U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 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: (602) 654-9646
N/A
_____________________________________________________________________________
(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: XXXXXXXXXXXX as of April 30,
1999.
Transitional Small Business Disclosure Format (check one): YES NO X
PAGE
<PAGE>
RIGL CORPORATION
INDEX TO FORM 10-QSB
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Page
Number
Consolidated Balance Sheets
as of March 31, 1999 and September 30, 1998 4
Consolidated Statements of Operations
for the six months and three months ended
March 31, 1999 and 1998 6
Consolidated Condensed Statements of Cash Flows
for the six months ended March 31, 1999 and 1998 7
Notes to Consolidated Financial Statements 8-15
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 15-17
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 18
Item 2 - Changes in Securities and Use of Proceeds 18
Item 3 - Defaults Upon Senior Securities 18
Item 4 - Submission of Matters to a Vote of Security Holders 18
Item 5 - Other Information 18
Item 6 - Exhibits and Reports on Form 8-K 18
Signatures 19
PAGE
<PAGE>
RIGL CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, September 30,
1998 1998
__________ __________
(unaudited)
ASSETS
_______
Current assets:
Cash and cash equivalents $ 43,673 $ 1,194,139
Accounts receivable 128,468 97,122
Other receivables 1,417 2,926
Inventory 5,034
Prepaid expenses 2,500 1,949
__________ __________
Total current assets 181,092 1,296,136
Property and equipment 485,991 307,235
Less accumulated depreciation (158.154) (98,992)
__________ __________
Net property and equipment 327,837 208,243
Other assets:
Organization costs 1,560 1,560
Shareholder loans 65,500 68,000
Other interest bearing loans 344,733 75,000
Proprietary technology 587,743 797,663
Technology rights 28,750 14,375
Deposits 62,270 62,271
Goodwill 152,295 -
Less accumulated amortization (5,857) (624)
__________ __________
Net other assets 1,236,995 1,018,245
__________ __________
Total assets $ 1,745,924 $ 2,522,624
LIABILITIES AND STOCKHOLDERS' EQUITY
____________________________________
Current liabilities:
Accounts payable $ 178,110 $ 45,717
Notes Payable 175,564 0
Accrued payroll expenses 220,653 123,788
__________ __________
Total current liabilities 574,327 169,505
Commitments and contingencies
Stockholders' equity:
Preferred stock; $.001 par value;
authorized 15,000,000 shares,
Series A, 3,000,000 authorized:
No shares issues and outstanding at
March 31, 1999 and September 30, 1998 - -
Series A.1, 3,000,000 authorized:
No shares issues and outstanding at
March 31, 1999 and September 30, 1998 - -
Common stock; $.001 par value;
authorized 50,000,000 shares;
issued and outstanding: 14,567,770 at
March 31, 1999 and
12,403,634 shares at September 30, 1998,
respectively
15,421 12,404
Additional paid-in capital 6,632,890 6,547,141
Treasury stock, at cost, 679,292 shares (69,822) (69,822)
Accumulated deficit (5,406,892) (4,136,604)
__________ __________
Total stockholders' equity 1,171,597 2,353,119
__________ __________
Total liabilities and
stockholders' equity $1,745,924 $ 2,522,624
========== ==========
See accompanying notes to these consolidated financial statements.
PAGE
<PAGE>
RIGL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Six Months Ended Three Months Ended
______________________ _______________________
March 31, March 31, March 31, March 31,
1999 1998 1999 1998
__________ __________ __________ __________
Revenue:
Collection fees $ 233,470 $ 324,824 $ 123,330 $ 163,636
Revenues from
medical practices 351,698 - 216,936 -
Corporate revenue 45,171 37,742 - 36,193
Other income 4,263 264 4,249 231
__________ __________ __________ __________
Total revenue 634,602 362,830 344,515 200,060
Direct expense 2,795 - 2,806 -
__________ __________ __________ __________
Gross profit 631,807 362,830 341,709 200,060
General &
administrative
expenses 1,832,766 1,196,433 950,359 596,825
Depreciation &
amortization
expense 64,395 30,950 33,361 4,014
__________ __________ __________ __________
Net operating
income (loss) (1,265,354) (864,553) (642,011) (400,779)
Interest expense 11,853 26 11,696
Interest (income) (6,969) (40,119) (60) (24,250)
__________ __________ __________ __________
Income before taxes $ (1,270,238) $ (824,460) $ (653,647) $ (376,529)
Provision for
income taxes 50 - 50 -
__________ __________ __________ __________
Net income (loss) $ (1,270,288) $ (824,460) $ (653,697) $ (376,529)
========== ========== ========== ==========
Basic EPS $ (0.10) $ (0.08) $ (0.05) $ (0.03)
========== ========== ========== ==========
Diluted EPS $ (0.10) $ (0.08) $ (0.05) $ (0.03)
========== ========== ========== ==========
See accompanying notes to these consolidated financial statements.
