U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended September 30, 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 November 13, 1998, the Issuer had 3,578,208 shares of Common Stock, par
value $.01, outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X
<PAGE>
MENTORTECH INC.
Form 10-QSB
INDEX
Page
----
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets at September 30, 1998 and
December 31, 1997 3
Consolidated Statements of Operations for the three and
nine months ended September 30, 1998 and 1997 5
Consolidated Statement of Cash Flows for the nine months
ended September 30, 1998 and 1997 6
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II - Other Information
Item 4. Submission of Matters to a Vote of Shareholders 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 16
2
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, 1998 December 31, 1997
------------------ -----------------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 85 $1,659
Accounts receivable 4,424 3,503
Prepaid expenses 1,177 351
Inventory 80 34
------ ------
Total current assets 5,766 5,547
------ ------
Property and Equipment:
Property and equipment 4,506 3,900
Accumulated depreciation
and amortization (2,024) (1,536)
------- -------
Total property and equipment 2,482 2,364
------- -------
Other Assets:
Other assets, net 416 585
Goodwill (net of accumulated amortization
of $780 in 1998 and $446 in 1997) 4,668 5,001
----- -----
TOTAL ASSETS $13,332 $13,497
====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(in thousands)
<TABLE>
<CAPTION>
September 30, 1998 December 31, 1997
------------------ -----------------
(unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $2,911 $ 2,831
Deferred revenue 2,128 2,155
Loans payable - others - current portion 978 601
Loans payable - affiliate - current portion 149 102
Capital equipment obligations -- 5
------ ------
Total current liabilities 6,166 5,694
Other Liabilities:
Accrued Severance Pay 518 556
Accounts payable - long term 277 271
Other liabilities 134 136
----- ----
7,095 6,657
----- -----
Total liabilities
Stockholders' Equity:
Common stock 34 34
Additional paid in capital - common stock 8,638 8,722
Accumulated deficit (2,029) (1,771)
Cumulative foreign currency translation adjustment (406) (145)
------ ------
Total Stockholders' Equity 6,237 6,840
----- -----
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $13,332 $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>
Three Months Ended Nine Months Ended
September 30 September 30,
------------ -------------
1998 1997 1998 1997
---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C>
Revenues $4,650 $4,396 $14,782 $13,083
Cost of revenues 2,984 2,730 9,327 8,105
------ ------ ------- ------
Gross profit 1,666 1,666 5,455 4,978
Selling and marketing 770 750 2,486 1,955
General and administrative 975 981 3,055 2,770
Research and development -- 110 -- 340
------ ----- ------ ------
Operating (loss) (79) (175) (86) (87)
Gain on sale of subsidiary -- 17 -- 44
Financial (expense), net (49) (39) (172) (136)
---- ---- ----- ----
Net (loss) $(128) $ (197) $ (258) $ (179)
===== ======= ====== =======
Net (loss) per share
Basic and Diluted $(.04) $(.08) $(.07) $(.09)
===== ====== ===== =====
Number of shares used in computing
net (loss) per share
Basic and Diluted 3,446 2,395 3,446 2,048
===== ===== ===== =====
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------
1998 1997
---- ----
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) for the period $(258) $(179)
Adjustments to reconcile net income (loss) to net
cash (used in) provided by operating activities
821 674
Depreciation and amortization
(38) 94
Increase (decrease) in accrued severance pay, net
(922) (121)
Increase in trade receivables
(826) (105)
Decrease (increase) in prepaid expenses
0 56
Decrease in other receivables
169 0
Decrease in other assets
(46) 55
Decrease in inventories
(410)
Increase (decrease) in related parties
(27) 110
Decrease in deferred revenue
0 (73)
Increase in deferred income taxes
1 5
Capital gain
84 (198)
Decrease in accounts payable and accrued expenses
Net cash (used in) operating activities (1,042) (612)
CASH FLOWS FROM INVESTING ACTIVITIES:
(729) (908)
Purchase of property and equipment
123 71
Proceeds from sales of property and equipment
(45)
Purchase of subsidiary
1,217
Cash acquired in acquisition
Net cash (used in) provided by investing (606) 335
activities
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------
1998 1997
---- ----
(unaudited)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital equipment obligation repayments $ (5) $ (37)
(480)
Decrease in loans payable 47
(69)
Additional costs of issuance of common stock (84)
377 629
Increase in short-term bank credit
335 43
Net cash provided by (used in) financing activities
(1,313) (234)
Net (decrease) in cash and cash equivalents
Effect of exchange rate changes on cash (261) (20)
and cash equivalents
1,659 288
Cash and cash equivalents at the beginning of the period
$85 $34
Cash and cash equivalents at the end of the period
Supplemental disclosure of cash flow information:
Cash paid during the period for
3 38
Income taxes
Interest 192 88
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. See Management's Discussion and Analysis 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,
1997. 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
Note 3. Subsequent Events
On October 28, 1998 Mashov Computer Marketing Ltd. exercised warrants to
purchase 132,045 shares of the Company's common stock. The Company received
gross proceeds of $580,998.
