The following Items were
the subject of a Form 12b-25
and are included herein:
Part I, Items 1,2 and 3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2000 Commission file number: 0-28152
Affinity Technology Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 57-0991269
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Affinity Technology Group, Inc.
1201 Main Street, Suite 2080
Columbia, SC 29201-3201
(Address of principal executive offices)
(Zip code)
(803) 758-2511
(Registrant's telephone number, including area 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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
30,018,653 shares of Common Stock, $0.0001 par value, as of May 1, 2000.
Part I. Financial Information
Item 1. Financial Statements
Affinity Technology Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31,
2000 December 31,
(Unaudited) 1999
------------------------- --------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,715,497 $ 2,116,016
Investments - 1,474,949
Accounts receivable, less allowance for doubtful accounts of
$115,576 and $105,076 at March 31, 2000 and December 31, 1999,
respectively 1,353,013 713,644
Net investment in sales-type leases - current 315,783 324,485
Inventories 1,200,771 1,224,532
Other current assets 596,645 626,354
------------------------- --------------------------
Total current assets 5,181,709 6,479,980
Net investment in sales-type leases - non-current 172,089 249,830
Property and equipment, net 2,547,557 2,921,770
Software development costs, less accumulated amortization of $436,407
and $368,033 at March 31, 2000 and December 31, 1999, respectively 1,103,561 1,199,053
Other assets 2,204,774 2,278,895
------------------------- --------------------------
Total assets $ 11,209,690 $ 13,129,528
========================= ==========================
Liabilities and stockholders' equity Current liabilities:
Accounts payable $ 54,707 $ 215,897
Accrued expenses 1,063,261 1,548,135
Notes payable 125,352 -
Current portion of deferred revenue 71,375 78,710
------------------------- --------------------------
Total current liabilities 1,314,695 1,842,742
Deferred revenue 817,954 615,806
Commitments and contingent liabilities
Stockholders' equity:
Common stock, par value $0.0001; authorized 60,000,000 shares,
issued 32,177,091 and 31,961,956 shares at March 31, 2000 and
December 31, 1999, respectively 3,218 3,196
Additional paid-in capital 69,581,217 69,394,954
Deferred compensation (117,990) (163,167)
Treasury stock, at cost (2,167,078 and 2,163,556 shares at March
31, 2000 and December 31, 1999, respectively) (3,505,061) (3,490,819)
Accumulated deficit (56,884,343) (55,073,184)
------------------------- --------------------------
Total stockholders' equity 9,077,041 10,670,980
------------------------- --------------------------
Total liabilities and stockholders' equity $ 11,209,690 $ 13,129,528
========================= ==========================
</TABLE>
See accompanying notes.
Affinity Technology Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
2000 1999
------------------------- --------------------------
<S> <C> <C>
Revenues:
Transactions $ 161,796 $ 123,546
Mortgage processing services 73,861 113,399
Sales and rental 3,000 4,750
Professional services 10,000 -
Patent license fees 25,000 -
Other income 79,460 84,264
------------------------- --------------------------
353,117 325,959
Costs and expenses:
Cost of revenues 111,327 169,828
Research and development 329,933 299,125
Selling, general and administrative expenses 1,772,890 2,431,682
------------------------- --------------------------
Total costs and expenses 2,214,150 2,900,635
------------------------- --------------------------
Operating loss (1,861,033) (2,574,676)
Interest income 49,874 120,965
------------------------- --------------------------
Net loss $ (1,811,159) $ (2,453,711)
========================= ==========================
Net loss per share - basic and diluted $ (0.06) $ (0.08)
========================= ==========================
Shares used in computing net loss per share 29,872,823 29,639,351
========================= ==========================
</TABLE>
See accompanying notes.
