SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For The Quarter Ended September 30, 1999 Commission File No. 0-18224
TotalAxcess.com,Inc. (formerly, Group V Corp.)
(Exact name of registrant as specified in its charter)
Delaware 95-4176781
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
201 Clay Street, Oakland, California 94103
(Address of principal executive offices) (Zip Code)
(510)286-8700
(Registrant's telephone number, including area code)
550 15th Street, San Fracisco, CA 94103
(Former Address, if changed (Former Zip Code, if changed
since last report) since last report)
(415)575-0222
(Former telephone number, if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of1934 during the preceding 12 months (or for 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:
Indicate the number of shares outstanding of each of the issuer's classes
of capital stock, as of the latest practicable date.
Preferred Stock $.01 par value; 170,000 shares outstanding as of June 30, 1999
Preferred Stock Series B $2.00 par value;35,193
shares outstanding as of June 30, 1999
Common Stock $.01 par value; 128,727,643 shares as of November 15,1999.
TOTALAXCESS.COM, INC.
(formerly, GROUP V CORPORATION.)
INDEX
PAGE
PART I
Item 1. Financial Statements
Consolidated Condensed Balance Sheet as of September 30,1999 (unaudited)..... 1
Consolidated Condensed Statements of Operations for the Three Months Ended
September 30, 1999 and 1998 (unaudited)..................................... 2
Consolidated Condensed Statements of Cash Flows for the
Three Months Ended September 30, 1999 and 1998 (unaudited)................ 3
Notes to Consolidated Condensed Financial Statements.................... 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................... 8
PART II
Item 1. Legal Proceedings.................................................. 10
Item 2. Changes in Securities.............................................. 10
Item 3. Defaults Upon Senior Securities.................................... 10
Item 4. Submission of Matters to a Vote of Security Holders................ 10
Item 5. Other Information.................................................. 10
Item 6. Exhibits and Reports on Form 8-K................................... 10
Signatures ................................................................ 11
TOTALAXCESS.COM, INC.
(formerly, GROUP V CORPORATION.)
Consolidated Condensed Balance Sheet
As of September 30, 1999 (Unaudited)
0,
1939
(Unaudited)
Current Assets:
Cash and cash equivalents ..................................$ 506,369
Marketable securitie .................................... 30,176
Accounts receivable......................................... 2,636,984
Advances..................................................... (14,621)
Inventories.................................................. 30,555
Prepaid expenses ............................................ 99,045
Total Current Assets .............................. 3,288,508
Fixed assets:
Furniture
and equipment ............................................. 154,684
Less accumulated depreciation ............................. (63,981)
Total fixed assets, net ............................. 90,704
Other assets ...................................................... 7,200
TOTAL ASSETS.......................................................$ 3,386,412
Current Liabilities:
Current portion of capital lease obligations ..............$ 698,091
Notes Payable ............................................. 35,000
Accounts payable........................................... 5,416,109
Due to affiliates ......................................... --
Deferred revenue........................................... --
Accrued expenses and accrued interest...................... 1,564,696
Total
Current Liabilities ................................ 7,713,896
Long Term Liabilities:
Long term capital lease obligations................................ 4,560
Notes payable ..................................................... 1,065,717
Total
Long Term Liabilities...................................... 1,070,277
Total Liabilities ......................................... 8,784,173
Commitments and Contingencies
Stockholders' Equity:
Preferred stock - par value $.01; authorized 1,000,000 shares; 14%
cumulative convertible; issued and outstanding 170,000 shares
(aggregate liquidation of $170,000)............................... 1,700
Preferred Stock Series B - par value $2.00; authorized, issued
and outstanding 35,193 shares (aggregate liquidation of
$300,000)...................................... 70.386
Common stock - par value $.01; authorized 333,000,000 shares;
126.800,000 shares issued and outstanding.................... 1,268,000
Additional paid-in capital.......................................... 19,702,624
Stockholders' receivables........................................... --
Unrealized loss on marketable securities........................... (100,145)
Accumulated
deficit........................................................... (26,340,326)
Total Stockholders' Equity............................. ( 5,397,762)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........................$ 3,386,412
See accompanying notes to these consolidated condensed financial statements.
TOTALAXCESS.COM, INC.
(formerly, GROUP V CORPORATION.)
