<PAGE> 1
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to _______________________
Commission File Number 0-20180
INTERNATIONAL REALTY GROUP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 62-1277260
- ------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
111 Northwest 183rd Street, Suite 518, Miami, Florida 33169
- --------------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
305-944-8811
(Registrant's telephone number, including area code)
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 of 1934 during
the preceding 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 [ ]
The number of shares outstanding of each of Issuer's classes of common equity as
of July 31, 1999.
COMMON STOCK, PAR VALUE $.001 115,792,613
----------------------------- -----------
Title of Class Number of Shares
Transitional Small Business Disclosure Format Yes [ ] No [X]
<PAGE> 2
International Realty Group, Inc.
Index
PART I
<TABLE>
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheet as of
June 30, 1999 2
Consolidated Statements of Operations for the
Three Months and Six Months
Ended June 30, 1998 and 1999 3
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1998 and 1999 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis or Plan of Operation 6
PART II
Item 2. Changes in Securities 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
</TABLE>
1
<PAGE> 3
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERNATIONAL REALTY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
REAL ESTATE AT COST:
Property held for development or sale $ 5,527,113
-----------
ACCOUNTS RECEIVABLE:
Due from shareholder 1,354,831
Accounts receivable 87,070
-----------
Total accounts receivable 1,441,901
-----------
CASH AND CASH EQUIVALENTS 18,339
PROPERTY AND EQUIPMENT - NET 92,751
EXCESS OF COST OVER ESTIMATED FAIR VALUE OF
NET ASSETS ACQUIRED - NET 79,194
OTHER ASSETS 106,414
-----------
TOTAL $ 7,265,712
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Mortgage and note payable $ 527,031
Accounts payable and accrued liabilities 326,137
Due to shareholders 613,771
-----------
Total Liabilities 1,466,939
-----------
MINORITY INTEREST 1,290,117
-----------
STOCKHOLDERS' EQUITY:
Common stock, $.001 par; 450,000,000 shares
authorized; 115,792,613 shares issued and outstanding 115,792
Additional paid in capital 6,828,367
Accumulated deficit (2,184,329)
-----------
Accumulated other comprehensive income:
Currency translation adjustment (235,702)
4,524,128
Treasury Stock, at cost 15,472
-----------
Total Stockholders' Equity 4,508,656
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,265,712
===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
2
<PAGE> 4
PART I: FINANCIAL INFORMATION, CONTINUED.
ITEM 1. FINANCIAL STATEMENTS, CONTINUED.
INTERNATIONAL REALTY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1998 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------------------ ------------------------------
1998 1999 1998 1999
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
REVENUE
Revenues from services provided $ 203,800 $ 228,168 $ 395,400 $ 379,586
OPERATING COSTS AND EXPENSES:
Operating expenses - services 184,000 200,738 356,700 349,131
Operating expenses - development 49,100 34,332 102,500 67,552
General and administrative expenses 20,100 46,046 46,200 55,955
Interest expense 80,400 2,263 185,800 8,888
Depreciation and amortization 13,300 13,376 28,000 26,750
----------- ------------- ----------- -------------
Total Operating Expenses 346,900 296,755 719,200 508,276
(LOSS) FROM OPERATIONS (143,100) (68,587) (323,800) (128,690)
OTHER INCOME (EXPENSE):
Exchange rate fluctuations (21,000) -- (50,800) --
Other income (expense) 3,400 -- 6,600 --
----------- ------------- ----------- -------------
Total other (expense) - net (17,600) -- (44,200) --
----------- ------------- ----------- -------------
(LOSS) BEFORE MINORITY INTEREST AND (160,700) (68,587) (368,000) (128,690)
PROVISION FOR INCOME TAXES
MINORITY INTEREST 29,800 5,690 59,800 11,198
----------- ------------- ----------- -------------
(LOSS) BEFORE PROVISION FOR INCOME TAXES (130,900) (62,897) (308,200) (117,492)
PROVISION FOR INCOME TAXES (BENEFIT) -- -- -- --
----------- ------------- ----------- -------------
NET (LOSS) (130,900) (62,897) (308,200) (117,492)
Other comprehensive income:
Foreign currency translation adjustment (5,500) (2,730) (9,000) (29,037)
----------- ------------- ----------- -------------
COMPREHENSIVE (LOSS) $ (136,400) $ (65,627) $ (317,200) $ (146,529)
=========== ============= =========== =============
PER SHARE INFORMATION
Weighted average number of shares 9,954,313 115,792,613 9,954,313 115,792,613
=========== ============= =========== =============
Basic loss per share $ (.01) $ (.00) $ (.03) $ (.00)
=========== ============= =========== =============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
3
<PAGE> 5
PART I: FINANCIAL INFORMATION, CONTINUED.
