UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
---------
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended March 31, 1998 Commission File Number 0-14731
--------------- -------
COMPUTER MARKETPLACE(R), INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0558415
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1171 Railroad Street
Corona, California 91720
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (909) 735-2102
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
As of May 4, 1998, 1,352,424 shares of the issuer's common stock were
outstanding.
<PAGE>
COMPUTER MARKETPLACE(R), INC. AND SUBSIDIARIES
- ------------------------------------------------------------------------------
INDEX
- ------------------------------------------------------------------------------
Part I: FINANCIAL INFORMATION
Item 1: Financial Statements
Condensed Consolidated Balance Sheet as of March 31, 1998
[Unaudited]............................................... 1
Condensed Consolidated Statements of Operations for the three
and nine months ended March 31, 1998 and 1997 [Unaudited]. 2
Condensed Consolidated Statements of Cash Flows for the nine
months ended March 31, 1998 and 1997 [Unaudited].......... 3
Notes to Condensed Consolidated Financial Statements [Unaudited]4-5
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 6-9
PART II - OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8K........................... 10
Signature Page.................................................... 11
. . . . . . . .
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
COMPUTER MARKETPLACE(R), INC. AND SUBSIDIARIES
- ------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1998.
[UNAUDITED]
- ------------------------------------------------------------------------------
Assets:
Current Assets:
Cash and Cash Equivalents $ 237,210
Accounts Receivable, Less Allowance for Doubtful
Accounts of $123,266 900,289
Inventory - Net 410,666
Other Current Assets 34,800
-----------
Total Current Assets 1,582,965
Property Held for Sale - Net 486,534
Property and Equipment - Net 1,087,234
Other Assets 347,579
-----------
Total Assets $ 3,504,312
===========
Liabilities and Stockholders' Equity:
Current Liabilities:
Notes Payable $ 466,176
Accounts Payable 787,291
Accrued Payroll and Payroll Related Liabilities 112,913
Current Portion of Long-Term Debt 39,314
Other Current Liabilities 211,275
-----------
Total Current Liabilities 1,616,969
-----------
Long-Term Debt 685,665
-----------
Minority Interest in Net Assets of Subsidiary 86,173
-----------
Stockholders' Equity:
Preferred Stock - $.0001 Par Value, 1,000,000 Shares
Authorized, No Shares Issued and Outstanding --
Common Stock - $.0001 Par Value, 50,000,000 Shares
Authorized, 1,352,424 Shares Issued and Outstanding 135
Deferred Compensation (320,098)
Capital in Excess of Par Value 8,785,099
Accumulated Deficit (7,349,631)
-----------
Total Stockholders' Equity 1,115,505
-----------
Total Liabilities and Stockholders' Equity $ 3,504,312
===========
The Accompanying Notes Are an Integral Part of These Condensed Consolidated
Financial Statements.
1
<PAGE>
COMPUTER MARKETPLACE(R), INC. AND SUBSIDIARIES
- ------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
- ------------------------------------------------------------------------------
<TABLE>
Three months ended Nine months ended
March 31, March 31,
--------- ---------
1 9 9 8 1 9 9 7 1 9 9 8 1 9 9 7
------- ------- ------- -------
Revenues:
Product Sales, Rental, Service
<S> <C> <C> <C> <C>
and Other $ 67,542 $ 5,689,355 $ 6,610,712 $19,557,647
Cost and Expenses:
Cost of Revenues-Product Sales,
Rental, and Other 1,141,860 5,065,512 5,670,727 17,201,269
Selling, General and
Administrative 726,171 1,547,059 2,480,601 4,505,810
---------- ----------- ----------- -----------
Total Cost and Expenses 1,868,031 6,612,571 8,151,328 21,707,079
----------- ----------- ----------- -----------
Operating Loss (900,489) (923,216) (1,540,616) (2,179,432)
----------- ----------- ----------- -----------
Other Income [Expense]:
