**SECURITIES AND EXCHANGE COMMISSION**

 

**WASHINGTON, D.C. 20549**

 

 

**FORM 10-QSB**

 

 

**QuarterlyReport Under Section 13 or 15(d)**

**ofthe Securities Exchange Act of 1934**

 

 

**ForQuarter ended February 28, 2003**

** **

**Commissionfile number 2-92261**

 

 

**WESTBRIDGERESEARCH GROUP**

 

 

| **California**                     |   | **95-3769474**      |
|------------------------------------|--------|---------------------|
| (State or other  jurisdiction      |   | (I.R.S. Employer    |
| of incorporation or  organization) |   | Identification No.) |

 

| **1150  Joshua Way**                     |   |       |
|------------------------------------------|--------|------------|
| **Vista,  California**                   |   | **92083**  |
| (Address of principal  executive office) |   | (Zip Code) |

 

Registrant’s telephone number, including area code:                    **(760) 599-8855**

 

Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has beensubject to such filing require-ments for the past 90 days.   Yes ý       No o

 

Indicate by check mark whether the registrant is an accelerated filer(as defined in Rule 12b-2 of the Exchange Act).    Yes o      No ý

 

Indicate the number of shares outstanding of each ofthe issuer’s classes of common stock, as of a recent date: 2,103,438 shares ofcommon stock, no par value, as of February 28, 2003.

 

 

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PARTI  — FINANCIAL INFORMATION

 

ITEM 1  — FINANCIAL STATEMENTS

## **WESTBRIDGE RESEARCHGROUP AND SUBSIDIARY**

**CONSOLIDATED CONDENSED BALANCE SHEETS**

 

 

 
|                                                                                                  |   | **FEBRUARY  28,** |    | **NOVEMBER  30,** |   |
|-------------------------------------------------------------------------------------------------------|--------|-------------------|---------|-------------------|--------|
|                                                                                                  |   | **2003**          |    | **2002**          |   |
|                                                                                                  |   | **(unaudited)**   |    | **(audited)**     |   |
|                                                                                                  |   |              |    |              |   |
| ASSETS                                                                                                |
|                                                                                                  |   |              |    |              |   |
| CURRENT ASSETS                                                                                        |   |              |    |              |   |
| Cash                                                                                                  |   | $                 | 133,236 |              | $      | 269,037 |   |
| Trade accounts  receivable, less allowance for doubtful accounts of $14,705 and $14,705  respectively |   | 197,871           |    | 170,231           |   |
| Inventories                                                                                           |   | 175,512           |    | 130,639           |   |
| Prepaid expenses  and other current assets                                                            |   | 39,243            |    | 21,283            |   |
|                                                                                                  |   |              |    |              |   |
| Total Current  Assets                                                                                 |   | 545,862           |    | 591,190           |   |
|                                                                                                  |   |              |    |              |   |
| PROPERTY AND  EQUIPMENT                                                                               |   | 562,623           |    | 562,623           |   |
| Less accumulated  depreciation                                                                        |   | [513,228          | ]       | [503,685          | ]      |
|                                                                                                  |   |              |    |              |   |
| Net Property and  Equipment                                                                           |   | 49,395            |    | 58,938            |   |
|                                                                                                  |   |              |    |              |   |
| INTANGIBLE ASSET                                                                                      |   | 151,600           |    | 151,600           |   |
| LONG TERM  ACCOUNTS RECEIVABLE, net                                                                   |   | 130,000           |    | 130,000           |   |
|                                                                                                  |   |              |    |              |   |
| TOTAL ASSETS                                                                                          |   | $                 | 876,857 |              | $      | 931,728 |   |

 

 

See accompanying notes toconsolidated

condensedfinancial statements.

 

 

2

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**WESTBRIDGE RESEARCH GROUP ANDSUBSIDIARY**

 

**CONSOLIDATED CONDENSED BALANCE SHEETS**

(continued)

