U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
1934
For the fiscal year ended JUNE 30, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
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Commission File Number: 0-24217
RIGL CORPORATION
(Name of small business issuer as specified in its charter)
NEVADA 85-0206668
State of Incorporation IRS Employer Identification Number
4840 EAST JASMINE STREET, SUITE 105
MESA, ARIZONA 85205
(Address of principal executive offices)
Issuer's telephone number: (480) 654-9646
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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. [ X ] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB
State issuer's revenues for its most recent Quarter: $1,399,497
State the aggregate market value of the voting and non-voting common equity held
by non- affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked prices of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
--------------------------------------
12b-2 of the Exchange Act.)
As of July 31, 1999, there were 13,047,770 common shares outstanding at a
weighted and held by non-affiliates with an aggregate value of $1.32 and total
number of votes were 17,223,056 based on the average bid and asked price on such
date.
*The common share price is the average trading price on the NASDAQ OTC.
- --------------------------------------------------------------------------------
<PAGE>
INDEX FORM 10-QSB
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
Consolidated Balance Sheets as of June 30, 1999
Consolidated Statements of Operations for the period
ending June 30, 1999
Consolidated Statements of Cash Flows for the period
ending June 30, 1999
Notes to Consolidated Financial Statements
ITEM 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
ITEM 2 - Changes in Securities and Use of Proceeds
ITEM 3 - Defaults Upon Senior Securities
ITEM 4 - Submission of Matters to a Vote of Security Holders
ITEM 5 - Other Information
ITEM 6 - Exhibits and Reports on Form 8-K
SIGNATURES PAGE
<PAGE>
PART I
ITEM 1 - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
RIGL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1999
(UNAUDITED)
ASSETS
1999 1998
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and Cash Equivalents $ 499,558.00 $ 2,021,399.00
Accounts Receivable 3,224,218.00 7,108.00
Inventory 5,034.00 -
Prepaid Expenses 2,129,555.00 2,207.00
--------------- ---------------
TOTAL CURRENT ASSETS $ 5,858,365.00 2,030,714.00
PROPERTY AND EQUIPMENT:
Machinery and Equipment 524,471.00 184,115.00
LESS: Accumulated Depreciation (190,746.00) (47,595.00)
--------------- ---------------
TOTAL PROPERTY AND EQUIPMENT 333,725.00 136,520.00
OTHER ASSETS:
Notes Receivable 440,740.00 40,000.00
Shareholder Loans 63,000.00 68,000.00
Intangible Assets 5,704,512.00 598,875.00
Deposits 62,075.00 60,706.00
Goodwill 152,295.00 -
Contingent Asset 3,250,000.00 -
Organization Costs 1,560.00 1,560.00
--------------- ---------------
TOTAL OTHER ASSETS 9,674,182.00 769,141.00
-------------- -------------
TOTAL ASSETS $15,866,272.00 2,936,375.00
============== =============
LIABILITIES
CURRENT LIABILITIES:
Trade Accounts Payable 70,351.00 72,373.00
Accrued Expenses 1,249,919.00 12,000.00
--------------- ---------------
TOTAL CURRENT LIABILITIES 1,320,270.00 84,373.00
LONG-TERM LIABILITIES:
Notes Payable 6,578,857.00 162,460.00
---------------
TOTAL LONG-TERM LIABILITIES 6,578,857.00 162,460.00
-------------- -------------
TOTAL LIABILITIES 7,899,127.00 246,833.00
STOCKHOLDERS' EQUITY
Preferred Stock - (1,759,599.00)
Common Stock 39,449.00 12,274.00
Treasury Stock (69,822.00) (69,822.00)
Additional Paid-In-Capital 14,433,156.00 7,238,808.00
Retained Earnings(Loss) (6,435,638.00) (2,732,119.00)
--------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 7,967,145.00 2,689,542.00
