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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of
1934
For the quarterly period ended March 31, 1998
Commission file number 0-29236
MARINE MANAGEMENT SYSTEMS, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 06-0886588
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
470 West Avenue, Stamford, CT, 06902
(Address of Principal Executive Offices)
(203) 327-6404
(Issuer's Telephone Number, Including Area Code)
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 such 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 ___
Number of Shares of Issuer's Common Stock, $.002 par value outstanding as of
March 31, 1998 was 4,421,120
Transitional Small Business Disclosure Format (check one):
Yes __ No x
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MARINE MANAGEMENT SYSTEMS, INC.
Form 10-QSB
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page No.
<S> <C>
Item 1. Financial Statements (unaudited, except as noted)
Balance Sheets, March 31, 1998 and December 31, 1997 (audited) 3
Statements of Operations, Three Months Ending March 31, 1998 4
Statement of Cash Flows, Three Months Ending March 31, 1998 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis or Plan of Operation 11
PART II - OTHER INFORMATION
Item 6. - Exhibits and Reports on Form 8-K 15
Signatures 16
</TABLE>
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MARINE MANAGEMENT SYSTEMS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED)
3/31/98 12/31/97
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<S> <C> <C>
Assets
Current:
Cash $ 35,969 $ 19,150
Accounts receivable 1,093,363 1,400,020
Inventories 16,935 9,044
Prepaid expenses and other 48,892 22,297
------------ ------------
Total current assets 1,195,159 1,450,511
Cash - restricted 650,000 650,000
Property and Equipment, net of accumulated depreciation of $284,740 and $267,268 164,058 181,530
Computer software costs, net of accumulated amortization of $1,967,931 and $1,803,595 2,652,803 2,767,139
------------ ------------
Total Assets $ 4,662,020 $ 5,049,180
============ ============
Liabilities and Stockholders' equity
Current:
Short-term borrowings $ 75,506 $ 85,504
Accounts payable and accrued expenses 857,205 749,072
Subordinated debt - related parties 166,000 166,000
Billings in excess of costs on uncompleted contracts 80,993 149,960
Deferred revenue 298,029 341,824
Customer deposits 52,147 65,749
Current portion of long-term debt and capital lease obligations 37,300 37,300
------------ ------------
Total current liabilities 1,567,180 1,595,409
Long-term debt and capital lease obligations, less current portion 653,553 663,110
Subordinated debt - related parties 500,000 500,000
------------ ------------
Total liabilities 2,720,733 2,758,519
Commitments and contingencies
Stockholders' equity:
Common stock, $.002 par value, 9,000,000 shares authorized, 4,421,120 issued and
outstanding 8,842 8,842
Additional paid-in capital 11,540,352 11,540,352
Accumulated deficit (9,607,907) (9,258,533)
------------ ------------
Total stockholders' equity 1,941,287 2,290,661
Total Liabilities and Stockholders' Equity $ 4,662,020 $ 5,049,180
============ ============
</TABLE>
See accompanying Notes to Financial Statements
Page 3
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MARINE MANAGEMENT SYSTEMS, INC.
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDING
MARCH 31, 1998 AND MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended March 31,
1998 1997
---- ----
<S> <C> <C>
Revenues:
Marine Sales - Software $ 451,326 $ 288,968
Marine Sales - Hardware 50,324 87,612
Marine Sales - Service 224,181 233,575
Hardware Sales - Non Marine 129,965 62,127
Contract Sales 101,668 78,732
----------- -----------
957,464 751,014
Cost of Revenues:
Software and Services 275,412 196,723
Software amortization 164,336 75,000
Hardware 86,956 100,873
Contract 101,668 78,732
----------- -----------
628,372 451,328
Gross profit 329,092 299,686
Operating expenses:
Research and development 95,151 76,606
Selling and administrative 544,548 667,104
Depreciation and amortization 17,473 20,528
----------- -----------
657,172 764,238
Loss from operations (328,080) (464,552)
Other income (expense):
Interest expense - net (21,294) (63,302)
----------- -----------
----------- -----------
Net loss $ (349,374) $ (527,854)
=========== ===========
Basic and diluted loss per share $ (0.08) $ (0.20)
Average number of shares outstanding 4,421,120 2,623,343
</TABLE>
See accompanying Notes to Financial Statements
Page 4
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MARINE MANAGEMENT SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended March 31,
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net (loss) $(349,374) $(527,854)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 181,808 95,526
Accounts receivable
Accounts receivable 306,657 7,133
Inventories (7,891) 9,269
Prepaid expenses and other (26,595) (29,609)
Accounts payable and accrued expenses 108,133 618,668
Billings in excess, deferred revenue and customer deposits (126,364) 4,504
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 86,374 177,637
Cash flows from investing activities:
Capitalized computer software costs (50,000) (342,331)
Acquisitions of property and equipment -- (5,131)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (50,000) (347,462)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of short-term borrowings - net (9,998) --