8
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
This Report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 which are subject to risks and
uncertainties. Actual results could differ materially from the forward-looking
statements in this report. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed elsewhere in this
Report. The following discussion and analysis should be read in conjunction with
the Company's financial statements and notes thereto included elsewhere in this
report.
Overview
Effective February 13, 1997, the Company's predecessor, PC Etcetera, Inc.
("PCE U.S.") underwent a change of control pursuant to the Stock Purchase
Agreement between PCE U.S. and Mashov Computers Marketing Ltd. ("MCM"), whose
shares are publicly traded on the Tel-Aviv Stock Exchange (the "TASE"). MCM is a
majority-owned subsidiary of Mashov Computers Ltd., whose shares are also
publicly traded on the TASE. Based on the Stock Purchase Agreement, MCM acquired
1,054,865 shares of Common Stock and 658,412 shares of Series C Preferred Stock
of PCE U.S. (collectively, the "Sale Stock"), with each share of Series C
Preferred Stock convertible into 1.25 shares of Common Stock. In consideration
for the Sale Stock, PCE U.S. acquired two of MCM's subsidiaries, Sivan and
Mashov CBT. Pursuant to the Stock Purchase Agreement, MCM acquired 69% of PCE
U.S.'s equity and voting securities on a fully diluted basis, subject to an
adjustment based upon the fiscal year 1996 audited balance sheets of PCE U.S.,
Sivan and Mashov CBT. Such adjustment was made on August 4, 1997 when MCM
contributed 43,199 shares of Common Stock to the capital of the Company. In
addition, on August 4, 1997, the 658,412 shares of Series C Preferred Stock were
converted by MCM into 823,015 shares of Common Stock.
In October 1997, the Company acquired the assets of GLTN Computer
Consultants, Inc., a Long Island, New York, ILT training company in
consideration of $130,000 and the issuance of 15,909 shares of Common Stock. On
March 3, 1998, an 8 for 1 reverse stock split of the Company's Common Stock was
effectuated.
In addition, the name of the Company's wholly-owned subsidiary, Mashov
C.B.T., Ltd., was changed to Mentortech Systems, Ltd. ("Mentortech Systems").
All reporting and results for Mentortech Systems have been included in the
financial statements of the Company's Israeli operations.
Financial Reporting
The unaudited financial statements for the three and nine months ended
September 30, 1997 included in this report reflect the operations of Sivan and
Mentortech Systems for such periods and the operations of PCE U.S. and
Mentortech TBT (formerly PC Etcetera Israel) since February 13, 1997, the date
of the stock purchase transaction. All per share data have been revised to
reflect an 8 for 1 reverse stock split that was effectuated on March 3, 1998.
Three and nine months ended September 30, 1998 as compared to three and nine
months ended September 30, 1997.
