-----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, QJYh2D/2fnzbmHe2M4BHVeJ86UIbmY3ZO/D19/KE2OX5hjKdnDdGKg+1fGQy34wK gAMVUvFfr471aBZxJYpZrQ== 0001010549-98-000171.txt : 19980611 0001010549-98-000171.hdr.sgml : 19980611 ACCESSION NUMBER: 0001010549-98-000171 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980610 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: SEC FILE NUMBER: 000-11808 FILM NUMBER: 98645661 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 QUARTERLY REPORT 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, 1998 [ ] 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 [ ] No [X] 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 December 31, 1998, 68,580,000 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, 1998 INDEX PART I - FINANCIAL INFORMATION PAGE NUMBER Item 1 - Financial Statements Consolidated Balance Sheet March 31, 1998 (Unaudited) F-1-F-2 Consolidated Statements of Operations - for the Three Months ended March 31, 1998 (Unaudited) F-3-F4 Consolidated Statements of Cash Flows for the Three Months ended March 31, 1998 (Unaudited) F-5-F-6 Notes to Consolidated Financial Statements F-7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 3 PART II - OTHER INFORMATION Item 5 - Other Information 4 Item 6 - Exhibits, Financial Statement Schedules and Reports on Form 8-K 4 SIGNATURES 4 2 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS March 31, December 31, 1998 1997 ----------- ------------ (Unaudited) CURRENT ASSETS Cash $ 135,451 $ 714,927 Accounts Receivable - Medical receivables, net of allowance for doubtful accounts of $530,286 and $390,562 in 1998 and 1997, respectively 1,458,864 1,403,694 Trade accounts receivable, net of allowance for doubtful accounts of $11,108 in 1998 and 1997, respectively 369,199 330,634 Notes receivable - Current Portion 208,178 108,178 Prepaid Expenses and Other 6,040 9,688 ---------- ---------- TOTAL CURRENT ASSETS 2,177,732 2,567,121 ---------- ---------- PROPERTY AND EQUIPMENT, NET 422,173 446,803 ---------- ---------- OTHER ASSETS Goodwill, net of accumulated amortization 621,859 819,080 Software Development Costs, net of accumulated amortization 269,545 405,966 Note Receivable, net of current portion 374,683 203,569 Deposits and Other Assets 83,547 83,627 ---------- ---------- TOTAL OTHER ASSETS 1,349,634 1,512,242 ---------- ---------- NET ASSETS OF DISCONTINUED OPERATIONS 180,457 186,362 ---------- ---------- $4,129,996 $4,712,528 ========== ========== (Continued) F-1 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' DEFICIT March 31, December 31, 1998 1997 ----------- ----------- (Unaudited) CURRENT LIABILITIES Notes Payable $ 605,312 $ 605,312 Current Maturities of Long-Term Debt 1,369,695 1,344,229 Accounts payable 279,205 472,286 Accrued liabilities 224,300 250,261 Other liabilities - related party 59,000 89,000 Deferred revenues 78,638 108,658 ----------- ----------- TOTAL CURRENT LIABILITIES 2,616,150 2,869,746 LONG-TERM DEBT, NET OF CURRENT MATURITIES 537,811 559,680 ----------- ----------- TOTAL LIABILITIES 3,153,961 3,429,426 ----------- ----------- MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES 1,593,824 1,754,841 ----------- ----------- COMMITMENTS AND CONTINGENCIES -- -- SHAREHOLDERS' DEFICIT Common stock; $.001 par value; 100,000,000 shares authorized; 68,580,000 shares issued 68,580 68,580 Additional paid-in capital 1,035,625 1,035,625 Accumulated deficit (1,709,955) (1,563,905) Treasury stock, at cost; 409,577 shares (12,039) (12,039) ----------- ----------- TOTAL SHAREHOLDERS' DEFICIT (617,789) (471,739) ----------- ----------- $ 4,129,996 $ 4,712,528 =========== =========== F-2 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended ---------------------- March 31, March 31, 1998 1997 ---------- --------- REVENUES Medical income $ 657,073 $ 532,647 Service fee and broker income 164,916 -- Software & maintenance sales 162,308 416,264 Other income -- 17,853 --------- --------- TOTAL REVENUES 984,297 966,764 --------- --------- COST OF REVENUES Cost of software and maintenance 33,094 96,788 Cost of medical services 597,577 307,466 --------- --------- TOTAL COST OF REVENUES 630,671 404,254 --------- --------- GROSS PROFIT 353,626 562,510 --------- --------- OPERATING EXPENSES Selling, general and administrative 520,056 446,801 Depreciation and amortization 88,550 72,119 --------- --------- TOTAL OPERATING EXPENSES 608,606 518,920 --------- --------- INCOME (LOSS) FROM OPERATIONS (254,980) 43,590 OTHER INCOME (EXPENSES) Gain on Sale of Asset 1,501 -- Interest expense (68,969) (51,508) Interest income and