U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
Commission file number
2-87738
T.H. LEHMAN & CO., INCORPORATED
(Name of small business issuer in its charter)
Delaware 22-2442356
(state or other jurisdiction (I.R.S./Employer
of incorporation or organization Identification Number)
4900 Woodway, Suite 650, Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (713) 621-8404
Securities registered under Section 12(b) of the Exchange Act:
Common Stock, $.01 Par.
(Title of Class)
Securities registered under Section 12(g) of the Exchange Act: None.
Check whether the issuer (1) 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 filing requirements for the past 90 days. Yes X No
--- ---
4,717,720
(Number of shares of common stock outstanding as of August 03, 2000)
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated condensed balance sheets at
June 30, 2000 and March 31, 2000 2
Consolidated condensed statements of
operations and comprehensive
income three months ended
June 30, 2000 and 1999 3
Consolidated condensed statements of
cash flows for the three months ended
June 30, 2000 and 1999 3-4
Notes to consolidated condensed
financial statements 4
Item 2. Management's Discussion and Analysis 5
PART II. OTHER INFORMATION
Signatures 6
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T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
JUNE 30, 2000 AND MARCH 31, 2000
ASSETS
June 30 March 31
2000 2000
(Unaudited) (Derived
from audited
financial
statements)
----------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 41,352 $ 9,081
Accounts receivable 13,063 0
Current portion of non-current receivables 241,346 275,023
----------- ----------
TOTAL CURRENT ASSETS 295,761 284,104
PROPERTY AND EQUIPMENT 5,077 9,950
OTHER ASSETS
Securities available for sale 1,584,867 1,265,770
Investments in non-public companies 833,659 833,659
Non-current receivables 1,052,245 1,080,933
Deposits 6,514 6,514
----------- ----------
TOTAL OTHER ASSETS 3,477,285 3,186,876
----------- ----------
TOTAL ASSETS $ 3,778,123 $3,480,930
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 309,019 $ 308,631
Accrued liabilities 237,460 136,408
Current portion of long-term debt 2,284,054 1,987,265
----------- -----------
TOTAL CURRENT LIABILITIES 2,830,533 2,432,304
LONG-TERM DEBT, less current portion 289,958 310,826
----------- -----------
TOTAL LIABILITIES 3,120,491 2,743,130
STOCKHOLDERS' EQUITY
Common stock-par value $.01; authorized
5,000,000 shares, issued 4,742,720 shares
at June 30, 2000 and March 31, 2000 47,427 47,427
Additional paid-in capital 7,764,014 7,764,014
Accumulated other comprehensive income 89,453 68,396
Accumulated deficit (7,194,824) (7,093,599)
Treasury stock at cost - 25,000 shares (48,438) (48,438)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 657,632 737,800
----------- -----------
$3,778,123 $3,480,930
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</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
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T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
THREE MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999
June 30 June 30
2000 1999
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
REVENUES
Management fees, net of allowances $ 132,634 $ 165,021
Income from finance receivables 0 15,440
Interest and dividends 2,100 0
Miscellaneous income 15 545
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TOTAL REVENUES 134,749 181,006
OPERATING EXPENSES
Selling, general and administrative 187,657 194,340
Interest expense 48,318 7,299
----------- -----------
TOTAL OPERATING EXPENSES 235,975 201,639
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES (101,226) (20,633)
PROVISION FOR INCOME TAXES 0 0
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NET INCOME (LOSS) (101,226) (20,633)
OTHER COMPREHENSIVE INCOME:
Unrealized gain (loss) on securities 21,057 99,966
Less: reclassification adjustment
for gains included in net income 0 0
----------- -----------
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) 21,057 99,966
----------- -----------
COMPREHENSIVE INCOME (LOSS) $ (80,169) $ 79,333
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 4,717,720 4,717,720
=========== ===========
NET INCOME (LOSS) PER COMMON SHARE $ (0.02) $ (0.00)
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
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T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999
June 30 June 30
2000 1999
(Unaudited) (Unaudited)
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (101,226) $ (20,633)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 4,873 4,004
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable (13,063) 0
Prepaid expenses and other current assets 0 140
Value of marketable securities (103,210) 0
Increase (decrease) in:
Accounts payable 389 21,476
Accrued liabilities 170,391 29,576
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NET CASH PROVIDED BY (REQUIRED BY)
OPERATING ACTIVITIES (41,846) 34,563
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T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999
June 30 June 30
2000 1999
(Unaudited) (Unaudited)
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<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES
Loans made evidenced by notes receivable (132,634) (165,021)
Collection of notes receivable 195,000 122,968
Acquisition of securities available for sale (215,887) 0
(Purchase) disposal of property and equipment 0 (3,029)
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NET CASH PROVIDED BY (REQUIRED BY)
INVESTING ACTIVITIES (153,521) (45,082)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of long-term debt 234,387 0
Repayment of long-term debt (6,749) (2,224)
----------- -----------
NET CASH PROVIDED BY (REQUIRED BY)
FINANCING ACTIVITIES 227,638 (2,224)
----------- -----------
INCREASE (DECREASE)IN CASH 32,271 (12,743)
CASH - BEGINNING 9,081 20,677
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CASH - END $ 41,352 $ 7,934
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CASH PAID DURING THE PERIODS FOR:
Interest $ 0 $ 434
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
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T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
1. COMMENTS
The accompanying unaudited consolidated condensed financial statements, which
are for interim periods, do not include all disclosure provided in the annual
consolidated financial statements. These unaudited consolidated condensed
financial statements should be read in conjuction with the consolidated
financial statements and footnotes thereto contained in the Annual Report on
Form 10-KSB for the year ended March 31, 2000 of T.H. Lehman & Co.,
Incorporated and Subsidiaries (the "Company"), as filed with the Securities and
Exchange Commission. The March 31, 2000 consolidated condensed balance sheet
was derived from audited consolidated financial statements, but does not include
all disclosures required by generally accepted accounting principles.