Revenues. The Company's revenues are derived from instructor-led training
("ILT") services, contractual consulting and staff augmentation services, and
technology-based training ("TBT") product sales. The Company's ILT revenues are
recognized over the life of the training course. Franchise fees from centers
operating with the Sivan trade name in Israel and utilizing Sivan's training
materials are included in ILT revenues. Contract consulting and staff
augmentation revenues are recognized as the services are performed. TBT revenues
are recognized upon shipment of the software provided that no significant vendor
obligations remain and collection of the related receivable is probable. The
Company's refund policy provides that dissatisfied trainees may either attend
the same course without charge or the trainee's employer may request a full
refund. An allowance for refunds has not been established, because historically
minimal refunds have been issued. Retakes of a course are provided on a seat
available basis. Accordingly, the Company believes that it does not incur any
financial exposure with respect to such retakes.
The Company's revenues for the three months ended September 30, 1998
increased 6% to $4.7 million from $4.40 million in the comparable 1997 period.
Revenues for the nine months ended September 30, 1998 also rose 13% to $14.78
million from $13.08 million for the nine months ended September 30, 1997.
Sivan's ILT revenues increased by $0.27 and $1.08 million respectively, for the
three and nine months ended September 30, 1998 to $3.17 million and $9.70
million compared to $2.90 million and $8.62 million for the same periods in
1997. The increase in Sivan's
9
<PAGE>
revenues in 1998 was due primarily to its success in offering more high-end
technical courses as well as an increase in the number of vocational courses
offered. TBT revenues for the three and nine months ended September 30, 1998
were $0.26 and $.062, respectively, compared to $0.02 and $.011 for the same
periods in 1997.
The revenues of the Company's U.S. operation were $1.23 million and $4.46
million for the three and nine months ended September 30, 1998. This represents
a decrease of $0.22 million or 15% for the three months ended September 30, 1998
as compared to the same period in 1997. Revenues for the nine months ended
September 30, 1998, which totaled $4.46 million, represents a 7% decline from
the same period in 1997. Consulting revenues for the New York metropolitan area
totaled $0.67 million and $2.69 million for the three and nine months ended
September 30, 1998, a decline of 24% and 36%, respectively, compared to revenues
of $1.1 million and $3.6 million for the three and nine months ended September
30, 1997. Management has made a substantial effort to reverse the declining
trend in revenue. During the third quarter of 1998 the Company recruited a
President of the Consulting Services Division. The new CSD President joined the
Company with a team of four additional employees. Management expects CSD
revenues to increase substantially in the fourth quarter.
The Company experienced growth in the ILT business in the United States in
1998. Revenues for the three and nine months ended September 30, 1998 rose to
$0.56 and $1.77 million, respectively, which represents increases of 42% when
compared to revenues of $0.40 and $1.2 million for the same periods in 1997.
Management attributes the increase in ILT revenues to the adoption of new
operating systems by its clients which resulted in increased demand for
training. The Company's U.S. operation had anticipated that the release of a new
application software entitled Office 97 would have a positive impact on ILT
revenues in previous periods. Management believes that this transition has
begun.
The Company's U.S. operation is also pursuing a move into the higher end
training market as many organizations require certification training for
Microsoft and Lotus back office applications and operating systems. Management
believes that this higher technical training environment will have a better
synergy with the U.S. operation's consulting business. The U.S. operation has
been authorized as a Lotus Authorized Education Center, and its status has been
upgraded to Premium Business partner and has received Microsoft Authorized
Technical Education Center status.
