-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OFPhzbFiOyXLS1GFAm2FvmfJ9te3K9n0BRW3K7MBuC1hjMhGdQIhDjdZqRTVLV31 rkP4yJdEm1L1xjgmeZtvtg== 0001010549-97-000119.txt : 19970520 0001010549-97-000119.hdr.sgml : 19970520 ACCESSION NUMBER: 0001010549-97-000119 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MB SOFTWARE CORP CENTRAL INDEX KEY: 0000714256 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 592219994 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-11808 FILM NUMBER: 97608543 BUSINESS ADDRESS: STREET 1: 2225 EAST RANDOL MILL RD STREET 2: SUITE 305 CITY: ARLINGTON STATE: TX ZIP: 76011 BUSINESS PHONE: 8177928872 MAIL ADDRESS: STREET 1: 2225 EAST RANDOL MILL RD STREET 2: SUITE 305 CITY: ARLINGTON STATE: TX ZIP: 76011 FORMER COMPANY: FORMER CONFORMED NAME: INAV TRAVEL CORPORATION DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: TWISTEE TREAT CORP DATE OF NAME CHANGE: 19910220 FORMER COMPANY: FORMER CONFORMED NAME: TWISTEE FREEZ CORP DATE OF NAME CHANGE: 19840917 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 1997 -------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT Commission File No. 0-11808 MB SOFTWARE CORPORATION Colorado 59-2219994 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 2225 E. Randol Mill Road - Suite 305 Arlington, Texas 76011-6306 (817) 633-9400 Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for 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 [ ] Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ X ] No [ ] As of March 31, 1997, 67,885,000 shares of the Issuer's $.001 par value common stock were outstanding. Transitional Small Business Disclosure Format Yes [ ] No [ X ] MB SOFTWARE CORPORATION Form 10-QSB Quarter Ended March 31, 1997 INDEX PART I - FINANCIAL INFORMATION PAGE NUMBER Item 1 - Financial Statements Consolidated Balance Sheet March 31, 1997 (Unaudited) 3-4 Consolidated Statements of Operations - for the Three Months ended March 31, 1997 (Unaudited) 5 Consolidated Statements of Cash Flows for the Three Months ended March 31, 1997 (Unaudited) 6 Notes to Consolidated Financial Statements 7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 PART II - OTHER INFORMATION Item 5 - Other Information 9 Item 6 - Exhibits, Financial Statement Schedules and Reports on Form 8-K 9 SIGNATURES 9 2 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET March 31, 1997 ASSETS MARCH, 31 DECEMBER,31 1997 1996 ------------- -------------- CURRENT ASSETS Cash $ 297,607 $ 196,653 Trade accounts receivable 2,751,930 345,452 Less Allowance for Bad Debt (104,775) (33,487) Notes receivable 266,552 10,000 Commissions Receivable 6,000 - Deposits 18,645 18,488 Prepaid Expenses 19,833 19,883 ------------- -------------- Total current assets 3,255,792 556,989 ------------- -------------- PROPERTY AND EQUIPMENT, NET 182,335 63,349 ------------- -------------- OTHER ASSETS Goodwill 823,625 850,109 Software development costs 428,979 394,240 ------------- -------------- Total other assets 1,434,939 1,307,698 ------------- -------------- $ 4,690,731 $ 1,864,687 ============= ============== - Continued - 3 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (continued) March 31, 1997
LIABILITIES AND SHAREHOLDERS' EQUITY March 31, December 31, 1997 1996 --------------- --------------- CURRENT LIABILITIES Notes Payable $ 661,699 $ 242,029 Accounts payable 187,162 149,741 Accrued liabilities 157,812 101,382 Advance on medical receivables 2,069,113 - Other liabilities 157,999 179,000 Other 3,872 - Deferred revenue 122,983 159,026 --------------- --------------- Total current liabilities 3,360,641 831,178 LONG TERM LIABILITIES Note Payable 1,348,932 1,283,808 Other Liabilities 40,000 40,000 --------------- --------------- Total long term liabilities 1,388,932 1,323,808 SHAREHOLDERS' EQUITY Common stock .001 par value;100,000,000 shares authorized; 67,885,000 shares issued 67,885 67,885 Additional paid-in capital 810,320 810,322 Retained Earnings (deficit) (1,156,467) (1,156,467) Treasury stock, at cost;409,577shares (12,039) (12,039) Net Earnings 231,459 - --------------- --------------- Total shareholders' equity (deficit) (58,842) (290,299) --------------- --------------- $ 4,690,731 $ 1,864,687 =============== ===============