Interest Expense (46,493) (94,927) (84,527) (301,033)
Interest Income 6,042 3,819 27,635 4,053
Miscellaneous Income 5,342 9,762 33,369 29,136
----------- ----------- ----------- -----------
Total Other [Expense] (35,109) (81,346) (23,523) (267,844)
----------- ----------- ----------- -----------
Loss Before Income Taxes, Minority
Interest in Subsidiary and
Extraordinary Item (935,598) (1,004,562) (1,564,139) (2,417,276)
Provision for Income Taxes -- -- -- --
Minority Interest in Income of
Subsidiary 40,473 (2,020) 32,265 (21,120)
------- ------- -------- --------
Loss Before Extraordinary Items (895,125) (1,006,582) (1,531,874) (2,438,396)
Extraordinary Items:
Gain from Extinguishment of Debt -
Net of Income Taxes of $-0- 98,226 --
Gain from Forfeited Deposit - Net
of Income Taxes of $-0- 50,000 -- 50,000 --
----------- ----------- ----------- -----------
Net Loss $ (845,125)$(1,006,582)$(1,383,648)$(2,438,396)
=========== =========== =========== ===========
Loss Per Share:
Loss Before Extraordinary Items -
Net of Income Taxes of $-0- $ (0.66)$ (0.74)$ (1.13)$ (1.80)
Extraordinary Items - Net of
Income Taxes of $-0- 0.04 -- 0.11 --
----------- ----------- ----------- -----------
Net Loss Per Share $ (0.62)$ (0.74)$ (1.02)$ (1.80)
=========== =========== =========== ===========
Weighted Average Common Shares
Outstanding 1,352,424 1,352,424 1,352,424 1,352,424
=========== =========== =========== ===========
</TABLE>
The Accompanying Notes Are an Integral Part of These Condensed Consolidated
Financial Statements.
2
<PAGE>
COMPUTER MARKETPLACE(R), INC. AND SUBSIDIARIES
- ------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
- ------------------------------------------------------------------------------
<TABLE>
Nine months ended
March 31,
1 9 9 8 1 9 9 7
------- -------
Operating Activities:
<S> <C> <C>
Net Loss $(1,383,648) $(2,438,396)
Adjustments to Reconcile Net Loss to Net Cash
Used in Operating Activities:
Depreciation and Amortization 253,807 250,701
Provisions for Losses on Accounts Receivable (48,544) 48,685
Provisions for Losses on Inventory (114,482) 307,881
Minority Interest in Consolidated Subsidiary (32,265) 143,367
Loss on Sale/Disposal of Equipment -- 61,292
Gain on Extinguishment of Debt (98,226) --
Net Write-off of Other Assets -- 23,600
Changes in Assets and Liabilities:
Accounts Receivable 843,488 (283,562)
Inventory 163,232 1,111,021
Other Current Assets 17,792 222,274
Accounts Payable (341,521) 326,751
Accrued Payroll and Payroll Related Liabilities (42,132) (166,456)
Other Current Liabilities (50,030) 183,389
Other Liabilities -- 42,968
---------- -----------
Net Cash Used in Operating Activities (832,529) (166,485)
---------- -----------
Cash Flows from Investing Activities:
Decrease in Notes Receivable - Related Parties -- 45,744
Purchase of Property and Equipment (521,307) (18,986)
Other (300,039) (54,099)
---------- -----------
Net Cash Used in Investing Activities (821,346) (27,341)
---------- -----------
Cash Flows from Financing Activities:
Net Decrease in Notes Payable (127,212) (685,650)
Proceeds from Long-Term Debt 750,000 --
Net Proceeds from Issuance of Stock -- 950,000
Payments on Long-Term Debt (232,243) (44,397)
---------- -----------
Net Cash Provided by Financing Activities 390,545 219,953
---------- -----------
[Decrease] Increase in Cash and Cash Equivalents (1,263,330) 26,127
Cash and Cash Equivalents, Beginning of Periods 1,500,540 594,921
---------- -----------
Cash and Cash Equivalents, End of Periods $ 237,210 $ 621,048
========== ===========
Supplemental Disclosures of Cash Flow Information:
Cash Paid for Interest $ 84,527 $ 301,033
Cash Paid for Income Taxes $ 3,910 $ --
Supplemental Disclosures of Non-Cash Operating Activities:
Reclassification of Accounts Payable (To) From Other
Liabilities/Notes Payable to Reflect Negotiated
Payment Terms $ (150,000) $ 135,194
Transfer of Inventory Items (To) From Rental Equipment $ (33,007) $ 93,511
</TABLE>
The Accompanying Notes Are an Integral Part of These Condensed Consolidated
Financial Statements.
