SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2000
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number:0-17821
MOMSPHARMACY.COM,INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 11-2962027
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(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
33 WALT WHITMAN ROAD, SUITE 200A HUNTINGTON STATION, NY 11746
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (631) 547-6520
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:
OUTSTANDING AT
CLASS OF COMMON STOCK JUNE 30, 2000
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$.01 par value 3,096,813
Transitional small business disclosure format (check one):
YES NO X
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TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page
Financial Statements:
Condensed Consolidated Balance Sheet as of
June 30, 2000 (Unaudited) 3
Condensed Consolidated Statements of Operations
for the Six Months Ended June 30, 2000 and
Five Months Ended June 30, 1999 (Unaudited) 4
Condensed Consolidated Statements of Operations
for the Three Months Ended June 30, 2000 and
1999 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 2000 and
Five Months Ended June 30, 1999 (Unaudited) 6
Notes to Condensed Consolidated Financial 7-8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-9
PART II. OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K 9
Signatures 9
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<TABLE>
<CAPTION>
MOMSPHARMACY.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
ASSETS JUNE 30,2000
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CURRENT:
<S> <C>
Cash and cash equivalents $ 640,484
Accounts receivable, net 896,632
Inventories 129,827
Note receivable 280,000
Prepaid expenses and other
current assets 13,260
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Total current assets 1,960,203
PROPERTY AND EQUIPMENT, net 29,793
OTHER ASSETS 20,219
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$ 2,010,215
LIABILITIES AND STOCKHOLDERS' DEFICIT
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CURRENT:
Accounts payable $ 303,967
Accrued expenses and other
current liabilities 430,361
Note payable 1,500,000
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Total current liabilities 2,234,328
STOCKHOLDERS' DEFICIT:
Preferred stock,$.01 par value; shares
authorized 5,000,000; issued and
outstanding 512,500 5,125
Common stock, $.01 par value; shares
authorized 20,000,000; issued and
outstanding 3,096,813 30,000
Additional paid-in capital 2,154,475
Unearned compensation (40,500)
Accumulated deficit (2,373,213)
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TOTAL STOCKHOLDERS' DEFICIT (224,113)
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$ 2,010,215
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</TABLE>
See notes to condensed consolidated financial statements.
3
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<TABLE>
<CAPTION>
MOMSPHARMACY.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
SIX MONTHS FIVE MONTHS
ENDED ENDED
JUNE 30, 2000 JUNE 30, 1999
<S> <C> <C>
NET SALES $ 4,263,611 $ 2,823,787
COST OF GOODS SOLD 3,453,114 2,287,378
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Gross profit 810,497 536,409
OPERATING EXPENSES:
Selling, general and
administrative expenses 1,302,885 1,035,369
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Operating loss (492,388) (498,960)
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OTHER:
Interest expense (233,112) (355,222)
Other income, net 72,948 --
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Total other income (expense) (160,164) (355,222)
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LOSS BEFORE INCOME TAXES (652,552) (854,182)
PROVISION FOR INCOME TAXES 1,686 --
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LOSS FROM CONTINUING OPERATIONS (654,238) (854,182)
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INCOME FROM DISCONTINUED OPERATIONS
NET OF TAX PROVISION OF $101,000
AND $208,775, RESPECTIVELY 297,633 622,042
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NET LOSS $ (356,605) $ (232,140)
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BASIC AND DILUTED INCOME (LOSS) PER
COMMON SHARE
Continuing operations $ (.22) $ (.34)
Discontinued operations .10 .25
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Net loss $ (.12) $ (.09)
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BASIC AND DILUTED WEIGHTED AVERAGE
OF COMMON SHARES OUTSTANDING 3,096,813 2,500,000
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</TABLE>
See notes to condensed consolidated financial statements.