The cost of ILT revenues consists primarily of the expenses of instructors,
classroom space costs as well as depreciation of classroom equipment. Cost of
revenues for consulting services consists primarily of the labor costs of the
consultants performing the work at clients' facilities. Cost of revenues for TBT
revenues include packaging and manufacturing costs of the products as well as
design expenses for custom TBT projects. Cost of revenues for the Company was
64% and 63% of revenues for the three and nine months ended September 30, 1998,
respectively, compared to 62% of revenues for the three and nine months ended
September 30, 1997. Cost of revenues for Sivan was 60% and 58%, respectively,
for the three and nine months ended September 30, 1998 compared to 54% and 58%
of revenues for the three and nine months ended September 30, 1997. Cost of
revenues for the U.S. operation was 62% and 68%, respectively, for the three and
nine months ended September 30, 1998, compared to 76% and 72% for the same
periods of 1997. The Company has decreased its cost of revenues relative to
increased sales. During the third quarter of 1998, the Company further reduced
its fixed costs through lease negotiations with its landlords. Management
expects a significant reduction in the cost of goods sold as a percentage of
sales for the remainder of 1998.
Sales and marketing expenses consist primarily of costs relating to
promotion, advertising, trade shows and exhibitions. Such expenses also include
compensation of salespeople, support staff, travel and related expenses. Sales
and marketing expenses increased slightly by $20,000 or 3% and by $531,000 or
27% to $0.77million and $2.49 million, respectively, for the three and nine
months ended September 30, 1998 from $0.75 million and $1.96 million for the
three and nine months ended September 30, 1997. Sales and marketing expenses in
Israel totaled $0.60 and $1.494 million for the three and nine months ended
September 30, 1998 as compared to $0.53 and $1.44 for the three and nine months
ended September 30, 1997. Sales and marketing expenses in the U.S. totaled $0.21
and $1.01 million for the three and nine months ended September 30, 1998, up
from $0.26 and $0.66 million for the comparable periods of 1997. Management
believes the increased revenues are a result of the increased sales and
marketing expenses.
General and administrative expenses include compensation costs for
administration, finance and general management personnel and office maintenance
and administrative costs. General and administrative costs for the Company
showed a slight decrease to $0.98 million for the three months ended September
30, 1998 from $0.98 for the three months ended September 30, 1997. General and
administrative expenses increased to $3.055 million for the nine months
10
<PAGE>
ended September 30, 1998 compared to $2.77 million, for the nine months ended
September 30, 1997. General and administrative expenses were $0.92 million for
the U.S. operations during the first three quarters of 1998, a reduction of 16%
compared to the comparable period in 1997 and $2.06 million for Sivan for the
nine months ended September 30, 1998 an increase decrease of 22% from 1997.
Management is continuing its efforts to reduce general and administrative
expenses. In the United States, all duplicate administrative functions arising
from the acquisition of GLTN have been eliminated.
Research and development expenses had consisted primarily of salaries of
the employees engaged in ongoing research and development activities of TBT
materials and other related costs. Research and development expenses amounted to
$0.11 and $0.34 respectively, for the three and nine months ended September 30,
1997. Thereafter, the Company now believes that all of this work is now directed
to client projects and thus is included in cost of sales. Due to a change in
Accounting Principles in Israel, the Company no longer charges expenses to
research and development without a permit from the Israeli Government's Chief
Scientist. Management has decided not to apply for such permit.
As a result of the foregoing, the Company had operating losses of $79,000
and $86,000 respectively, for the three and nine months ended September 30, 1998
compared to operating losses of $175,000 and $87,000, respectively, for the
comparable periods of 1997. Management has devoted substantial efforts to an
aggressive cost containment plan. Management believes once the cost containment
plan is fully implemented, the Company's increased investment in sales and
marketing will permit the Company to return to profitability.
Interest expenses, net, consists primarily of bank charges and interest
expenses offset by interest income. Interest expenses were $49,000 and $172,000
for the three and nine month periods ended September 30, 1998 as compared to
$39,000 and $136,000 in the comparable periods in 1997.
Sivan's operations had net income of $0.43 million in 1998 compared to a
net loss of $0.05 million in 1997. The Company's U.S. operation incurred a loss
of $0.48 million during the nine months ended September 30, 1998 and Mentortech
TBT incurred a loss of $0.21. As a result of the foregoing, the Company had net
loss of $128,000 and of $258,000 for the three and nine months ended September
30, 1998 as compared to net loss of $197,000 and $179,000 for the three and nine
month periods ended September 30, 1997.