Payments of long-term debt and capital lease obligations (9,557) (26,386)
Deferred registration costs -- (190,623)
Proceeds from subordinated short-term loans -- 350,000
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (19,555) 132,991
--------- ---------
NET INCREASE (DECREASE) IN CASH 16,819 (36,834)
CASH, BEGINNING OF PERIOD 19,150 58,117
--------- ---------
CASH, END OF PERIOD $ 35,969 $ 21,283
========= =========
Suplemental Disclosures of Cash Flow Information:
Cash paid For:
Interest $ 30,374 $ 11,400
Supplemental disclosure of non-cash investing and
financing activity:
Discount of subordinated short term loan $ -- $ 146,000
</TABLE>
See accompanying Notes to Financial Statements
Page 5
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MARINE MANAGEMENT SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
NOTE 1. NATURE OF BUSINESS
Marine Management Systems, Inc. (the "Company") provides a variety of products
and services related to ship operations and maintenance management. The Company
develops and sells computer software programs, information systems and computer
equipment, as well as provides support and engineering services related to these
products throughout the world.
NOTE 2. BASIS OF PRESENTATION:
(a) The accompanying unaudited financial statements, which are for interim
periods, except the December 31, 1997 balance sheet, do not include all
information contained in the Company's audited financial statements and the
footnotes thereto for the year ended December 31,1997 (the "Financial
Statements"). The December 31, 1997 balance sheet was derived from the audited
Financial Statements. Certain information and footnote disclosures included in
the Financial Statements, which are prepared in accordance with generally
accepted accounting principles, have been condensed or omitted. The accompanying
unaudited financial statements were prepared on a basis consistent with the
Financial Statements.
(b) In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments (which are of a normal recurring nature)
necessary for a fair presentation of the financial statements. 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.
( c ) Summary of Significant Accounting Policies
Computer Software Costs and Amortization
The Company capitalizes the direct costs and allocated overhead associated with
the development and testing of software programs after technological feasibility
has been established. The annual amortization of the capitalized costs is the
greater of the amount computed using the rates that current gross revenues for a
product or products bear to the total of current and anticipated future gross
revenues for that product or products or the straight-line method over the
remaining estimated economic life of the product including
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the period being presented. The establishment of technological feasibility and
the on-going assessment of recoverability of capitalized computer software costs
require considerable judgment by management with respect to certain external
factors, including, but not limited to, anticipated future revenues, estimated
economic life and changes in software and hardware technologies. Research and
development expenditures are expensed in the period incurred.
Revenue and Cost Recognition
Hardware revenues are revenues which are derived from the sale of hardware to
non-marine and marine industry customers.
Software revenues are revenues which are derived from the sale of software to
the marine industry customers. Services revenue are revenues derived from
software support, extended warranty contracts, and consulting services. Software
and services revenues are recognized in the period when the products are
delivered or the services are rendered. Revenues from the sales of extended
warranty contracts are deferred and recognized on a straight-line basis over the
term of the contract.
Revenues for contracts with a term in excess of one year are recognized using
the percentage-of-completion method, measured by percentage of costs incurred to
date to estimated total costs for each contract. Contract costs include all
direct costs and those indirect costs related to contract performance.
Provisions for estimated losses on uncompleted contracts are made in the period
in which such losses are determined. Changes in job performance, job conditions,
and estimated profitability may result in revisions to costs and income and are
recognized in the period in which the revisions are determined. Billings in
excess of costs and estimated earnings on uncompleted contracts represent
billings in excess of revenues recognized on contracts in progress. Revenues for
contracts with a term of less than one year are recognized when either the
services are performed or when the products are delivered.
Loss Per Share of Common Stock
During February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128 "Earnings Per
Share" which replaces the presentation of primary earnings per share ("EPS"),
with basic EPS. It also requires dual presentation of basic and diluted EPS. The
Company adopted SFAS 128 as of January 1, 1997. Loss per common share is
computed on the weighted average number of shares, less treasury stock. If
dilutive, common equivalent shares (common shares assuming exercise of options
and warrants) utilizing the treasury stock method are considered in presenting
diluted earnings per share.
