|
[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the quarterly period ended June 30,
2008
|
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transition period from _____________ to
_____________
|
NEVADA
|
91-1287406
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
5021
Indian School Road, Suite 100
|
|
Albuquerque,
New Mexico
|
87110
|
(Address
of principal executive offices)
|
(Zip
Code)
|
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 a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.
|
|
Large
accelerated filer [ ]
|
Accelerated
filer [ ]
|
Non-accelerated
filer [ ]
|
Smaller
reporting company [X]
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
|
YES
[_] NO [X]
|
3
|
|
3
|
|
4
|
|
5
|
|
6
|
|
14
|
|
21
|
|
21
|
|
22
|
|
22
|
|
22
|
|
22
|
|
23
|
|
23
|
|
23
|
|
23
|
New
Mexico Software, Inc.
|
||||||||
(Rounded
to the nearest thousand)
|
||||||||
June
30,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
(UNAUDITED)
|
(AUDITED)
|
|||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash and cash equivalents
|
$
|
27,000
|
$
|
59,000
|
||||
Accounts receivable, net
|
154,000
|
129,000
|
||||||
Inventory
|
24,000
|
22,000
|
||||||
Prepaid expenses and other assets
|
8,000
|
2,000
|
||||||
Total current assets
|
213,000
|
212,000
|
||||||
Furniture,
equipment and improvements, net
|
96,000
|
90,000
|
||||||
Security
deposits
|
4,000
|
4,000
|
||||||
Total assets
|
$
|
313,000
|
$
|
306,000
|
||||
Liabilities
and Stockholders' Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts payable
|
$
|
83,000
|
$
|
34,000
|
||||
Accrued expenses
|
76,000
|
44,000
|
||||||
Deferred revenue
|
30,000
|
39,000
|
||||||
Capital Lease
|
6,000
|
-
|
||||||
Total current liabilities
|
195,000
|
117,000
|
||||||
Long-term
liabilities:
|
||||||||
Capital lease- Long term portion
|
5,000
|
-
|
||||||
Total long-term liabilities
|
5,000
|
-
|
||||||
Total liabilities
|
200,000
|
117,000
|
||||||
Stockholders'
equity:
|
||||||||
Preferred stock, $0.001 par value, 500,000 shares
|
||||||||
authorized, no shares issued and outstanding as of June 30,
2008
|
-
|
-
|
||||||
Common stock, $0.001 par value, 200,000,000 shares
|
||||||||
authorized, 108,293,027 shares issued and outstanding
|
||||||||
as of June 30, 2008
|
124,000
|
107,000
|
||||||
Paid-in capital
|
14,510,000
|
14,212,000
|
||||||
Subscriptions payable
|
21,000
|
31,000
|
||||||
Deferred compensation
|
(136,000)
|
-
|
||||||
Accumulated deficit
|
(14,406,000)
|
(14,161,000)
|
||||||
Total stockholders' equity
|
113,000
|
189,000
|
||||||
Total liabilities and stockholder's equity
|
$
|
313,000
|
$
|
306,000
|
New
Mexico Software, Inc.
