<PAGE> 1
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended - December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________.
Commission file number 0-29462
MEDICAL MANAGEMENT SYSTEMS, INC.
(Exact name of Company as specified in its charter)
Colorado 95-4121451
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
5459 South Iris Street
Littleton, Colorado 80123
(Address of principal executive offices, including postal code.)
(303) 932-9998
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
Common Stock
Securities registered pursuant to Section 15(d) of the Act:
Title of each class
None
Indicate by check mark whether the Company (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES [ x ] NO [ ]
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Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ ]
The number of shares outstanding each of the Registrant's classes of
Common Stock, as of December 31, 1999 was 263,256.
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PART I
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.
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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.
In August 1996, Mr. Davis, the Company's President, acquired
9,825,498 shares from Jack Daugherty and Donald Parnell, 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.
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On October 15, 1998, the Company issued 3,334,934 shares of Common
Stock to Philip J. Davis in consideration of cash advances to the
Company in the amount of $16,724.67 and 3,334,934 shares of Common
Stock to John C. Lee in consideration of cash advances to the Company
in the amount of $16,724.67.
On January 19, 1999, the Company reverse split its shares on a
one-for one hundred basis.
On April 9,1999, the Company's board of directors granted bonuses
to the three directors totaling $300,000. The Company intends to pay
these bonuses if the funds become available.
On July 15, 1999, the Company issued 5,518 shares of Common Stock
to Philip J. Davis in consideration of cash advances to the Company in
the amount of $5,518.00 and 5,518 shares of Common Stock to John C. Lee
in consideration of cash advances to the Company in the amount of
$5,518.00.
On September 30, 1999, the Company issued 1,109 shares of Common
Stock to Philip J. Davis in consideration of cash advances to the
Company in the amount of $1,109.00 and 1,109 shares of Common Stock to
John C. Lee in consideration of cash advances to the Company in the
amount of $1,109.00.
The Company filed its Form 10 on a voluntary basis. It had no
obligations pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The Company believed that by filing such Form 10
and being obligated to file reports pursuant to Section 13 of the
Exchange Act, it could 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.
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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
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.
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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
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.
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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. A total of $46,702.66 related to legal,
accounting, transfer fees, travel and other miscellaneous expenses were
paid by Philip J. Davis and John C. Lee, officers, directors and
shareholders of the Company. Messrs. Davis and Lee were issued 80,154
shares of Common Stock in consideration of $46,702.66 of the foregoing.
Messrs. Davis and Lee anticipate funding the Company's operations,
including providing funds necessary to search for acquisition
candidates. Messrs. Davis and 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.
In 1999, a fee to the Company of $5,000.00 in connection with a
potential merger, was received directly by Messrs. Davis and Lee and is
being held by them to pay Company expenses. The balance of the funds
held by Messrs. Davis and Lee at December 31, 1999 is $4,423.
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.
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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.
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.
<PAGE> 10
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.
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.
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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).
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.
<PAGE> 12
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.
Year 2000
The Year 2000 issue is the result of computer programs written
using two digits rather than four to define the applicable year. As a
result, date-sensitive software may recognize a date using "00" as the
year 1900 rather than the Year 2000. This could result in system
failures or miscalculations causing disruptions of operations,
including among others, temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Since the Company has yet to acquire any technology in support of
its services, the planned acquisitions will most likely involve
hardware and software which is relatively new and therefore management
does not anticipate that it will incur significant operating expenses
or be required to invest heavily in computer systems improvements to be
Year 2000 compliant. As the Company makes arrangements with significant
hardware and software suppliers, the Company intends to determine the
extent to which the Company's systems may be vulnerable should those
third parties fail to address and correct their own Year 2000 issues
and take measures to reduce the Company's exposure, such as, finding
alternative suppliers or requiring the suppliers to correct Year 2000
compliance issues prior to the Company acquiring the product. The
Company anticipates that this will be an ongoing process relative to
computer products manufactured prior to January 1, 2000. There can be
no assurances that the systems of suppliers or other companies on which
the Company may rely on will be Year 2000 compliant. Additionally there
can be no assurances that all computer systems necessary to maintain
the viability of the Internet will be Year 2000 compliant. The Company
believes that it is taking the steps necessary regarding Year 2000
compliance issues with respect to matters within its control.
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> 13
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 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. PROPERTIES.
The Company owns no real property.
ITEM 3. LEGAL PROCEEDINGS.
