 15, 2015.
NON-INVASIVE MONITORING SYSTEMS, INC.
TABLE OF CONTENTS FOR FORM 10-Q
NON-INVASIVE MONITORING SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share
data)
| | |
April 30, 2015 | | |
July 31, 2014 | |
| | |
(Unaudited) | | |
| |
| ASSETS | |
| | | |
| | |
| Current assets | |
| | | |
| | |
| Cash | |
$ | 81 | | |
$ | 21 | |
| Inventories, net | |
| 455 | | |
| 455 | |
| Prepaid expenses, deposits, and other current assets | |
| 9 | | |
| 49 | |
| Total current assets | |
| 545 | | |
| 525 | |
| | |
| | | |
| | |
| Tooling and equipment, net | |
$ | – | | |
$ | 1 | |
| | |
| | | |
| | |
| Total assets | |
$ | 545 | | |
$ | 526 | |
| | |
| | | |
| | |
| LIABILITIES AND SHAREHOLDERS' DEFICIT | |
| | | |
| | |
| | |
| | | |
| | |
| Current liabilities | |
| | | |
| | |
| Accounts payable and accrued expenses | |
$ | 1,034 | | |
$ | 909 | |
| Customer deposits | |
| 4 | | |
| 4 | |
| Notes payable – Related Party | |
| 1,350 | | |
| 1,150 | |
| Notes payable – Other | |
| 50 | | |
| 50 | |
| Total current liabilities | |
| 2,438 | | |
| 2,113 | |
| | |
| | | |
| | |
| Total liabilities | |
$ | 2,438 | | |
$ | 2,113 | |
| | |
| | | |
| | |
| Shareholders' deficit | |
| | | |
| | |
| Series B Preferred Stock, par value $1.00 per share; 100 shares authorized, issued and outstanding; liquidation preference $10 | |
| – | | |
| – | |
| Series C Convertible Preferred Stock, par value $1.00 per share; 62,048 shares authorized, issued and outstanding; liquidation preference $62 | |
| 62 | | |
| 62 | |
| Series D Convertible Preferred Stock, par value $1.00 per share; 5,500 shares authorized; 2,795shares issued and outstanding; liquidation preference $4,193 | |
| 3 | | |
| 3 | |
| Common Stock, par value $0.01 per share; 400,000,000 shares authorized; 79,007,423 and 78,942,423 shares issued and outstanding, respectively. | |
| 790 | | |
| 789 | |
| Additional paid in capital | |
| 21,930 | | |
| 21,931 | |
| Accumulated deficit | |
| (24,630 | ) | |
| (24,323 | ) |
| Accumulated other comprehensive loss | |
| (48 | ) | |
| (49 | ) |
| Total shareholders' deficit | |
| (1,893 | ) | |
| (1,587 | ) |
| Total liabilities and shareholders' deficit | |
$ | 545 | | |
$ | 526 | |
The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.
NON-INVASIVE MONITORING SYSTEMS, INC.
CONDENSED CONSOLIDATED COMPREHENSIVE
STATEMENTS OF OPERATIONS - Unaudited
(In thousands, except per share data)
| | |
Three months ended April 30, | | |
Nine months ended April 30, | |
| | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| Revenues | |
| | | |
| | | |
| | | |
| | |
| Product sales, net | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | |
| Royalties | |
| – | | |
| – | | |
| – | | |
| 1 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total revenues | |
| – | | |
| – | | |
| – | | |
| 1 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating costs and expenses | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Cost of sales | |
| – | | |
| – | | |
| – | | |
| – | |
| Selling, general and administrative | |
| 50 | | |
| 73 | | |
| 203 | | |
| 231 | |
| Research and development | |
| – | | |
| – | | |
| – | | |
| 1 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total operating costs and expenses | |
| 50 | | |
| 73 | | |
| 203 | | |
| 232 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating loss | |
| (50 | ) | |
| (73 | ) | |
| (203 | ) | |
| (231 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Interest expense, net | |
| (35 | ) | |
| (32 | ) | |
| (104 | ) | |
| (99 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net loss | |
$ | (85 | ) | |
$ | (105 | ) | |
$ | (307 | ) | |
$ | (330 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Other Comprehensive income currency translation adjustment | |
| – | | |
| – | | |
| 1 | | |
| – | |
| Comprehensive net loss | |
$ | (85 | ) | |
$ | (105 | ) | |
$ | (306 | ) | |
$ | (330 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of common shares outstanding - Basic and diluted | |
| 79,007 | | |
| 78,942 | | |
| 78,986 | | |
| 78,942 | |
| | |
| | | |
| | | |
| | | |
| | |
| Basic and diluted loss per common share | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.
NON-INVASIVE MONITORING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS’ DEFICIT - Unaudited
For the nine months ended April 30, 2015
(Dollars in thousands, except share amounts)
| | |
Preferred
Stock | | |
| | |
Additional | | |
Accum- | | |
Accumulated
Other | | |
| |
| | |
Series B | | |
Series C | | |
Series D | | |
Common Stock | | |
Paid-in- | | |
ulated | | |
Comprehensive | | |
| |
| | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Loss | | |
Total | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Balance at July 31, 2014 | |
| 100 | | |
$ | – | | |
| 62,048 | | |
$ | 62 | | |
| 2,795 | | |
$ | 3 | | |
| 78,942,423 | | |
$ | 789 | | |
$ | 21,931 | | |
$ | (24,323 | ) | |
$ | (49 | ) | |
$ | (1,587 | ) |
| Conversion of Preferred Stock to Common | |
| – | | |
| – | | |
| – | | |
| – | | |
| (13 | ) | |
| – | | |
| 65,000 | | |
| 1 | | |
| (1 | ) | |
| – | | |
| – | | |
| – | |
| Foreign currency translation adjustment | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 1 | | |
| 1 | |
| Net loss | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (307 | ) | |
| – | | |
| (307 | ) |
| Balance at April 30, 2015 | |
| 100 | | |
$ | – | | |
| 62,048 | | |
$ | 62 | | |
| 2,782 | | |
$ | 3 | | |
| 79,007,423 | | |
$ | 790 | | |
$ | 21,930 | | |
$ | (24,630 | ) | |
$ | (48 | ) | |
$ | (1,893 | ) |
The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.
NON-INVASIVE MONITORING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS - Unaudited
(Dollars in thousands)
Nine months ended
April 30, 2015 and 2014
| | |
2015 | | |
2014 | |
| Operating activities | |
| | | |
| | |
| Net Loss | |
$ | (307 | ) | |
$ | (330 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities | |
| | | |
| | |
| Depreciation and amortization | |
| 1 | | |
| 4 | |
| Stock-based compensation expense | |
| - | | |
| 4 | |
| | |
| | | |
| | |
| Changes in operating assets and liabilities | |
| | | |
| | |
| Royalties and other receivables, net | |
| - | | |
| 1 | |
| Inventories, net | |
| - | | |
| 2 | |
| Prepaid expenses, deposits and other current assets | |
| 41 | | |
| 41 | |
| Accounts payable and accrued expenses | |
| 125 | | |
| 73 | |
| Net cash used in operating activities | |
| (140 | ) | |
| (205 | ) |
| | |
| | | |
| | |
| Financing activities | |
| | | |
| | |
| | |
| | | |
| | |
| Proceeds from note payable – related party | |
| 200 | | |
| - | |
| Net cash provided by financing activities | |
| 200 | | |
| - | |
| | |
| | | |
| | |
| Net (decrease) increase in cash | |
| 60 | | |
| (205 | ) |
| Cash, beginning of period | |
| 21 | | |
| 296 | |
| Cash, end of period | |
$ | 81 | | |
$ | 91 | |
The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.