ITEM 1. FINANCIAL STATEMENTS, CONTINUED.
INTERNATIONAL REALTY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1998 AND, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------------
1998 1999
--------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES: $ 12,200 $ 29,329
--------- --------
Net Cash Provided By Operating Activities 12,200 29,329
Cash flows from investing activities
Reduction of an investment in subsidiary company -- (85,453)
Purchases of fixed assets (4,400) (8,988)
--------- --------
Net Cash (Used In) Investing Activities (4,400) (94,441)
Cash flows from Financing activities
Increase in related party debt 15,000 --
Repayment of long term debt -- (15,286)
Repayment of related party debt (7,600) --
--------- --------
Net Cash Provided By (Used In) Financing Activities 7,400 (15,286)
EFFECT OF FOREIGN EXCHANGE ON CASH (6,700) --
--------- --------
NET INCREASE (DECREASE) IN CASH 8,500 (80,398)
BEGINNING - CASH BALANCE 107,200 98,737
--------- --------
ENDING - CASH BALANCE $ 115,700 $ 18,339
========= ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
4
<PAGE> 6
PART I: FINANCIAL INFORMATION, CONTINUED.
ITEM 1. FINANCIAL STATEMENTS, CONTINUED.
INTERNATIONAL REALTY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles ("GAAP") for interim financial
information and Item 310(b) of Regulation SB. They do not include all of the
information and footnotes required by GAAP for complete financial statements. In
the opinion of management, all adjustments (consisting only of normal recurring
adjustments) considered necessary for a fair presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. For further
information, refer to the financial statements of the Company as of December 31,
1998 and for the two years then ended, including notes thereto included in the
Company's Form 10-KSB.
The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries. Intercompany transactions and balances have been
eliminated in consolidation.
(2) STOCKHOLDERS' EQUITY
Increase in Authorized Capital:
On January 7, 1999 the Company amended Article IV of its Articles of
Incorporation to increase the number of authorized shares of Common Stock from
10,000,000 shares to 450,000,000 shares. Such amendment followed an Information
Statement, dated December 17, 1998, which was sent to all shareholders on
December 16, 1998 advising them of such action.
Among other reasons, the amendment allowed sufficient capital stock to retire
certain convertible notes (the "Notes") issued, pursuant to an Amended and
Restated Agreement dated August 19, 1996, when the Company consummated a
transaction ("Transaction") on such date with DSC, S.A. de C.V. ("DSC") and
Hemisphere Development Limited ("Hemisphere"). In the Transaction, the Company
acquired the majority interest in five (5) parcels of land amounting to
approximately 3,745 acres in Mexico, other assets and assumed liabilities of DSC
and Hemisphere in exchange for 1,000,000 shares of common stock with a fair
value of $.0445 per share and Notes with a face value of $4,700,900, convertible
into 105,638,300 shares of Common Stock. On January 8, 1999 the Company
cancelled the Notes, and issued Common Stock to DSC and Hemisphere, as provided
for in such Notes.