other 21,286 -- --------- --------- INCOME (LOSS) FROM CONTINUING OPERATIONS (301,162) (7,918) DISCONTINUED OPERATIONS (Loss) from operations of discontinued subsidiary (5,905) -- --------- --------- (LOSS) BEFORE MINORITY INTEREST (307,067) (7,918) MINORITY INTEREST INCOME (LOSS) 161,017 -- --------- --------- NET (LOSS) $(146,050) $ (7,918) ========= ========= (Continued) F-3 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED) Three Months Ended ------------------------- March 31, March 31, 1998 1997 ----------- ----------- INCOME PER WEIGHTED AVERAGE COMMON SHARE Continuing Operations $ -- $ -- Discontinued Operations -- -- ----------- ----------- $ -- $ -- =========== =========== WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING 68,580,000 67,885,000 =========== =========== F-4 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended ----------------------- March 31, March 31, 1998 1997 --------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) $(146,050) $ (7,918) Adjustments to reconcile net income (loss) to net cash used by operating activities: Minority Interest In Loss (161,017) -- Loss from Discontinued Operations 5,905 -- Depreciation and Amortization 88,550 72,119 Gain on Sale of Assets (1,501) -- Changes in assets and liabilities: Trade Accounts Receivable (93,735) (59,300) Notes Receivable 3,489 5,000 Prepaid expenses and other 3,648 (250) Deposits (3,562) (154) Accounts payable and accrued liabilities (219,042) (88,498) Other liabilities (30,000) (30,000) Deferred revenues (30,019) (36,045) --------- --------- NET CASH USED BY OPERATING ACTIVITIES (583,334) (145,046) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (1,239) (125,955) Software development costs capitalized -- (61,725) Proceeds from Sale of Assets 1,501 -- --------- --------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 262 (187,680) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on notes payable (296,404) (443,113) Proceeds from notes payable 300,000 876,398 --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 3,596 433,285 --------- --------- (Continued) F-5 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED) Three Months Ended -------------------------- March 31, March 31, 1998 1997 ------------ ----------- INCREASE (DECREASE) IN CASH (579,476) 100,559 CASH AT BEGINNING OF PERIOD 714,927 196,653 ----------- ----------- CASH AT END OF PERIOD $ 135,451 $ 297,212 =========== =========== SUPPLEMENTAL INFORMATION Cash paid during the period for interest $ 28,969 $ 25,181 =========== =========== SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Issuance of treasury stock in settlement of note payable $ -- $ 45,000 Note Payable -- (45,000) Purchase of Medical Clinics -- (1,933,381) Goodwill -- (34,247) Accounts Payable Assumed -- 223,018 Notes Payable -- 1,744,610 Sale of Software Assets 274,603 -- Increase in Notes Receivable (274,603) -- ----------- ----------- $ -- $ -- =========== =========== F-6 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1: BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principals for interim financial information and with the instructions to Form 10-QSB and Rule 10-01 of Regulations S-X. They do not include all information and notes required by generally accepted accounting principals 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, 1997. 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, 1998, are not necessarily indicative of the results that may be expected for the year ending December 31, 1998. NOTE 2: DISCONTINUED OPERATIONS On April 30, 1998, the Company entered into an agreement to sell its ownership in Sandy Home Health, Inc. (a Utah Corporation). The total sales price was $200,000 payable pursuant to the terms of a promissory note dated May 1, 1998. The promissory note is due May 1, 2001 with monthly interest payments starting June 1, 1998. The interest rate is the prime rate as published in the Wall Street Journal, plus 2% per annum. NOTE 3: ACQUISITIONS On April 1, 1998, the Company purchased the assets and assumed certain liability of Med-Sport Therapy & Rehabilitation Center, Inc. and compensated the previous owners as follows: Amount Due Date Previous Owners ------------- --------------- April 1, 1998 $ 38,000 May 1, 1998 33,000 July 1, 1998 167,000 --------- $ 238,000 ========= On April 1, 1998, the Company entered into a physician coverage and service agreement with Toth Enterprises II, P.A., a Texas professional association doing business as Victory Medical and Family Care and Dr. William G. Franklin. The Company through a subsidiary will provide administrative and management services for the clinic. The assets of Victory Medical and Family Care were purchased by the Company with issuance of 400,000 shares of the Company's common stock. In April 1998, the Company borrowed $1.4 million from Stone Capital pursuant to the terms of a promissory note which gives Healthcare Innovations, LLC the option to convert the note and its 49% ownership interest to preferred stock. F-7 SOFTWARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1998 (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, 1997. 