<PAGE> 1
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__________________________________
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D. C. 20549
__________________________________
FORM 10SB
General Form for Registration of Securities
File No. ___________
Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
MEDICAL MANAGEMENT SYSTEMS, INC.
(Exact name of registrant as specific in its charter)
Colorado 95-4121451
(State of Incorporation) (I.R.S. Employer I.D. No.)
5459 South Iris Street
Littleton, Colorado 80123
(Address of principal executive offices, including zip code)
Telephone number, including area code: (303) 932-9998
Copies to: Conrad C. Lysiak, Esq.
West 601 First Avenue, Suite 503
Spokane, Washington 99204
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK
(Title of Class)
Exhibit Index begins on page 39
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<PAGE> 2
ITEM 1. BUSINESS.
HISTORY, ORGANIZATION AND CHANGE OF CONTROL
MEDICAL MANAGEMENT SYSTEMS, INC. (the "Company"), was organized
under the laws of the State of Colorado, on July 30, 1987. The Company
was formed for the purpose of creating a corporate vehicle to seek,
investigate and, if such investigation warranted, acquire an interest
in business opportunities.
On March 24, 1989, the Company completed a public offering of
150,000 Units. Each Unit consisted of one share of its no par value
common stock (the "Common Stock"), one Class A common stock purchase
warrant and one Class B common stock purchase warrant. The Class A and
Class B warrants expired on October 19, 1992. In connection with the
offering, the underwriter received for $100 a purchase warrant for
15,000 shares of common stock at $0.60 per share.
On September 10, 1991, the Company's Board of Directors approved
a 20 to 1 reverse stock split.
On September 30, 1991, pursuant to a Share Exchange Agreement (the
"Exchange"), the Company issued an aggregated of 4,680,000 shares of
Common Stock in connection with its acquisition of Staley Corp.
("Staley"), a privately held development stage Colorado corporation,
wherein the Company acquired all of the issued and outstanding shares
of Staley. Prior to the exchange, the Company had an aggregate of
610,000 shares issued and outstanding. On the same date the Company's
name was changed to Dog World, Inc. In accordance with the Agreement,
all but one of the Company's officers and directors resigned, and the
directors and executive officers of Staley were elected directors and
executive officers of the Company.
From February 1, 1992 to November 1, 1993, the Company operated a
dog training and obedience facility located in Grand Prairie, Texas
under the name Dogs Only, Inc., a wholly owned subsidiary of Dog World,
Inc. The Company also offered dog boarding and kenneling, retail sales
of dog and cat care supplies, dog and cat food, as well as, veterinary
services through arrangements with independent veterinarians. Prior to
February 1, 1992, the Company was considered to be in the development
stage and had not generated any revenues.
During the second and third quarter of fiscal 1993, the Company
raised $543,100 in a private placement sale of 1,810,333 shares of
Common Stock. The proceeds from this sale of stock were used to open
a new retail facility, enhance the Company's veterinary service
capabilities and to repay outstanding bank debt.
<PAGE> 3
In June 1993, using the proceeds from the private placement, the
Company opened a second retail facility in Irving, Texas under the
trade name Vet Works+. This facility provided a wide range of total
pet care services including a complete veterinary hospital, "Dogs Only"
discipline training, all breed grooming, and indoor lodging and
boarding, as well as, the sale of pet foods and pet care products. The
original Dogs Only facility in Grand Prairie, Texas was consolidated on
November 1, 1993 with the Company's Irving, Texas Vet Works+ facility.
On June 1, 1993, the Company entered into an agreement with Willis
C. Dearing, DVM, to purchase the assets of Dearing Animal Hospital,
Inc. for cash. This agreement allowed the Company to offer veterinary
services to patrons of its stores, also provided for certain stock
option arrangements with Dr. Dearing.
In 1994, the Company issued 860,000 shares of Common Stock to
individuals in a private placement that raised net cash proceeds of
$250,471.
On March 15, 1995, the Company filed a Form 15 with the SEC to
terminate its duty to file reports under section 13 and 15(d) of the
Securities Exchange Act of 1934.
In April 1995, substantially all the Company's assets and business
operations were sold and the Company subsequently changed its name to
Medical Management Systems, Inc.
On June 26, 1995, the Company issued 6,000,000 shares to Jack R.
Daugherty, a former officer and director of the Company, in lieu of
payment of a loan in the amount of $150,000 due to Mr. Daugherty.
On June 26, 1995, the Company issued 3,000,000 shares to Donald L.
Parnell, a former officer and director of the Company, in lieu of
payment of salary in the amount the $75,000 due Mr. Parnell.
On June 26, 1995, the Company issued 400,000 shares to Gary A.
Agron, in lieu of payment of legal fees in the amount of $10,000.
On August 18, 1995, the Company changed its name to Medical
Management Systems, Inc.
In August 1996, Mr. Davis, the Company's President, acquired
9,825,498 shares from Jack Daugherty, Donald Parnell and Carl Motheral,
former officers and directors of the Company and the Company changed
its business purpose to that of a "shell" corporation.
On May 7, 1997, the Company entered into an Agreement and Release
with Vet Works+ and Willis C. Dearing, DVM, modifying their previous
agreement dated March 28, 1995. The Agreement and Release is a
settlement of all disputes and claims between the parties. The
Agreement and Release provides the surrender and cancellation of the
options granted to Dr. Dearing under the 1994 Incentive Stock Option
Agreement under the Dog World, Inc. Incentive Stock Option Plan.
<PAGE> 4
In June 1997, Mr. Davis transferred 3,275,000 shares of Common
Stock each to Mr. Lee, the Company's Secretary, and Mr. Van Gundy, the
Company's Treasurer, respectively.
The Company is filing this Form 10 on a voluntary basis. It has no
obligations pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The Company believes that by filing such Form 10
and being obligated to file reports pursuant to Section 13 of the
Exchange Act, it can attract an acquisition candidate of greater
financial value with a track record of success. While the Company
believes it will be a more attractive acquisition candidate, there is
no assurance that the foregoing assumption is correct.
The Company believes that there is a demand by non-public
corporations for shell corporations that have a public distribution of
securities, such as the Company. The Company believes that demand for
shells has increased dramatically since the Securities and Exchange
Commission (the "Commission") imposed burdensome requirements upon
"blank check" companies pursuant to Reg. 419 of the Securities Act of
1933 (the "Act"). According to the Commission, Rule 419 was designed
to strengthen regulation of securities offerings by blank check
companies, which Congress has found to have been a common vehicle for
fraud and manipulation in the penny stock market. See Securities Act
Releases No. 6891 (April 17, 1991), 48 SEC Docket 1131 and No. 6932
(April 13, 1992) 51 Docket 0382, SEC Docket 0382. The foregoing
regulation has decreased, substantially, the number of "blank check"
offerings filed with the Commission, and as a result has stimulated an
increased demand for shell corporations. While the Company has made
the foregoing assumption, there is no assurance that the same is
accurate or correct and accordingly, no assurance that the Company will
be acquired by or acquire an existing non-public entity.
GENERAL
The Company proposes to seek, investigate and, if warranted,
acquire an interest in one or more business opportunities ventures. As
of the date hereof the Company has no business opportunities or
ventures under contemplation for acquisition but proposes to
investigate potential opportunities in the form of investors or
entrepreneurs with a concept which has not yet been placed in
operation, or in the form of firms which are developing companies. The
Company may seek out established businesses which may be experiencing
financial or operation difficulties and are in need of the limited
additional capital the Company could provide. The Company anticipates
that it will seek to merge with or acquire an existing business. After
the merger or acquisition has taken place, the surviving entity will be
the Company (Medical Management Systems, Inc.), however, management
from the acquired entity will in all likelihood operate the Company.
There is however, a remote possibility that the Company may seek to
acquire and operate an ongoing business, in which case the existing
management might be retained. Due to the absence of capital available
for investment by the Company, the types of business seeking to be
acquired by the Company will no doubt be smaller and higher risks
types of businesses. In all likelihood, a business opportunity will
<PAGE> 5
involve the acquisition of or merger with a corporation which does not
need additional cash but which desires to establish a public trading
market for its Common Stock. Accordingly, the Company's ability to
acquire any business of substance will be extremely limited.
The Company does not propose to restrict its search for investment
opportunities to any particular industry, or geographical location and
may, therefore, engage in essentially any business, anywhere, to the
extent of its limited resources.
It is anticipated that business opportunities will be available to
the Company and sought by the Company from various sources, throughout
the United States including its Officers and Directors, professional
advisors such as attorneys and accountants, securities broker/dealers,
venture capitalists, members of the financial community, other
businesses and others who may present solicited and unsolicited
proposals. The reason for this is to attract the most favorable
business opportunities and ventures available. Management believes
that business opportunities and ventures will become available to it,
due to a number factors, including, among others: (a) management's
willingness to enter into unproven, speculative ventures; (b)
management's contacts and acquaintances; and, (c) the Company's
flexibility with respect to the manner in which it may structure
potential financing and/or acquisitions. However, there is no
assurance that the Company will be able to structure or finance and/or
acquire any business opportunity or venture.
OPERATION OF THE COMPANY
The Company intends to search throughout the United States for a
merger/acquisition candidate, however, because of the lack of capital,
the Company believes that the merger/acquisition candidate will be
conducting business within a limited geographical area. The Company,
however, intends to maintain its corporate headquarters and principal
place of business at 5459 South Iris Street, Littleton, Colorado 80123.
All corporate records will be maintained at said office, and it is
anticipated that all shareholders' meetings will take place in
Colorado. In the event that a merger or acquisition of the Company
takes place, no assurance can be given that the corporate records or
headquarters will continue to be maintained at Littleton, Colorado, or
that shareholders' meetings will be held in Colorado.
