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Previous: MENTORTECH INC, 10QSB/A, 1998-09-29 |
Next: MENTORTECH INC, S-3, 1998-09-29 |
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
Amendment No. 1
X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended June 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 August 13, 1998, the Issuer had 3,446,163 shares of Common Stock, par
value $.01, outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X
<PAGE>
MENTORTECH INC.
Form 10-QSB
Part I - Financial Information
Item 1. Financial Statements
2
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
------------- -----------------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 491 $ 1,659
Accounts receivable 4,382 3,503
Prepaid expenses 573 351
Inventory 33 34
------ ------
Total current assets 5,479 5,547
------ ------
Property and Equipment:
Property and equipment 4,347 3,900
Accumulated depreciation
and amortization (1,862) (1,536)
------- -------
Total property and equipment 2,485 2,364
------- -------
Other Assets:
Other assets, net 420 585
Goodwill (net of accumulated amortization
of $568 in 1998 and $446 in 1997) 4,807 5,001
----- -----
TOTAL ASSETS $13,191 $13,497
====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(in thousands)
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
------------- -----------------
(unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $2,769 $ 2,831
Deferred revenue 2,136 2,155
Loans payable - others - current portion 592 601
Loans payable - affiliate - current portion 182 102
Capital equipment obligations -- 5
------ ------
Total current liabilities 5,679 5,694
Other Liabilities:
Loans payable -- 136
Accounts payable - long term 255 271
Other liabilities 690 556
----- -----
Total liabilities 6,624 6,657
----- -----
Stockholders' Equity:
Common stock 34 34
Additional paid in capital - common stock 8,698 8,722
Accumulated deficit (1,901) (1,771)
Cumulative foreign currency translation adjustment (264) (145)
------ ------
Total Stockholders' Equity 6,567 6,840
----- -----
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $13,191 $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 Six Months Ended
June 30, June 30,
---------------------- ----------------------
1998 1997 1998 1997
---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C>
Revenues $5,160 $4,420 $10,132 $8,687
Cost of revenues 3,215 2,746 6,343 5,375
------ ------ ------- ------
Gross profit 1,945 1,674 3,789 3,312
Selling and marketing 892 686 1,716 1,205
General and administrative 975 800 2,080 1,789
Research and development -- 127 -- 230
------ ----- ------ ------
Operating income (loss) 78 61 (7) 88
Gain on sale of subsidiary -- 16 -- 27
Financial income (expense), net (41) (69) (123) (97)
---- ---- ----- ---
Net income (loss) $ 37 $ 8 $ (130) $ 18
==== ==== ===== ====
Net income (loss) per share
Basic $ .01 $.002 $ (.04) $ .005
==== ==== ===== =====
Diluted $ .01 $.002 $ (.04) $ .005
==== ==== ====== =====
Number of shares used in computing
net income (loss) per share
Basic 3,446 3,446 3,446 3,446
===== ===== ===== =====
Diluted 3,866 3,834 3,446 3,834
===== ===== ===== =====
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------------------
1998 1997
---- ----
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) for the period $(130) $ 18
Adjustments to reconcile net income (loss) to net
cash (used in) provided by operating activities
Depreciation and amortization 520 366
Increase (decrease) in accrued severance pay, net (8) 41
Increase in trade receivables (879) (199)
Decrease (increase) in prepaid expenses (222) 211
Decrease in other receivables -- 154
Decrease in other assets 165 79
Decrease in inventories 1 65
Increase (decrease) in related parties 80 (452)
Decrease in deferred revenue (19) (125)
Increase in deferred income taxes -- (72)
Capital gain -- (2)
Decrease in accounts payable and accrued expenses (78) (594)
---- -----
Net cash (used in) operating activities (570) (510)
--- ---
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (576) (657)
Proceeds from sales of property and equipment 129 35
Purchase of subsidiary -- (45)
Cash acquired in acquisition -- 1,217
------ -----
Net cash (used in) provided by investing
activities (447) 550
------ -----
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
MENTORTECH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------
1998 1997
---- ----
(unaudited)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital equipment obligation repayments $ (5) $ (52)
Decrease in loans payable -- (480)
Additional costs of issuance of common stock (24) --
Increase in short-term bank credit (3) 331
---
Net cash provided by (used in) financing activities (32) (201)
---- -----
Net (decrease) in cash and cash equivalents (1,049) (161)
Effect of exchange rate changes on cash
and cash equivalents (119) --
Cash and cash equivalents at the beginning of the period 1,659 282
------ ----
Cash and cash equivalents at the end of the period $491 $121
====== ======
Supplemental disclosure of cash flow information:
Cash paid during the period for
Income taxes $ 3 $ 28
Interest $123 $ 98
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 4. 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 491
<SECURITIES> 0
<RECEIVABLES> 4,382
<ALLOWANCES> 0
<INVENTORY> 33
<CURRENT-ASSETS> 5,479
<PP&E> 4,347
<DEPRECIATION> 1,862
<TOTAL-ASSETS> 13,191
<CURRENT-LIABILITIES> 5,679
<BONDS> 0
0
0
<COMMON> 34
<OTHER-SE> 6,533
<TOTAL-LIABILITY-AND-EQUITY> 13,191
<SALES> 10,132
<TOTAL-REVENUES> 10,132
<CGS> 6,343
<TOTAL-COSTS> 10,139
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 123
<INCOME-PRETAX> (130)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (130)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
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