<PAGE>
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998
(First quarter of fiscal 1998)
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from_____________ to ________________
Commission File No. 0-24073
IBS INTERACTIVE, INC.
(Exact name of Small Business Issuer as specified in its Charter)
Delaware 13-3817344
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
2 Ridgedale Avenue
Suite 350
Cedar Knolls, NJ 07927
(Address of Principal Executive Offices)
(973) 285-2600
(Registrant's Telephone Number, including Area Code)
------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if
Changed Since Last Report
Check whether the issuer (1) has 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 ?
As of March 31, 1998, 1,849,237 shares of the issuer's common stock,
par value .01 per share were outstanding.
Transitional Small Business Disclosure Format Yes ? No |X|
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<PAGE>
IBS INTERACTIVE, INC.
INDEX
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Condensed Interim Balance Sheet as of March 31, 1998
(unaudited)...................................................
Condensed Interim Statements of Income for the three months
ended March 31, 1998 and 1997 (unaudited).....................
Condensed Interim Statements of Cash Flows for the three months
ended March 31, 1998 and 1997 (unaudited).....................
Notes to Condensed Interim Financial Statements...............
Item 2. Management's Discussion and Analysis or Plan of Operations.....
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..............................................
Item 2. Changes in Securities and Use of Proceeds......................
Item 3. Default 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>
Item 1. Financial Statements.
IBS INTERACTIVE, INC.
Condensed Interim Balance Sheet
March 31, 1998
(in thousands)
(unaudited)
ASSETS
Current Assets
Cash.................................................... $ 192
Accounts receivable (net of allowance for doubtful
accounts of $69)..................................... 1,334
Deferred tax asset...................................... 63
------
Total Current Assets......................... 1,589
Property and equipment, net.................................... 606
Intangible assets.............................................. 902
Deferred compensation.......................................... 558
Deferred offering costs........................................ 354
Other assets................................................... 31
------
TOTAL ASSETS................................. $4,040
======
See accompanying Notes to Condensed Interim Financial Statements.
<PAGE>
IBS INTERACTIVE, INC.
Condensed Interim Balance Sheet
March 31, 1998
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
<S> <C>
Notes payable....................................................................... $ 454
Capital lease obligation, current portion........................................... 40
Accounts payable and accrued expenses............................................... 755
Current portion of deferred compensation............................................ 230
Accrued interest payable............................................................ 20
Income taxes payable................................................................ 122
---------
Total Current Liabilities..................................................... 1,621
Long term capital lease obligation....................................................... 58
Non-current liabilities.................................................................. 361
Deferred tax liabilities................................................................. 44
---------
Total Liabilities................................................................... 2,084
-------
Stockholders' Equity
Preferred Stock, $.01 par value, authorized 1,000,000 shares, none issued and
outstanding..................................................................... --
Common Stock, $.01 par value, authorized 11,000,000 shares, 1,849,237 shares issued
and outstanding................................................................. 19
Additional paid in capital.......................................................... 1,883
Retained earnings................................................................... 54
--------
Total Stockholders' Equity.......................................................... 1,956
-------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,040
=========
</TABLE>
See accompanying Notes to Condensed Interim Financial Statements.
<PAGE>
IBS INTERACTIVE, INC.
Condensed Interim Statements of Operations
For the three months ended March 31, 1998 and 1997
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the three months ended March 31,
1998 1997
---- ----
<S> <C> <C>
Revenues...................................................... $ 1,742 $ 365
Cost of services.............................................. 1,006 249
------------- -------------
Gross profit.................................................. 736 116
Operating expenses:
Selling, general and administrative...................... 413 235
Amortization of intangibles.............................. 34 --
------------- -------------
Operating income (loss)....................................... 289 (119)
Interest expense.............................................. 32 2
Tax provision................................................. 117 --
------------- -------------
Net income (loss)............................................. 140 (121)
------------- -------------
Earnings (loss) per share
Basic and Diluted............................................. $ 0.08 $ (0.07)
------------- -------------
Weighted average common shares outstanding
Basic......................................................... 1,805,766 1,685,225
Diluted....................................................... 1,850,989 1,685,225
</TABLE>
See accompanying Notes to Condensed Interim Financial Statements.
<PAGE>
IBS INTERACTIVE, INC.