The Officers and Directors will personally seek acquisition/merger
candidates and/or orally contact individuals or broker/dealers and
advise them of the availability of the Company as an acquisition
candidate. The Officers and Directors will review material furnished
to them by the proposed merger/acquisition candidates and decide if a
merger/acquisition is in the best interests of the Company and its
shareholders.
The Company may employ outside consultants, however, until a
merger/acquisition candidate has been targeted by the Company,
management believes that it is impossible to consider the criteria that
will be used to hire consultants. While the Company may hire
<PAGE> 6
independent consultants, it has not considered any criteria regarding
their experience, the services to be provided, or the term of service.
The Company has not had any discussions with any consultants and there
are no agreements or understandings with any consultants.
Other than as disclosed herein, there are no other plans for
accomplishing the business purpose of the Company.
SELECTION OF OPPORTUNITIES
The analysis of new business opportunities will be undertaken by
or under the supervision of the Officers and Directors, none of whom is
a professional business analyst or has any previous training or
experience in business analysis. Inasmuch as the Company will have no
funds available to it in its search for business opportunities and
venture, the Company will not be able to expend significant funds on a
complete and exhaustive investigation of such business or opportunity.
The Company will however, investigate, to the extent believed
reasonable by its management, such potential business opportunities or
ventures.
As part of the Company's investigation, Officers and Directors
will meet personally with management and key personnel of the firm
sponsoring the business opportunity, may visit and inspect plants and
facilities, obtain independent analysis or verification of certain
information provided, check references of management and key personnel,
and conduct other reasonable measures, to the extent of the Company's
limited financial resources and management and technical expertise.
Prior to making a decision to recommend to shareholders
participation in a business opportunity or venture, the Company will
generally request that it be provided with written materials regarding
the business opportunity containing such items as a description of
products, services and company history; management resumes; financial
information; available projections with related assumptions upon which
they are based; evidence of existing patents, trademarks or service
marks or rights thereto; present and proposed forms of compensation to
management; a description of transactions between the prospective
entity and its affiliates during relevant periods; a description of
present and required facilities; an analysis of risks and competitive
conditions; and, other information deemed relevant.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require
substantial management time and attention and costs for accountants,
attorneys and others. $17,503 in legal and accounting expenses, $2,241
in stock transfer fees and $1,853 in travel and miscellaneous expenses
were paid by Mr. Davis and Mr. Lee, Officers and Directors of the
Company. Mr. Davis and Mr. Lee anticipate funding the Company's
operations, including providing funds necessary to search for
acquisition candidates. Mr. Davis and Mr. Lee anticipate funding such
expenses until an acquisition candidate is found, without regard to the
amount involved. Accordingly, no alternative cash resources have been
explored.
<PAGE> 7
There are no loan agreements or understandings. The Company will
not make any loans to officers or directors, nor will the Company make
loans to any acquisition candidate. Money advanced by Messrs. Davis
and Lee is and will be done gratuitously without any obligation on the
part of the Company to repay the same.
The Company will have unrestricted flexibility in seeking,
analyzing and participating in business opportunities. In its efforts,
the Company will consider the following kinds of factors:
(a) Potential for growth, indicated by new technology,
anticipated market expansion or new products;
(b) Competitive position as compared to other firms engaged in
similar activities;
(c) Strength of management;
(d) Capital requirements and anticipated availability of required
funds from future operations, through the sale of additional
securities, through joint ventures or similar arrangements or from
other sources; and,
(e) Other relevant factors.
Potentially available business opportunities may occur in many
different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex. Potential
investors must recognize that due to the Company's limited capital
available for investigation and management's limited experience in
business analysis, the Company may not discover or adequately evaluate
adverse facts about the opportunity to be acquired.
The Company is unable to predict when it may participate in a
business opportunity. It expects, however, that the analysis of
specific proposals and the selection of a business opportunity may take
several months or more. The Company does not plan to raise any capital
at the present time, by private placements, public offerings, pursuant
to Regulation S promulgated under the Act, or by any means whatsoever.
Further, there are no plans, proposals, arrangements or understandings
with respect to the sale or issuance of additional securities prior to
the location of an acquisition or merger candidate.
FORM OF ACQUISITION
The manner in which the Company participates in an opportunity
will depend upon the nature of the opportunity, the respective needs
and desires of the Company and the promoters of the opportunity, and
the relative negotiating strength of the Company and such promoters.
The exact form or structure of the Company's participation in a
business opportunity or venture will be dependent upon the needs of the
particular situation. The Company's participation may be structured as
an asset purchase agreement, a lease, a license, a joint venture, a
partnership, a merger, or acquisition of securities.
<PAGE> 8
As set forth above, the Company may acquire its participation in
a business opportunity through the issuance of Common Stock or other
securities in the Company. Although the terms of any such transaction
cannot be predicted, it should be noted that in certain circumstances
the criteria for determining whether or not an acquisition is so-called
"tax free" reorganization under Section 368(a)(1) of the Internal
Revenue Code of 1954, as amended, may depend upon the issuance to the
shareholders of the acquired company of at least eighty percent (80%)
of the Common Stock of the combined entities immediately following the
reorganization. If a transaction were structured to take advantage of
these provisions rather than other "tax free" provisions provided under
the Internal Revenue Code all prior shareholders may, in such
circumstances, retain twenty percent (20%) or less of the total issued
and outstanding Common Stock. If such a transaction were available to
the Company, it will be necessary to obtain shareholder approval to
effectuate a reverse stock split or to authorize additional shares of
Common Stock prior to completing such acquisition. This could result
in substantial additional dilution to the equity of those who were
shareholders of the Company prior to such reorganization. Further,
extreme caution should be exercised by any investor relying upon any
tax benefits in light of the proposed new tax laws. It is possible
that no tax benefits will exist at all. Prospective investors should
consult their own legal, financial and other business advisors.
The present management and the shareholders of the Company in this
offering will in all likelihood not have control of a majority of the
voting shares of the Company following a reorganization transaction.
In fact, it is most probable that the shareholders of the acquired
entity will gain control of the Company. Further, management intends
to make available for purchase by shareholders of the acquired entity
of up to 75% of the shares of Common Stock owned by them. The terms of
sale of the shares presently held by officers and/or directors of the
Company will not be afforded to other shareholders of the Company. As
part of such a transaction, all or a majority of the Company's
Directors may resign and new Directors may be appointed without any
vote by shareholders.
Present stockholders have not agreed to vote their respective
shares of Common Stock in accordance with the vote of the majority of
all non-affiliated future stockholders of the Company with respect to
any business combination.
The Company may not borrow funds and use funds to make payments to
Company promoters, management or their affiliates or associates.
The Company has an unwritten policy that it will not acquire or
merge with a business or company in which the Company's management or
their affiliates or associates directly or indirectly have an ownership
interest. Management is not aware of any circumstances under which the
foregoing policy will be changed and management, through their own
initiative, will not change said policy.
<PAGE> 9
The Company is required by the regulations promulgated under the
Securities Exchange Act of 1934 to obtain and file with the Commission,
audited financial statements of the acquisition candidate not later
than sixty days from the date the Form 8-K is due at the Commission
disclosing the acquisition/merger.
RIGHTS OF DISSENTING SHAREHOLDERS
Under the Colorado Corporation Code, a business combination
typically requires the approval of two-thirds of the outstanding shares
of both participating companies. The Company's Articles of
Incorporation reduce the voting requirement to a majority of the
Company's outstanding Common Stock. Shareholders who vote against any
business combination in certain instances may be entitled to dissent
and to obtain payment for their shares pursuant to Sections 7-4-123 and
7-4-124 of the Colorado Corporation Code. The requirement of approval
of the Company's shareholders in any proposed business combination is
limited to those transactions identified as a merger or a
consolidation. A business combination identified as a share exchange
does not require the approval of the Company's shareholders, nor does
it entitle shareholders to dissent and obtain payment for their shares.
Accordingly, unless the acquisition is a statutory merger, requiring
shareholder approval, the Company will not provide shareholders with a
disclosure document containing audited or unaudited financial
statements, prior to such acquisition.
Prior to any business combination for which shareholder approval
is required, the Company intends to provide its shareholders complete
disclosure documentation concerning the business opportunity or target
company and its business. Such disclosure will in all likelihood be in
the form of a proxy statement which will be distributed to shareholders
at least 20 days prior to any shareholder's meeting.
None of the Company's officers, directors, promoters, their
affiliates or associates have had any preliminary contact or
discussions with and there are no present plans, proposals,
arrangements or understandings with any representatives of the owners
of any business or company regarding the possibility of an acquisition
or merger transaction contemplated in this registration statement.
NOT AN "INVESTMENT ADVISER"
The Company is not an "investment adviser" under the Federal
Investment Advisers Act of 1940, which classification would involve a
number of negative considerations. Accordingly, the Company will not
furnish or distribute advice, counsel, publications, writings, analysis
or reports to anyone relating to the purchase or sale of any securities
within the language, meaning and intent of Section 2(a)(11) of the
Investment Advisers Act of 1940, 15 U.S.C. 80b2(a)(11).
<PAGE> 10
NOT AN "INVESTMENT COMPANY"
The Company may become involved in a business opportunity through
purchasing or exchanging the securities of such business. The Company
does not intend however, to engage primarily in such activities and is
not registered as an "investment company" under the Federal Investment
Company Act of 1940. The Company believes such registration is not
required.
The Company must conduct its activities so as to avoid becoming
inadvertently classified as a transient "investment company" under the
Federal Investment Company Act of 1940, which classification would
affect the Company adversely in a number of respects. Section 3(a) of
the Investment Company Act provides the definition of an "investment
company" which excludes an entity which does not engage primarily in
the business of investing, reinvesting or trading in securities, or
which does not engage in the business of investing, owning, holding or
trading "investment securities" (defined as "all securities other than
United States government securities or securities of majority-owned
subsidiaries") the value of which exceeds forty percent (40%) of the
value of its total assets (excluding government securities, cash or
cash items). The Company intends to implement its business plan in a
manner which will result in the availability of this exemption from the
definition of "investment company." The Company proposes to engage
solely in seeking an interest in one or more business opportunities or
ventures.
