UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 1999.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to
__________
Commission File Number: 2-89616
Consolidated Medical Management, Inc.
(Exact name of Registrant as specified in charter)
Montana 82-0369233
State or other jurisdiction of IRS Employer I.D. No.
incorporation or organization
11829 Florida Blvd., Baton Rouge, LA 70815
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (504) 292-3100
Check whether the Issuer (1) has filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act 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 fling requirements for the past 90 days. (1) Yes
[X] No [ ] (2) Yes [X] No [ ]
State the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date: At May 5, 1999, there were
6,349,838 common shares of the Registrant outstanding.
Consolidated Medical Management, Inc.
Baton Rouge, Louisiana
Table of Contents
Part I - Financial Information
Page
Item 1. Financial Statements 1
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5
Report of Independent Accountants 15
Item 2. Management's Discussion and
Analysis of Financial Condition and Results
of Operations 16
Part II - Other Information
Item 2. Change in Securities 18
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 20
Signature 20
Part I
Financial Information
Item 1. Financial Information
The consolidated financial statements for Consolidated Medical Management
Company, Inc. (the Company) included herein are unaudited but reflect, in
management's opinion, all adjustments, consisting only of normal recurring
adjustments, that are necessary for a fair presentation of the Company's
financial position and the results of its operations for the interim periods
presented. Because of the nature of the Company's business, the results of
operations for the three months ended March 31, 1999 are not necessarily
indicative of the results that may be expected for the full fiscal year. The
financial statements included herein should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1998 (1998 Form 10-KSB).
The consolidated financial statements included herein have been subjected to a
limited review by Roberts, Cherry and Company, independent accountants for the
Company, whose report is included herein.
<PAGE>
Consolidated Medical Management, Inc.
(A Montana Corporation)
Consolidated Balance Sheets
(Unaudited)
March 31, 1999 December 31,
1998
Assets
Current Assets
Cash $ 35,070 $ 25,540
Receivables , net 208,985 166,869
Prepaid Expenses 15,903 4,315
Notes Receivable 116,000 140,673
Total Current Assets 375,958 337,397
Property and Equipment, net 333,975 336,298
Other Assets 133,946 139,743
Total Assets $ 843,879 $ 813,438
Liabilities and Stockholders' Equity
(Deficit)
Current Liabilities
Notes Payable - Current Portion $ 87,507 $ 88,532
Capital Lease Obligation
Payable - Current Portion 86,266 83,406
Convertible Debentures and Notes
Payable - Current Portion 415,000 415,000
Accounts Payable 237,228 140,456
Accrued Expenses 31,289 138,101
Total Current Liabilities 857,290 865,495
Notes Payable - Long Term Portion 2,612 2,613
Capital Lease Obligation Payable
- Long-Term Portion 187,893 221,156
Total Long Term Liabilities 190,505 223,769
Total Liabilities 1,047,795 1,089,264
Stockholders' Equity
(Deficit)
Common Stock
$.001 par value, 50,000,000
shares authorized, 6,347,838
shares issued and outstanding
as of March 31, 1999 and
5,496,057 shares issued and
outstanding as of December 31,
1998 6,348 5,496
Additional Paid-in-Capital 1,937,499 1,854,173
Retained Earnings (Deficit) (2,147,763) (2,135,495)
Total Stockholders' Equity
(Deficit) (203,916) (275,826)
Total Liabilities and Stockholders'
Equity (Deficit) $843,879 $813,438
The accompanying notes and are an integral part of the consolidated financial
statements.
<PAGE>
Consolidated Medical Management, Inc.
(A Montana Corporation)
Consolidated Statements of Operations (Unaudited)
Three Months ended March 31,
1999 1998
Revenues $308,376 $ -
Operating Expenses
Personnel Costs 53,245 -
Consulting 112,335 -
Depreciation and Amortization 3,964 -
Legal and Professional 87,634 -
Office Expense 47,963 2,821
Occupancy 8,752 -
Total Operating Expenses 313,893 2,821
Income (Loss) from Operations (5,517) (2,821)
Other Income (Expenses)
Other 9,069 -
Interest Expense (15,823) -
Interest Income 12 -
(6,742) -
Income (Loss) before Income Taxes (12,259) (2,821)
Income Tax Expense - -
Net Income (Loss) $(12,259) $(2,821)
Net Income (Loss) per Share $(0.0023) $(0.001)
The accompanying notes and are an integral part of the consolidated financial
statements.
