<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X
___ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
September 30, 1995
For the quarterly period ended _________________________________________
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ________________
0-16286
Commission file number _________________________________________________
MEDPLUS CORPORATION
________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 95-4082020
________________________________________________________________________
(State or other jurisdiction of (IRS Employer identification number)
incorporation or organization)
8 S. Nevada Ave., Ste. 500, Colorado Springs, Colorado 80903
________________________________________________________________________
(address of principle executive offices) (Zip Code)
719-575-0044
________________________________________________________________________
(Registrants telephone number, including area code)
121 E. Pikes Peak Ave., Ste. 226-A, Colorado Springs, Colorado 80903
________________________________________________________________________
Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 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
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by section 13 or
15 (d) of the Securities Exchange Act of 1934 subsequent to
the distribution requirements under a plan confirmed by a
court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at December 13, 1995
_________________________________________________________________________
Common Stock, Par-Value 6,157,874
_________________________________________________________________________
$.001 per share
_________________________________________________________________________
<PAGE>
MEDPLUS CORPORATION
REPORT ON FORM 10-Q
TABLE OF CONTENTS
PART I PAGE NUMBER
- ------ -----------
ITEM 1. - FINANCIAL INFORMATION
Balance Sheets at September 30, 1995
and March 31, 1995 . . . . . . . . . . . . . . . 3
Statements of Operations for the
Three Months and Six Months Ended
September 30, 1995 and September 30, 1994 . . . 5
Statements of Cash Flows for the
Six Months Ended September 30, 1995
and September 30, 1994 . . . . . . . . . . . . . 6
Notes to Financial Statements. . . . . . . . . . . 7
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS . . . . . . . . . . . . . . . . . . 10
PART II
- -------
Other Information . . . . . . . . . . . . . . . . . 11
Exhibit Index . . . . . . . . . . . . . . . . . . . 13
Signature Page. . . . . . . . . . . . . . . . . . . 14
2
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PART I
ITEM 1. FINANCIAL INFORMATION
MEDPLUS CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS SEPTEMBER 30, 1995 MARCH 31, 1995
- ------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents $ 623 $14,212
Accounts receivable
Prepaid expenses and other
current assets 696 1,238
------- -------
Total current assets 1,319 15,450
------- -------
PROPERTY:
Office Equipment 12,428 17,428
Furniture and Fixtures
Leasehold Improvements
------- -------
Total 12,428 17,428
Less accumulated depreciation 8,290 7,047
------- -------
Net property 4,138 10,381
------- -------
OTHER ASSETS:
Goodwill (Net of amortization
of $ 16,806 at September 30, 1995
and $ 15,906 at March 31, 1995 26,073 26,973
------- -------
Total other assets 26,073 26,973
------- -------
TOTAL ASSETS $31,530 $52,804
------- -------
------- -------
See accompanying notes to financial statements
3
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MEDPLUS CORPORATION
- -------------------
CONSOLIDATED BALANCE SHEETS Continued
SEPTEMBER 30, 1995 MARCH 31, 1995
LIABILITIES AND SHAREHOLDERS' EQUITY (UNAUDITED)
CURRENT LIABILITIES:
Accounts payable and accrued
expenses $ 208,542 $ 196,267
Notes payable (Note 4) 66,526 170,783
Deferred Salaries 171,580 171,580
----------- -----------
Total current liabilities 446,648 538,630
----------- -----------
Long Term Note Payable (Note 4) 117,555 123,555
Total liabilities 564,203 662,185
----------- -----------
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value;
authorized 2,000,000 shares;
no shares outstanding
Common stock, $.001 par value;
authorized, 30,000,000 shares;
issued and outstanding, 6,157,874
and 3,943,922 shares at September
30, 1995 and March 31, 1995
respectively 19,851 17,838
Additional paid in capital 6,531,341 6,324,712
Accumulated deficit (7,083,865) (6,951,931)
----------- -----------
Net shareholders' equity (532,673) (609,381)
----------- -----------
TOTAL $ 31,530 $ 52,804
----------- -----------
----------- -----------
See accompanying notes to financial statements
4
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MEDPLUS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTH PERIOD SIX MONTH PERIOD
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------- -------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES: $ 8,548 $ 23,620 $ 21,951 $ 68,547