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Recent Accounting Standards
Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive
Income", established standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income is defined
to include all changes in equity except those resulting from investments by
owners and distributions to owners. Among other disclosures, SFAS No. 130
requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be recognized under
current accounting standards as components of comprehensive income and reported
in a financial statement that is displayed with the same prominence as other
financial statements.
Statement of Financial Accounting Standards No. 131 "Disclosures about Segments
of an Enterprise and Related Information", which supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise" establishes
standards for the way the public enterprises report information about operating
segments in annual financial statements and requires reporting of selected
information about operating segments in interim financial statements issued to
the public. It also establishes standards for disclosures regarding products and
services, geographical areas and major customers. SFAS No 131 defined operating
segments as components of an enterprise about which separate financial
information is available that is evaluated regularly by Management in deciding
how to allocate resources and in assessing performance.
Both SFAS Nos. 130 and 131, which the Company adapted January 1, 1998, require
comparative information for earlier years to be restated. The adoption of SFAS
No. 130 and 131 did not have an effect on the Company's financial statements or
disclosures.
Statement of Position 97-2 "Software Revenue Recognition", which supersedes
Statement of Position 91-1 "Software Revenue Recognition" provides guidance on
when revenue should be recognized and in what amounts for licensing, selling,
leasing, or otherwise marketing computer software. The Company adapted Statement
of Position 97-2 effective January 1, 1998. The adoption of SOP 97-2 did not
have a material effect on the Company's financial position or results of
operations.
NOTE 3. INITIAL PUBLIC OFFERING
The Company completed an initial public offering underwritten by Whale
Securities Co., L. P. on May 1, 1997 of 1,440,000 shares of Common Stock of the
Company at a price of $5.00 per share and 1,656,000 warrants at a price of $.10
per warrant. Each warrant will be exercisable effective May 1, 1998, to purchase
one share of Common Stock at $5.50 per share. The IPO raised $5,476,294 net of
commissions, fees, registration and other associated costs.
8
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NOTE 4. SUBSEQUENT EVENTS
On April 9, 1998, the Company received $700,000 in a bridge loan from an
investor, in the form of a bridge note which is convertible into shares of
common stock at $1.00 per share. The bridge note bears interest at 10% and is
due September 30, 1998.
The investor intends to replace the bridge note by the purchase of a $2,000,000
senior convertible note, convertible into common stock of the Company at $1.00
per share on or before September 30, 1998.
Upon the issuance of the convertible bridge note and the senior convertible
note, the Company may recognize additional interest expense to the extent, if
any, the market value of the Company's common stock exceeds the stated $1.00 per
share conversion price.
The Senior Convertible Note will bear interest at 10% and have a maturity of
five years from the date of issuance. The issuance of senior convertible notes
is subject to the approval of stockholders.
Item 2. Management's Discussion And Analysis Or Plan Of Operation
This report contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Statements in this report,
which are not historical facts, are forward-looking statements. Such
forward-looking statements, including those concerning the Company's
expectations for liquidity, demand and sales of new and existing products,
industry and market segment growth and market and technology opportunities, all
involve risks and uncertainties. Actual results may differ materially from such
forward-looking statements for reasons including, but not limited to, changes in
the marine transportation industry, delays or problems in the development and
commercialization of the Company's products, customer interest in and acceptance
of the Company's current and new products and services, the impact of
competitive products and services and technological changes affecting the
Company's products and products under development.
Overview
The Company has significantly reduced its expenditures on development
as modules of the Windows-based version of Fleet Manager Enterprise Series of
products were completed in 1997, and are now being marketed. Development of
product enhancements continues, however, but at a lower rate. While the Company
expects significant growth in revenues from the marketing of these products,
there can be no assurance that the Windows-based products will achieve market
acceptance or that any introduction of Windows-based products by the Company's
competitors will not exert downward price pressure on the Company's Fleet
Manager Enterprise Series of products.