Effective January 14, 1981, the Securities and Exchange Commission
adopted Rule 3a-2 which deems that an issuer is not engaged in the
business of investing, reinvesting, owning, holding or trading in
securities for purposes of Section 3(a)(1), cited above, if, during a
period of time not exceeding one year, the issuer has a bona fide
intent to be engaged primarily, or as soon as reasonably possible (in
any event by the termination of a one year period of time), in a
business other than that of investing, reinvesting, owning, holding or
trading in securities and such intent is evidenced by the Company's
business activities and appropriate resolution of the Company's Board
of Directors duly adopted and duly recorded in the minute book of the
Company. The Rule 3a-2 "safe harbor" may not be relied on more than a
single time.
COMPANY'S OFFICE
The Company's offices are located at 5459 South Iris Street,
Littleton, Colorado 90123, and the telephone number is (303) 932-9998.
The Company's office is located in the home of Philip Davis, the
Company's President and a member of the Board of Directors.
Approximately nine square feet are allocated to the Company on a rent
free basis. The office will remain at Mr. Davis's home until an
acquisition has been concluded. There are no written documents
memorializing the foregoing.
<PAGE> 11
There are no preliminary agreements or understandings with respect
to the office facility subsequent to the completion of an acquisition.
Upon a merger or acquisition, the Company intends to relocate its
office to that of the acquisition candidate.
EMPLOYEES
The Company is a development stage company and currently has no
employees other than certain of its Officers and Directors. See
"Management." Management of the Company expects to use consultants,
attorneys and accountants as necessary, and does not anticipate a need
to engage any full-time employees so long as it is seeking and
evaluating business opportunities. The need for employees and their
availability will be addressed in connection with the decision whether
or not to acquire or participate in a specific business opportunity.
ITEM 2. FINANCIAL INFORMATION.
SELECTED CONSOLIDATED FINANCIAL DATA
The selected financial data presented below has been derived from
the financial statements of the Company, which financial statements
have been audited by Hein + Associates, LLP, independent certified
public accountants, as indicated in their report included elsewhere
herein.
The following table summarized certain financial information and
should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the
Financial Statements and related notes included elsewhere in this
Prospectus. For the reasons set forth in this Form 10 registration
statement the information shown below may not be indicative of the
Company's future results of operations.
Statement of Loss and Accumulate Deficit Data:
(In order to transmit these documents to the SEC via EDGAR, Medical
Management Systems, Inc., a development stage enterprise, Statement
of Loss and Accumulated Deficit Data has been formatted to fit across
two pages. This is page 1 of page 2.)
<TABLE>
<CAPTION>
Four Months
Years Ended December 31 Ended
1996 1995 1994 12/31/93
<S> <C> <C> <C> <C>
Net Operating revenues $ - $ - $ - -
Income (Loss) from
continuing operations (8,964) (102,098) - -
Income (loss) from
continuing operations
per share - (0.01) - -
Income (loss) from
discontinued operations (60,000) (167,127) (363,625) (126,992)
Balance Sheet Data:
Total Assets - 68,964 343,330 407,174
Long term debt - 150,000 172,351 76,023
Stockholders' Equity (14,358) (180,394) 88,831 291,985
<PAGE> 12
(In order to transmit these documents to the SEC via EDGAR, Medical
Management Systems, Inc., a development stage enterprise, Statement of
Loss and Accumulated Deficit Data has been formatted to fit across two
pages. This is page 2 of page 2.)
Six Months
Years Ended August 31 Ended
1993 1992 6/30/96 6/30/96
<C> <C> <C> <C>
$ - $ - $ 16,358 $ -
- - (5,239) (8,964)
- - - -
(267,571) (126,684) - (60,000)
394,874 157,171 1,993 -
13,466 - - -
328,977 53,448 (19,597) (14,358)
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITIONS
Results of Operations - (July 30, 1987) through July 31, 1997.
The Company is considered to be in the development stage as
defined in Statement of Financial Accounting Standards No. 7. There
have been no operations since April 1995 when the Company sold
substantially all of its assets in pet care and veterinary services.
Since April 1995, the Company has been dormant.
On May 7, 1997, the Company reached an agreement with a former
director of the Company whereby the former director agreed to pay
$8,500 in cash along with a promissory note for $1,500 in settlement of
a dispute involved in the sale of Company assets in April 1995. In
addition, the former director agreed to surrender options granted him
to acquire 985,333 shares of the Company's common stock and release the
Company from all claims, demands and obligations. The Company accepted
the cash and note in satisfaction of a $60,000 note due from the former
director which had been written off and recorded as a loss in its
financial statements for the year ended December 31, 1996. The
promissory note carries interest at 12%, is unsecured and is due with
accrued interest six months from the agreement date.
The Company used $8,000 of the cash received to settle an
outstanding trade payable. The difference between the amount that had
been due, $14,358, and the amount paid has been recognized as income
from relief of indebtedness.
In August 1995, the Company changed its business purpose to a
blank check company.
<PAGE> 13
Liquidity and Capital Resources.
The Company has 18,310,330 shares of Common Stock outstanding.
The Company has no current operating history and no material assets.
The Company has $493.00 in cash as of June 30, 1997.
ITEM 3. DESCRIPTION OF PROPERTIES.
The Company has no material assets.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth as of July 31, 1997, the Common
Stock ownership of each person known by the Company to be the
beneficial owner of five percent or more of the Company's Common Stock,
each director individually and all officers and directors of the
Company as a group. Each person has sole voting and investment power
with respect to the shares of Common Stock shown, and all ownership is
of record and beneficial.
<TABLE>
<CAPTION>
Name and address Number of Percent
of owner Shares Position of Class
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Philip J. Davis 3,519,198 President and a member 19.22%
5459 South Iris Street of the Board of Directors
Littleton, CO 80123
John C. Lee [2] 3,275,000 Secretary and a member 17.90%
5410 E. Long Pl. of the Board of Directors
Littleton, CO 80122
Charles C.
Van Gundy[3] 3,275,000 Treasurer and a member 17.90%
210 Dawson Drive of the Board of Directors
Castle Rock, CO 80104
All officers and 10,034,198 55.02%
directors as a
group (3 persons)
Gary A. Agron 942,000 5.14%
5445 DTC Parkway
Suite 570
Englewood, CO 80111
Jack Daugherty 2,087,835 11.4%
1600 West 7th Street
Fort Worth, TX 76012
</TABLE>
<PAGE> 14
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Officers and Directors.
The officers and directors of the Company are as follows:
Name Age Position
Philip J. Davis 40 President and a member of the Board
of Directors
John C. Lee 41 Secretary and a member of the Board
of Directors
Charles C. Van Gundy 44 Treasurer and a member of the Board
of Directors
All directors hold office until the next annual meeting of
shareholders and until their successors have been elected and
qualified. The Company's officers are elected by the Board of
Directors at the annual meeting after each annual meeting of the
Company's shareholders and hold office until their death, or until they
resign or have been removed from office.
Philip J. Davis - President and a member of the Board of Directors
Mr. Davis has been the President and a member of the Board of
Directors of the Company, since August 1996. Since December 1996, Mr.
Davis has been the President, Treasurer and a member of the Board of
Directors of Mizar Energy Company, a Colorado corporation, which was
formed for the purpose of buying, selling and producing oil and gas,
and buying and selling oil and gas leases. Since December 1992, Mr.
Davis is a self-employed consultant. From January 1991 to November
1992, Mr. Davis was affiliated with Private Investors Cartel, Ltd., a
securities broker/dealer, as a trader and principal thereof. From
September 1984 to December 1990, Mr. Davis was the President and a
member of the Board of Directors of Richfield Securities, Inc., a
securities broker/dealer. On January 27, 1992, the District Business
Conduct Committee of the National Association of Securities Dealers,
Inc. rendered a decision against Mr. Davis finding that Mr. Davis,
Richfield Securities, Inc. and another individual charged unfair and
fraudulent markups in connection with the sale of securities. Further,
the District Business Conduct Committee found that Mr. Davis and
Richfield Securities, Inc. failed to establish and implement written
supervisory procedures to detect and prevent the markup violations.
Richfield Securities, Inc. was fined $30,133.97 and suspended from
membership in the National Association of Securities Dealers, Inc. for
one year and Mr. Davis was censured, fined $30,133.97, suspended from
the National Association of Securities Dealers for one year and
required to requalify by examination prior to becoming associated with
any member of the National Association of Securities Dealers, Inc. On
January 15, 1991, Mr. Davis voluntarily closed Richfield Securities,
Inc. Further, Richfield Securities, Inc., Mr. Davis and the third
party were assessed the costs of the action in the amount of $908.00.
<PAGE> 15
Mr. Davis appealed the foregoing decision to the Securities and
Exchange Commission (the "Commission") and on November 12, 1993 the
foregoing sanctions were affirmed by the Commission. The suspensions
referred to above began on March 21, 1994 and concluded on the close of
business on March 21, 1995. In October 1992, Mr. Davis filed for
protection under Chapter XIII of the United States Bankruptcy Act. In
July 1994, the action was voluntarily dismissed by the Bankruptcy
Court. On December 2, 1994, Mr. Davis filed a petition for bankruptcy
pursuant to Chapter VII of the United States Bankruptcy Act. Mr. Davis
was granted a discharge in March 1995. From May 1991 to November 1995,
Mr. Davis was Secretary/Treasurer and a member of the Board of
Directors of Kapalua Acquisitions, Inc., a Colorado corporation, which
was formed for the purpose of acquiring or merging with an existing
operating entity. Kapalua's Common Stock began trading on the Bulletin
Board, operated by the National Association of Securities Dealers,
Inc., in November 1995. From November 1994 to November 1995, Mr.