- ---------
EXPENSES:
- ---------
General and Administrative 38,567 111,847 69,020 185,824
Sales and Marketing 38,802 35,414 84,866 103,809
---------- ---------- ---------- ---------
Total Expenses 77,369 147,261 153,886 289,633
---------- ---------- ---------- ----------
Operating Loss (68,821) (123,641) (131,935) (221,082)
OTHER INCOME:
- -------------
Interest Income 3 4
---------- ---------- ---------- ---------
Total Other Income 3 4
Net Loss (68,821) (123,638) (131,935) (221,082)
Net Loss Per Share of
Common Stock (0.01) (0.03) (0.03) (0.07)
Weighted Average Number
of Common Shares
Outstanding 5,419,890 3,974,297 4,282,607 3,274,171
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
MEDPLUS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTH PERIOD ENDED
SEPTEMBER 30,
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS (USED BY) OPERATING ACTIVITIES:
Net loss ($131,935) ($221,082)
Adjustments to reconcile net income (loss) to net
cash from (used) by operating activities:
Depreciation and amortization 2,143 8,463
(Increase) decrease in assets:
Prepaid expenses and other current
assets 542 8,483
Prepaid offering 38,686
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 12,275 108,593
--------- ---------
Total cash provided (used) by operating activities (116,975) (56,857)
CASH FLOWS FROM (USED BY) INVESTING ACTIVITIES:
Proceeds from sale of equipment 5,000
--------- ---------
Total cash provided (used) by investing activities 5,000
CASH FLOWS FROM (USED BY) FINANCING ACTIVITIES:
Payment on long term debt (6,000)
Payment of note payable (103,806) (10,500)
Issuance of common stock 208,192 64,999
--------- ---------
Total cash from (used by) financing activities 98,386 54,499
Increase (decrease) in cash and cash equivalents (13,589) (2,358)
Cash and cash equivalents at beginning of period 14,212 2,925
--------- ---------
Cash and cash equivalents at end of period 623 567
--------- ---------
--------- ---------
</TABLE>
6
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MEDPLUS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. GOING CONCERN
The accompanying unaudited consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business. As reflected in the Company's most recent 10-K for the fiscal
year ended March 31, 1995, the Company has incurred significant losses
from operations during each of the three years ended March 31, 1995. The
fact that the Company has continued to incur operating losses and other
factors indicate that the Company may be unable to continue as a going
concern for a reasonable period of time in the absence of additional
financing. The consolidated financial statements do not include any
adjustments relating to the recoverability and classification of recorded
asset amounts or the amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.
The Company's continuation as a going concern is dependent on its ability
to generate sufficient cash flow to meet its obligations on a timely
basis, to obtain financing as may be required, and ultimately to attain
successful operations. Management is continuing its efforts to obtain
additional funds needed for the successful operation of the Company.
2. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of MEDPLUS
CORPORATION contain all adjustments (consisting of only normal recurring
adjustments) which, in the opinion of management are necessary to
present fairly the financial position of the Company as of the periods
ended September 30, 1995 and March 31, 1995, and the results of
operations and its cash flows for the six month periods ended September
30, 1995 and September 30, 1994. Certain information and footnote
disclosures normally included in financial statements have been condensed
or omitted pursuant to rules and regulations of the Securities and
Exchange Commission, although the registrant believes that the
disclosures in the consolidated financial statements are adequate to make
the information presented not misleading.
INCOME TAXES - As of September 30, 1995 the Company has net operating
loss carry forwards of approximately $5,209,000, which can be utilized in
future periods to offset future taxable income. The net operating loss
carry forwards begin expiring in the year 2000. Due to the Company's net
operating loss position and carry forwards the adoption of SFAS 109 has
no material impact.
The unaudited consolidated financial statements included herein should
be read in conjunction with the consolidated financial statements of the
Company for the year ended March 31, 1995, included in the Company's
Annual Report on Form 10-K.
3. COMPUTATION OF NET LOSS PER SHARE
Net loss per share is computed by dividing net loss by the weighted
average number of shares of common stock outstanding. Options and
warrants are not included because their effect would be antidilutive.
