|
|
|
|
|
|
|
|
|
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
Amendment No. 2
X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended March 31, 1998.
__ Transition report under Section 13 or 15(d) of the Exchange Act for the
transition period from __ to __
Commission file number: 0-17419
MENTORTECH INC.
---------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 13-3260705
-------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
462 Seventh Avenue, New York, New York 10018
--------------------------------------------
(Address of Principal Executive Offices)
(212) 736-5870
--------------
(Issuer's Telephone Number, Including Area Code)
______________________________________________
(Former Name, Former Address and Former Fiscal
Year, if Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS
As of May 12, 1998, the Issuer had 3,446,166 shares of Common Stock, par value
$.01, outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
2
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---- ----
(unaudited)
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $1,631 $1,659
Accounts receivable 3,331 3,503
Prepaid expenses 662 351
Inventory 7 34
----- -----
Total current assets 5,631 5,547
----- -----
Property and Equipment:
Property and equipment 4,070 3,900
Accumulated depreciation and amortization (1,724) (1,536)
------ ------
Total property and equipment 2,346 2,364
------ -----
Other Assets:
Other assets, net 505 585
Investment in affiliate -- --
Goodwill (net of accumulated amortization of
$217 in 1998 and $287 in 1997) 4,905 5,001
------ ------
TOTAL ASSETS $13,387 $13,497
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---- ----
(unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities:
Accounts payable and accrued expenses $ 2,706 $2,831
Deferred revenue 2,381 2,155
Loans payable - others - current portion 565 601
Loans payable - affiliate - current portion 83 102
Capital equipment obligations 0 5
----- -----
Total current liabilities 5,735 5,694
----- -----
Other Liabilities:
Loans payable 212 136
Accounts Payable - Long Term 271 271
Other liabilities 558 556
----- -----
Total liabilities 6,776 6,657
----- -----
Stockholders' Equity:
Common stock 34 34
Additional paid in capital - common stock 8,698 8,722
Accumulated deficit (1,938) (1,771)
Cumulative foreign currency
translation adjustment (183) (145)
Total Stockholders' Equity 6,611 6,840
----- -----
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $13,387 $13,497
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
<TABLE>
<CAPTION>
For the three months ended March 31,
------------------------------------
1998 1997
---- ----
(unaudited)
<S> <C> <C>
Revenues $4,972 $4,267
Cost of revenues 3,128 2,629
----- ------
Gross profit 1,844 1,638
Selling and marketing 824 519
General and administrative 1,105 989
Research and development 0 103
--- ---
Operating income (loss) (85) 27
--- ---
Gain on sale of subsidiary 0 11
Financial expense, net 82 28
--- ---
Net income (loss) $(167) $10
===== ===
Net income (loss) per share
Basic ($0.05) $0.004
====== ======
Diluted ($0.05) $0.004
====== ======
Number of shares used in computing net
income (loss) per share
Basic 3,446 2,698
===== =====
Diluted 3,446 2,698
===== =====
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
March, 31
----------------------
1998 1997
---- ----
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) for the period ($167) $10
Adjustments to reconcile net (loss)
to net cash (used in) provided by operating activities
Depreciation and amortization 284 251
Increase in accrued severance pay, net 2 21
Increase in trade receivables 172 316
Decrease in prepaid expenses (311) (180)
Decrease (increase) in other receivables 0 56
Decrease (increase) in other assets 80 (5)
Decrease (increase) in inventories 27 56
Increase (decrease) in related parties (19) (340)
Increase in deferred revenue 226 203
Increase (decrease) in accounts payable and accrued expenses (125) (769)
---- ----
Net cash (used in) provided by operating activities 169 (377)
--- ----
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (170) (385)
Proceeds from sales of property and equipment 0 9
Purchase of subsidiary 0 (45)
Cash acquired in acquisition 0 1,217
--- -----
Net cash provided by (used in) investing activities (170) 796
---- ---
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(in thousands)
<TABLE>
<CAPTION>
March 31,
----------------------
1998 1997
---- ----
(unaudited)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital equipment obligation repayments (5) (15)
Loans Payable 76 0
Additional Costs of Issuance of Common Shares (24) 0
--- ---
Increase in short-term bank credit (36) (42)
--- ---
Net cash provided by financing activities 11 (57)
-- ---
Net increase (decrease) in cash and cash equivalents 10 362
Effect of exchange rate changes on cash and cash equivalent (38) 0
Cash and cash equivalents at the beginning of the period 288 384
--- ---
Cash and cash equivalents at the end of the period $1,631 $746
------ ----
Supplemental disclosure of cash flow information:
Cash paid during the period for
Income taxes $ 0 $20
Interest $ 88 $411
Supplemental disclosure of non-cash and financing activities:
Two shareholder loans in the amount of $2,578 and $438
were converted to equity in 1997
Effective March 3, 1998 an 8:1 reverse stock split was
effectuated
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Interim Financial Statements
The accompanying financial information is unaudited, but in the opinion of
management, reflects all adjustments (which include only normal recurring
adjustments) necessary to present fairly the Company's financial position,
operating results and cash flows for those periods presented. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulation of the Securities and
Exchange Commission (the "Commission") See Management's Discussion and Analysis,
"Overview" and "Financial Reporting." The financial information should be read
in conjunction with the audited financial statements and notes thereto for the
year ended December 31, 1998. Results for the interim period are not necessarily
indicative of results for the entire year.