Davis was President of Kapalua Acquisitions, Inc. Mr. Davis resigned
his positions as an officer and director of Kapalua Acquisitions, Inc.,
on November 17, 1995, when it completed a reverse acquisition with
Startech Corporation, a Connecticut corporation engaged in the business
of waste disposal. From May 1991 to November 1995, Mr. Davis was
Secretary/Treasurer and a member of the Board of Directors of Paia
Acquisitions, Inc., a Colorado corporation. Paia's Common Stock began
trading on the Bulletin Board operated by the National Association of
Securities Dealers, Inc., in January 1996. In November 1995, Paia
acquired all of the issued and outstanding shares of common stock of
Consolidated Financial Management, Inc. d/b/a Banc-Pro, an Arizona
corporation in exchange for 3,900,000 post reverse-split restricted
shares of common of Paia and 845,000 preferred shares of Paia. Mr.
Davis resigned as an officer and director of Paia in November 1995.
From May 1991 to November 1995, Mr. Davis was Secretary/Treasurer of
Lahaina Acquisitions, Inc., a Colorado corporation which was formed for
the purpose of acquiring or merging with an existing operating entity.
Lahaina's Common Stock began trading on the Bulletin Board, operated by
the National Association of Securities Dealers, Inc., in August 1996.
In November 1995, Mr. Davis resigned from the foregoing positions to
assume the Presidency of Lahaina Acquisitions, Inc. Mr. Davis resigned
the foregoing position on May 27, 1997, when he sold his interest in
Lahaina Acquisitions, Inc. to third parties. Mr. Davis also resigned
his position as a Director of Lahaina Acquisitions, Inc. on the same
date, a position he held since May 1991. Mr. Davis will devote
approximately 20% of his time to the Company.
John C. Lee - Secretary and a member of the Board of Directors
Mr. Lee is Secretary and a member of the Board of Directors of the
Company, since August 1996. Since December 1996, Mr. Lee has been the
Secretary and a member of the Board of Directors of Mizar Energy
Company, a Colorado corporation which was formed for the purpose of
buying, selling and producing oil and gas, and buying and selling oil
and gas leases. Mr. Lee has held the foregoing positions since
inception of the Company. Since November 1992, Mr. Lee been engaged in
the practice of investing his personal funds in securities. From
November 1995 to May 1997, Mr. Lee was Secretary and a member of the
<PAGE> 16
Board of Directors of Lahaina Acquisitions, Inc., a Colorado
corporation, which was formed for the purpose of acquiring or merging
with an existing operating entity. Lahaina's Common Stock began
trading on the Bulletin Board, operated by the National Association of
Securities Dealers, Inc., in August 1996. On May 27, 1997, Mr. Lee
resigned the foregoing positions when he sold his interest in Lahaina
Acquisitions, Inc. to third parties. From November 1994 to November
1995, Mr. Lee was Vice President and a member of the Board of Directors
of Kapalua Acquisitions, Inc., a Colorado corporation. Kapalua's
Common Stock began trading on the Bulletin Board, operated by the
National Association of Securities Dealers, Inc., in November 1995.
Mr. Lee resigned his positions, on November 5, 1995, as an officer and
director when it completed a reverse acquisition with Startech
Corporation, a Connecticut corporation engaged in the business of waste
disposal. From August 1989 to November 1992, Mr. Lee was Secretary of
Private Investors Cartel, Ltd. a securities broker/dealer. From April
1985 to August 1989, Mr. Lee was self-employed as a financial
consultant. From March 1985 to July 1986, Mr. Lee was Vice President
of American Mobile Communications in Littleton, Colorado. American
Mobile Communications was engaged in the business of acquiring and
managing mobile home parks. From November 1984 to July 1985, Mr. Lee
was Secretary of Sequal Securities, Inc. a securities broker/dealer
located in Glendale, Colorado. From October 1981 to March 1985, Mr.
Lee was President of Rigel Securities, a securities broker/dealer
located in Aurora, Colorado. Mr. Lee will devote approximately 20% of
his time to the operation of the Company.
Charles C. Van Gundy - Treasurer and a member of the Board of
Directors.
Mr. Van Gundy is Treasurer and a member of the Board of Directors
of the Company, since August 1996. From January 1992 to August 1997,
Mr. Van Gundy was been employed by U. S. Pawn, Inc., Denver, Colorado,
a NASDAQ traded public company, in various accounting positions and
ultimately as its Vice President of Finance and Chief Financial
Officer, Secretary/Treasurer and a member of the Board of Directors.
From November 1995 to May 1997, Mr. Van Gundy was Treasurer and a
member of the Board of Directors of Lahaina Acquisitions, Inc., a
Colorado corporation which was formed for the purpose of acquiring or
merging with an existing operating entity. Lahaina's Common Stock
began trading on the Bulletin Board, operated by the National
Association of Securities Dealers, Inc., in August 1996. From 1982 to
January 1992, Mr. Van Gundy served as an accounting officer for various
mutual fund, high technology and economic redevelopment organizations.
Mr. Van Gundy holds a Bachelor of Science degree in accounting and
finance from Metropolitan State College of Denver (1979), and
subsequently studied law at the University of San Diego School of Law
until 1981.
There are no family relationships between any director or
executive officer and any other director or executive officer.
<PAGE> 17
There are no agreements or understandings for any officer or
director to resign at the request of another person and that none of
the officers or directors are acting on behalf of or will act at the
direction of any other person. The officers and directors may resign,
however, at the time of the acquisition or merger at the request of the
management of the acquisition candidate.
The activities of each Officer and Director will be material to
the operation of the Company. No other person's activities will be
material to the operation of the Company. There are no promoters of
the Company, other than its Officers and Directors.
ITEM 6. EXECUTIVE COMPENSATION.
None of the Company's officers or directors currently receives any
salary from the Company. The Company does not anticipate entering into
employment agreements with any of its officers or directors in the near
future. Directors do not receive compensation for their services as
directors and are not reimbursed for expenses incurred in attending
board meetings.
Other than consulting fees and finder's fees which may be paid to
unaffiliated third parties, no other individuals will receive any
salaries or fees from the Company. The Company's officers and
directors will not receive finder's fees, consulting fees or salaries.
Officers, directors and/or principal shareholders may receive cash or
stock from the sale of their shares of the Company's stock to the
Company's merger/acquisition candidate or principals of the
merger/acquisition candidate.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On March 24, 1989, the Company completed a public offering of
150,000 Units. Each Unit consisted of one share of its no par value
common stock (the "Common Stock"), one Class A common stock purchase
warrant and one Class B common stock purchase warrant. The Class A and
Class B warrants expired on October 19, 1992. In connection with the
offering, the underwriter received for $100 a purchase warrant for
15,000 shares of common stock at $0.60 per share
On September 1, 1991, the Company's Board of Directors approved a
10 to 1 reverse stock split.
On September 30, 1991, pursuant to a Share Exchange Agreement (the
"Exchange"), the Company issued an aggregated of 4,680,000 shares of
Common Stock in connection with its acquisition of Staley Corp.
("Staley"), a privately held development stage Colorado corporation,
wherein the Company acquired all of the issued and outstanding shares
of Staley. Prior to the exchange, the Company had an aggregate of
610,000 shares issued and outstanding. On the same date the Company's
name was changed to Dog World, Inc. In accordance with the Agreement,
all but one of the Company's officers and directors resigned, and the
directors and executive officers of Staley were elected directors and
executive officers of the Company.
<PAGE> 18
From February 1, 1992 to November 1, 1993, the Company operated a
dog training and obedience facility located in Grand Prairie, Texas
under the name Dogs Only, Inc., a wholly owned subsidiary of Dog World,
Inc. The Company also offered dog boarding and kenneling, retail sales
of dog and cat care supplies, dog and cat food, as well as, veterinary
services through arrangements with independent veterinarians. Prior to
February 1, 1992, the Company was considered to be in the development
stage and had not generated any revenues.
During the second and third quarter of fiscal 1993, the Company
raised $543,100 in a private placement sale of 1,810,333 shares of
Common Stock. The proceeds from this sale of stock were used to open
a new retail facility, enhance the Company's veterinary service
capabilities and to repay outstanding bank debt.
In June 1993, using the proceeds from the private placement, the
Company opened a second retail facility in Irving, Texas under the
trade name Vet Works+. This facility provided a wide range of total
pet care services including a complete veterinary hospital, "Dogs Only"
discipline training, all breed grooming, and indoor lodging and
boarding, as well as, the sale of pet foods and pet care products. The
original Dogs Only facility in Grand Prairie, Texas was consolidated on
November 1, 1993 with the Company's Irving, Texas Vet Works+ facility.
On June 1, 1993, the Company entered into an agreement with Willis
C. Dearing, DVM, to purchase the assets of Dearing Animal Hospital,
Inc. for cash. This agreement allowed the Company of offer veterinary
services to patrons of its stores, also provided for certain stock
option arrangements with Dr. Dearing.
The Company issued 860,000 shares of Common Stock to individuals
in a private placement that raised net cash proceeds of $250,471.
In 1994, the Company has an Incentive Stock Plan, under which
1,653,333 shares of the Company's common stock may granted to
employees. Options granted are to be exercisable at current market
value at the time of grant over a period not to exceed ten years.
Pursuant to the Plan, in 1994, the Company granted options to purchase
a total of 1,608,333 shares at $0.30 per share to four formerly
directors of the Company. In 1996, 650,000 of the options were
canceled upon resignation of three of the directors. The remaining
958,333 were held by the director to whom the Company sold its assets
and business operations in 1995. These options are all exercisable as
of December 31, 1996, except for 166,667 shares, which become
exercisable on April 1, 1997. The options will expire, if unexercised,
as follows:
April 1, 2000 333,333 [1]
April 1, 2001 333,333 [1]
April 1, 2002 166,667 [1]
June 1, 2003 125,000
-------
958,333
=======
<PAGE> 19
[1] For these options, the Company agreed to provide cash to the
optionee in an amount sufficient to pay any related tax liability.