<PAGE>
Consolidated Medical Management, Inc.
Baton Rouge, Louisiana
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months ended
March 31, 1999 March 31, 1998
Cash Flows from Operating
Activities:
Net Income (Loss) ($ 12,259) ($ 2,481)
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by Operating
Activities:
Depreciation and Amortization 3,964
Non Cash Consulting and
Services Paid by Stock Issue 84,168
(Increase) Decrease in
Receivables (42,116)
(Increase) Decrease in Prepaid
Expenses (11,588)
(Increase) Decrease in Other
Assets 4,156
Increase (Decrease) in Accounts
Payable 96,773
Increase (Decrease) in Interest
Payable to Related Party 2,481
Increase (Decrease) in Accrued
Expenses (106,812)
Net Cash Provided (Used) by Operating
Activities 16,286 -
Cash Flows from Investing
Activities:
Payment on Notes Receivable 24,673
Net Cash Provided (Used) by
Investing Activities 24,673 -
Cash Flows from Financing
Activities:
Payments on Long-Term Debt (31,429)
Net Cash Provided (Used) by
Financing Activities (31,429) -
Net Increase (Decrease) in Cash 9,530 -
Cash, Beginning of period 25,540
Cash, end of period $35,070 $-
Supplemental Disclosure of Cash Flow
Information
Cash Paid During the Year for:
Interest $15,823 $-
Income Taxes $- $-
Supplemental Disclosure of Non-Cash
Financing Information
In the quarter ended March 31,
1999, the Company issued
common stock for consulting
services rendered totaling $84,168.
The accompanying notes and are an integral part of the consolidated financial
statements.
<PAGE>
Consolidated Medical Management, Inc.
(A Montana Corporation)
Notes to Consolidated Financial Statements
(UNAUDITED)
Note 1 Organization and Summary of Significant Policies
The Company (formerly Golden Maple Mining and Leaching Co., Inc.) was
incorporated under the laws of the State of Montana on August 13, 1981. The
Company ceased its mining operations in 1985, and discontinued all business
operations in 1990. On May 23, 1998, the Company acquired all the common
stock of Consolidated Medical Management, Inc. (a private Louisiana
corporation, hereafter sometimes referred to as "CMMI-LA" or "subsidiary") in
a stock for stock exchange transaction, whereupon, CMMI-LA became a wholly
owned subsidiary of the Company
The CMMI-LA subsidiary provides management services for home healthcare
providers predominately in southern Louisiana. The Company's subsidiary,
Independent Diagnostic Services, Inc., provides diagnostic ultrasound imaging
services to physician offices, clinics, hospital, and skilled nursing
facilities, and also provides mobile laboratories that will enable services to
be provided for communities with limited access to technologists, hospitals
and diagnostic laboratories. The Company has formed a subsidiary, Psychiatric
Medical Services, Inc. ("PMSI") to operate a partial-unit mental services
hospital in an existing hospital environment.
Principles of Consolidation - The consolidated financial statements include
the accounts of Consolidated Medical Management, Inc. (a Montana Corporation),
and its subsidiaries, Independent Diagnostic Services, Inc. and Psychiatric
Management Services, Inc. The Company and its subsidiaries provide health
care services specializing in mobile diagnostic imaging and the operation of a
part-hospital psychiatric unit and therefore extends credit to the health care
providers involved with the patients served. All significant intercompany
transactions and balances have been eliminated.
Accounting policies of the Company conform with generally accepted accounting
principles and reflect practices appropriate to the industry in which it
operates. The significant policies are summarized below:
Property, Plant, Equipment and Depreciation - Expenditures for property,
plant and equipment are recorded at cost. Renewals and improvements which
extend the economic life of such assets are capitalized. Expenditures for
maintenance, repairs and other renewals are charged to expense. For major
dispositions, the cost and accumulated depreciation are removed from the
accounts and any gain or loss is included in the results of operations.
Depreciation is provided over the estimated useful lives of assets using
accelerated methods.
Receivables - The Company, through it's Louisiana subsidiary, grants credit
through trade receivables to its customers, all of whom are home health care
providers in the state of Louisiana. The Company performs ongoing credit
evaluations of its customers' financial condition and, generally, requires no
collateral from its customers. As of year-end, the company reviewed its
receivables and determined those receivables that collection was deemed
questionable and charged off those receivables. A further review of
receivables indicated no additional allowance was necessary for the remaining
accounts.