Affinity Technology Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
2000 1999
-------------------------- --------------------------
<S> <C> <C>
Operating activities
Net loss $ (1,811,159) $ (2,453,711)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 567,408 563,268
Amortization of deferred compensation 45,177 30,457
Provision for doubtful accounts 15,000 15,000
Inventory valuation allowance 30,000 30,000
Deferred revenue 194,813 (35,858)
Other (1,794) -
Changes in current assets and liabilities:
Accounts receivable (654,369) 191,402
Net investment in sales-type leases 86,443 128,845
Inventories (6,239) 9,779
Other current assets 28,837 (277,801)
Accounts payable and accrued expenses (646,064) 46,905
-------------------------- --------------------------
Net cash used in operating activities (2,151,947) (1,751,714)
Investing activities
Purchases of property and equipment, net (20,916) (25,221)
Software development costs - (78,061)
Sales of short term investments, net 1,474,949 2,673,601
-------------------------- --------------------------
Net cash provided by investing activities 1,454,033 2,570,319
Financing activities
Proceeds from notes payable 125,352 -
Payments on notes payable - (141,480)
Exercise of options 172,043 20,804
-------------------------- --------------------------
Net cash provided by (used in) financing activities 297,395 (120,676)
-------------------------- --------------------------
Net (decrease) increase in cash (400,519) 697,929
Cash and cash equivalents at beginning of period 2,116,016 2,026,932
-------------------------- --------------------------
Cash and cash equivalents at end of period $ 1,715,497 $ 2,724,861
========================== ==========================
</TABLE>
See accompanying notes.
Notes to Condensed Consolidated Financial Statements
1. Going Concern
To date, the Company has generated operating losses, has experienced an
extremely lengthy sales cycle for its products and has been required to use a
substantial amount of existing cash resources to fund its operations. If the
Company continues to use cash at the rate used during 1999, the Company would
deplete its existing cash reserves in the second quarter of 2000. Although the
Company has taken steps to reduce its operating expenses and believes that
existing cash, cash equivalents and internally generated funds will be
sufficient to fund operations during 2000, such resources, together with
projected revenues that may be received under existing contracts, will be
insufficient to fund the Company's operations in 2001 and beyond. To remain
viable after 2000, the Company must substantially increase revenues, raise
additional capital and/or substantially reduce its operations.
Management's plan includes increased sales with new customer
relationships established during 1999 and in the first quarter of 2000, sales
growth through deployment of existing product offerings to new customers,
deployment of a recently developed Internet product, and continued cost
curtailment. In addition, the Company believes it is due significant amounts
related to a development contract and certain other amounts and is pursuing
collection on these balances. The Company also has several patents which
management would consider selling, if necessary. Additionally, management
intends to continue discussions with investment bankers and venture capital
firms regarding additional financing.
2. Basis of Presentation
The accompanying unaudited financial statements of Affinity Technology
Group, Inc. (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. The balance sheet at
December 31, 1999 has been derived from the audited consolidated financial
statements at that date, but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
The accompanying unaudited condensed consolidated financial statements
reflect all adjustments (consisting of normal, recurring accruals) which, in the
opinion of management, are necessary for a fair presentation of the results for
the periods shown. The results of operations for such periods are not
necessarily indicative of the results expected for the full year or for any
future period. The accompanying financial statements should be read in
conjunction with the audited consolidated financial statements of the Company
for the year ended December 31, 1999.
In accordance with management's oversight of the Company's operations,
the Company conducts its business within one industry segment - financial
services technology.
Certain amounts in 1999 have been reclassified to conform to 2000
presentation for comparability. These reclassifications have no effect on
previously reported stockholders' equity or net loss.
3. Inventories
<TABLE>
<CAPTION>
Inventories consist of the following:
March 31, December 31,
2000 1999
------------------------- -------------------------
<S> <C> <C>
Electronic parts and other components $ 866,427 $ 976,345
Work in process 1,192,712 1,189,766
Finished goods 779,456 772,407
------------------------- -------------------------
2,838,595 2,938,518
Reserve for obsolescence (1,637,824) (1,713,986)
------------------------- -------------------------
$ 1,200,771 $ 1,224,532
========================= =========================
</TABLE>
4. Loan Warehousing Agreement
Surety Mortgage, Inc., a wholly owned subsidiary of the Company
("Surety"), has a credit facility with a maximum borrowing amount of $2,000,000.
Pursuant to the terms of the credit facility, Surety may obtain advances from
the lender for funding of mortgage loans made by Surety during the interim
period between the funding and sale of the loans to permanent investors. All
advances made pursuant to the agreement are secured by a security interest in
the rights and benefits due Surety in conjunction with the making of the
underlying loan. The credit facility bears interest at the lender's prime rate
plus 50 basis points and expires on June 1, 2000. There were outstanding
borrowings under the Loan Warehousing Agreement as of March 31, 2000 of
$125,352.