4
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<TABLE>
<CAPTION>
MOMSPHARMACY.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS THREE MONTHS
ENDED ENDED
JUNE 30, 2000 JUNE 30, 1999
<S> <C> <C>
NET SALES $ 2,143,119 $ 1,709,325
COST OF GOODS SOLD 1,748,599 1,461,120
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Gross profit 394,520 248,205
OPERATING EXPENSES:
Selling, general and
administrative expenses 686,178 483,480
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Operating loss (291,658) (235,275)
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OTHER:
Interest expense (41,042) (223,978)
Other income, net 36,408 --
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Total other income (expense) (4,634) (223,978)
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LOSS BEFORE INCOME TAXES (296,292) (459,253)
PROVISION FOR INCOME TAXES 771 --
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LOSS FROM CONTINUING OPERATIONS (297,063) (459,253)
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INCOME FROM DISCONTINUED OPERATIONS
NET OF TAX PROVISION OF $65,000
AND $93,000, RESPECTIVELY 190,262 274,829
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NET LOSS $ (106,801) $ (184,424)
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BASIC AND DILUTED INCOME (LOSS) PER
COMMON SHARE
Continuing operations $ (.10) $ (.18)
Discontinued operations .06 .11
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Net loss $ (.04) $ (.07)
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BASIC AND DILUTED WEIGHTED AVERAGE
OF COMMON SHARES OUTSTANDING 3,096,813 2,500,000
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</TABLE>
See notes to condensed consolidated financial statements.
5
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<TABLE>
<CAPTION>
MOMSPHARMACY.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS FIVE MONTHS
ENDED ENDED
JUNE 30,2000 JUNE 30,1999
OPERATING ACTIVITIES:
<S> <C> <C>
Net loss (356,605) (232,140)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Income (loss) from discontinued operations 126,393 (1,824,292)
Gain on sale of discontinued operations -- 2,252,938
Non-cash compensation 30,000 --
Depreciation and amortization 2,925 311
Provision for doubtful accounts 190,602 58,000
Changes in operating assets and liabilities:
Accounts receivable 50,235 (166,112)
Inventory (35,109) 45,712
Note receivable -- 400,000
Prepaid expenses and other assets 164,333 587,443
Accounts payable and accrued expenses (149,264) 150,943
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Net cash provided by operating
Activities 23,510 1,272,803
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INVESTING ACTIVITIES:
Purchase of property and equipment (14,193) (10,777)
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Net cash used in investing activities (14,193) (10,777)
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FINANCING ACTIVITIES:
Proceeds from sale of Preferred Stock 1,025,000 --
Proceeds from exercise of stock options
and warrants 17,100
Purchase of warrants -- (500,000)
Proceeds from sale of Common Stock -- 1,000,000
Proceeds from draws of line of credit 1,720,000 5,920,000
Repayment of line of credit (2,447,804) (7,631,315)
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Net cash provided by (used in)
financing activities 314,296 (1,211,315)
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NET INCREASE IN CASH AND CASH EQUIVALENTS 323,613 50,711
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 316,871 --
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CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 640,484 $ 50,711
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</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE>
MOMSPHARMACY.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The consolidated financial statements of MOMSPharmacy.com, Inc. and
Subsidiaries (formerly Allion Healthcare, Inc.) (The "Company") include the
accounts of the Company and its three wholly owned subsidiaries;
MOMSPharmacy.com Operating Company, Inc., Mail Order Meds, Inc. and Mail Order
Meds of New York, Inc. All significant inter-company balances and transactions
have been eliminated in consolidation.
2. INVENTORIES
Inventories at June 30, 2000 were comprised of pharmaceuticals.
3. INTERIM PERIODS
The financial statements for the six months ended June 30, 2000 and
five months ended June 30, 1999 are unaudited but, in the opinion of management,
include all adjustments, consisting of normal recurring accruals, necessary for
fair presentation of financial position and results of operations. Results for
the interim periods are not necessarily indicative of the results for a full
year. These consolidated financial statements should be read in conjunction with
the Company's December 31, 1999 consolidated financial statements and notes
thereto.