Consolidated Condensed Statements of Operations
For the Three Month Period Ended September 30, 1999 and 1998 (Unaudited)
Three Months Ended
1999 1998
(Unaudited) (Unaudited)
Revenues $ 3,744,451 $ 272,576
Costs and expenses:
General and administrative 515,819 675,060
Professional services 65,598 132,743
Depreciation and amortization 8,175 29,815
Interest expense, net 0 24,000
Total costs and expenses 6,196,871 1,148,643
Net (loss) from continuing
Operations (2,452,420) ( 876,067)
Net (Loss) $(2,452,420) $( 876,067)
Net (loss) applicable to $(2,452,420) $( 876,067)
Basic and diluted net (loss) $ (.02) $ (.02)
Weighted average common
shares outstanding 128,157,481 49,889,880
================================================================
See accompanying notes to these consolidated condensed financial statements.
TOTALAXCESS.COM, INC.
(formerly, GROUP V CORPORATION.)
Consolidated Condensed Statements of Cash Flows
For the Three Month Period Ended September 30, 1999 and 1998 (Unaudited)
Three Months Ended
September 30
1999 1998
(Unaudited) (Unaudited)
Operating activities:
Net Loss $(2,448,096) $(876,067)
Adjustments to reconcile net loss to
Depreciation and amortization 8,175 29,815
Increase (decrease) from changes in:
Accounts receivable and advances (2,088,436) 127,194
Inventories (30,555) (2,961)
Prepaid expenses (40,688) (9,565)
Other Assets -- (7,461)
Accounts payable, accrued 4,061,817 693,722
Deferred revenue -- 40,305
Due to Officer (356,686) --
Due to affiliate -- (354,639)
Net cash used in operating activities (894,580) (289,222)
Investing activities:
Purchase of Equipment (15,674) (51,974)
Acquisition of other assets -- --
Net cash provided in investing (15,674) (51,974)
Financing activities:
Net cash provided from financing activities 812,730 --
Net (decrease) increase in cash (97,524) (341,196)
- --------------------------------------------------------------------------------
Cash and cash equivalents, beginning of period 572,951 62,408
================================================================================
Cash and cash equivalents, end of period 475,427 278,788
================================================================================
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Income taxes $ -- $ --
Interest $ -- $ --
Non-cash investing and financing activities:
Preferred Stock Series B converted to common stock $ -- $ --
Purchase of equipment via assumption of capital leases $ -- $ --
Purchase of NPC for Notes payable $ -- $ --
Purchase of NPC for Accrued liability $ -- $ --
See accompanying notes to these consolidated condensed financial statements.
TOTALAXCESS.COM, INC.
(formerly, GROUP V CORPORATION)
Notes to Consolidated Condensed Financial Statements
September 30, 1999
(Unaudited)
Note 1.General
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements for the quarter ended
September 30, 1999, include the accounts of TotalAxcess.com, Inc., National
Pools Corporation ("NPC"), Lottery Publications Corporation ("LPC"), Academy
Network Services, Inc. ("ANS"), and Premier Plus, Inc. ("PPI").
As used herein, the above is collectively referred to as the "Company,"
unless the context indicates otherwise. All intercompany accounts and
transactions have been eliminated in consolidation.
MANAGEMENT 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 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.
REVENUE RECOGNITION
The Company's telecommunication services provide PIN numbers for its
customers, who are primarily distributors of pre-paid phone cards. The PIN
numbers are pre-numbered code combinations that are imprinted on these cards by
the customers/distributors. This allows for the proper routing and time
recording of minutes used on the calling cards. The Company contracts with a
provider of switching equipment that processes the phone card calls when the end
consumer ultimately uses them. When cards are ready for distribution to end
consumers, customers/distributors authorize the Company to activate a specific
sequence of PIN's. The Company then immediately notifies its switching equipment
contractor to activate the related PIN's. Upon activation of the PIN's, the
Company recognizes revenue, as the risks and rewards of the activated PIN's are
transferred to the customers/distributors and, generally, no right of return
exists. The Company typically bills its customers/distributors as calls are made
using activated PIN's. Sixty days after activation of each PIN, any unbilled
amounts for each activated PIN are billed in full. To adhere to the matching
principle, the Company accrues for the estimated cost of providing
telecommunication services for activated PIN's at the time revenue is
recognized.
CASH EQUIVALENTS
Cash equivalents are highly liquid investments with maturities of three
months or less when
acquired.