No material legal proceedings are pending to which the Registrant
is a party or of which any of Registrant's property is the subject
matter. No legal proceedings are known to be contemplated by
governmental authorities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On January 19, 1999, the shareholders of the Company voted to
approve a reverse split the outstanding shares of Common Stock on a
one-for-one hundred basis.
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The Registrant's securities are traded over-the-counter on the
Bulletin Board operated by the National Association of Securities
Dealers, Inc. under the symbol MMGS. The table shows the high and low
bid of Registrant's Common Stock since November 3, 1998, when the
Registrant's securities began trading.
Quarter Ended BID
1998 High Low
12/31 0.00 0.00
1999
3/31 1.00 1.00
6/30 1.00 1.00
9/30 1.00 1.00
12/31 1.00 1.00
<PAGE> 14
As of December 31, 1999, the Company has 92 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 and Indiana.
The Securities and Exchange Commission (the "Commission") has
suggested that the Company take steps to prohibit further transfer of
the securities distributed to current shareholders, unless the Company
is assured that further transfer would not violate the securities laws
of the fifty states. The Company believes that the Commission has no
authority to cause the Company to place restrictions on the securities
it previously distributed and which it currently does not own. Such
action by the Company would legally be construed as a unilateral
modification of a fully executed contract and would therefore
constitute a breach of the agreement under which the shares were
originally issued. Further, the Company believes that such action by
the Commission would be a usurpation of the authority granted the
Commission by Congress.
Further, because each state has a series of exempt securities
transactions 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 resales are prohibited, the Company
believes that the seller thereof may be liable criminally and/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.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data presented below has been derived from
the financial statements of the Company. The following table
summarizes certain financial information and should be read in
conjunction with "Management's Discussion and Analysis of Results of
Operations and Financial Condition" and the Financial Statements and
related notes included elsewhere in this Statement.
<PAGE> 15
Statement of Operations and Accumulated Deficit Data:
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Income Statement:
Income $ 5,000 $ 90 $ - $ - $ -
Operating Expenses $ 310,845 $ 14,262 $ 24,473 $ 8,964 $ 102,098
Loss from Continuing
Operations $ (305,845) $ (14,172) $ (24,473) $ (8,964) $ (102,098)
Net Loss $ (305,845) $ (14,172) $ (8,115) $ (68,964) $ (269,225)
Net Loss from
Continuing Operations
per share $ (1.20) $ (0.07) $ (0.13) $ (0.05) $ (1.14)
Net Loss per share $ (1.20) $ (0.07) $ (0.04) $ (0.39) $ (3.02)
Balance Sheet Data:
Working Capital $ 4,423 $ 12 $ 836 $ (14,358) $ (90,394)
Total Assets $ 4,423 $ 12 $ 1,951 $ - $ 68,964
Current Liabilities $ 300,210 $ - $ - $ - $ -
Total Current
Liabilities $ 300,210 $ - $ - $ - $ -
Long-term debt $ - $ - $ - $ - $ 150,000
Shareholders'
Equity (deficit) $ 295,787 $ (3,196) $ (22,473) $ (14,358) $ (180,394)
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Results of Operations - Through December 31, 1999.
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 basically dormant;
except the Company incurred $310,845 of expenses in 1999 for legal,
accounting costs, and bonus's granted to the directors; $14,262 of
expenses in 1998 for legal and accounting costs and $24,473 of expenses
in 1997, primarily for legal and accounting costs associated with
filing its Form 10; $8,964 in 1996 for various administrative expenses
and $102,098 in 1995 for costs incurred subsequent to the disposal of
the business in an initial effort to enter other business ventures.
The Company's expenses in 1997, 1998 and 1999 were funded by advances
from shareholders.
In the period ended December 31,1999, a fee to the Company of $5000.00
in connection with a potential merger was received directly by
shareholders of the Company and is being held by them to pay Company
expenses. The balance of the funds held by them at December 31, 1999
is $4,423.
In August 1995, the Company changed its business purpose to a
blank check company.
<PAGE> 16
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 promissory
note was repaid in February 1998.
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 recorded with gain on
disposal of business, along with the $10,000 settlement referred to
above.
On January 19, 1999, the Company reverse split its shares on a
one-for-one hundred basis.
On April 9, 1999, the Company's board of directors granted
bonuses to the three directors totaling $300,000. The Company
intends to pay these bonuses if the funds become available.
