---

---

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 August 31, 2001

Commission file number 2-92261

---

WESTBRIDGE RESEARCH GROUP(Exact name of registrant as specified in its charter)

California(State or other jurisdiction of incorporation or organization)

95-3769474(IRS Employer Identification No.)1150 Joshua Way
Vista, California(Address of principal executive office)

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 August 31,
2001.

---

---

---

PART
IFINANCIAL INFORMATION

ITEM
1FINANCIAL STATEMENTS

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY        CONSOLIDATED CONDENSED BALANCE SHEETS

|                                                                                                   |                               | AUGUST 31,
2001            |                                          | NOVEMBER 30,
2000 |        
|-------------------------------------------------------------------------------------------------- | ----------------------------- | -------------------------- | ---------------------------------------- | ----------------- | -------
|
|ASSETS                                                                                             |                               |                            |                                          |                   |        
|CURRENT ASSETS                                                                                     |                               |                            |                                          |                   |        
|Cash                                                                                               |                               | $                          | 285,201                                  |                   | $      
|Trade accounts receivable, less allowance for doubtful accounts of $15,000 and $5,000 respectively |                               |                            | 244,572                                  |                   |        
|Inventories                                                                                        |                               |                            | 136,469                                  |                   |        
|Prepaid expenses and other current assets                                                          |                               |                            | 27,181                                   |                   |        
|                                                                                                   |                               |                            |                                          |                   |        
|                                                                                                   |                               |                            | Total Current Assets                     |                   |        
|PROPERTY AND EQUIPMENT                                                                             |                               |                            | 566,641                                  |                   |        
|                                                                                                   | Less accumulated depreciation |                            |                                          | [463,053          | ]      
|                                                                                                   |                               |                            |                                          |                   |        
|                                                                                                   |                               | Net Property and Equipment |                                          |                   | 103,588
|PREPAID ROYALTY, net of accumulated amortization of $93,987 and $79,650 respectively               |                               |                            | 101,955                                  |                   |        
|LONG TERM ACCOUNTS RECEIVABLE, net                                                                 |                               |                            | 130,000                                  |                   |        
|                                                                                                   |                               |                            |                                          |                   |        
|TOTAL ASSETS                                                                                       |                               | $                          | 1,028,966                                |                   | $      
|                                                                                                   |                               |                            |                                          |                   |        
|LIABILITIES AND SHAREHOLDERS' EQUITY                                                               |                               |                            |                                          |                   |        
|CURRENT LIABILITIES                                                                                |                               |                            |                                          |                   |        
|Accounts payable                                                                                   |                               | $                          | 32,519                                   |                   | $      
|Accrued expenses                                                                                   |                               |                            | 43,953                                   |                   |        
|Current portion of capital lease obligation                                                        |                               |                            | 13,779                                   |                   |        
|Current portion of long-term debt                                                                  |                               |                            | 3,240                                    |                   |        
|                                                                                                   |                               |                            |                                          |                   |        
|                                                                                                   |                               |                            | TOTAL CURRENT LIABILITIES                |                   |        
|Notes payable  related parties                                                                    |                               |                            | 213,538                                  |                   |        
|Long-term debt                                                                                     |                               |                            | 32,492                                   |                   |        
|Capital lease obligations: net of current portion                                                  |                               |                            | 5,161                                    |                   |        
|                                                                                                   |                               |                            |                                          |                   |        
|TOTAL LIABILITIES                                                                                  |                               |                            | 344,682                                  |                   |        
|                                                                                                   |                               |                            |                                          |                   |        
|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                                                                                |                               |                            | [7,890,570                               | ]                 |        
|                                                                                                   |                               |                            |                                          |                   |        
|                                                                                                   |                               |                            | TOTAL SHAREHOLDERS' EQUITY               |                   |        
|                                                                                                   |                               |                            |                                          |                   |        
|                                                                                                   |                               |                            | TOTAL LIABILITIES & SHAREHOLDERS' EQUITY |                   | $      
|                                                                                                   |                               |                            |                                          |                   |        

See
accompanying notes to consolidated
condensed financial statements.

---

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

|                                                          |                                   | THREE MONTHS
ENDED AUGUST 31 |           | NINE MONTHS
ENDED AUGUST 31 |        
|--------------------------------------------------------- | --------------------------------- | ---------------------------- | --------- | --------------------------- | -------
|
|NET SALES                                                 |                                   | $                            | 250,617   |                             | $      
|COST OF SALES                                             |                                   |                              | 121,145   |                             |        
|                                                          |                                   |                              |           |                             |        
|GROSS PROFIT                                              |                                   |                              | 129,472   |                             |        
|                                                          |                                   |                              |           |                             |        
|OPERATING EXPENSES                                        |                                   |                              |           |                             |        
|                                                          | Research and development          |                              |           | 35,468                      |        
|                                                          | Selling                           |                              |           | 94,757                      |        
|                                                          | General and administration        |                              |           | 61,698                      |        
|                                                          | Royalties                         |                              |           | 12,700                      |        
|                                                          |                                   |                              |           |                             |        
|                                                          |                                   | TOTAL OPERATING EXPENSES     |           |                             | 204,623
|                                                          |                                   |                              |           |                             |        
|                                                          | Operating [loss] income           |                              |           | [75,151                     | ]      
|OTHER INCOME (EXPENSE)                                    |                                   |                              |           |                             |        
|                                                          | Interest expense                  |                              |           | [7,179                      | ]      
|                                                          | Interest income                   |                              |           | 5,708                       |        
|                                                          | Other income                      |                              |           | 59                          |        
|                                                          |                                   |                              |           |                             |        
|                                                          | [Loss] income before income taxes |                              |           | [76,563                     | ]      
|Provision for income taxes                                |                                   |                              | 1,600     |                             |        
|                                                          |                                   |                              |           |                             |        
|                                                          | Net [loss] income                 |                              | $         | [78,163                     | ]      
|                                                          |                                   |                              |           |                             |        
|Basic earnings per common share                           |                                   | $                            | [.04      | ]                           | $      
|                                                          |                                   |                              |           |                             |        
|Weighted average shares outstanding                       |                                   |                              | 2,103,438 |                             |        
|                                                          |                                   |                              |           |                             |        
|Diluted earnings per common share                         |                                   | $                            | [.03      | ]                           | $      
|                                                          |                                   |                              |           |                             |        
|Weighted average shares, options and warrants outstanding |                                   |                              | 2,274,355 |                             |        
|                                                          |                                   |                              |           |                             |        