PAGE
<PAGE>
RIGL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended
__________________________
March 31, March 31,
1999 1998
__________ __________
CASH FLOWS PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
Net cash provided by (used in)
operating activities $ (1,269,755) $ (914,752)
__________ __________
CASH FLOWS PROVIDED BY (USED IN)
INVESTING ACTIVITIES:
Capital expenditures (178,756) (33,667)
Expenditures to acquire intangible assets (14,375) (10,000)
Expenditures to acquire/develop
technology rights (40,080) (81,500)
__________ __________
Net cash provided by (used in)
investing activities (233,211) (125,167)
__________ __________
CASH FLOWS PROVIDED BY (USED IN)
FINANCING ACTIVITIES:
Payments on shareholder loans 2,500
Proceeds from issuance of common stock 350,000 1,495
Proceeds from issuance of preferred stock - 2,065,640
__________ __________
Net cash provided by (used in)
financing activities 352,500 2,607,135
__________ __________
Net increase(decrease) in cash and
cash equivalents (1,150,466) 1,027,216
Cash and cash equivalents
at beginning of period 1,194,139 838,809
__________ __________
Cash and cash equivalents at end of period $ 43,673 $ 1,866,205
========== ==========
See accompanying notes to these consolidated financial statements
PAGE
<PAGE>
RIGL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
a. Organization of business
Nuclear Corporation of New Mexico ("NCNM") was incorporated in December 1968
for the purpose of mineral, oil and gas exploration. The initial amount
raised for exploration activities was $300,000, and NCNM remained active in
this business until 1974. Since 1974, NCNM has been substantially inactive,
receiving only residual income from over-riding royalty interest in oil and
gas leases.
In April, 1994 NCNM moved its domicile from the state of New Mexico to Nevada.
From that period until its combination with Renaissance Center, Inc.
("RenCen") NCNM remained substantially inactive.
On June 27, 1997, in an agreement and plan of merger, all of the common stock
of RenCen, a Nevada corporation, was acquired by NCNM. In the agreement, one
share of common stock of NCNM was received by the shareholders of RenCen for
each share of RenCen's common stock held. In addition, every one share of
Series A preferred stock of RenCen was exchanged for one share of Series A
preferred stock of NCNM. In connection with the merger agreement, NCNM
changed its name to Renaissance International Group, Ltd. ("Renaissance").
The merger was accounted for similarly to a pooling of interests.
The management of RenCen instituted a 1 for 2 reverse split of its common
stock held by management prior to the combination with NCNM. Subsequently,
RenCen decreased the number of authorized shares of common stock, par value
$.001, from 50 million to 25 million shares. In addition, the number of
shares issued and outstanding were reduced on the basis of 1 for 2 with any
scrip shares created as a result of the reverse rounded up to the next whole
share. No reduction or alterations were made to the preferred shares of
RenCen. On June 22, 1998, the shareholders approved a change of the Company
name to RIGL Corporation ("the Company" or "RIGL") and increased the
authorized shares of the Company to 50 million shares.
On September 1, 1998, RIGL Corporation purchased 100% of the common stock of
Medical Resource Systems, Inc. in exchange for 100,000 shares of RIGL
Corporation common stock. This business combination was accounted for as a
pooling of interests.
On November 10, 1998, RIGL Corporation purchased all of the outstanding common
stock of Mountain Office Management, Inc. in exchange for 300,000 shares of
the Company's common stock.