-------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $15,866,272.00 2,936,375.00
============== =============
See the accompanying notes to these financial statements
</TABLE>
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<TABLE>
<CAPTION>
RIGL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDING JUNE 30, 1999 AND 1998
(UNAUDITED)
JUNE 30, 1999 JUNE 30, 1998
-------------------------------- ------------------------------
3RD QUARTER YEAR TO DATE 3RD QUARTER YEAR TO DATE
<S> <C> <C> <C> <C>
INCOME
Sales 1,399,497.00 2,034,099.00 $ 35,113.00 73,120.00
COST OF SALES 489,100.00 491,896.00 - -
--------------- --------------- -------------- --------------
GROSS PROFIT 910,397.00 1,542,203.00 35,113.00 73,120.00
SELLING EXPENSES 116,914.00 185,298.00 -
GENERAL & ADMINISTRATIVE 1,807,842.00 3,636,667.00 486,293.00 1,284,406.00
--------------- --------------- -------------- --------------
TOTAL EXPENSES 1,924,756.00 3,821,965.00 486,293.00 1,284,406.00
EARNINGS (LOSS) FROM OPERATIONS (1,014,359.00) (2,279,762.00) (451,180.00) (1,211,286.00)
OTHER INCOME (EXPENSE)
Interest Income (1,319.00) (8,287.00) (22,297.00) (62,416.00)
Interest Expense 15,705.00 27,558.00 -
--------------- --------------- -------------- --------------
TOTAL OTHER INCOME 14,386.00 19,271.00 (22,297.00) (62,416.00)
-
NET INCOME (LOSS) (1,028,745.00) (2,299,033.00) (428,883.00) (1,148,870.00)
=============== =============== ============== ==============
EARNINGS PER SHARE:
Basic Earnings Per Share $ (0.08) $ (0.03)
--------------- --------------
WEIGHTED AVERAGE NUMBER OF COMMON 12,883,190 12,669,675
--------------- --------------
SHARES OUTSTANDING
Diluted Earnings Per Share $ (0.08) $ (0.03)
--------------- --------------
WEIGHTED AVERAGE NUMBER OF COMMON 12,883,190 12,730,303
--------------- --------------
AND COMMON SHARE EQUIVALENTS OUTSTANDING
See the accompanying notes to these financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RIGL CORPORATION
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED JUNE 30, 1999 AND MARCH 31, 1999
(UNAUDITED)
1999
--------------------------------
3RD QTR 2ND QTR
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $(1,028,745.00) $ (653,697.00)
Adjustments to reconcile net income to net cash provided by operating
activities.
Depreciation and amortization 31,121.00 33,361.00
(Increase) decrease in:
Trade accounts receivable (3,094,333.00) (649,419.00)
Prepaid expenses (2,126,198.00)
Deposits 195.00
Notes Receivable (96,007.00)
Increase (decrease) in:
Trade accounts payable (107,760.00)
Accrued Expenses 1,029,266.00
--------------- ---------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (5,392,461.00) (1,269,755.00)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment, and Intangibles (38,480.00) (233,211.00)
Purchases of intangibles (5,088,109.00) -
--------------- ---------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (5,126,589.00) (233,211.00)
CASH FLOWS FROM FINANCING ACTIVITIES
Captial Infusion 6,403,293.00 -
Payment on shareholder loans 2,500.00 2,500.00
Proceeds from the issuance of common stock 4,569,142.00 350,000.00
--------------- ---------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 10,974,935.00 352,500.00
NET INCREASE (DECREASE) IN CASH 455,885.00 (1,150,466.00)
CASH AT BEGINNING OF PERIOD 43,673.00 1,194,139.00
--------------- ---------------
CASH AT END OF PERIOD $ 499,558.00 $ 43,673.00
=============== ===============
See the accompanying notes to these financial statements
</TABLE>
<PAGE>
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. All material inter-company transactions and
balances have been eliminated in consolidation.
ACCOUNTING METHOD
The Company recognizes income and expenses based upon the accrual method of
accounting.