Stock Options:
During the first quarter the Company's president exercised an option to acquire
200,000 shares of common stock pursuant to an employment agreement.
(3) SUBSIDIARY COMPANIES
During the first quarter minority shareholders of Appraisal Group International,
Rt. ("AGI Rt."), Budapest, Hungary, made, with the concurrence of the parent
company, a capital contribution of $105,152 reducing the Company's ownership of
such subsidiary from 75% to 37.5%.
The financial position and results of operations of AGI Rt. were not material to
those of the Company for the 1998 fiscal year or the period ended June 30, 1999.
Based on the change in management and ownership position, the Company is
accounting for its investment in AGI Rt. utilizing the cost method. The
financial position and results of operations of AGI Rt. were consolidated with
those of the Company at December 31, 1998.
5
<PAGE> 7
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 1: CONTINUED
Item 2. Management's Discussion and Analysis or Plan of Operations.
The following discussion and analysis covers material changes in
financial condition since December 31, 1998 and material changes in the results
of operations for the three and six months ended June 30, 1999, as compared to
the same period in 1998. This discussion and analysis should be read in
conjunction with "Management's Discussion and Analysis and Results of
Operations" included in the Company's Form 10-KSB for the year ended December
31, 1998.
GENERAL
ORGANIZATION AND BUSINESS
INTERNATIONAL REALTY GROUP, INC., (the "Company") was incorporated in Delaware
on April 13, 1970. Its principle offices are located at 111 NW 183 Street, Suite
518, Miami, Florida 33169. Its telephone number is (305) 944-8811, Fax (305)
651-3394.
The Company, together with its consolidated subsidiaries, currently operates in
two business segments: (i) real estate consulting services, and (ii) land
development.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THREE MONTHS ENDED JUNE 30, 1998
REAL ESTATE CONSULTING SERVICES
Revenues increased for the three months ended June 30, 1999 totaling
approximately $228,200 as compared to approximately $203,800 for the same period
in 1998. Revenues for 1999 were derived from operations performed by Appraisal
Group International, Inc. ("AGII"). Revenues from foreign operations performed
by Appraisal Group International, Rt. ("AGI Rt.") during the 1998 period were
$1,000. During the current period, revenues for residential appraisals were
consistent with the comparable 1998 period of approximately $124,000.
Operating expenses for the three months ended June 30, 1999 were approximately
$200,700 compared to approximately $184,000 for the comparable period in 1998.
Of such expenses, domestic operations accounted for 100% in 1999, and in 1998,
domestic operations accounted for 92%, and foreign operations accounted for 8%
or $14,000 of the 1998 expense. Included in such operating expenses are the
direct expenses, including the production of appraisal reports, appraiser's
fees, travel, photography and other related expenses. Such expenses were
$139,700 in the current period compared to $114,500 for the 1998 period.
LAND DEVELOPMENT
The Company acquired interests in five properties located in Mexico, pursuant to
the transaction ("Transaction") with DSC S.A. de C.V. ("DSC") and Hemisphere
Developments Limited ("Hemisphere"). The Company believes that each of the
Mexican properties is suitable for future development or sale. Any development
of the properties is contingent upon the Company obtaining necessary financing.
Potential sources of financing include mortgage financing from financial
institutions located in the United States or Mexico, or the issuance of equity
securities of the Company. The Company has no present understanding, agreement
or commitment for financing any such property and there can be no assurance that
financing will be available to the Company on commercially reasonable terms or
at all.
6
<PAGE> 8
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS, CONTINUED
During the current period, land development operations incurred costs, paid
directly by DSC through the reduction of their account payable to the Company,
of approximately $34,300, compared to $49,100 for the comparable period in 1998,
for personnel, engineering, site plans and other related expenses.
CORPORATE
Corporate general and administrative expenses for the current period were
$46,000 compared to $20,100 in the 1998 period. The increase in such expenses is
primarily attributable to the annual audit, legal and other corporate reporting
requirement expenses.
