-----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, OcR4UkvXbVGg38AueDIrI+G7ENhg2kUDVw9A01QxN/KrJTqrJPNm1Q6ncdcC27S0 egQ48RB/Pbhf2gFBKRYJVQ== 0001010549-99-000116.txt : 19990517 0001010549-99-000116.hdr.sgml : 19990517 ACCESSION NUMBER: 0001010549-99-000116 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MB SOFTWARE CORP CENTRAL INDEX KEY: 0000714256 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HEALTH SERVICES [8000] IRS NUMBER: 592219994 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-11808 FILM NUMBER: 99623248 BUSINESS ADDRESS: STREET 1: 2225 E RANDOL MILL RD STREET 2: STE 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, 1999 [ ] 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 Securities registered pursuant to Section 12(b) of the Act: Name of each Exchange Title of Each Class on Which Registered Common NASDAQ - OTC BULLENTIN BOARD 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 May 10, 1999, 68,691,971 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, 1999 INDEX PART I - FINANCIAL INFORMATION PAGE NUMBER ----------- Item 1 - Financial Statements Consolidated Balance Sheet March 31, 1999 (Unaudited) and December 31, 1998 (Audited) F-1-F-2 Consolidated Statements of Operations - for the Three Months ended March 31, 1999 (Unaudited) and December 31, 1998 (Audited) F-3-F4 Consolidated Statements of Cash Flows for the Three Months ended March 31, 1999 (Unaudited) and December 31, 1998 (Audited) F-5-F-6 Notes to Consolidated Financial Statements 7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8-9 PART II - OTHER INFORMATION Item 5 - Other Information 10 Item 6 - Exhibits, Financial Statement Schedules and Reports on Form 8-K 10 SIGNATURES 10
MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS March 31, December 31, 1999 1998 ---------- ---------- (Unaudited) CURRENT ASSETS Cash $ 72,597 $ 188,797 Accounts receivable - Medical receivables, net of allowance for doubtful accounts and contractual adjustments of $1,595,052 and $1,810,887 in 1999 and 1998, respectively 904,791 1,003,126 Notes receivable 83,233 51,288 Prepaid expenses 4,200 4,200 ---------- ---------- TOTAL CURRENT ASSETS 1,064,821 1,247,411 ---------- ---------- PROPERTY AND EQUIPMENT, NET 341,686 396,022 ---------- ---------- OTHER ASSETS Goodwill, net of accumulated amortization 296,908 316,806 Software development costs, net of accumulated amortization 139,487 169,376 Deposits and other assets 69,444 73,036 ---------- ---------- TOTAL OTHER ASSETS 505,839 559,218 ---------- ---------- $1,912,346 $2,202,651 ========== ========== (Continued) F-1
MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' DEFICIT March 31, December 31, 1999 1998 ----------- ----------- (Unaudited) CURRENT LIABILITIES Notes payable Related parties $ -- $ -- Other 287,020 303,946 Current maturities of long-term debt Related parties -- -- Other 36,275 54,965 Accounts payable 372,793 483,074 Accrued liabilities 367,465 315,004 Deferred revenues 53,309 57,423 ----------- ----------- TOTAL CURRENT LIABILITIES 1,116,862 1,214,412 LONG-TERM DEBT, NET OF CURRENT MATURITIES Related parties 1,703,808 1,703,808 Other 38,057 56,392 PREFERRED STOCK DIVIDENDS PAYABLE 130,644 85,000 ----------- ----------- TOTAL LIABILITIES 2,989,371 3,059,612 ----------- ----------- SHAREHOLDERS' DEFICIT Series A senior cumulative convertible participating preferred stock; $10 par value; 340,000 shares issued and outstanding in 1998 3,400,000 3,400,000 Common stock; $.001 par value; 100,000,000 shares authorized; 69,100,000 shares issued 69,100 69,100 Additional paid-in capital 1,101,105 1,101,105 Accumulated deficit (5,635,191) (5,415,127) Treasury stock, at cost; 408,029 shares (12,039) (12,039) ----------- ----------- TOTAL SHAREHOLDERS' DEFICIT (1,077,025) (856,961) ----------- ----------- $ 1,912,346 $ 2,202,651 =========== ===========
