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 SEPTEMBER 30, 2000
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.
(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
-------------------------------- ----------------------------
(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
--- ---
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 SEPTEMBER 30, 2000
--------------------- ------------------
$.01 par value 3,096,813
Transitional small business disclosure format (check one):
YES NO X
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<PAGE>
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page
----
Financial Statements:
Condensed Consolidated Balance Sheet as of
September 30, 2000 (Unaudited) 3
Condensed Consolidated Statements of Operations for
the Nine Months Ended September 30, 2000 and Eight
Months Ended September 30, 1999(Unaudited) 4
Condensed Consolidated Statements of Operations for
for the Three Months Ended September 30, 2000
and 1999 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 2000 and
Eight Months Ended September 30, 1999 (Unaudited) 6
Notes to Condensed Consolidated Financial
Statements 7
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 SEPTEMBER 30,2000
------ -----------------
CURRENT:
<S> <C>
Cash and cash equivalents $ 599,632
Accounts receivable, net 930,479
Inventories 118,704
Prepaid expenses and other
current assets 40,515
-----------
Total current assets 1,689,330
PROPERTY AND EQUIPMENT, net 43,884
OTHER ASSETS 20,219
-----------
$ 1,753,433
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT:
Accounts payable $ 311,730
Accrued expenses and other
current liabilities 257,044
Note payable 1,500,000
-----------
Total current liabilities 2,068,774
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 30,968
Additional paid-in capital 2,153,507
Unearned compensation (25,000)
Accumulated deficit (2,479,941)
-----------
TOTAL STOCKHOLDERS' DEFICIT (315,341)
-----------
$ 1,753,433
===========
</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)
NINE MONTHS ENDED EIGHT MONTHS ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
------------------ ------------------
<S> <C> <C>
NET SALES $6,525,431 $4,706,498
COST OF GOODS SOLD 5,377,098 3,866,809
--------- ---------
Gross profit 1,148,333 839,689
OPERATING EXPENSES:
Selling, general and
administrative expenses 1,787,128 1,532,384
--------- ---------
Operating loss (638,795) (692,695)
--------- ---------
OTHER:
Interest expense (270,103) (475,145)
Other income, net 72,948 -
--------- ---------
Total other income (expense) (197,155) (475,145)
--------- ---------
LOSS BEFORE INCOME TAXES (835,950) (1,167,840)
PROVISION FOR INCOME TAXES 4,368 -
--------- ---------
LOSS FROM CONTINUING OPERATIONS (840,318) (1,167,840)
--------- ---------
INCOME FROM DISCONTINUED OPERATIONS
NET OF TAX PROVISION OF $128,000
AND $72,000, RESPECTIVELY 376,984 210,757
--------- ---------
NET LOSS $(463,334) $(957,083)
========= =========
BASIC AND DILUTED INCOME (LOSS) PER
COMMON SHARE
Continuing operations $ (.28) $ (.47)
Discontinued operations .13 .09
--------- ---------
Net loss $ (.15) $ (.38)
========= =========
BASIC AND DILUTED WEIGHTED AVERAGE
OF COMMON SHARES OUTSTANDING 3,096,813 2,500,000
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
MOMSPHARMACY.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
------------------ ------------------
<S> <C> <C>
NET SALES $ 2,261,820 $ 1,882,711
COST OF GOODS SOLD 1,923,984 1,579,431
----------- -----------
Gross profit 337,836 303,280
OPERATING EXPENSES:
Selling, general and
administrative expenses 484,243 497,015
----------- -----------
Operating loss (146,407) (193,735)
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OTHER:
Interest expense (36,991) (119,923)
Other income, net -- --
----------- -----------
Total other income (expense) (36,991) (119,923)
----------- -----------
LOSS BEFORE INCOME TAXES (183,398) (313,658)
PROVISION FOR INCOME TAXES 2,682 --
----------- -----------
LOSS FROM CONTINUING OPERATIONS (186,080) (313,658)
----------- -----------
INCOME FROM DISCONTINUED OPERATIONS
NET OF TAX PROVISION OF $28,000 AND
TAX BENEFIT OF $140,000,RESPECTIVELY 79,351 (411,285)
----------- -----------
NET LOSS $ (106,729) $ (724,943)
=========== ===========
BASIC AND DILUTED INCOME (LOSS) PER
COMMON SHARE
Continuing operations $ (.06) $ (.13)
Discontinued operations .03 (.16)
----------- -----------