FAIR VALUE OF FINANCIAL INSTRUMENTS
As of June 30, 1999, marketable equity securities consist of 650,292 shares
of common stock of NuOasis Resorts, Inc., a stockholder (Note 2). The Company
has classified these equity securities as available-for-sale and, accordingly,
they are presented in the accompanying consolidated balance sheet at their
estimated fair market value based on quoted market prices as of June 30, 1999.
Additionally, unrealized gains and losses on these securities are presented as a
component of other comprehensive loss in the accompanying consolidated
statements of operations and comprehensive loss.
EQUIPMENT
Equipment is recorded at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of the related assets,
which are five to ten years. Maintenance and repairs are charged to operations
as incurred.
INCOME TAXES
The Company uses the "liability method" of accounting for income taxes.
Accordingly, deferred tax liabilities and assets are determined based on the
difference between the financial statement and tax bases of assets and
liabilities, using enacted tax rates in effect for the year in which the
differences are expected to reverse. Current income taxes are based on the
year's taxable income for federal and state income tax reporting purposes
ACCOUNTING FOR EMPLOYEE STOCK OPTIONS
In October 1995, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 123, "Accounting for Stock-Based Compensation." In conformity with the
provisions of SFAS No. 123, the Company has determined that it will not change
to the fair value method prescribed by SFAS No. 123 and will continue to follow
Accounting Principles Board Opinion No. 25 for measurement and recognition of
employee stock-based transactions. There were no stock options granted to
employees during each of the years ended June 30, 1999 and 1998 or during the
quarter ended September 30, 1999.
ISSUANCE OF STOCK FOR SERVICES
Shares of the Company's common stock issued for services are recorded in
accordance with SFAS No. 123 at the fair market value of the stock issued or the
fair market value of the services provided whichever value is more reliably
measurable. The values of the services are typically stipulated by contractual
agreements.
LOSS PER COMMON SHARE
Loss per common share is computed based on the net loss for each period, as
adjusted for dividends required on preferred stock ($23,800 for each of Fiscal
1998 and Fiscal 1997) and the weighted average number of common shares
outstanding. Common stock equivalents were not considered in the loss per share
calculations, as the effect would have been anti-dilutive.
NOTE 2. ACQUISITIONS
National Pools Corporation
On June 13, 1996, NuOasis Resorts, Inc. (formerly, Nona Morelli's II,
Inc.), ("Nona"), ("NuOasis Resorts"), granted an option (the "Option") to Joseph
Monterosso, the current President of the Company, to acquire 250,000 Series B
Preferred Shares of Group V (the "Series B Shares") owned by NuOasis Resorts.
The Option is exercisable at a price of $13.00 per share.
On December 19, 1996, Group V entered into Stock Purchase Agreements with
each of the shareholders of National Pools Corporation ("NPC") pursuant to
which Group V agreed to issue a series of Secured Promissory Notes (the "Notes")
in the aggregate principal amount of $1,200,000 and 1,000,000 shares of Group
V's restricted common stock to the NPC shareholders in exchange for all of the
issued and outstanding shares of capital stock of NPC. The Notes are convertible
into a maximum of 241,900,000 shares of Group V common stock. The conversion of
the Notes is contingent upon NPC's operations achieving certain financial goals
over the next several fiscal years. The terms of the conversion are, for every
$250,000 of net annual operating income achieved by NPC, $7,500 in principal
amount of the Notes may be converted into 1,511,875 shares of restricted Group V
common stock. The Notes are non-recourse to Group V, secured by the assets of
NPC, bear interest at 8% per annum, and are due and payable on May 31, 1999. As
part of this acquisition, NuOasis Resorts and Group V agreed to a debt
assumption agreement whereby NuOasis Resorts assumed all Group V debt in excess
of $20,000 on December 24, 1996, except for amounts owed to certain affiliates,
which have been converted into shares of Group V common stock. The NPC Stock
Purchase Agreements closed on December 24, 1996.
On June 13, 1997, Mr. Monterosso exercised the Option to purchase 128,041
Series B Shares, at $13.00 per share, by payment to NuOasis Resorts of
approximately $1,665,000. The 128,041 Series B Shares acquired may be
immediately converted into 9,987,198 shares of restricted Group V common stock.
Additionally, on June 13, 1997, Group V sold its wholly owned subsidiary, CMA,
Inc., to NuOasis Resorts for cash of $1,140,000, notes receivable from NPC
aggregating $245,836 and a credit against the NuOasis Resorts intercompany
account of $95,000.