3
<PAGE>
COMPUTER MARKETPLACE(R), INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
- ------------------------------------------------------------------------------
[1] Significant Accounting Policies
Significant accounting policies of Computer Marketplace Inc and Subsidiaries
[the "Company"] are set forth in the Company's Form 1-KSB for year ended June
20, 1997, as filed with the securities and Exchange Commission.
[2] Basis of Presentation
In the opinion of management, the accompanying unaudited condensed consolidated
financial statements include all adjustments [consisting only of normal
recurring accruals necessary for a fair presentation of the consolidated
financial position of the company as of March 31, 1998, and 1997, the
consolidated results of its operations for the three and nine months ending
March 31, 1998 and 1997 and its cash flows for the nine months ending March 31,
1998 and 1997. Although the Company believes that the disclosures in these
financial statements are adequate to make the information presented not
misleading, certain information and footnote information normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission. Results of operations for the period
ended March 31, 1998 are not necessarily indicative of results to be expected
for the full year. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Form 10-KSB for the
year ended June 30, 1997.
[3] Stock Transactions
In April 1997, the Company effected a one-for-six reverse stock split of the
outstanding shares of common stock of the Company by changing the 8,114,542 then
outstanding shares of common stock, par value $.0001 per share, into 1,352,424
shares of common stock of the Company, par value $.0001 per share. All share
data has been adjusted and retroactively restated to reflect this change.
[4] Extraordinary Items
During the nine months ended March 31, 1998, the Company negotiated payment
terms of certain accounts payable, resulting in a gain of $98,226. During the
nine months ending March 31, 1998 the company recognized a gain of $50,000 from
a merger candidate who voluntarily forfeited their deposit.
There was no income tax effect on these transactions.
[5] Subsequent Events
On April 2, 1998, the Company signed a Letter of Intent to purchase U.S. Cancer
Care, Inc. for 10 million shares of Computer Marketplace common stock. The
purchase is dependent upon raising funds from the exercise of outstanding
options and warrants, as well as the execution of a definitive agreement. Other
conditions include the closing by U.S. Cancer Care of four facilities in
California and Florida, due diligence by both parties, and shareholder approval.
On May 1, 1998, the Company signed a Letter of Intent to sell 100% of the stock
of its subsidiary, Medical Marketplace, Inc., to Medley Credit Acceptance
Corporation ["Medley"] for approximately 100,000 shares of Medley common stock.
The sale is dependent upon the execution of certain employment agreements, due
diligence by both parties, and shareholder approval.
4
<PAGE>
COMPUTER MARKETPLACE(R), INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Sheet #2
[UNAUDITED]
- ------------------------------------------------------------------------------
[5] Subsequent Events [Continued]
On April 30, 1998, the Company executed a Promissory Note [the "Note"] payable
to an individual in exchange for $200,000. Proceeds from the Note were used to
repay the outstanding balance of the Company's existing credit facility with a
financing company. The Note requires the repayment of principal, with interest
at a rate of 12% per annum, on or before October 31, 1998 and is collateralized
by the assignment of a UCC-2 filing covering substantially all of the Company's
assets. Prepaid interest of 2% of the original principal balance was paid upon
execution of the Note.
Despite ongoing efforts, the Company has failed to meet the continued listing
requirements for the Nasdaq Small Caps Market. Unless the Company satisfies such
requirements, it is likely that the Company's securities will no longer be
listed on the Nasdaq Small Caps Market.
5
<PAGE>
Item 2:
COMPUTER MARKETPLACE(R), INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------------
Results of Operations
The following information should be read in conjunction with the condensed
consolidated financial statements and the notes thereto included in this
Quarterly Report and in the audited Financial Statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the Company's Form 10 - KSB for the fiscal year ended June 30,
1997.
Quarter Ended March 31, 1998 Compared to Quarter Ended March 31, 1997
Total revenues for the quarter ended March 31, 1998 were $ 967,542 compared to
$5,689,355 for the quarter ended March 31, 1997. This represents a decrease of
$4,721,812 or 83%.