On March 16, 1999 RIGL Corporation entered into an agreement to acquire 100%
of the common stock of Telco Billing, Inc. a Nevada corporation in exchange
for 17,000,000 shares of RIGL Corporation common stock. 2,000,000 million
shares of RIGL Corporation common stock was issued upon signing of the
agreement to Telco Billing, Inc. existing shareholders. The balance due of
15,000,000 shares of RIGL Corporation common stock will be issued upon
closing of the agreement scheduled for June 1, 1999.
b. Nature of business
RIGL's focus is to bring businesses to the internet utilizing a combination of
services, proprietary technology, existing tools and information service
providers. RIGL has positioned itself to build a substantial presence in the
Information Marketplace while providing its customers the ability to
capitalize on the rapidly growing internet market. RIGL has developed a
strategic plan based on the proprietary technology and knowledge base of its
technical development team to leverage itself into the information
marketplace.
RIGL is creating a network of online services to provide information to
consumers and businesses. RIGL offers an innovative new service which has
simplified the process of gaining an online presence so businesses nationwide
can advertise their goods and services with the click of a button. This
service is offered through Telco Billing, Inc. under the trade name Yellow-
Page.Net. RIGL currently is in the process of acquiring Telco Billing, Inc.
which will become a wholly owned subsidiary of RIGL Corporation. The
acquisition is scheduled to close on June 1, 1999.
Yellow-Page.Net is an online information service that contains listings, on a
local basis by city, category or business name, for more than 18 million
businesses in the United States and Canada free of charge. Yellow-Page.Net
features a myriad of other online services including business locators,
detailed destination and mapping services, people finders (white pages), web
site construction, sales leads and toll-free number directories.
Yellow-Page.Net offers 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 fax and 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
small monthly fee. The premium listing service is offered through a special
arrangement with phone companies. The feature, called "Local Exchange Carrier
Billing," makes it simple and easy by having service fees billed to the
customers' monthly phone bill. Yellow-Page.Net's goal is to make things very
simple and easy for advertisers to help them get over the stigma that
advertising on the internet is too difficult or costly for their company to
participate. Even if a business does not have a computer, Yellow-Page.Net has
made it easy to advertise on the internet.
Yellow-Page.Net is a member of two yellow page trade associations: Yellow Page
Publishers Association, "YPPA," which is the major trade association of yellow
page publishers throughout the world, and the Association of Directory
Publishers, "ADP," who chiefly 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 aggressively pursuing various programs to increase
traffic both to www.yellow-page.net and to other sites utilizing the same core
database.
Technology and implementation tools are necessary to simplify the management
and presentation of information. RIGL is committed to creating strategic
partnerships with key vendors to enhance the core Asset Management Information
Retrieval Environment (AMIRE) technology that RIGL is developing. The tools
and technology must allow companies to provide Intelligent Intuitive
Information to their market, without the need for large cost intensive
information management departments. RIGL's core technology works between its
customers' information repository and the web browser that the end information
user will utilize to access the information. This type of technology is
commonly referred to as "middle ware", providing the critical link between a
simple user interface (Web Browser) and a complex data repository. RIGL's
development is focused on building middle ware tools to increase the end
user's browser intelligence as well as provide a common form of information
that can easily be interpreted across multiple markets and industries.
RIGL Technologies, a wholly owned subsidiary of RIGL Corporation, is currently
finalizing 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 system is focused primarily on medical
information sources today, the core engine was designed to provide middle-ware
services between databases and web browsers regardless of what the information
is. Once this system is finalized and released it is the intent of RIGL
Technologies to begin developing additional modules that customize the
environment for various information markets. Based on the technical ability
and reputation of the technical staff RIGL has provided consulting services,
based on RIGL's proprietary information management models, to Silicon
Graphics and Price Waterhouse Consulting to provide information system designs
for their respective customers.
RIGL Technologies has a long term goal to move information access to a new
level of efficiency. Search engine capabilities today are limited and more
often than not provide erroneous or irrelevant data when searching. Building
on the AMIRE core engine RIGL is confident that it can create the next
generation tools to provide intelligent web-based data searching.
In support of the development efforts RIGL has created a medical service
organization to provide an internal test bed for its technologies. The
Company has assembled a team of medical management professionals which has
formulated a unique proprietary process of Medical Resource Planning ("MRP").
This process, when implemented into physician practices, provides economies of
scale allowing the practice to operate more efficient and cost effective.
