SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: November 12, 1998
(Date of Earliest Event Reported: September 1, 1998)
RIGL CORPORATION
_____________________________________________________________________________
(Exact name of registrant as specified in its charter)
Nevada 0-24217 85-0206668
_______________ ______________ _____________
(State or other jurisdiction (Commission File No.) (IRS Employer I.D. No.)
of incorporation)
7501 North 16th Street, Suite 200, Phoenix, Arizona 85020
_____________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 906-1924
_____________________________________________________________________________
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
A. Financial Statements of Business Acquired
The financial statements of Medical Resource Systems, Inc. as of
September 30, 1997 and for the two years then ended, together with
the audit report of Singer Lewak Greenbaum & Goldstein LLP dated
October 2, 1998 is attached as Exhibit A.
B. Pro Forma Financial Information
Pro forma financial schedules are attached hereto as Exhibit B.
C. Exhibits
Exhibit A - Medical Resource Systems, Inc. audited balance sheets
as of September 30, 1997 and 1996, and the related statements of
operations, shareholders' equity, and cash flows for the years then
ended.
Exhibit B - Pro forma financial schedules:
Pro forma combining operating statement for the nine months ended
June 30, 1998.
Pro forma combining balance sheet as of June 30, 1998.
Pro forma combining operating statement for the year ended
September 30, 1997
Pro forma combining balance sheet as of September 30, 1997
Pro forma combining operating statement for the year ended
September 30, 1996
Pro forma combining balance sheet as of September 30, 1996
SIGNATURES
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, thereto duly authorized.
September 12, 1998
RIGL CORPORATION
/s/ John A. Williams
__________________
John A. Williams,
Chief Financial Officer
<PAGE>
Exhibit "A"
MEDICAL RESOURCE SYSTEMS, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
SEPTEMBER 30, 1997 AND 1996
<PAGE>
MEDICAL RESOURCE SYSTEMS, INC.
CONTENTS
September 30, 1997
___________________________________________________________________________
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS
Balance Sheets 2
Statements of Operations 3
Statements of Shareholders' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6 - 10
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Shareholders
Medical Resource Systems, Inc.
We have audited the accompanying balance sheets of Medical Resource Systems,
Inc. as of September 30, 1997 and 1996, and the related statements of
operations, shareholders' equity, and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Medical Resource Systems,
Inc. as of September 30, 1997 and 1996, and the results of its operations and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
October 2, 1998
<PAGE>
MEDICAL RESOURCE SYSTEMS, INC.
BALANCE SHEETS
September 30,
___________________________________________________________________________
ASSETS
1997 1996
________ ________
CURRENT ASSETS
Accounts receivable $ 23,122 $ 25,483
Prepaid expenses 3,735 5,516
________ ________
Total current assets 26,857 30,999
EQUIPMENT, net of accumulated
depreciation of $23,332 and $20,974,
respectively 7,104 14,875
OTHER ASSETS
Deposits 2,426 10,000
________ ________
Total assets $ 36,387 $ 55,874
________ ________
________ ________
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Book overdraft $ 2,893 $ 12,217
Accounts payable and accrued liabilities 25,061 35,258
Notes payable 20,000 20,000
________ ________
Total current liabilities 47,954 67,475
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' DEFICITS
Common stock, $1 par value
100 shares authorized, issued,
and outstanding 100 100
Accumulated deficit (11,667) (11,701)
________ ________
Total shareholders' deficit (11,567) (11,601)
________ ________
TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIT $ 36,387 $ 55,874
________ ________
________ ________
The accompanying notes are an integral part of these financial statements.
<PAGE>
MEDICAL RESOURCE SYSTEMS, INC.
