U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
Amendment No. 1
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT
For the transition period from to
Commission file number 0-24217
RIGL CORPORATION
(Exact name of small business issuer as specified in its charter)
_____________________________________________________________
Nevada 85-0206668
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
_____________________________________________________________
4840 East Jasmine Street, Suite 105
Mesa, Arizona 85205
(Address of principal executive offices) (Zip Code)
_____________________________________________________________
Registrant's telephone number,
including area code: (480) 654-9646
______________________________________________________________
7501 North 16th Street, Suite 200, Phoenix, Arizona 85020
(Former name of former address, if changed since last report.)
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. Yes (X) No
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
37,809,603 as of July 31, 1999.
Transitional Small Business Disclosure Format (check one):
YES NO (X)
<PAGE>
Index Form 10-QSB/A
Part I Financial Information
Item 1 Financial Statements Page Number
Consolidated Balance Sheets as of
June 30, 1999 and September 30, 1998 3
Consolidated Statements of Operations
for the nine months and three months ended
June 30, 1999 and 1998 4
Consolidated Condensed Statements
of Cash Flows for the nine months ended
June 30, 1999 and 1998 5
Notes to Consolidated Financial Statements 6-10
Item 2 Management's Discussion and
Analysis of Financial Condition
and Results of Operations 11-12
Part II Other Information
Item 1 Legal Proceedings 13
Item 2 Changes in Securities and Use of Proceeds 13
Item 3 Defaults Upon Senior Securities 13
Item 4 Submission of Matters to a Vote of
Security Holders 13
Item 5 Other Information 13
Item 6 Exhibits and Reports on Form 8-K 13
Signatures 14
<PAGE>
RIGL CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, September 30,
1999 1998
______________ ______________
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 499,559 $ 1,194,139
Accounts receivable 3,426,958 97,122
Prepaid expenses 538,027 1,949
Other current assets 5,034 2,926
______________ ______________
Total current assets 4,469,578 1,296,136
Property and equipment 524,471 307,234
Less accumulated depreciation (190,746) (98,991)
_______________ ______________
Net property and equipment 333,725 208,243
Other assets:
Notes receivable 238,000 75,000
Shareholder loans 63,000 68,000
Patents 28,750 14,375
Proprietary technology rights 675,762 797,663
Intangible assets 5,000,000 -
Deposits 62,075 62,271
Goodwill 152,295 -
Contingent asset 3,250,000 -
Organization costs 1,560 1,560
Less accumulated amortization (8,473) (624)
________________ ______________
Net other assets 9,462,969 1,018,245
________________ ______________
Total assets $14,266,272 $ 2,522,624
================= ==============
LIABILITIES AND STOCKHOLDERS= EQUITY
Current liabilities:
Trade accounts payable $ 70,351 $ 45,717
Accrued expenses 1,256,117 123,788
Current maturity of
long-term debt 4,540,000 -
________________ _____________
Total current liabilities 5,866,468 169,505
Long-term liabilities:
Notes payable 32,659 -
________________ _____________
Total long-term liabilities 32,659 -
________________ _____________
Total liabilities 5,899,127 169,505
________________ _____________
Commitments and contingencies
Stockholders= equity:
Preferred stock; 2,100 -
Common stock 37,945 12,404
Treasury stock (69,822) (69,822)
Additional paid-in capital 14,163,031 6,547,141
Retained earnings (loss) (5,766,109) 6,547,141
________________ ____________
Total stockholders= equity 8,367,145 2,353,119
________________ ____________
Total liabilities and stockholders= equity
$14,266,272 $2,522,624
================ ===========
See accompanying notes to these consolidated financial statements.