NON-INVASIVE MONITORING SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)
April 30, 2015
The following (a) condensed consolidated
balance sheet as of July 31, 2014, which has been derived from audited financial statements, and (b) the unaudited condensed consolidated
interim financial statements included herein have been prepared by Non-Invasive Monitoring Systems, Inc. (together with its consolidated
subsidiaries, the “Company” or “NIMS”) in accordance with accounting principles generally accepted in the
United States (“GAAP”) for interim financial information and the instructions to the quarterly report on Form 10-Q
and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP
for complete financial statements. These statements reflect adjustments, all of which are of a normal, recurring nature, and which
are, in the opinion of management, necessary to present fairly the Company’s financial position as of April 30, 2015, and
results of operations and cash flows for the interim periods ended April 30, 2015 and 2014. The results of operations for the three
and nine months ended April 30, 2015, are not necessarily indicative of the results for a full year. Certain information and footnote
disclosure normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The Company’s
accounting policies continue unchanged from July 31, 2014. These financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended July 31, 2014.
| 1. | ORGANIZATION AND BUSINESS |
Organization. Non-Invasive
Monitoring Systems, Inc., a Florida corporation (together with its consolidated subsidiaries, the “Company” or “NIMS”),
began business as a medical diagnostic monitoring company to develop computer-aided continuous monitoring devices to detect abnormal
respiratory and cardiac events using sensors on the human body’s surface. It has ceased to operate in this market and has
licensed the rights to its technology. The Company is now focused on developing and marketing its Exer-Rest® line
of acceleration therapeutic platforms based upon unique, patented whole body periodic acceleration (“WBPA”) technology.
The Exer-Rest line of acceleration therapeutic platforms currently includes the Exer-Rest AT, AT3800 and AT4700 models.
Business. The Company
is developing and marketing its Exer-Rest® line of acceleration therapeutic platforms based upon unique, patented
whole body periodic acceleration (“WBPA”) technology. The Exer-Rest line of acceleration therapeutic platforms currently
includes the Exer-Rest AT, AT3800 and AT4700 models.
The Company received revenue from royalties
on sales of diagnostic monitoring hardware and software by SensorMedics and from VivoMetrics in prior years. SensorMedics indicated
they will discontinue licensed product sales after current inventory is depleted and, therefore, the royalty revenue from SensorMedics
is expected to be minimal to none. VivoMetrics ceased operations in July 2009 and filed for Chapter 11 bankruptcy protection in
October 2009. Pursuant to VivoMetrics’ approved bankruptcy plan of reorganization, our license with VivoMetrics was assigned
to another company; however, there can be no assurance as to the future amount of royalty revenue, if any, that we may derive from
this license or from our existing license with SensorMedics. In fiscal year 2009, NIMS began commercial sales of its third generation
Exer-Rest therapeutic platforms.
During the calendar years 2005to 2007,
the Company designed, developed and manufactured the first Exer-Rest platform (now the Exer-Rest AT), a second generation acceleration
therapeutics platform, and updated its operations to promote the Exer-Rest AT overseas as an aid to improve circulation
and joint mobility and to relieve minor aches and pains.
The Company has developed a third generation
of Exer-Rest acceleration therapeutic platforms (designated the Exer-Rest AT3800 and the Exer-Rest AT4700)
that has been manufactured by Sing Lin Technologies Co. Ltd. (“Sing Lin”) based in Taichung, Taiwan (see Note 10).
The Company’s financial statements
have been prepared and presented on a basis assuming it will continue as a going concern. As reflected in the accompanying unaudited
condensed consolidated financial statements, the Company had net losses of $307,000 and $330,000 for the nine month periods ended
April 30, 2015 and 2014, respectively, and has experienced cash outflows from operating activities. The Company also has an accumulated
deficit of $24.6 million as of April 30, 2015, and has potential purchase obligations at April 30, 2015(see note 10). The Company
had $81,000 of cash at April 30, 2015and negative working capital of approximately $1,893,000. These matters raise substantial
doubt about the Company’s ability to continue as a going concern.
The Company is continuing its business
activities without any significant revenues from product sales. Absent any significant revenues from product sales, the Company
is seeking debt or equity financing or a strategic collaboration. There is no assurance that the Company will be successful in
this regard, and, if not successful, that it will be able to continue its business activities. The accompanying condensed consolidated
financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty.
NON-INVASIVE MONITORING SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)
April 30, 2015
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Consolidation.
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned
subsidiaries, Non-Invasive Monitoring Systems of Florida, Inc., which has no current operations, and NIMS of Canada, Inc., a Canadian
corporation, which has no current operations. All material inter-company accounts and transactions have been eliminated in consolidation.
Use of Estimates. The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
(“GAAP”) requires management to make estimates and assumptions, such as accounts receivable, warranty accrual, deferred
taxes, and the input variables for stock based compensation as estimates, that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ materially from these estimates.
Cash and Cash Equivalents.
The Company considers all highly liquid short-term investments purchased with an original maturity date of three months or less
to be cash equivalents. The Company had approximately $81,000 and $21,000, on deposit in bank operating accounts at April 30, 2015
and July 31, 2014, respectively.
Allowances for Doubtful Accounts.
Royalties and other receivables are recorded at the stated amount of the transactions. The Company provides an allowance for royalties
and other receivables it believes it may not collect in full. Receivables are written off when they are deemed to be uncollectible
and all collection attempts have ceased. The amount of bad debt recorded each period and the resulting adequacy of the allowance
at the end of each period are determined using a combination of the Company’s historical loss experience, customer-by-customer
analysis of the Company’s accounts receivable each period and subjective assessments of the Company’s future bad debt
exposure.
Inventories. Inventories
are stated at lower of cost or market using the first-in, first-out method, and are evaluated at least annually for impairment.
Inventories at April 30, 2015and July 31, 2014 primarily consist of finished Exer-Rest units, spare parts and accessories. Provisions
for potentially obsolete or slow-moving inventory are made based on management’s analysis of inventory levels, historical
obsolescence and future sales forecasts.
Tooling
and Equipment. These assets are stated at cost and depreciated or amortized using the straight-line method, over their
estimated useful lives.
Long-lived Assets. The Company reviews its long-lived
assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In
performing the review for recoverability, the Company estimates the future undiscounted cash flows expected to result from the
use of the asset and its eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of
the assets, an impairment loss is recognized as the difference between the fair value and the carrying amount of the asset.
Taxes Assessed on Revenue-Producing Transactions.
The Company presents sales taxes assessed on revenue-producing transactions between a seller and customer using the net presentation;
thus, sales and cost of revenues are not affected by such taxes.
Income Taxes. The Company provides for income
taxes using an asset and liability based approach. Deferred income tax assets and liabilities are recorded to reflect the tax consequences
in future years of temporary differences between the carrying amounts of assets and liabilities for financial statement and income
tax purposes. The deferred tax asset for loss carryforwards and other potential future tax benefits has been fully offset by a
valuation allowance since it is uncertain whether any future benefit will be realized. The utilization of the loss carryforward
is limited to future taxable earnings of the Company and may be subject to severe limitations if the Company undergoes an ownership
change pursuant to the Internal Revenue Code Section 382.
The Company files its tax returns as prescribed by the laws
of the jurisdictions in which it operates. Tax years ranging from 2010 to 2014 remain open to examination by various taxing jurisdictions
as the statute of limitations has not expired. It is the Company’s policy to include income tax interest and penalty
expense in its tax provision.
Revenue Recognition. Revenue from product sales
is recognized when persuasive evidence of an arrangement exists, the goods are shipped and title has transferred, the price is
fixed or determinable, and the collection of the sales proceeds is reasonably assured. The Company recognizes royalties as they
are earned, based on reports from licensees. Research and consulting revenue and revenue from sales of extended warranties on therapeutic
platforms are recognized over the term of the respective agreements.
NON-INVASIVE MONITORING SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)
April 30, 2015
Advertising Costs. The
Company expenses all costs of advertising and promotions as incurred. There were no advertising and promotional costs
incurred for the three and nine months ended April 30, 2015and 2014.
Research and Development Costs.
Research and development costs are expensed as incurred, and primarily consist of payments to third parties for research and development
of the Exer-Rest® device and regulatory testing and other costs to obtain FDA approval.
Warranties. The Company’s warranties are
two years on all Exer-Rest® products sold domestically and one year for products sold outside of the U.S. and are
accrued based on management’s estimates and the history of warranty costs incurred. There were no material warranty costs
incurred during the three and nine months ended April 30, 2015 and 2014, and management estimates that the Company’s accrued
warranty expense at April 30, 2015will be sufficient to offset claims made for units under warranty.