STATEMENTS OF OPERATIONS
For the Years Ended September 30,
___________________________________________________________________________
1997 1996
________ ________
SALES $ 753,329 $ 726,111
________ ________
OPERATING EXPENSES
Administrative salaries 527,288 534,726
Rent and occupancy expenses 53,317 48,468
Other operating expenses 171,181 154,606
________ ________
Total operating expenses 751,786 737,800
________ ________
INCOME (LOSS) FROM OPERATIONS 1,543 (11,689)
________ ________
OTHER INCOME (EXPENSE)
Interest income - 521
Interest expense (1,636) -
Gain on sale of asset 177 -
________ ________
Total other income (expense) (1,459) 521
INCOME (LOSS) FROM OPERATIONS BEFORE
PROVISION FOR INCOME TAXES 84 (11,168)
PROVISION FOR INCOME TAXES 50 55
________ ________
NET INCOME (LOSS) $ 34 $ (11,223)
________ ________
________ ________
BASIC EARNINGS (LOSS) PER SHARE $ 0.34 $ (112.23)
WEIGHTED-AVERAGE SHARES OUTSTANDING 100 100
________ ________
________ ________
The accompanying notes are an integral part of these financial statements.
<PAGE>
MEDICAL RESOURCE SYSTEMS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended September 30,
___________________________________________________________________________
Common Stock Accumulated
Shares Amount Deficit Total
________ ________ ________ _______
BALANCE
September 30, 1995 100 $ 100 $ (478) $ (378)
NET LOSS (11,223) (11,223)
________ ________ ________ _______
BALANCE
September 30, 1996 100 100 (11,701) (11,601)
NET INCOME 34 34
________ ________ ________ _______
BALANCE
September 30, 1997 100 $ 100 $(11,667) $(11,567)
________ ________ ________ _______
The accompanying notes are an integral part of these financial statements.
<PAGE>
MEDICAL RESOURCE SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended September 30,
___________________________________________________________________________
1997 1996
________ ________
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 34 $ (11,223)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities
Depreciation 7,148 2,439
Gain on disposal of equipment (177) -
(Increase) decrease in
Accounts receivable 2,361 (1,171)
Prepaid expenses 1,781 -
Deposits 7,574 (10,000)
Increase (decrease) in
Accounts payable and accrued liabilities (10,197) 11,196
________ ________
Net cash provided by (used in)
operating activities 8,524 (8,759)
________ ________
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of equipment 800 -
Purchases of equipment - (4,742)
________ ________
Net cash provided by (used in)
investing activities 800 (4,742)
________ ________
Net increase (decrease)
in cash and cash equivalents 9,324 (13,501)
CASH AND CASH EQUIVALENTS (BOOK OVERDRAFT),
BEGINNING OF YEAR (12,217) 1,284
BOOK OVERDRAFT, END OF YEAR $ (2,893) $ (12,217)
________ ________
________ ________
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Interest paid $ 1,636 $ -
________ ________
________ ________
Income taxes paid $ 50 $ 55
________ ________
________ ________
The accompanying notes are an integral part of these financial statements.
<PAGE>
MEDICAL RESOURCE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
___________________________________________________________________________
NOTE 1 - ORGANIZATION
Medical Resource Systems, Inc. (the "Company") is an Arizona corporation,
founded on June 11, 1993. The Company operates primarily in Phoenix,
Arizona. Its primary sources of revenue are derived from the processing of
billing and collection services for physicians and physician groups.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
_________________________
For purposes of the statements of cash flows, the Company considers all
highly-liquid investments purchased with original maturities of three
months or less to be cash equivalents.
Fair Value of Financial Instruments
___________________________________
For certain of the Company's financial instruments including cash and cash
equivalents, accounts receivable, and accounts payable and accrued
liabilities, the carrying amounts approximate fair value due to their short
maturities.
Equipment
_________
Equipment is stated at cost. Depreciation is generally provided using
accelerated methods. The estimated useful lives of the related assets are
three to five years.
Depreciation expense for the years ended September 30, 1997 and 1996 was
$7,148 and $2,439, respectively.
Estimates
_________
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements,
as well as the reported amounts of revenues and expenses included in the
determination of net earnings during the reporting period. Actual results
could differ from those estimates.