Therefore, the time physicians spend on running the business is reduced to a
minimum (current statistics show that physicians spend 28% of their time
running the business), thus allowing physicians to use their skills in
practicing medicine. The net result of decreased costs and increased revenue
are equally split between the physicians and the Company.
While providing a valuable service to physicians, RIGL's team of technical
experts, with years of experience in software development, system integration
and implementation, continuously utilize the input of the medical management
professionals, physicians and their staffs to design the interface and
functionality of Medical AMIRE . This approach results in a system designed
to meet the day-to-day requirements of medical offices, proven in a real life
environment by the actual users, not programmers.
RIGL is continuing to identify opportunities to create partnerships and expand
operations in the online web market. In addition to internal technology
development RIGL intends to dramatically increase its offerings of services
and technologies to the Information Marketplace through acquisitions, joint
ventures, and coalition agreements.
NOTE 2 - 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 intercompany transactions and
balances have been eliminated in consolidation.
b. Accounting Method
The Company recognizes income and expenses based upon the accrual method of
accounting. No allowances have been made for doubtful accounts.
c. Unaudited Information and Basis of Presentation
The consolidated balance sheet as of March 31, 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 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.
d. Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using the
straight-line method over the useful lives of the assets as follows:
Furniture and equipment 5-7 years
Automobiles 5 years
Leasehold Improvements estimated useful life or
length of lease,
whichever is shorter
e. Proprietary Technology
The Company capitalizes production costs incurred to further develop a
computer software product with established technological feasibility.
Amortization of these costs has not been recorded as sales of the product have
not begun in earnest.
f. Income Taxes
The Company, a C Corporation, accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 (Accounting for Income
Taxes).
As of September 30, 1998, the Company has approximately $3,369,000 of net
operating loss carry forwards which can be used to offset future taxable
income.
g. Management's Estimates and Assumptions
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 and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
h. Recent Accounting Pronouncements
In June 1997, SFAS No. 130, "Reporting Comprehensive Income" ("SFAS 130") was
issued. SFAS 130 establishes standards for the reporting of comprehensive
income and its components in a full set of general-purpose financial
statements for periods beginning after December 15, 1997. Reclassification of
financial statements for earlier periods for comparative purposes is required.
In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information" ("SFAS 131") was issued. SFAS 131 revises information
regarding the reporting of operating segments. It also establishes standards
for related disclosures about products and services, geographic areas and
major customers.
The Company adopted SFAS 130 and SFAS 131 in the first quarter of fiscal 1999
and does not expect such adoptions to have a material effect on the
consolidated financial statements and footnotes.
NOTE 3 SHAREHOLDERS' EQUITY
During the six months ended March 31, 1999, the Company completed the
following stock transactions from its authorized but unissued capital shares:
The Company issued 300,000 shares in exchange for all the issued and
outstanding stock of Mountain Office Management Systems, Inc.
The Company revised the agreement for the 1998 North American rights to
the Medasys System by rescinding and renegotiating the transaction. In
December 1998, the Company rescinded the 255,864 shares of common stock
issued, which was originally valued at $500,000. In January 1999, the
Company issued 100,000 shares of common stock for the exclusive North
American rights effective January 1, 1999.
The Company, prior to the signing of the agreement to acquire Telco
Billing, Inc., received $350,000 in exchange for 700,000 shares of the
Company's common stock and an ongoing commitment to aide management in
future business ventures.
The Company issued 20,000 shares in exchange for marketing services.
The Company issued 2,000,000 to the shareholders of Telco Billing, Inc.
pursuant to the agreement and prior to the closing as part of the
acquisition price. The transaction calls for the issuance of 17,000,000
shares at closing less the 2,000,000 previously issued.
Effective October 22, 1997 warrants were issued to existing stockholders to
acquire 2,666,920 common shares at a price of $2.00 per share and 750,000
common shares at a price of $2.30 per share. The warrants expire on October
30, 1999. The Company granted certain of its executive officers and other
individuals options to purchase shares of the Company's common stock. At
December 31, 1998 options to purchase 1,125,474 shares of common stock were
outstanding.