Stock-based compensation. The Company recognizes
all share-based payments, including grants of stock options, as operating costs and expenses, based on their grant date fair values.
Stock-based compensation expense is recognized over the vesting life of the underlying stock options and is included in selling,
general and administrative costs and expenses in the condensed consolidated comprehensive statements of operations for all periods
presented.
Fair Value of Financial Instruments. Fair value
estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of April
30, 2015and July 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments such as cash and cash
equivalents, royalties and other receivables, accounts payable and accrued expenses approximate fair values because they are short
term in nature or they bear current market interest rates. As of April 30, 2015, the respective carrying value of the notes payable
– related party and notes payable – other approximate our current borrowing rate for similar debt instruments of comparable
maturity and are considered Level 3 measurements within the fair value hierarchy.
Foreign Currency Translation. The functional
currency for the Company’s foreign subsidiary is the local currency. Assets and liabilities are translated at exchange rates
in effect at the balance sheet date while income and expense amounts are translated at average exchange rates during the period.
The resulting foreign currency translation adjustments are disclosed as a separate component of shareholders deficit and accumulated
other comprehensive loss. There were no foreign currency translation adjustments for the three and nine months ended April 30,
2014 and there were no foreign currency translation adjustments for the three months ended April 30, 2014 and $1,000 for the nine
months ended April 30, 2015.
Comprehensive Income (Loss). Comprehensive income
(loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances
from non-owner sources, including foreign currency translations.
Loss Contingencies. We recognize contingent losses
that are probable and estimable. In this context, we define probability as circumstances under which events are likely to occur.
In regards to legal costs, we record such costs as incurred.
The Company’s inventory consisted of the following at
April 30, 2015 and July 31, 2014 (in thousands):
| | |
April 30, 2015 | | |
July 31, 2014 | |
| Work-in-progress, spare parts and accessories | |
$ | 11 | | |
$ | 9 | |
| Finished goods | |
| 444 | | |
| 446 | |
| Total inventories | |
$ | 455 | | |
$ | 455 | |
Although it does not plan to do so, if
the Company were to dispose of the inventory outside the course of normal business, the amount recovered by the Company could be
substantially less than cost.
NON-INVASIVE MONITORING SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)
April 30, 2015
| 4. | STOCK-BASED COMPENSATION |
The Company measures the cost of employee, officer and director
services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The fair value
of the Company’s stock option awards is expensed over the vesting life of the underlying stock options using the graded vesting
method, with each tranche of vesting options valued separately. The Company recorded stock-based compensation of $0, for the three
and nine months ended April 30, 2015, and $1,000 and $4,000 respectively, for the three and nine months ended April 30, 2014. All
stock-based compensation is included in the Company’s selling, general and administrative costs and expenses.
The Company’s 2000 Stock Option Plan
(the “2000 Plan”), as amended, provides for the issuance of up to 2,000,000 shares of the Company’s Common Stock.
The 2000 Plan allows the issuance of incentive stock options, stock appreciation rights and restricted stock awards. The exercise
price of the options is determined by the compensation committee of the Company’s Board of Directors, but incentive stock
options must be granted at an exercise price not less than the fair market value of the Company’s Common Stock as of the
grant date or an exercise price of not less than 110% of the fair value for a 10% shareholder. Options expire up to ten years from
the date of the grant and are exercisable according to the terms of the individual option agreements. The 2000 Plan expired on
March 1, 2012. No additional grants may be made under the 2000 Plan; however, previously granted options will remain in force pursuant
to the terms of the individual grants.
In November 2010, the Company’s Board
and Compensation Committee approved the Non-Invasive Monitoring Systems, Inc. 2011 Stock Incentive Plan (the “2011 Plan”).
Awards granted under the 2011 Plan may consist of incentive stock options, stock appreciation rights (SAR), restricted stock grants,
restricted stock units (RSU) performance shares, performance units or cash awards. Subject to adjustment in certain circumstances,
the 2011 Plan authorizes up to 4,000,000 shares of the Company’s common stock for issuance pursuant to the terms of
the 2011 Plan. The 2011 Plan was approved by our shareholders in March 2012 and no awards have been granted under the 2011 Plan
as of April 30, 2015.
The Company did not grant any stock options during the nine
months ended April 30, 2015and 2014.
A summary of the Company’s stock option activity for the
nine months ended April 30, 2015 is as follows:
| | |
Shares | | |
Weighted
Average
Exercise
Price | | |
Weighted
average
remaining
contractual
term (years) | | |
Aggregate
intrinsic
Value | |
| Options outstanding, July 31, 2014 | |
| 378,750 | | |
$ | 0.380 | | |
| | | |
| | |
| Options granted | |
| - | | |
| n/a | | |
| | | |
| | |
| Options exercised | |
| - | | |
| n/a | | |
| | | |
| | |
| Options forfeited or expired | |
| - | | |
| n/a | | |
| | | |
| | |
| Options outstanding, April 30, 2015 | |
| 378,750 | | |
$ | 0.380 | | |
| 1.38 | | |
$ | 0.00 | |
| Options expected to vest, April 30, 2015 | |
| 378,750 | | |
$ | 0.380 | | |
| 1.38 | | |
$ | 0.00 | |
| Options exercisable, April 30, 2015 | |
| 378,750 | | |
$ | 0.380 | | |
| 1.38 | | |
$ | 0.00 | |
The 378,750 options outstanding at April 30, 2015 were all issued
under the 2000 Plan. There were no options exercised during the three and nine month period ended April 30, 2015 and 2014. There
were no options forfeited or expired during the three and nine month period ended April 30, 2015 and 75,000 expired during the
nine month period ended April 30, 2014.
As of April 30, 2015, there were no unrecognized costs related
to outstanding stock options.
The Company is a party to two licensing agreements with SensorMedics
and VivoMetrics. The Company received royalty income from the sale of its diagnostic monitoring hardware and software from SensorMedics
and previously received royalties from VivoMetrics prior to its bankruptcy. There was no royalty income from the SensorMedics license
during the three and nine months ended April 30, 2015, respectively, and $0 and $1,000 for the three and nine months ended April
30, 2014. SensorMedics indicated they will discontinue licensed product sales after inventory is depleted and, therefore, the royalty
revenue from SensorMedics is expected to be minimal to none. There were no royalties recognized from VivoMeterics for the three
and nine months ended April 30, 2015 and 2014. VivoMetrics ceased operations in July 2009 and filed for Chapter 11 bankruptcy protection
in October 2009. Under VivoMetrics’ approved bankruptcy plan of reorganization, our license with VivoMetrics was assigned
to another company; however, there can be no assurance as to the future amount of royalty income, if any, that may result from
this license.
NON-INVASIVE MONITORING SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)
April 30, 2015
2010 Credit Facility. On March 31, 2010, the Company
entered into a Note and Security Agreement with Frost Gamma Investments Trust (“Frost Gamma”), a trust controlled by
Dr. Phillip Frost, which beneficially owns in excess of 10% of the Company’s common stock, and Hsu Gamma Investments, LP,
an entity controlled by the Company’s Chairman (collectively, the “Lenders”), pursuant to which the Lenders have
provided a revolving credit line (the “Credit Facility”) in the aggregate principal amount of up to $1.0 million, secured
by all of the Company’s personal property. The Company is permitted to borrow and reborrow from time to time under the Credit
Facility until July 31, 2013 and subsequently the date was extended to July 31, 2015(the “Credit Facility Maturity Date”).
The interest rate payable on amounts outstanding under the Credit Facility is 11% per annum, and increases to 16% per annum after
the Credit Facility Maturity Date or after an event of default. All amounts owing under the Credit Facility are required to be
repaid by the Credit Facility Maturity Date, and amounts outstanding are prepayable at any time. As of April 30, 2015, the Company
had drawn an aggregate of $1,000,000 under the Credit Facility and there is no available balance remaining.