Revenues from computer product sales and rentals for the quarter ended March 31,
1998 totaled $663,940 resulting in a $4,151,910 or 86% decrease compared to
$4,815,850 for the quarter ended March 31, 1997. The sales decrease results in
part from price reductions in new computer hardware which negatively impacts
selling prices and sales of used computer hardware. The most significant factor
resulting in this decrease in sales is that all branch offices of the Company
were closed down during the year ending June 30, 1997. The sales associated with
these offices diminished substantially. In addition, the sales staff at the main
facility in Corona, California were significantly reduced.
Medical product sales and rentals contributed $303,602 in revenues for the
quarter ended March 31, 1998, compared to $873,505 for the quarter ended March
31, 1997. The current quarter's result represents a $569,903 or a 65% decrease
in revenues over the same period in 1997. The decrease in medical product sales
is attributed directly to an inability to fund new purchases.
Total aggregate cost of revenues for the quarter ended March 31, 1998 and 1997
were $1,141,860 or 118% of revenues and $5,065,512 or 89% of revenues,
respectively.
Cost of revenues for computer products were $599,594 or 90% of revenues and
$4,492,901 or 93% of revenues for the quarters ended March 31, 1998, and 1997
respectively. The 3% decrease of cost is insignificant in management's view and
does not represent any trend.
Cost of revenues for medical products were $542,266 or 175% of revenues and
$572,611 or 66% of revenues for the quarters ended March 31, 1998, and 1997
respectively. The increase in cost of revenues primarily has to do with
unanticipated costs associated with sales occurring over the last year.
Total selling, general, and administrative [SG & A] expenses for the quarter
ended March 31, 1998 and 1997 were $726,171 or 75% of revenues and $1,547,059 or
27% of revenues, respectively. The aggregate decrease in SG&A expenses from the
prior period was $820,888.
SG&A expenses attributed to computer products were $437,346 or 66% of revenues
and $1,283,329 or 27% of revenues for the quarters ended March 31, 1998, and
1997 respectively. The increase in SG&A expenses as a percentage of revenues is
due primarily to the sales volume decrease previously mentioned. The aggregate
decrease in SG&A expenses from the prior period was $845,983 directly reflecting
the extent of personnel cut backs in the quarter.
SG&A expenses attributed to medical products were $288,825 or 93 % of revenues
and $263,730 or 30% of revenues for the quarters ended March 31, 1998, and 1997
respectively. The increase in SG&A expenses as a percentage of revenues is due
primarily to the dramatic drop in sales and the sales force expansion, therefore
the increase in personnel expense. While the company has invested considerable
resources in expanding the sales force and support staff, the desired results
have fallen short of expectations.
6
<PAGE>
COMPUTER MARKETPLACE(R), INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------------
Total operating loss was $900,489 and $923,216 for the quarters ended March 31,
1998, and 1997 respectively. This $22,727 change was a result of reduced
expenses and the business conditions described herein.
Operating loss for computer products was $373,000 and $960,380 for the quarters
ended March 31, 1998, and 1997 respectively. The Companies reduction in staff,
contraction of the company's computer business as well as a change of focus in
the business direction have in part resulted in the conditions herein described.
Operating income [loss] for medical products and rentals was $(527,489) and
$37,164 for the quarters ended March 31, 1998, and 1997 respectively.
Interest expense for the quarter ended March 31, 1998, was $46,493 compared to
$94,927 for the quarter ended March 31, 1997. The decrease of $48,434 or 51% is
due to the repayment of the mortgage payable associated with the sale of the
Company's headquarters facility in the year ended June 30, 1997.
The Company's consolidated net loss was $845,125 or $.62 per share for the
quarter ended March 31, 1998, versus $1,006,582 or $0.74 per share for the
quarter ended March 31, 1997. The net loss was a result of the business
conditions described herein.
Nine Months Ended March 31, 1998 Compared to Nine Months Ended March 31, 1997
Total revenues for the nine months ended March 31, 1998 were $6,610,712 compared
to $19,557,647 for the nine months ended March 31, 1997. This represents a
decrease of $12,946,935 or 66%.