On August 22, 1997 and effective June 13, 1996, the Option was amended (the
"Amended Option") to increase the exercise price for 21,959 of the Series B
Preferred shares from $13.00 per share to $72.20 per share, or approximately
$1,585,000 for the 21,959 shares of Series B Preferred Stock. The option to
purchase the remaining 100,000 Series B Preferred shares was terminated.
Concurrently, NuOasis Resorts granted Mr. Monterosso a new option to purchase
the remaining 100,000 Series B shares at an exercise price of $11.70 per share.
Additionally, as consideration for granting the new option, NuOasis Resorts
acquired the right to require Mr. Monterosso to purchase all or any remaining
unexercised shares of the 100,000 Series B shares in its entirety by September
1, 1998.
Closing on September 2, 1997, but effective June 30, 1997, Mr. Monterosso
exercised the Amended Option to purchase 21,959 Series B Shares, at $72.20 per
share, by payment to NuOasis Resorts of approximately $1,585,000. The 21,959
Series B Shares acquired may be immediately converted into 1,712,802 shares of
restricted Group V common stock. Concurrent with the exercise of the Amended
Option, Group V released NuOasis Resorts from liability, if any, arising from
any events while NuOasis Resorts controlled Group V, in exchange for
approximately $1,585,000 of marketable securities.
On September 2, 1997, NuOasis Resorts sold to Mr. Monterosso 6,000,000 New
Class D Warrants in consideration for a $1,800,000 promissory note secured by
the New Class D Warrants, due in September 1998 (the "Warrant Note"). Each New
Class D Warrant is exercisable at $1.00 per share and entitles Mr. Monterosso to
receive, upon exercise, two shares of common stock, or a total of 12,000,000
common shares if all New Class D Warrants have been exercised. The New Class D
Warrants expire on March 30, 2004, and to date, none of the New Class D Warrants
have been exercised.
On September 2, 1997, NuOasis Resorts granted to Mr. Monterosso an option
to purchase 7,800,000 common shares of the Company exercisable at $0.15 per
share after NuOasis Resorts' converted its remaining 100,000 shares of Series B
Preferred Stock into 7,800,000 common
shares.
As a result of the acquisition of NPC and the sales and purchases of the
Series B Preferred Stock, as discussed above, a change in control of the
Registrant has occurred and the Registrant is now no longer a controlled
subsidiary of NuOasis Resorts. Universal Network Services, Inc.
In September 1997, the Company agreed in principle to acquire a 50%
convertible net profits interest ("Net Profits Interest") in Universal Network
Services, Inc. ("UNSI"). NPC's Chief Operating Officer, Mr. Dennis Houston, is a
shareholder and officer of UNSI. The Net Profits Interest would have provided
the Company with up to 50% of UNSI's net operating profit and granted the
Company the option to convert its Net Profits Interest into an equity interest
of up to 100% of UNSI's issued and outstanding common stock. During the quarter
ended March 31, 1998, the Company abandoned its acquisition of the Net Profits
Interest in UNSI and recorded $22,500 in related professional service expense
and in June 1998 terminated its employment agreement with Mr. Houston. UNSI is
an interexchange carrier that provided telecommunications services to both
residential and business customers throughout the United States and certain
foreign countries. In August 1998, UNSI filed for protection under Chapter 11 of
the U.S. Bankruptcy code and has subsequently been liquidated under Chapter 7 of
the U.S. Bankruptcy Code.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Registrant has incurred net losses and negative cash flows from
operating activities since its inception in 1987. The Registrant had cash and
cash equivalents of approximately $536,545 and $106,149 as of September 30, 1999
and 1998, respectively, and a working capital deficit of $(4,319,239) and
$(2,201,453) as of September 30, 1999 and 1998, respectively. The Company's
revenues increased from $272,576 to $3,744,451 between the quarters ended
September 30, 1998 and June 30, 1999, respectively. This represents an increase
of 1,274% in revenue. This increase occurred primarily as the result of new
telecommunication services contracts secured by the Company in fiscal year 1999.
Further, the Company increased its internal sales force and independent
distributor network relative to fiscal year 1998.
This Quarterly Report on Form 10-QSB for the quarter ended September 30,
1999 (the "Form 10-QSB") contains certain "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"). Forward-looking statements are statements other
than historical information or statements of current condition and relate to
future events or the future financial performance of the Company. Some
forward-looking statements may be identified by use of such terms as "expects,"
"anticipates," "intends," "estimates," "believes" and words of similar import.