INTEREST EXPENSE, during the current period, was significantly reduced from
$80,400 in 1998 to $2,300 in 1999. The majority of interest expense in 1998 was
attributable to certain notes ($62,900) issued to DSC and Hemisphere in the
Transaction, and mortgage interest expense ($17,500) for properties located in
Mexico. The decrease in interest expense is attributable to the retirement of
the convertible notes, and the payoff of the mortgage note on a Mexican
property. OTHER INCOME (EXPENSE), consisting of miscellaneous income and
exchange rate fluctuations were $21,000 for the 1998 period. Since September 30,
1996 the Company has recognized translation expense as being attributable to the
currency fluctuations of Mexican pesos denominated accounts receivable and
mortgages, notes and other liabilities. As of January 1, 1999, the peso is
recognized as the functional currency for its local operations and any
adjustments are recognized as a component of equity. During the current period,
currency translation adjustments of $2,730 were recognized in stockholder's
equity. DEPRECIATION AND AMORTIZATION EXPENSE between the periods was
consistent.
As a result of the above, the Company had a net loss of $62,900 for the three
month period ended June 30, 1999 compared to a net loss of $130,900 for the
comparable 1998 period. The majority of the difference in the loss during the
1998 comparable period is attributable to accrued interest expense, as discussed
above. Domestic operations performed by AGII had an operating profit during the
current period of $26,100 compared to $37,100 in 1998. The decrease in AGII
profit between the periods is attributable to increases in both direct appraisal
and overhead expense. Foreign operations performed by AGI RT had an operating
loss of $3,800 during the 1998 period.
SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998
REAL ESTATE CONSULTING SERVICES
Revenues decreased for the six months ended June 30, 1999 totaling approximately
$379,600 as compared to approximately $395,400 for the same period in 1998. A
portion of the decrease was a result of the fact that revenues for 1999 were
derived solely from operations performed by Appraisal Group International, Inc.
("AGII"). AGII had revenues of approximately $364,400 for the same period in
1998. Revenues from foreign operations performed by Appraisal Group
International, Rt. ("AGI Rt.") during the 1998 period were $35,000. AGII's
overall revenues increased by 9.6% between the comparable periods. Residential
appraisal revenues decreased by 8% compared to the previous period, due to the
loss of a major client during the fourth quarter 1998 and residential mortgage
interest rate fluctuations. Commercial appraisal revenue increased 22% over the
comparable 1998 period.
7
<PAGE> 9
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS, CONTINUED
Operating expenses for the six months ended June 30, 1999 were approximately
$349,100 compared to approximately $356,700 for the comparable period in 1998.
Of such expenses, domestic operations accounted for 100% in 1999, and in 1998,
domestic operations accounted for 81% and foreign operations accounted for 13%
or $47,300 of the 1998 expense. Included in current operating expenses were
direct expenses, including the production of appraisal reports, appraiser's
fees, travel, photography and other related expenses. These expenses were
$227,700 in the current period compared to $200,100 for the 1998 period.
LAND DEVELOPMENT
As discussed above, the Company acquired interests in five properties located in
Mexico, pursuant to the Transaction with DSC and Hemisphere.
During the current period, land development operations incurred costs, paid
directly by DSC through the reduction of their account payable to the Company,
of approximately $67,600, compared to $102,500 for the comparable period in
1998, for personnel, engineering, and other related expenses.
CORPORATE
Corporate general and administrative expenses for the current period were
$56,000 compared to $46,200 in the 1998 period. The increase in such expenses is
primarily attributable to the annual audit, legal and other corporate reporting
expenses.