On July 15, 1999, and September 30, 1999, the Company issued
11,036 and 2,218 shares of Common Stock respectively, to two
shareholders in consideration of cash advances to the Company in the
amount of $11,036.00 and $2,218.00.
Liquidity and Capital Resources.
The Company had 263,256 shares of Common Stock outstanding on
December 31, 1999. The Company has no current operating history and
no material assets. The Company has $4,423.00 in cash held by two
shareholders of the company as of December 31, 1999.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Financial statements begin on following page.
<PAGE> 17
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. and Subsidiary as of December 31,
1999 and 1998, and the related consolidated statements of operations,
changes in stockholders' deficit and cash flows for each of the three
years in the period ended December 31, 1999. 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, 1999 and 1998, and the results of their operations and
their cash flows for each of the three years in the period ended
December 31, 1999, 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
Dallas, Texas
March 1, 2000
F-1
<PAGE> 18
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
December 31,
1999 1998
<S> <C> <C>
CURRENT ASSETS:
Cash $ - $ 12
Related party receivables 4,423 -
------------ ------------
Total assets $ 4,423 $ 12
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Trade accounts payable $ 210 $ -
Compensation payable 300,000 -
------------ ------------
Total current liabilities 300,210 -
ADVANCES FROM RELATED PARTIES - 3,208
STOCKHOLDERS' DEFICIT:
Preferred stock, no par value;
10,000,000 shares authorized,
none issued and outstanding - -
Common stock, no par value;
40,000,000 shares authorized;
263,256 and 250,002 shares
issued and outstanding at
December 31, 1999 and 1998,
respectively 1,287,718 1,274,464
Accumulated deficit (1,583,505) (1,277,660)
------------ ------------
Total stockholders' deficit (295,787) (3,196)
------------ ------------
Total liabilities and
stockholders' deficit $ 4,423 $ 12
============ ============
</TABLE>
See accompanying notes to these financial statements.
F-2
<PAGE> 19
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Years Ended December 31,
1999 1998 1997
<S> <C> <C> <C>
REVENUES $ 5,000 $ 90 $ -
GENERAL AND ADMINISTRATIVE
EXPENSES 310,845 14,262 24,473
---------- --------- --------
Loss from continuing
operations (305,845) (14,172) (24,473)
DISCONTINUED OPERATIONS -
Gain on disposal
of business - - 16,358
---------- --------- --------
NET LOSS $ (305,845) $ (14,172) $ (8,115)
========== ========= ========
LOSS PER SHARE
(basic and diluted):
Continuing operations $ (1.20) $ (0.07) $ (0.13)
========== ========= ========
Net loss $ (1.20) $ (0.07) $ (0.04)
========== ========= ========
WEIGHTED AVERAGE SHARES 255,671 197,041 183,103
========== ========= ========
</TABLE>
See accompanying notes to these financial statements.
F-3
<PAGE> 20
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
For the Period From January 1, 1997 through December 31, 1999
<TABLE>
<CAPTION>
Common Stock Accumulated
Shares Amount Deficit Total
<S> <C> <C> <C> <C>
BALANCES,
January 1, 1997 183,103 $ 1,241,015 $ (1,255,373) $ (14,358)
Net loss for the year - - (8,115) (8,115)
------- ----------- ------------ ----------
BALANCES,
December 31, 1997 183,103 1,241,015 (1,263,488) (22,473)
Shares issued 66,899 33,449 - 33,449
Net loss for the year - - (14,172) (14,172)
------- ----------- ------------ ---------
BALANCES,
December 31, 1998 250,002 1,274,464 (1,277,660) (3,196)
Shares issued 13,254 13,254 - 13,254
Net loss for the year - - (305,845) (305,845)
------- ----------- ------------ ---------
BALANCES,
December 31, 1999 263,256 $ 1,287,718 $ (1,583,505) $(295,787)
======= =========== ============ ==========
</TABLE>
See accompanying notes to these financial statements.