2011 Promissory Notes. On September 12, 2011, the Company
entered into two promissory notes in the principal amount of $50,000 each with Frost Gamma (“2011 Frost Note”) and
with an unrelated third party for a total of $100,000. The interest rate payable by NIMS on both the Frost Gamma Note and the unrelated
third party note is 11% per annum, payable on the maturity date of September 12, 2014 and subsequently the date was extended to
July 31, 2015(the “Promissory Notes Maturity Date”). The Company may prepay either or both notes in advance of the
Promissory Notes Maturity Date without premium or penalty.
2012 Promissory
Note. On May 30, 2012, the Company entered into a promissory note in the principal amount of $50,000 with Hsu Gamma, an entity
controlled by NIMS’ Chairman of the Board and Interim Chief Executive Officer, Jane H. Hsiao, (the “Hsu Gamma Note”).
The interest rate payable by NIMS on the Hsu Gamma Note is 11% per annum, payable on the maturity date of September 12, 2014 and
subsequently the date was extended to July 31, 2015. The Hsu Gamma Note may be prepaid in advance of the Promissory Notes Maturity
Date without premium or penalty.
2013 Promissory Note. On
February 22, 2013, the Company entered into a promissory note in the amount of $50,000 with Jane Hsiao, the Company’s Chairman
of the Board and Interim Chief Executive Officer (the “2013 Hsiao Note”). The interest rate payable by the Company
on the 2013 Hsiao Note is 11% per annum, originally payable on the maturity date of September 12, 2014 and subsequently the date
was extended to July 31, 2015. The 2013 Hsiao Note may be prepaid in advance of the Promissory Notes Maturity Date without premium
or penalty.
2014 Promissory Note. On September 24, 2014, the
Company entered into a promissory note (the “2014 Hsiao Note”) in the principal amount of $50,000 with Jane Hsiao,
NIMS' Chairman of the Board and Interim Chief Executive Officer. The interest rate payable by NIMS on the 2014 Hsiao Note is 11%
per annum, payable on the maturity date of July 31, 2015. The 2014 Hsiao Note may be prepaid in advance of the Maturity Date without
penalty.
2015 Promissory Notes. On February 2, 2015, the
Company entered into a promissory note (the “2015 Hsiao Note”) in the principal amount of $50,000 with Jane Hsiao,
NIMS' Chairman of the Board and Interim Chief Executive Officer. The interest rate payable by the Company on the 2015 Hsiao Note
is 11% per annum, payable on the maturity date of July 31, 2015. The 2015 Hsiao Note may be prepaid in advance of the Maturity
Date without penalty.
On April 16, 2015, the Company entered into a promissory note
(“2015 Frost Note”) in the amount of $100,000 with Frost Gamma. The interest rate payable by the Company on the 2015
Frost Note is 11% per annum, payable on the maturity date of July 31, 2015. The 2015 Frost Note may be prepaid in advance of the
Promissory Notes Maturity Date without premium or penalty.
NON-INVASIVE MONITORING SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)
April 30, 2015
At April 30, 2015, the Company was obligated under the above
described Credit Facility and promissory notes to make future principal payments (excluding interest) as follows:
| Year Ending July 31, | |
| |
| | |
| |
| 2015 | |
| 1,400,000 | |
| | |
$ | 1,400,000 | |
The Company has three classes of Preferred Stock. Holders
of Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are entitled to vote with the holders of common
stock as a single class on all matters.
Series B Preferred Stock is not redeemable by the Company and
has a liquidation value of $100 per share, plus declared and unpaid dividends, if any. Dividends are non-cumulative,
and are at the rate of $10 per share, if declared.
Series C Preferred Stock is redeemable by the Company at a price
of $0.10 per share upon 30 days prior written notice. This series has a liquidation value of $1.00 per share plus declared
and unpaid dividends, if any. Dividends are non-cumulative, and are at the rate of $0.10 per share, if declared. Each
share of Series C Preferred Stock is convertible into 25shares of the Company’s common stock upon payment of a conversion
premium of $4.20 per share of common stock. The conversion rate and the conversion premium are subject to adjustments
in the event of stock splits, stock dividends, reverse stock splits and certain other events.
Series D Preferred Stock is not redeemable by the Company. This
series has a liquidation value of $1,500 per share, plus declared and unpaid dividends, if any. Each share of Series
D Preferred Stock is convertible into 5,000 shares of the Company’s common stock. The conversion rate is subject
to adjustments in the event of stock splits, stock dividends, reverse stock splits and certain other events.
The Company issued 65,000 shares of the Company’s common
stock for the conversion of 13 shares of Series D Preferred Stock during the nine months ended April 30, 2015 and did not issue
any shares of the Company’s common stock for the nine months ended April 30, 2014. No preferred stock dividends were declared
for the three and nine months ended April 30, 2015 and 2014.
The Company did not issue any shares for the three and nine
months ended April 30, 2015. The Company did not declare any preferred stock dividends for the three and nine months ended April
30, 2015 and 2014.
| 8. | BASIC AND DILUTED LOSS PER SHARE |
Basic net loss per common share is computed by dividing net
loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted
net loss per common share is computed giving effect to all dilutive potential common shares that were outstanding during the period.
Diluted potential common shares consist of incremental shares issuable upon exercise of stock options and warrants and conversion
of preferred stock. In computing diluted net loss per share for the three and nine months ended April 30, 2015 and 2014, no dilution
adjustment has been made to the weighted average outstanding common shares because the assumed exercise of outstanding options
and warrants and the conversion of preferred stock would be anti-dilutive.
Potential common shares not included in calculating diluted
net loss per share are as follows:
| | |
April 30, 2015 | | |
April 30, 2014 | |
| Stock options | |
| 378,750 | | |
| 538,750 | |
| Series C Preferred Stock | |
| 1,551,200 | | |
| 1,551,200 | |
| Series D Preferred Stock | |
| 13,910,000 | | |
| 13,975,000 | |
| Total | |
| 15,839,950 | | |
| 16,064,950 | |
NON-INVASIVE MONITORING SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)
April 30, 2015
| 9. | RELATED PARTY TRANSACTIONS |
The Company signed a five year lease for office space in Miami,
Florida with a company owned by Dr. Phillip Frost, who is the beneficial owner of more than 10% of the Company’s Common Stock.
The current rental payments under the Miami office lease, which commenced January 1, 2008 and expired on December 31, 2012, are
approximately $1,250 per month and are currently on a month-to-month basis. The Company recorded rent expense related to the Miami
lease of approximately $4,000 and $12,000 respectively, for the three and nine months ended April 30, 2015, and approximately $4,000
and $11,000, respectively, for the three and nine months ended April 30, 2014
The Company signed a three year lease for warehouse space in
Hialeah, Florida with a company jointly controlled by Dr. Frost and Dr. Jane Hsiao, the Company’s Chairman and Interim CEO.
The rental payments under the Hialeah warehouse lease, which commenced February 1, 2009 and expired on January 31, 2012, then continued
on a month-to-month basis. As further described in Note 10, the Company vacated the Hialeah warehouse in September 2014 and entered
into a new lease with an unrelated third party. The Company recorded rent expense related to the Hialeah warehouse of approximately
$0 and $6,000 for the three and nine months ended April 30, 2015 and $17,000 and $45,000, respectively, for the three and nine
months ended April 30, 2014.
As more fully described in Note 6, the Company entered into
a $1.0 million Credit Facility in March 2010 with both an entity controlled by Dr. Frost and an entity controlled by Dr. Hsiao.
There were no advances under the Credit Facility during the three and nine months ended April 30, 2015. There was $1.0 million
outstanding balance due, plus interest, on the Credit Facility as of April 30, 2015 and July 31, 2014 and there is no available
balance remaining. The Credit Facility expires in July 31, 2015.
On September 12, 2011,
the Company entered into a Promissory Note in the principal amount of $50,000 with Frost Gamma Investments Trust (“Frost
Gamma”), a trust controlled by Dr. Phillip Frost, which beneficially owns in excess of 10% of the Company’s common
stock (the “Frost Gamma Note”). The interest rate payable on the Frost Gamma Note is 11% per annum, payable on the
Promissory Notes Maturity Date of July 31, 2015. The Company may prepay the Frost Gamma Note without premium or penalty.