7
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4. NOTE PAYABLE TO RELATED PARTIES
Notes Payable at September 30 and March 31,1995 consists of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1995 MARCH 31, 1995
------------------ --------------
(UNAUDITED)
<S> <C> <C>
Unsecured note payable to Company
director bearing interest at 10%
per annum, $10,000 together
with accrued interest, and $15,000
together with accrued interest, is
payable upon the Company obtaining
$100,000 and $500,000 in equity
financing, respectively $ 25,000 $ 25,000
Unsecured note payable to the former
President and Director of the Company
bearing interest at 18% per annum. This
note is past due and under dispute 40,500 40,500
Unsecured note payable to the President
of the Company bearing interest at 18%
per annum. During August, 1995, the
payee elected to convert the total due,
together with accrued interest, into shares
of the Company's common stock 59,504
Unsecured note payable to partnership
controlled by the President of the
Company bearing interest at 18% per
annum. During August, 1995, the
payee elected to convert the total due,
together with accrued interest, into
shares of the Company's common stock 44,302
Unsecured note payable to a former
shareholder and officer of the Company
which was in dispute over amounts owed
at March 31, 1994. The Company
accrued $139,000 at March 31, 1994.
The dispute was settled during the
year ended March 31, 1995 through
the issuance of a $171,288 note payable.
The note is non-interest bearing, due in
equal monthly installments of $2,000
from May 1995 through April 1997
in addition to a balloon payment of
</TABLE>
8
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<TABLE>
<S> <C> <C>
$123,288 payable May 1997. This
note has been discounted $46,256 to
reflect an effective interest rate of 18% 119,032 125,032
-------- --------
Total: 184,532 294,338
Less current portion: (66,977) (170,783)
-------- --------
Long-term portion: $117,555 $123,555
-------- --------
-------- --------
</TABLE>
9
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1995, the Company had working capital of ($445,329)
compared to working capital of ($523,180) at March 31, 1995. The increase in
working capital is primarily due to the conversion of debt to the Company's
common stock by a related party (See Note 4 to Financial Statements).
The Company's liquidity position is severely strained. Liquidity needs are
currently being met from internally generated funds. Because the Company has
not achieved positive cash flow from its operating activities, the Company's
ability to continue operations is dependent upon its ability to raise
additional equity and/or debt financing. This and other factors raise
substantial doubt as to the Company's ability to continue as a going concern.
Although the Company is actively engaged in activities with intent to raise
equity financing, in order to meet its long-term liquidity needs, there can
be no assurance that the Company will be able to consummate the transaction
and/or raise the additional financing necessary for continuing operations.
RESULTS OF OPERATIONS
Revenue derived from the sale of the Company's services decreased 64% from
$23,620 during the three month period ended September 30, 1994 to $8,548
during the three month period ended September 30, 1995 and decreased 68% from
$68,547 during the six month period ended September 30, 1994 to $21,951
during the six month period ended September 30, 1995. The Company's revenue
decrease is primarily attributable to a decline in approval rates by the
Company's lender. The Company has since signed an agreement with a new
lender which should improve the Company's overall approval rates (See PART
II, ITEM 5. OTHER INFORMATION).
General and administrative expenses decreased 66% to $38,567 during the
three month period ended September 30, 1995 as compared to $111,847 during
the three month period ended September 30, 1994 and decreased 63% to $69,020
during the six month period ended September 30, 1995 as compared to $185,824
during the six month period ended September 30, 1994. The decrease of 66% and
63%, respectively, is due primarily to a decrease in support personnel, and
related expenses, in an effort to reduce overhead expense.
Sales and marketing expenses increased 10% to $38,802 during the three month
period ended September 30, 1995 as compared to $35,414 during the three
month period ended September 30, 1994 and decreased 18% to $84,866 during
the six month period ended September 30, 1995 as compared to $103,809 during
the six month period ended September 30, 1994. The decrease of 18% is due
primarily to a reduction in operating personnel, and related expenses, due to
the Company's severely limited operating capital.