5. Net Loss Per Share of Common Stock
The Company has adopted Financial Accounting Standards Board Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128").
Net loss per share of Common Stock amounts presented on the face of the
consolidated statements of operations have been computed based on the weighted
average number of shares of Common Stock outstanding in accordance with SFAS
128. Stock warrants and stock options were not included in the calculation of
diluted loss per share because the Company has experienced operating losses in
all periods presented and, therefore, the effect would be anti-dilutive.
6. Commitments and Contingencies
The Company is subject to legal actions which from time to time have
arisen in the ordinary course of business. In addition, a claim was filed by a
plaintiff who claimed certain rights, damages and interests incidental to the
Company's formation and development. The claim resulted in a jury verdict of
$68,000 in favor of the plaintiff and the plaintiff subsequently requested, and
was granted, a new trial. The Company is appealing the grant of a new trial.
Additionally, a former employee has filed suit against the Company alleging
breach of contract and non-payment of wages. The Company intends to vigorously
contest all such actions and, in the opinion of management, the Company has
meritorious defenses and the resolution of such actions will not materially
affect the financial position of the Company.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements in this report (including Management's Discussion and
Analysis of Financial Condition and Results of Operations) that are not
descriptions of historical facts, such as statements about the Company's future
prospects and cash requirements, may be forward-looking statements and are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Actual results may vary due to risks and uncertainties,
including economic, competitive and technological factors affecting the
Company's operations, markets, products, services and prices, unanticipated
costs and expenses affecting the Company's cash position and other factors
discussed in the Company's filings with the Securities and Exchange Commission,
including the information set forth under the caption "Business Risks" in Item 1
of the Company's Annual Report on Form 10-K for the year ended December 31,
1999. These and other factors may cause actual results to differ materially from
those anticipated.
Overview
Since its formation in 1994, the Company has concentrated its product
development efforts primarily on developing "closed loop" electronic commerce
systems that enable financial institutions to automate the processing and
consummation of consumer loans and other financial services at the point of
sale. This technology is designed to enable financial institutions to open new
distribution channels and link all distribution channels electronically to their
credit departments.
Prior to 1998, the Company's primary products and services consisted of
the Affinity Automated Loan Machine ("ALM") and e-xpertLender. The ALM captures
origination information for loan applications and then routes this information
to the Company's proprietary DeciSys/RT for an automated decision. e-xpertLender
connects the Company's automated decisioning system with a financial
institution's delivery channels and its risk management group and gives the
consumer a choice of closing methods that include branches, ALMs, mail, and
third party closing agents. During 1998 and 1999, the Company developed a system
to process and automate decisioning of automobile loans pursuant to a
development contract with the indirect automobile finance unit of The Dime
Savings Bank of New York (formerly the Citibank Indirect Auto Unit). As
previously announced by the Company, the Company has been informed by Dime that
they will not deploy the system, and the Company has filed a lawsuit against
Dime as a result of their decision not to deploy the system. The Company has
developed a generic version of this automobile loan processing and decisioning
system to be sold, under the brand name of iDEAL, to other financial
institutions. Also, during 1998 and 1999, the Company developed a version of its
ALM to capture and begin the processing of mortgage loan applications. To date,
such ALMs have been deployed and operated by Surety Mortgage, Inc., a subsidiary
of the Company. In addition, during 1999 and 2000, the Company developed an
Internet product, to be marketed under the name rtDS ("real time Decision
Service"), which is an outsourced service enabling lenders to deliver automated
decisions to web loan applicants in real-time.
To date, the Company has generated substantial operating losses and
experienced an extremely lengthy sales cycle for its products and services.
Average consumer use of ALMs and average rates of loan approvals have been lower
than customer expectations. The Company believes that the ALM has not proven to
be a viable channel for the delivery of consumer loans and other products in a
fully automated manner. Although the Company has developed and is developing
other products and services to exploit its DeciSys/RT technology, to date such
products and services have not generated substantial revenues, and the Company
has been required to use a substantial amount of existing cash resources to fund
its operations. Although the Company believes that existing cash, cash
equivalents and internally generated funds will be sufficient to fund operations
for the remainder of 2000, such resources, together with projected revenues that
may be received under existing contracts, will be insufficient to fund the
Company's operations in 2001 and beyond. To remain viable after 2000, the
Company must substantially increase revenues, raise additional capital and/or
substantially reduce its operations. No assurances can be given that the Company
will be able to increase its revenues, raise additional capital or reduce its
operations in a manner that allows it to continue operations in 2001 and beyond.