|
||||||||||||||||
(Rounded
to the nearest thousand)
|
||||||||||||||||
(UNAUDITED)
|
||||||||||||||||
For
the three months ended
|
For
the six months ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Revenue
|
||||||||||||||||
Software
hosting and maintenance
|
$ | 61,000 | $ | 137,000 | $ | 132,000 | $ | 256,000 | ||||||||
Software
usage fees
|
115,000 | 97,000 | 249,000 | 193,000 | ||||||||||||
Radiological
services
|
21,000 | - | 21,000 | - | ||||||||||||
Hardware
sales
|
5,000 | 4,000 | 10,000 | 23,000 | ||||||||||||
Software
sales and licenses
|
- | 4,000 | 14,000 | 7,000 | ||||||||||||
Custom
programming
|
- | 2,000 | 11,000 | 5,000 | ||||||||||||
Scanning
services
|
- | 23,000 | - | 23,000 | ||||||||||||
Gross
revenues
|
202,000 | 267,000 | 437,000 | 507,000 | ||||||||||||
Cost
of services
|
139,000 | 104,000 | 210,000 | 177,000 | ||||||||||||
Gross
Profit
|
63,000 | 163,000 | 227,000 | 330,000 | ||||||||||||
Operating
costs and expenses:
|
||||||||||||||||
General
and administrative
|
219,000 | 187,000 | 416,000 | 468,000 | ||||||||||||
Depreciation
and amortization
|
10,000 | 12,000 | 18,000 | 22,000 | ||||||||||||
Research
and development
|
4,000 | 35,000 | 35,000 | 84,000 | ||||||||||||
Total
operating costs and expenses
|
233,000 | 234,000 | 469,000 | 574,000 | ||||||||||||
Net
operating income (loss)
|
(170,000 | ) | (71,000 | ) | (242,000 | ) | (244,000 | ) | ||||||||
Other
income (expense):
|
||||||||||||||||
Interest
(expense)
|
(2,000 | ) | (6,000 | ) | (3,000 | ) | (7,000 | ) | ||||||||
Other
|
||||||||||||||||
Gain
(loss) on disposal of fixed assets
|
- | - | - | 6,000 | ||||||||||||
Total
other income (expense)
|
(2,000 | ) | (6,000 | ) | (3,000 | ) | (1,000 | ) | ||||||||
Net
income (loss)
|
$ | (172,000 | ) | $ | (77,000 | ) | $ | (245,000 | ) | $ | (245,000 | ) | ||||
Earnings
per share - basic and fully diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
Weighted
average number of common shares
|
||||||||||||||||
outstanding
- basic and fully diluted
|
108,872,953 | 96,273,006 | 108,196,756 | 93,301,657 |
New
Mexico Software, Inc.
|
||||||||
(Rounded
to the nearest thousand)
|
||||||||
(UNAUDITED)
|
||||||||
For
the six months ended
|
||||||||
June
30,
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
loss
|
$ | (245,000 | ) | $ | (245,000 | ) | ||
Adjustments
to reconcile net loss to
|
||||||||
net
cash used by operating activities:
|
||||||||
Common
stock issued for salaries
|
30,000 | 264,000 | ||||||
Common
stock issued for services
|
71,000 | 74,000 | ||||||
Common
stock issued for interest
|
- | 1,000 | ||||||
Stock
options issued for salaries
|
- | 6,000 | ||||||
Stock
options issued for services
|
- | 62,000 | ||||||
Depreciation
|
18,000 | 22,000 | ||||||
Depreciation
allocated to cost of services
|
3,000 | 3,000 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(25,000 | ) | 4,000 | |||||
Inventory
|
(2,000 | ) | 2,000 | |||||
Prepaid
expenses and other assets
|
(6,000 | ) | 7,000 | |||||
Accounts
payable
|
49,000 | (53,000 | ) | |||||
Accrued
expenses
|
32,000 | (69,000 | ) | |||||
Deferred
revenue
|
(9,000 | ) | (12,000 | ) | ||||
Net
cash (used) provided by operating activities
|
(84,000 | ) | 66,000 | |||||
Cash
flows from investing activities
|
||||||||
Acquisition
of fixed assets
|
(27,000 | ) | (42,000 | ) | ||||
Capital
lease
|
11,000 | - | ||||||
Net
cash used by investing activities
|
(16,000 | ) | (42,000 | ) | ||||
Cash
flows from financing activities
|
||||||||
Net
proceeds from the issuance of common stock
|
68,000 | - | ||||||
Net
proceeds from warrants/options exercised
|
- | - | ||||||
Net
cash provided by financing activities
|
68,000 | - | ||||||
Net
increase (decrease) in cash equivalents
|
(32,000 | ) | 24,000 | |||||
Cash
equivalents - beginning
|
59,000 | 21,000 | ||||||
Cash