10
<PAGE>
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None
ITEM 5. OTHER INFORMATION
On July 13, 1995 the Company signed a letter of intent to acquire
Surgical Funding Group, Inc., located in Irvine, California for stock. In
November, 1995 the Company completed the acquisition. Surgical Funding Group,
Inc. provides patient financing to a significant provider base of plastic
surgeons nation wide and has a strong presence in California. Under the terms
of the agreement Surgical Funding will retain its present marketing
facilities in California. Also P. James Voloshin, MD, Surgical Funding's
President and founder, has accepted a nomination to serve on the Board of
Directors of MEDPLUS.
In August ,1995 the Company completed an agreement to form a
joint-venture with Senior Care Action Network(""SCAN'') located in
Scottsdale, Arizona. SCAN is the owner of a Preferred Provider Organization
(""PPO'') of nursing homes, home health care and other services dedicated to
the health care needs of senior citizens. SCAN is also affiliated with
National Health & Safety Corporation (""NHS'') and is the authorized
representative for its Power X Consumer Wholesale Buying Service which offers
discounts for a comprehensive line of health care products and services,
including the SCAN PPO network. The objective of the joint-venture will be to
enhance the demand for the Company's products by adding certain other related
health care products and services made available to the Company by SCAN. SCAN
will be able to expand the market for its products and services by offering
them to the Company's present and future client base through the Company's
marketing arrangement with Interchange, Inc.
In November, 1995 the Company reached an agreement with Care Card
Northwest (""Care Card'') to provide Care Card's two health care credit
cards, Care Card NorthwestT and Care Line NorthwestT, to health care, death
care and veterinary care providers across the nation. The Care Card Northwest
and Care Line Northwest programs are financed under an agreement between Care
Card Northwest and United States Bank of Oregon, a U.S. Bancorp Company,
Member FDIC. Both MEDPLUS and Care Card are in the health care financial
services industry providing patient financing to health care providers. Under
the terms of the agreement MEDPLUS and Care Card Northwest will mutually
develop and expand Care Card's health care credit card and loan programs.
MEDPLUS will market the Care Card products in all states other than
Washington and Oregon through its nationwide marketing affiliates. MEDPLUS
will also transfer its provider/merchant account base to the Care Card
Northwest program. It is expected that this relationship with Care Card
Northwest will significantly improve MEDPLUS' approval rates to its health
care providers across the nation.
11
<PAGE>
On November 22, 1995 the Company offered a letter of intent to acquire
Yes Charge, located in Ventura, California for stock. Yes Charge markets a
non-recourse credit card to Dental Care providers throughout the State of
California. As of the date of this submission the offer has neither been
accepted or rejected.
On November 4, 1995 the Company moved its corporate headquarters to 8 S.
Nevada Ave., Ste. 500, Colorado Springs, Colorado, 80903. The Company is
subleasing approximately 1700 square feet of office space.
ITEM 6. EXHIBITS AND REPORTS ON FORM 10-Q
(a) The following exhibit is attached hereto:
Exhibit
No. Title of Document
------- -----------------
27 Financial Data Schedule
12
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EXHIBIT INDEX
Exhibit
No. Title of Document
------- -----------------
27 Financial Data Schedule
13
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MEDPLUS CORPORATION
December 13, 1995 James W. Snyder
-------------------------------
James W. Snyder, Chairman and
Chief Executive Officer
December 13, 1995 Robert A. Spade
-------------------------------
Robert A. Spade, President
December 13, 1995 Robert T. Ryman
-------------------------------
Robert T. Ryman, Vice President
of Finance, Chief Financial Officer
14
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<PAGE>
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 623
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,319
<PP&E> 12,428
<DEPRECIATION> 8,290
<TOTAL-ASSETS> 31,530
<CURRENT-LIABILITIES> 446,648
<BONDS> 0
<COMMON> 19,851
0
0
<OTHER-SE> (512,822)
<TOTAL-LIABILITY-AND-EQUITY> 31,350
<SALES> 8,548
<TOTAL-REVENUES> 8,548
<CGS> 0
<TOTAL-COSTS> 77,369
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (68,821)
<INCOME-TAX> 0
<INCOME-CONTINUING> (68,821)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (68,821)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
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