-----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, V/y3IEmKNNuJTodSsnV15n/1gule0mx6cjCtMtKGNRn8zCBHqoO4CyTf77gQzlbF 3xDoQYJkAT8SPg+orY1wmw== 0001010549-98-000251.txt : 19980828 0001010549-98-000251.hdr.sgml : 19980828 ACCESSION NUMBER: 0001010549-98-000251 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980819 SROS: NASD 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: 98694048 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. 2054 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 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 [ 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 June 30, 1998, 68,700,000 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 June 30, 1998 INDEX PART I - FINANCIAL INFORMATION PAGE NUMBER Item 1 - Financial Statements Consolidated Balance Sheet June 30, 1998 (Unaudited) F-1,F-2 Consolidated Statements of Operations - for the Six Months and Three Months ended June 30, 1998 and 1997 (Unaudited) F-3 Consolidated Statements of Cash Flows for the Six Months ended June 30, 1998 (Unaudited) F-4,F-5 Notes to Consolidated Financial Statements F-6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 3 PART II - OTHER INFORMATION Item 5 - Other Information 3 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 June 30, December 31, 1998 1997 ---------- ------------ (Unaudited) CURRENT ASSETS Cash $ 885,297 $ 776,079 Accounts receivable - Medical receivables, net of allowance for doubtful accounts of $621,804 and $390,572 in 1998 and 1997, respectively 1,633,430 1,632,742 Trade accounts receivable, net of allowance for doubtful accounts of $11,108 in 1998 and 1997, respectively 616,296 330,634 Notes receivable - current portion 306,161 108,178 Prepaid expenses and other 8,748 20,981 ---------- ---------- TOTAL CURRENT ASSETS 3,449,932 2,868,614 ---------- ---------- PROPERTY AND EQUIPMENT, NET 481,187 500,215 ---------- ---------- OTHER ASSETS Goodwill, net of accumulated amortization 679,699 1,244,022 Software development costs, net of accumulated amortization 232,659 405,966 Notes receivable, net of current portion 255,700 203,569 Deposits and other assets 81,796 83,627 ---------- ---------- TOTAL OTHER ASSETS 1,249,854 1,937,184 ---------- ---------- NET ASSETS OF DISCONTINUED OPERATIONS 483,801 -- ---------- ---------- $5,664,774 $5,306,013 ========== ==========
(Continued) F-1
MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' DEFICIT June 30, December 31, 1998 1997 ---------- ------------ (Unaudited) CURRENT LIABILITIES Notes payable $ 2,117,995 $ 791,410 Current maturities of long-term debt 1,076,762 1,383,711 Accounts payable 562,151 710,446 Accrued liabilities 205,957 359,090 Other liabilities - related party 59,000 89,000 Deferred revenues 68,343 108,658 ----------- ----------- TOTAL CURRENT LIABILITIES 4,090,208 3,442,315 LONG-TERM LIABILITIES Long-term debt, net of current maturities 598,705 580,596 ----------- ----------- TOTAL LIABILITIES 4,688,913 4,022,911 ----------- ----------- MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES 1,585,287 1,754,841 ----------- ----------- COMMITMENTS AND CONTINGENCIES -- -- SHAREHOLDERS' DEFICIT Common stock; $.001 par value; 100,000,000 shares authorized; 68,700,000 and 68,580,000 shares issued, respectively 68,700 68,580 Additional paid-in capital 1,041,505 1,035,625 Accumulated deficit (1,707,592) (1,563,905) Treasury stock, at cost; 409,577 shares (12,039) (12,039) ----------- ----------- TOTAL SHAREHOLDERS' DEFICIT (609,426) (471,739) ----------- ----------- $ 5,664,774 $ 5,306,013 =========== ===========
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 June 30, Six Months Ended June 30, ---------------------------- -------------------------- 1998 1997 1998 1997 ------------ ------------ ------------ ------------ REVENUES Medical income $ 996,131 $ 991,257 $ 1,653,204 $ 1,523,904 Service fee and broker income 177,751 -- 342,667 -- Software & maintenance sales 97,896 394,400 260,204 810,664 Other income -- 13,860 -- 31,713 ------------ ------------ ------------ ------------ TOTAL REVENUES 1,271,778 1,399,517 2,256,075 2,366,281 ------------ ------------ ------------ ------------ COST OF REVENUES Cost of software and maintenance -- 115,485 14,427 212,273 Cost of medical services 694,187 766,981 1,310,431 1,074,447 ------------ ------------ ------------ ------------ TOTAL COST OF REVENUES 694,187 882,466 1,324,858 1,286,720 ------------ ------------ ------------ ------------ GROSS PROFIT 577,591 517,051 931,217 1,079,561 ------------ ------------ ------------ ------------ OPERATING EXPENSES Selling, general and administrative 426,223 465,515 946,279 912,316 Depreciation and amortization 93,707 102,853 182,257 174,972 ------------ ------------ ------------ ------------ TOTAL OPERATING EXPENSES 519,930 568,368 1,128,536 1,087,288 ------------ ------------ ------------ ------------ INCOME (LOSS) FROM OPERATIONS 57,661 (51,317) (197,319) (7,727) OTHER INCOME (EXPENSES) Interest expense (69,726) (91,476) (138,695) (142,984) Other 59,472 -- 82,259 -- ------------ ------------ ------------ ------------ INCOME (LOSS) FROM CONTINUING OPERATIONS 47,407 (142,793) (253,755) (150,711) DISCONTINUED OPERATIONS (Loss) from operations of discontinued subsidiaries (53,581) -- (59,486) -- ------------ ------------ ------------ ------------ (LOSS) BEFORE MINORITY INTEREST (6,174) (142,793) (313,241) (150,711) MINORITY INTEREST 8,537 -- 169,554 -- ------------ ------------ ------------ ------------ NET INCOME (LOSS) $ 2,363 $ (142,793) $ (143,687) $ (150,711) ============ ============ ============ ============ INCOME PER WEIGHTED AVERAGE COMMON SHARE $ .000 $ (.002) $ (.002) $ (.002) ============ ============ ============ ============ WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING 68,670,000 67,885,000 68,631,428 67,885,000 ============ ============ ============ ============
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) Six Months Ended June 30, -------------------------- 1998 1997 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) $ (143,687) $ (150,711) Adjustments to reconcile net (loss) to net cash used by operating activities: Depreciation and amortization 182,257 174,972 Minority interest (169,554) -- Change in allowance for doubtful accounts 231,232 103,725 Changes in assets and liabilities: Trade accounts receivable (517,582) (322,263) Notes receivable 24,489 5,000 Prepaid expenses and other 6,778 (2,574) Deposits -- (157) Accounts payable and accrued liabilities (301,428) 87,437 Other liabilities (30,000) (70,000) Deferred revenues (40,315) (65,554) Other (83,965) -- ----------- ----------- NET CASH (USED) BY OPERATING ACTIVITIES (841,775) (240,125) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (92,752) (138,361) Software development costs capitalized -- (127,820) ----------- ----------- NET CASH (USED) BY INVESTING ACTIVITIES (92,752) (266,181) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on notes payable (1,274,858) (458,819) Proceeds from notes payable 2,312,603 1,887,524 Proceeds from common stock issuance 6,000 -- ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 1,043,745 1,428,705 ----------- -----------
The accompanying notes are an integral part of these financial statements (Continued) F-4 MB SOFTWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED) Six Months Ended June 30 --------------------------- 1998 1997 ------------- ----------- INCREASE IN CASH $ 109,218 $ 922,399 CASH AT BEGINNING OF PERIOD 776,079 196,653 ----------- ----------- CASH AT END OF PERIOD $ 885,297 $ 1,119,052 =========== =========== SUPPLEMENTAL INFORMATION Cash paid during the period for interest $ 35,395 $ 25,181 =========== =========== 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 Sale of software assets 274,603 -- Increase in notes receivable (274,603) -- ----------- ----------- $ -- $ -- =========== =========== The accompanying notes are an integral part of these consolidated financial statements F-5 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 six month period ended June 30, 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. As of July 1998, this purchase is being rescinded. F-6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS In the second quarter of 1998, MB Software Corporation (the "Company") continued its focus on acquiring and operating healthcare businesses that utilize the Company's medical practice management software. Much of the Company's efforts were directed toward integrating the previously acquired practices and streamlining their operations. Specific activities included installation of common practice management systems and reporting mechanisms, realignment of management and staff, and reduction of costs. In addition, the Company continued to explore opportunities for acquiring new businesses and expanding existing operations. The Company is in the process of evaluating its Year 2000 ("Y2K") compliance status. A special committee of the Company's Board of Directors has been appointed to oversee the Company's Y2K compliance efforts. The Company believes that its proprietary medical practice management software, One ClaimPlus(TM), is Y2K compliant. The Company is currently evaluating the effects that the Y2K problem may have on its healthcare operations. Because the Company has not completed this review, it is impossible to predict the effect that the Y2K problem may have on the Company's healthcare operations. A Y2K related problem, whether through a failure of the Company's medical