On March 15, 1995, the Company filed a Form 15 with the SEC to
terminate its duty to file reports under section 13 and 15(d) of the
Securities Exchange Act of 1934.
On April 1 1995, the Company sold substantially all of its assets
to a director of the Company in exchange for the following: (1)
$100,000 in cash: (2) a non-interest bearing note with payments
scheduled to begin in December 1995, over 60 months in the total amount
of $60,000 to $120,000, depending on monthly sales of the disposed
business; and (3) assumption of lease obligations totaling
approximately $60,000. In addition, the sale agreement provided that
the purchaser would continue to be considered an employee under the
Incentive Stock Option Agreement for a period of ten years, which would
enable him to retain his stock options. No payments have been received
to date on the note and it was fully reserved as of December 31, 1996.
On June 26, 1995, the Company issued 6,000,000 shares to Jack R.
Daugherty, a former officer and director of the Company, in lieu of
payment of a loan in the amount of $150,000 due to Mr. Daugherty.
On June 26, 1995, the Company issued 3,000,000 shares to Donald L.
Parnell, a former officer and director of the Company, in lieu of
payment of salary in the amount the $75,000 due Mr. Parnell.
On June 26, 1995, the Company issued 400,000 shares to Gary A.
Agron, in lieu of payment of legal fees in the amount of $10,000.
On August 18, 1995, the Company changed its name to Medical
Management Systems, Inc.
In August 1996, Mr. Davis the Company's President acquired
9,825,498 shares from Jack Daugherty, Donald Parnell and Carl Motheral,
former officers and directors of the Company and the Company changed
its business purpose to that of a "shell" corporation.
On May 7, 1997, the Company entered into an Agreement and Release
with Vet Works+ and Willis C. Dearing, DVM, modifying their previous
agreement dated March 28, 1995. The Agreement and Release is a
settlement of all disputes and claims between the parties. The
Agreement and Release provides the surrender and cancellation of the
options granted to Dr. Dearing under the 1994 Incentive Stock Option
Agreement under the Dog World, Inc. Incentive Stock Option Plan.
In June 1997, Mr. Davis transferred 3,275,000 shares of Common
Stock each to Mr. Lee, the Company's Secretary, and Mr. Van Gundy, the
Company's Treasurer, respectively.
<PAGE> 20
ITEM 8. LEGAL PROCEEDINGS.
The Company is not a party to any litigation and to its knowledge,
no action, suit or proceedings against it has been threatened by any
person.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.
No market exists for the Company's securities and there is no
assurance that a regular trading market will develop, or if developed,
that it will be sustained. A shareholder in all likelihood, therefore,
will be unable to resell the securities referred to herein should he or
she desire to do so. Furthermore, it is unlikely that a lending
institution will accept the Company's securities as pledged collateral
for loans unless a regular trading market develops.
There are no plans, proposals, arrangements or understandings with
any person with regard to the development of a trading market in any of
the Company's securities.
As of July 31, 1997, the Company has 93 holders of record of its
Common Stock.
The Company has not paid any dividends since it is inception and
does not anticipate paying any dividends on its Common Stock in the
foreseeable future.
Blue Sky Considerations.
The laws of some states prohibit the resale of securities issued
by "blank check" or "shell" corporations. The Company may be
considered a "blank check" or "shell" corporation for the purpose of
state securities laws. Accordingly, it is possible that current
shareholders may be unable to resell their securities in other states.
The Company is unaware which particular states prohibit such resales,
other than Idaho or Indiana.
Further, because each state has a series of exempt securities
transaction predicated upon the particular facts of each transaction,
it is impossible to determine if a contemplated transaction by an
existing shareholder would possibly violate the securities laws of any
particular state.
In the event a current shareholder or broker/dealer resells its
securities in a state where such resale is prohibited, the Company
believes that the seller thereof may be liable criminally or civilly
under that particular state's laws. The Company believes that it will
not be liable for such improper secondary sales.
Existing shareholders should exercise caution in the resale of
their shares of common stock in light of the foregoing.
<PAGE> 21
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
On June 26, 1995, the Company issued 6,000,000 shares to Jack R.
Daugherty, a former officer and director of the Company, in lieu of
payment of a loan in the amount of $150,000 due to Mr. Daugherty.
On June 26, 1995, the Company issued 3,000,000 shares to Donald L.
Parnell, a former officer and director of the Company, in lieu of
payment of salary in the amount the $75,000 due Mr. Parnell.
On June 26, 1995, the Company issued 400,000 shares to Gary A.
Agron, in lieu of payment of legal fees in the amount of $10,000.
In August 1996, Mr. Davis the Company's President acquired
9,825,498 shares from Jack Daugherty, Donald Parnell and Carl Motheral,
former officers and directors of the Company.
On May 7, 1997, the Company entered into an Agreement and Release
with Vet Works+ and Willis C. Dearing, DVM, modifying their previous
agreement dated March 28, 1995. The Agreement and Release is a
settlement of all disputes and claims between the parties. The
Agreement and Release provides the surrender and cancellation of the
options granted to Dr. Dearing under the 1994 Incentive Stock Option
Agreement under the Dog World, Inc. Incentive Stock Option Plan.
In June 1997, Mr. Davis transferred 3,275,000 shares of Common
Stock each to Mr. Lee, the Company's Secretary, and Mr. Van Gundy, the
Company's Treasurer, respectively.
ITEM 11. DESCRIPTION OF THE COMPANY'S SECURITIES TO BE
REGISTERED.
Common Stock.
The authorized Common Stock of the Company consists of 40,000,000
shares of no par value Common Stock. All shares have equal voting
rights and are not assessable. Voting rights are not cumulative and,
therefore, the holders of more than 50% of the Common Stock could, if
they chose to do so, elect all of the directors of the Company.
Upon liquidation, dissolution or winding up of the Company, the
assets of the Company, after the payment of liabilities, will be
distributed pro rata to the holders of the Common Stock. The holders
of the Common Stock do not have preemptive rights to subscribe for any
securities of the Company and have no right to require the Company to
redeem or purchase their shares. The shares of Common Stock presently
outstanding are fully paid and nonassessable.
<PAGE> 22
Preferred Stock.
The Company is authorized to issue 10,000,000 shares of Preferred
Stock, no par value. The Preferred Stock may be issued in series from
time to time with such designation, rights, preferences and limitations
as the Board of Directors of the Company may determine be resolution.
The rights, preferences and limitations of separate series of Preferred
Stock may differ with respect to such matters as may be determined by
the Board of Directors, including, without limitation, the rate of
dividends, method and nature of payment of dividends, terms of
redemption, amounts payable on liquidation, sinking fund provisions (if
any), conversion rights (if any) and voting rights. No Preferred Stock
has been issued by the Company.
Dividends.
Holders of the Common Stock are entitled to share equally in
dividends when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefore. No dividend has
been paid on the Common Stock since inception, and none is contemplated
in the foreseeable future.
Transfer Agent.
American Securities Transfer and Trust, Inc., 1825 Lawrence
Street, Suite 444, Denver, Colorado 80202, is the Company's transfer
agent.
Issuance of Additional Securities.
The Company has not considered and does not know, at the present
time, of circumstances which may result in the issuance to management,
promoters or their affiliates or associates of securities of the
Company, other than the possible issuance of securities to a finder of
the acquisition/merger candidate. The Company will not, however, issue
securities to a finder who is an Officer, Director or affiliate of the
Company. Currently, there are no agreements nor have there been any
discussions with anyone to pay a finder's fee in cash or securities.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 7-3-10(o) of the Colorado Revised Statutes and certain
provisions of the Company's Articles of Incorporation under certain
circumstances provide for indemnification of the Company's Officers,
Directors and controlling persons against liabilities which they may
incur in such capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but this
description is qualified in its entirety by reference to the Company's
Articles of Incorporation and to the statutory provisions.
<PAGE> 23
In general, any Officer, Director, employee or agent may be
indemnified against expenses, fines, settlements or judgments arising
in connection with a legal proceeding to which such person is a party,
if that person's actions were in good faith, were believed to the be in
the Company's best interest, and were not unlawful. Unless such person
is successful upon the merits in such an action, indemnification may be
awarded only after a determination by independent decision of the Board
of Directors, by legal counsel, or by a vote of the shareholders, that
the applicable standard of conduct was met by the person to be
indemnified.
The circumstances under which indemnification is granted in
connection with an action brought on behalf of the Company is generally
the same as those set forth above; however, with respect to such
actions, indemnification is granted only with respect to expenses
actually incurred in connection with the defense or settlement of the
action. In such actions, the person to be indemnified must have acted
in good faith and in a manner believed to have been in the Company's
best interest, and have not been adjudged liable for negligence or
misconduct.
Indemnification may also be granted pursuant to the terms of
agreements which may be entered in the future or pursuant to a vote of
shareholders or Directors. The statutory provision cited above and the
Company's Articles of Incorporation also grant the power to the Company
to purchase and maintain insurance which protects its Officers and
Directors against any liabilities incurred in connection with their
service in such a position, and such a policy may be obtained by the
Company.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements are included on pages 23 through 38
herein.
ITEM 14. DISAGREEMENTS WITH ACCOUNTANTS, AND ACCOUNTING AND FINANCIAL
DISCLOSURE.
There have been no disagreements on accounting and financial
disclosures from the inception of the Company through the date of this
Registration Statement.
<PAGE> 24
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
MEDICAL MANAGEMENT SYSTEMS, INC.
AND SUBSIDIARY
(Formerly Dog World, Inc.)
FINANCIAL STATEMENTS AS OF
DECEMBER 31, 1996, 1995, 1994 AND 1993
<PAGE> 25
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Medical Management Systems, Inc.