Condensed Interim Statements of Cash Flows
For the three months ended
March 31, 1998 and 1997
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the three months ended March 31,
1998 1997
---- ----
<S> <C> <C>
Cash Flows provided by Operating Activities............................ $ 506 $ 57
Cash Flows used in Investing Activities................................ (93) (122)
Cash Flows (used in) provided by Financing Activities.................. (317) 74
---------- ---------
NET INCREASE IN CASH................................................... 96 9
CASH at BEGINNING OF PERIOD............................................ 96 179
--------- --------
CASH at END OF PERIOD.................................................. $ 192 $ 188
========== ========
</TABLE>
See accompanying Notes to Condensed Interim Financial Statements.
<PAGE>
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
1. FINANCIAL STATEMENT PRESENTATION
a. The condensed interim financial statements included herein
have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission
with respect to Form 10-QSB. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations,
although the Company believes that the disclosures made herein
are adequate to make the information contained herein not
misleading. These interim financial statements should be read in
conjunction with the 1997 financial statements and the notes
thereto included in the Company's Prospectus dated May 14, 1998.
In the Company's opinion, all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation
of the information shown have been included.
b. The results of operations for the three months ended March 31,
1998 presented herein are not necessarily indicative of the
results of operations expected for the year ending December 31,
1998.
c. Net earnings per share was determined on the basis of the
weighted average number of shares of common stock including, when
applicable, dilutive stock options using the treasury stock
method.
2. SUBSEQUENT EVENTS
a. On May 20, 1998, the Company completed an initial public offering
(the "Offering") of 1,380,000 shares of its Common Stock, par
value $.01 per share (the "Common Stock"), including the sale of
180,000 shares pursuant to the exercise in full of the
underwriter's over-allotment option. The Company intends to use
the net proceeds from the Offering in the approximate aggregate
amount of $6,644,000 for: (i) potential acquisitions; (ii)
network expansion; (iii) sales and marketing; (iv) payment of
indebtedness; and (v) working capital and general corporate
purposes.
b. Utilizing proceeds from the Offering, the Company has:
(1) Repaid unsecured promissory notes in the original
principal amount of $200,000 issued in October 1997,
together with accrued interest thereon at the rate of
8% per annum; and
<PAGE>
(2) Repaid unsecured promissory notes in the original
principal amount of $95,000 issued in August 1995,
together with accrued interest thereon at the rate
of 6% per annum.
c. Upon consummation of the Offering, in connection with the
conversion of a non-interest bearing demand note in the original
principal amount of $150,000, the Company issued 25,000 shares of
Common Stock.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS FORWARD-LOOKING STATEMENTS WITHIN
THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED (THE "EXCHANGE ACT"). ACTUAL RESULTS, EVENTS AND CIRCUMSTANCES
(INCLUDING FUTURE PERFORMANCE, RESULTS AND TRENDS) COULD DIFFER MATERIALLY FROM
THOSE SET FORTH IN SUCH STATEMENTS DUE TO VARIOUS FACTORS, RISKS AND
UNCERTAINTIES INCLUDING THOSE SET FORTH UNDER THE CAPTION "RISK FACTORS" IN THE
COMPANY'S PROSPECTUS DATED MAY 14, 1998. EXCEPT AS OTHERWISE REQUIRED TO BE
DISCLOSED IN PERIODIC REPORTS REQUIRED TO BE FILED BY COMPANIES REGISTERED UNDER
THE EXCHANGE ACT BY THE RULES OF THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION"), THE COMPANY HAS NO DUTY AND UNDERTAKES NO OBLIGATION TO UPDATE
SUCH STATEMENTS.
OVERVIEW
The Company provides a broad range of computer networking, programming,
applications development and Internet services primarily to businesses and
organizations. The Company's revenues are derived principally from consulting
fees earned in connection with the performance of systems integration services,
recurring monthly Internet connectivity fees and consulting fees earned in
connection with programming and applications development services.