F-2 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, 1999 March 31, 1998 -------------- --------------- REVENUES Medical income - net of contractual adjustments of $371,993 and $344,590 in 1999 and 1998, respectively $ 565,605 $ 556,308 Service fees 81,239 164,916 Software & maintenance sales 60,671 162,308 --------- --------- TOTAL REVENUES 707,515 883,532 --------- --------- COST OF REVENUES Cost of software and maintenance 4,078 33,094 Cost of medical services 534,774 512,542 --------- --------- TOTAL COST OF REVENUES 538,852 545,636 --------- --------- GROSS PROFIT 168,663 337,896 --------- --------- OPERATING EXPENSES Selling, general and administrative 298,355 520,056 Depreciation and amortization 76,188 85,105 --------- --------- TOTAL OPERATING EXPENSES 374,543 605,161 --------- --------- (LOSS) FROM OPERATIONS (205,880) (267,265) OTHER INCOME (EXPENSES) Gain on sale of asset -- 1,501 Interest expense (45,828) (68,457) Interest income and other 116,644 21,286 --------- --------- TOTAL OTHER INCOME (EXPENSE) 70,816 (45,670) --------- --------- (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST (135,064) (312,935) MINORITY INTEREST IN LOSS -- 161,017 --------- --------- (LOSS) BEFORE PREFERRED STOCK DIVIDEND AND DISCONTINUED OPERATIONS (135,064) (151,918) --------- --------- (Continued) F-3
MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED) Three Months Ended March 31, 1999 March 31, 1998 -------------- -------------- PREFERRED STOCK DIVIDEND $ 85,000 $ -- ------------ ------------ (LOSS) BEFORE DISCONTINUED OPERATIONS (220,064) (151,918) DISCONTINUED OPERATIONS Income from operations of discontinued subsidiary -- 5,868 ------------ ------------ NET LOSS $ (220,064) $ (146,050) ============ ============ INCOME PER WEIGHTED AVERAGE COMMON SHARE Continuing Operations $ -- $ -- Discontinued Operations -- -- ------------ ------------ $ -- $ -- ============ ============ WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING 69,100,000 68,580,000 ============ ============
F-4
MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, 1999 March 31, 1998 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) before discontinued operations $(220,064) $(151,918) Adjustments to reconcile net (loss) to net cash used by operating activities: Depreciation and amortization 76,188 85,105 Gain on sale of assets -- (1,501) Change in allowance for doubtful accounts (215,835) 110,440 Changes in assets and liabilities: Trade accounts receivable 314,170 (222,447) Notes receivable (31,945) 3,489 Prepaid expenses and other -- 2,931 Deposits -- (3,213) Accounts payable (110,281) (173,003) Accrued liabilities 13,105 (61,371) Deferred revenues (4,114) (30,019) --------- --------- NET CASH USED BY CONTINUING OPERATIONS (178,776) (441,507) --------- --------- NET CASH USED BY DISCONTINUED OPERATIONS -- (161,017) --------- --------- NET CASH USED BY OPERATING ACTIVITIES (178,776) (602,524) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (22,448) (1,239) Proceeds from sale of assets -- 1,501 --------- --------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (22,448) 262 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on notes payable Related parties -- -- Other (42,424) (295,212) Proceeds from notes payable Related parties -- -- Other 42,448 300,000 Preferred stock dividends payable 85,000 -- --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 85,024 4,788 --------- ---------
F-5 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED) Three Months Ended March 31, 1999 March 31, 1998 -------------- -------------- (DECREASE) IN CASH $(116,200) $(597,474) CASH AT BEGINNING OF PERIOD 188,797 716,735 --------- --------- CASH AT END OF PERIOD $ 72,597 $ 119,261 ========= ========= SUPPLEMENTAL INFORMATION Cash paid during the period for interest Related parties $ 24,225 $ 19,090 Other 49,427 42,593 --------- --------- $ 73,652 $ 61,683 ========= ========= SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Disposition of assets $ 53,975 $ -- Leases assumed by third party (53,975) -- Sale of Software Assets -- 274,603 Increase in Notes Receivable -- (274,603) --------- --------- $ -- $ -- ========= ========= F-6 NOTE 1: BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial informaiton and with the instructions to Form 10-QSB and Rule 10-01 of of Regulations S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed, there has been no material change in the information disclosed in the notes to consolidated financial statements included in the Annual Report on Form 10-KSB of MB Software Corporation for the year ended December 31, 1998. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included Operating results for the three month period ended March 31, 1999, are not necessarily indicative of the results that may be expected for the year ended December 31, 1999. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General - ------- In the first quarter of 1999, MB Software Corporation (the "Company") continued to focus on the operations of its existing health care businesses and development of its medical practice management software business. In the year ending December 31, 1998, the Company sold numerous health care entities that had proven to be cost-prohibitive to operate. In the first quarter of 1999, the Company continued the process of restructuring the remaining entities in an effort to maximize profits and reduce administrative expenses. The health care division of the Company continued to focus on Company-owned physician practices in Florida. The Company's remaining health care businesses consist of three clinics in Florida and a chiropractic clinic in Las Vegas, Nevada. Florida law, as opposed to the law of many other states, permits the corporate practice of medicine of the type engaged in by the Company. The Florida clinics account for approximately 82% of gross medical revenues. In the first quarter of 1999, the software division of the Company focused on its continued restructuring and new product development pertaining to the health care industry. The Company did not have any material changes in its Year 2000 compliance status from that disclosed in the Form 10Q for the quarter ended June 30, 1998, except that the Company's OneClaim(R) Plus software has met the compliance standards for Medicare and as a result, will meet compliance standards for the industry as a whole. The following summarizes the results of operations for the three month period ended March 31, 1999 and March 31, 1998: 7 Three Months Ended March 31 ---------------------------------------------------------------------------- 1999 % 1998 % ------------------ ------------------ Medical Activities: Gross Revenue $ 938,598 100* $ 900,898 100* Contractual Allowance 371,993 0.40* 344,590 0.38* -------------- -------- -------------- -------- Net Revenue 565,605 60* 556,308 62* -------- -------- Cost of Revenue (534,774) - 0.95** (512,542) -0.92** -------------- -------- -------------- -------- Gross Profit 30,831 0.5** 43,766 0.8** -------------- -------- -------------- -------- Service Fees 81,239 164,916 -------------- -------------- Software Activities: Gross Revenue 60,671 162,308 Cost of Revenue (4,078) (33,094) -------------- -------------- Gross Profit 55,593 129,214 -------------- -------------- GROSS PROFIT 168,663 337,896 Operating Expenses: Selling, General and Administrative: Bad Debt Expense Other General and Administrative 298,355 520,056 -------------- -------------- 298,355 520,056 Depreciation and Amortization 76,188 85,105 Interest Expense (45,828) (68,457 Interest Income and Other 116,644 21,286 Gain on sale of assets -- 1,501 -------------- Loss from Continuing Operations before Minority Interest in 1998 (135,064) (312,935) -------------- --------------
Notes - ----- * Computed as percentage of Gross Medical Revenue ** Computed as percentage of Net Medical Revenue 8 Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998 - ------------------------------------------------------------------------------- Gross medical revenues increased 4% to $937,598 for the three months ended March 31, 1999 as compared to $900,898 for the three months ended March 31, 1998. This increase is partially attributable to patient increases in the Company's Florida clinics and the addition of a third Florida clinic. The contractual allowance adjustment increased .08% to $371,993 for the first quarter of 1999 compared with $344,590 for the three months ended March 31, 1998. In the first quarter of 1999, the Company identified numerous slow paying receivables or receivables that due to changing conditions required reductions in their realizable amounts. These amounts have been recorded in the contractual adjustment of $371,993. The cost of medical revenues increased .04% to $534,774 for the three months ended March 31, 1999 compared to $512,542 for the three months ended March 31, 1998. This modest increase is partially attributable to a short-term increase in labor costs in that additional employees were retained to assist in receivable collection efforts. The gross profit from medical activities decreased 42% to $30,831 for the three months ended March 31, 1999 as compared to $43,766 for the three months ended March 31, 1999. The decrease reflects, in part, the increased contractual allowance percentages increased expenses attendant to the opening of the new clinics and the increased short-term labor costs. The service fees for the first quarter ending March 1999 decreased 51% to $81,239 from $164,916 for the first quarter of March 1998. Service fees are earned in connection with practice management agreements. The reduction in the service fee amounts reflects the Company's determination to reduce practice management arrangements in favor of Company-owned practices. In the quarter ending March 31, 1999, gross revenue from software activities decreased 62% to $60,671 from $162,308 for the first quarter ending March 1998. The revenue reduction reflects reduced technical support fees and reduced software sales, each partially resulting from a period of time allocated to research and development for new products. The Company's gross profit for the first quarter ending March 1999 decreased 50% to $168,663 from $337,896 for the first quarter ending March 1998. As delineated herein, this reduction in gross profit is substantially related to the reduction in service fees as well as the revenue reductions pertaining to the software activities. The other selling, general and administrative expenses decreased by 42% to $298,355 for the three-month period ended March 31, 1999 as compared to $520,056 for the three-month period ended March 31, 1998. This decrease reflects savings resulting from the termination of certain operations and reduction in the due diligence costs associated with acquiring practice management affiliations. The net loss from continuing operations decreased 56.8% to $135,064 for the three month period ended March 31, 1999, as compared to a loss of $312,935 loss for the three months ended March 31, 1998. The reduction evidences the Company's continuing efforts to eliminate those operations that have not been profitable. Liquidity and Capital Resources - ------------------------------- The Company's operations used $178,776 of cash during the three months ended March 31, 1999 compared to a use of cash of $602,524 for the quarter ended March 31, 1998. While there a multitude of factors to which the reduction may be attributed, it is noteworthy that for the quarter ending March 31, 1998, there was a cash usage of $161,017 by discontinued operations without a similar expenditure for the same quarter of 1999. 9 As of March 31, 1999, the Company had working capital deficits of $52,041. The working capital as of March 31, 1998 was $32,999. At March 31, 1999, the Company had cash of $72,597. To increase its cash position, the Company plans on out-sourcing the collection efforts for a portion of significantly delinquent Florida receivables in a multi-party financing/collections arrangement. In the three months ended March 31, 1999, the Company expended $22,448 for the purchase of equipment. The Company does not anticipate any major purchase of equipment for the remaining nine (9) months of 1999. PART II - OTHER INFORMATION ITEM 5. OTHER INFORMATION None 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 - None - ------------------- 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, 1999 /s/ Scott A. Haire ---------------------- Scott A. Haire, Chairman of the Board, Chief Executive Officer and President (Principal Financial Officer) 10 EX-27 2 FDS --
5 0000714256 MB SOFTWARE CORPORATION 1 US DOLLAR 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 1 72,597 0 2,499,753 1,595,052 0 1,064,821 341,686 436,395 1,912,346 1,116,862 0 0 3,400,000 69,100 (1,077,025) 1,912,346 168,663 707,515 538,852 298,355 116,644 0 122,016 0 0 (135,064) 0 85,000 0 (220,064) 0 0
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