On May 30, 2012, the
Company entered into a Promissory Note in the principal amount of $50,000 with Hsu Gamma Investments, L.P. (“Hsu Gamma”),
an entity controlled by NIMS’ Chairman of the Board and Interim Chief Executive Officer, Jane H. Hsiao, (the “Hsu Gamma
Note”). The interest rate payable on the Hsu Gamma Note is 11% per annum, payable on the Promissory Notes Maturity Date of
July 31, 2015. The Company may prepay the HSU Gamma Note without premium or penalty.
On February 22, 2013, the Company entered into a Promissory
Note in the amount of $50,000 with Jane Hsiao, the Company’s Chairman of the Board and Interim Chief Executive Officer (the
“Hsiao Note”). The interest rate payable by the Company on the Hsiao Note is 11% per annum, payable on the Promissory
Notes Maturity Date of July 31, 2015. The Hsiao Note may be prepaid in advance of the Promissory Notes Maturity Date without penalty.
On September 24, 2014, the Company entered into a promissory
note (the “2014 Hsiao Note”) in the principal amount of $50,000 with Jane Hsiao, NIMS' Chairman of the Board and Interim
Chief Executive Officer. The interest rate payable by NIMS on the 2014 Hsiao Note is 11% per annum, payable on the maturity date
of July 31, 2015. The 2014 Hsiao Note may be prepaid in advance of the Maturity Date without penalty.
On February 2, 2015, the Company entered into a promissory note
(the “2015 Hsiao Note”) in the principal amount of $50,000 with Jane Hsiao, NIMS' Chairman of the Board and Interim
Chief Executive Officer. The interest rate payable by the Company on the 2015 Hsiao Note is 11% per annum, payable on the maturity
date of July 31, 2015. The 2015 Hsiao Note may be prepaid in advance of the Maturity Date without penalty.
On April 16, 2015, the Company entered into a promissory note
(“2015 Frost Note”) in the amount of $100,000 with Frost Gamma. The interest rate payable by the Company on the 2015
Frost Note is 11% per annum, payable on the maturity date of July 31, 2015. The 2015 Frost Note may be prepaid in advance of the
Promissory Notes Maturity Date without premium or penalty.
The Company also incurred interest expense related to the Credit
Facility of approximately $27,000 and $83,000 for the three and nine months ended April 30, 2015, as well as for the three and
nine months ended April 30 2014, respectively. The Company also incurred interest expense related to the promissory notes of approximately
$8,000 and $21,000 for the three and nine months ended April 30, 2015, respectively, and $5,000 and $16,000 for the three and nine
months ended 2014, respectively. Approximately $602,000 and $498,000 of accrued interest remained outstanding for all debt at April
30, 2015 and July 31, 2014, respectively.
NON-INVASIVE MONITORING SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)
April 30, 2015
Dr. Hsiao, Dr. Frost and directors Steven Rubin and Rao Uppaluri
are each significant stockholders, officers and/or directors or former directors of TransEnterix, Inc. (formerly SafeStitch Medical,
Inc.) (“TransEnterix”), a publicly-traded, medical device manufacturer, Tiger X Medical, Inc. (“Tiger X”)
(formerly known as Cardo Medical, Inc.), a publicly traded former medical device company, and IDI, Inc. (“IDI”) (formerly
known as Tiger Media), a publicly-traded data fusion company. The Company’s Chief Financial Officer also served as the Chief
Financial Officer of TransEnterix until October 2, 2013. The Company’s Chief Financial Officer continued as an employee of
TransEnterix until March 3, 2014, during which he supervised the Miami based accounting staffs of TransEnterix under a cost sharing
arrangement whereby the total salaries of the Miami based accounting staffs of NIMS and TransEnterix were shared. Since
December 2009, the Company’s Chief Legal Officer has served under a similar cost sharing arrangement as Corporate Counsel
of IDI and as the Chief Legal Officer of each of TransEnterix and Tiger X. The Company recorded additions to selling, general and
administrative costs and expenses to account for the sharing of costs under these arrangements of $9,000 and $27,000, respectively,
for the three and nine months ended April 30, 2015, and $9,000 and $27,000, respectively, for the three and nine months ended April
30, 2014. Accounts payable to TransEnterix related to these arrangements totaled approximately $1,200 and $3,000 respectively,
at April 30, 2015 and July 31, 2014.
| 10. | COMMITMENTS AND CONTINGENCIES |
Leases.
The Company is under an operating lease agreement for office
space that expired in 2012 and continues on a month to month basis. The Company is also under an operating lease agreement for
warehouse space that runs through September 2015 and requires for the payment of taxes, insurance and utilities.
Generally, the lease agreements require the payment of base
rent plus escalations for increases in building operating costs and real estate taxes. Rental expense for operating leases amounted
$15,000 and $45,000 for the three and nine months ended April 30, 2015 and $21,000 and $56,000 for the three and nine
months ended April 30, 2014
Product Development and Supply Agreement.
On September 4, 2007, the Company entered into a Product Development
and Supply Agreement (the “Agreement”) with Sing Lin Technologies Co. Ltd., a company based in Taichung, Taiwan ("Sing
Lin"). Pursuant to the Agreement, the Company consigned to Sing Lin the development and design of the next generation Exer-Rest
and related devices. The Agreement commenced as of September 3, 2007 and had a term that extended three years from the acceptance
by NIMS of the first run of production units. Thereafter, the Agreement automatically renewed for successive one year terms unless
either party sent the other a notice of non-renewal. Either party was permitted to terminate the Agreement with ninety days prior
written notice. Upon termination, each party’s obligations under the Agreement were to be limited to obligations related
to confirm orders placed prior to the termination date.
Pursuant to the Agreement, Sing Lin designed, developed and
manufactured the tooling required to manufacture the acceleration therapeutic platforms for a total cost to the Company of $471,000.
Sing Lin utilized the tooling in the performance of its production obligations under the Agreement. The Company paid Sing Lin $150,000
of the tooling cost upon execution of the Agreement and $150,000 upon the Company’s approval of the product prototype concepts
and designs. The balance of the final tooling cost became due and payable in September 2008 upon acceptance of the first units
produced using the tooling, and was paid in full during the year ended July 31, 2009.
Under the now-terminated Agreement, the Company also granted
Sing Lin the exclusive distribution rights for the products in certain countries in the Far East, including Taiwan, China, Japan,
South Korea, Malaysia, Indonesia and certain other countries. Sing Lin agreed not to sell the Products outside its geographic areas
in the Far East.
The Agreement provided for the Company to purchase approximately
$2.6 million of Exer-Rest units within one year of the September 2008 acceptance of the final product. The Agreement further provided
for the Company to purchase $4.1 million and $8.8 million of Exer-Rest products in the second and third years following such acceptance,
respectively. These minimum purchase amounts were based upon 2007 product costs multiplied by volume commitments. Through April
30, 2015, the Company had paid Sing Lin $1.7 million in connection with orders placed through that date. Of this amount, $90,000
was previously included as advances to contract manufacturer. As of April 30, 2015, the Company has approximately $41,000 of payables
due to Sing Lin. As of April 30, 2015 and July 31, 2014, aggregate minimum future purchases under the Agreement totaled approximately
$13.9 million.
NON-INVASIVE MONITORING SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)
April 30, 2015
As of April 30, 2015, the Company had not placed orders sufficient
to meet the first-year or second-year minimum purchase obligations under the Agreement. The Company notified Sing Lin in June 2010
that it was terminating the Agreement effective September 2010, and Sing Lin in July 2010 demanded that the Company place orders
sufficient to fulfill the three year minimum purchase obligations in the Agreement. As of June 15, 2015, Sing Lin has not followed
up on its July 2010 demand. There can be no assurance that Sing Lin will not attempt to enforce its remedies under the Agreement,
or pursue other potential remedies.