UNAUDITED INFORMATION AND BASIS OF PRESENTATION
The consolidated balance sheet as of June 30, 1999 and statements of operations
and condensed cash flows for all periods included in the accompanying financial
statements have not been audited. In the opinion of management these financial
statements include all normal and recurring adjustments necessary for a fair
presentation of such financial information. The results of operations for the
interim periods are not necessarily indicative on the results of operations to
be expected for the full year.
The financial information included herein has been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations. The interim financial
information and the notes thereto should be read in conjunction with the audited
financial statements for the fiscal year ended September 30, 1998 which were
included in the Company's 1998 Annual Report to Stockholders.
CASH AND CASH EQUIVALENTS, SHORT AND LONG-TERM INVESTMENTS
All highly liquid instruments with an original maturity of three months or less
are considered cash equivalents, those with original maturities greater than
three months and current maturities less than twelve months from the balance
sheet date are considered short-term investments, and those with maturities
greater than twelve months from the balance sheet date are considered long-term
investments.
<PAGE>
CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to significant
concentration of credit risk consist primarily of cash, trade receivables, and
subscriptions receivables. Subscriptions receivables are typically unsecured
and are derived from revenues earned from customers primarily located in the
United States. The Company performs ongoing evaluations of its customers and
maintains reserves for the potential credit losses; such losses have been within
management's expectations.
DEPRECIATION AND AMORTIZATION
Property and equipment, including leasehold improvements, are stated at cost and
depreciated using the straight-line method over the estimated useful lives of
the assets, generally five to seven years. The Company periodically evaluates
the recoverability of its long-lived assets based on expected undiscounted cash
flows and recognizes impairments, if any, based on expected discounted future
cash flows.
REVENUE RECOGNITION
The Company's revenues are derived principally from the its subsidiaries TBI,
RIGL Tech, MRS, and RenCen. Advertising revenues are recognized over the period
in which the advertisement is displayed or viewed by others, provided that no
significant Company obligations remain at the end of the period and collection
of the resulting receivable is probable. Billing vendors collect and disburse
net allowance for certain revenues which the vendors estimate will be refunded,
rebated, uncollectable, or unbillable.
INCOME TAXES
The provision for income taxes is computed based on the pretax income item
included in the statement of income. The asset and liability approach is used
to recognize deferred tax assets and liabilities of the expected future tax
consequences of temporary difference between the carrying amounts and the tax
basis of assets and liabilities. The Company, a C Corporation accounts for its
income taxes in accordance with Statement of Financial Accounting Standards No.
109 (Accounting for Income Taxes). As of June 30, 1999, the Company has
approximately $4,397,745 of net operating loss carry forwards that can be used
to offset future taxable income.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reported period. Actual results
could differ from those estimates. Material estimates that are particularly
susceptible to significant change relate to the determination of the
collectability of receivables
<PAGE>
DESCRIPTION OF BUSINESS
Overview
RIGL Corporation ("the Company" or "RIGL") is the holding company of four
wholly owned subsidiaries: Telco Billing, Inc., d.b.a. Yellow-page.Net ("TBI"),
RIGL Technologies, Inc. ("RIGL Tech"), Medical Resources Systems, Inc. ("MRS"),
and Renaissance Center, Inc. ("RenCen").
On March 16, 1999, the Company entered into an agreement to acquire 100% of
the common stock of TBI in exchange 17,000,000 shares of the Company's common
stock. The Company issued 2,000,000 at the signing of the agreement and
obtained the consent of the shareholders of TBI. At the execution of the
agreement 15,000,000 of the Company's common stock was issued on June 1, 1999.
TBI has become a wholly owned subsidiary at the execution of the agreement.
On October 1, 1999, RIGL Corporation ("The Company" or "RIGL") will have
amended its articles of incorporation with stockholders in agreement to change
the Company's name to YP. Net., Inc.
----------------
TBI's primary business is online information and advertising service that
is comprised of business and individual listings which can be accessed on a
local basis, by city, category, or name. The acquisition of TBI will increase
the Company's presence on the Internet and information management.