These forward-looking statements relate to plans, objectives and expectations
for future operations. In light of the risks and uncertainties inherent in all
such projected operation matters, the inclusion of forward-looking statements in
this Form 10-QSB should not be regarded as a representation by the Company or
any other person that the objectives or plans of the Company will be achieved or
that any of the Company's operating expectations will be realized. Revenues and
results of operations are difficult to forecast and could differ materially from
those projected in the forward-looking statements contained in this Form 10-QSB
The Company expects to increase revenues and cash flow through the
wholesale distribution and sale of pre-paid calling cards by expanding its
in-house sales force and adding more independent distributors to its network.
The Company's One Plus long distance service, which the Company is revamping to
provide more competitive rates, and additional services will be included as a
product for this sales force to market.
Additionally, management announced in August 1999 the strategic alliance
with licensed long distance carrier Comnet that will broaden their international
pre-paid network services into Mexico. The Company has been negotiating and is
prepared to move forward with additional strategic alliances' in Paraguay, India
and Italy that management believes will further increase revenues and cash flow.
The Registrant will also continue to search for additional sources of equity
financing through the private placement of its common stock.
RESULTS OF OPERATIONS
COMPARISON OF THE THREE MONTHS ENDED September 30, 1999 and 1998
Total general and administrative expenses decreased by $159,241 or 23%
during the quarter ended September 30, 1999, compared to the same period last
year, as the Company continued to streamline its operations and staffing by
implementing the relocation of it's telecommunication operations.
Professional services decreased by $ 67,145 or 51% during the current
quarter compared to the same period during last year. These fee's declined as
the Company negotiated the settlement of several litigation matters.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
On August 28, 1998, the Company received a lawsuit (San Francisco Superior
Court Case No. 997548) filed by Worldcom Network Services, Inc. ("Worldcom") to
recover the sum of $2,208,362 allegedly due and owing as a result of a debt that
the Company allegedly guaranteed on behalf of UNSI. Although the Company denies
liability on the guarantee, the Company has reached a settlement with Worldcom
in which the Company will transfer 2,266,667 shares of its restricted common
stock to Worldcom. In exchange, Worldcom agrees to release the Company from any
and all liability, known and unknown up to the date of the related settlement
agreement, which is November 3, 1999.
On October 2, 1998, Pickett Communications, Inc. ("Pickett") filed a
complaint (San Francisco Superior Court Case No. 998281) for monetary damages
and challenged the Company's rights to use the HitLoTTo logo. In July 1999, a
settlement agreement was executed that requires the Company to release 218,036
shares of its restricted common stock to Pickett. This stock had previously been
issued to Pickett pursuant to a contract dated October 14, 1997 in which the
Company agreed to pay Pickett for services it provided to NPC. The Company has
previously refused to release the common stock, as NPC disputed certain charges,
which it believed were unauthorized.
On February 19, 1999, Accountempts and RHI Management Resources filed a
complaint (San Francisco Superior Court Case No. 301366) for breach of contract
to recover approximately $26,000 allegedly due and owing for temporary
employment services. On July 27, 1999, a settlement agreement was executed in
which the Company agreed to pay an aggregate amount of $24,000 at the rate of
$2,000 per month.
On August 30, 1999, the California Labor Commissioner awarded Joseph Arton
$34,426 in wages, interest and penalties based on claims that this individual
was an employee of the Company. As a result of the Company's appeal filed on
September 20, 1999, Joseph Arton filed a related complaint (San Francisco
Superior Court Case No. 306593). A trial is set for November 1999 that will
address the employee's claim for unpaid wages. The Company contends that Joseph
Arton was not an employee of the Company, but was an independent contractor.
Further, the Company is considering filing a cross complaint for breach of
contract.
On November 10, 1998, the Company filed legal action (TotalAxcess, Inc. v.