The Company commenced operations in June 1995 as an Internet service
provider offering Web-site hosting services. Since April 1996, the Company has
acquired Interactive Networks, Inc., Mordor International and Allnet Technology
Services, Inc., each an Internet service provider principally offering dial-up
access services. The Company began to provide Systems Integration and
Programming and Applications Development services in April 1996 and has
increasingly emphasized such services. In January 1998, the Company acquired
Entelechy, Inc., a provider of programming and applications development
services, including distance learning and on-line trading applications. In
January 1998, the Company also acquired substantially all of the assets of JDT
Webwerx LLC (consisting primarily of computer equipment and intangible assets).
The Company's consulting services generally produce higher profit margins than
the Company's Internet services. For the three months ended March 31, 1998,
Systems Integration, Programming and Applications Development and Internet
services accounted for approximately 63%, 17% and 20%, respectively, of the
Company's revenues as compared to 55%, 9% and 36%, respectively, for the year
ended December 31, 1997.
Although the Company was profitable during the three months ended March
31, 1998, the Company expects that operating expenses will increase
significantly in connection with expansion activities that the Company
anticipates undertaking, including those related to potential acquisitions of
systems integrators, programmers, applications developers and Internet service
providers, further development and upgrade of the Company's network and
increased marketing activities. Utilizing proceeds from its initial public
offering of Common Stock (the "Offering) consummated on May 20, 1998, the
Company has begun, during the
<PAGE>
second quarter of 1998, to increase network development and marketing efforts
resulting in an increase in operating expenses during such period. Accordingly,
the Company's future profitability will depend on corresponding increases in
revenues from operations.
The Company is dependent on a limited number of clients for a
substantial portion of its revenues. For the three months ended March 31, 1998,
the Company's largest client, Aetna U.S. Healthcare Inc. ("Aetna"), which
engaged the Company in October 1997 accounted for approximately 86% of the
Company's revenues. Revenues derived from the Company's consulting contracts are
generally non-recurring in nature. The Company's contract with Aetna provides
for the Company to render services pursuant to purchase orders, each of which
constitutes a separate contractual commitment by Aetna. As of the date of filing
of this Quarterly Report, the Company continues to provide services to Aetna
although such services are not being performed pursuant to written purchase
orders issued under the Company's contract with Aetna or any other written
contract with Aetna. The Company has not received any written purchase orders
from Aetna for work to be performed subsequent to April 30, 1998. Non-renewal or
termination of the Company's contract with Aetna or the failure by Aetna to
issue additional purchase orders under the existing contract would have a
material adverse effect on the Company. There can be no assurance that the
Company will obtain additional contracts for projects similar in scope or
profitability to those previously obtained from Aetna or any other client, that
the Company will be able to retain existing clients or attract new clients or
that the Company will not remain largely dependent on a limited client base
which may continue to account for a substantial portion of the Company's
revenues. In addition, the Company generally will be subject to delays in client
funding; lengthy client review processes for awarding contracts; nonrenewal;
delay, termination, reduction or modification of contracts in the event of
changes in client policies or as a result of budgetary constraints; and
increased or unexpected costs resulting in losses in the event of "fixed-price"
contracts.
The Company's expense levels are based on its expectations concerning
future revenues and are fixed to a large extent. Any decline in demand for the
Company's services or increases in expenses which are not offset by
corresponding increases in revenue could have a material adverse effect on the
Company. In May 1998, in connection with the consummation of the Offering, the
Company incurred a non-recurring charge of $35,000 related to a private
placement in October 1997 of certain of its securities (the "1997 Financing").
Additionally, the Company expects to incur charges of approximately $180,000,
$197,000, $197,000 and $17,000 related to the acquisition of Entelechy, Inc. and
annual charges in each of the years ending December 31, 1998, 1999, 2000, and
2001 in the amount of $27,000 in connection with the award in 1998 of a
restricted stock grant to an executive officer.
The Company anticipates that growth in its client and subscriber base
will increase operating costs (including expenses related to network
infrastructure and client support) and will require the Company to hire
additional network engineers, programmers and technical personnel. The Company
currently has 49 full-time employees. The Company has entered into employment
agreements with eighteen of its employees, including its executive officers,
which provide for aggregate salaries of $1,113,000 during the year ended
December 31,
<PAGE>
1998. The Company anticipates hiring up to four additional employees to market
and sell the Company's services. The Company also intends to hire up to three
additional technical and support personnel.