RIGL Tech's primary business has been the development of proprietary
technologies in information access and data management. In the past RIGL Tech's
focus has been primarily the development of middle-ware services (for a
description of this term, see the sub-section entitled "RIGL Technology's")
through research and development. The application of these proprietary
technologies is information access and data management. They have not yet been
released to market.
MRS was created for the purpose of testing the development of prototypical
informational models development by RIGL Tech. The Company has assembled
technical medical management professionals, and has been instrumental in the
development of a proprietary process called Medical Resource Planning. In the
past MRS was focused on the development and testing of these new proprietary
technologies, as a result this has enabled MRS to redirect its efforts and move
into to a new medical information management business. Currently, MRS has
executed future and present contracts to provide emergency room physician
billing and collection services.
RenCen provides consulting services to large corporate clients and has
developed proprietary informational management models. RenCen in the past was
primarily focused on multi-media technology and it has become a broader based
software developer that implements newly developed products.
<PAGE>
Service and Products
The Company has devoted its primary focus to developing proprietary
technologies for the purpose of entering and expanding information commerce
through the Internet. The Company has positioned itself to build a presence in
the information marketplace while providing its customers the ability to
capitalize on a rapidly growing Internet market. RIGL has developed strategic
plans based on the proprietary technologies and utilizes its growing knowledge
base of technical development experts to leverage itself into the information
commerce marketplace. The Company has developed a network of online services to
provide information to consumers and businesses in the rapidly growing Internet
market. RIGL with its acquisition of TBI now offers innovative new services,
which simplifies the process of gaining an online presence for businesses
nationwide to advertise goods and services with the click of a button under the
trade name Yellow-page.Net.
---------------
TELCO BILLING, INC. (TBI)-YELLOW-PAGE.NET
Yellow-page.Net is an online information and advertising service that is
comprised of business and individual listings which can be accessed on a local
basis, by city, category, or name. More than 18 million businesses in the United
States and Canada are listed free of charge. Yellow-page.Net features a myriad
of other online services including business locators, detailed destination and
mapping services, people finders, web site construction, sales leads, and
toll-free number directories. Also offered is a premium listing service that
allows businesses to be listed in a special priority area located before other
non-premium business listings which are listed alphabetically, and many times
span multiple web pages. In addition, these listings may contain facsimile and
1-800 number listings, an online detailed map to business locations, as well as
direct links to business e-mail and web sites for no additional charge. Whether
a large corporation or a small home-based business, premium business listings
are available for a monthly fee. The premium listing service is offered
through a contractual arrangement with the telecommunications companies. These
telecommunications companies utilize a billing feature called Local Exchange
Carrier ("LEC Billing") which enables the Company to bill customers on one
monthly phone bill.
Yellow-page.Net is a member of two yellow page trade associations; Yellow
Page Publishers Association, "YPPA" which represents publishers throughout the
world, and the Association of Directory Publishers, "ADP", who primarily
represent independent yellow page publishers. Yellow-page.Net has a partnership
with one of the largest Internet yellow page databases to maximize the exposure
of its customers' premium listing. In addition, Yellow-page.Net is pursuing
aggressively to increase traffic to www.Yellow-page.Net, and other sites
-------------------
utilizing this core database.
RIGL TECHNOLOGIES (RIGL TECH)
RIGL Tech has developed a prototype information system for the medical
industry. This technology, known as AMIRE (Asset Management Information
Retrieval Environment) is designed to provide intuitive access to information
databases via a web browser. While the prototype is focused on medical
information sources, RIGL Tech has designed a core engine to provide middle-ware
services between databases and web browsers regardless of the information
contained or accessed. When this system is released it is the intent of RIGL
Tech to begin developing additional modules that will customize an environment
for various information markets. RIGL Tech continues to provide consulting
services and has developed proprietary information management models, which has
aided large corporate clients. RIGL Tech is committed and determined to move
information access to a new level of efficiency. Currently, search engine
capabilities are limited and inefficient, and provide erroneous or irrelevant
data when searching.