Cash Flows and Concentration of Credit Risk - Cash consists principally of
demand deposits at commercial banks. These balances, as reflected in the
bank's records, are insured by the Federal Deposit Insurance Corporation up to
$100,000. At March 31, 1999 and December 31, 1998, the Company's deposits did
not exceed the insured limits.
Risks and Uncertainties - The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reported period. Actual results could differ from those
estimates.
Note 2 Receivables
Receivables consist of the following:
1999 1998
Management Fees, Service billings $ 228,814 $ 188,484
Advances to Trinity Billing 13,564 13,564
Interest 3,478 3,478
Other 3,233 1,447
249,089 206,973
Less: Allowance for Uncollectible
Accounts (40,104) (40,104)
$ 208,985 $ 166,869
Note 3 Notes Receivable
1999 1998
Note Receivable from Spectrum
Financial, Inc., a related party,
in the original amount of $15,000,
with interest at 6%, principal and
interest due June 30, 1999,
unsecured. $ 15,000 $ 15,000
Note Receivable from Jaguar
International, Inc., a related party,
in the original amount of $100,000,
with interest at 6%, principal and
interest due June 30, 1999,
unsecured. 100,000 100,000
Note Receivable from Louisiana
Mobile Imaging, Inc. in the original
amount of $75,000, with interest at
0%, principal due December 1, 1998,
secured by a pledge of receivables. - 24,673
Note Receivable from an individual
in the original amount of $1,000, with
interest at 6%, principal and interest
due November 13, 1999, unsecured. 1,000 1,000
Total Notes Receivable 116,000 140,673
Less Current Portion (116,000) (140,673)
Long Term Portion of Notes Receivable $ - $ -
Note 4 Property, Plant and Equipment
1999 1998
Furniture $ 6,721 $ 6,721
Equipment 30,297 30,297
Automotive 3,600 3,600
Assets under Capital Lease 399,175 399,175
439,793 439,793
Less Accumulated Depreciation
(including $92,463 of accumulated
amortization of capital lease assets) (105,818) (103,495)
Property, Plant and Equipment - Net $ 333,975 $ 336,298
Note 5 Other Assets
1999 1998
Prepaid Consulting Agreement (net of
accumulated amortization of $16,000 and
4,000, respectively) $ 104,000 $ 110,000
Deposits 2,684 2,684
Other 27,262 27,059
$ 133,946 $ 139,743
Note 6 Lease Commitments
During the period ended March 31, 1999, the Company leased its main
administration office facilities under operating leases, which expired June
1998 and August 1998. Thereafter the office space has been rented on a
month-to-month basis. Monthly rent for the office space totals $600. Lease
expense for the three-month periods ended March 31, 1999 and 1998 totaled
$1,800 and $-0-, respectively.
The Company also is leasing remote office space for its subsidiary, IDSI, from
a related party, Jaguar International, Inc. under a monthly operating lease of
$1,700 monthly. Total rent expense for the three-month period ended March 31,
1999 was $5,100.
The Company is also leasing equipment used by it's subsidiary, IDSI, under
operating leases with total monthly lease expense payments of $842. The
leases are for thirty-six (36) months, and expire in September and October
2001. Total lease expense for the three-month period ended March 31, 1999 was
$2,526.
The Company also leases office space for the use of one of its officers in San
Antonio, Texas under an operating lease. The lease is on a month to month
basis with monthly rental of $400. Total rent paid in the first quarter of
1999 was $1,200.