4 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Three Months Ended 3/31/97 Ended 3/31/96 REVENUES Service fee & broker income 7,518 $ 1,816 Consulting Fees 23,610 - Software & maintenance sales 425,826 603,099 Other income 4,514 30,008 Medical income 705,852 - ------------- -------------- Total revenues 1,167,320 634,923 COST OF REVENUES Cost of service & broker fees - - Cost of software & maintenance 136,416 102,839 Cost of services 8,706 ------------- -------------- Total cost of revenues 145,122 102,839 ------------- -------------- GROSS PROFIT 1,022,198 532,084 ------------- -------------- OPERATING EXPENSES Selling, general & administrative 708,331 429,839 Depreciation and amortization 56,981 5,616 ------------- -------------- Total operating expenses 765,312 435,455 ------------- -------------- INCOME FROM OPERATIONS 256,886 96,629 OTHER INCOME (EXPENSES) Interest income(expense), net 25,181 (1,038) Other, net 246 (2,211) ------------- -------------- Total other income (expense), net 25,427 (3,249) ------------- -------------- NET INCOME BEFORE TAXES 231,459 93,379 ------------- -------------- PROVISION FOR INCOME TAXES - - NET PROFIT $ 231,459 $ 93,379 ============= ============== Income per weighted-average common share 0 0 ============= ============== Weighted-average common shares outstanding 67,885 49,815 ============= ============== 5 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Three Months ended Mar. 31, ended Mar. 31, 1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net Income(Loss) for the period $ 231,459 $ 93,379 Adjustments to reconcile net income(loss) to net cash used by operating activities: Depreciation 56,981 5,616 Gain on debt extinguishment Gain from reduction of liabilities (8,579) Change in allowance for doubtful accounts (71,288) Changes in assets and liabilities, net of effects of acquisition and disposition Trade accounts receivable (2,439,965) (61,793) Advances on medical receivable l2,069,113 Commission receivable 6,000 Prepaid expenses and other (50) Deposits 157 (700) Accounts payable and accrued liabities (85,821) (72,345) Other liabilities -related parties (21,001) 350,033 Deferred revenues (36,043) 48,722 Other 3,872 1,034 ------------ ----------- Net cash used by operating activities (295,165) 363,946 ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (118,986) (4,725) Software development costs capitalized (45,792) (38,279) Collections on notes receivable 26,631 (9,000) Advances on notes receivable (212,038) ------------ Net cash provided (used) by investing activities (350,185) (52,004) ------------ ----------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on notes payable (18,845) (159,246) Proceeds from notes payable 425,000 454,000 Payment on other liabilities - related parties Change in cash overdraft (14,277) Proceeds from common stock issuance 45,000 Treasury Stock (1,152,459) ------------ ----------- Net cash provided by financing activities (746,304) 325,477 ------------ ----------- INCREASE / (DECREASE) IN CASH 100,954 (13,535) ------------ Cash at beginning of period 196,653 36,535 Cash at end of period $ 297,607 $ 23,000 ============ =========== SUPPLEMENTAL INFORMATION Cash paid during the period for interest $ 25,181 $ 1,038 ============ =========== SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Issuance of treassury stock in settlement of note payable 45000
6 MB SOFTWARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1997 (Unaudited) 1. BASIS OF PRESENTATION Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, although management believes the disclosures herein are adequate to make the information presented not misleading. These interim financial statements should be read in conjunction with the most recent financial statements of MB Software Corporation included in the Company's report on Form 10-KSB for the year ended December 31, 1996. The interim financial information included herein is unaudited; however it reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of financial position, results of operations and cash flows for the interim period. The results of operations for the three months ended March 31, 1997 are not necessarily indicative of the results to be expected for the full year. - -------------------------------------------------------------------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company MB Software Corporation has begun to strengthen its position in healthcare through application of a strategy to augment and leverage its core business. In the quarter ended March 31, 1997, the Company maintained its market-share with its current customer install base of 3,500 users comprised of physicians, dentists and chiropractors, with over 2,350 physical installs. The Company has embarked on its 1997 Strategic Plan, which calls for even greater concentration and quality of customer service within its core business, Santiago SDS, Inc., building Santiago's revenue stream in two untapped areas - Electronic Media Claims (EMC) and electronically prepared physician billing statements. Combined, those elements of business represent significant upside revenue potential, which could add revenues