 
|                                                                                               |   | **FEBRUARY  28,** |    | **NOVEMBER  30,** |   |
|----------------------------------------------------------------------------------------------------|--------|-------------------|---------|-------------------|--------|
|                                                                                               |   | **2003**          |    | **2002**          |   |
|                                                                                               |   | **(unaudited)**   |    | **(audited)**     |   |
|                                                                                               |   |              |    |              |   |
| LIABILITIES AND  SHAREHOLDERS’ EQUITY                                                         |
|                                                                                               |   |              |    |              |   |
| CURRENT  LIABILITIES                                                                               |   |              |    |              |   |
| Accounts payable                                                                                   |   | $                 | 89,912  |              | $      | 55,964 |   |
| Accrued expenses                                                                                   |   | 39,492            |    | 46,127            |   |
| Current portion  of capital lease obligation                                                       |   | —            |    | 2,396             |   |
| Current portion  of long-term debt                                                                 |   | 3,759             |    | 4,200             |   |
|                                                                                               |   |              |    |              |   |
| TOTAL CURRENT  LIABILITIES                                                                         |   | 133,163           |    | 108,687           |   |
|                                                                                               |   |              |    |              |   |
| Long-term debt,  net of current portion                                                            |   | 24,352            |    | 25,341            |   |
| Notes payable —  related parties                                                              |   | 190,637           |    | 195,472           |   |
|                                                                                               |   |              |    |              |   |
| TOTAL  LIABILITIES                                                                                 |   | 348,152           |    | 329,500           |   |
|                                                                                               |   |              |    |              |   |
| SHAREHOLDERS’  EQUITY                                                                         |   |              |    |              |   |
| Common stock, no  par value:  Authorized 9,375,000 shares  Issued and outstanding 2,103,438 shares |   | 8,479,854         |    | 8,479,854         |   |
|                                                                                               |   |              |    |              |   |
| Paid in Capital:                                                                                   |   | 95,000            |    | 95,000            |   |
| Accumulated  deficit                                                                               |   | [8,046,149        | ]       | [7,972,626        | ]      |
|                                                                                               |   |              |    |              |   |
| TOTAL  SHAREHOLDERS’ EQUITY                                                                   |   | 528,705           |    | 602,228           |   |
|                                                                                               |   |              |    |              |   |
| TOTAL  LIABILITIES & SHAREHOLDERS’ EQUITY                                                 |   | $                 | 876,857 |              | $      | 931,728 |   |

 

 

See accompanying notes toconsolidated

condensedfinancial statements.

 

 

3

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##### **WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY**

 

**CONSOLIDATED CONDENSED STATEMENTS OFOPERATIONS**

**(unaudited)**

 

 
|                                         |   | **THREE  MONTHS ENDED** |       |
|----------------------------------------------|--------|-------------------------|------------|
|                                         |   | **FEBRUARY  28,**       |       | **FEBRUARY 28,** |   |
|                                         |   | **2003**                |       | **2002** |   |
|                                         |   |                    | ** ** |   | ** ** |
| NET SALES                                    |   | $                       | 175,988    |   | $ | 248,913 |   |
|                                         |   |                    |       |   |   |
| COST OF SALES                                |   | 49,869                  |       | 88,762 |   |
|                                         |   |                    |       |   |   |
| GROSS PROFIT                                 |   | 126,119                 |       | 160,151 |   |
|                                         |   |                    |       |   |   |
| OPERATING  EXPENSES                          |   |                    |       |   |   |
| Research and  development                    |   | 37,749                  |       | 41,233 |   |
| Selling                                      |   | 105,935                 |       | 89,134 |   |
| General and  administration                  |   | 51,705                  |       | 68,522 |   |
| Royalties                                    |   | —                  |       | 12,777 |   |
|                                         |   |                    |       |   |   |
| TOTAL OPERATING  EXPENSES                    |   | 195,389                 |       | 211,666 |   |
|                                         |   |                    |       |   |   |
| Operating loss                               |   | [69,270                 | ]          | [51,515 | ] |
|                                         |   |                    |       |   |   |
| OTHER INCOME  (EXPENSE)                      |   |                    |       |   |   |
| Interest expense                             |   | [4,887                  | ]          | [4,346 | ] |
| Interest income                              |   | 634                     |       | 1,679 |   |
| Other income                                 |   | —                  |       | 105 |   |
|                                         |   |                    |       |   |   |
| Loss before  income taxes                    |   | [73,523                 | ]          | [54,077 | ] |
|                                         |   |                    |       |   |   |
| Provision for  income taxes                  |   | [0                      | ]          | [0 | ] |
|                                         |   |                    |       |   |   |
| Net Loss                                     |   | $                       | [73,523    | ] | $ | [54,077 | ] |
|                                         |   |                    |       |   |   |
| Basic and  diluted earnings per common share |   | $                       | [.03       | ] | $ | [.02 | ] |
|                                         |   |                    |       |   |   |
| Weighted average  shares outstanding         |   | 2,103,438               |       | 2,103,438 |   |

 

 

See accompanyingnotes to consolidated

condensed financialstatements.