INTEREST EXPENSE, during the current period, was significantly reduced from
$185,800 in 1998 to $8,900 in 1999. The majority of interest expense in 1998 was
attributable to the Notes ($127,200) issued to DSC and Hemisphere in the
Transaction, and mortgage and other interest expense ($68,600) for properties
located in Mexico. OTHER INCOME (EXPENSE) consisting of miscellaneous income and
exchange rate fluctuations were $44,200 for the 1998 period. Since September 30,
1996 the Company had recognized translation expense as being attributable to the
currency fluctuations of Mexican pesos denominated accounts receivable and
mortgages, notes and other liabilities. As of January 1, 1999, the peso is
recognized as the functional currency for its local operations and any
adjustments are recognized as a component of equity. During the current period,
currency translation adjustments of $29,000 were recognized in stockholder's
equity. DEPRECIATION AND AMORTIZATION EXPENSE between the periods was consistent
As a result of the above, the Company had a net loss of $117,500 for the six
month period in 1999 compared to a net loss of $308,200 for the comparable 1998
period. The majority of the difference in the loss during the 1998 comparable
period is attributable to accrued interest expense, as discussed above. Domestic
operations performed by AGII had an operating profit during the current period
of $27,200 compared to $55,200 in 1998. The decrease in profit during the
current periods is attributable to reduced residential appraisal revenues and
increases in direct and overhead expenses. Foreign operations performed by AGI
RT had an operating loss of $16,700 during the 1998 period.
LIQUIDITY AND CAPITAL RESOURCES:
CASH FLOWS FROM OPERATIONS. The Company incurred for the period ending June 30,
1999 a net loss of ($117,500) with a positive cash flow from operating
activities of $29,300 compared to a net loss of ($308,200) with a positive cash
flow from operating activities of $12,200 in 1998. Cash flows (used in)
investing activities,
8
<PAGE> 10
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS, CONTINUED
including the acquisition of fixed assets and the reduction of the investment in
AGI Rt., were ($94,400) for the current period compared to ($4,400) in 1998.
Cash flow provided by (used in) financing activities, including related-party
debt and repayment of long-term debt, was ($15,300) in 1999 compared to $7,400
in 1998. There was no effect of exchange rate fluctuation in the 1999 period,
compared to ($6,700) in 1998.
LIQUIDITY AND LONG-TERM DEBT. As of June 30, 1999, the Company had accounts
receivable totaling $1,441,900. Of this amount, $1,354,800 is due from
shareholder. The Company is utilizing such receivables for operating expenses
and future capital requirements. In addition, accounts receivable from domestic
operations totaled $87,100. As of June 30, 1999, the Company's liabilities
totaled $1,466,900, compared to $6,820,500 as of December 31, 1998. Of this
latter amount, the notes to DSC and Hemisphere and accrued interest, which
totaled $5,287,200, were converted to common stock as of January 8, 1999. Of
mortgages and notes payable at June 30, 1999, totaling $527,000, certain Mexican
financial institutions are due approximately $499,400, and $27,600 is
attributable to domestic operations.
CURRENCY RISK The Company is subject to risk in changes of foreign exchange
rates for its subsidiaries that use a foreign currency as their functional
currency, or for assets or liabilities which are foreign currency denominated
and are translated to U.S. dollars at each reporting period. The Company has
made currency translation adjustments totaling $235,700 for its foreign
operations, recognized as a component of shareholder's equity. When a foreign
entity operates in a highly inflationary economy, the Company uses the U.S.