without a corresponding offset in operating expense. While introduction of the Company's Windows-95 version of OneClaim Plus continues to prove its ease of use and efficacy in multiple disciplines of physician, dental and chiropractic practice management in the healthcare marketplace, the Company also recognizes that incremental growth must be achieved through acquisition of compatible and complementary companies. Such growth strategy was successfully implemented during the quarter ended March 31, 1997, wherein two acquisitions were accomplished. Both going concerns were transitioned into the Company's Strategic Plan without major capitalization or restructuring. Both acquisitions, Color Country Health Express, Inc. and North Florida Physical Medicine Associates remain ahead of plan in terms of financial and operational improvement. 7 Results of Operations This section discusses the operational results of the Company and its subsidiaries for the quarterly period ended March 31, 1997. Since January 1, 1997, the Company has been able to exceed its goals in terms of acquisitions, operating improvement and overall profitability. During the quarterly period, MB Software acquired the assets and specific liabilities of two (2) going concerns: o Color Country Health Express, Inc., a Utah-based medical facility comprised of three (3) locations. This acquisition occurred in January. o North Florida Physical Medicine Associates, formerly First Coast Physical Medicine, a Florida-based physical medicine and medical facility with two locations. In the quarterly period ended March 31, 1997, revenues from the consolidated entities improved to $1,167,320, an increase of 84% over the $634,922 reported for the same period in 1996. Revenues were generated from software sales, medical and physical medicine services, and claim servicing fees. This was the fifth consecutive quarter of increased revenues for the Company. Operating expenses again increased at a decreasing rate when measured against the revenue growth for the quarter. Actual operating expenses for the March 31, 1997 quarter were $765,312, 65% of revenues, compared to $435,455, which were 69% of revenues for the quarter ended March 31, 1996. This cost containment and decrease were noteworthy when measured against a higher than normal non-recurring administrative costs associated with the acquisition of the two target entities. Total current liabilities for the period ended March 31, 1997 reflected $3,360,641. For the same period in 1996, total current liabilities were $935,672. The Company's Management continues to fulfill its Strategic Plan which calls for profitability in all operating arms of the Company, acquisition of carefully measured medical targets that are complimentary to its core software business and aggressive cost containment. The Company demonstrated continued profitability through strong operational results and exceeded its revenue targets. Additionally, Management has developed a focus to contain debt and quickly move to reduce financial obligations associated with the consolidations. The company continues to pursue its strategy of forming alliances with major healthcare entities that share common strategies. One such alliance was effected with Envoy-NEIC in March, 1997. The company plans to leverage distribution of software through existing channels and build critical mass of claim volume through the combined efforts of allianced companies, thereby creating a win-win situation that benefits the healthcare industry as a whole. Liquidity and Capital Resources As of March 31, 1997, the Company had total assets of $4,690,731, an increase of 278% over the quarter ended March 31, 1996 which reflected total assets of $1,238,319. Net working capital improved to ($104,849) for the quarter ended March 31, 1997 over ($782,091) for the same period March 31, 1996. 8 PART II - OTHER INFORMATION ITEM 5. OTHER INFORMATION ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K Exhibits - All exhibits are incorporated by reference from prior filings with the Commission. Financial Statements - See Item 1 for financial statements filed with this - -------------------- report. Reports on Form 8-K - Original 8-K was filed Feb. 6, 1997 and an Amendment - ------------------- No.1 was filed April 4, 1997 - -------------------------------------------------------------------------------- SIGNATURES In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MB SOFTWARE CORPORATION Date: May 14, 1997 /s/ Scott A. Haire ---------------------- Scott A. Haire, Chairman of the Board, Chief Executive Officer and President (Principal Financial Officer) EX-27 2
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