---

---

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

---

FORM 10-QSB

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For Quarter ended May 31, 2001
Commission file number 2-92261

---

WESTBRIDGE RESEARCH GROUP

California(State or other jurisdiction of incorporation or organization)

95-3769474(I.R.S. Employer Identification No.)1150 Joshua Way
Vista, California(Address of principal executive offices)

92083(zip code)


(760) 599-8855(Registrant's telephone number, including area code)

---

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes /X/ No / /

Indicate
the number of shares outstanding of each of the issuer's classes of common stock, as of a recent date: 2,103,438 shares of common stock, no par value, as of May 31,
2001.

---

---

---

PART IFINANCIAL INFORMATION

ITEM 1FINANCIAL STATEMENTS

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY  CONSOLIDATED CONDENSED BALANCE SHEETS

|                                                                                                  |                               | May 31,
2001               |           | November 30,
2000 |        
|------------------------------------------------------------------------------------------------- | ----------------------------- | -------------------------- | --------- | ----------------- | -------
|
|ASSETS                                                                                            |                               |                            |           |                  
|CURRENT ASSETS                                                                                    |                               |                            |           |                   |        
|Cash                                                                                              |                               | $                          | 279,542   |                   | $      
|Trade accounts receivable, less allowance for doubtful accounts of $5,000 and $5,000 respectively |                               |                            | 358,624   |                   |        
|Inventories                                                                                       |                               |                            | 130,285   |                   |        
|Prepaid expenses and other current assets                                                         |                               |                            | 28,556    |                   |        
|                                                                                                  |                               |                            |           |                   |        
|                                                                                                  | Total Current Assets          |                            |           | 797,007           |        
|PROPERTY AND EQUIPMENT                                                                            |                               |                            | 564,920   |                   |        
|                                                                                                  | Less accumulated depreciation |                            |           | [453,810          | ]      
|                                                                                                  |                               |                            |           |                   |        
|                                                                                                  |                               | Net Property and Equipment |           |                   | 111,110
|PREPAID ROYALTY, net of accumulated amortization of $89,208 and $79,650 respectively              |                               |                            | 106,734   |                   |        
|LONG TERM ACCOUNTS RECEIVABLE, net                                                                |                               |                            | 130,000   |                   |        
|                                                                                                  |                               |                            |           |                   |        
|TOTAL ASSETS                                                                                      |                               | $                          | 1,144,851 |                   | $      
|                                                                                                  |                               |                            |           |                   |        

See
accompanying notes to consolidated condensed financial statements.

---

|                                            |                                          | May 31,
2001 |            | November 30,
2000 |  
|------------------------------------------- | ---------------------------------------- | ------------ | ---------- | ----------------- | -
|
|LIABILITIES AND SHAREHOLDERS' EQUITY        |                                          |              |            |                  
|CURRENT LIABILITIES                         |                                          |              |            |                   |  
|Accounts payable                            |                                          | $            | 63,590     |                   | $
|Accrued expenses                            |                                          |              | 44,096     |                   |  
|Current portion of capital lease obligation |                                          |              | 14,875     |                   |  
|Current portion of long-term debt           |                                          |              | 3,160      |                   |  
|                                            |                                          |              |            |                   |  
|                                            | TOTAL CURRENT LIABILITIES                |              |            | 125,721           |  
|Notes payablerelated parties               |                                          |              | 214,668    |                   |  
|Long-term debt                              |                                          |              | 33,554     |                   |  
|Capital lease obligations:                  |                                          |              |            |                   |  
|                                            | net of current portion                   |              |            | 8,461             |  
|                                            |                                          |              |            |                   |  
|TOTAL LIABILITIES                           |                                          |              | 382,404    |                   |  
|                                            |                                          |              |            |                   |  
|SHAREHOLDERS' EQUITY                        |                                          |              |            |                   |  
|Common stock, no par value:                 |                                          |              |            |                   |  
|Authorized 9,375,000 shares                 |                                          |              |            |                   |  
|Issued and outstanding 2,103,438 shares     |                                          |              | 8,479,854  |                   |  
|Paid in Capital:                            |                                          |              | 95,000     |                   |  
|Accumulated deficit                         |                                          |              | [7,812,407 | ]                 |  
|                                            |                                          |              |            |                   |  
|                                            | TOTAL SHAREHOLDERS' EQUITY               |              |            | 762,447           |  
|                                            |                                          |              |            |                   |  
|                                            | TOTAL LIABILITIES & SHAREHOLDERS' EQUITY |              | $          | 1,144,851         |  
|                                            |                                          |              |            |                   |  

See
accompanying notes to consolidated condensed financial statements.