Risk Concentrations
___________________
Substantially all of the Company's revenues are generated from two
customers located in Phoenix, Arizona.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
____________
The Company accounts for income taxes under the asset and liability method
of accounting. Under this method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. A valuation allowance is required when
it is less likely than not that the Company will be able to realize all or
a portion of its deferred tax assets.
Earnings per Share
__________________
During the year ended September 30, 1997, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share."
Basic earnings per share is computed by dividing income available to
common shareholders by the weighted-average number of common shares
outstanding. Diluted earnings per share is computed similar to basic
earnings per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common
shares were dilutive. Diluted earnings per share are not presented for
1997 and 1996 because there are no common stock equivalents.
Recently Issued Accounting Pronouncements
_________________________________________
The Financial Accounting Standards Board ("FASB") issued SFAS No. 130,
"Reporting Comprehensive Income," which is effective for financial
statements with fiscal years beginning after December 15, 1997. Earlier
application is permitted. SFAS No. 130 establishes standards for reporting
and display of comprehensive income and its components in a full set of
general-purpose financial statements. The Company does not expect adoption
of SFAS No. 130 to have a material impact, if any, on its financial
position or results of operations.
The FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," effective for fiscal years beginning after
December 15, 1997. SFAS No. 131 requires a company to report certain
information about its operating segments including factors used to
identify the reportable segments and types of products and services from
which each reportable segment derives its revenues. The Company does not
anticipate any material change in the manner that it reports its segment
information under this new pronouncement.
NOTE 3 - ACCOUNTS RECEIVABLE
Accounts receivable consist primarily of amounts due from one customer
related to services provided for physician billing. The Company has not
recorded an allowance for doubtful accounts and believes receivables are
fully collectible.
NOTE 4 - NOTES PAYABLE
Notes payable at September 30 consisted of the following:
1997 1996
________ ________
Demand note dated May 31, 1993 to a
former shareholder in the corporation.
The note bears interest at 8%. $ 13,000 $ 13,000
Demand note dated June 30, 1993 to a
former shareholder in the corporation.
The note bears interest at 8%. 7,000 7,000
________ ________
Total $ 20,000 $ 20,000
________ ________
________ ________
<PAGE>
NOTE 5 - COMMITMENTS AND CONTINGENCIES
Leases
______
The Company has entered into certain non-cancelable operating leases for
its corporate office and for computer equipment.
.
Future minimum rental commitments under these lease agreements with
initial or remaining terms of one year or more at September 30, 1997 are
as follows:
Year Ending
September 30,
_____________
1998 $ 90,000
1999 54,000
2000 7,000
________
Total $ 151,000
Rent expense was $47,624 and $42,781 for the years ended September 30,
1997 and 1996, respectively.
The Company has also entered into a verbal subleasing agreement. The rent
is $1,375 per month on a month-to-month basis. Total rent collected was
$16,500 for the year ended September 30, 1997.
Litigation
__________
The Company may become involved in various lawsuits arising from the
normal course of business. Management believes that any such lawsuits
which may arise would have an immaterial impact on the financial condition
of the Company.
<PAGE>
NOTE 6 - INCOME TAXES
Significant components of the provision for income taxes based on income
for the years ended September 30 are as follows:
1997 1996
________ ________
Current Federal $ - $ 5
State 50 50
________ ________
50 55
________ ________
Deferred Federal - -
State - -
________ ________
Provision for income taxes $ 50 $ 55
________ ________
________ ________
<PAGE>
NOTE 6 - INCOME TAXES (Continued)
A reconciliation of the provision for (benefit from) income tax expense
with the expected income tax computed by applying the federal statutory
income tax rate to income before provision for income taxes for the years
ended September 30 is as follows:
1997 1996
________ ________
Income tax provision computed at federal
statutory tax rate 34.0% 34.0%
Change in deferred income tax
valuation reserve (214.0) (39.0)
State taxes, net of federal benefit 5.0 5.0
Permanent differences and other 235.0 (1.0)
_________ ________
Total 60.0% (1.0)%
________ ________
________ ________
As of September 30, 1997, the Company had federal and state net operating
loss carryforwards of approximately $13,179 and $21,242, respectively,
which expire through 2012 and 2007, respectively.