To date, the Company has generated minimal operating revenues, has
incurred significant losses and has experienced substantial negative cash flow
from operations. The Company's prospects must be considered in light of the
risks, expenses and difficulties frequently encountered by companies in their
early stage of development, particularly technology-based companies operating in
unproven markets with unproven products. The Company had an accumulated deficit
as of March 31, 2000 of $56,884,343. The Company expects to incur substantial
additional costs to develop its financial product origination capabilities, to
enhance and market iDEAL, e-xpertLender, the ALM and Decisys/RT and to develop
any new products and services. Accordingly, there can be no assurance that the
Company will ever be able to achieve profitability or, if achieved, sustain such
profitability.
The market for the Company's products and services is new, evolving and
uncertain, and it is difficult to determine the size and predict the future
growth rate, if any, of this market. In addition, the market for products and
services that enable electronic commerce is highly competitive and is subject to
rapid innovation and competition from traditional products and services having
all or some of the same features as products and services enabling electronic
commerce. Competitors in this market have frequently taken different strategic
approaches and have launched substantially different products or services in
order to exploit the same perceived market opportunity. Until the market has
validated a strategy through widespread acceptance of a product or service, it
is difficult to identify all current or potential market participants or gauge
their relative competitive position.
Results of Operations
Revenues
The Company's revenues for the three months ended March 31, 2000 were
$353,117 compared to $325,959 for the corresponding period of 1999.
Transaction fees. Revenues from transaction fees were $161,796 for the
three months ended March 31, 2000, compared to $123,546 for the corresponding
period in 1999. The increase during the three months ended March 31, 2000, as
compared to the same period in 1999 is attributable to an increase in the number
of financial service applications processed using DeciSys/RT.
Mortgage Processing Services. Mortgage processing services represents
fees earned by Surety Mortgage, Inc. ("Surety"), a wholly-owned subsidiary of
the Company, for originating and processing mortgage loans. Revenues from
mortgage processing services were $73,861 for the three months ended March 31,
2000, compared to $113,399 for the corresponding period in 1999. The decrease
during the three months ended March 31, 2000, as compared to the same period in
1999 is attributable to a decrease in the number of mortgage loans processed by
Surety.
Professional Services. During the three months ended March 31, 2000,
the Company recognized revenue associated with the performance of professional
services for one customer. No professional service revenue was recognized in the
comparable period of 1999.
Patent license revenue. During the three months ended March 31, 2000,
the Company recognized $25,000 associated with one patent license agreement. No
patent license revenue was recognized in the comparable period of 1999.
Costs and Expenses
Cost of Revenues. Cost of revenues for the three months ended March 31,
2000 was $111,327, compared to $169,828 for the corresponding period in 1999.
The decrease during the three months ended March 31, 2000, as compared to the
same period in 1999 is attributable to reduced maintenance and depreciation
expense associated with fewer ALMs in service under operating leases in 2000 and
a decrease in the direct costs associated with processing mortgage loans due to
a decrease in the quantity of mortgage loans processed by Surety.
Research and Development. Costs incurred for research and development
for the three months ended March 31, 2000, totaled $329,933, compared to
$299,125 for the corresponding period in 1999. The increase in research and
development costs for the three months ended March 31, 2000 compared to the same
period in 1999 is attributable to less deferred costs associated with specific
professional services contracts in 2000 compared to 1999. Costs associated with
the performance of professional services are deferred until the professional
services are completed by the Company and accepted by the customer. Upon
acceptance by the customer, the corresponding revenue and deferred costs are
recognized by the Company. Generally, the Company has reduced the number of
employees involved in research and development activities in 2000 compared to
1999.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses totaled $1,772,890 for the three months ended March 31,
2000, as compared to $2,431,682 for the corresponding period in 1999. The
decrease for the three months ended March 31, 2000, as compared to the
corresponding period of 1999 is primarily attributable to a decrease in
employment and related costs associated with an overall reduction in the number
of employees. In January of 2000 the Company reduced its employee base by 47%.