The Company’s long-lived assets include furniture and
equipment, office equipment and computers, tooling, websites and software, leasehold improvements, patents and trademarks. Tooling
and equipment, net of accumulated depreciation, consists of the following at April 30, 2015 and July 31, 2014 (in thousands):
| | |
Estimated
Useful Life | |
April 30,
2015 | | |
July 31,
2014 | |
| Furniture and fixtures, leasehold improvements, office equipment and computers | |
3 – 5years | |
$ | 85 | | |
$ | 85 | |
| Website and software | |
3 years | |
| 26 | | |
| 26 | |
| | |
| |
| 111 | | |
| 111 | |
| Less accumulated depreciation | |
| |
| (111 | ) | |
| (110 | ) |
| Tooling and equipment, net | |
| |
$ | 0 | | |
$ | 1 | |
Depreciation expense was $0 and $1,000 during the three and
nine months ended April 30, 2015 and was $1,000 and $4,000 during the three and nine months ended April 30, 2014. Nine Exer-Rest®
AT 3800 and AT 4700 demonstration units are included in furniture and fixtures at an aggregate cost of $26,000. These units were
placed in service in fiscal 2009 and 2010, and were fully depreciated based upon five-year estimated useful lives.
NON-INVASIVE MONITORING SYSTEMS, INC
April 30, 2015
| ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS. |
Cautionary Statement Regarding Forward-looking Statements.
This Interim Report on Form 10-Q contains,
in addition to historical information, certain forward-looking statements regarding Non-Invasive Monitoring Systems, Inc. (the
“Company” or “NIMS,” also referred to as “us”, “we” or “our”). These
forward-looking statements represent our expectations or beliefs concerning the Company’s operations, performance, financial
condition, business strategies, and other information and that involve substantial risks and uncertainties. For this purpose, any
statements contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements.
Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,”
“anticipate,” “intend,” “could,” “estimate,” or “continue” or the negative
or other variations thereof or comparable terminology are intended to identify forward-looking statements. The Company’s
actual results of operations, some of which are beyond the Company’s control, could differ materially from the activities
and results implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but
are not limited to the Company’s: history of operating losses and accumulated deficit; immediate need for additional financing;
the Company’s inability to repay the Credit Facility currently due on July 31, 2015or Promissory Notes due on July 31, 2015,
dependence on future sales of the Exer-Rest® motion platforms; current and future purchase commitments; competition;
dependence on management; changes in healthcare rules and regulations; risks related to proprietary rights; government regulation,
including regulatory approvals; other factors described herein as well as the factors contained in “Item 1A - Risk Factors”
of our Annual Report on Form 10-K for the year ended July 31, 2014. We do not undertake any obligation to update forward-looking
statements, except as required by applicable law. These forward-looking statements are only predictions and reflect our views as
of the date they are made with respect to future events and financial performance.
Overview
We are primarily engaged
in the development, manufacture and marketing of non-invasive, whole body periodic acceleration (“WBPA”) therapeutic
platforms, which are motorized platforms that move a subject repetitively head to foot. Our acceleration therapeutic platforms
are the inventions of Marvin A. Sackner, M.D., our founder, former Chief Executive Officer and a current member of our Board of
Directors. Over thirty peer reviewed scientific publications attest to the benefits of whole body periodic acceleration in animal
and human research investigations. According to those studies, the application of this technology causes increased release of beneficial
substances such as nitric oxide from the inner lining of blood vessels throughout the vasculature for improved circulation and
the reduction of inflammation. These findings are not being claimed as an intended use of the device for marketing purposes, but
demonstrate a potential mechanism for its benefits.
The development and commercialization of the Exer-Rest has necessitated
substantial expenditures and commitments of capital, and we anticipate expenses and associated losses to continue for the foreseeable
future. We will be required to raise additional capital to fulfill our business plan, but no commitment to raise such additional
capital exists or can be assured. We are also examining strategic alternatives. If we are unsuccessful in our efforts to expand
sales and/or raise capital, or some other strategic alternative, we will not be able to continue operations.
Products
Whole Body Periodic Acceleration (“WBPA”) Therapeutic
Devices
The original AT-101 was a comfortable gurney-styled
device that provided movement of a platform repetitively in a head-to-foot motion at a rapid pace. Sales of the AT-101 commenced
in October 2002 in Japan and in February 2003 in the United States. QTM Incorporated (“QTM”), an FDA registered manufacturer
located in Oldsmar, Florida, manufactured the device, which was built in accordance with ISO and current Good Manufacturing Practices.
As discussed above, we ceased manufacturing and selling the AT-101 in the United States in January 2005as we began development
of the Exer-Rest AT. We continued selling our existing inventory of AT-101 devices overseas until the Exer-Rest AT became available
in October 2007, at which time we discontinued marketing of the AT-101.
The Exer-Rest AT is based upon the design
and concept of the AT-101, but has the dimensions and appearance of a commercial extra long twin bed. The Exer-Rest AT, which was
also manufactured by QTM until we stopped production in July 2009, weighs about half as much as the AT-101, has a much more efficient
and less costly drive mechanism, has a much lower selling price than did the AT-101 and is designed such that the user can utilize
and operate it without assistance. The wired hand held controller provides digital values for speed, travel and time, rather than
analog values for speed and arbitrary force values as in the AT-101. Sales of the Exer-Rest AT began outside the United States
in October 2007 and in the United States in February 2009. We discontinued manufacturing of the Exer-Rest AT in July 2009, and
we expect to utilize our remaining inventory of these units primarily for research purposes.
NON-INVASIVE MONITORING SYSTEMS, INC
April 30, 2015
The Exer-Rest AT3800 and Exer-Rest AT4700,
which were manufactured for us by Sing Lin prior to the termination of our agreement with them, are next generation versions of
the Exer-Rest AT and further advance the acceleration therapeutic platform technology. The AT3800 (38” wide) and AT4700 (47”
wide) models combine improved drive technology for quieter operation, a more comfortable “memory-foam” mattress, more
convenient operation with a multi-function wireless remote and a more streamlined look to improve the WBPA experience. Sales of
the Exer-Rest AT3800 and Exer-Rest AT4700 platforms began outside the United States in October 2008, and U.S. sales commenced in
February 2009.
LifeShirt®
The LifeShirt is a patented Wearable Physiological
Computer that incorporates transducers, electrodes and sensors into a sleeveless garment. These sensors transmit vital and physiological
signs to a miniaturized, battery-powered, electronic module which saves the raw waveforms and digital data to the compact flash
memory of a Personal Digital Assistant (“PDA”) attached to the LifeShirt. Users of the LifeShirt can enter symptoms
(with intensity), mood and medication information directly into the PDA for integration with the physiologic information collected
by the LifeShirt garment. The flash memory can then be removed from the LifeShirt and the data uploaded and converted into minute-by-minute
median trends of more than 30 physical and emotional signs of health and disease. Vital and physiological signs can therefore be
obtained non-invasively, continuously, cheaply and reliably with the comfortably worn LifeShirt garment system while resting, exercising,
working or sleeping. The LifeShirt was sold exclusively by VivoMetrics, but has not been marketed since VivoMetrics ceased operations
in July 2009. Under VivoMetrics’ approved bankruptcy plan of reorganization, our license with VivoMetrics was assigned to
another company; however, there can be no assurance as to the future amount of LifeShirt sales, if any, that may result from this
license.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial
condition and results of operations set forth below under “Results of Operations” and “Liquidity and Capital
Resources” should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this Form
10-Q. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts
of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis,
we evaluate our estimates, including those related to royalties, inventory, tooling and equipment and contingencies. The Company’s
accounting policy for loss contingencies complies with ASC 450-20-25-2. We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily apparent from other sources. A more detailed discussion
on the application of these and other accounting policies can be found in Note 2 in the Notes to the Condensed Consolidated Financial
Statements set forth in Item 8 of our Annual Report on Form 10-K for the year ended July 31, 2014. Actual results may differ from
these estimates.
Results of Operations
In January 2005, we began developing the Exer-Rest line of acceleration
therapeutic platforms, which were designed to be more efficient and less expensive than the original AT-101 platform. The Exer-Rest
AT platform was first available for delivery to certain locations outside of the United States in October 2007. Our newest
platforms, the Exer-Rest AT3800 and AT4700, which we developed under our former agreement with Sing Lin, became available for sale
in October 2008. In January 2009, the Exer-Rest line of therapeutic platforms was registered by the FDA in the United States as
Class I (Exempt) Medical Devices. We began our US and international sales activity with aggressive marketing and promotional pricing
beginning in February 2009. We opened our first demonstration and therapy center in Toronto, Canada in April 2009; however, we
closed that facility in January 2010 to focus our marketing and sales efforts on healthcare providers as well as individuals. We
continue to offer the Exer-Rest to hospitals, cardiac rehabilitation clinics, chiropractic and physical therapy centers, senior
living communities and other healthcare providers, as well as to their patients, professional athletes and other individuals.