Significant components of the Company's deferred tax assets and
liabilities for federal and state income taxes as of September 30, 1997
and 1996 consisted of the following:
1997 1996
________ ________
Deferred tax asset
Net operating loss carryforwards $ 5,179 $ 8,346
Valuation allowance (5,179) (8,346)
________ ________
NET DEFERRED TAX ASSET $ - $ -
________ ________
________ ________
During the year ended September 30, 1997, the Company did not utilize its
federal net operating loss carryforwards.
NOTE 7 - SUBSEQUENT EVENTS
As of September 1, 1998, 100% of the Company's common stock was purchased
by RIGL Medical Systems, Inc. in exchange for stock.
On May 31, 1998, the board of directors approved a compensation plan for
one of its officers for one year at $110,000.
<PAGE>
Exhibit B. - Pro Forma Financial Information
The following unaudited pro forma financial statements give effect to the
merger of RIGL Corporation ("RIGL") and Medical Resource Systems, Inc. ("MRS")
to be accounted for as a pooling of interests. The unaudited pro forma
balance sheets presents the combined financial position of RIGL and MRS as of
June 30, 1998, September 30, 1997 and September 30, 1996 assuming that the
merger had occurred as of October 1, 1995. Such pro forma information is
based upon the historical balance sheet data of RIGL and MRS as of those
dates.
The unaudited pro forma statement of operations gives effect to the merger of
RIGL and MRS by combining the results of operations of RIGL for the two years
ended September 30, 1997 and the nine months ended June 30, 1998 with the
results of operations of MRS for the two years ended September 30, 1997 and
the nine months ended June 30, 1998, respectively, on a pooling of interests
basis.
The unaudited pro forma condensed consolidated financial data does not reflect
any synergies expected to be realized after the MRS acquisition (because their
realization cannot be assured).
THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA IS PRESENTED FOR
INFORMATIONAL PURPOSES ONLY AND IS NOT NECESSARILY INDICATIVE OF THE OPERATING
RESULTS OR FINANCIAL POSITION THAT WOULD HAVE OCCURRED HAD THE MRS ACQUISITION
DESCRIBED HEREIN BEEN CONSUMMATED AT THE DATES INDICATED, NOR IS IT
NECESSARILY INDICATIVE OF THE FUTURE OPERATING RESULTS OR FINANCIAL POSITION
OF THE COMPANY FOLLOWING THE MRS ACQUISITION.
These unaudited pro formal financial statements should be read in conjunction
with the historical financial statements of RIGL and MRS.
<PAGE>
STATEMENT OF OPERATIONS: (UNAUDITED)
NINE MONTHS ENDED JUNE 30, 1998
_____________________________________________________________________________
PRO FORMA
RIGL MRS ADJUSTMENTS COMBINED
________ ________ _________ ________
REVENUE
Collection fees $ 523,333 $ 523,333
Corporate revenue $ 72,856 72,856
Royalty income 264 264
________ ________ _________ ________
Total revenue 73,120 523,333 596,453
Direct expense - - -
________ ________ _________ ________
GROSS PROFIT 73,120 523,333 596,453
General & administrative
expense 1,497,050 473,695 1,970,745
Depreciation & amortization
expense 51,515 1,426 52,941
________ ________ _________ ________
NET OPERATING INCOME (LOSS) (1,475,445) 48,212 (1,427,233)
OTHER INCOME (EXPENSE)
Interest income 62,416 62,416
Interest expense (1,626) (1,626)
________ ________ _________ ________
INCOME (LOSS) BEFORE
INCOME TAXES (1,413,029) 46,586 (1,366,443)
Provision for income taxes 1,716 - 1,716
________ ________ _________ ________
NET INCOME(LOSS) $ (1,414,745) $ 46,586 $ $(1,368,159)
________ ________ _________ ________
________ ________ _________ ________
Net income (loss per share
basic $ (0.12)
________
________
Weighted average shares
outstanding 11,238,967
________
________
Note 1 - Net income (loss) per share amounts are based on the average number
of common shares of the combined companies outstanding during each period.