<PAGE>
RIGL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Nine Months Ended Three Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
__________ ____________ ____________ __________
Revenue:
Internet advertising $ 1,222,838 $ - $ 1,222,838 $ -
Billing and collection 397,289 - 158,819 -
Corporate revenue 410,520 73,120 58,103 35,113
__________ ____________ ____________ __________
Total revenue 2,030,647 73,120 1,439,760 35,113
Cost of sales 491,896 - 489,100 -
__________ ____________ ____________ __________
Gross profit 1,538,751 73,120 950,660 35,113
General & administrative
expenses 2,974,833 1,231,175 1,142,067 464,012
Total expenses 2,974,833 1,231,175 1,142,067 464,012
__________ ____________ ____________ __________
Net operating income (loss) before interest,
taxes, depreciation and amortization
(EBITDA) (1,436,082) (1,158,055) (191,407) (428,899)
Depreciation and
amortization (95,516) (51,515) (31,121) (20,565)
Other income and (expense)
Interest expense 3,452 0 0 22,297
Interest (income) (19,271) 62,416 (14,387) 0
__________ ____________ ____________ _________
Total other income (15,819) 62,416 (14,387) 22,297
Income before
taxes (1,547,417) (1,147,154) (236,915) (427,167)
Provision for
income taxes (2,088) (1,716) (2,038) (1,716)
Net income (loss) before extraordinary
items (1,549,505) (1,148,870) (238,953) (428,883)
_________ ____________ ___________ _________
Extraordinary item (500,000) 0 (500,000) 0
$(2,049,505) $(1,148,870) $(738,953) $(376,529)
=========== ============= =========== ========
Earnings per share:
Basic earnings
per share $ (0.14) $ (0.10) $ (0.04) $ (0.03)
__________ _____________ ___________ _________
Weighted average number of common shares
outstanding 15,164,546 11,078,339 20,193,372 12,669,675
_________ _____________ ___________ _________
Diluted earnings per share
$ (0.12) $ (0.10) $ (0.03) $ (0.03)
_________ _____________ ___________ _________
Weighted average number of
common and common share
equivalents outstanding:
17,364,546 11,138,967 22,293,372 12,730,303
_________ _____________ ___________ _________
See accompanying notes to these consolidated financial statements.
<PAGE>
RIGL CORPORATION
STATEMENT OF CASH FLOWS
FOR THE PERIOD AND QUARTER ENDED
JUNE 30, 1999 AND 1998
(UNAUDITED)
Nine Months Ended Three Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
_____________ ___________ ___________ ___________
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss) (2,049,505) (1,148,870) (738,953) (428,883)
Total adjustments to reconcile net income
to net cash provided by operating activities:
2,824,199 47,049 2,416,168 401,884
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
774,694 (1,101,821) 1,677,215 (26,999)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures:
(177,663) (115,454) 1,093 (81,787)
Expenditures to develop or acquire:
Patents and/or
technology rights (342,474) (10,000) (88,019) 0
Expenditures to acquire intangible assets:
(5,000,000) (170,011) (5,000,000) (88,511)
Notes receivable (58,000) - 106,733 -
_____________ __________ _____________ _________
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES:
(5,578,138) (295,465) (4,980,193) (170,298)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds (payments) on loans:
2,540,000 157,357 2,540,000 -
Proceeds from the issuance of common stock:
1,446,435 2,419,626 1,096,435 352,491
Cash acquired in acquisition:
122,429 - 122,429 -
____________ ___________ _____________ __________
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES:
4,108,864 2,576,983 3,758,864 352,491
NET INCREASE (DECREASE) IN CASH:
(694,580) 1,179,697 455,886 155,194
___________ ___________ ____________ _________
CASH AT BEGINNING OF PERIOD:
1,194,139 841,702 43,673 1,866,205
___________ ___________ ___________ _________
CASH AT END OF PERIOD:
499,559 2,021,399 499,559 2,021,399
=========== =========== ========== =========
See accompanying notes to these consolidated financial statements.
<PAGE>
RIGL CORPORATION
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. 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.
b. Accounting method
The Company recognizes income and expenses based upon the accrual method
of accounting.
c. 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 of the results that may be
expected for the year ending September 30, 1999.
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.
d. 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.
e. 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.
f. 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.
g. Revenue recognition
The Company's revenues are derived principally from 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.
h. 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 differences
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.
i. 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.
NOTE 2 - DESCRIPTION AND OVERVIEW OF BUSINESS
a. Overview
RIGL Corporation ("the Company" or "RIGL") conducts its operations
through 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 for 17,000,000 shares
of the Company's common stock. At the execution of the agreement
the Company issued 2,000,000 shares to the shareholders of TBI.
Upon receiving consent of the majority shareholders of RIGL,
the Company issued 15,000,000 shares and completed the acquisition
effective as of June 1, 1999. TBI is now a wholly owned subsidiary.
