-----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, JY16ZfeBvP1iFZGafCfqZp3Gudq0sy01mmmdOwQ9SRy1ESIpJrqyki3Vju/mQqg8 GzqbtVKjCPiMeX9QUMCRJg== /in/edgar/work/0001010549-00-000638/0001010549-00-000638.txt : 20001117 0001010549-00-000638.hdr.sgml : 20001117 ACCESSION NUMBER: 0001010549-00-000638 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MB SOFTWARE CORP CENTRAL INDEX KEY: 0000714256 STANDARD INDUSTRIAL CLASSIFICATION: [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: 771392 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 0001.txt 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: September 30, 2000 ------ [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT Commission File No. 0-11808 MB SOFTWARE CORPORATION Colorado 59-2220004 (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 October 31, 2000, 69,200,000 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 September 30, 2000 INDEX PART I - FINANCIAL INFORMATION PAGE NUMBER Item 1 - Financial Statements Consolidated Balance Sheet September 30, 2000 (Unaudited) and December 31, 1999 (Audited) F1-F2 Consolidated Statements of Operations - for the Three and Nine Months ended September 30, 2000 (Unaudited) F-3 Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2000 (Unaudited) F-4 Notes to Consolidated Statements F-5 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 3-4 PART II - OTHER INFORMATION Item 5 - Other Information 4-5-6 Item 6 - Exhibits, Financial Statement Schedules and Reports on Form 8-K 6 SIGNATURES 6 2
MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS ------ September 30, December 31, 2000 1999 ------------- ------------ (Unaudited) (Audited) Cash $ -- $ 26,078 Medical receivables, net allowance for doubtful accounts and contactual allowances of $972,689 and $822,692 in 2000 and 1999, respectively 589,359 713,625 Notes receivable 275,245 177,721 Prepaid expenses 19,067 4,131 ---------- ---------- Total current assets 883,671 921,555 ---------- ---------- PROPERTY AND EQUIPMENT, NET 132,515 178,525 ---------- ---------- Note receivable - shareholder 350,000 350,000 ---------- ---------- Total assets $1,366,186 $1,450,080 ========== ==========
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MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' DEFICIT ------------------------------------- September 30, December 31, 2000 1999 ----------- ----------- (Unaudited) (Audited) CURRENT LIABILITIES Cash Overdraft $ 35,356 $ -- Current maturities of notes payable 1,519,714 1,057,925 Current maturities of capital leases 1,434 17,434 Accounts payable 303,547 402,410 Accrued liabilities 359,387 346,639 Other liabilities 20,811 -- ----------- ----------- Total current liabilities 2,240,249 1,824,408 LONG TERM DEBT Capital leases 1,662 3,050 ----------- ----------- Total long term liabilities 1,662 3,050 ----------- ----------- TOTAL LIABILITIES 2,241,911 1,827,458 SHAREHOLDERS' DEFICIT Series A senior cumulative convertible particpating preferred stock; $10 par value; 340,000 shares issued and outstanding in 2000 and 1999; dividends in arrears 2000 $640,644, and 3,400,000 3,400,000 1999, $385,644 Undesignated preferred stock; $10 par value; 660,000 shares authorized; none issued -- -- Common stock .001 par value;150,000,000 shares authorized; 69,200,000 shares issued in 2000 and 1999 69,200 69,200 Additional paid-in capital 1,182,382 1,103,005 Accumulated deficit (5,515,268) (4,937,544) Treasury stock, at cost; 408,029 shares (12,039) (12,039) ----------- ----------- Total shareholders' deficit (875,725) (377,378) ----------- ----------- $ 1,366,186 $ 1,450,080 =========== ===========
F2
MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED Three Months Ended Nine Months Ended -------------------------------------- ------------------------------------- September 30, 2000 September 30, 1999 September 30, 2000 September 30,1999 ------------------ ------------------ ------------------ ----------------- REVENUES Medical income - net of contractual Adjustments of $356,090 and $17,474 and $1,083,712 and $745,369 in 2000 and 1999, respectively $ 523,502 $ 528,906 $ 1,628,573 1,626,561 Service fees 2,484 -- 2,743 -- ----------- ----------- ----------- ----------- Total revenues 525,986 528,906 1,631,316 1,626,561 COST OF REVENUES Cost of medical services 398,244 304,993 1,193,118 947,376 ----------- ----------- ----------- ----------- Total cost of revenues 398,244 304,993 1,193,118 947,376 ----------- ----------- ----------- ----------- GROSS PROFIT 127,742 223,913 438,198 679,185 OPERATING EXPENSES Selling, general & administrative 302,680 426,210 902,331 1,250,687 Depreciation and amortization 13,553 19,576 42,178 57,179 ----------- ----------- ----------- ----------- Total operating expenses 316,233 445,786 944,509 1,307,866 ----------- ----------- ----------- ----------- LOSS FROM OPERATIONS (188,491) (221,873) (506,311) (628,681) OTHER INCOME (EXPENSE) Interest income and other 9,676 (5,987) 28,964 -- Interest Expense (39,227) 58,261 (99,476) -- Franchise Tax (900) -- (900) ----------- ----------- ----------- ----------- Total other income (expense) (30,451) 52,274 (71,412) -- ----------- ----------- ----------- ----------- LOSS FROM CONTINUING OPERATIONS (218,942) (169,599) (577,723) (628,681) DISCONTINUTED OPERATIONS Income (loss) from operations of discontinued subsidiary -- 108,249 -- 115,600 ----------- ----------- ----------- ----------- NET LOSS $ (218,942) $ (61,350) $ (577,723) $ (513,081) =========== =========== =========== =========== Loss from continuing operations $ (218,942) $ (169,599) $ (577,723) $ (628,681) Plus: Cumulative preferred stock dividends (85,000) (85,000) (255,000) (255,000) ----------- ----------- ----------- ----------- Loss available to common shareholders $ (303,942) $ (254,599) $ (832,723) $ (883,681) =========== =========== =========== =========== BASIC AND DILUTED EARNINGS (L0SS) PER SHARE Continuing Operations $ (0.00) $ (0.01) $ (0.01) $ (0.01) Discontinued Operations -- 0.00 -- 0.00 Weighted-average common shares outstanding 69,200,000 69,100,000 69,200,000 69,100,000