9
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Starting in mid-1995, the Company began the development of the
Integrated Shipboard Information Technology (ISIT) platform for the maritime
industry. This platform is designed to permit the integration of a myriad of
ship equipment and informational systems under a common protocol, including
proposed ISIT-compliant versions of the Company's Fleet Manager Enterprise
Series products currently under development, and to provide a standard interface
to shore-based systems. When completed, the ISIT platform is intended to provide
users with a common communication path for all of their ISIT-compliant software
applications, enabling them to use most satellite services and a variety of
telephone networks and services, including the Internet. ISIT is also intended
to provide a means for collecting and storing a ship's operating data (for
instance the data found in the various control systems on the ship's bridge and
engine room which operate with their own proprietary protocols) in a common
database and format.
The Company completed the initial development and began testing of the
ISIT platform in the second quarter of 1997. It is postponing the initial
marketing of the ISIT platform and ISIT-compliant versions of its Windows-based
Fleet Manager Enterprise Series products until the end of 1998, electing to
initially work with selected companies to build specific interfaces to ISIT. The
Company believes this will lead to a stronger product and the ability as part of
its marketing strategy to provide demonstrations of successful commercial
applications of ISIT. While the Company believes the ISIT platform and ISIT
compliant versions of its Fleet Manager Enterprise Series will result in
significant growth in revenues, there can be no assurance that the development
of the ISIT platform or of ISIT-compliant versions of the Fleet Manager
Enterprise Series or other products will be completed and ready for market in
early 1999, or that any product resulting from such development will adequately
meet the requirements of the marketplace or achieve market acceptance. While the
ISIT development project is expected to be completed by the end of the second
quarter 1999, a related, partially U.S. Government funded project, Ship Life
Cycle Support Infrastructure (SLCSI) is expected to continue beyond that time.
The purpose of this project is to develop new business practices aboard ship to
provide ship owners and ship operators with comprehensive life cycle support
services to increase the economic life and operational safety of the ship. The
ISIT communications interface and the American Bureau of Shipping (ABS) ship
data record will be tested within this project. The success of the Company in
developing, introducing, selling or supporting the ISIT platform, ISIT-compliant
versions of the Fleet Manager Enterprise Series or additional ISIT
platform-related products will depend on a variety of factors in addition to the
timely and successful completion of product design and development, including
timely and efficient implementation of the manufacturing process; effective
sales, marketing and customer services; and the absence of performance problems
or other difficulties that may require design modifications and related expenses
and hinder market acceptance. If the market for the ISIT platform fails to
develop, develops more slowly than anticipated or if ISIT-compliant products do
not achieve
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market acceptance, the Company's business, results of operations and financial
condition will be materially adversely affected.
The Company anticipates that the investment in development and research
resources and expansion of sales and marketing efforts will result in
improvement in the Company's performance in 1998 and beyond. However, management
cautions that the Company's future level of sales and potential profitability
will depend on many factors, including an increased demand for the Company's
existing products, the ability of the Company to develop and sell new products
and product versions to meet customers' needs, the ability of management to
control costs and successfully implement the Company's strategy, and the ability
of the Company to develop and deliver products in a timely manner.
In the fourth quarter of 1997, management implemented a cost reduction
program which cut the Company's expenditures to levels where it believes it can
reach break-even at significantly more modest revenues. The Company will
continue to monitor expenses to keep them in line with actual sales.
Results Of Operations
Three Months Ending March 31, 1998 Compared to Three Months Ending March 31,
1997.
Revenues. Revenues for the first quarter of 1998 of $957,464 were
$206,452 higher than the same period in 1997 representing a 27.5% increase. This
increase was due primarily to a significant increase in software sales, coupled
with an increase in non-marine hardware sales and contract revenues, more than
offsetting a modest decline in marine service revenues and a decline in marine
hardware sales .
The Company's software revenues of $451,326 for the first quarter of
1998, increased $162,358, or 56.2% from $288,968 for the comparable period in
1997, primarily reflecting increased sales of the Fleet Manager Enterprise
Series. Total hardware revenues of $180,289 ($50,324 for marine and $129,965 for
non marine hardware revenues) for the first quarter of 1998 increased $30,550,
or 20.4%, from $149,739 ($87,612 for marine and $62,127 for non-marine hardware
revenues) for the first quarter of 1997. Increases in non-marine hardware
revenues reflect an increase in hardware warranty revenues as well as an
increase in hardware sales to one non-marine customer. Decreases in marine
hardware revenues reflect a reduced percentage of software purchasers that
purchased hardware with their software in this period. Contract revenues of
$101,668 for the first quarter of 1998 increased 29.1% from $78,732 for the
comparable period in 1997 reflecting the startup of the U.S. Government partial
funding of the Ship Life Cycle Support Infrastructure (SLCSI) project.