The Company also leases other office assets, notably a copier, and phone
system, under non-cancelable operating leases expiring through September
2000. Lease expense for the three-month period ended March 31, 1999 was
$1,271. At March 31, 1999, future minimum lease payments under long-term
non-cancelable leases for succeeding fiscal periods is as follows:
1999, through December 31, $ 11,328
2000 12,842
2001 7,926
Thereafter -
Total $ 32,096
Note 7 Notes Payable
1999 1998
Note payable to GE Capital financing
the phone system, in the original amount
of $10,222, dated September 16, 1997,
payable in thirty-nine installments of
$341 with interest at 12.5%, secured by
a pledge of the phone system. $ 5,119 $ 6,145
Six (6) notes payable to Spectrum
Financial, Inc., a related party of the
Company, dated September 29, 1998, due
July 29, 1999, interest at 10%, payable
on maturity, unsecured 85,000 85,000
Total Notes Payable 90,119 91,145
Less: Current Portion (87,507) (88,532)
Long-Term Portion $ 2,612 $ 2,613
Maturities of Notes Payable over the next
five years are:
1999 $ 87,507
2000 2,612
After -
$ 90,119
Note 8 Capital Leases
1999 1998
Equipment Capital Leases Payable to
leasing companies in original amounts
totaling approximately $399,176, payable
in monthly installments ranging from
twenty-four to sixty months, totaling
$10,133 ($9,572 beginning February 1,
1999), with implicit interest rate of
twelve (12%) percent, through March
2003. These leases are secured by pledges
of imaging equipment and related
transportation vehicles with original cost
totaling approximately $400,000 as
of December 31, 1998. These vehicles are
included in company owned assets
described as Capital Lease Assets. $ 274,159 $ 304,562
Less: Current Portion (86,266) (83,406)
Long-Term Portion 187,893 221,156
Following is a schedule of minimum lease
payments under Capital Leases:
1999 $ 86,147
2000 114,863
2001 84,588
2002 46,431
2003 11,608
After -
Total Payments 343,637
Less: Interest included therein (69,478)
Net Payments $ 274,159
Maturities of Capital Lease Obligations
payable in subsequent periods ending
March 31, are as follows:
2000 85,261
2001 95,621
2002 59,549
2003 33,728
After -
$ 274,159
Note 9 Convertible Debentures and Notes Payable
The Company issued convertible debentures in 1998 that are subordinated to
bank debt and secured leases. The debentures are otherwise unsecured but are
given a preference over unsecured debt. The debentures include interest at
fifteen (15%) percent, interest is payable in monthly installments. Each
debenture has a conversion right for each holder to convert the debenture
principal to shares of the Company's common stock at the greater of $2.50 per
share or ninety (90%) percent of the bid price, whichever is greater on the
date of conversion. Accrued interest and any principal amount not converted
to shares of stock will be paid in cash at conversion. As of March 31, 1999,
the company had issued and outstanding $190,000 in debentures. The debentures
are due one year from date of issue. All debentures issued are due in 1999.
The Company issued convertible promissory notes payable in 1998. The notes
are unsecured and include interest at ten (10%) percent, interest is payable
in monthly installments. Each note has a conversion right for each holder to
convert the note's unpaid principal to shares of the Company's common stock
based on $2.50 per share, or a total of 90,000 at the note holder's
discretion. Accrued interest and any principal amount not converted to shares
of stock will be paid in cash at conversion. As of March 31, 1999, the
company had issued and outstanding $225,000 in debentures. The notes are due
July 31, 1999.
The Company has entered into an agreement with Spectrum Financial, Inc.
("Spectrum") whereby Spectrum will exchange shares it owns with the debenture
holder upon exercise of the debenture's conversion option, in satisfaction of
the Company's obligations under the conversion provisions. In exchange,
Spectrum will then receive an unsecured note payable from the Company (see
Note 7) for the face amount of the debenture surrendered. During the year
ended December 31, 1998, Spectrum exchanged a total of 14,000 of its shares in
connection with this agreement and received five notes payable from the
Company totaling $35,000.
1999
Total Convertible Debentures and Notes Payable $ 415,000
Less: Current Portion (415,000)
Long-Term Portion $ -
Note 10 Income Taxes
The provision for income taxes for three months ended March 31, 1999 and 1998
consists of the following:
1999 1998
Current Provision
Federal $ - $ -
State - -
Deferred Provision (Benefit) - -
Total Income Tax Expense (Benefit) $ - $ -
The effective tax rate of the Company for 1999 and 1998 differs from the
federal statutory rate primarily due to state income taxes, if any.
Deferred income taxes arise from temporary differences resulting from the
Company's subsidiary utilizing the cash basis of accounting for tax purposes
and the accrual basis for financial reporting purposes. Deferred taxes are
classified as current or noncurrent, depending on the classification of the
assets and liabilities to which they relate. Deferred taxes arising from
timing differences that are not related to an asset or liability are
classified as current or noncurrent depending on the periods in which the
timing differences are expected to reverse. The Company's previous principal
temporary differences relate to revenue and expenses accrued for financial
purposes, which are not taxable for financial reporting purposes. The
Company's temporary differences consist of bad debt expense recorded in the
financial statements that is not deductible for tax purposes and differences
in the depreciation expense calculated for financial statement purposes and
tax purposes.