NuOasis Resorts, Inc; Nona Morelli's II, Inc.; NuOasis International, Inc.; Fred
Luke, Jr.; Rocci Howe; Steven H. Dong; John D. Desbrow; Archer & Weed; Richard
Weed) in San Francisco Superior Court, Case No. 999131. The suit alleges fraud
and misrepresentation in the sale of securities, which were not qualified for
sale and professional malpractice against legal counsel representing the
Defendants in this transaction. On July 26, 1999, NuOasis Resorts, Inc. and Nona
Morelli's II, Inc. filed a cross complaint against the Company alleging claims
for breach of contract, fraud, material misrepresentation in the purchase of
securities and libel, and seeks rescission of certain contracts and the
imposition of a constructive trust over certain securities. Also on July 26,
1999, Rocci Howe, Fred Luke, Jr. and Steven Dong filed cross complaints against
the Company alleging claims for breach of contract, indemnity and libel. All
counsel have stipulated to a change in venue from San Francisco to Orange County
Superior Court, and the San Francisco Court has transferred the file to the
Orange County Court. The trial date is set for July 2000. The Court ordered that
all claims the Company has against Richard Weed are to be arbitrated and that
this arbitration will not take place until after the trial. Management plans to
vigorously pursue its complaint and defend each cross complaint, which it
believes lack substantial merit.
On January 6, 1999, the Company filed a lawsuit (TotalAxcess.com, Inc. v.
Dennis Houston, Orange County Superior Court Case No. 809248). This complaint
alleges breach of fiduciary duty by Mr. Houston as one of the Company's
directors for failing to disclose material facts in the Ark-Tel Asset Purchase
Agreement which have resulted in the Company's being sued by Worldcom Network
Services, Inc. (see above). On June 29, 1999, Mr. Houston filed a cross
complaint alleging claims for breach of contract, breach of the implied covenant
of good faith and fair dealing, misrepresentation, fraud and embezzlement. The
Company is vigorously pursuing the matter against Mr. Houston and plans to
vigorously defend the cross complaint. At the present time, related legal
counsel has not yet received responses to discovery, but the court has set an
evaluation conference for December 2, 1999.
On June 26, 1997, the Company filed a lawsuit (TotalAxcess.com, Inc. v.
Network Long Distance, Inc.) filed in the District Court, City and County of
Denver, Case No. 97 CV 4131, Division 7. The complaint was filed against Network
Long Distance, Inc. and their transfer agent to compel them to release shares of
Network Long Distance, Inc.'s common stock (the "Shares") that was received by
the Company in connection with a release of liability granted to NuOasis
Resorts, Inc. Once the Shares were properly transferred to the Company, the
Company dismissed its claims as moot. However, Network Long Distance, Inc.
(currently known as Eclipse Communications, Inc. or "Eclipse") continues to
pursue the Shares through its counterclaims. Eclipse is claiming that it owns
some or all of the Shares and is seeking damages and an injunction prohibiting
the transfer of the Shares. In response to Eclipse's allegations, management has
indicated that it will vigorously contest the litigation, as it believes the
case to be groundless and without merit. This matter is currently set for trial
to commence in February 2000. Should Eclipse prevail in this matter, it may be
in a position to recover a significant portion of the stock at issue, or the
value thereof, plus 8% interest per annum from 1997 through trial.
Although there is no pending litigation at the present time, M.H. Meyerson
& Co. ("Meyerson") claims that it is entitled to 717,898 warrants to purchase
common stock of the Company pursuant to a December 12, 1997 Investment Banking
Agreement. The Company contends that Meyerson is not entitled to the warrants
because it failed to fulfill its obligations under the Investment Banking
Agreement. The Company is in settlement discussions regarding this matter.
Item 2. Changes in Securities
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
EXHIBIT NO. DESCRIPTION
27 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
GROUP V CORPORATION (formerly, NUOASIS GAMING, INC.)
Date: November 16, 1999 By: /s/ Josheph Monterosso
Joseph Monterosso, President and Director
Date: November 16, 1999 By: /s/ Russell F. McCann, Jr.
Russell F. McCann, Jr., Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 506,369
<SECURITIES> 30,176
<RECEIVABLES> 2,636,984
<ALLOWANCES> 0
<INVENTORY> 30,555
<CURRENT-ASSETS> 3,288,508
<PP&E> 154,684
<DEPRECIATION> (63,981)
<TOTAL-ASSETS> 3,386,412
<CURRENT-LIABILITIES> 7,713,896
<BONDS> 0
0
72,086
<COMMON> 1,268,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,386,412
<SALES> 0
<TOTAL-REVENUES> 3,744,451
<CGS> 5,607,279
<TOTAL-COSTS> 6,196,871
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,452,420)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,452,420)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,452,420)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