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Cost of Revenues. Costs of revenues increased 39.2% to $628,372 in the
first quarter of 1998 from $451,328 in the first quarter of 1997, primarily due
to higher sales during this period coupled with increased software amortization.
Also, higher contract sales, which are reimbursed by the government at the
Company's cost, adversely impacted the cost of revenues for the first quarter of
1998 compared to the first quarter of 1997.
Gross profit and margins. The Company generated gross profits in the
first quarter of 1998 of $329,092, a 9.8% increase over last year's first
quarter gross profit of $299,686. This was due primarily to higher sales. Gross
margins decreased in the first quarter of 1998 to 34.4% from 39.9% in the first
quarter of 1997 reflecting the significant increase (119.1%) in software
amortization to $164,336 for the first quarter of 1998 as compared to $75,000
for first quarter 1997. The increase in amortization reflects the completion of
the Windows-based version of MMS products in late 1997 and the related
amortization of the Fleet Manager Enterprise Series capitalized software. Higher
contract costs, as discussed above, also negatively impacted the gross margins
for the first quarter of 1998 compared to the first quarter of 1997.
Operating expenses. Operating expenses for the first quarter of 1998
decreased $107,066, or 14.0%, to $657,172 from $764,238 in the same period in
1997 reflecting primarily the decrease in selling and administration expenses of
$122,556 from 1997 to 1998. This decrease represents the results of cost
containment efforts implemented in the fourth quarter of 1997.
Other income (expense). Net interest expenses of $21,294 for the first
quarter of 1998 reflect a decrease of $42,008, or 66.4%, from interest expenses
in the first quarter of 1997 of $63,302. Increased borrowings during the first
quarter of 1997 compared to the same period in 1998, accomplished through short
term notes which were paid down out of the proceeds of the Company's initial
public offering in May 1997, account for this difference.
Net Loss. As a result of the foregoing, the Company's first quarter net
loss decreased to $349,374 in 1998 from $527,854 in 1997, a 33.8% improvement.
EBITDA, or net earnings (loss) before interest, taxes depreciation and
amortization was a loss of $146,273 for the first quarter of 1998 compared with
a loss of $396,023 for the first quarter of 1997, representing a 63.1%
improvement. The substantial improvement in EBITDA reflects higher sales and
lower expenses, as explained above. Included in the net loss is higher software
amortization expenses coinciding with the launch of the Company's Windows-based
Fleet Manager Enterprise Series, which must be deducted from the net loss to
arrive at EBITDA. The EBITDA loss calculation is summarized as follows:
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<TABLE>
<CAPTION>
1st Quarter 1st Quarter
1998 1997
---- ----
<S> <C> <C>
Net Loss ($349,374) ($527,856)
Depreciation 17,471 20,528
Software Amortization 164,336 75,000
Interest 21,294 63,302
--------- ---------
EBITDA ($146,273) ($396,026)
</TABLE>
Liquidity And Capital Resources
At March 31, 1998 the Company had cash of $35,969 compared to March 31,
1997 cash levels of $21,283. Negative working capital at the end of the first
quarter of 1998 of $372,021 compared to the negative working capital level at
the end of the first quarter 1997 of $2,707,653, primarily due to the impact of
the completion of the Company's initial public offering in May 1997. The Company
used the $5,476,294 of net proceeds from its initial public offering to pay down
the Company's debt and accounts payable, pay current expenses, and to invest in
continued software development of its Fleet Manager Enterprise Series of
Windows-based software and the development of the ISIT platform technology. The
Company's cash requirements to cover developmental and organizational costs
required to establish new products has been reduced significantly as new
products were completed.
Net cash provided from operating activities in the first quarter of
1998 of $86,374 compared to net cash provided from operating activities of
$177,637 for the same period in 1997. The net cash provided from operating
activities in 1998 were primarily generated by accounts receivable collections
and from an increase in accounts payable, somewhat offset by reduced billings in
excess of costs and reduced customer deposits.
Net cash used in investing activities in the first quarter of 1998 of
$50,000 compared to net cash used in investing activities of $347,462 in the
first quarter of 1997. The net cash used in investing activities in both 1997
and 1998 was used in the development of new product software which was
capitalized. The Company's cash requirements to fund developmental expenses from
year to year incurred in connection with the establishment of new products have
decreased as the Windows-based Fleet Manager Enterprise Series was completed.
