INTERNATIONAL MONETARY SYSTEMS LTD /WI/

In January 2016, the Company repurchased the remaining 723 shares to which the common stock guarantee agreement related at a cost of $21,702, paid in trade dollars. The shares were retired directly to authorized and unissued status. 

In accordance with a board approved stock buyback plan, during the first three months of 2016, the Company purchased 1,100 shares, at a cost of $12,085, in open market and private transactions. The repurchased shares were placed in treasury.

Operating expenses in the quarter ended March 31, 2016 were $2,807,189, a decrease of $158,274 or 5.3% compared to the first quarter of 2015. This decrease is primarily due to decreased administrative costs and lower amortization expense as a number of the membership lists acquired in prior years become fully amortized.

The Company generated an operating loss of $87,758 for the quarter, compared to an operating loss of $103,002 in 2015.  After adjusting for interest and income taxes, there was a net loss for the quarter of $59,359 compared to a net loss of $73,766 in the first quarter of 2015.  

On March 31, 2016, there was a working capital deficit of approximately $117,000 compared to a deficit of approximately $232,000 at March 31, 2015. A working capital deficit at the end of the first quarter is typical for the Company due to the somewhat cyclical nature of the business. We believe that current cash needs can be met with the present cash balance and from working capital generated over the next 12 months. Additionally, the Company has letters of credit with various financial institutions with unused borrowing capacity of approximately $317,000, which may be drawn as needed.