equivalents - ending
|
$ | 27,000 | $ | 45,000 | ||||
Supplemental
disclosures:
|
||||||||
Interest
paid
|
$ | - | $ | 4,000 | ||||
Shares
issued for exercise of warrants
|
$ | 10,000 | $ | - |
Computers
|
$ | 389,000 | ||
Furniture,
fixtures and equipment
|
122,000 | |||
Automobiles
|
41,000 | |||
Leasehold
improvements
|
20,000 | |||
572,000 | ||||
Accumulated
depreciation
|
(476,000 | ) | ||
$ | 96,000 |
Number of Warrants
|
Exercise Price
|
Expiration Date
|
|||||
771,545 | $ | 0.21 |
July
24, 2009
|
||||
110,000 | $ | 0.25 |
July
24, 2008
|
||||
700,000 | $ | 0.15 |
June
29, 2011
|
Options
Outstanding
|
Options
Exercisable
|
||||||||||||||||||||||
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Prices
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
||||||||||||||||||
$ | 0.01-$0.049 | 12,500,000 | 8.4 | $ | 0.03 | 6,500,000 | $ | 0.03 | |||||||||||||||
$ | 0.05-$0.30 | 2,335,000 | 4.3 | $ | 0.06 | 2,335,000 | $ | 0.06 | |||||||||||||||
$ | 0.31-$0.50 | 100,000 | 2.8 | $ | 0.39 | 100,000 | $ | 0.39 |
For
the six months ended June 30,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||
Options:
|
||||||||||||||||
Outstanding
at beginning of year
|
15,835,000 | $ | 0.04 | 16,085,000 | $ | 0.04 | ||||||||||
Granted
|
- | - | 500,000 | $ | 0.04 | |||||||||||
Cancelled
|
(900,000 | ) | $ | 0.06 | (750,000 | ) | $ | 0.07 | ||||||||
Exercised
|
- | - | - | - | ||||||||||||
Outstanding
at end of period
|
14,935,000 | $ | 0.04 | 15,835,000 | $ | 0.04 |
Year
|
Amount
|
|||
2008
|
$ | 35,000 | ||
2009
|
$ | 31,000 | ||
2010
|
$ | 6,000 |
|
1.
|
software
hosting and maintenance services;
|
|
2.
|
software
usage fees;
|
|
3.
|
radiological
services;
|
|
4.
|
hardware
sales;
|
|
5.
|
software
sales and licenses;
|
|
6.
|
custom
programming services.
|
For
the Quarter Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 202,000 |
compared
to
|
$ | 267,000 |
a
decrease of $65,000 or 24.3%
|
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 437,000 |
compared
to
|
$ | 507,000 |
a
decrease of $70,000 or 13.8%
|
For
the Quarter Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 61,000 |
compared
to
|
$ | 137,000 |
a
decrease of $76,000 or 55.5%
|
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 132,000 |
compared
to
|
$ | 256,000 |
a
decrease of $124,000 or 48.4%
|
For
the Quarter Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 115,000 |
compared
to
|
$ | 97,000 |
an
increase of $18,000 or 18.6%
|
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 249,000 |
compared
to
|
$ | 193,000 |
an
increase of $56,000 or 29.0%
|
For
the Quarter Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 21,000 |
compared
to
|
$ | 0 |
an
increase of $21,000
|
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 21,000 |
compared
to
|
$ | 0 |
an
increase of $21,000
|
For
the Quarter Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 5,000 |
compared
to
|
$ | 4,000 |
an
increase of $1,000 or 25.0%
|
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 10,000 |
compared
to
|
$ | 23,000 |
a
decrease of $13,000 or 56.5%
|
For
the Quarter Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 0 |
compared
to
|
$ | 4,000 |
a
decrease of $4,000
|
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 14,000 |
compared
to
|
$ | 7,000 |
an
increase of $7,000 or 100.0%
|
For
the Quarter Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 0 |
compared
to
|
$ | 2,000 |
a
decrease of $2,000
|
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 11,000 |
compared
to
|
$ | 5,000 |
an
increase of $6,000 or 120.0%
|
For
the Quarter Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 139,000 |
compared
to
|
$ | 104,000 |
an
increase of $35,000 or 33.7%
|
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 210,000 |
compared
to
|
$ | 177,000 |
an
increase of $33,000 or 18.6%