The net deferred tax asset or liability is composed of the following:
1999 1998
Total Deferred Tax Assets $ - $ -
Less: Valuation Allowance
Net Deferred Tax Asset
Total Deferred Tax Liabilities - -
Net Deferred Tax Liability - -
Less Current Portion - -
Long - Term Portion $ - $ -
The Company has net operating loss carryforwards totaling $869,697, which
expire through 2014.
Note 11 Common and Preferred Stock
Common Stock
The Company's common stock is $0.001 par value, there are 50,000,000 shares
authorized as of March 31, 1999 and December 31, 1998. As of March 31, 1998
and December 31, 1998, the Company had 6,347,838 and 5,496,057 shares issued
and outstanding, respectively.
Preferred Stock
In 1998, the Company amended its articles to authorize Preferred Stock. There
are 20,000,000 shares authorized with a par value of $0.001. The shares are
non-voting and non-redeemable by the Company. The Company further designated
two series of its Preferred Stock: "Series 'A' $12.50 Preferred Stock" with
2,159,193 shares of the total shares authorized and "Series 'A' $8.00
Preferred Stock," with the number of authorized shares set at 1,079,957
shares. As of March 31, 1999 and December 31, 1998 there are no shares issued
and outstanding.
Dividends - Dividends are non-cumulative, however, the holders of such series,
in preference to the holders of any common stock, shall be entitled to
receive, as and when declared payable by the Board of Directors from funds
legally available for the payment thereof, dividends in lawful money of the
United States of America at the rate per annum fixed and determined as herein
authorized for the shares of such series, but no more, payable quarterly on
the last days of March, June, September, and December in each year with
respect to the quarterly period ending on the day prior to each such
respective dividend payment date. In no event shall the holders of either
series receive dividends of more than one percent (1%) in any fiscal year.
Each share of both series shall rank on a parity with each other share of
preferred stock, irrespective of series, with respect to dividends at the
respective fixed or maximum rates for such series.
Conversion provisions - Any holder of either series may convert any or all of
such shares into shares of common stock of the Company at any time. Said
shares shall be convertible at a rate equal to three (3) shares of common
stock of the Company for each one (1) share of Series "A" $12.50 Preferred
Stock. The Series "A" $12.50 Preferred Stock shall be convertible, in whole
or in part, at any time after the common stock of the Company shall maintain
an average bid price per share of at least $12.50 for ten (10) consecutive
trading days.
Series "A" $8.00 Preferred Stock shall be convertible at a rate equal to three
(3) shares of common stock of the Company for each one (1) share of Series "A"
$8.00 Preferred Stock. The Series "A" $8.00 Preferred Stock shall be
convertible, in whole or in part, at any time after the common stock of the
Company shall maintain an average bid price per share of at least $8.00 for
ten (10) consecutive trading days.
The preferential amount payable with respect to shares of either Series of
Preferred Stock in the event of voluntary or involuntary liquidation,
dissolution, or winding-up, shall be an amount equal to $5.00 per share, plus
the amount of any dividends declared and unpaid thereon.
Note 12 Earnings per Share
Earnings per share for the year ended March 31, 1999 is computed as follows:
Income (Numerator) Shares (Denominator) Per-Share
Amount
Net Income (Loss) ($ 12,259)
Basic EPS
Income (Loss)
available to common
stockholders ( 12,259) 5,311,507 ($ 0.0023)
Effect of Dilutive
Securities
Convertible Debt - -
Diluted EPS
Income (Loss)
available to common
stockholders ($ 12,259) 5,311,507 ($ 0.0023)
Earnings per share for the three month period ended March 31, 1998 is computed
as follows:
Income (Numerator) Shares (Denominator) Per-Share
Amount
Net Income (Loss) ($ 2,821)
Basic EPS
Income available
to common
stockholders ( 2,821) 2,584,900 ($ 0.001)
Effect of Dilutive
Securities
none - -
Diluted EPS
Income available to
common stockholders ($ 2,821) 2,584,900 ($ 0.001)
The Company has issued convertible debt that, if fully converted, would have a
dilutive effect of 180,000 shares. The Company has entered into an agreement
with a related party, Spectrum Financial, Inc. whereby Spectrum will exchange
shares it controls for the debt issued to convertible debt holders upon the
debt holders' exercise of their options. Due to the effect of this agreement,
these shares are not considered dilutive for these calculations.
Note 13 Commitments and Contingencies
In the opinion of management, there are no contingent claims or litigation
against the Company, which would materially affect its financial position at
March 31, 1999.