 

 

4

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**WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY**

 

**CONSOLIDATED CONDENSEDSTATEMENT OF CASH FLOWS**

**(unaudited)**

** **
|                                                                         |   | **THREE  MONTHS ENDED** |    |
|------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                         |   | **FEBRUARY  28,**       |    | **FEBRUARY  28,** |   |
|                                                                         |   | **2003**                |    | **2002** |   |
|                                                                         |   |                    |    |   |   |
| CASH FLOWS FROM  OPERATING ACTIVITIES:                                       |   |                    |    |   |   |
| Net loss                                                                     |   | $                       | [73,523 | ] | $ | [54,077 | ] |
|                                                                         |   |                    |    |   |   |
| Adjustments to  reconcile net loss to net cash used in operating activities: |   |                    |    |   |   |
|                                                                         |   |                    |    |   |   |
| Amortization of  prepaid royalty                                             |   | —                  |    | 4,779 |   |
| Depreciation and  amortization                                               |   | 9,543                   |    | 9,544 |   |
|                                                                         |   |                    |    |   |   |
| Changes in  Operating Assets and Liabilities:                                |   |                    |    |   |   |
|                                                                         |   |                    |    |   |   |
| Increase in  trade accounts receivable                                       |   | [27,640                 | ]       | [53,654 | ] |
| Increase in  inventories                                                     |   | [44,873                 | ]       | [24,815 | ] |
| Increase in  prepaid expenses                                                |   | [17,960                 | ]       | [14,205 | ] |
| Increase in  accounts payable                                                |   | 33,948                  |    | 53,031 |   |
| Decrease in  accrued liabilities                                             |   | [6,635                  | ]       | [10,019 | ] |
|                                                                         |   |                    |    |   |   |
| Net cash used in  operating activities                                       |   | [127,140                | ]       | [89,416 | ] |
|                                                                         |   |                    |    |   |   |
| CASH FLOWS FROM  INVESTING ACTIVITIES:                                       |   |                    |    |   |   |
| Purchase of  property and equipment                                          |   | —                  |    | [755 | ] |
|                                                                         |   |                    |    |   |   |
| Net cash used in  investing activities                                       |   | [0                      | ]       | [755 | ] |
|                                                                         |   |                    |    |   |   |
| CASH FLOWS FROM  FINANCING ACTIVITIES:                                       |   |                    |    |   |   |
| Payments on  capital lease obligations                                       |   | [2,396                  | ]       | [3,341 | ] |
| Payments on  notes payable and notes payable- related parties                |   | [6,265                  | ]       | [9,742 | ] |
|                                                                         |   |                    |    |   |   |
| Net Cash used in  financing activities                                       |   | [8,661                  | ]       | [13,083 | ] |
|                                                                         |   |                    |    |   |   |
| DECREASE IN CASH                                                             |   | [135,801                | ]       | [103,254 | ] |
|                                                                         |   |                    |    |   |   |
| CASH AT  BEGINNING OF PERIOD                                                 |   | 269,037                 |    | 392,608 |   |
|                                                                         |   |                    |    |   |   |
| CASH AT END OF  PERIOD                                                       |   | $                       | 133,236 |   | $ | 289,354 |   |

 

 

See accompanying notes to consolidated

 condensed financial statements.

 

 

5

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**WESTBRIDGERESEARCH GROUP AND SUBSIDIARY**

 

**NOTESTO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**

 

 

**A.            Basisof Presentation:**

 

The consolidated balancesheet as of February 28, 2003, the consolidated statement of operations for thethree-month periods ended February 28, 2003, and February 28, 2002,respectively, and the consolidated statements of cash flows for the three-monthperiods then ended have been prepared by the Company without audit.  In the opinion of management, alladjustments (which include only normal recurring adjustments except as noted inmanagement’s discussion and analysis of financial condition and results ofoperations) necessary to present fairly the financial position, results ofoperations and changes in cash flows have been made.

 

Certain information andfootnote disclosures normally included in financial statements prepared inaccordance with generally accepted accounting principles have been condensed oromitted.  It is suggested that theseconsolidated financial statements be read in conjunction with the financialstatements and notes thereto included in the 2002 Annual Report on Form10-KSB.  The results of operations forthe quarter ended February 28, 2003, are not necessarily indicative of theoperating results for the full year.

 

 

**B.            Reclassification:**

 

None.

 

 

**C.            SubsequentEvents:**

 

None

 

 

 

6

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**WESTBRIDGERESEARCH GROUP AND SUBSIDIARY**

 

**MANAGEMENT’SDISCUSSION AND ANALYSIS**

 

 

**ITEM 2**.  Management’sDiscussion and Analysis of Financial Condition and Results of Operations.

 

 

**Results of Operations:**

 

 

Net product sales for thefirst quarter of fiscal 2003 were $175,988, representing a decrease of 29% overthe same period in 2002.  This decreaseis primarily due to three of the Company’s major distributors (2 foreign and 1domestic) delaying ordering into the Company’s second fiscal quarter due toweather conditions.

 

Cost of sales as apercentage of net sales decreased to 28% for the quarter ended February 28,2003 as compared with 35% for the same period in the prior year.  This decrease is primarily due to themajority of the first quarter sales were of the Company’s highest marginproprietary product formulation.