NOTE 4 - EARNINGS PER SHARE
In February 1997 the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings Per
Share, which is effective for financial statements for both interim and annual
periods ending after December 15, 1997. The new standard eliminates primary
and fully dilutive earnings per share and requires presentation of basic and
diluted earnings per share with disclosures of the methods used to compute the
per share amounts.
Basic earnings per share excludes dilution and is computed by dividing income
available to common shareholders by the weighted-average common shares
outstanding for the period. Diluted earnings per share reflects the weighted-
average common shares outstanding plus the potential effect of securities or
contracts which are convertible to common shares such as options, warrants,
and convertible debt and preferred stock. The adoption of this standard is not
expected to have a material impact on earnings per share of the Company. In
computing diluted EPS, the average stock price for the period is used in
determining the number of shares assumed to be purchased from exercise of
stock options rather than the higher of the average or ending stock price as
used in the computation of fully diluted EPS.
The following is a reconciliation between the components of the basic and
diluted net income (loss) per share calculations for the periods presented
below:
<PAGE>
Six Months Ended:
March 31, 1999 March 31, 1998
______________________________ _____________________________
Income Shares Per Income Shares Per
Share Share
Amount Amount
________ ________ ________ ________ ________ _______
Basic income
(loss) per
share
Net income
(loss) $ (1,270,288) 12,795,078 $(0.10) $(824,460) 10,175,598 $(0.08)
======== =======
Effect of
dilutive
securities
Stock
options
/warrants
________ ________ ________ ________
Diluted net
income (loss)
per share
Net income
(loss) plus
assumed
exercises
and
conversions $(1,270,288) 12,795,078 $(0.10) $(824,460) 10,175,598 $(0.08)
========= ========== ======= ======== ========= ========
Three Months Ended:
March 31, 1999 March 31, 1998
______________________________ _____________________________
Basic income
(loss) per
share
Net income
(loss) $ (653,647) 12,883,190 $(0.05) $(376,529) 11,109,830 $(0.03)
======== =======
Effect of
dilutive
securities
Stock
options
/warrants
________ ________ ________ ________
Diluted net
income (loss)
per share
Net income
(loss) plus
assumed
exercises
and
conversions $ (653,647) 12,883,190 $(0.05) $(376,529) 11,109,830 $(0.03)
========= ========== ======= ======== ========== =======
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL POSITION AND LIQUIDITY
The Company's current ratio was 0.3 to 1 at March 31, 1999. Cash and cash
equivalents decreased $1,150,466 to $43,673 at March 31, 1999 from $1,194,139
at September 30, 1998. The decrease in cash and cash equivalents was
primarily due to cash used in operations and expenditures for long lived
assets.
The Company has successfully raised capital financing during the years ended
September 30, 1998 and 1997, respectively. Additional capital will be
required for 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, among other things, the expansion of existing financial
resources, and the availability of other financing on favorable terms and
future operating results. Therefore, the Company's ultimate success may
depend upon its ability to raise additional capital or debt 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 Company does not anticipate paying dividends on its Common Stock in the
foreseeable future.
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 judgments 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.
RESULTS OF OPERATIONS
Total Revenue. Total revenue increased $271,772 to $634,602 during the
six months ended March 31, 1999 as compared to the $362,830 in the same period
of fiscal 1998. These increases are due to the consulting services provided
to physician practices. These services began in the fourth quarter of fiscal
1998. The remaining increases were due to consulting services provided by
Renaissance Center, Ltd. in the entertainment and multimedia industries.
These increases were offset by a decrease in the billing and collection fees
generated. These decreases were due to a partial reduction in the billing
services performed to one of their clients.
Management has recognized that recent developments in data storage 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 this
information a reality as well as adding artificial intelligence to core
operating systems.
These recent developments, combined with the Company's own state of the art
proprietary technology have enabled it to look at alternative applications.
Management believes that the health services industry may provide this
alternative. This industry, though technically advanced in equipment, relies
upon out-dated record keeping and retrieval methods. The Company is actively
pursuing acquisitions and affiliations in the medical industry. Initially it
has targeted physician groups, outpatient surgical centers, skilled nursing
facilities and medical specialty organizations. It is management's intention
to continue to examine all industries for possible applications of its
proprietary technology as well as looking for opportunities to acquire other
synergistic technologies.
Management believes that the billing and collection fees and consulting
services to physician practices will increase in fiscal 1999.