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31,1998 COMPARED TO THREE MONTHS ENDED MARCH 31,1997
Revenues:
Revenues increased by $1,377,000 or 377% from $365,000 for the three months
ended March 31, 1997 ("1997") to $1,742,000 the three months ended March 31,
1998 ("1998"). Revenues for 1998 primarily from Systems Integration services
and, to a lesser extent, Programming and Applications Development services were
higher than those recognized in 1997. Additionally, the continued expansion of
the Company's network infrastructure during 1998 resulted in additional Internet
access subscribers and related revenue. During 1998, Aetna, the Company's
largest client, accounted for 86% of the Company's aggregate revenue. Aetna
engaged the Company for the provision of services in October 1997.
Cost of Services:
Cost of Services consists primarily of expenses relating to the operation of the
network, including telecommunications and Internet access costs, costs
associated with monitoring network traffic and quality and providing technical
support to clients and subscribers, cost of equipment and applications sold to
clients and subscribers, salaries and expenses of engineering, programming and
technical personnel and fees paid to outside consultants. Cost of services
increased by $757,000, or 304%, from $249,000 for 1997 to $1,006,000 for 1998.
This is a result principally of increases in salaries and expenses paid to an
increased number of engineering, programming and technical personnel whose
services are billed by the Company to clients and which are directly related to
the provision of services offered. Additionally, the Company incurred increased
telecommunications and Internet access costs due to expansion of the Company's
network and an increase in the number of Internet access subscribers. The
Company expects that these costs will continue to increase in the future to the
extent the Company is able to expand its client and subscriber base, and to the
extent the Company is able to expand its service offerings and network.
Selling, general and administrative:
Selling, general and administrative expenses consist primarily of salaries and
costs associated with marketing literature, advertising, direct mailings and the
Company's management, accounting, finance and administrative functions. Selling,
general and administrative expenses increased by $178,000 or 75.7% from $235,000
in 1997 to $413,000 for 1998. This increase is primarily attributed to the
hiring of additional personnel whose salaries, in whole or in part, are not
directly allocable to hours billed for services rendered to clients and
additional costs incurred in connection with expanded administrative functions.
The Company expects to incur additional charges in the amount of approximately
$180,000, $179,000, $197,000 and $17,000 in each of the years ending December
31, 1998, 1999, 2000, 2001, respectively, in connection with the acquisition of
Entelechy, Inc. The Company also expects to incur annual charges in the amount
of $27,000 through the year ending December 31, 2001 in connection with the
award in 1998 of a restricted stock grant to an
<PAGE>
executive officer. The charges related to each of the acquisition of Entelechy,
Inc. and the restricted stock grant are expensed ratably during the year.
Amortization of Intangible Assets:
Amortization of intangible assets increased by $34,000, from $-0- for 1997 to
$34,000 for 1998. This increase is primarily attributed to the amortization of
intangible assets, including customer lists and goodwill, acquired by the
Company in connection with its purchase of Mordor International and Allnet
Technology Services, Inc. which were consummated in May 1996 and April 1997,
respectively.
Interest:
Interest expense consists of interest on indebtedness and capital leases and
financing charges in connection with the 1997 Financing. Interest expense
increased by $30,000, or 977%, from $2,000 for 1997 to $32,000 for 1998. This
increase was principally attributable to expenses incurred in connection with
the 1997 Financing. The promissory notes in the original principal amount of
$200,000 issued in connection with the 1997 Financing were repaid in full
immediately after the consummation of the Offering.
Net Income:
As a result of the foregoing, the Company achieved net income of $140,000 for
1998 compared to a net loss of $121,000 for 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements have been to fund expenses in
connection with providing consulting services to clients and Internet access to
subscribers. The Company has historically satisfied its working capital
requirements principally through the issuance of equity and debt securities and
borrowings.
At March 31, 1998, the Company had negative working capital of $32,000,
compared to positive working capital of $333,000 at March 31,1997. The decrease
in liquidity resulted primarily from an increase in 1998 in accounts receivable
in the amount of $282,000 and taxes payable in the amount of $97,000.