<PAGE>
RIGL Tech is committed to creating strategic partnerships with vendors to
enhance the Asset Management Information Retrieval Environment ("AMIRE").
Technology and the implementation of management information tools are necessary
to simplify the management and presentation of information. This technology
will allow companies to provide intuitive intelligent information to their
markets without the need for large expenditures related to information
management. This technology will enable customers to access a repository of
data that interacts with a web browser to allow the end-user access and utilize
information. This type of technology is commonly referred to as "middle-ware",
which provides a critical link between a user interface (Web Browser) and a data
repository. These developments will enhance the end-user's browser
intelligence, as well as provide a common platform which information can then be
easily interpreted across multiple markets and industries.
MEDICAL RESOURCE SYSTEMS, INC. (MRS)
In support of the development efforts, The Company has created a medical
service organization to internally test prototypical informational models for
its proprietary technologies. The Company has assembled a team of medical
management professionals, which has aided in the development a proprietary
process of Medical Resource Planning ("MRP"). This process enables physicians
to operate with economies of scale, and allows physicians to identify and
implement efficiencies within their practices. MRS's experts have proactively
utilized feedback from customers and clients to improve the Medical AMIRE . In
the past MRS was focused on the development and testing of these new proprietary
technologies, as a result this has enabled MRS to redirect its efforts and move
into to a new lucrative medical information management business. Currently, MRS
has executed future and present contracts to provide emergency room physician
billing and collection services. MRS is continuing to identify opportunities to
create partnerships and expand operations in the online web market.
RENAISSANCE CENTER, INC. (RENCEN)
RenCen provides consulting services to large corporate clients and has
developed proprietary informational management models. RenCen in the past was
primarily focused on multi-media technology and it has become a broader based
software developer that implements newly developed products.
RenCen has developed proprietary technology for the purpose of integrating
components in the area of high-tech digital multi-media studios. RenCen has
recognized that recent develops in data storage devices and optical transmission
capabilities have greatly increased the capability to transfer, store, and
retrieve data. Hierarchical communication languages can be used to develop
software applications, which will make real-time access of information a
reality, as well as adding artificial intelligence to core operating systems.
<PAGE>
These recent developments, combined with the RenCen's own state-of-the-art
proprietary technology has enabled it to look at alternative applications. It is
RenCen intention to continue to examine all industries for possible applications
of its propriety technology, as well as looking for opportunities to acquire or
develop other synergistic technologies.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Certain matters contained herein are forward looking statements that
involve risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Assumptions relating
to these forward looking statements involve judgements with respect to, among
other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond control of the Company. Material
exhibits have been omitted from this filing Form 10-QSB ending June 30, 1999,
and will be included in the annual filing of the Form 10-KSB for September 30,
1999.
On March 16, 1999, the Company entered into an agreement to acquire 100% of
the common stock of TBI in exchange 17,000,000 shares of the Company's common
stock. The Company issued 2,000,000 at the signing of the agreement and
obtained the consent of the shareholders of TBI. At the execution of the
agreement 15,000,000 of the Company's common stock was issued on June 1, 1999.
TBI has become a wholly owned subsidiary at the execution of the agreement.
On September 1, 1999 MRS has entered into and agreement with Arrowhead
Community Hospital to provide emergency room physician billing and collection
services. This agreement has a renewal date annually.
MRS has entered into an agreement that will commence October 1, 1999, with
Phoenix Baptist Hospital to provide emergency room physician billing and
collection services. This agreement has a renewal date annually.
MRS has entered into and an agreement that will commence on January 1,
2000, with Western Arizona Regional Medical Center to provide emergency room
physician billing and collection services. This agreement has a renewal date
annually.
As of October 1, 1999, RIGL Corporation ("The Company" or "RIGL") will have
amended its articles of incorporation with stockholders in agreement to change
the Company's name to YP.Net., Inc.
--------------
<PAGE>
RESULTS OF OPERATIONS
Quarter Ended June 30, 1999 Compared to Quarter Ended June 30, 1998.