F-4
<PAGE> 21
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES:
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Net loss $ (305,845) $ (14,172) $ (8,115)
Adjustments to reconcile
net loss to net cash provided
(used) by operating activities:
Gain on disposal of business - - (16,358)
Changes in current assets
and liabilities 295,787 (1,115) (6,885)
---------- --------- --------
Net cash used by
operating activities (10,058) (15,287) (31,358)
CASH FLOWS FROM INVESTING
ACTIVITIES -
Collection of note receivable - 1,500 8,500
CASH FLOWS FROM FINANCING
ACTIVITIES -
Advances from related parties 10,046 13,348 23,309
---------- --------- --------
NET INCREASE (DECREASE) IN CASH (12) (439) 451
CASH, beginning of year 12 451 -
---------- --------- --------
CASH, end of year - $ 12 $ 451
========== ========= ========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Settlement of account
payable $ - $ - $ 6,358
========== ========= ========
Common stock issued to retire
loans from related parties $ 13,254 $ 33,449 $ -
========== ========= ========
</TABLE>
See accompanying notes to these financial statements.
F-5
<PAGE> 22
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
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.
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
Basic loss per common share is based upon the weighted average number
of outstanding common shares. Diluted loss per share considers
warrants and options in the computation except when 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.
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.
Reverse Stock Split
In January 1999, the Company's stockholders approved a 100 to 1 reverse
stock split. The Company's authorized shares and stated capital
remained unchanged. The accompanying financial statements and
footnotes have been restated to reflect the reverse split from the
earliest period presented.
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 search for
a viable merger or acquisition candidate.
F-6
<PAGE> 23
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Sale of Business Operations
In 1995, the Company sold substantially all of its assets to a
former director of the Company.
In 1997, the Company and former director reached a final
settlement on the sale, which resulted in $10,000 in proceeds to
the Company. Also, the former director agreed to surrender
options granted him to acquire 9,853 shares of the Company's
common stock, and release the Company from all claims, demands and
obligations. In addition, in 1997 the Company settled certain
liabilities applicable to the sold assets at less than the
recorded amount and recognized income of $6,358 related to the
transaction.
3. Related Party Transactions
Two stockholders and directors of the Company have made payments
from personal funds to pay Company expenses. During 1999, 13,254
shares of common stock were issued to the two stockholders in
consideration for $13,254 of the advances. In 1999, a fee to the
Company of $5,000 in connection with a potential merger, was
received directly by the stockholders and is being held so they
may pay Company expenses as they come due. The balance of the
funds held by the stockholders at December 31, 1999 is $4,423.
In 1999, the Company's board of directors granted bonuses to the
three directors totaling $300,000. The Company intends these
amounts would be paid if funds become available.
4. Stockholders' Equity
The Company has an Incentive Stock Plan, under which 16,533 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. Options
to purchase 9,583 shares were canceled in 1997 as described in
Note 2. There are no options outstanding at December 31, 1999 and
1998.
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.
F-7
<PAGE> 24
MEDICAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Income Tax
The Company has a net operating loss (NOL) for federal income tax
purposes, which will be severely limited due to a change in common
stock ownership in 1996. The NOL that has arisen since the change
in stock ownership is about $30,000. The Company has a deferred
tax asset of about $110,000 at December 31, 1999, resulting from
the NOL and the deduction of accrued bonuses for financial
statement purposes, which are not currently deductible for tax
purposes. This deferred tax asset is fully reversed with a
valuation allowance.
**********
F-8
<PAGE> 25
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
There has been no change in the Company's independent accountant
during the past two fiscal years and through the date hereof,
accordingly the disclosures required by Item 14, are not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
Officers and Directors
The officers and directors of the Company are as follows:
Philip J. Davis 43 President and a member of the
Board of Directors
John C. Lee 44 Secretary and a member of the
Board of Directors
Charles C. Van Gundy 47 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. From December 1996 until
December 1999, Mr. Davis was 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. Mr. Davis resigned
his positions as an officer and director of Mizar Energy Company when
he sold 425,000 shares of 700,000 shares owned by him to HBOA.COM.,
Inc., a District of Columbia corporation. Since December 1992, Mr.
Davis is a self-employed consultant. 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.
<PAGE> 26
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 positions
on May 27, 1997, when he sold 366,667 shares of a total of 440,000
shares owned by him to a third party. 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. From December 1996 until December 1999,
Mr. Lee was 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 resigned his positions as an
officer and director of Mizar Energy Company when he sold 425,000
shares of 700,000 shares owned by him to HBOA.COM., Inc., a District of
Columbia corporation. 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 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 366,667 shares of a total of 440,000 shares
owned by him to a third party. 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. Mr.
Lee will devote approximately 20% of his time to the operation of the
Company.
<PAGE> 27
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 an 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.
Since November 1997, Mr. Van Gundy has served as the President, Chief
Executive Officer and a member of the Board of Directors of U.S. Pawn,
Inc. 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. On May 27,
1997, Mr. Van Gundy resigned the foregoing positions when he sold
16,667 shares of a total of 20,000 shares owned by him to a third
party. 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.