The Management service contracts that the Company has with the home health
care agencies it served include a provision that allows the Company's client
to recover the amount paid by the client from the management fees paid to the
Company if the client is required to repay any fees it receives, due to
actions or services provided it by the Company.
Note 14 Economic Dependence
During the three month period ended March 31, 1999, approximately sixty-four
(64%) percent of the Company's total operating income was earned under
management contracts with one major customer. The contracts have a term of one
year, ending December 31, 1999, renewable annually
Note 15 Related Party Transactions
During the three month period ended March 31, 1999, the Company paid fees
totaling $35,799 in the form of cash and stock, to related companies and
individuals that own stock in the Company and provided services to the
Company. Included in this total of fees are amounts paid as follows:
Paid to Description of Fees Amount
GCSW Funding, Inc. Consulting services provided $ 23,999
Spectrum Financial, Inc. Consulting services provided 11,800
$ 35,799
The Company has informal agreements with three related companies, GCSW
Funding, Inc., Jaguar International, Inc. (a shareholder of the Company) and
Southern Properties, Inc. to provide various consulting services to the
Company as required.
The Company engaged Spectrum Financial, Inc., which is owned by two of the
Company's shareholders who collectively own fifteen percent of the Company's
outstanding common stock as of March 31, 1999, to provide consulting
services. Such consulting services have included identifying potential
targeted companies for acquisition, and negotiating such transactions.
Spectrum is then paid fees, either in cash or by the issuance of the companies
stock. In 1999, the Company paid Spectrum fees totaling $11,800 for such
services.
The Company has also agreed to pay Spectrum commissions in connection with its
services rendered in identification of specific targets for acquisition,
whether the targeted company is acquired or not.
The Company also has notes payable totaling $85,000 payable to Spectrum
Financial, Inc. as of March 31, 1999. The notes are unsecured, see Note 7.
As of March 31, 1999, the Company has accrued $4,003 in interest payable on
these notes and has recorded $4,003 in interest expense.
The Company holds a note receivable from Jaguar International, Inc., which
owns forty-four (44%) percent of the outstanding stock as of December 31,
1998, in the amount of $100,000, see Note 3, as of December 31, 1998. The
Company also holds a note receivable from Spectrum Financial, Inc. in the
amount of $15,000 as of December 31, 1998.
The Company also has included in accounts payable, $4,600 payable to Spectrum
Financial, Inc. for cost reimbursements due it. Accounts Payable also
includes $45,560 due companies controlled by the Company's major stockholder,
for consulting services rendered and fees incurred by these companies on
behalf of the Company.
Note 16 Non Cash Financing Transactions
During 1999, the Company issued stock in exchange for services of $84,168
(851,781 common shares issued) for quarter ended March 31, 1999.
Note 17 Stock Options
The Company has two stock option plans. The first plan was adopted in April
1998. Under this plan, the Company granted options to three entities for a
total of 550,000 shares of the Company's common stock. The original exercise
price of the options granted under the plan was $0.10 per share, and was for a
five-year period. All shares granted under this plan were issued.
In October 1998, the Company adopted "1998 Non-Qualified Stock Option Plan
No.2". Under this plan, a total of 1,500,000 shares are available. The
qualified recipients of the plan's options are all employees of the Company
and any other individuals who perform bona fide services to the Company. The
Options granted under this plan have a term of five years, and a maximum
exercise price of $4.125 per share. Subsequent to year-end, the Company
granted four options under this plan for a total of 522,986 shares at an
option price of $0.10 per share. All of the shares optioned to date have been
exercised.
No compensation costs were charged to income in 1999 under these plans.
Note 18 Fair Values
The Company has a number of financial instruments, none of which are held for
trading purposes. The Company estimates that the fair value of all financial
instruments at March 31, 1999 does not differ materially from the aggregate
carrying values of its financial instruments recorded in the accompanying
balance sheet.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Consolidated Medical Management, Inc.
(A Montana Corporation)
Baton Rouge, Louisiana
We have made a review of the consolidated balance sheet of Consolidated
Medical Management, Inc. as of March 31, 1999, and the related consolidated
statements of operations and cash flows for the three-month periods ended
March 31, 1999 and 1998, in accordance with standards established by the
American Institute of Certified Public Accountants. These financial
statements are the responsibility of the Company's management.
A review of interim financial information consists principally of obtaining an
understanding of the system for the preparation of interim financial
information, applying analytical review procedures to financial data, and
making inquiries of persons responsible for financial and accounting matters.