See
accompanying notes to consolidated
condensed financial statements.

---

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

|                                                                                            |                                         | NINE MONTHS ENDED |        
|------------------------------------------------------------------------------------------- | --------------------------------------- | ----------------- | -------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                       |                                         |                   |        
|Net income                                                                                  |                                         | $                 | [4,235 
|Adjustments to reconcile net income to net cash (used in) provided by operating activities: |                                         |                   |        
|Amortization of prepaid royalty                                                             |                                         |                   | 14,337 
|Depreciation and amortization                                                               |                                         |                   | 27,730 
|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 [used in] provided by operating activities                                         |                                         |                   | [21,461
|                                                                                            |                                         |                   |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                       |                                         |                   |        
|Purchase of property and equipment                                                          |                                         |                   | [9,844 
|                                                                                            |                                         |                   |        
|Net cash used in investing activities                                                       |                                         |                   | [9,844 
|                                                                                            |                                         |                   |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                       |                                         |                   |        
|Payments on capital lease obligations                                                       |                                         |                   | [12,675
|Payments on notes payable and notes payable-related parties                                 |                                         |                   | [17,952
|                                                                                            |                                         |                   |        
|Net Cash used in financing activities                                                       |                                         |                   | [30,627
|                                                                                            |                                         |                   |        
|[DECREASE] INCREASE IN CASH                                                                 |                                         |                   | [61,932
|CASH AT BEGINNING OF PERIOD                                                                 |                                         |                   | 347,133
|                                                                                            |                                         |                   |        
|CASH AT END OF PERIOD                                                                       |                                         | $                 | 285,201
|                                                                                            |                                         |                   |        

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 August 31, 2001, the consolidated statements of operations for the three and nine-month periods ended
August 31, 2001, and 2000, respectively, and the consolidated statements of cash flows for the nine-months 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 consolidated financial statements and notes thereto included in the
2000 Annual Report on Form 10-KSB. The results of operations for the quarter ended August 31, 2001, are not necessarily indicative of the operating results for the full year.

B. Reclassification:

None

C. 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 August 31, 2001 were $250,617, representing a 40% decrease from $415,901 for the same period in the prior
year. For the nine month period ended August 31, 2001, sales were $1,075,039 and represents decrease of 19% from $1,322,604 in the prior year. These decreases are primarily due to the Company's
major distributor experiencing cash flow difficulties which has resulted in a decrease in orders by this distributor during the Company's third fiscal quarter and nine month period ended
August 31, 2001. It is unlikely that this distributor will eventually place orders to make up the majority of the decrease.

Cost
of sales as a percentage of net sales increased to 48% from 45% for the quarter ended August 31, 2001 when compared with the same period in the prior year. For the nine
month period ended August 31, 2001, cost of sales as a percentage of net sales decreased to 36% compared with 37% in the prior year.

Operating
expenses for the three and nine month periods ended August 31, 2001 decreased 12% and increased 2%, respectively, compared with the same periods in the prior year.

Research
and development expenses as a percentage of net sales for the three and nine month periods ended August 31, 2001 were 14% and 10% respectively, compared with 8% and 8%
for the same periods in the prior year. This increase is primarily due to decreased sales.

Selling
expenses during the three month period ended August 31, 2001 decreased by $18,533 or 16%, and increased $6,309 or 2% for the nine month period ended August 31,
2001 when compared with the same periods in the prior year. The three month decrease is primarily due to decreased advertising
during the quarter and the nine month increase is primarily due to an adjustment to the bad debt allowance.

General
and administrative expenses in the three month period ended August 31, 2001 decreased by $9,178 or 13%, and increased $10,738 or 6% for the nine month period ended
August 31, 2001 when compared with the same periods in the prior year. The three month decrease is primarily due to reduced travel costs and office supplies and the nine month increase is
primarily due to increased equipment and building repairs and legal expenses.

Net
loss for the quarter ended August 31, 2001 was $78,163 as compared with net loss of $5,571, for the same period in the prior year. Accordingly, basic earnings per share
decreased to approximately [$.04] for the quarter ended August 31, 2001 compared with approximately $.00 for the quarter ended August 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.

---

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY  MANAGEMENT'S DISCUSSION AND ANALYSIS

Liquidity and Capital Resources:

The Company has no material commitments for capital expenditures.

Working
capital was $599,932 at August 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

A. EXHIBITS



B.
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 KOENEMANNChristine Koenemann, President
Principal Executive Officer
Principal Financial Officer

Date: October 19, 2001

---

QuickLinks