Shares of MRS have been adjusted to the equivalent shares of RIGL.
<PAGE>
BALANCE SHEET : (UNAUDITED)
JUNE 30, 1998
_____________________________________________________________________________
PRO FORMA
RIGL MRS ADJUSTMENTS COMBINED
________ ________ _________ ________
CURRENT ASSETS
Cash $ 2,021,399 $ 45,119 $ 2,066,518
Accounts receivable 1,050 23,122 24,172
Other receivables 8,811 8,811
________ ________ _________ ________
Total current assets 2,031,260 68,241 2,099,501
PROPERTY AND EQUIPMENT 184,116 25,981 210,097
Less accumulated
depreciation (47,595) (20,302) (67,897)
________ ________ _________ ________
Net property and equipment 136,521 5,679 142,200
OTHER ASSETS
Shareholder loans, net 68,000 68,000
Other interest bearing loans 40,000 40,000
Proprietary technology - -
Technology rights 438,875 438,875
Deposits 60,706 6,161 66,867
Organization costs 1,560 1,560
________ ________ _________ ________
Total other assets 609,141 6,161 615,302
Less accumulated
amortization (546) (546)
________ ________ _________ ________
Net other assets 608,595 6,161 614,756
________ ________ _________ ________
TOTAL ASSETS $ 2,776,376 $ 80,081 $ $ 2,856,457
________ ________ _________ ________
________ ________ _________ ________
<PAGE>
BALANCE SHEET (UNAUDITED)
JUNE 30, 1998
_____________________________________________________________________________
PRO FORMA
RIGL MRS ADJUSTMENTS COMBINED
________ ________ _________ ________
CURRENT LIABILITIES
Notes payable $ - $ 20,000 $ 20,000
Accounts payable 72,373 5,061 77,434
Accrued expense 12,000 20,000 32,000
Shareholder loans 2,460 2,460
________ ________ _________ ________
Total current liabilities 86,833 45,061 131,894
COMMITMENTS
STOCKHOLDERS' EQUITY
Preferred stock 1,761 1,761
Additional paid in capital 1,759,599 1,759,599
Subscriptions receivable (1,761,360) (1,761,360)
________ ________ _________ ________
Total preferred stock - -
________ ________ _________ ________
Common stock 12,953 100 13,053
Additional paid-in capital 6,042,423 6,042,423
Subscriptions receivable - -
________ ________ _________ ________
Total common stock 6,055,376 100 6,055,476
________ ________ _________ ________
Treasury stock (69,822) (69,822)
Accumulated deficit (3,296,011) 34,920 (3,261,091)
________ ________ _________ ________
Total stockholder's equity 2,689,543 35,020 2,724,563
________ ________ _________ ________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,776,376 $ 80,081 $ $ 2,856,457
________ ________ _________ ________
________ ________ _________ ________
Note 1 - The pro forma balance sheet gives effect to the merger of RIGL and
MRS by combining the respective balance sheets of the two companies at June
30, 1998, on a pooling of interests basis.