Net cash provided from operating activities increased from $57,000 in
1997 to $506,000 in 1998. This change was primarily attributed to: (i) increased
operational activity undertaken by the Company in 1998 which resulted in net
income in the amount of $140,000, compared to a net loss in the amount of
$121,000 for 1997; (ii) increases in 1998 in accounts receivable in the amount
of $282,000; (iii) decreases during 1998 in deferred revenue in the amount of
$238,000; (iv) increases in 1998 in income taxes in the amount of $97,000; and
(v) increases in 1998 in depreciation/amortization in the amount of $91,000.
<PAGE>
Net cash used in investing activities decreased from $122,000 for 1997
to $93,000 for 1998 due to decreased capital expenditures.
Net cash provided by financing activities was $74,000 for 1997,
compared to net cash used by financing activities in the amount of $317,000 for
1998. This change is primarily attributable to $354,000 in deferred costs
associated with the Offering which was consummated on May 20, 1998. In
connection with the Offering, the Company issued and sold 1,380,000 shares of
Common Stock and received net proceeds in the approximate amount of $6,644,000.
At March 31, 1998, the Company had outstanding indebtedness owing to
Interchange State Bank in the amount of $9,000. This indebtedness, which was
repaid in full subsequent to March 31, 1998, bore interest at the rate of 10%
per annum, and was secured by a lien on substantially all the assets of the
Company and the personal guarantees of Messrs. Loglisci and Alteri.
At March 31, 1998, the Company had capital lease obligations in the
aggregate amount of $105,000. These capital lease obligations are secured by the
personal guarantees of Messrs. Loglisci, Frederick and Alteri. In addition,
certain of these capital lease agreements are secured by the equipment which is
the subject of the capital lease.
<PAGE>
Part II OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
In January 1998, the Company became aware of a threatened suit for
breach of contract and wrongful termination on the basis of race and gender
discrimination in connection with its dismissal of an employee in December 1997.
The claimant has asserted that she is entitled to compensation payable under a
two-year employment agreement between claimant and the Company. The employment
agreement provides for the payment by the Company of an annual salary over a
two-year term in the amount of $38,000. The claimant is seeking an amount
equivalent to six months salary, plus attorneys' fees of $1,000, aggregating
$20,000 in settlement of the matter. The Company was notified on June 16, 1998
that the claim has been forwarded to the Equal Employment Opportunity Commission
for review. No action is required by the Company at this time. There can be no
assurance that this matter will be resolved in a manner favorable to the
Company.
In February 1998, the Company became aware of a threatened suit for
damages and expenses allegedly incurred by an individual and other persons and
or/companies that the individual claims to represent resulting from the
Company's termination of a subscriber's Internet access service. The claimant
also alleges that the Company's termination of service was a violation of the
claimant's civil rights. The claimant seeks an unspecified amount of expenses
and damages. There can be no assurance that this matter will be resolved in a
manner favorable to the Company.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
(A) In connection with the Offering, on March 10, 1998, the Company
amended and restated its Certificate of Incorporation, as amended, to among
other things: (i) increase the authorized capital stock of the Company from
3,000 shares of common stock to 12,000,000 shares, of which 11,000,000 shares
were designated Common Stock and 1,000,000 shares were designated as preferred
stock; (ii) change the par value of the authorized capital stock from no par
value to $.01 per share; and (iii) provide for a 1,029.1-to-1 split of the
issued and outstanding common stock.
(B) Not applicable.
(C) On January 31, 1998, the Company acquired all of the issued and
outstanding capital stock of Entelechy, Inc. ("Entelechy"), in exchange for
277,434 shares of Common Stock. The Company relied upon an exemption from
registration in connection with the issuance of such securities permitted by
Section 4(2) of the Securities Act. The Company issued 147,310 shares of Common
Stock at the closing of the acquisition transaction on January 31, 1998, and
will issue a total of 130,124 shares (the "Contingent Shares") ratably on each
of the first, second and third anniversary of the acquisition closing date. The
issuance of such shares is contingent upon the former Entelechy stockholders, to
whom such shares are issuable, remaining in the continuous employ of the
Company. The purchase price of Entelechy will be established based upon the
value of shares issued at closing. The
<PAGE>
Company's final determination of the Entelechy purchase price is subject to the
completion of various valuations, analyses and closing adjustments. The values
ascribed to the Contingent Shares (assuming that the former Entelechy
stockholders remain employees of the Company) will result in a charge to
operations as such shares are earned through each fiscal year until December 31,
2001. The Company estimates that the charges to operations will approximate
$180,000, $197,000, $197,000 and $17,000 in the years ending December 31, 1998,
1999, 2000 and 2001, respectively.