Littleton, Colorado
We have audited the accompanying consolidated balance sheets of Medical
Management Systems, Inc. (formerly Dog World, Inc. and Subsidiary) as
of December 31, 1996, 1995, 1994 and 1993 and the related consolidated
statements of operations, changes in stockholders' equity (deficit) and
cash flows for each of the three years in the period ended December
31, 1996 and the four month period ended December 31, 1993. These
financial statements are the responsibility of management of the
Company. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Medical Management Systems, Inc. and Subsidiary as of December 31,
1996, 1995, 1994 and 1993, and the results of their operations and
their cash flows for each of the three years in the period ended
December 31, 1996 and the four month period ended December 31, 1993, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1
to the financial statements, the Company currently has no business
operations, which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to this
matter are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
HEIN + ASSOCIATES LLP
February 10 , 1997
Dallas, Texas
F-1
<PAGE> 26 MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
(formerly Dog World, Inc.)
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31,
1996 1995 1994 1993
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and interest
bearing accounts $ - $ 8,964 $ 5,220 $ 90,006
Trade accounts receivable,
no allowance for
doubtful accounts
considered necessary - - 6,456 3,134
Amounts due
from employees - - 15,491 445
Inventory - - 30,000 55,551
Prepaid expenses - - 21,643 2,192
------ --------- --------- ---------
Total Current Assets 8,964 78,810 151,328
PROPERTY AND EQUIPMENT, at cost:
Leasehold improvements - - 94,418 89,600
Training and veterinary
equipment - - 129,574 80,266
Office furniture and
equipment - - 40,428 34,942
------ --------- --------- ---------
- - 264,420 204,808
Less accumulated depreciation
and amortization - - (64,544) (17,265)
------ --------- --------- ---------
Net Property & Equipment - - 199,876 187,543
OTHER ASSETS:
Cost in excess of net
assets acquired, net
of accumulated amortization
of $5,382 and $1,983 in 1994
and 1993, respectively - - 45,618 49,017
Organizational costs, net
of accumulated amortization
of $5,938 and $4,012 in 1994
and 1993, respectively - - 3,691 5,617
Note receivable, net of allowance
of $60,000 in 1996 - 60,000 - -
Other - - 15,335 13,670
------ --------- --------- ---------
Total Assets $ - $ 68,964 $ 343,330 $ 407,175
====== ========= ========= =========
</TABLE>
Continued
F-2
<PAGE> 27
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
(formerly Dog World, Inc.)
CONSOLIDATED BALANCE SHEETS, Continued
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
December 31,
1996 1995 1994 1993
<S> <C> <C> <C> <C>
CURRENT LIABILITIES:
Current portion of capital
lease obligation $ - $ - $ 3,065 $ 2,723
Trade accounts payable 14,358 14,358 50,387 25,083
Accrued liabilities - 85,000 28,696 11,361
----------- ----------- ---------- ---------
Total current liabilities 14,358 99,358 82,148 39,167
CAPITAL LEASE OBLIGATION,
net of current portion - - 45,351 12,523
NOTES PAYABLE:
Related party - 150,000 127,000 -
Bank - - - 63,500
STOCKHOLDERS' EQUITY(DEFICIT):
Preferred stock, no par
value; 10,000,000 shares
authorized, none issued
and outstanding - - - -
Common stock subscribed - - - 90,000
Common stock, no par value;
40,000,000 shares authorized;
shares issued and outstanding
were 18,310,330 at December 31,
1996, 8,910,330 at December 31,
1995 and 1994 and 8,050,330 at
December 31, 1993 1,241,015 1,006,015 1,006,015 755,544
Accumulated deficit (1,255,373) (1,186,409) (917,184) (553,559)
----------- ---------- ---------- ---------
Total Stockholders'
Equity (Deficit) (14,358) (180,394) 88,831 291,985
----------- ---------- ---------- ---------
Total Liabilities and
Stockholders' Equity
(Deficit) $ - $ 68,964 $ 343,330 $ 407,175
=========== ========== ========== =========
</TABLE>
See accompanying notes to these financial statements.
F-3
<PAGE> 28
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
(formerly Dog World, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION> For the Four
Months Ended
For the Years Ended December 31, 12/31
1996 1995 1994 1993
<S> <C> <C> <C> <C>
GENERAL AND ADMINISTRATIVE
EXPENSES $ 8,964 $ 102,098 $ - $ -
----------- ---------- ---------- ----------
Loss from continuing
operations (8,964) (102,098) - -
DISCONTINUED OPERATIONS:
Loss from operations - 87,097 363,625 126,992
Loss on disposal of business 60,000 80,030 - -
----------- ---------- ---------- ----------
(60,000) (167,127) (363,625) (126,992)
----------- ---------- ---------- ----------
NET LOSS $ (68,964) $ (269,225) $ (363,625) $ (126,992)
=========== ========== ========== ==========
LOSS PER SHARE:
Continuing operations $ - $ (.01) $ - $ -
=========== ========== ========== ==========
Net loss $ - $ (.03) $ (.04) $ (.02)
=========== ========== ========== ==========
WEIGHTED AVERAGE SHARES 17,526,996 8,910,330 8,766,997 8,050,330
=========== ========== ========== ==========
</TABLE>
See accompanying notes to these financial statements.
F-4
<PAGE> 29
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
(formerly Dog World, Inc.)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
For the Period From September 1, 1993 through December 31, 1996
<TABLE>
<CAPTION>
Common
Common Stock Stock Accumulated
Shares Amount Subscribed Deficit Total
<S> <C> <C> <C> <C> <C>
BALANCES, 09/01/93 8,050,330 $ 755,544 $ - $ (426,567) $ 328,977
Common stock subscribed - - 90,000 - 90,000
Net loss for the period - (126,992) (126,992)
---------- ---------- -------- ----------- ---------
BALANCES, 12/31/93 8,050,330 755,544 90,000 (553,559) 291,985
Shares issued 860,000 250,471 (90,000) - 160,471
Net loss for the year - - - (363,625) (363,625)
---------- ---------- -------- ----------- ---------
BALANCES, 12/31/94 8,910,330 1,006,015 - (917,184) 88,831
Net loss for the year - - - (269,225) (269,225)
---------- ---------- -------- ----------- ---------
BALANCES, 12/31/95 8,910,330 1,006,015 - (1,186,409) (180,394)
Shares issued 9,400,000 235,000 - - 235,000
Net loss for the year - - - (68,964) (68,964)
---------- ---------- -------- ----------- ---------
BALANCES, 12/31/86 18,310,330 $1,241,015 $ - $(1,255,373) $ (14,358)
========== ========== ======== =========== =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 30
MEDICAL MANAGEMENT SYSTEMS INC. AND SUBSIDIARY
(formerly Dog World, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Four
Months Ended
For the Years Ended December 31, 12/31
1996 1995 1994 1993
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(68,964) $(269,225) $(363,625) $(126,992)
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation and amortization - 6,497 52,605 8,444
Loss on disposal of business 60,000 80,030 - -
Changes in current assets
and liabilities 93,862 30,374 3,372
Other - (30,420) (1,669) 1,211
-------- --------- --------- ---------
Net cash used by operating
activities (8,964) (119,256) (282,315) (113,965)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for other assets - - - (7,518)
Expenditures for property
and equipment - - (24,612) (4,616)
Proceeds from sale of business - 100,000 - -
-------- --------- --------- ---------
Net cash provided (used) by
investing activities - 100,000 (24,612) (12,134)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from subscription and
sale of common stock - - 160,471 90,000
Proceeds from notes payable - 23,000 63,500 63,500
Repayments of capital
lease obligations - - (1,830) (838)
-------- --------- --------- ---------
Net cash provided by
financing activities - 23,000 222,141 152,662
-------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH (8,964) 3,744 (84,786) 26,563
CASH, beginning of year 8,964 5,220 90,006 63,443
-------- --------- --------- ---------
CASH, end of year $ - $ 8,964 $ 5,220 $ 90,006
======== ========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ - $ 2,072 $ 9,243 $ 838
======== ========= ========= =========
Common stock issued to
retire notes payable and
accrued liabilities $235,000 $ - $ - $ -
======== ========= ========= =========
Equipment acquired for
capital lease $ - $ - $ 35,000 $ -
======== ========= ========= =========
Property and equipment
sold, net of capital
lease obligations $ - $ 144,963 $ - $ -
======== ========= ========= =========
Note receivable from
sale of business $ - $ 60,000 $ - $ -
======== ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE> 31
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
(formerly Dog World, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization.
Medical Management Systems, Inc. (the Company) was incorporated as
Apache Investments, Inc. in 1987 under the laws of the State of
Colorado. In February 1992, the Company commenced its initial
principal operations of owning and operating a pet school and kennel in
Grand Prairie, Texas. In September 1991, the name of the Company was
changed to Dog World, Inc. In June 1993, the Company acquired a
veterinary practice in Irving, Texas. In April 1995, substantially all
the Company's assets and business operations were sold and the Company
subsequently changed its name to Medical Management Systems, Inc.
Change in Fiscal Year.
In 1993, the Company changed its fiscal year end from August 31 to
December 31. Accordingly, the accompanying financial statements
include statements of operations and cash flows for the four month
period ended December 31, 1993.
Consolidation Policy.
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, Consignment Sports, Inc. All
material inter-company accounts and transactions have been eliminated
in consolidation.
Net Loss per Common Share.
Net loss per common share is based upon the weighted average number of
outstanding common shares. Warrants and options are not considered in
the computation as their effect would be anti-dilutive.
Cash and Cash Equivalents.
The Company considers all highly liquid investments with an initial
maturity of three months or less to be cash equivalents.
Intangible Assets.
Costs in excess of net assets acquired were amortized on a straight-
line basis over fifteen years. Organization costs were amortized on a
straight-line basis over five years. These assets were written off
upon the sale of the Company's business operations in 1995.
Property and Equipment.