Revenues from computer product sales and rentals was $3,129,606 for the nine
months ended March 31, 1998 and $13,954,875 for the nine months ended March 31,
1997. The sales decrease results in part from price reductions in new computer
hardware which negatively impacts selling prices and sales of used computer
hardware. The Company anticipates the lower computer products sales trend to
continue into the fourth quarter. The most significant factor resulting in this
decrease in sales is that all branch offices of the Company were closed down
during the year ending June 30, 1997. The sales associated with these offices
diminished substantially. In addition, the sales staff at the main facility in
Corona, California, was significantly reduced.
Medical product sales and rentals contributed $3,481,106 in revenues for the
nine months ended March 31, 1998, compared to $5,602,772 for the nine months
ended March 31, 1997. The current periods results represents a $2,121,666 or a
38% decrease in revenues over the same period in 1997. The decrease in medical
product sales is attributed directly to an inability to fund new purchases.
Total aggregate cost of revenues for the nine months ended March 31, 1998, and
1997 were $5,670,727 or 86% of revenues and $17,201,269 or 88% of revenues,
respectively.
Cost of revenues for computer products were $2,672,084 or 85% of revenues and
$12,629,457 or 91% of revenues for the nine months ended March 31, 1998, and
1997 respectively. The 6% decrease in cost of revenue primarily has to do with
market fluctuations and management does not view this 6% differential as a
trend.
Cost of revenues for medical products were $2,998,643 or 86% of revenues and
$4,571,812 or 82% of revenues for the quarters ended March 31, 1998, and 1997
respectively, a 4% increase in cost of revenues as a percentage of sales.
Total selling, general and administrative [SG & A] expenses for the nine months
ended March 31, 1998, and 1997 were $2,480,601 or 37% of revenues and $4,505,810
or 23% of revenues, respectively. The aggregate decrease in SG&A expenses from
the prior period was $2,025,209.
7
<PAGE>
COMPUTER MARKETPLACE(R), INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------------
SG&A expenses attributed to computer products were $1,551,106 or 50% of revenues
and $3,892,064 or 28% of revenues for the nine months ended March 31, 1998, and
1997 respectively. The increase in SG&A expenses as a percentage of revenues is
due primarily to the sales volume decrease previously mentioned. The aggregate
decrease in SG&A expenses from the prior period was $2,340,958, directly
reflecting the extent of personnel cut backs in the first nine months of the
fiscal year.
SG&A expenses attributed to medical products were $929,495 or 27% of revenues
and $613,746 or 11% of revenues for the nine months ended March 31, 1998, and
1997 respectively. The increase in SG&A expenses as a percentage of revenues is
due primarily to the increase in personnel expense and an expanded sales force.
Total operating loss was $1,540,616 and $2,179,432 for the nine months ended
March 31, 1998, and 1997 respectively. This $638,816 favorable change was a
result of reduced expenses and the business conditions described herein.
Operating loss for computer products was $1,093,584 and $2,566,646 for the nine
months ended March 31, 1998, and 1997 respectively.
Operating income [loss] for medical products and rentals was $(447,032) and
$417,214 for the nine months ended March 31, 1998, and 1997 respectively.
Interest expense for the year ended March 31, 1998 was $84,527, compared to
$301,033 for the year ended March 31, 1997. The decrease of $216,506 or 72% is
due to the repayment of the mortgage payable associated with the sale of the
Company's headquarters facility in the year ended June 30, 1997.
The Company's consolidated net loss was $1,383,648 or $1.02 per share for the
nine months ended March 31, 1998, versus $2,438,396 or $1.80 per share for the
nine months ended March 31, 1997. The net loss was a result of the business
conditions described herein.
During the nine months ended March 31, 1998, the Company negotiated payment
terms of certain accounts payable, resulting in a gain of $98,226. During the
nine months ending March 31, 1998 the company recognized a gain of $50,000 from
a merger candidate who voluntarily forfeited their deposit.
There was no income tax effect on these transactions.
Variability of Periodic Results and Seasonality
Results from any one period cannot be used to predict the results for other
fiscal periods. Revenues fluctuate from period to period, however, management
does not see any seasonality or predictability to these fluctuations.
Liquidity and Capital Resources
The Company has historically financed its growth and cash needs primarily
through borrowings and cash generated from operations. The funds received
through the initial public offering in June 1993, in the amount of approximately
$6.6 million enabled the Company to eliminate most of its long term debt at that
time. The Company had negative working capital of 34,004 at Match 31, 1998.