(D) On March 14, 1998, the Company's registration statement on Form
SB-2, as amended (file number 333-47741), relating to the Offering was declared
effective by the Commission. Whale Securities Co., L.P. acted as the underwriter
in connection with the Offering which was consummated on May 20, 1998. In
connection with the Offering, the Company registered, issued and sold 1,380,000
shares of Common Stock, including 180,000 shares of Common Stock issued in
connection with the exercise in full of the underwriter's over-allotment option
at an initial public offering price of $6.00 per share resulting in proceeds to
the Company (net of underwriting discount, commissions and other expenses
payable by the Company) in the aggregate approximate amount of $6,644,000.
Additionally, the Company registered 120,000 shares of Common Stock underlying
warrants to purchase Common Stock sold by the Company to the underwriter for
$100. The warrants are exercisable for a four-year period commencing on May 14,
1999 at a price of $8.10 per share.
The Registration Statement was declared effective subsequent to
the end of the three month period ended March 31, 1998 for which this Quarterly
Report on Form 10-QSB is being filed. Through the end of the three month period
ended March 31, 1998, the Company had incurred deferred costs relating to the
Offering in the amount of $354,000. Such expenses related to legal, accounting,
underwriting and registration fees. During the three month period ended March
31, 1998, the Company did not receive and as a result did not use any proceeds
from the Offering.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(A) On March 9, 1998 the holders of a majority of the issued
and outstanding Common Stock acted pursuant to the written Consent of Holders of
a Majority of the Outstanding Capital Stock of the Company.
(B) Not Applicable.
(C) On March 9, 1998, pursuant to a written consent, the
holders of a majority of the issued and outstanding capital stock of the Company
approved and authorized a restatement and amendment to the Company's Certificate
of Incorporation, as amended, which restatement and amendment (i) increased the
authorized capital stock of the Company from 3,000 shares of common stock to
12,000,000 shares, of which 11,000,000 shares were
<PAGE>
designated Common Stock and 1,000,000 shares were designated preferred stock,
(ii) changed the par value of the authorized capital stock from no par to $.01
per share, (iii) provided for a 1,029.1-to-1 split of the issued and outstanding
common stock, and (iv) changed the name of the Company to IBS Interactive, Inc.
Item 5. OTHER INFORMATION.
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) Exhibits
The exhibits in the following table have been filed as
part of this Quarterly Report on Form 10-QSB:
Exhibit Number Description of Exhibit
-------------- ----------------------
27 Financial data schedule for the
three month period ended March
31,1998
(B) No reports on Form 8-K were filed during the three
months ended March 31, 1998.
<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.
IBS INTERACTIVE, INC.
By:/s/ Nicholas R. Loglisci, Jr.
Nicholas R. Loglisci,Jr.
President and Chief Operating
Officer (Principal Executive
Officer)
By:/s/ Jeffrey E. Brenner
Jeffrey E. Brenner
Sr. Vice President, Finance and
Administration (Principal
Financial and Accounting Officer)
Date: June 26, 1998
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Exhibit
-------------- ----------------------
27 Financial data schedule for the
three month period ended March
31,1998
<TABLE> <S> <C>
<ARTICLE>5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited financial statements of IBS Interactive, Inc. for the period ended
March 31, 1998. This Schedule is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 192
<SECURITIES> 0
<RECEIVABLES> 1,403
<ALLOWANCES> 69
<INVENTORY> 0
<CURRENT-ASSETS> 1,589
<PP&E> 2,003
<DEPRECIATION> 495
<TOTAL-ASSETS> 4,040
<CURRENT-LIABILITIES> 1,621
<BONDS> 0
0
0
<COMMON> 19
<OTHER-SE> 1,937
<TOTAL-LIABILITY-AND-EQUITY> 4,040
<SALES> 0
<TOTAL-REVENUES> 1,742
<CGS> 1,006
<TOTAL-COSTS> 447
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32
<INCOME-PRETAX> 257
<INCOME-TAX> 117
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<CHANGES> 0
<NET-INCOME> 140
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