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, 1998 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 as previously announced, continued its transition away from a single-dimensional software company, toward a healthcare company that maximizes its software heritage. The Company owns and manages nine healthcare operations in sites concentrated in Florida, Texas, Nevada, Utah and California. In April 1998, the Company acquired two major clinics with substantial revenue base, while divesting itself of two less cost effective operations. Acquired was the Victory Medical and Family Health Clinic based in Austin, Texas. Victory Medical is a multi-specialty clinic with a strong physical medicine and family practice orientation. The Company acquired a Fort Worth Rehab Clinic as it continues its focus on Physical Medicine and the Rehab business. The Company plans to expand its technology to offer more services that are not being offered in the Clinics at the present time, thereby enhancing the revenue and growth base for both facilities. The Company divested itself of Santiago SDS, Inc., a Newport Beach, California based software business serving billing centers, sole practitioner physicians and multi-specialty clinics. The Company retained ownership to OneClaim Plus(TM), its proprietary practice management software that it continues to use throughout its multi-state operations. Moreover, the Company also sold Sandy Home Health in the quarter ended March 31, 1998 and opted to focus on healthcare operations with greater profit potential and less administrative overhead. Results of Operations Note: The Company will amend its Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 to reflect changes made to its financial statements in connection with the annual audit. The results set forth below for the quarter ended March 31, 1997 represent the results that will be included in the amended Form 10-Q. This section discusses the results of operations of the Company and its subsidiaries for the quarterly period ended March 31, 1998. Revenues in the quarter ended March 31, 1997, inched upward to $984,297, over $966,764 reported in the same quarter, 1997. Revenues were generated primarily from medical services and to less extent from service fees and software sales. Operating Expenses increased to $608,606 in the quarter ended March 31, 1998 compared to 518,920 for the same quarter of 1997, a 17% increase in operating expenses. Said increase was directly attributable to operational realignment of companies. The Company reported a net loss of ($146,050) in the quarter ended March 31, 1998 over the same period in 1997. Major contributors to the shortfall were depreciation, write-downs and credit adjustments. 3 Total current liabilities decreased to $2,616,150 for the quarter ended March 31, 1998 compared to $3,012,424 for the same period in 1997. The Company maintains that a strategy of healthcare acquisitions coupled with cost effective software systems and management are proven and methodology. Liquidity and Capital Resources As of March 31, 1998, the Company reported total assets of $4,129,996 as compared to $4,103,141 for the same period in 1997, Net working capital was ($438,418) for the quarter ended March 31, 1998 for ($512,311) for the quarter ended March 31, 1997. 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 - Form 8-K filed March 23, 1998. - -------------------------------------------------------------------------------- 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: June 9, 1998 /s/ Scott A. Haire ---------------------- Scott A. Haire, Chairman of the Board, Chief Executive Officer and President (Principal Financial Officer) 4 EX-27 2 FDS --
5 0000714256 MB Software Corporation 1 US DOLLARS 3-MOS Dec-31-1997 Jan-01-1998 Mar-31-1998 1 135,451 0 1,828,063 541,394 0 2,177,732 422,173 32,094 4,129,996 2,616,150 0 0 0 68,580 0 4,129,996 984,297 984,297 630,671 1,239,277 0 0 68,969 (307,162) 0 (307,162) (5,905) 0 0 (146,050) (0.00) 0
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