Depreciation and amortization of property and equipment is computed on
the straight-line method over the shorter of the estimated useful lives
of the related assets or the lease term.
<PAGE> 32
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES
(formerly Dog World, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Inventory.
Inventory consists of pet supplies, medicine, food, and nutritional
supplements stated at the lower of average cost or market.
Income Taxes.
The Company accounts for income taxes under the liability method, which
requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in
the financial statements or tax returns. Under this method, deferred
tax assets and liabilities are determined based on the difference
between the financial statements and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.
Continuation as a Going Concern.
The Company currently has no business operations or assets, which
raises substantial doubt about its ability to continue as a going
concern. Management's plans in regard to this matter are to reorganize
the Company in order to search for a viable merger or acquisition
candidate.
2. SALE OF BUSINESS OPERATIONS.
On April 1, 1995, the Company sold substantially all of its assets to
a director of the Company in exchange for the following: (1) $100,000
of cash; (2) a non-interest bearing note with payments scheduled to
begin in December 1995 over 60 months in the total amount of $60,000 to
$120,000, depending on monthly sales of the disposed business; and (3)
assumption of lease obligations totaling approximately $60,000. In
addition, the sale agreement provided that the purchaser would continue
to be considered an employee under the Incentive Stock Option Agreement
(see Note 4) for a period of ten years, which would enable him to
retain his stock options. The Company recorded the sale based upon the
minimum amount due on the note, which resulted in a loss on disposal of
$80,030. No payments have been received to date on the note and it was
fully reserved as of December 31, 1996. The provision for loss on the
note of $60,000 was recorded as an additional loss on disposal in the
1996 statement of operations.
The revenues and expenses related to the disposed business have been
netted in the accompanying statements of operations under the caption
"loss from operations". Revenues from the disposed business were
$37,352, $365,901, and $114,249 for the periods ended 1995, 1994 and
1993, respectively.
<PAGE> 33
MEDICAL MANAGEMENT SYSTEMS AND SUBSIDIARIES
(formerly Dog World, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. RELATED PARTY TRANSACTIONS.
In 1994, a director of the Company repaid approximately $150,000 of the
Company's bank debt. The director was subsequently issued common stock
in satisfaction of the liability as described in Note 4.
4. STOCKHOLDERS' EQUITY.
In 1996, the Company issued 9,400,000 shares to satisfy $150,000 of
debt (Note 3) and $85,000 of accrued liabilities.
In 1994, the Company issued 860,000 shares of common stock to
individuals in a private placement that raised net cash proceeds of
$250,471. The Company has an Incentive Stock Plan, under which
1,653,333 shares of the Company's common stock may be granted to
employees. Options granted are to be exercisable at current market
value at the time of grant over a period not to exceed ten years.
Pursuant to the Plan, in 1994 the Company granted options to purchase
a total of 1,608,333 shares at $.30 per share to four directors of the
Company. In 1996, 650,000 of the options were canceled upon
resignation of three of the directors. The remaining 958,333 were held
by the director to whom the Company sold its assets and business
operations in 1995 (see Note 2). These options are all exercisable as
of December 31, 1996, except for 166,667 shares, which become
exercisable on April 1, 1997. The options will expire, if unexercised,
as follows:
April 1, 2000 333,333 [1]
April 1, 2001 333,333 [1]
April 1, 2002 166,667 [1]
June 1, 2003 125,000
--------
958,333
========
[1] For these options, the Company agreed to provide cash to the
optionee in an amount sufficient to pay any related tax liability.
The Company is authorized to issue 10,000,000 shares of no par value
preferred stock. The preferred stock may be issued in series from time
to time with such designation, rights, preferences and limitations as
the board of directors of the Company may determine by resolution.
5. INCOME TAX
The Company has a net operating loss for Federal income tax purposes,
which will be severely limited due to a change in common stock
ownership in 1996. Therefore, a valuation allowance has been provided
each year for the full amount of the deferred tax asset resulting from
the net operating losses.
<PAGE> 34
MEDICAL MANAGEMENT SYSTEMS, INC.
AND SUBSIDIARY
(Formerly Dog World, Inc.)
UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JUNE 30, 1997
<PAGE> 35
MEDICAL MANAGEMENT SYSTEMS, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, 1997 December
(Unaudited) 31, 1996
<S> <C> <C>
Cash $ 493 -
Note receivable 1,500 -
---------- ----------
Total Assets $ 1,993 -
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable $ 2,015 $ 14,358
Loan payable to stockholders 19,575 -
---------- ----------
Total Liabilities 21,590 14,358
Stockholders Equity
Preferred stock, 10,000,000
shares authorized, no par
value; none issued and
outstanding - -
Common stock, 40,000,000
shares authorized, no par
value; 18,310,330 shares
issued and outstanding 1,241,015 1,241,015
Accumulated deficit (1,260,612) (1,255,373)
---------- ----------
Total Stockholders' Equity (19,597) (14,358)
---------- ----------
Total Liabilities and
Stockholders' Equity $ 1,993 $ -
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-1
<PAGE> 36
MEDICAL MANAGEMENT SYSTEMS, INC.
STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 1997
<TABLE>
<CAPTION>
Three Six
Months Months
<S> <C> <C>
Revenues $ - $ -
Expenses
Accounting and legal 3,227 17,503
Stock transfer fees 350 2,241
Travel 1,067 1,532
Miscellaneous 33 321
-------- --------
4,677 21,597
Other Income
Recovery of bad debts 10,000 10,000
Relief of liabilities 6,358 6,358
-------- --------
16,358 16,358
======== ========
Net Income (Loss) $ 11,681 $ (5,239)
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-2
<PAGE> 37
MEDICAL MANAGEMENT SYSTEMS, INC.
STATEMENT OF CASH FLOWS
For the Three and Six Months Ended June 30, 1997
<TABLE>
<CAPTION>
Three Months Six Months
<S> <C> <C>
Cash Flows From Operations
Net income (loss) $ 11,681 $ (5,239)
Adjustments:
Accounts payable 12,343 12,343
--------- ---------
Net cash used by operations (662) (17,582)
Cash Flows From Investing
Activities - -
Cash Flows From Financing
Activities
Note receivable (1,500) (1,500)
Borrowings from stockholders 2,655 19,595
--------- ---------
Net cash provided by financing
activities 1,155 18,075
========= =========
Increase In Cash 493 493
Cash, Beginning Of Period - -
--------- ---------
Cash, End Of Period $ 493 $ 493
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE> 38
MEDICAL MANAGEMENT SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Medical Management Systems, Inc. (the Company) was incorporated as
Apache Investments, Inc. in 1987 under the laws of the State of
Colorado. In February 1992, the Company commenced its initial
principal operations of owning and operating a pet school and kennel in
Grand Prairie, Texas. In September 1991, the name of the Company was
changed to Dog World, Inc. In June 1993, the Company acquired a
veterinary practice in Irving, Texas. In April 1995, substantially all
the Company's assets and business operations were sold and the Company
subsequently changed its name to Medical Management Systems, Inc.
The Company currently has no business operations and intends to
actively seek, locate, evaluate, structure and complete mergers with or
acquisitions of private companies, partnership or sole proprietorships.
2. OTHER INCOME AND NOTE RECEIVABLE
On May 7, 1997, the Company reached an agreement with a director of the
Company whereby the director agreed to pay $8,500 in cash along with a
promissory note for $1,500 in settlement of a dispute involving the
sale of Company assets in April 1995. In addition, the director agreed
to surrender options granted him to acquire 985,333 shares of the
Company's common stock, execute a Consent of Directors previously
executed by all other directors, transfer 25,000 shares of common stock
to another officer and director and release the Company from all
claims, demands and obligations. The Company accepted the cash and
note in satisfaction of a $60,000 note due from the director which had
been written off and recorded as a loss in its financial statements for
the year ended December 31, 1996.
The promissory note carries interest at 12%, is unsecured and is due
with accrued interest six months from the agreement date.
The Company used $8,000 of the cash received to settle an outstanding
trade payable. The difference between the amount that had been due,
$14,358, and the amount paid has been recognized as income from relief
of indebtedness.
3. STOCKHOLDER LOAN
The Company is obligated to two stockholders and directors of the
Company for payments they have made from personal funds for Company
expenses. The amount, $19,575 at June 30, 1997, is payable without
interest when the Company has funds available.
<PAGE> 39
EXHIBITS
Exhibit No. Description
The following documents are incorporated herein by reference from
the Registrant's Form S-18 Registration Statement filed with the
Securities and Exchange Commission on August 25, 1988 and was declared
effective on October 20, 1988:
3.1 Articles of Incorporation.
3.2 Bylaws of the Company.
4.1 Specimen Stock Certificate.
The following documents are filed herewith:
3.3 Articles of Amendment to Articles of Incorporation to
change the name to Medical Management Systems, Inc.
10.1 Agreement and Release with Vet Works+ and Willis
Dearing.
27 Financial Data Schedule.
<PAGE> 40
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Denver, Colorado, on this 5th day of
September, 1997.
MEDICAL MANAGEMENT SYSTEMS, INC.
BY: /s/ Philip J. Davis, President
KNOW ALL MEN BY THESE PRESENT, that each person whose signature
appears below constitutes and appoints Philip J. Davis, as true and
lawful attorney-in-fact and agent, with full power of substitution, for
his and in his name, place and stead, in any and all capacities, to
sign any and all amendment (including post-effective amendments) to
this registration statement, and to file the same, therewith, with the
Securities and Exchange Commission, and to make any and all state
securities law or blue sky filings, granting unto said attorney-in-fact
and agent, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in about the premises,
as fully to all intents and purposes as he might or could do in person,
hereby ratifying the confirming all that said attorney-in-fact and
agent, or any substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of
1934, this Form 10 Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
Signature Title Date
/s/ Philip J. Davis President and a member September 5, 1997
of the Board of Directors
/s/ John C. Lee Secretary and a member September 5, 1997
of the Board of Directors
/s/ Charles C. Treasurer, Principal September 5, 1997
Van Gundy Accounting Officer,
Chief Financial Officer
and a member of the
Board of Directors
<PAGE> 41
EXHIBIT INDEX
Exhibit No. Description
The following documents are incorporated herein by reference from
the Registrant's Form S-18 Registration Statement filed with the
Securities and Exchange Commission on August 25, 1988 and declared
effective on October 20, 1988:
3.1 Articles of Incorporation.
3.2 Bylaws of the Company.
4.1 Specimen Stock Certificate.
The following documents are filed herewith:
3.3 Articles of Amendment to Articles of Incorporation to
change the name to Medical Management Systems, Inc.