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.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities and Exchange Act of 1934 requires
certain defined persons to file reports of and changes in beneficial
ownership of a registered security with the Securities and Exchange
Commission and the National Association of Securities Dealers in
accordance with the rules and regulations promulgated by the Commission
to implement the provisions of Section 16. Under the regulatory
procedure, officers, directors and persons who own more than ten
percent of a registered class of a company's equity securities are also
required to furnish the Company with copies of all Section 16(a) forms
they filed.
<PAGE> 28
Based on review of the copies of Forms 3 and 4 and a review of the
records of the Company's transfer agent, all reports required to be
filed pursuant to Section 16(a) have been filed with the Commission.
ITEM 11. EXECUTIVE COMPENSATION
On April 9, 1999, the Company's board of directors granted bonuses
to the three directors totaling $300,000. The Company intends to pay
these bonuses if the funds become available.
Except for the forgoing, none of the Company's officers or
directors currently receive 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 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following schedule sets forth the Common Stock ownership of
each person known by the Company to be the beneficial owner of five per
cent 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.
Name and address Number of Percent
of owner Shares Position of Class
Philip J. Davis 75,269 President and a member 28.59%
5459 South Iris Street of the Board of Directors
Littleton, CO 80123
John C. Lee [2] 72,827 Secretary and a member 27.66%
5410 E. Long Place of the Board of Directors
Littleton, CO 80122
Charles C.
Van Gundy [3] 32,750 Treasurer and a member 12.44%
210 Dawson Drive of the Board of Directors
Castle Rock, CO 80104
<PAGE> 29
All officers and 180,846 68.69%
directors as a
group (3 persons)
Jack Daugherty 20,879 7.09%
1600 West 7th Street
Fort Worth, TX 76012
ITEM 13. 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.
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> 30
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
=======
[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
<PAGE> 31
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 loan in the amount of $150,000 due to Mr. Daugherty. The
Company relied upon Section 4(2) of the Securities Act of 1933 (the
"Act") and the transaction was by the issuer not involving a public
offering. All certificates contained a legend which prohibited
transfer unless the same were registered or were sold pursuant to an
applicable exemption from registration. The Company believed that the
purchaser did not need the protection of the Act, because the purchaser
was sophisticated and had access to all material information about the
Company.
On June 26, 1996, the Company issued 3,000,000 shares to Donald L.
Parnell, a former officer and director of the Company is lieu of
payment of salary in the amount of $75,000 due Mr. Parnell. The
Company relied upon Section 4(2) of the Securities Act of 1933 (the
"Act") and the transaction was by the issuer not involving a public
offering. All certificates contained a legend which prohibited
transfer unless the same were registered or were sold pursuant to an
applicable exemption from registration. The Company believed that the
purchaser did not need the protection of the Act, because the purchaser
was sophisticated and had access to all material information about the
Company.
On June 26, 1996, the Company issued 400,000 shares to Gary Agron,
in lieu of payment of legal fees in the amount of $10,000. The Company
relied upon Section 4(2) of the Securities Act of 1933 (the "Act") and
the transaction was by the issuer not involving a public offering. All
certificates contained a legend which prohibited transfer unless the
same were registered or were sold pursuant to an applicable exemption
from registration. The Company believed that the purchaser did not
need the protection of the Act, because the purchaser was sophisticated
and had access to all material information about the Company.
In August 1996, Mr. Davis the Company's President acquired
9,825,498 shares from Jack Daugherty and Donald Parnell, former
officers and directors of the Company. Messrs. Daugherty, Parnell and
Davis relied upon Section 4(1/2) exemption in that the parties believed
that the shares had come to rest and the transaction did not involve
a public offering. The shares were issued under the premise that Mr.
Davis's ownership would commence a new holding period. All
certificates issued to Mr. Davis contained a legend which prohibited
transfer unless the same were registered or were sold pursuant to an
applicable exemption from registration. Messrs. Daugherty, Parnell and
Davis believed that Mr. Davis did not need the protection of the Act,
because Mr. Davis was sophisticated and had access to all material
information about the Company.
<PAGE> 32
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. By
the terms of the Agreement, certain options issued to Dr. Dearing were
rescinded, cancelled, set aside and held for naught. Further, 250,000
shares of Common Stock owned by Dr. Dearing were transferred to Mr.