Interest Income/Expense. Interest income for the three months ended
March 31, 2000, totaled $49,874, as compared to $122,327 for the corresponding
period in 1999. The decrease in interest income for the three months ended March
31, 2000, is due to a decrease in cash and cash equivalents and investments
balances as compared to the same period of 1999 coupled with a decrease in the
amount of amortization of deferred interest income associated with ALMs under
sales-type lease agreements. Interest expense for the three months ended March
31, 1999, was $1,362. The Company incurred no interest expense for the three
months ended March 31, 2000.
Liquidity and Capital Resources
The Company has generated operating losses of $56,884,343 since its
inception and has financed its operations primarily through net proceeds from
its initial public offering in May 1996. Prior to the Company's initial public
offering, the Company's operations were financed through the private sale of
debt and equity securities, capital lease obligations, bank financing, factoring
of ALM rental contracts, and loans from affiliates. Net proceeds from the
Company's initial public offering were $60,088,516.
The Company continues to use a substantial amount of existing cash
resources to fund its operations. If the Company continued to use cash resources
at the rate used in 1999, the Company would deplete its existing cash resources
in the middle part of 2000; however, the Company has taken certain measures to
reduce its cash depletion rate, including decreasing its employee base. The
Company believes existing cash, cash equivalents and internally generated funds
will be sufficient to meet the Company's currently anticipated cash requirements
through 2000. However no assurances can be given that the Company's existing
cash resources will be sufficient to fund the Company's cash requirements for
2000. Moreover, existing cash resources and projected revenues that may be
received under existing contracts will be insufficient to fund the Company's
operations in 2001 and thereafter. Accordingly, to remain viable after 2000, the
Company must substantially increase revenues, raise additional capital and/or
substantially reduce its operations. No assurances can be given that the Company
will be able to increase its revenues, raise additional capital or reduce its
operations in a manner that would allow it to continue operations in 2001 and
beyond. In order to fund operations, the Company may need to raise additional
funds through the issuance of equity securities, in which case the percentage
ownership of the stockholders of the Company will be reduced, stockholders may
experience additional dilution, and such equity securities may have rights,
preferences or privileges senior to common stock. There can be no assurance that
additional financing will be available when needed on terms favorable to the
Company or at all. If adequate funds are not available or not available on
acceptable terms, the Company may be unable to continue operations; develop,
enhance and market products; retain qualified personnel; take advantage of
future opportunities; or respond to competitive pressures, any of which would
have a material adverse effect on the Company's business, operating results and
financial condition.
Net cash used during the three months ended March 31, 2000, to fund
operations was approximately $2,152,000 compared to approximately $1,752,000 for
the same period in 1999. Proceeds from the offering and other sources of cash
were used to fund current period operations and research and development of
approximately $330,000. During the three months ended March 31, 1999, net
proceeds from the offering and other sources of cash were used to fund
operations, research and development of approximately $299,000 and software
development of approximately $78,000. At March 31, 2000, cash and liquid
investments were $1,715,497, as compared to $3,590,965 at December 31, 1999. At
March 31, 2000 working capital was $3,867,014, as compared to $4,637,238 at
December 31, 1999.
Surety has established a credit facility with a maximum borrowing
amount of $2,000,000. Pursuant to the terms of the credit facility, Surety may
obtain advances from the lender for funding of mortgage loans made by Surety
during the interim period between the funding and sale of the loans to permanent
investors. All advances made pursuant to the agreement are secured by a security
interest in the rights and benefits due Surety in conjunction with the making of
the underlying loan. The credit facility bears interest at the lender's prime
rate plus 50 basis points and expires on June 1, 2000. Outstanding borrowings
under the Loan Warehousing Agreement as of March 31, 2000 were $125,352.
Implications of Year 2000 Issues
The Company's operational transition into the year 2000 was uneventful
and the Company is unaware of any material problems or issues associated with
the operation of its systems as a result of Year 2000 issues. In addition, the
Company is unaware of any material problems or issues associated with critical
third party systems and services utilized by the Company. The Company's
incremental costs associated with Year 2000 issues have been insignificant and
the Company does not believe that significant costs will be incurred in
remediation of Year 2000 issues.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company's market risk exposure is the potential loss arising from
changes in interest rates and its impact on investments and the Company's
mortgage brokerage business. The Company does not believe such risk is material.
