-----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, LE5gpCupLrJ2hhAn+JdV0MIeg/81nt2XZiQaQ+n3+hiZhgeWZp9QJD7Ak06LYRHt ooFaiL9Sagz5X6uV2AR5RQ== 0001010549-98-000242.txt : 19980817 0001010549-98-000242.hdr.sgml : 19980817 ACCESSION NUMBER: 0001010549-98-000242 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19980814 SROS: NASD 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/A SEC ACT: SEC FILE NUMBER: 000-11808 FILM NUMBER: 98688290 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/A 1 AMENDED QUARTERLY REPORT U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A [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 [ ] 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, 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, 1996 (Unaudited) F-1 Consolidated Statements of Operations - for the Three Months ended March 31, 1997 (Unaudited) F-3 Consolidated Statements of Cash Flows for the Three Months ended March 31, 1997 (Unaudited) F-4 Notes to Consolidated Financial Statements F-6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations F-7 PART II - OTHER INFORMATION Item 5 - Other Information 3 Item 6 - Exhibits, Financial Statement Schedules and Reports on Form 8-K 3 SIGNATURES 3 2 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS March 31, December 31, 1997 1996 ----------- ---------- (Unaudited) CURRENT ASSETS Cash $ 297,212 $ 196,653 Accounts receivable - Medical receivables, net of allowance for doubtful accounts of $103,725 in 1997 483,018 -- Trade accounts receivable, net of allowance for doubtful accounts of $33,487 and $33,487, respectively 1,694,750 311,965 Notes receivable - current portion 5,000 10,000 Prepaid expenses and other 20,133 19,883 ---------- ---------- TOTAL CURRENT ASSETS 2,500,113 538,501 ---------- ---------- PROPERTY AND EQUIPMENT, NET 299,250 63,349 ---------- ---------- OTHER ASSETS Goodwill, net of accumulated amortization 856,972 850,109 Software development costs, net of accumulated amortization 428,161 394,240 Deposits and other assets 18,645 18,488 ---------- ---------- TOTAL OTHER ASSETS 1,303,778 1,262,837 ---------- ---------- $4,103,141 $1,864,687 ========== ========== The accompanying notes are an integral part of these consolidated financial statements. (Continued) F-1 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' DEFICIT March 31, December 31, 1997 1996 ----------- ------------ (Unaudited) CURRENT LIABILITIES Notes payable $ 2,323,592 $ 209,123 Current maturities of long-term debt 31,208 32,906 Accounts payable 250,899 149,741 Accrued liabilities 134,742 101,382 Other liabilities - related party 149,000 179,000 Deferred revenues 122,983 159,026 ----------- ----------- TOTAL CURRENT LIABILITIES 3,012,424 831,178 LONG-TERM LIABILITIES Long-term debt, net of current maturities 1,348,932 1,283,808 Other liabilities 40,000 40,000 ----------- ----------- TOTAL LIABILITIES 4,401,356 2,154,986 ----------- ----------- COMMITMENTS AND CONTINGENCIES -- -- SHAREHOLDERS' DEFICIT Common stock; $.001 par value; 100,000,000 shares authorized; 67,885,000 shares issued 67,885 67,885 Additional paid-in capital 810,322 810,322 Accumulated deficit (1,164,383) (1,156,467) Treasury stock, at cost; 409,577 shares (12,039) (12,039) ----------- ----------- TOTAL SHAREHOLDERS' DEFICIT (298,215) (290,299) ----------- ----------- $ 4,103,141 $ 1,864,687 =========== =========== The accompanying notes are an integral part of these consolidated financial statements. F-2 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended ---------------------------- March 31, March 31, 1997 1996 ------------ ------------ REVENUES Medical income $ 532,647 $ -- Service fee and broker income -- 1,816 Software & maintenance sales 416,264 603,099 Other income 17,853 30,008 ------------ ------------ TOTAL REVENUES 966,764 634,923 ------------ ------------ COST OF REVENUES Cost of software and maintenance 96,788 102,839 Cost of medical services 307,466 -- ------------ ------------ TOTAL COST OF REVENUES 404,254 102,839 ------------ ------------ GROSS PROFIT 562,510 532,084 ------------ ------------ OPERATING EXPENSES Selling, general and administrative 446,801 429,839 Depreciation and amortization 72,119 5,616 ------------ ------------ TOTAL OPERATING EXPENSES 518,920 435,455 ------------ ------------ INCOME FROM OPERATIONS 43,590 96,629 OTHER INCOME (EXPENSES) Interest expense (51,508) (1,038) Other -- (2,211) ------------ ------------ NET (LOSS) INCOME $ (7,918) $ 93,379 ============ ============ INCOME PER WEIGHTED AVERAGE COMMON SHARE $ -- $ -- ============ ============ WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING 67,885,000 49,815,000 ============ ============ The accompanying notes are an integral part of these consolidated financial statements. F-3 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, March 31, 1997 1996 ---------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (7,918) $ 93,379 Adjustments to reconcile net (loss) income to net cash used by operating activities: Depreciation and amortization 72,119 5,616 Changes in assets and liabilities: Trade accounts receivable (59,300) (61,793) Notes receivable 5,000 -- Prepaid expenses and other (250) -- Deposits (154) (700) Accounts payable and accrued liabilities (88,498) (72,345) Other liabilities (30,000) 350,033 Deferred revenues (36,045) 48,722 Other -- 1,034 --------- --------- NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES (145,046) 363,946 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (125,955) (4,725) Software development costs capitalized (61,725) (38,279) Change in notes receivable -- (9,000) --------- --------- NET CASH (USED) BY INVESTING ACTIVITIES (187,680) (52,004) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on notes payable (443,113) (159,246) Proceeds from notes payable 876,398 454,000 