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MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) NINE MONTHS NINE MONTHS ENDED ENDED September 30, 2000 September 30, 1999 ------------------ ------------------ CASH FLOWS FROM OPERATING ACTIVITIES Loss from continuing operations $ (577,723) $ (628,681) Adjustments to reconcile loss from continuing operations to cash used in operating activities: Depreciation 42,178 57,179 Change in allowance for doubtfull accounts -- (1,248,968) Changes in assets and liabilities: Accounts receivable (124,266) 1,346,507 Prepaid expenses 14,936 (5,257) Accounts payable (98,862) (9,463) Accrued liabilities 112,937 (67,245) ----------- ----------- Net cash used in continuing operations (630,800) (555,928) Net cash provided by (used in) discontinued operations 79,859 (115,600) ----------- ----------- Net cash used in operating activities (550,941) (671,528) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment -- (13,514) Issuance of preferred stock dividends -- 300,644 Proceeds from sale of business segment -- 550,052 Payments on notes receivable (44,894) -- Issuance of notes receivable 90,000 (228,037) ----------- ----------- Net cash provided by investing activities 45,106 609,145 CASH FLOWS FROM FINANCING ACTIVITIES Payments on capital leases (17,388) (70,677) Payments on notes payable (2,010) (183,926) Proceeds from new borrowings 364,799 180,439 Proceeds from notes payable related parties 99,000 10,000 Bank overdraft 35,356 -- ----------- ----------- Net cash provided by (used in) financing activities 479,757 (64,164) ----------- ----------- NET DECREASE IN CASH (26,078) (126,547) Cash at beginning of period 26,078 203,977 ----------- ----------- Cash at end of period $ -- $ 77,430 =========== =========== SUPPLEMENTAL INFORMATION Cash paid during the period for interest to rela$ed party -- $ 24,225 Cash paid during the period for interest to others 41,673 49,427 ----------- ----------- $ 41,673 $ 73,652 =========== ===========
F4 NOTE 1: BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Rule 10-01 of Regulation 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, 1999. 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 nine-month period ended September 30, 2000, are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. NOTE 2: ORGANIZATION AND NATURE OF OPERATIONS The financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business. The Company has continuously incurred losses from operations and has a working capital deficit. The appropriateness of using the going concern basis is dependent upon the Company's ability to obtain additional financing or equity capital and, ultimately, to achieve profitable operations. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management plans to raise capital by obtaining financing through debt, private placement or conversion of Series A preferred stock. The Company believes that these actions will enable the Company to continue until its operations become profitable. NOTE 3: RELATED PARTIES Included in notes payable is related party payables of $220,000 and $889,000 for 2000 and 1999, respectively. NOTE 4: SALE OF CLINIC Effective September 1, 2000, the Company sold its South Florida Medical Center Clinic to a company wholly owned by two shareholders of the Company. The sale was accomplished by an assumption of net liabilities by the related company of approximately $79,000. The net affect of the transaction was recorded as a contribution to capital. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General - ------- During the third quarter of 2000, MB Software Corporation (the "Company") continued operations of its Florida health care clinics and pursued development of online financial services for health care providers. The health care division of the Company continued to focus on Company-owned physician practices in Florida. Florida law permits the corporate management practice of medicine of the type engaged in by the Company. The Company owns three clinics, each located in Florida. The following summarizes the results of operations for the three-month and the nine-month period ended September 30, 2000 and 1999. Three Months Ended September 30, 2000 Compared to Three Months Ended September - -------------------------------------------------------------------------------- 30, 1999 - -------- Revenue less contractual adjustments resulting from medical activities decreased 0.01% from $528,906 for the three-month period ended September 30, 1999 to $525,986 for the three-months ended September 30, 2000. The cost of medical revenues increased 30.57% to $ 398,244 for the three months ended September 30, 2000, compared to $304,993 for the three months ended September 30, 1999. The Company is currently reviewing operational guidelines as part of an overall strategy to reduce costs. 