---

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY  CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS  (unaudited)

|                                                          |                            | Three Months
Ended May 31 |           | Six Months
Ended May 31 |        
|--------------------------------------------------------- | -------------------------- | ------------------------- | --------- | ----------------------- | -------
|
|NET SALES                                                 |                            | $                         | 518,603   |                         | $      
|COST OF SALES                                             |                            |                           | 168,538   |                         |        
|                                                          |                            |                           |           |                         |        
|GROSS PROFIT                                              |                            |                           | 350,065   |                         |        
|                                                          |                            |                           |           |                         |        
|OPERATING EXPENSES                                        |                            |                           |           |                         |        
|                                                          | Research and development   |                           |           | 39,218                  |        
|                                                          | Selling                    |                           |           | 118,455                 |        
|                                                          | General and administration |                           |           | 64,158                  |        
|                                                          | Royalties                  |                           |           | 17,916                  |        
|                                                          |                            |                           |           |                         |        
|                                                          |                            | TOTAL OPERATING EXPENSES  |           |                         | 239,747
|                                                          |                            |                           |           |                         |        
|                                                          | Operating income           |                           |           | 110,318                 |        
|OTHER INCOME (EXPENSE)                                    |                            |                           |           |                         |        
|                                                          | Interest expense           |                           |           | [6,813                  | ]      
|                                                          | Interest income            |                           |           | 1,482                   |        
|                                                          | Other income               |                           |           |                        |        
|                                                          |                            |                           |           |                         |        
|                                                          | Income before income taxes |                           |           | 104,987                 |        
|Provision for income taxes                                |                            |                           |          |                         |        
|                                                          |                            |                           |           |                         |        
|                                                          | Net income                 |                           | $         | 104,987                 |        
|                                                          |                            |                           |           |                         |        
|Basic earnings per common share                           |                            | $                         | .05       |                         | $      
|                                                          |                            |                           |           |                         |        
|Weighted average shares outstanding                       |                            |                           | 2,103,438 |                         |        
|                                                          |                            |                           |           |                         |        
|Diluted earnings per common share                         |                            | $                         | .05       |                         | $      
|                                                          |                            |                           |           |                         |        
|Weighted average shares, options and warrants outstanding |                            |                           | 2,280,355 |                         |        
|                                                          |                            |                           |           |                         |        

See
accompanying notes to consolidated condensed financial statements.

---

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY  CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS  (unaudited)

|                                                                                            |                                         | Six Months Ended |        
|------------------------------------------------------------------------------------------- | --------------------------------------- | ---------------- | -------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                       |                                         |                  |        
|Net income                                                                                  |                                         | $                | 73,928 
|Adjustments to reconcile net income to net cash (used in) provided by operating activities: |                                         |                  |        
|Amortization of prepaid royalty                                                             |                                         |                  | 9,558  
|Depreciation and amortization                                                               |                                         |                  | 18,487 
|Changes in Operating Assets and Liabilities:                                                |                                         |                  |        
|                                                                                            | Increase in trade accounts receivable   |                  |        
|                                                                                            | Increase in inventories                 |                  |        
|                                                                                            | [Increase] decrease in prepaid expenses |                  |        
|                                                                                            | Increase in accounts payable            |                  |        
|                                                                                            | Decrease in accrued liabilities         |                  |        
|                                                                                            |                                         |                  |        
|Net cash provided by [used in] operating activities                                         |                                         |                  | [35,349
|                                                                                            |                                         |                  |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                       |                                         |                  |        
|Purchase of property and equipment                                                          |                                         |                  | [8,123 
|                                                                                            |                                         |                  |        
|Net cash used in investing activities                                                       |                                         |                  | [8,123 
|                                                                                            |                                         |                  |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                       |                                         |                  |        
|Payments on capital lease obligations                                                       |                                         |                  | [8,279 
|Payments on notes payable and notes payablerelated parties                                 |                                         |                  | [15,840
|                                                                                            |                                         |                  |        
|Net Cash used in financing activities                                                       |                                         |                  | [24,119
|                                                                                            |                                         |                  |        
|[DECREASE] INCREASE IN CASH                                                                 |                                         |                  | [67,591
|CASH AT BEGINNING OF PERIOD                                                                 |                                         |                  | 347,133
|                                                                                            |                                         |                  |        
|CASH AT END OF PERIOD                                                                       |                                         | $                | 279,542
|                                                                                            |                                         |                  |        

See
accompanying notes to consolidated condensed financial statements.