dollar as the functional currency, rather than the local currency. During 1998,
Mexico was considered a highly inflationary economy. As of January 1, 1999, the
Mexican peso is once again recognized as the functional currency. The Company
has not engaged in the purchase of forward contracts, or other hedging
techniques, to manage such foreign exchange risk to protect against earnings and
cash flow volatility resulting from changes in foreign exchange rates.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby
providing cautionary statements identifying important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements (as such term is defined in the Reform Act) made by
or on behalf of the Company herein or orally, whether in presentations, in
response to questions or otherwise. Any statements that express, or involve
discussions as to expectations, beliefs, plans, objectives, assumptions or
future events or performance (often, but not always, through the use of words or
phrases such as "will result", "are expected to", "will continue", "is
anticipated", "estimated", "projection" and "outlook") are not historical facts
and may be forward-looking and, accordingly, such statements involve estimates,
assumptions, and uncertainties which could cause actual results to differ
materially from those expressed in the forward-looking statements. Such
uncertainties include, among other, the following: (i) the Company's ability to
obtain additional financing to implement its business strategy; (ii) real estate
investment risks, including the potential for increases in real property taxes;
(iii) real estate development risks, including obtaining building permits or
necessary zoning changes, construction delays strikes, adverse weather
conditions and other conditions beyond the control of the Company; (iv)
illiquidity of real estate investments; (v) the financial condition of the
Company's clients; (vi) imposition of new regulatory requirements affecting the
Company; (vii) a downturn in general or local economic conditions where the
Company owns real property; (viii) the delay or failure to properly manage
growth and successfully integrate
9
<PAGE> 11
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS, CONTINUED
acquired companies and operations; (ix) lack of geographic diversification; (x)
effect of uninsured loss and (ix) other factors which are described in further
detail in the Company's filings with the Securities and Exchange Commission,
including the Company's definitive information statement, dated December 17,
1998.
The Company cautions that actual results or outcomes could differ materially
from those expressed in any forward-looking statements made by or on behalf of
the Company. Any forward-looking statement speaks only as of the date on which
such statement is made, and the Company undertakes no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it is not
possible for management to predict all of such factors. Further, management
cannot assess the impact of each such factor on the business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
YEAR 2000 COMPLIANCE:
The Year 2000 issue is the result of computer programs being written using two
(2) digits rather than the four (4) digits to define the year. Any of the
Company's computer programs that have date-sensitive software may recognize a
date using "00" as the year 1900 rather than 2000. This problem could force
computers to either shut down or provide incorrect data or information. The
Company utilizes generic software programs developed, maintained and upgraded by
independent computer software providers. In response to the Year 2000 issue,
management is of the opinion that the providers of these software programs will
resolve the date sensitive issue so that all critical systems will be in
compliance prior to the Year 2000. In addition, the Company has taken measures
to resolve Year 2000 issues by upgrading its computer network systems and
ancillary software programs in its corporate, land development, and real estate
consulting segments. The Company does not anticipate any material adverse impact
on its business.
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
None
ITEM 2: CHANGES IN 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. Exhibits
27.1 Financial Data Schedule (For SEC purposes only)
B. Reports on Form 8-K
None.
10
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
INTERNATIONAL REALTY GROUP, INC.
Date: August 13, 1999 By: /s/ Richard M. Bradbury
-------------------------------
Richard M. Bradbury
President
(Principal Financial Officer)
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
INTERNATIONAL REALTY GROUP'S UNAUDITED FINANCIAL STATEMENTS DATED JUNE 30, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 18,339
<SECURITIES> 0
<RECEIVABLES> 1,441,901
<ALLOWANCES> 0
<INVENTORY> 5,527,113<F1>
<CURRENT-ASSETS> 6,989,353
<PP&E> 276,533
<DEPRECIATION> (183,782)
<TOTAL-ASSETS> 7,265,712
<CURRENT-LIABILITIES> 1,466,939
<BONDS> 0
0
0
<COMMON> 115,792
<OTHER-SE> 4,392,864
<TOTAL-LIABILITY-AND-EQUITY> 7,265,712
<SALES> 0
<TOTAL-REVENUES> 379,586
<CGS> 0
<TOTAL-COSTS> 416,683
<OTHER-EXPENSES> 82,705
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,888
<INCOME-PRETAX> (117,492)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (117,492)
<EPS-BASIC> (.00)
<EPS-DILUTED> 0
<FN>
<F1>Inventory consists of real estate held for development or sale.
</FN>
</TABLE>