|
For
the Quarter Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 219,000 |
compared
to
|
$ | 187,000 |
an
increase of $32,000 or 17.1%
|
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 416,000 |
compared
to
|
$ | 468,000 |
a
decrease of $52,000 or 11.1%
|
For
the Quarter Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 10,000 |
compared
to
|
$ | 12,000 |
a
decrease of $2,000 or 16.7%
|
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 18,000 |
compared
to
|
$ | 22,000 |
a
decrease of $4,000 or 18.2%
|
For
the Quarter Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 4,000 |
compared
to
|
$ | 35,000 |
a
decrease of $31,000 or 88.6%
|
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
$ | 35,000 |
compared
to
|
$ | 84,000 |
a
decrease of $49,000 or 58.33%
|
For
the Six Months Ended June 30,
|
|||
2008
|
2007
|
||
used
$(84,000)
|
compared
to
|
provided
$66,000
|
a
decrease in available cash of
$150,000
|
For
the Six Months Ended June 30,
|
|||
2008
|
2007
|
||
used
$(16,000)
|
compared
to
|
used
$(42,000)
|
an
increase in available cash of
$26,000
|
For
the Six Months Ended June 30,
|
|||
2008
|
2007
|
||
provided
$68,000
|
compared
to
|
provided
$0
|
an
increase in available cash of
$68,000
|
|
·
|
Rapid
changes in technology relating to the
Internet
|
|
·
|
Continued
growth and use of the Internet
|
|
·
|
Changes
in government regulations
|
|
·
|
Changes
in our business strategies
|
|
·
|
Hardware
failure of a catastrophic
proportion
|
|
·
|
Terrorist
interference with the operation of the Internet or effects of terrorist
activities on the economy
|
|
·
|
Difficulty
recruiting and retaining staff of sufficient technical caliber to provide
adequate and on-going customer support and product maintenance and
development
|
|
·
|
Failure
to successfully market our products through the Internet and our
representatives
|
|
·
|
Inability
to locate sources to retire our line of credit or to obtain alternative
lending sources
|
|
·
|
Inability
to solve cash flow problems
|
Name
of Purchaser
|
Number
of Shares
|
Price
|
Relationship
|
||||||
Mary
Hansen (1)
|
3,000,000 | $ | 51,000 |
Contractor
|
|||||
Bruce
Stabile (2)
|
525,654 | $ | 14,000 |
Contractor
|
|||||
Richard
Govatski (3)
|
2,000,000 | $ | 34,000 |
Board
Member
|
|||||
Teresa
Dickey (4)
|
2,000,000 | $ | 34,000 |
Board
Member
|
|||||
John
Handley (5)
|
2,000,000 | $ | 34,000 |
Board
Member
|
|||||
Frank
Reidy (6)
|
2,000,000 | $ | 34,000 |
Board
Member
|
|||||
Frank
Reidy (7)
|
2,823,530 | $ | 48,000 |
Board
Member
|
|||||
John
Shaver (8)
|
1,176,471 | $ | 20,000 |
Shareholder
|
|||||
Rafael
Rubio (9)
|
1,000,000 | $ | 17,000 |
Employee
|
1.
|
Of
the 3,000,000 shares issued to Ms. Hansen, 1,000,000 shares have been
earned as of June 30, 2008. Ms. Hansen provided services in
payment for the shares earned.
|
2.
|
Mr.
Stabile provided services in payment for the shares issued to
him.
|
3.
|
Of
the 2,000,000 shares issued to Mr. Govatski, 500,000 shares have been
earned as of June 30, 2008. Mr. Govatski provided services in
payment for the shares earned.
|
4.
|
Of
the 2,000,000 shares issued to Ms. Dickey, 500,000 shares have been earned
as of June 30, 2008. Ms. Dickey provided services in payment
for the shares earned.
|
5.
|
Of
the 2,000,000 shares issued to Mr. Handley, 500,000 shares have been
earned as of June 30, 2008. Mr. Handley provided services in
payment for the shares earned.
|
6.
|
Of
the 2,000,000 shares issued to Mr. Reidy, 500,000 shares have been earned
as of June 30, 2008. Mr. Reidy provided services in payment for
the shares earned.
|
7.
|
Mr.
Reidy provided cash in payment for these shares issued to
him.
|
8.
|
Mr.
Shaver cash in payment for these shares issued to
him.
|
9.
|
Mr.
Rubio provided services in payment for these shares issued to
him.
|