Change in cash overdraft -- (14,277) Proceeds from common stock issuance -- 45,000 --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 433,285 325,477 --------- --------- The accompanying notes are an integral part of these consolidated financial statements. (Continued) F-4 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED) Three Months Ended -------------------------- March 31, March 31, 1997 1996 ----------- ----------- INCREASE (DECREASE) IN CASH $ 100,559 $ (13,535) CASH AT BEGINNING OF PERIOD 196,653 36,535 ----------- ----------- CASH AT END OF PERIOD $ 297,212 $ 23,000 =========== =========== SUPPLEMENTAL INFORMATION Cash paid during the period for interest $ 25,181 $ 1,038 =========== =========== SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Purchase of medical clinics (1,933,381) -- Goodwill (34,247) -- Accounts payable assumed 223,018 -- Notes payable 1,744,610 -- ----------- ----------- $ -- $ -- =========== =========== The accompanying notes are an integral part of these consolidated financial statements. F-5 MB SOFTWARE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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, 1996. 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, 1997, are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. NOTE 2: ACQUISITION In February 1997, the Company acquired two medical clinics, one in Utah and one in Florida. The Utah clinic, Color Country Health Express, Inc., has three (3) locations; and the Florida clinic, North Florida Physical Medicine Associates, has two (2) locations. F-6 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company Software Corporation has begun to strengthen its position in healthcare through application of 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 embarked on its 1997 Strategic Plan which called for even greater concentration and the quality of customer service within its core business, Santiago SDS, Inc. and build 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, to the point of adding materially to profitability 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, dentists and chiropractic practice management in the healthcare market place, the Company also recognizes that incremental growth consistent with projected revenue and profitability targets must be achieved through acquisition of compatible and complementary companies. Such strategies were successfully impacted (?) during the quarter ended March 31, 1997 wherein two acquisitions were accomplished. Both going concerns were transitioned into the Company's Strategic Plan which called for near-term and long-term profitability, without major capitalization or total rebuild. Both acquisitions, Color Country Health Express, Inc. and North Florida Physical Medicine Associates remain ahead of plan in terms of financial and operational improvement. 2. The Company remains focused on its Plan to position all its operating entities so as to benefit from federal and state healthcare legislation. Inflation rates for 1997 continue in check and pose no threat to the Company's operations or strategies. Results of Operations This section discusses the results of operations 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 $966,764, an increase of 52% over $634,922 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 continued to increase at a decreasing rate when measured against the revenue growth for the quarter. Actual operating expenses for the March 31, 1997 quarter were $518,920, 54% of revenues, compared to $435,455, which were 69% of revenues for the quarter ended March 31, 1996. This cost containment and decrease included a higher than normal non-recurring administrative cost associated with the acquisition of the two target entities. Total current liabilities for the period ended March 31, 1997 reflected $3,012,424. For the same period in 1996, total current liabilities were $935,672. The Company's Management continues to fulfill a strategic plan which called for profitability in all operating arms of the Company acquisition of carefully measured medical targets, that would be complimentary to its core software business and aggressive cost containment, despite acquisition costs which traditionally elevate administrative costs. The Company demonstrated continued profitability through strong operational results and exceeded revenue targets. Additionally, Management has developed a focus to contain debt and quickly move to reduce financial obligations associated with the consolidations. (?) Additionally, the company continues to pursue its strategy of forming an alliance 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. Liquidity and Capital Resources As of March 31, 1997, the Company had total assets of $4,103,141, and increase of 231% over the quarter ended March 31, 1996 which reflected total assets of $1,238,319. Net working capital improved to ($512,311) for the quarter ended March 31, 1997 over ($782,091) for the same period March 31, 1996. F-7 PART II - OTHER INFORMATION ITEM 5. OTHER INFORMATION On January 5th, 1996, in connection with the restructuring of the Company's liabilities, Robert T. Shaw was issued an unsecured Promissory Note in the amount of $455,000 at 8% interest maturing in December 1997. Mr. Shaw also purchased 4,500,000 shares of treasury stock for $45,000. The proceeds were used to restructure short term liabilities and enhance the Company's current software developments. 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 - No reports were filed on Form 8K during this period. 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: ______, 1997 /s/ Scott A. Haire ---------------------- Scott A. Haire, Chairman of the Board, Chief Executive Officer and President (Principal Financial Officer) 3 -----END PRIVACY-ENHANCED MESSAGE-----