---

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY  NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

A. Basis of Presentation:

The consolidated balance sheet as of May 31, 2001, the consolidated statements of operations for the six-month periods ended May 31,
2001, and 2000, respectively, and the consolidated statements of cash flows for the six-month periods then ended have been prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring adjustments except as noted in management's discussion and analysis of financial condition and results of operations) necessary to
present fairly the financial position, results of operations and changes in cash flows have been made.

Certain
information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the 2000 Annual
Report on Form 10-KSB. The results of operations for the quarter ended May 31, 2001, are not necessarily indicative of the operating results for the full year.

B. Reclassification:

C. Stock Split:

On July 17, 1997 the shareholders of the Company voted to execute a one-for-four reverse stock split. The reverse stock split
was effective for shareholders of record on February 6, 1998. Per share amounts in the accompanying financial statements have been restated to give effect for the reverse stock split as if it
occurred on December 1, 1996.

D. Subsequent Events:

None

---

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY  MANAGEMENT'S DISCUSSION AND ANALYSIS

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations:

Net sales for the three month period ended May 31, 2001 were $518,603, representing a 25% decrease from the same period in the prior year. For the six
month period ended May 31, 2001, sales were $824,422 and represents a decrease of 9% from $906,703 in the prior year. This decrease is due to two of the Company's major distributors
experiencing cash flow difficulties which has resulted in a decrease in orders by these distributors during the Company's second fiscal quarter. It is unknown whether these distributors will
eventually place these orders or not.

Cost
of sales as a percentage of net sales decreased to 33% for the quarter ended May 31, 2001 as compared with 34% for the same period in the prior year. For the six month
period ended May 31, 2001, cost of sales as a percentage of net sales also decreased to 33% from 34% when compared with the prior year.

Operating
expenses for the three and six month periods ended May 31, 2001 increased 3% and 11%, respectively, compared with the same periods in the prior year. The increase is
primarily due to increased selling and general and administrative expenses discussed below.

Research
and development expenses as a percentage of net sales for the three and six month periods ended May 31, 2001 were 8% and 9% respectively, compared with 6% and 8% for
the same periods in the prior year. This percentage increase is a result of increased labor expense and decreased sales.

Selling
expenses as a percentage of net sales for the three and six month periods ended May 31, 2001 were 23% and 30%, respectively, compared with 18% and 25% for the same
periods in the prior year. This percentage increase is primarily due to decreased sales for the three month period ended May 31, 2001, and the result of increased advertising and decreased
sales for the six month period ended May 31, 2001.

General
and administrative expenses in the three and six month periods ended May 31, 2001 increased by $11,646 or 23%, and increased $19,906 or 19%, respectively, when compared
with the same periods in the prior year. This increase is due to increased insurance costs and legal expenses related to a new stock option agreement and trademark issues.

Net
income for the quarter ended May 31, 2001 was $104,987 as compared with net income of $220,056, for the same period in the prior year. Accordingly, basic earnings per share
decreased to approximately $.05 for the quarter ended May 31, 2001 compared with approximately $.11 for the quarter ended May 31, 2000.

Income
taxes have not been provided for in the accompanying financial statements of operations due to the net operating loss carry forwards generated in prior years that are available
for carry forward against current year income.

Liquidity and Capital Resources:

The Company has no material commitments for capital expenditures.

Working
capital was $671,286 at May 31, 2001, which represents an increase from $597,185 at November 30, 2000.

Based
on current cash flow projections management expects that the Company can continue operations for the current year without infusions of additional cash.

Impact of Inflation

The Company does not believe inflation has had a significant effect on its operations.

---

PART IIOTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 2. CHANGES IN SECURITIES

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K





---

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|                    |  | WESTBRIDGE RESEARCH GROUP
(Registrant)                                                
|------------------- |  | --------------------------------------------------------------------------------------
|                    |  | /s/ Christine Koenemann                                                               
|                    |  | Christine Koenemann, President
Principal Executive Officer
Principal Financial Officer
|Date: July 20, 2001 |  |                                                                                       

---

QuickLinks