TBI's primary business is online information and advertising services
that are comprised of business and individual listings which can
be accessed on a local basis, by city, category, or name. The acquisition
of TBI increases the Company's presence on the Internet and
compliments its information management services.
RIGL Tech's primary business has been the development of proprietary
technologies for applications 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.
In August of 1998, RIGL acquired MRS for 100,000 shares of Common Stock.
MRS's principal business is performing billing and collection
services for emergency room physicians. The acquisition was considered
by management as instrumental in creating industry credibility and
offered the Corporation a test platform for its proprietary technology.
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.
b. Service and products
The Company's primary focus is 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. Strategic plans, based on the proprietary
technologies, utilize the Company's growing knowledge base of
technical development experts to leverage itself into the information
commerce marketplace. The development network of online
services 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.
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. The primary service offered is a
premium listing that lists businesses in a special priority area.
This area is located before other non-premium business listings
which are listed alphabetically, and offers a visibility which
can not normally be achieved in the standard alpha listing.
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 in most locations 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 designed a core engine to provide middle-ware
services between databases and web browsers regardless of the
information contained or accessed. RIGL Tech's first application of
this system has been geared toward 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, 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 either by
its own efforts or by developing strategic partnerships with vendors,
which will enhance 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 (WebBrowser) 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)
MRS provides emergency room and independent physicians with billing
and collection services. In most instances the transmission of
information to generate the claim is handled electronically. The
proprietary service is accomplished via Electronic Data
Interchange (EDI) over land based lines. MRS's personnel are
working together with the Company's technology group to
complete a web based system which can accomplish this task
even easier and provides the physicians with direct access
to their own records. The design of the new system,
utilizing the AMIRE core engine, will enable physicians to monitor
claim submissions and remittals in a more timely fashion
and further allow specific payor information to be analyzed.
These attributes will allow physicians to be more productive
in the future.(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 developments 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.
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's 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.
NOTE 3 ASSET AQUISITION
During the Company's most recent quarter ended, it completed the
acquisition of TBI pursuant to an agreement executed on
March 16, 1999. The acquisition called for the Company to issue
17,000,000 shares of its Common Stock to the shareholders
of TBI in exchange for all of the issued and outstanding shares
of TBI. TBI operates an Internet Based Directory for advertising
under the name of Yellow-Page. Net and displays itself over the
internet under a URL of the same name. The URL was owned separately
and under license to TBI, which license contained an acceleration
clause on the annual royalty due thereunder if a change of
control occurred as part of the acquisition. Management negotiated with
the owners of the URL and acquired outright ownership in
exchange for $3,000,000 in cash and a promissory note of $2,000,000.
The promissory note is collateralized by 2,000,000 shares of Common
Stock. The note as amended, is due and payable January 15, 2000
and in the event the Company can not redeem the note the
holders recourse is against the Common Stock.
The following table synopsizes the Balance Sheet of
Telco Billing, Inc. as audited at May 31, 1999.
TELCO BILLING, INC.
Current Assets
Cash $ 122,429.00
Trade Receivables 3,079,937.00
P.P. & E. 39,573.53
Depreciation ( 4,087.53)
__________
Total P.P.&E. 35,486.00
Other Assets
Prepaid Marketing 647,210.00
Current Liabilities
Accrued Rent 11,669.52
Accrued Royalty 400,000.00
Income Tax Payable 960,562.00
Accounts Payable 0.00
__________
Net equity at time of acquisition:
2,512,830.48
==========
NOTE 4 SHAREHOLDERS' EQUITY
During the nine months ended June 30, 1999, the Company issued
shares for the following:
For services rendered valued at $147,166.50 the Company issued 294,333 shares.
For net equity capital of $1,446,435 in which the Company has paid
selling commission and expenses of $105,565 the Company issued
2,387,500 shares.
For the acquisition of Mountain Office Management Systems, Inc. the
Company issued 300,000 shares.
For the rescission of the acquisition of the Medasys system acquired
last year, the Company received back 255,864 shares and then
negotiated for the North American rights and issued 100,000 shares therein.
To acquire $2,000,000 on a loan, the Company issued 1,000,000 shares
as a loan origination fee which the Company valued at $500,000
and the Company issued an additional 2,500,000 shares as collateral on this
loan.