Liquidity and Capital Resources
At September 30, 1998, the Company had cash and cash equivalents of
approximately $85,000 and a working capital deficiency of $400,000 compared to
cash and cash equivalents of approximately $1.66 million and a working capital
deficiency of approximately $78,000 at December 31, 1997.
The Company completed a private placement of securities in December 1997,
wherein it issued and sold 511,364 shares of Common Stock and warrants to
purchase 255,682 shares of Common Stock. The Company obtained net proceeds of
approximately $2 million from the private placement. The Company's financial
position was further improved by Mashov's conversion of $1,162,000 of debt into
264,090 shares of Common Stock and warrants to purchase 132,045 shares of Common
Stock offset by the losses incurred.
On October 28, 1998 Mashov Computers Marketing Ltd. exercised warrants to
purchase 132,045 shares of the Company's common stock. The Company received
$580,998 as a result of this transaction which will be reflected in Q4 financial
statements.
In 1997, the Company obtained an oral commitment from its Israeli bank to
provide Sivan up to $1.1 million in working capital loans. As of September 30,
1998, Sivan had borrowed approximately $954,000 from such bank.
The Company's operating activities used approximately $1.04 million net
cash in the nine months ended September 30, 1998. Accounts receivable increased
by approximately $0.92 million and prepaid expenses increased by $0.826 million
during the same period. This increase was due primarily to higher accounts
receivable due to the increase in sales volume. Accounts payable and accrued
expenses decreased by $0.08 million during the same period. Prepaid expenses
increased by $0.83 million in part due to some systems and Consulting Services
Division investments in the US and advance payments in Israel. The Company's
investing activities used approximately $606,000 primarily for the purchase of
fixed assets.
11
<PAGE>
Based on the working capital loan commitment and the exercise of warrants
and subsequent cash received, the Company believes that it has sufficient
working capital to fund its current level of operational and capital
requirements through 1999. The Company does not have any material capital
commitments for 1999. To the extent the Company increases the scope of its
activities significantly, it may be required to obtain additional financing.
Seasonality
While the Company's revenues have not been substantially affected by
seasonal variations, the revenues of the Company's Israeli subsidiary, Sivan,
are affected by the timing of the national holidays, when classes are suspended.
12
<PAGE>
The Year 2000 Issue
Some of the Company's older computer programs were written using two digits
rather than four to define the applicable year. As a result, those computer
programs have time-sensitive software that recognize a date using "00" as the
year 1900 rather than the year 2000. This could cause a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities.
The Company has completed an assessment and is in the process of modifying and
replacing portions of its software so that its computer systems will function
properly with respect to dates in the year 2000 and thereafter. The total Year
2000 project cost is estimated at approximately $75,000. The Company has
incurred costs of approximately $45,000 to date.
13
<PAGE>
PART II-OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Shareholders
None.
Item 6. Exhibits and Reports on Form 8-K.
Exhibits.
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 1997 Stock Option Plan (6)
10.3 Employment Agreement of Roy Machnes (7)
10.4 Employment Agreement of Elan Penn (7)
10.5 Employment Agreement of Terry I. Steinberg (7)
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.
14
<PAGE>
(6) 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.
(7) 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.
Reports on Form 8-K.
No Current Reports on Form 8-K have been filed since September 30, 1998.
15
<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/Matthew L. Root
--------------------
Matthew L. Root
Chief Financial Officer
Date: November 13, 1998
16
<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 1997 Stock Option Plan (6)
10.3 Employment Agreement of Roy Machnes (7)
10.4 Employment Agreement of Elan Penn (7)
10.5 Employment Agreement of Terry I. Steinberg (7)
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 Quarterly Report on Form 10-QSB for
the quarter ended June 30, 1997 and hereby incorporated by reference
thereto.
(7) 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 85
<SECURITIES> 0
<RECEIVABLES> 4,424
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