In the opinion of the Company, the accompanying unaudited consolidated condensed
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 June 30, 2000 are not
necessarily indicative of the results to be expected for the full fiscal year.
2. RELATED PARTY TRANSACTION
During May 2000, the Company acquired 184,000 shares of United Media Limited, a
publicly traded company, for $215,887 under a one year 8% note from an entity
controlled by a major shareholder for investment purposes. 75% of the increase
in value of the acquired shares when liquidated by the Company is due the note
holder. At the end of the term of the note the Company may return the shares in
full settlement of the outstanding balance and accrued interest.
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T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
JUNE 30, 2000
Statements of Operations:
Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999
Revenues totaled $134,749 during the three months ended June 30, 2000, 26% lower
than the $181,006 in revenues from the same quarter in the previous year.
Management fees decreased to $132,634 from $165,021 due to less patient
activity. Income from finance receivables decreased from $15,440 during the
three months ended June 30, 1999 to $0 for the current quarter due to
the liquidation of these type of receivables as of last year.
Interest expense increased from $7,299, for the three months ended June 30,
1999, to $48,318 for the three months ended June 30,2000. This is due to note
payables issued in exchange for the acquisition of shares in three publicly
traded companies and two private companies as described in Note 10 above.
Liquidity, Capital Resources and Income Taxes:
At June 30, 2000 cash amounted to $41,352, an increase of $32,271 from the cash
balance of $9,081 at March 31, 2000. This cash will be used to fund operations.
The Company's primary source of liquidity has been the cash it has obtained from
the liquidation of its investment portfolio and collection of medical accounts
receivable.
The Company anticipates that internally generated cash and its lines of credit
will be sufficient to finance overall operations.
The Company is continually seeking to acquire businesses and may be in various
stages of negotiations at any point in time which may or may not result in
consummation of a transaction. To provide funding for such acquisitions it may
take a number of actions including (i) selling of its existing investments (ii)
use of available working capital (iii) seeking short or long term loans (iv)
issuing stock. In addition, the Company may seek additional equity funds if
needed. These sources of capital may be both conventional and non- traditional.
The Company has no existing funding commitments and is presently under no
contractual obligation to make any investment or acquisition.
At March 31, 2000, the Company had an operating tax loss carry forward of
approximately $5,365,000.
Impact of Inflation and Other Business Conditions:
Generally, increases in the Company's operating costs approximate the rate of
inflation. In the opinion of management, inflation has not had a material effect
on the operation of the Company. The Company has historically been able to react
effectively to increases in labor or other operating costs through a combination
of greater productivity and selective price increases where allowable.
Year 2000 Issue
The Company purchased a medical practice management system (including software,
hardware needed to utilize the system, licensing, training and support) for
approximately $30,000 in 1996. This system is specifically designed for the
management of medical practices, which accounts for most of the Company's
revenue. The version of the system the Company owned was not Year 2000
compliant. However the vendor of this system updated the version with one that
is fully Year 2000 compliant without charge.
The Company's financial statements are produced by the management company of
T.H. Lehman & Co., Inc. which uses a licensed financial and general ledger
software program which is currently Year 2000 compliant.
The Company utilizes personal computers that utilizes Microsoft Windows 95 or
higher. The Company believes that the Windows operating system is Year 2000
compliant.
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T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
JUNE 30, 2000
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
/s/ Elliot Gerstenhaber DATE: August 14, 2000
-----------------------
Secretary/Treasurer and
Principal Financial Officer
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