UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number: 000-27945
ASCENDANT SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 75-2900905 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 16250 Dallas Parkway, Suite 102, Dallas, Texas | 75248 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: 972-250-0945
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 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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x
At November 8, 2004, there were approximately 21,933,400 shares of Ascendant Solutions, Inc. common stock outstanding.
FORM 10-Q
For the Quarterly Period Ended September 30, 2004
PART I.
CONSOLIDATED FINANCIAL INFORMATION
2
CONDENSED CONSOLIDATED BALANCE SHEETS
(000’s omitted, except per share amounts)
| September 30, 2004 |
December 31, 2003 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 3,092 | $ | 2,006 | ||||
| Trade accounts receivable, net of allowance for doubtful accounts of $177 at September 30, 2004 |
5,176 | — | ||||||
| Other receivables |
45 | 46 | ||||||
| Receivable from affiliates |
87 | 52 | ||||||
| Inventories |
2,475 | — | ||||||
| Prepaid expenses |
481 | 125 | ||||||
| Total current assets |
11,356 | 2,229 | ||||||
| Property and equipment, net |
752 | 17 | ||||||
| Deferred acquisition costs |
— | 310 | ||||||
| Goodwill |
7,726 | — | ||||||
| Other intangible assets |
372 | — | ||||||
| Investments in limited partnerships, net |
353 | 285 | ||||||
| Other assets |
106 | — | ||||||
| Total assets |
$ | 20,665 | $ | 2,841 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 1,705 | $ | 60 | ||||
| Accounts payable to affiliates |
— | 1 | ||||||
| Accrued liabilities |
2,493 | 48 | ||||||
| Notes payable, current |
713 | — | ||||||
| Total current liabilities |
4,911 | 109 | ||||||
| Notes payable, long-term |
12,569 | — | ||||||
| Limited partnership and minority interests |
457 | 209 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity: |
||||||||
| Preferred stock, $0.0001 par value: |
||||||||
| Authorized shares—7,500,000 |
||||||||
| Issued and outstanding—none |
— | — | ||||||
| Common stock, $0.0001 par value: |
||||||||
| Authorized shares—50,000,000 |
||||||||
| Issued and outstanding shares—21,883,400 at September 30, 2004 and 21,665,900 at December 31, 2003 |
2 | 2 | ||||||
| Additional paid-in capital |
59,906 | 59,822 | ||||||
| Deferred compensation |
(36 | ) | (46 | ) | ||||
| Accumulated deficit |
(57,144 | ) | (57,255 | ) | ||||
| Total stockholders’ equity |
2,728 | 2,523 | ||||||
| Total liabilities and stockholders’ equity |
$ | 20,665 | $ | 2,841 | ||||
See accompanying notes to the Condensed Consolidated Financial Statements
3
ASCENDANT SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000’s omitted, except per share amounts)
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenue: |
||||||||||||||||
| Healthcare revenues |
$ | 9,232 | $ | — | $ | 19,902 | $ | — | ||||||||
| Real estate advisory revenues |
2,852 | — | 5,919 | 100 | ||||||||||||
| 12,084 | — | 25,821 | 100 | |||||||||||||
| Cost of sales |
7,841 | — | 16,304 | 20 | ||||||||||||
| Gross profit |
4,243 | — | 9,517 | 80 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Selling, general and administrative expenses |
3,973 | 300 | 8,885 | 1,049 | ||||||||||||
| Non-cash stock compensation |
10 | 9 | 45 | 26 | ||||||||||||
| Depreciation and amortization |
147 | 16 | 237 | 46 | ||||||||||||
| Total operating expenses |
4,130 | 325 | 9,167 | 1,121 | ||||||||||||
| Operating income (loss) |
113 | (325 | ) | 350 | (1,041 | ) | ||||||||||
| Investment income |
117 | 16 | 257 | 50 | ||||||||||||
| Interest income (expense), net |
(173 | ) | 7 | (338 | ) | 27 | ||||||||||
| Loss on sale of property and equipment |
— | — | (17 | ) | — | |||||||||||
| Income (loss) before limited partnership and minority |
57 | (302 | ) | 252 | (964 | ) | ||||||||||
| Limited partnership and minority interest |
(11 | ) | 42 | (50 | ) | 204 | ||||||||||
| Income tax provision |
43 | — | 91 | — | ||||||||||||
| Net income (loss) |
$ | 3 | $ | (260 | ) | $ | 111 | $ | (760 | ) | ||||||
| Basic net income (loss) per share |
$ | 0.00 | $ | (0.01 | ) | $ | 0.01 | $ | (0.04 | ) | ||||||
| Diluted net income (loss) per share |
$ | 0.00 | $ | (0.01 | ) | $ | 0.00 | $ | (0.04 | ) | ||||||
| Shares used in computing basic net income (loss) per share |
21,883,400 | 21,665,900 | 21,760,622 | 21,520,900 | ||||||||||||
| Shares used in computing diluted net income (loss) per share |
22,419,092 | 21,665,900 | 22,318,058 | 21,520,900 | ||||||||||||
See accompanying notes to the Condensed Consolidated Financial Statements.
4
ASCENDANT SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(000’s omitted)
(Unaudited)
| Nine Months Ended September 30, |
||||||||
| 2004 |
2003 |
|||||||
| Operating Activities |
||||||||
| Net income (loss) |
$ | 111 | $ | (760 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
||||||||
| Provision for doubtful accounts |
177 | — | ||||||
| Depreciation and amortization |
237 | 46 | ||||||
| Deferred compensation amortization |
27 | 26 | ||||||
| Non-cash stock option compensation |
18 | — | ||||||
| Loss on sale of property and equipment |
17 | — | ||||||
| Limited partnership and minority interest |
50 | (205 | ) | |||||
| Changes in operating assets and liabilities, net of effects from acquisitions: |
||||||||
| Accounts receivable |
2,262 | 47 | ||||||
| Inventory |
(194 | ) | — | |||||
| Prepaid expense and other assets |
(1 | ) | 116 | |||||
| Accounts payable |
88 | 40 | ||||||
| Accrued liabilities |
(527 | ) | 6 | |||||
| Net cash provided by (used in) operating activities |
2,265 | (684 | ) | |||||
| Investing Activities |
||||||||
| Return of capital distributions |
29 | 30 | ||||||
| Proceeds from sale of property and equipment |
39 | — | ||||||
| Deferred acquisition costs |
310 | (93 | ) | |||||
| Net cash acquired in acquisitions |
1,537 | — | ||||||
| Purchases of property amd equipment |
(93 | ) | (32 | ) | ||||
| Distributions to limited partners |
(31 | ) | — | |||||
| Investment in limited partnerships |
(97 | ) | — | |||||
| Payment of acquistion liabilities |
(1,350 | ) | — | |||||
| Purchase cost of acquisitions, net of cash acquired and acquisition notes issued |
(737 | ) | — | |||||
| Net cash used in investing activities |
(393 | ) | (95 | ) | ||||
| Financing Activities |
||||||||
| Proceeds from exercise of common stock purchase options |
48 | — | ||||||
| Proceeds from sale of limited partnership interests |
230 | 255 | ||||||
| Debt payments |
(1,064 | ) | — | |||||
| Net cash (used in) provided by financing activities |
(786 | ) | 255 | |||||
| Net increase (decrease) in cash and cash equivalents |
1,086 | (524 | ) | |||||
| Cash and cash equivalents at beginning of period |
2,006 | 2,950 | ||||||
| Cash and cash equivalents at end of period |
$ | 3,092 | $ | 2,426 | ||||
See accompanying notes to the Condensed Consolidated Financial Statements.