Net loss $ (.03) $ (.29)
=========== ===========
BASIC AND DILUTED WEIGHTED AVERAGE
OF COMMON SHARES OUTSTANDING 3,096,813 2,500,000
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
MOMSPHARMACY.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED EIGHT MONTHS ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
------------------ ------------------
OPERATING ACTIVITIES:
<S> <C> <C>
Net loss (463,334) (957,083)
Adjustments to reconcile net loss to
net cash used in our operating activities:
Income (loss) from discontinued operations -- (1,127,155)
Gain on sale of discontinued operations -- 1,459,071
Non-cash compensation 45,500 --
Depreciation and amortization 4,936 311
Provision for doubtful accounts 204,132 58,000
Changes in operating assets and liabilities:
Accounts receivable 2,858 392,566
Inventory (23,986) 45,712
Note receivable 200,000 (312,922)
Prepaid expenses and other assets 137,078 (32,084)
Accounts payable and accrued expenses (108,424) 150,943
----------- ------------
Net cash used in operating activities (1,240) (322,641)
----------- ------------
INVESTING ACTIVITIES:
Proceeds from dispositions of businesses
and sales of property and equipment -- 3,188,524
Purchase of property and equipment (30,295) (18,284)
----------- ------------
Net cash (used in)/provided by
investing activities (30,295) 3,170,240
----------- ------------
FINANCING ACTIVITIES:
Proceeds from sale of Preferred Stock 1,025,000 --
Proceeds from exercise of stock options
and warrants 17,100 --
Proceeds from sale of Common Stock -- 1,000,000
Proceeds from draws of line of credit 1,720,000 7,915,000
Repayment of line of credit (2,447,804) (11,751,528)
----------- ------------
Net cash provided by/(used in)
financing activities 314,296 (2,836,528)
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NET INCREASE IN CASH AND CASH EQUIVALENTS 282,761 11,071
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 316,871 --
----------- ------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 599,632 $ 11,071
=========== ============
</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 September 30, 2000 were comprised of
pharmaceuticals.
3. INTERIM PERIODS
---------------
The financial statements for the nine months ended September 30,
2000 and eight months ended September 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.
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.
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
---------------------
NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE EIGHT MONTHS
------------------------------------------------------------------
ENDED SEPTEMBER 30, 1999
------------------------
NET SALES: Net sales of the Company's mail order medications divisions were
$6,525,431 for the nine months ended September 30, 2000 and $4,706,498 for the
eight months ended September 30, 1999. Monthly average net sales of specialty
prescriptions medications increased by 20.13% during the third quarter of 2000
as compared to the third quarter of 1999.
GROSS PROFIT: Gross profit was 17.59% of sales for the nine months ended
September 30, 2000 and 17.84% for the eight months ended September 30, 1999.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and
administrative expenses were $1,787,128 for the nine months ended September 30,
2000 and $1,532,384 for the eight months ended September 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 nine months ended
September 30, 2000 was ($197,155) and ($475,145) for the eight months ended
September 30, 1999. For the nine months ended September 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 September 30, 2000 and September 30, 1999
the Company had cash balances of $599,632 and $11,071 respectively. Inventories
at September 30, 2000 and September 30, 1999 were $118,704 and $100,884
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 September 30,
2000 and September 30, 1999, the borrowings under this facility were $0 and
$1,798,386.
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
--------------------------------
Item 7. Financial Statements, Pro Forma Financial
Information, Exhibits
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: November 14, 2000
MOMSPHARMACY.COM, INC. AND SUBSIDIARIES
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(Registrant)
By: /S/ MICHAEL P. MORAN
----------------
Michael P. Moran, Director,
President, Chief Executive Officer,
Chief Financial Officer, Secretary