Net cash used in financing activities of $19,555 in the first quarter
of 1998 compared to net cash provided by financing activities of $132,991 in the
same period in 1997. Ordinary repayments of short term loans and lease
obligations caused the net cash used in financing activities in 1998. In 1997,
short term loans which were received as
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bridge loans to the Company prior to the initial public offering, provided the
financing funds in the first quarter.
On April 9, 1998, the Company borrowed $700,000 as a bridge loan from
an investor, in the form of a bridge note, which is convertible into shares of
common Stock at $1.00 per share, subject to adjustments under certain
circumstances. This bridge note bears interest at 10% and is due September 30,
1998. The Company and the investor have entered into an agreement to replace the
bridge note by the investor's purchase of a $2,000,000 Senior Convertible Note,
convertible into Common Stock of the Company at $1.00 per share, subject to
adjustment under certain circumstances, on or before September 31, 1998. The
senior convertible note will bear interest at 10% and have a maturity of five
years from the date of issuance. The issuance of the senior convertible note is
subject to the approval of stockholders and the satisfaction of other
conditions. Although Management believes that a majority of stockholders will
approve the issuance of the senior convertible note, there can be no assurance
that this transaction will be completed. Upon issuance of the bridge note and
the senior convertible note, the Company may recognize additional interest
expense to the extent, if any, the market value of the Company's Common Stock
exceeds the conversion price of such notes.
The Company believes that the $700,000 bridge loan will be sufficient
to meet the Company's cash requirements during the period of the bridge loan.
Furthermore, if the issuance of the $2,000,000 senior convertible note is
consummated, the Company believes that the additional proceeds will be
sufficient to meet the Company's cash requirements and commitments through
April, 1999. In the event the additional financing is not consummated, or if the
Company's plans change or prove to be inaccurate, the Company will be required
to seek additional financing. There can be no assurance that any additional
financing will be available to the Company, on commercially reasonable terms, or
at all. The failure to obtain any needed financing would have a material adverse
effect on the Company.
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PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibits are filed herewith:
11. Statement re: Computation of Per Share Earnings
27. Financial Data Schedule
(b) Reports on Form 8-K. No reports on Form 8-K were filed in the quarter ended
March 31, 1998.
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MARINE MANAGEMENT SYSTEMS, INC
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MARINE MANAGEMENT SYSTEMS, INC
(Registrant)
Dated: May 14, 1998 By: /s/ Michael P. Barney
---------------------
Michael P. Barney
President and Chief Executive Officer
Dated: May 14, 1998 By: /s/ Robert D. Ohmes
-------------------
Robert D. Ohmes
Executive Vice President and
Chief Financial Officer
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Exhibit 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
MARINE MANAGEMENT SYSTEMS, INC.
EARNINGS PER SHARE
MARCH 31, 1998 AND MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Method - FAS 128, prior year restated
1998 1998 1997 1997
Actual Weighted Average Actual Weighted Average
------ ---------------- ------ ----------------
<S> <C> <C> <C> <C>
Common shares outstanding - beginning 4,421,120 4,421,120 2,701,110 2,701,110
Less: receivable shares - - (77,767) (77,767)
---------- -----------
Common shares outstanding - basic EPS 4,421,120 4,421,120 2,623,343 2,623,343
----------
Net loss for period $ (349,374) $ (527,854)
----------- -----------
Basic and diluted loss per share $ (0.08) $ (0.20)
=========== ===========
Prior stated loss per share n/a $ (0.18)
===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for the quarter ended March 31, 1998 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CURRENCY> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 35,969
<SECURITIES> 0
<RECEIVABLES> 1,193,363
<ALLOWANCES> 100,000
<INVENTORY> 16,935
<CURRENT-ASSETS> 1,195,159
<PP&E> 448,798
<DEPRECIATION> 284,740
<TOTAL-ASSETS> 4,662,020
<CURRENT-LIABILITIES> 1,567,180
<BONDS> 500,000
0
0
<COMMON> 8,842
<OTHER-SE> 1,941,287
<TOTAL-LIABILITY-AND-EQUITY> 4,662,020
<SALES> 957,464
<TOTAL-REVENUES> 947,464
<CGS> 628,372
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 657,172
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,294
<INCOME-PRETAX> (349,374)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (349,374)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> (0.08)
</TABLE>