Working capital at March 31, 1997 was $1,612,072.
During the quarter ended March 31, 1998, the Company used the June 30, 1997
available cash and cash equivalents of approximately $1,500,000, the
availability of borrowing under the Company's revolving credit facility and
vendor extended credit in order to fund the operations of the Company.
8
<PAGE>
COMPUTER MARKETPLACE(R), INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------------
New Millennium Leasing, Inc. ["NMLI"], was formed in early 1997. The primary
focus of the company is to provide leasing for a majority of the sales generated
by its parent, Medical Marketplace, Inc. ["MMP"]. In so doing, NMLI will add
incremental revenue and net income by discounting those leases on a non recourse
basis to lenders who buy leases in this manner.
NMLI only writes leases whose net present value exceeds the sales price of the
equipment. However, in certain circumstances, the lease also allows NMLI to
retain the residual value of the equipment. This residual value becomes an asset
on the balance sheet and is taken into income over the term of the lease.
The stated goal of NMLI is to both increase the profitability of each
transaction entered into by MMP and via leasing, to generate new transactions
that MMP would not have previously been able to generate due to the lack of a
leasing division.
During the nine months ended March 31, 1998, the Company significantly downsized
its operations and is actively pursuing merger and acquisition possibilities.
On April 2, 1998, the Company signed a Letter of Intent to purchase U.S. Cancer
Care, Inc. for 10 million shares of Computer Marketplace common stock. The
purchase is dependent upon raising funds from the exercise of outstanding
options and warrants, as well as the execution of a definitive agreement. Other
conditions include the closing by U.S. Cancer Care of four facilities in
California and Florida, due diligence by both parties, and shareholder approval.
On May 1, 1998, the Company signed a Letter of Intent to sell 100% of the stock
of its subsidiary, Medical Marketplace, Inc., to Medley Credit Acceptance
Corporation ["Medley"] for approximately 100,000 shares of Medley common stock.
The sale is dependent upon the execution of certain employment agreements, due
diligence by both parties, and shareholder approval.
On April 30, 1998, the Company executed a Promissory Note [the "Note"] payable
to an individual in exchange for $200,000. Proceeds from the Note were used to
repay the outstanding balance of the Company's existing credit facility with a
financing company. The Note requires the repayment of principal, with interest
at a rate of 12% per annum, on or before October 31, 1998 and is collateralized
by the assignment of a UCC-2 filing covering substantially all of the Company's
assets. Prepaid interest of 2% of the original principal balance was paid upon
execution of the Note.
9
<PAGE>
PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits as required by item 601 of regulation S-K:
None required
(b) Form 8-K filed on March 12, 1998, with respect to Item 5.
10
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
COMPUTER MARKETPLACE, INC.
Date: May 15, 1998 By: /s/ L. Wayne Kiley
------------------
L. Wayne Kiley
President, Chief Executive Officer and
Chief Financial Officer
Signing on behalf of the
registrant and as principal
financial and accounting
officer.
11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet and the consolidated statement of operations and is
qualified in its entirety by reference to said statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-END> Mar-31-1998
<CASH> 237,210
<SECURITIES> 0
<RECEIVABLES> 900,289
<ALLOWANCES> 0
<INVENTORY> 410,666
<CURRENT-ASSETS> 1,582,965
<PP&E> 1,087,234
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,504,312
<CURRENT-LIABILITIES> 1,616,969
<BONDS> 0
0
0
<COMMON> 135
<OTHER-SE> 1,115,370
<TOTAL-LIABILITY-AND-EQUITY> 3,504,312
<SALES> 6,610,712
<TOTAL-REVENUES> 6,610,712
<CGS> 5,670,727
<TOTAL-COSTS> 2,480,601
<OTHER-EXPENSES> (61,004)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 84,527
<INCOME-PRETAX> (1,531,874)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,531,874)
<DISCONTINUED> 0
<EXTRAORDINARY> 148,226
<CHANGES> 0
<NET-INCOME> (1,383,648)
<EPS-PRIMARY> (1.02)
<EPS-DILUTED> (1.02)
</TABLE>