3 The Company's gross profit for the third quarter decreased 75.28% to $127,742 for the third quarter ended September 30, 2000 from $ 223,913 for the third quarter ending September 1999. The Company is of the belief that the operational costs of the healthcare clinic in South Florida were prohibitive in relations to the profits generated thereby resulting in decreased gross profits. It is anticipated that the closure of the South Florida clinic will result in an increase in gross profits The Company's selling, general and administrative expenses decreased 40.81% to $302,680 for the three months ended September 30, 2000 as compared to $426,210 for the third quarter ending September 30, 1999. These reductions contributed to the decreased expenses. The net loss on operations decreased 17.71% to $188,491 for the three-month period ended September 30, 2000 as compared to a loss of $221,873 for the three months ended September 30, 1999. The reduction in the net loss is partially attributable to increased operational efficiency. Nine Months Ended September 30, 2000 Compared to Nine Months Ended September 30, - -------------------------------------------------------------------------------- 1999 - ---- The gross medical revenues increased 14.35% to $2,712,285 for the nine-month period ended September 30, 2000, compared to $2,371,930 for the nine-month period ended September 30, 1999. This minimal increase is partially attributable to an increase in patient volume. The cost of medical revenue increased 25.93% to $1,193,118 for the nine-month period ended September 30, 2000, as compared to $947,376 for the nine-month period ended September 30, 1999. The increased is due to costs attendant to the operations of South Florida Medical Center. This healthcare clinic was closed effective August 31, 2000. . Gross profit decreased 54.96% to $679,185 for the nine-month period ending September 30, 1999 as compared to $438,198 for the nine- months period ending September 30, 2000. This reduction in gross profits reflects the significant cost associated with South Florida Medical Center. This clinic was closed August 31 2000. The Company's selling, general and administrative expenses decreased 38.60% to $902,331 for the third quarter ending September 30, 2000 as compared to $1,250,687 for the third quarter ending September 30, 1999. The savings of $348,356 represents the reductions in administrative expenses and the closing of the South Florida Medical Center. As such, this expense category is anticipated to remain at a reduced level. Net operating loss decreased 24.17% to $506,311 for the nine-month period ended September 30, 2000, as compared to $628,681 for the nine-month period ended September 30, 1999. This reduction in loss reflects other reduced amounts for the nine-month period ending September 30, 2000. These amounts include the reduced cost of medical revenue; reduced amount of selling, general and administrative expenses; and the reduction in depreciation and amortization. Liquidity and Capital Resources - ------------------------------- The Company's operations used $26,078 of cash during the nine-months ended September 30, 2000 compared to a use of cash of $126,547 for the nine-months ended September 30, 1999. As of September 30, 2000, the Company had a working capital deficit of $1,356,578, compared to the September 30, 1999 working capital of $287,827. At September 30, 2000, the Company had a cash overdraft of $35,356. PART II - OTHER INFORMATION Item 5. Other Information. The strategy of the Company continues to be to create a national physical medicine network by utilizing a four-point approach consisting of: o Development and implementation of a comprehensive pain management and prevention program including nutritional supplements; o increasing the number of clinics in which the Company has an interest, either through the means of acquisition, ground-floor development, or innovative partnering arrangements; o contracting with insurers for "total episode responsibility," and o the incorporation of leading-edge information technology within the healthcare sector. 4 INFORMATION TECHNOLOGY Medical information technology is the cornerstone of the Company's strategy to increase revenue. The Company's information technology incorporates three independent yet complementary facets: An Internet-based comprehensive healthcare system operated on the Healthcare Innovations, LLC ISP; PatientMed 2000, a leading-edge Internet appliance that will feature physician websites and on-line marketing of various vitamin and mineral supplements, and a Microsoft Windows(R) based Practice Management Software System. PatientMed 2000 Effective July 20, 2000, the Company entered into an agreement with Screen.Phone.net Inc. whereby the Company acquired an exclusive license in connection with PatientMed 2000_. PatientMed 2000_ is a ScreenPhone - an appliance incorporating a telephone, alphanumeric keyboard, modem and touch screen, to provide users with telephone-based Internet access. PatientMed 2000 provides users with an expanded array of Internet and telephone services as well as extensive applications and service packages specifically tailored to each segment of the healthcare market. PatientMed 2000_ facilitates and features an improved two-way mode of communication and an information delivery system between the physician and patient. By touching one icon on the screen, the patient is immediately connected to the Internet. Once connected, the patient may "chat" on-line with the physician or access information via a secure e-mail address provided to each patient. In a real-time communication dynamic, clinical data may be transmitted and assessments and interventions made without the necessity of a patient office visit. Similarly, the patient may access the clinic e-mail address to schedule