It is substantially less in scope than an audit in accordance with generally
accepted auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1998, and the
related consolidated statements of income, cash flows and changes in common
shareholders' equity (deficit) for the year then ended (not presented herein);
and in our report dated February 5, 1999, we expressed a qualified opinion on
those financial statements. In our opinion, the information set forth in the
accompanying balance sheet as of December 31, 1998, is fairly stated in all
material respects in relation to the balance sheet from which it has been
derived.
ROBERTS, CHERRY and COMPANY
A Corporation of
Certified Public Accountants
Shreveport, Louisiana
May 13, 1999
Consolidated Medical Management, Inc.
(A Montana Corporation)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis should be read in combination with
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Item 6 of the 1998 Form 10-KSB, the financial statements and
notes contained in Item 7 of the 1998 Form 10-KSB and the interim financial
statements and notes thereto contained elsewhere in this Report.
RESULTS OF OPERATIONS
For the Three Month Period Ended March 31, 1999
For the three months ended March 31, 1999, the Company recognized net loss of
($12,259), (with loss per share of ($0.0023) per common share). During this
period, the Company, since the acquisition of Consolidated Medical Management,
Inc. (the private Louisiana company) by the public Company (formerly Golden
Maple Mining and Leaching, Inc.), has aggressively pursued acquisitions of
related medical service providers and other entities that, once acquired, will
add to its ability to provide medical services. The following principal
factors contribute to these results. For the period ended March 31, 1999, the
Company recognized the operations of its wholly-owned subsidiaries,
Independent Diagnostic Services, Inc. and Psychiatric Management Services,
Inc. (PMSI) with consolidated operating revenue of $308,376 for the
three-month period ended March 31, 1999.
Operating revenues are composed of management fees associated with providing
services, under contract, to various home-health providers and PHP (Partial
Hospital Programs), primarily located in southern Louisiana and the fee income
from delivery of diagnostic and transportation services associated with the
health care industry. Changes in the home health care industry caused the
Company to shift its emphasis away from home health care and toward the PHP
program, and to other medical management programs, which the Company expects
will be more profitable.
For the three-month period ended March 31, 1999, the Company incurred
operating costs associated with the production of revenue totaling $313,893.
The most significant elements of operating expenses are personnel costs
totaling $53,245 for the quarter. Personnel costs include the professional
wages of the personnel who deliver the health-care services required by the
contracts and related administrative salaries and benefits. Another
significant operating cost is consulting fees paid in connection with the
medical management performed by the Company. These costs totaled $112,335 for
the three-month period ending March 31, 1999. In the quarter, the Company
incurred legal and professional fees totaling $87,634 primarily associated
with filings and legal matters on stock related issues. The Company incurred
office expense totaling $47,963 for the three-month period
For the three-month ended March 31, 1998, the net loss applicable to common
stock totaled ($2,821) or ($0.001) per share. In this 1998 period, the
Company had no operations and recognized nominal expenses associated with the
maintenance of the Company's filings.
FINANCIAL CONDITION
Liquidity and Capital Resources
As of March 1999, the Company sold a total of $450,000 in convertible and
subordinated debentures ($415,000 remains as of March 31, 1999). The
debentures are subordinated to bank debt and secured leases and are due within
one year of issue. The debentures are otherwise unsecured but are given a
preference over unsecured debt. The debentures include interest at fifteen
(15%) percent, payable in monthly installments. Each debenture has a
conversion right for each holder to convert the debenture principal to shares
of the Company's common stock at the greater of $2.50 per share or ninety
(90%) percent of the bid price, whichever is greater on the date of
conversion. Accrued interest and any principal amount not converted to shares
of stock will be paid in cash. A consultant to the Company, and a
stockholder, Spectrum Financial, Inc. entered into an agreement with the
Company whereby it assumed the Company's obligation to exchange shares it
owned upon request of conversion by a debenture holder.
The Company had cash of $35,070 as of March 31, 1999 and receivables totaling
$208,985 from customers, of which $114,318 (54% of total receivables) was
current, Management has reviewed the collectibility of these accounts, and
determined that the collection is probable.
The Company has advanced funds to Jaguar, Inc. (a shareholder), Spectrum
Financial, Inc. (a shareholder) and Southern Properties Management, Inc. in
the form of notes receivable totaling $116,000 as of March 31, 1999. The
terms of the notes call for the Company to be paid interest of 6%, are due
June 30, 1999 and are unsecured. Management believes these amounts to be
collectable.