4. DISCONTINUED OPERATIONS
On June 25, 1999, the Company sold certain assets of its Houston, Texas
operation including all licenses, inventory customer lists and names. As a
result, the Company has discontinued all its operations in Houston, Texas as of
June 25, 1999. The proceeds of the sale were $2,820,805, including $2,420,805 in
cash and a note for $400,000 payable on June 30, 2000. The Company has recorded
$2,683,000 in bad debt expense representing all accounts receivable from Houston
uncollected as of December 31, 1999. In addition, the Company sold all of its
records, specified contracts and licenses, operating certificates and permits of
Commonwealth Certified Home Care, Inc., a certified home health agency, for
$302,000. The sale was consummated in August 1999 in accordance with the
confirmation order from the Bankruptcy Court. Accordingly, results from the
Houston, Texas and Commonwealth Certified Home Care operations are shown as
discontinued operations with the prior year restated.
5. ISSUANCE OF PREFERRED STOCK
During the quarter ended March 31, 2000, the Company issued 512,500
shares of Series A Convertible Preferred Stock in exchange for $1,025,000. These
securities were issued pursuant to Rule 506 under Section 4(2), 4(6) of the
Securities Act.
6. SETTLEMENT OF LAWSUIT
On January 4, 2000, the Company settled a pending lawsuit whereby the
Company will receive $121,580. As of June 2000, the Company has received all of
the payments.
7. SUBSEQUENT EVENT
During July 2000, the Company received $200,000, representing a partial
payment of its note receivable. The note receivable is related to the sale of
the Houston Operations in June 1999.
7
<PAGE>
MOMSPHARMACY.COM, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report contains certain forward looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act, which are
intended to be covered by the safe harbors created thereby. Although the Company
believes that the assumptions underlying the forward looking statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward looking statements
contained in this report will prove to be accurate. Factors that could cause
actual results to differ from the results specifically discussed in the forward
looking statements include, but are not limited to, the absence of anticipated
contracts, higher than historical costs incurred in performance of contracts or
in conducting other activities, future economic, competitive and market
conditions, the outcome of legal proceedings, as well as management business
decisions.
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO THE FIVE MONTHS ENDED JUNE 30, 1999
NET SALES: Net sales of the Company's mail order medications divisions were
$4,263,611 for the six months ended June 30, 2000 and $2,823,787 for the five
months ended June 30, 1999. Monthly average net sales of specialty prescriptions
medications increased by 26% during the second quarter of 2000 as compared to
the second quarter of 1999.
GROSS PROFIT: Gross profit was 19.00% of sales for the six months ended June 30,
2000 and 19.00% for the five months ended June 30, 1999.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and
administrative expenses were $1,302,885 for the six months ended June 30, 2000
and $1,035,369 for the five months ended June 30, 1999. The increase in selling,
general and administrative expenses is attributable to an increase in both
clinical and administrative personnel.
OTHER INCOME (EXPENSE): Other income (expense) during the six months ended June
30, 2000 was ($160,164) and ($355,222) for the five months ended June 30, 1999.
For the six months ended June 30, 2000, other income (expense) is comprised of
interest expense and the net gain from the Company's settlement of a lawsuit.
LIQUIDITY AND CAPITAL RESOURCES: At June 30, 2000 and June 30, 1999 the Company
had cash balances of $640,484 and $50,711 respectively. Inventories at June 30,
2000 and June 30, 1999 were $129,827 and $146,459 respectively. In addition, the
Company has a revolving credit facility in the amount of $4.0 million available
to the Company for short-term borrowings. Borrowings under the facility bear
interest at Prime + 2% and are collateralized by a perfected and primary
security interest in all assets, accounts receivable, trademarks, licenses, and
values of any kind of the Company. At June 30, 2000 and June 30, 1999, the
borrowings under this facility were $0 and $3,062,812.
The Company believes that its existing capital resources will enable it to
maintain its current and planned operations for at least 12 months from the date
hereof.
8
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MOMSPHARMACY.COM, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 6: EXHIBITS AND REPORTS ON FORM 8-K
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There were no reports on Form 8-K filed during the quarter
ended June 30, 2000.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Quarterly Report to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: August 14, 2000
MOMSPHARMACY.COM, INC. AND SUBSIDIARIES
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(Registrant)
By: /S/ MICHAEL P. MORAN
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Michael P. Moran, Director,
President, Chief Executive Officer,
Chief Financial Officer, Secretary