Note 2. Accounting Policy
For purposes of the Statements of Cash Flows, the Company considers all
highly liquid instruments with maturity of one year or less when purchased to be
cash equivalents.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MENTORTECH, INC.
By:/s/Roy Machnes
-----------------
Roy Machnes
President and Chief Executive Officer
By:/s/Elan Penn
---------------
Elan Penn
Chief Financial Officer
Date: September 28, 1998
9
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
--- -----------
3.1 Certificate of Incorporation, as amended (1)
3.2 Certificate of Amendment of Certificate of Incorporation with regard to the
change of the Company's name and the increase in the Company's authorized
capital stock (2)
3.3 Certificate of Amendment of Certificate of Incorporation with regard to a
reverse stock split (3)
3.4 By-Laws (4)
10.1 Lease for premises situated at 462 Seventh Avenue, 4th Floor, New York, New
York (5)
10.2 Lease for premises situated at 462 Seventh Avenue, 18th Floor, New York,
New York (6)
10.3 1997 Stock Option Plan (7)
10.4 Employment Agreement of Roy Machnes (8)
10.5 Employment Agreement of Elan Penn (8)
10.6 Employment Agreement of Terry I. Steinberg (8)
27 Financial Data Schedule
___________
(1) Filed as an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1989 and hereby incorporated by reference thereto,
as amended by document filed as an exhibit to the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1993.
(2) Filed as an exhibit to the Company's Quarterly Report on Form 10-QSB for
the quarter ended September 30, 1997 and hereby incorporated by reference
thereto.
(3) Filed as an exhibit to the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1997 and hereby incorporated by reference thereto.
(4) Filed as an exhibit to the Company's Form S-18 (File No. 33-19521) and
hereby incorporated by reference thereto.
(5) Filed as an exhibit to the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1993 and hereby incorporated by reference
thereto.
(6) Filed as an exhibit to the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1992 and hereby incorporated by reference
thereto.
(7) Filed as an exhibit to the Company's Quarterly Report on Form 10-QSB for
the quarter ended June 30, 1997 and hereby incorporated by reference
thereto.
(8) Filed as a "Related Agreement" to the Stock Purchase Agreement, which
Related Agreement was filed as an exhibit to the Company's Current Report
on Form 8-K for an event dated February 13, 1997 and hereby incorporated by
reference thereto.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,631
<SECURITIES> 0
<RECEIVABLES> 3,331
<ALLOWANCES> 0
<INVENTORY> 7
<CURRENT-ASSETS> 5,631
<PP&E> 4,070
<DEPRECIATION> 1,724
<TOTAL-ASSETS> 13,387
<CURRENT-LIABILITIES> 2,706
<BONDS> 0
0
0
<COMMON> 34
<OTHER-SE> 6,577
<TOTAL-LIABILITY-AND-EQUITY> 13,387
<SALES> 4,972
<TOTAL-REVENUES> 4,972
<CGS> 3,128
<TOTAL-COSTS> 5,057
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 82
<INCOME-PRETAX> (167)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (167)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
|
|