appointments, obtain certain lab results, order clinic nutritional products and obtain medical information and services directly related to the Company clinics. Significantly, PatientMed 2000 affords the clinic direct access to insurance companies. The clinic may use PatientMed 2000 to access and provide insurance information in two-way real-time communications with participating on-line insurance companies. There is a three-fold market for the PatientMed 2000. Prototypes for the PatientMed 2000 will be utilized in all operational venues in the Company's clinics. This will afford the Company the substantial benefit of evaluating and further enhancing PatientMed 2000 in its intended environment. The second market for the PatientMed 2000 includes medical clinics and ancillary healthcare facilities throughout North America. The third market arena is comprised of patient and other individual and entity users. There are a substantial number of individuals in the U.S. that are informed consumers concerning injury prevention and nutritional benefits. Many are baby-boomers, a unique group of individuals with the resources and needs tailored to the Company's specific venues. There is also a robust consumer market in the United States for fitness-related services including those attendant to injury prevention and nutritional supplements. The growth potential in the second and third markets appears to be substantial. According to IDC, a division of International Data Group, in their report The Worldwide Information Appliance Market 1999-2004, the author projects that worldwide Internet appliance shipments will grow from 11 million units in 1999 to over 89 million units in 2004. IDC predicts that U.S. unit shipments of lower-cost, transportable consumer information appliances will outnumber those of consumer PC's by 2002. The IDC anticipates that while the costs for Internet appliances are expected to begin to drop significantly as the market matures, the worldwide value of Internet appliance shipments will grow from $2.4 billion in 1999 to more than $17 billion in 2004. The Healthcare Innovations, LLC ISP Clinics acquiring the PatientMed 2000 may also acquire a personalized, custom web site to be housed on the ISP to be provided by Healthcare Innovations, LLC. The ISP will host a unique, new and exclusive medical domain. From the domain the clinic will be able to refer patients to the personalized physician web site. Each such web site will contain a comprehensive marketing unit to facilitate the purchase of vitamins and selected herbs promulgated by the Company. Windows-based(R) Practice Management Software System The Company will have a software system available to work in conjunction with PatientMed 2000. Once complete, the software will have the following capabilities: Complete practice management, including billing and collections; flexible appointment scheduling; extensive claims tracking capability; selective patient demographic reporting; simple to use interface; seamless integrated electronic claims/statements; fully customized superbills; state of the art Internet connectivity; and unlimited fee schedule maintenance. 5 PAIN MANAGEMENT The Company's four-point approach incorporates development and implementation of a comprehensive pain management and prevention program. The Company's premise for this goal is providing superior pain management care to its patients through utilization of standardized "best practice outcomes" or clinical pathways established throughout the Company and consistent with accepted standards of medical practice. This will include a complementary nutritional products line. CLINIC GROWTH The nexus of the four points focuses on increasing the number of clinics in which the Company has a qualitative as well as financial interest. To expand the Company's clinic base, the Company intends to utilize innovative partnering arrangements. The Company will only partner with professionals that share the Company's vision of providing superior service and experience to patients. This will include medical doctors, osteopaths and chiropractors. The Company may also consider acquisition of existing clinics and the controlled development of new practices in selected cities. TOTAL EPISODIC CARE The Company has developed strategic partnerships with insurers in which the Company-managed clinicians will have clinical and financial responsibility for total episodic care. The Company currently has structured an alliance with United Healthcare and Humana, major healthcare forces in markets wherein the Company clinics transact business. As a product of the alliance, the Company acquired one of the few Pre-Approved Pain Management care contracts in the United States. For episodes such as low-risk, spinal -related injury, the Company clinicians will receive global payments covering not only professional services, but also facility and ancillary care. This arrangement will enable clinicians to share in the healthcare and economic value created by improving care across the entire spectrum of services. With this four-point strategy, the Company will continue to build a nationwide organization to provide superior healthcare services for patients as well as economic value for its shareholders. ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K Exhibits - 10.1 - -------- 10.2 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: 16th November, 2000 /s/ Scott A. Haire ---------------------- Scott A. Haire, Chairman of the Board, Chief Executive Officer and President (Principal Financial Officer) 6 -----END PRIVACY-ENHANCED MESSAGE-----