Davis. Dr. Dearing and Mr. Davis relied upon Section 4(1/2) exemption
for the transfer of the 25,000 shares of Common Stock in that the
parties believed that the shares had come to rest and the transaction
did not involved a public offering. The shares were transferred to Mr.
Davis under the premise that Mr. Davis's ownership would commence a new
holding period. All certificates issued to Mr. Davis contained a
legend which prohibited transfer unless the same were registered or
were sold pursuant to an applicable exemption from registration. Dr.
Dearing and Mr. Davis believed that Mr. Davis did not need the
protection of the Act, because Mr. Davis was sophisticated and had
access to all material information about the Company.
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. Messrs. Lee, Van Gundy and Davis
relied upon Section 4(1/2) exemption in that the parties believed that
the shares had come to rest and the transaction did not involved a
public offering. The shares were transferred under the premise that
Messrs. Lee's and Van Gundy's ownership would commence a new holding
period. All certificates issued to Messrs. Lee and Van Gundy contained
a legend which prohibited transfer unless the same were registered or
were sold pursuant to an applicable exemption from registration.
Messrs. Lee, Van Gundy and Davis believed that Messrs. Lee and Van
Gundy were sophisticated and had access to all material information
about the Company.
On October 15, 1998, the Company issued 3,344,934 shares of Common
Stock to Philip J. Davis in consideration of cash advances to the
Company of $16,724.67 and 3,344,934 shares of Common Stock to John C.
Lee in consideration of cash advances to the Company in the amount of
$16,724.67.
On January 19, 1999, the Company reverse split its Common Stock on
a one-for-one hundred basis.
On April 9,1999, the Company's board of directors granted bonuses
to the three directors totaling $300,000. The Company intends to pay
these bonuses if the funds become available.
On July 15, 1999, the Company issued 5,518 shares of Common Stock
to Philip J. Davis in consideration of cash advances to the Company in
the amount of $5,518.00 and 5,518 shares of Common Stock to John C. Lee
in consideration of cash advances to the Company in the amount of
$5,518.00.
<PAGE. 33
On September 30, 1999, the Company issued 1,109 shares of Common
Stock to Philip J. Davis in consideration of cash advances to the
Company in the amount of $1,109.00 and 1,109 shares of Common Stock to
John C. Lee in consideration of cash advances to the Company in the
amount of $1,109.00.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K.
(a) Financial Statements are contained in Item 8.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed for the period ended
December 31, 1998.
(c) Exhibits.
The following documents are incorporated herein by reference from
the Registrant's Form S-18 Registration Statement (SEC File No. 33-
23986-LA) filed with the Securities and Exchange Commission on August
25, 1988 and declared effective on October 20, 1988:
Exhibit
No. Description
3.1 Articles of Incorporation.
3.2 Bylaws of the Company.
4.1 Specimen Stock Certificate.
The following documents are incorporated herein by reference from
the Registrant's Form 10 Registration Statement (SEC File No. 0-29462)
filed with the Securities and Exchange Commission on September 5, 1997:
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.
The following documents are incorporated herein:
27 Financial Data Schedule.
<PAGE> 35
SIGNATURE PAGE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto
duly authorized, on this 28th day of March, 2000.
MEDICAL MANAGEMENT SYSTEMS, INC.
(Registrant)
BY: /s/ Philip J. Davis
Philip J. Davis, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following person on
behalf of the Registrant and in the capacities.
SIGNATURES TITLE DATE
/s/ Philip J. Davis
Philip J. Davis President and a member March 28, 2000
of the Board of Directors
/s/ John C. Lee
John C. Lee Secretary and a member March 28, 2000
of the Board of Directors
/s/ Charles C. Van Gundy Treasurer, Principal March 28, 2000
Charles C. Accounting Officer,
Van Gundy Chief Financial Officer
and a member of the
Board of Directors
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Financial Condition at Decmeber 31, 1999 Audited and
the Consolidated Statement of Income for the year ended December 31, 1999
Audited and is qualified in its entirety by reference to such financial
statement.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 4,423
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,423
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,423
<CURRENT-LIABILITIES> 300,210
<BONDS> 0
0
0
<COMMON> 1,287,718
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,423
<SALES> 0
<TOTAL-REVENUES> 5,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 310,845
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (305,845)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (305,845)
<EPS-BASIC> (1.20)
<EPS-DILUTED> (1.20)
</TABLE>