NOTE 5 EARNINGS PER SHARE
Diluted earnings per share are based upon the weighted average
number of common and common equivalent shares outstanding during
the period. Common equivalent shares are excluded from the computation
in periods in which they would have an anti-dilutive effect. The
difference between basic and diluted earnings per share for
the Company for the quarter and period ended June 30, 1999 is solely
attributable to the Class B stock converted at the maximum
conversion rate of 1:1 which represents 2,100,000 shares.
For the same period the Company had options of 1,212,000 and warrants of
5,297,645 which were excluded as their inclusion would be
anti-dilutive. For the period ended June 30, 1998 the Company
had 60,628 shares included which represent options granted to
certain employees. For the quarter and period June 30, 1998
the Company had options of 1,573,000 and warrants of 3,807,945
outstanding which were excluded as their inclusion would
be anti-dilutive.
NOTE 6 SUBSEQUENT EVENTS
Subsequent to the period herein reported on, the Company entered
into an Asset Based Lending Agreement (ABL) with Fremont
Financial Corporation. This ABL establishes a maximum line of
credit of $3,000,000 which is collateralized by the receivables
of TBI.
The line of credit carries a minimum monthly interest payment
of $12,000 regardless of the amount outstanding. The interest
rate is 11.25%, the Reference Rate of 8.25% plus 3% Applicable
Margin, per annum. (Reference Rate is defined as the
"Prime Rate" as published by the Wall Street Journal" and based
on "the base rate on corporate loans posted by at least 75% of
the nation's thirty largest banks".)
The Term of the agreement is for four years. Early termination
of the agreement carries a maximum penalty of 5% of the line limit
during the first year, reducing to 3% the second year and 1% during
the third and fourth year. The line limit has been set as a
percentage of receivables.
As of September 1, 1999, MRS, the billing and collection service
for physicians, had executed a contract with the Baptist Hospital
Network in Arizona and began rendering its services to one of the three
hospital network emergency rooms. By January, of the year 2000,
MRS should have all three emergency rooms on line which will
more than double that divisions current business.
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
For the nine months ended June 30, 1999, cash decreased by $694,580 (58%).
This decrease was attributed to the continued funding of General
& Administrative expenses and technology development by the Company.
If it were not for the Company's ability to raise additional equity
capital and financing through third parties the Company might have
achieved a negative cash position. Key management deferred
compensation for over six months while negotiating the acquisition
of TBI and borrowing the funds from third parties. This commitment
by management is believed to have had a significant impact on the
Corporations ability to complete the acquisition and to borrow the
capital to do so.
During the nine months ended June 30, 1999, the Company raised
equity capital of $1,446,435 and obtained from third party
lenders sums totaling $2,540,000. When combined with the
cash in the acquired entity the Company received $4,108,864
from its financing activities, an increase of $1,531,881
(59%) over the same period last year. The increase can be attributed
to borrowed funds. If borrowed or incorporated funds were
excluded, the Company would have had a decrease of
$973,191 (40%) over the same period last year. The decrease is
attributed to management's attempt to avoid further dilution
on behalf of the shareholders while solidifying a base to grow from.
With the acquisition of TBI, the Company believes that it can
sustain and fund all future operations. The Company believes that
the acquisition of the $3,000,000 line of credit from Fremont along
with its ability to access equity capital markets will provide
adequate resources to fund and expand ongoing operations.
RESULTS OF OPERATIONS - QUARTER
Net loss for the quarter increased by $310,070 (72%) over the same
period last year. This increase is directly attributable to a
one time loan origination fee paid by the Company to acquire
capital for the purchase of TBI. If the loan origination fee
were not included the Company would have had a decrease in its loss
position of $189,930 (44%) which is attributed to the one month
inclusion of operations of TBI in the consolidated financial statements.
Net loss for the period increased by $0.01 per share and can be
attributed to the inclusion of the loan origination fee. Considering
the issuance of shares on the acquisition of TBI and the loan
origination fee, the earnings per share would have decreased
the loss by $0.03 to only $0.01 per share. This decrease in loss can be
attributed to the inclusion of one month of operations of TBI and
a reduction in the cost of operations associated with MRS.