<PAGE>
STATEMENT OF OPERATIONS: (UNAUDITED)
YEAR ENDED SEPTEMBER 30, 1997
_____________________________________________________________________________
PRO FORMA
RIGL MRS ADJUSTMENTS COMBINED
________ ________ _________ ________
REVENUE
Collection fees $ 753,506 $ 753,506
Corporate revenue $ 35,450 35,450
Royalty income 1,092 1,092
________ ________ _________ ________
Total Revenue 36,542 753,506 790,048
Direct expense 10,542 - 10,542
________ ________ _________ ________
GROSS PROFIT 26,000 753,506 779,506
General & administrative
expense 1,358,403 744,638 2,103,041
Depreciation & amortization
expense 16,626 7,148 23,774
________ ________ _________ ________
NET OPERATING INCOME (LOSS) (1,349,029) 1,720 (1,347,309)
OTHER INCOME (EXPENSE)
Interest income 17,975 17,975
Interest expense (1,636) (1,636)
________ ________ _________ ________
INCOME (LOSS) BEFORE
INCOME TAXES (1,331,054) 84 (1,330,970)
Provision for income taxes - 50 50
________ ________ _________ ________
NET INCOME (LOSS) $ (1,331,054) $ 34 $ $(1,331,020)
________ ________ _________ ________
________ ________ _________ ________
Net income (loss) per share
basic $ (0.18)
________
________
Weighted average shares
outstanding 7,396,680
________
________
Note 1 - Net income (loss) per share amounts are based on the average number
of common shares of the combined companies outstanding during each period.
Shares of MRS have been adjusted to the equivalent shares of RIGL.
<PAGE>
BALANCE SHEET: (UNAUDITED)
SEPTEMBER 30, 1997
_____________________________________________________________________________
PRO FORMA
RIGL MRS ADJUSTMENTS COMBINED
________ ________ _________ ________
CURRENT ASSETS
Cash $ 841,702 $ (2,893) $ 838,809
Accounts receivable 23,122 23,122
Other receivables 5,342 5,342
________ ________ _________ ________
Total current assets 847,044 20,229 867,273
PROPERTY AND EQUIPMENT 87,510 30,437 117,947
Less accumulated
depreciation (15,814) (23,332) (39,146)
________ ________ _________ ________
Net property and equipment 71,696 7,105 78,801
OTHER ASSETS
Shareholder loans, net 105,841 105,841
Other interest bearing loans 70,000 70,000
Proprietary technology 13,000 13,000
Technology rights 10,000 10,000
Deposits 790 6,161 6,951
Organization costs 1,560 1,560
________ ________ _________ ________
Total other assets 201,191 6,161 207,352
Less accumulated
amortization (812) (812)
________ ________ _________ ________
Net other assets 200,379 6,161 206,540
________ ________ _________ ________
TOTAL ASSETS $ 1,119,119 $ 33,495 $ $ 1,152,614
________ ________ _________ ________
________ ________ _________ ________
<PAGE>
BALANCE SHEET: (UNAUDITED)
SEPTEMBER 30, 1997
_____________________________________________________________________________
PRO FORMA
RIGL MRS ADJUSTMENTS COMBINED
________ ________ _________ ________
CURRENT LIABILITIES
Notes payable $ - $ 20,000 $ 20,000
Accounts payable 4,708 5,061 9,769
Accrued expenses 22,715 20,000 42,715
Shareholder loans 5,103 5,103
________ ________ _________ ________
Total current liabilities 32,526 45,061 77,587
COMMITMENTS
STOCKHOLDERS' EQUITY
Preferred stock 3,000 3,000
Additional paid-in capital 2,934,500 2,934,500
Subscriptions receivable (638,400) (638,400)
________ ________ _________ ________
STOCKHOLDERS' EQUITY
Total preferred stock 2,299,100 2,299,100
________ ________ _________ ________
Common stock 6,537 100 6,637
Additional paid-in capital 663,023 663,023
Subscriptions receivable (800) (800)
________ ________ _________ ________
Total common stock 668,760 100 668,860
________ ________ _________ ________
Accumulated deficit (1,881,267) (11,666) (1,892,933)
________ ________ _________ ________
Total stockholders' equity 1,086,593 (11,566) 1,075,027
________ ________ _________ ________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,119,119 $ 33,495 $ $ 1,152,614
________ ________ _________ ________
________ ________ _________ ________
Note 1 - The pro forma balance sheet gives effect to the merger of RIGL and
MRS by combining the respective balance sheets of the two companies at
September 30, 1997 on a pooling of interests basis.