Total Revenue
Total revenue increased to $1,399,497 for quarter ended June 30, 1999 from
$35,113 for quarter ended June 30, 1998. These increases are attributed to the
acquisition of TBI as of June 1, 1999. Revenue has increased from MRS's efforts
of increasing billing and collection services, and efforts from the medical
practise consulting services.
Selling and Marketing Expenses
Total selling and marketing expenses increased to $116,914 for quarter
ended June 30, 1999. This increase is attributable to the marketing efforts
generated from TBI for the promotion internet yellow page advertising.
General and Administrative Expenses
General and Administrative expenses increased to $1,807,842 for quarter
ended June 30, 1999 from $486,293 for quarter ended June 30, 1998. The
increases in general and administrative expenses relate to several key
components to the future success of the Company. Expenses incurred with
research and development are attributed to the development of the Company's
internally developed proprietary technologies. Costs have increased due to the
acquisition and operational support of TBI. The Company had thirty-five
employees and approximately thirty-five full-time equivalent employees at June
30, 1999.
Interest Income
Interest income decreased to $1,319 for quarter ended June 30, 1999 from
$22,297 for quarter ended June 30, 1998. This decrease is attributed to lower
cash balances, which was utilized in operating activities.
Income Taxes
The provision for income taxes relates to minimum tax requirements in
multi-jurisdictional taxing authorities where the Company does business. The
Company has approximately $4,397,745 of net operating loss carry forwards that
can be used to offset future taxable income.
<PAGE>
Net Income (loss)
Net Losses for quarter ended June 30, 1999 was ($1,028,745) for ($.08) per
basic shares and ($.08) diluted per share, compared to ($428,883) for ($.03) per
basic shares and ($.03) diluted per share.
LIQUIDITY AND CAPITAL RESOURCES
Quarter Ended June 30, 1999 Compared to Quarter Ended March 31, 1999.
The Company has funded its working capital requirements from cash used by
operating activities of ($5,392,491) at June 30, 199, and the ending cash
balance as of June 30, 1999 is $499,558. The Company has successfully raised
capital financing during the years ended September 30, 1998 and 1997,
respectively. Additional capital will be required to the Company to fully
expand its operations into all of the markets. The amount of the additional
capital that may be required is dependent upon the expansion of existing
financial resources, and the availability of other financing. There can be no
assurance that additional capital can be raised or obtained as needed or that
the Company can ultimately fulfill its business objectives. The principle source
of revenue is generated from the sales of internet online advertising from TBI
and the billing and collections services from MRS. The Company does not
anticipate paying dividends on its Common Stock in the foreseeable future.
Cash flows used by investing activities was $5,126,589 for the quarter
ended June 30, 1999 compared to $233,211 for the quarter ended March 31, 1999.
The Company has invested in intangible assets related to proprietary
technologies that the Company has acquired or internally developed. The Company
continues to purchase additional computer equipment to upgrade and replace
incompatible equipment to adhere to internal requirements for the Year 2000.
Cash flows provided for financing activities was $10,974,935 for quarter
ended June 30, 1999 compared to $352,500 for March 31, 1999. The Company
obtained cash from issuance of stock and infusion of capital resources. The
infusion of cash provided by financing activities was attributable to the
acquisition of TBI and purchases of intangibles and related technologies.
YEAR 2000
The Company and its third party vendors utilize software, which
truncates the year to a two-digit field. Accordingly, when the date passes the
year 2000, errors may occur in the calculation and processing of data
significant to the revenue recognition of the Company. The Company's management
in respect to TBI's billing service providers: Integretel (IGT), Enhance
Services Billing, Inc.(ESBI), Olympic, Inc.(OLY), have taken steps to modify and
upgrade equipment and software programs to be prepared for the Year 2000
conversions.
The Year 2000 issue also affects the Company's internal systems
including the Company's information technology (IT) and non -IT systems.