RESULTS OF OPERATIONS PERIOD
Net loss for the period increased by $900,635 (78.39%) over the same
period last year. This increase is mainly attributable to a one time
loan origination fee of $500,000 and the increase of technology
personnel working on the web based solution for the medical billing
and collection subsidiary. If the loan origination fee were excluded
the actual increase in loss would be $400,635 (34.87%). The net
loss per share increased by $0.04 (40%). If the loan origination
fee were excluded the loss would have been the same as the same
period last year. This would be attributable to the issuance
of shares in the acquisition of TBI.
INTERNET ADVERTISING
With the acquisition of TBI, the Company has taken an active position,
on the internet, by providing its clients an inexpensive and
easy to use presence on the internet. The acquisition which took
place in June and effective June 1, 1999 gave the Company a
significant boost in revenues. For the Quarter ended June 30, 1999
(one month of consolidated operations) the Company has $1,222,838
in gross revenues. With direct costs of $489,100 (40%) the
gross profit for this segment was $733,738 (60%). General and
administrative expenses were $245,135 (20%) leaving a net profit
for this subsidiary of $444,752 (40%). TBI has an active base of
clients located all over the United States.
BILLING AND COLLECTIONS
The acquisition of MRS in August of 1998 gave the Company its first
real presence in the medical industry, an industry the Company
believed it could benefit and profit in by adapting its core
technology to. Gross revenue for the quarter ended was $158,819.
There are no direct costs associated with this business segment.
General and administrative costs were just over $175,000 which left
the Company in a loss position of approximately $17,000. Part of
this loss is attributable to ongoing costs associated with the
integration of two new physician groups.
CORPORATE
Corporate operations include the technology group and all efforts
associated with the expansion of the Corporation. Revenues for
the quarter were derived from consolidating services in the
medical and technology industry segments for inclusion of the
Company's core technology. With no direct costs associated herewith,
general and administrative costs increased by $257,920 (56%)
over the same period last year. This increase can be attributed to
the addition of technology personnel developing the web based
solution for MRS and other operational personnel being trained for TBI.
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.
FORWARD LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 (the "Act")
provides a safe harbor for forward-looking statements made by or
on behalf of the Company. The Company and its representatives may
from time to time make written or oral statements that the
Company believes are "forward-looking", including statements
contained in this report and other filings with the Securities
and exchange Commission and in reports to the Company's stockholders.
The Company believes that all statements that express expectations
and projections with respect to future matters, including but
not limited to the launching or prospective development of new
business initiatives, are forward-looking statements within the meaning
of the Act. These statements are made on the basis of management's
views and assumptions, as of the time the statements are made,
regarding future events and business performance. There can be
no assurance, however, that management's expectations will
necessarily come to pass.
<PAGE>
RIGL CORPORATION
PART II
Item 1 Legal Proceedings
None
Item 2 Changes in Securities and Use of Proceeds
None
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) Earnings Per Share computation
(b) Financial Data Schedule for nine months
ended June 30, 1999, submitted to
Securities and Exchange Commission in
electronic format.
(c) 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 the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
September 24, 1999
RIGL CORPORATION
/s/ Kevin L. Jones
Kevin L. Jones, Title: Director and President
/s/ Peter de Krey
Peter de Krey, Title: Corporate Secretary
<PAGE>
RIGL CORPORATION
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
NUMBER
_______________________________________________________
27 FINANCIAL DATA SCHEDULE
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S.DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 499,559
<SECURITIES> 0
<RECEIVABLES> 3,436,958
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,469,578
<PP&E> 524,471
<DEPRECIATION> (190,746)
<TOTAL-ASSETS> 14,266,272
<CURRENT-LIABILITIES> 5,866,468
<BONDS> 0
0
2,100
<COMMON> 8,365,045
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14,266,272
<SALES> 2,030,647
<TOTAL-REVENUES> 2,030,647
<CGS> 491,896
<TOTAL-COSTS> 491,896
<OTHER-EXPENSES> 2,974,833
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,452
<INCOME-PRETAX> (1,547,417)
<INCOME-TAX> (2,088)
<INCOME-CONTINUING> (1,549,505)
<DISCONTINUED> 0
<EXTRAORDINARY> (500,000)
<CHANGES> 0
<NET-INCOME> (2,049,505)
<EPS-BASIC> (.14)
<EPS-DILUTED> (.12)
</TABLE>