<PAGE>
STATEMENT OF OPERATIONS: (UNAUDITED)
YEAR ENDED SEPTEMBER 30, 1996
_____________________________________________________________________________
PRO FORMA
RIGL MRS ADJUSTMENTS COMBINED
________ ________ _________ ________
REVENUE
Collection fees $ 726,111 $ 726,111
Corporate revenue
Royalty income $ 1,341 1,341
________ ________ _________ ________
Total revenue 1,341 726,111 727,452
Direct expense 680 680
________ ________ _________ ________
GROSS PROFIT 661 726,111 726,772
General & administrative
expense 218,148 735,361 953,509
Depreciation &
amortization expense 2,439 2,439
________ ________ _________ ________
NET OPERATING INCOME (LOSS) (217,487) (11,689) (229,176)
OTHER INCOME (EXPENSE)
Interest income 521 521
Interest expense
________ ________ _________ ________
INCOME (LOSS) BEFORE
INCOME TAXES (217,487) (11,168) (228,655)
Provision for income taxes 55 55
________ ________ _________ ________
NET INCOME (LOSS) $ (217,487) $ (11,223) $ $ (228,710)
________ ________ _________ ________
________ ________ _________ ________
net income (loss) per share $ (0.16)
________
________
Weighted average shares outstanding 1,474,293
________
________
Note 1 - Net income (loss) per share amounts are based on the average number
of common shares of the combined companies outstanding during each period.
Shares of MRS have been adjusted to the equivalent shares of RIGL.
<PAGE>
BALANCE SHEET: (UNAUDITED)
SEPTEMBER 30, 1996
_____________________________________________________________________________
PRO FORMA
RIGL MRS ADJUSTMENTS COMBINED
________ ________ _________ ________
CURRENT ASSETS
Cash $ 9,345 $ 9,345
Accounts receivable $ 25,483 25,483
Other receivables 1,781 1,781
________ ________ _________ ________
Total current assets 9,345 27,264 36,609
PROPERTY AND EQUIPMENT 35,849 35,849
Less accumulated
depreciation (20,974) (20,974)
________ ________ _________ ________
Net property and
equipment 14,875 14,875
OTHER ASSETS
Shareholder loans, net
Other interest bearing loans
Proprietary technology 13,000 13,000
Technology rights
Deposits 13,735 13,735
Organization costs
________ ________ _________ ________
Total other assets 13,000 13,735 26,735
Less accumulated amortization
________ ________ _________ ________
Net other assets 13,000 13,735 26,735
________ ________ _________ ________
TOTAL ASSETS $ 22,345 $ 55,874 $ $ 78,219
________ ________ _________ ________
________ ________ _________ ________
<PAGE>
BALANCE SHEET: (UNAUDITED)
SEPTEMBER 30, 1996
_____________________________________________________________________________
PRO FORMA
RIGL MRS ADJUSTMENTS COMBINED
________ ________ _________ ________
CURRENT LIABILITIES
Notes payable $ 20,000 $ 20,000
Accounts payable 17,475 17,475
Accrued expense 30,000 30,000
Shareholder loans $ 100 100
________ ________ _________ ________
Total current liabilities 100 67,475 67,575
COMMITMENTS
STOCKHOLDERS' EQUITY
Preferred stock 3,000 3,000
Additional paid-in capital 2,997,000 2,997,000
Subscriptions receivable (2,965,000) (2,965,000)
________ ________ _________ ________
Total preferred stock 35,000 35,000
________ ________ _________ ________
Common stock 6,013 100 6,113
Additional paid-in capital 534,915 534,915
Subscriptions receivable (3,470) (3,470)
________ ________ _________ ________
Total common stock 537,458 100 537,558
________ ________ _________ ________
Accumulated deficit (550,213) (11,701) (561,914)
________ ________ _________ ________
Total stockholders' equity 22,245 (11,601) 10,644
________ ________ _________ ________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 22,345 $ 55,874 $ $ 78,219
________ ________ _________ ________
________ ________ _________ ________
Note 1 - The pro forma balance sheet gives effect to the merger of RIGL and
MRS by combining the respective balance sheets of the two companies at
September 30, 1996 on a pooling of interests basis.