Currently, MRS is updating the medical billing software, and has purchased
information systems internally to comply with the requirements for the Year
2000. The cost of purchasing these systems has not been material, and has been
expensed as incurred. Management currently believes that all material internal
systems are compliant for the year 2000. TBI's service providers IGT, ESBI, and
OLY are compliant with Year 2000 readiness and has assured TBI that their
information systems are Year 2000 compliant in all material effects. TBI
believes that its most significant risk with respect to Year 2000 issues relates
to the performance and readiness status of the numerous parties through which
billing is routed. A reasonable worse case Year 2000 scenario will be the
failure of these service providers' systems that negatively affects TBI's
ability, or the ability of any third party through which billing is routed. The
impact of these failures cannot be estimated at this time, and TBI will be
dependent, if such failures occur, on the contingency plans of its third party
providers. TBI does have back up systems or other means of billing its customer
through direct billing efforts in the event of a worst case scenario.
<PAGE>
RECENT ACCOUNTING PRONOUNCEMENTS: NONE
PART II
OTHER INFORMATION
ITEM 1 - Legal Proceedings
None; Not Applicable
ITEM 2 - Changes in Securities and Use of Proceeds
None; Not Applicable
ITEM 3 - Defaults Upon Senior Securities
None
ITEM 4 - Submission of Matters to a Vote of Security Holders
None
ITEM 5 - Other Information
None
ITEM 6 - Exhibits and Reports on Form 8-K
(a)11 Earnings Per Share computation
(a)27 Financial Data Schedule for nine months ended June 30, 1999,
submitted to Securities and Exchange Commission in electronic
format.
(b) Reports on Form 8-K: Reports were filed in electronic format on
Form 8-K on June 7, 1999 and June 30, 1999 and are incorporated
herein by reference.
<PAGE>
SIGNATURES
----------
In accordance with Section 13 or 15(d) 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.
RIGL CORPORATION
By: /s/ Kevin L. Jones Date: September 16, 1999
Kevin L. Jones
Title: Director and President
By: /s/ Peter de Krey Date: September 16, 1999
Peter de Krey
Title: Corporate Secretary
<PAGE>
<TABLE>
<CAPTION>
RIGL CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
1999 1998
3RD QUARTER 3RD QUARTER
<S> <C> <C>
BASIC EARNINGS PER SHARE:
Common shares outstanding, beginning of period
Effects of weighting shares:
Weighted common shares issued
--------------- ------------
Weighted average number of common shares 12,795,078 12,669,675
=============== ============
outstanding
Net Income (Loss) $(1,028,745.00) (428,883.00)
=============== ============
Earnings Per Share $ (0.08) (0.03)
=============== ============
DILUTED EARNINGS PER SHARE:
Common shares outstanding, beginning of period
Effects of weighting shares:
Weighted common shares issued 12,883,190 12,730,303
--------------- ------------
Weighted average number of common shares and
common equivalent shares outstanding 12,883,190 12,730,303
=============== ============
Net Income (Loss) $(1,028,745.00) (428,883.00)
=============== ============
Earnings Per Share $ (0.08) (0.03)
=============== ============
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
RIGL CORPORATION FORM 10-QSB THIRD QUARTER ENDING JUNE 30, 1999
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> JUN-30-1999
<CASH> 499558
<SECURITIES> 0
<RECEIVABLES> 3224218
<ALLOWANCES> 0
<INVENTORY> 5034
<CURRENT-ASSETS> 5858365
<PP&E> 524471
<DEPRECIATION> 190746
<TOTAL-ASSETS> 15866272
<CURRENT-LIABILITIES> 1320270
<BONDS> 0
0
0
<COMMON> 39449
<OTHER-SE> 14433156
<TOTAL-LIABILITY-AND-EQUITY> 15866272
<SALES> 1399497
<TOTAL-REVENUES> 1399497
<CGS> 489100
<TOTAL-COSTS> 116914
<OTHER-EXPENSES> 1807842
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1028745)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1028745)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1028745)
<EPS-BASIC> (.08)
<EPS-DILUTED> (.08)
</TABLE>