10.1 Agreement and Release with Vet Works+ and Willis
Dearing.
27 Financial Data Schedule.
ARTICLE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Corporation Act,
the undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation:
FIRST: The name of the corporation is Dog World, Inc.
SECOND: Article I of the Articles of Incorporation is
herewith amended to change the name of the corporation to:
MEDICAL MANAGEMENT SYSTEMS, INC.
THIRD: The amendment to the corporations Articles of
Incorporation reflected in paragraph SECOND above, was by the
requisite number of shareholders at the shareholders' meeting
held on April 18, 1995.
Dated: April 19, 1995.
MEDICAL MANAGEMENT SYSTEMS, INC.
(formerly Dog World, Inc.)
BY: /s/ Donald L. Parnell
President
BY: /s/ Henry T. Stanley, Jr.
Secretary
<PAGE> 1
AGREEMENT AND RELEASE
This Agreement and Release ("Agreement") is entered
into this 7th day of May, 1997, by and between Medical Management
Systems, Inc., a Colorado corporation, formerly Dog World, Inc.
(hereinafter referred to as "Medical") on one hand and Vet Works+
Veterinary Services, P.C., a Texas professional corporation,
(hereinafter referred to as "Vet Works") and Willis C. Dearing,
DVM (hereinafter collectively referred to as "Dearing") on the
other hand.
RECITALS
1. On or about March 28, 1995, Vet Works, Dearing and
Medical entered into an Memorandum of Agreement which is
incorporated herein by reference as if set forth in full,
regarding the repayment of funds by Vet Works and Dearing to Dog
World, Inc. and the purchase of certain assets by Vet Works and
Dearing from Dog World. The repayment of such funds and the
purchase of assets by Vet Works and Dearing, as set forth in the
Memorandum of Agreement, was effected through the execution by
the parties of that certain Purchase and Sale and Closing
Agreement (the "Closing Agreement") and related documents more
fully described herein, dated April 24, 1995.
2. A dispute has now arisen between the parties
regarding the foregoing Memorandum of Agreement and related
documents; and
3. The parties desire to settle all disputes and
claims which have arisen between them, pursuant to the terms and
conditions set forth below. The parties believe this settlement
to be in their respective best interests based upon their
independent investigations of the facts and analyses of the legal
principles involved. The parties desire to settle all such
disputes and claims in order to avoid the expense of litigation
and to put to rest all claims which have been asserted or which
might have been asserted by any of them in connection with the
Memorandum of Agreement and related documents; and
4. The settlement of the above-described claims and
disputes, including all negotiations leading to the settlement,
the surrender of certain options, the execution of the consent of
directors, the transfer of certain shares and the payment of
$10,000 and any and all terms of this Agreement are not intended
to constitute and shall not constitute and shall not constitute
any admission or concession of any kind by any party as to such
claims and disputes. The parties each hereby acknowledge that
the foregoing disputes and claims involve arguable and disputed
questions of fact and law, and they now wish fully and finally to
compromise and settle such claims and disputes.
<PAGE> 2
AGREEMENT
NOW, THEREFORE, in consideration of the following
terms, covenants and conditions, as well as other good and
valuable considerations, the receipt and sufficiency of which is
hereby acknowledged by each party, the parties agree as follows:
Section 1. Surrender of Options.
Dearing hereby surrenders the options granted to him
under two (2) 1994 Incentive Stock Option Agreements under the
Dog World, Inc., Incentive Stock Option Plan, each dated May 9,
1994 (the "ISO Agreement") to acquire 833,333 shares and 125,000
shares, respectively, of Medical's common stock. A copy of the
ISO Agreements are attached hereto and incorporated herein by
reference as though set forth in full. The execution of this
Agreement by Dearing rescinds, cancels, and sets aside the above
referenced ISO Agreement and all options granted to Dearing.
Section 2. Consent of to Action of the Board.
Dearing hereby consents to the actions taken by the
Board of Directors on August 20, 1996 and agrees to execute a
Consent of Directors previously executed by all other directors.
In the event that Dearing does not execute the foregoing Consent
of Directors, the execution of this Agreement shall constitute
the execution of the Consent of Directors aforesaid.
Section 3. Transfer of Stock.
Dearing will transfer to Philip J. Davis, Medical stock
certificate no. 000064 for 25,000 shares of common stock, or an
affidavit of lost stock certificate in lieu thereof. Dearing
will endorse the foregoing stock certificate, if available, and
have his signature Medallion guaranteed.
Section 4. Payment to Medical.
Dearing will pay to Medical ten thousand dollars
($10,000.00) payable as follows: certified funds in the amount
of $8,500.00 upon the execution of this Agreement and the balance
of $1,500.00 to be paid in six (6) months together with interest
thereon at the rate of twelve percent (12%) as evidenced by a
promissory note of even date herewith.
Section 5. Release of Claims.
1. Vet Works and Dearing hereby release and forever
discharge Medical, its respective successors, parents,
subsidiaries, affiliates, assigns, officers, directors, agents,
servants and employees from any and all claims, demands,
obligations, payments, losses, causes of action, costs, expenses,
attorneys fees and liabilities of any nature whatsoever, whether
<PAGE> 3
based on contract, tort, statutory or other legal or equitable
theory of recovery, whether known or unknown, which Vet Works
and/or Dearing has had or claims to have against Medical from the
beginning of time to the date of this Agreement; and
2. Medical hereby releases and forever discharges
Dearing, his heirs, successors and assigns, and Vet Works, its
successors, partners, subsidiaries, affiliates, assigns,
officers, directors, agents, servants and employees, from any and
all claims, demands, obligations, payments, losses, causes of
action, costs, expenses, attorneys fees and liabilities of any
nature whatsoever, whether based on contract, tort, statutory or
other legal or equitable theory of recovery, whether known or
unknown, which Medical has, had or claims to have against Vet
Works and/or Dearing, from the beginning of time to the date of
this Agreement including but not limited to the monetary
obligations as outlined in paragraph 3 and subparagraphs (i),
(ii) and (iii) of the Memorandum of Agreement and paragraph
1.6(b) on Page 3 of the Closing Agreement, as well as the related
Promissory Note dated April 24, 1995 in the principal amount of
$120,000 executed by Vet Works and Dearing, payable to Dog World,
Inc. (the "Promissory Note") and any and all obligations
thereunder. Medical agrees to return the original Promissory
Note, with the notation "Paid in Full" stamped or written on the
face of such Note, to Vet Works and Dearing upon the execution of
this Agreement.
Section 6. Representation of Medical Management Systems, Inc.
Medical Management Systems, Inc. Hereby represents and
warranties (1) that it is the successor-in-interest to Dog World,
Inc. And any predecessors thereof; (2) that it is the sole legal
owner and holder of the rights granted to Dog World, Inc. In the
aforementioned Memorandum of Agreement, Closing Agreement and/or
the related Promissory Note; and (3) that neither it nor Dog
World, Inc. has sold, conveyed or assigned, in whole or in part,
any of its rights or obligations granted to Dog World, Inc. in
the Memorandum of Agreement, Closing Agreement or Promissory
Note. Medical will provide evidence satisfactory to Vet Works
and Dearing of Medical's succession to the rights and interests
referenced herein formerly held by Dog World, Inc.
Section 7. Integration Clause.
This Agreement represents and contains the entire
agreement and understanding among the parties hereto with respect
to the subject matter of this Agreement, and supersedes any and
all prior oral and written agreements and understandings. No
representations, warranties, conditions, understandings or
agreements of any kind with respect to the subject matter of this
<PAGE> 4
Agreement shall be relied upon by the parties except those
contained herein. This Agreement may not be amended or modified
except by an agreement signed by the party against whom
enforcement of any modification or amendment is sought.
Section 8. Confidentially.
The terms of this Agreement are confidential and the
terms hereof have not been disclosed to any persons, other than
to the parties' attorneys, and will not be disclosed to any
person without the express consent of all parties or unless
disclosure is required pursuant to rules and regulations of the
Securities and Exchange Commission.
Section 9. Counterparts.
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all
of which together shall be deemed one and the same instrument.
MEDICAL MANAGEMENT SYSTEMS, INC.
formerly Dog World, Inc.
BY: /s/ Philip J. Davis, President
VET WORKS+ VETERINARY SERVICES, P.C.
BY: /s/ Willis C. Dearing, DVM, President
/s/ Willis C. Dearing, DVM, Individually
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at June 30, 1997 (Unaudited) and for the
year ended December 31, 1996, and the Statement of Income for the six months
ended June 30, 1996 (Unaudited) and for the year ended December 31, 1996 and
is qualified in its entirety by reference to such financial condition.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1997
<PERIOD-END> DEC-31-1996 JUN-30-1997
<CASH> 0 493
<SECURITIES> 0 0
<RECEIVABLES> 0 1,500
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 1,993
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 1,993
<CURRENT-LIABILITIES> 14,358 21,590
<BONDS> 0 0
0 0
0 0
<COMMON> 1,241,015 1,241,015
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 0 1,993
<SALES> 0 0
<TOTAL-REVENUES> 0 16,358
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 8,964 21,597
<LOSS-PROVISION> 60,000 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (68,964) (5,239)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (68,964) (5,239)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