NON-INVASIVE MONITORING SYSTEMS, INC
April 30, 2015
Three and Nine months ended April 30, 2015 Compared to
Three and Nine months Ended April 30, 2014
Revenue. There was no revenue for
the three and nine months ended April 30, 2015, as compared to no revenue for the three months ended April 30, 2014 and $1,000
for the nine months ended April 30, 2014. The $1,000 decrease for was primarily due to the decrease in royalty revenue as SensorMedics
sold off its remaining inventory of licensed product (see Note 5)
Cost of Sales. There were no cost
of sales for the three and nine months ended April 30, 2015 and 2014, as a result of not having any product sales during those
periods.
Selling,
general and administrative costs and expenses. Selling,
general and administrative (“SG&A”) costs and expenses were $50,000 for the three months ended April 30, 2015,
as compared to $73,000 for the three months ended April 30, 2014 and SG&A costs and expenses were $203,000 for the nine months
ended April 30, 2015, as compared to $231,000 for the nine months ended April 30, 2014. These $23,000 and $28,000 decreases for
the three and nine month periods were primarily attributable to decreases in stock-based compensation expense, payroll expenses
and depreciation expense. SG&A costs and expenses include stock based compensation, which totaled $0 for the three and nine
months ended April 30, 2015,respectively, and $1,000 and $4,000 for the three and nine months ended April 30,2014, respectively.
Research and development costs and expenses.
There were no Research and development costs and expenses (“R&D”) for the three months ended April 30, 2015 and
2014. There were no R&D costs and expenses for the nine months ended April 30, 2015, as compared to $1,000 for the nine months
ended April 30, 2014. This $1,000 decrease was primarily attributable to a decrease in professional regulatory fees and costs associated
with Exer-Rest units used in research to gather clinical data.
Total operating costs and expenses. Total
operating costs and expenses were $50,000 for the three months ended April 30, 2015, as compared to $73,000 for the three months
ended April 30, 2014 and total operating costs and expenses were $203,000 for the nine months ended April 30, 2015, as compared
to $232,000 for the nine months ended April 30, 2014. These $23,000 and $29,000 decreases for the three and nine month periods
were primarily attributable to the lower SG&A and R&D costs and expenses discussed above.
Other expense.
Net interest expense was $35,000 and $104,000 for the three and nine months ended April 30, 2015
and net interest expense was $32,000 and $99,000 for the three and nine months ended April 30, 2014. The $3,000 and $5,000 respective
increases for the three and nine month periods were related to increased balances outstanding under the Note and Security Agreement
and Promissory Notes described in Note 6 to the accompanying unaudited condensed consolidated financial statements.
Liquidity and Capital Resources
The Company’s operations have been
primarily financed through private sales of its equity securities and advances under Credit Facility and Promissory Notes. At April
30, 2015, we had approximately $81,000 of cash and negative working capital of approximately $1,893,000. We believe that the cash
on hand at April 30, 2015 is not sufficient to meet our anticipated cash requirements for operations and debt service for the next
12 months.
We expect to incur losses from operations
for the foreseeable future. It is likely that we will not be able to generate significant additional revenue and we will be required
to obtain additional external financing through public or private equity offerings, debt financings or collaborative agreements
to continue operations. No assurance can be given that such additional financing will be available on acceptable terms or at all.
We are also examining strategic alternatives. Our ability to sell additional shares of our stock and/or borrow cash could be materially
adversely affected by the current climate in the global equity and credit markets. Current economic conditions have been, and continue
to be, volatile and continued instability in these market conditions may limit our ability to access the capital necessary to fund
and grow our business and to replace, in a timely manner, maturing liabilities or to successfully examine strategic alternatives.
Additionally, the sales of equity or convertible debt securities may result in dilution to our stockholders.
Net cash used in operating activities was
$140,000 and $205,000 for nine months ended April 30, 2015 and 2014, respectively. This $65,000 decrease was principally due to
due to an increase in outstanding accounts payable and accrued expenses.
No cash was used or provided by investing
activities for the nine months ended April 30, 2015 and 2014.
Net cash provided by financing activities
was $200,000 for the nine months ended April 30, 2015, from the $200,000 proceeds from the Promissory Notes described in Note 6.
No cash was provided by financing activities for the nine months ended April 30, 2014.
NON-INVASIVE MONITORING SYSTEMS, INC
April 30, 2015
Under our now-terminated
agreement with Sing Lin, we were committed to purchase approximately $2.6 million of Exer-Rest units within one year of acceptance
of the final product, which acceptance occurred in September 2008, and an additional $4.1 million and $8.8 million of products
in the second and third years following acceptance of the final product, respectively. Under the agreement, we were required to
pay a portion of the product purchase price at the time production orders were placed, with the balance due upon delivery. Through
April 30, 2015, we paid Sing Lin $1.7 million in connection with orders placed through that date. As of April 30, 2015, we had
not placed orders sufficient to satisfy the first-year or second-year purchase obligations under the agreement. We notified Sing
Lin in June 2010 that we were terminating the agreement effective September 2010, and Sing Lin in July 2010 demanded that we place
orders sufficient to fulfill the three year minimum purchase obligations in the agreement. As of June 15, 2015, Sing Lin has not
followed up on its July 2010 demand. There can be no assurance that Sing Lin will not attempt to enforce its remedies against us,
or pursue other potential remedies. If Sing Lin seeks to enforce remedies against us, any such remedies could have a material adverse
effect on our business, liquidity and results of operations. As of April 30, 2015, the Company had payables due to Sing Lin of
approximately $41,000.
On April 8, 2013, the
Company entered into the Stock Purchase Agreement with the Investors pursuant to which the Investors agreed to purchase in a private
placement an aggregate of 10,020,000 shares of the Company’s common stock, par value $0.01 (the “Shares”), at
a price of $0.05 per share, for aggregate consideration of $501,000. The $0.05 per share price was less than the market price,
which was approximately $0.12 as of the date of the agreement. Among the Investors purchasing Shares pursuant to the agreement
were Dr. Jane Hsiao, the Company’s Chairman of the Board and Interim Chief Executive Officer and Frost Gamma, an entity
controlled by Dr. Phillip Frost, one of the largest beneficial owners of the Company’s common stock. Dr. Hsiao
purchased 2.0 million Shares and Frost Gamma purchased 2.0 million Shares.
2010 Credit Facility. On March 31,
2010, the Company entered into a new Note and Security Agreement with Frost Gamma Investments Trust, a trust controlled by Dr.
Phillip Frost, which beneficially owns in excess of 10% of the Company’s common stock, and Hsu Gamma Investments, LP, an
entity controlled by the Company’s Chairman (together, the “Lenders”), pursuant to which the Lenders have provided
a revolving credit line (the “Credit Facility”) in the aggregate principal amount of up to $1.0 million, secured by
all of the Company’s personal property. The Company is permitted to borrow and reborrow from time to time under the Credit
Facility until July 31, 2013 and subsequently the date was extended to July 31, 2015(the “Credit Facility Maturity Date”).
The interest rate payable on amounts outstanding under the Credit Facility is 11% per annum, and increases to 16% per annum after
the Credit Facility Maturity Date or after an event of default. All amounts owing under the Credit Facility are required to be
repaid by the Credit Facility Maturity Date, and amounts outstanding are prepayable at any time. As of April 30, 2015, the Company
had drawn an aggregate of $1,000,000 under the Credit Facility and there is no available balance remaining.