equipment, through a failure of a third party dealing with the Company (such as a utility provider, or a third party payor of a medical claim), or otherwise, could have a material adverse effect on the Company and its results of operation. The Company is attempting to survey its major third party vendors, especially medical equipment manufacturers, regarding their Y2K compliance status. The Company expects to develop a contingency plan for Y2K failures with respect to its medical equipment. Results of Operations This section discusses the results of operations of the Company and its subsidiaries for the quarterly period ended June 30, 1998. In the quarter ended June 30, 1998, revenues from the consolidated entities were $1,271,778 compared to $1,399,517 reported for the same period in 1997. The year to date revenue for 1998 of $2,256,075 compared to $2,366,281 for the year to date of 1997. Cost of revenues and operating expenses for the quarter ended June 30, 1998 were $694,187and $519,930 respectively. Year to date 1998 cost of revenues plus operating expenses exceeded total revenue by ($197,319) as compared to ($7,727) for the same period in 1997. Total current assets increased to $3,449,932. This increase from December 31, 1997 is largely attributable to the increase in receivables. The nature of revenues generated from the subsidiaries acquired during 1998 lends themselves to larger receivables balances. Total liabilities increased to $4,688,913 from the December 31, 1997 balance of $4,022,911. Liquidity and Capital Resources As of June 30, 1998, the Company had total assets of $5,664,774 with current assets of $3,449,932, property and equipment $481,187 and other assets tota1$1,249,854. Total current liabilities at June 30, 1998 were $4,090,208 with total long-term liabilities equaling $598,705. Loans to the Company by certain of its officers, directors and shareholders totaled $3,198,808. Net working capital at the end of the period was ($640,276). The Company is actively engaging in acquisitions of complementary companies, development of software products, and developing greater market share for specific products and services. It is impossible to predict what impact, if any, the above will have on the operating results of the Company. The Company will attempt to enhance cash flows from operations through sales efforts and operating efficiencies and in addition, may attempt to seek financing opportunities to obtain funds in 1998 as necessary to continue the development 3 of the Company, its programs and strategic acquisitions. However, there can be no assurance that the Company will produce additional revenue or profits from these efforts. The Company intends to continue its growth by new acquisitions, adding customers and catering to existing customers as well as aggressively marketing new products and services. PART II - OTHER INFORMATION ITEM 5. OTHER INFORMATION On April 1, 1998, the Company, through a subsidiary, acquired the assets of Victory Medical and Family Care in Austin, Texas for 400,000 shares of the Company's common stock. The subsidiary entered into a services agreement with the physician group in Austin whereby the subsidiary would provide assets and administrative and management services to the practice. Soon after entering into the agreements, disputes arose amoung the parties regarding the representations made in the agreements and the future operations of the practice. The Company filed a lawsuit in Tarrant County, Texas and a counter claim was filed in Travis County, Texas. The parties are currently negotiating a recission of the transaction. On August 11, 1998, the Company entered into a services agreement to provide administrative and management services to a facility providing physical therapy and chiropractic services in Austin, Texas. That facility employs one physician and one chiropractor each of whom were previously affiliated with Victory Medical and Family Care. ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K Exhibits - - -------- Financial Statements - See Item 1 for financial statements filed with this - - --------------------- report. Reports on Form 8-K - - - ------------------- Form 8-K /A filed May 20, 1998; Form 8K filed June 30, 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: August 19, 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 -- WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 0000714256 MB Software Corporation 1 US DOLLARS 3-MOS DEC-31-1998 APR-01-1998 JUN-30-1998 1 885,297 0 2,249,726 632,912 0 3,449,932 481,187 52,950 5,664,774 4,090,208 0 0 0 68,700 0 5,664,774 2,256,075 2,256,075 1,324,858 2,453,394 0 0 138,695 (253,755) 0 (253,755) (59,486) 0 0 (143,687) (0.0 0
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