The Company's accounts payable and accrued expenses total $268,517 as of March
31, 1999. This compares to $278,557 as of December 31, 1998. The Company's
obligations under these accounts have aged since December 31, 1998, with
$147,274 of these amounts owed for more than ninety days.
Subsequent to quarter end, the Company issued a $100,000 debenture, using
these funds to reduce these obligations. The Company is considering various
means to obtain long-term financing to support its acquisition plans and
current operation requirements. However, the Company's ability to fund its
obligations under its remaining debentures and notes payable, with over
$500,000 due in the next one hundred twenty days, is not certain without
additional long-term financing or capital injection.
PART II
OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
Since the end of the fiscal year ended December 31, 1998, and through the end
of the quarter ended March 31, 1999, the Company has sold the following shares
of common stock of the Company without registration under the Securities Act
of 1933:
a. On January 14, 1999 the Company issued 159,995 shares of common stock
to Underwriters Trust, controlled by Charles Coburn, Trustee, a consultant of
the Company. The shares were issued for consulting services under the
Company's Non-Qualified Stock Option Plan dated October 7, 1998.
b. On January 14, 1999 the Company issued 117,999 shares of common stock
to Spectrum Financial, Inc., controlled by C. J. Douglas and Virgil Robbins,
consultants to the Company. The shares were issued for consulting services
under the Company's Non-Qualified Stock Option Plan dated October 7, 1998.
c. On January 14, 1999 the Company issued 239,992 shares of common stock
to GCSW Funding Group, controlled by Garvis Wooley, a stockholder of the
Company. The shares were issued for consulting services under the Company's
Non-Qualified Stock Option Plan dated October 7, 1998.
d. On January 19, 1999 the Company issued 306,295 shares of common stock
to Rapid Release Research, L. L. C., a contract promotional company engaged by
the Company. The shares were issued for promotional marketing consulting
services.
e. On January 21, 1999 the Company issued 15,000 shares of common stock to
Dr. Joe S. Wakil, M. D. a consultant and director of the Company. The shares
were issued for consulting services.
f. On January 21, 1999 the Company issued 7,500 shares of common stock to
Ms. Jean Brandau, a consultant to the Company. The shares were issued for
consulting services.
g. On January 21, 1999 the Company issued 5,000 shares of common stock to
Ms. Antoinette Dipuma, an employee of the Company. The shares were issued for
consulting services.
All of the aforesaid securities set forth immediately above were issued
without registration under the Act by reason of the exemption from
registration afforded by the provisions of Section 4(2) thereof, as
transactions by an issuer not involving any public offering, each recipient of
securities having delivered appropriate investment representations to
Registrant with respect thereto and having consented to the imposition of
restrictive legends upon the certificates evidencing such securities. No
underwriting discounts or commissions were paid in connection with such
issuances.
Item 5. Other Information
Changes in Management
The following table sets forth the current executive officers and directors of
the Company:
Director
Name Age Position(s) Since
Dale L. Bachman 51 Director and CEO 1999
Sunni M. Wooley 23 Acting Chairman, Director and
President and CFO 1999
Peggy D. Behrens 43 Director and Secretary 1999
Lynn Simon, M.D. 48 Director 1999
All of the officers have previously reported their biographical information.
The Company presently has no employment contracts with any of its executive
officers. The Company anticipates negotiating and entering into employment
contracts with such persons during the first quarter of 1999.
Mr. Lamar Laster, who was the Chairman and COO of the Company, resigned
effective April 20, 1999.
There are no family relationships among directors or executive officers of the
Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibits are included as part of this report:
Exhibit No
Description of Exhibit
None
(b) No reports on Form 8-K were filed during the quarter covered by this
report.
<PAGE>
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.
Consolidated Medical Management, Inc.
___________________________________________
By - Sunni M. Wooley, President and Principal Financial Officer
Date: May 14, 1999
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD-END> MAR-31-1999
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<SECURITIES> 0
<RECEIVABLES> 208,985
<ALLOWANCES> 0
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<CURRENT-ASSETS> 375,958
<PP&E> 333,975
<DEPRECIATION> 0
<TOTAL-ASSETS> 843,879
<CURRENT-LIABILITIES> 857,290
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0
0
<COMMON> 6,348
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 843,879
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<OTHER-EXPENSES> 6,742
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<INCOME-PRETAX> (12,259)
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