The Company's cash and cash equivalents consist of highly liquid investments
with maturities of three months or less. Further, when the Company receives a
commitment to originate a mortgage loan from a consumer or correspondent, the
Company immediately receives a commitment from an investor to buy such mortgage
loan. The Company does not believe that its mortgage brokerage business exposes
it to significant market risk for changes in interest rates.
<PAGE>
Part II. Other Information
Items 3, 4 and 5 are not applicable.
Item 1. Legal Proceedings
On April 18, 2000, the Company filed a lawsuit against The Dime Savings
Bank of New York, FSB ("The Dime") and Hudson United Bancorp ("Hudson") in The
United States District Court for the district of South Carolina, Columbia
Division. The lawsuit arises out of the Company's contract with The Dime
relating to the development of a system to process and automate decisioning of
automobile loans, which contract was acquired by The Dime in connection with its
acquisition of the indirect automobile loan business formerly operated by
Citibank, N.A. In the Company's complaint, the Company alleges breach of
contract by The Dime and intentional interference with the contract by Hudson,
which attempted to merge with The Dime earlier this year. The lawsuit also
contains a civil conspiracy claim against both Dime and Hudson, and seeks actual
and punitive damages against both defendants.
Item 2. Changes in Securities and Use of Proceeds.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) The Company's registration statement on Form S-1 (File No.
333-1170) with regard to an initial public offering of 5,060,000
shares of common stock, par value $0.0001 per share, of the
Company was declared effective by the Securities and Exchange
Commission on April 24, 1996. As set forth in the Company's Form
SR, Report of Sales of Securities and Use of Proceeds Therefrom,
Montgomery Securities and Donaldson, Lufkin & Jenrette Securities
Corporation acted as the managing underwriters for the offering,
which commenced April 25, 1996. As of March 31, 2000, the Company
has used net proceeds of $60,088,000 from the offering as follows:
<TABLE>
<CAPTION>
Direct or indirect payments to
directors, officers, general
partners of the issuer or their
associates; to persons owning ten
percent or more of any class of
equity securities of the issuer; Direct or indirect
and to affiliates of the issuer. payments to others
------------------------------------ ---------------------------
<S> <C> <C>
Construction of plant, building and facilities $ -
Purchase and installation of machinery and equipment 5,689,000
Purchase of real estate -
Acquisition of other business(es) 300,000
Repayment of indebtedness $ 771,000 1 1,000,000
Working capital 33,059,000
Temporary investments:
US Treasury obligations -
Commercial paper -
Money market / cash 1,715,000
Other purposes
Marketing 4,537,000
Research & development 10,776,000
Purchase of software 2,241,000
1 Reflects the repayment of debt owned to Carolina First Corporation, as
described under the caption "Use of Proceeds" in the Company's Prospectus, dated
April 25, 1996.
</TABLE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter
ended March 31, 2000.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Affinity Technology Group, Inc.
By: /s/ Joseph A. Boyle
Joseph A. Boyle
President, Chief Executive Officer and Chief Financial Officer
(principal executive and financial officer)
Date: May 22, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,715,497
<SECURITIES> 0
<RECEIVABLES> 1,468,589
<ALLOWANCES> 115,576
<INVENTORY> 1,200,771
<CURRENT-ASSETS> 5,181,709
<PP&E> 8,576,432
<DEPRECIATION> 6,028,875
<TOTAL-ASSETS> 11,209,690
<CURRENT-LIABILITIES> 1,314,695
<BONDS> 0
0
0
<COMMON> 3,218
<OTHER-SE> 9,073,823
<TOTAL-LIABILITY-AND-EQUITY> 11,209,690
<SALES> 0
<TOTAL-REVENUES> 353,117
<CGS> 111,327
<TOTAL-COSTS> 2,214,150
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 45,000
<INTEREST-EXPENSE> (49,874)
<INCOME-PRETAX> (1,811,159)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,811,159)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,811,159)
<EPS-BASIC> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