General & Administrative Expenses. General & administrative expenses
increased $636,333 to $1,832,766 during the six months ended March 31, 1999 as
compared to the $1,196,433 in the same period of fiscal 1998. The increases
in general & administrative expenses relate to several key components to the
future success of the Company. First are the expenses incurred associated
with research and development costs related to the Company's proprietary
technology. Additional costs are due to increased sales and marketing efforts
related to the Company's proprietary technology. Finally, general &
administrative expenses increased due to the costs incurred in securing key
management personnel for both the corporate management development programs.
The Company had thirty five employees at March 31, 1999 compared to thirty at
September 30, 1998. These employees were dedicated to the development of the
AMIRE system and the enrollment and operation of physician practices.
Management anticipates additional employees will be hired as the Company
progresses through the development stage of the AMIRE system and enrolls
physician practices.
Depreciation & Amortization Expense. Depreciation & amortization
expense increased $33,445 to $64,395 during the six months ended March 31,
1999 as compared to the $30,950 in the same period of fiscal 1998. The
increase in depreciation is due to the addition of approximately $180,000 in
property and equipment during fiscal 1999. Management anticipates additional
property and equipment will be required as the Company progresses through the
development stage of the AMIRE system. The Company has approximately $588,000
capitalized as proprietary technology as of March 31, 1999 and anticipates
additional costs will be incurred to develop the AMIRE systems. Amortization
of these costs has not been recorded as sales of the product have not begun in
earnest.
Interest Income. Interest income decreased $33,151 to $6,968 during the
six months ended March 31, 1999 as compared to the $40,119 in the same period
of fiscal 1998. The decrease is due to the lower cash balances to invest in
interest earning accounts. These cash balances will be utilized in the future
on the development of the AMIRE system, therefore interest income could
decrease in future periods.
Income Taxes. The provision for income taxes relates to minimum tax
requirements in various states that the Company does business. The Company
has approximately $3,400,000 of net operating loss carry forwards which can be
used to offset future taxable income.
Net Income (loss) and Weighted Average Shares. Net loss for the six
months ended was $1,270,288 (or $0.10 per share) compared to net loss of
$824,460 (or $0.08 per share) for the prior year second quarter.
The weighted average number of shares outstanding for the six month period
ended March 31, 1999 and 1998 were 12,795,078 and 10,175,598 , respectively.
PAGE
<PAGE>
RIGL CORPORATION
PART II
Item 1 Legal Proceedings
None
Item 2 Changes in Securities and Use of Proceeds
(a) Not applicable
(b) Not applicable
(c) 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) Exhibit Index Page 19
(b) A Form 8-K was filed on October 16, 1998 announcing the
appointment of Eugene Starr to the Board of Directors and the
resignation of Walter Vogel.
A Form 8-K/A was filed on November 12, 1998 providing the
required financial information of the acquisition of Medical
Resource Systems, Inc.
A Form 8-K was filed on March 29, 1999 announcing that it had
signed an agreement to acquire Telco Billing, Inc.
PAGE
<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, thereto duly
authorized.
May 14, 1999
RIGL CORPORATION
By _____/s/______
Kevin L. Jones
Kevin L. Jones,
Title: Director and President
By _____/s/______
Peter de Krey
Peter de Krey,
Title: Corporate Secretary
PAGE
<PAGE>
RIGL CORPORATION
INDEX TO EXHIBITS
Exhibit
Number Description
____________________________________
27 Financial Data Schedule
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE>5
<MULTIPLIER>1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 03-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 43,673
<SECURITIES> 0
<RECEIVABLES> 128,468
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 181,092
<PP&E> 485,991
<DEPRECIATION> 158,154
<TOTAL-ASSETS> 1,745,924
<CURRENT-LIABILITIES> 574,327
<BONDS> 0
0
0
<COMMON> 6,578,489
<OTHER-SE> 5,406,892
<TOTAL-LIABILITY-AND-EQUITY> 1,745,924
<SALES> 634,602
<TOTAL-REVENUES> 631,807
<CGS> 0
<TOTAL-COSTS> 1,897,161
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,853
<INCOME-PRETAX> 1,270,238
<INCOME-TAX> 50
<INCOME-CONTINUING> 1,270,288
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,270,288
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