2011 Promissory Notes. On September
12, 2011, the Company entered into two promissory notes in the principal amount of $50,000 each with Frost Gamma, a trust controlled
by Dr. Phillip Frost, which beneficially owns in excess of 10% of the Company’s common stock, and with an unrelated third
party for a total of $100,000. The interest rate payable by NIMS on both the Frost Gamma Note and the unrelated third party note
is 11% per annum, payable on the maturity date of September 12, 2014 and subsequently the date was extended to July 31, 2015(the
“Promissory Notes Maturity Date”). The Company may prepay either or both notes in advance of the Promissory Notes Maturity
Date without premium or penalty.
2012 Promissory
Note. On May 30, 2012, the Company entered into a promissory note in the principal amount of $50,000 with Hsu Gamma, an entity
controlled by NIMS’ Chairman of the Board and Interim Chief Executive Officer, Jane H. Hsiao, (the “Hsu Gamma Note”).
The interest rate payable by NIMS on the Hsu Gamma Note is 11% per annum, payable on the maturity date of September 12, 2014 and
subsequently the date was extended to July 31, 2015. The Hsu Gamma Note may be prepaid in advance of the Promissory Notes Maturity
Date without premium or penalty.
2013 Promissory
Note. On February 22, 2013, the Company entered
into a promissory note in the amount of $50,000 with Jane Hsiao, the Company’s Chairman of the Board and Interim Chief Executive
Officer (the “2013 Hsiao Note”). The interest rate payable by the Company on the 2013 Hsiao Note is 11% per annum,
originally payable on the maturity date of September 12, 2014 and subsequently the date was extended to July 31, 2015. The 2013
Hsiao Note may be prepaid in advance of the Promissory Notes Maturity Date without premium or penalty.
2014 Promissory Note. On September
24, 2014, the Company entered into a promissory note (the “2014 Hsiao Note”) in the principal amount of $50,000 with
Jane Hsiao, NIMS' Chairman of the Board and Interim Chief Executive Officer. The interest rate payable by NIMS on the 2014 Hsiao
Note is 11% per annum, payable on the maturity date of July 31, 2015. The 2014 Hsiao Note may be prepaid in advance of the Maturity
Date without penalty.
NON-INVASIVE MONITORING SYSTEMS, INC
April 30, 2015
2015 Promissory Notes. On February
2, 2015, the Company entered into a promissory note (the “2015 Hsiao Note”) in the principal amount of $50,000 with
Jane Hsiao, NIMS' Chairman of the Board and Interim Chief Executive Officer. The interest rate payable by the Company on the 2015
Hsiao Note is 11% per annum, payable on the maturity date of July 31, 2015. The 2015 Hsiao Note may be prepaid in advance of the
Maturity Date without penalty.
On April 16, 2015, the Company entered
into a promissory note (“2015 Frost Note”) in the amount of $100,000 with Frost Gamma. The interest rate payable by
the Company on the 2015 Frost Note is 11% per annum, payable on the maturity date of July 31, 2015. The 2015 Frost Note may be
prepaid in advance of the Promissory Notes Maturity Date without premium or penalty
As of June 15, 2015, the Company had cash
and cash equivalents of approximately $66,000, and did not have any further funding available under the Credit Facility. Furthermore,
the Maturity Date of the Credit Facility is July 31, 2015 and the Company currently does not have sufficient funds to repay the
Credit Facility. If we are unable to generate significant revenues from sales of Exer-Rest platforms or obtain an extension on
the Credit Facility Maturity Date and Promissory Notes Maturity Date, we will have insufficient funds to repay our existing debt
and continue operations without raising additional capital. We are also examining strategic alternatives. There can be no assurance
that we will be able to raise such additional capital on terms acceptable to us or at all or that we will be successful in our
examination of strategic alternatives. This uncertainty, along with the Company’s limited remaining cash balances, raises
substantial doubt about the Company’s ability to continue as a going concern.
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK.
Not required for smaller reporting companies
as defined in Rule 12b-2 of the Exchange Act.
ITEM 4. CONTROLS AND
PROCEDURES.
Evaluation of Disclosure
Controls and Procedures
We carried out an evaluation,
under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer,
of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange
Act of 1934 (the “Exchange Act”) as of the end of the period covered by this report. Based on that evaluation, our
Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of April 30,
2015 were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s
rules and forms.
Changes in Internal
Control over Financial Reporting
There were no material changes in our internal
controls over financial reporting or in other factors that could materially affect, or are reasonably likely to affect, our internal
controls over financial reporting during the quarter ended April 30, 2015. Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
NON-INVASIVE MONITORING SYSTEMS, INC
April 30, 2015
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
None.
Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
Item 6. Exhibits
| 31.1 |
Certification of Chief Executive Officer pursuant to
Rules 13a–14 and 15d-14 under the Securities Exchange Act of 1934.* |
| |
|
| 31.2 |
Certification of Chief Financial Officer pursuant to
Rules 13a–14 and 15d-14 under the Securities Exchange Act of 1934.* |
| |
|
| 32.1 |
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350 as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |
| |
|
| 32.2 |
Certification of Chief Financial Officer pursuant to 18 U.S.C.
1350 as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
| |
|
| 101.INS |
XBRL Instance Document* |
| |
|
| 101.SCH |
XBRL Taxonomy Extension Schema Document* |
| |
|
| 101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document* |
| |
|
| 101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document* |
| |
|
| 101.LAB |
XBRL Taxonomy Extension Label Linkbase Document* |
| |
|
| 101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document* |
NON-INVASIVE MONITORING SYSTEMS, INC
April 30, 2015
SIGNATURES
In accordance with
the requirements of the Exchange Act the Registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
| Dated: June 15, 2015 |
By: |
/s/ Jane H. Hsiao |
|
| |
|
Jane H. Hsiao, Interim Chief Executive Officer |
| |
|
|
| Dated: June 15, 2015 |
By: |
/s/ James J. Martin |
|
| |
|
James J. Martin, Chief Financial Officer |
EXHIBIT INDEX
| 31.1 |
Certification of Chief Executive Officer pursuant to Rules 13a–14 and 15d-14 under the Securities Exchange Act of 1934. |
| |
|
| 31.2 |
Certification of Chief Financial Officer pursuant to Rules 13a–14
and 15d-14 under the Securities Exchange Act of 1934.
|
| 32.1 |
Certification of Chief Executive Officer pursuant to 18 U.S.C.
1350 as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
| 32.2 |
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350 as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
Exhibit
31.1
Certification
of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.
I, Jane
H. Hsiao, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Non-Invasive Monitoring Systems, Inc.; |
| 2. | Based on my knowledge, this 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 report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting
that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal
control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize
and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
| Dated: June 15, 2015 |
By: |
/s/ Jane H. Hsiao |
|
| |
|
Jane H. Hsiao, Interim Chief Executive Officer |
Exhibit
31.2
Certification
of Chief Financial Officer Pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.
I, James J. Martin,
certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Non-Invasive Monitoring Systems, Inc.; |
| 2. | Based on my knowledge, this 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 report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting
that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal
control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize
and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
| Dated: June 15, 2015 |
By: |
/s/ James J. Martin |
|
| |
|
James J. Martin, Chief Financial Officer |
Exhibit 32.1
CERTIFICATIONS PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002
(18 U.S.C. SECTION 1350)
In connection with the Quarterly Report
of Non Invasive Monitoring Systems, Inc. (the "Company") on Form 10-Q for the quarterly period ended April 30, 2015,
as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jane H. Hsiao, Interim Chief
Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The
Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The
information contained in the Report fairly presents, in all material respects, the financial condition and result of operations
of the Company.
| Dated: June 15, 2015 |
By: |
/s/ Jane H. Hsiao |
|
| |
|
Jane H. Hsiao, Interim Chief Executive Officer |
Exhibit 32.2
CERTIFICATIONS PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002
(18 U.S.C. SECTION 1350)
In connection with the Quarterly Report
of Non Invasive Monitoring Systems, Inc. (the "Company") on Form 10-Q for the quarterly period ended April 30, 2015,
as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James J. Martin, Chief Financial
Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The
Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The
information contained in the Report fairly presents, in all material respects, the financial condition and result of operations
of the Company.
| Dated: June 15, 2015 |
By: |
/s/ James J. Martin |
|
| |
|
James J. Martin, Chief Financial Officer |
|
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