 

Operating expenses forthe three month period ended February 28, 2003 decreased by 7% from the sameperiod in the prior year.  The decreaseis primarily due to a reduction in royalty expense as the Company exercised itsbuyout option under the provisions of the Development Agreement and theLicensing Agreement in April, 2002.

 

Research and developmentexpenses decreased by $3,484, or 8% over the prior year’s first quarter.   This decrease is primarily due to areduction in research and development salaries during fiscal 2002.

 

Selling expenses as apercentage of net sales for the three month period ended February 28, 2003increased to approximately 60% compared with 35% for the same period in theprior year.  This increase is primarilydue to an additional sales person hired during the second fiscal quarter of2002 and another general and administrative employee taking on sales andmarketing duties which has reallocated her salary to selling expenses fromgeneral and administrative expenses. The increase is also due to reduced sales.

 

General andadministrative expenses during the three month period ended February 28, 2003decreased by $16,817 or 24%, compared with the same period in the prior year.This decrease is primarily due to the reallocation of general andadministrative staff salaries to sales salaries as discussed above and reducedannual meeting expenses during the quarter.

 

 

7

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Net loss for the quarterended February 28, 2003 was $73,523 or $.03 per common share compared with anet loss of $54,077, or $.02 per common share for the same period in the prioryear.

 

Income taxes have notbeen provided for in the accompanying consolidated statements of operations dueto the net operating loss carryforwards generated in prior years that areavailable for carryforward against current year income.

 

 

## **WESTBRIDGE RESEARCHGROUP AND SUBSIDIARY**

 

## **MANAGEMENT’S DISCUSSIONAND ANALYSIS**

 

 

**Liquidity and Capital Resources:**

 

The Company has no material commitments for capitalexpenditures.

 

Working capital was $412,699 at February 28, 2003,down from $482,503 at November 30, 2002.

 

Based on current cash flow projections managementexpects that the Company can continue operations for the current year withoutinfusions of additional cash.

 

 

**Impact of Inflation**

 

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

 

 

**                PART II— OTHER INFORMATION**

 

 

**ITEM 1. **LEGAL PROCEEDINGS

None

 

**ITEM 2.**  CHANGESIN SECURITIES

None

 

**ITEM 3.**  DEFAULTSUPON SENIOR SECURITIES

None

 

**ITEM 4.**  SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS

None

 

 

8

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**ITEM 5.**  OTHERINFORMATION

None

 

**ITEM 6.**  EXHIBITSAND REPORTS ON FORM 8-K

 

                                A.            EXHIBITS

                                                None

 

                                B.            REPORTS ON FORM 8-K

                                                None

 

**WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY**

 

 

**                SIGNATURES**

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon 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:  April 21, 2003

 

 

9

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**Westbridge Research Group,Inc.CERTIFICATION OF PRINCIPLE EXECUTIVE OFFICER AND PRINCIPLEFINANCIAL OFFICER**

**Section 302Certification**

** **

**I,Christine Koenemann, certify that:**

** **

**1. Ihave reviewed this quarterly report on Form 10-QSB of Westbridge ResearchGroup, Inc. (the “registrant”);**

** **

**2. Basedon my knowledge, this quarterly report does not contain any untrue statement ofa material fact or omit to state a material fact necessary in order to make thestatements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this quarterlyreport;**

** **

**3. Basedon my knowledge, the financial statements, and other financial informationincluded in this quarterly report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant asof, and for, the periods presented in this quarterly report;**

** **

**4. Theregistrant’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and we have:**

**a)**              designedsuch disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period inwhich this quarterly report is being prepared;

**b)**             evaluatedthe effectiveness of the registrant’s disclosure controls and procedures as ofa date within 90 days prior to the filing date of this quarterly report(the “Evaluation Date”); and

**c)**              presentedin this quarterly report our conclusions about the effectiveness of thedisclosure controls and procedures based on our evaluation as of the EvaluationDate;

** **

**5. Theregistrant’s other certifying officers and I have disclosed, based on our mostrecent evaluation, to the registrant’s auditors and the audit committee ofregistrant’s board of directors (or persons performing the equivalentfunction):**

**a)**              allsignificant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant’s ability to record, process, summarizeand report financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

**b)**             anyfraud, whether or not material, that involves management or other employees whohave a significant role in the registrant’s internal controls; and

** **

** **

**10**

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** **

**6. Theregistrant’s other certifying officers and I have indicated in this quarterlyreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.**

** **

** **
| Date: April 21, 2003 |   | By:    |                            |
|----------------------|--------|--------|---------------------------------|
|                 |   |   | /s/ Christine Koenemann         |
|                 |   |   | Christine Koenemann,  President |
|                 |   |   | Principal Executive  Officer    |
|                 |   |   | Principal Financial Officer     |

** **

** **

**11**

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