<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 SEPTEMBER 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 Identification No.)
incorporation or organization)
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 December 1, 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
<TABLE>
<CAPTION>
Part I
------
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheet as of
September 30, 1999 2
Consolidated Statements of Operations for the Three Months and Nine Months
Ended September 30, 1998 and 1999 3
Consolidated Statements of Cash Flows for the Nine Months Ended September 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
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
------
REAL ESTATE AT COST:
Property held for development or sale $5,527,113
----------
ACCOUNTS RECEIVABLE:
Due from shareholder 1,325,063
Accounts receivable 78,478
----------
Total accounts receivable 1,403,541
----------
CASH AND CASH EQUIVALENTS 10,216
PROPERTY AND EQUIPMENT - NET 84,489
EXCESS OF COST OVER ESTIMATED FAIR VALUE OF 74,795
NET ASSETS ACQUIRED - NET
OTHER ASSETS 107,890
----------
TOTAL $7,208,044
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
Mortgage and note payable $ 560,652
Accounts payable and accrued liabilities 280,893
Due to shareholders 627,962
----------
Total Liabilities 1,469,507
----------
MINORITY INTEREST 1,285,805
----------
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 (2,249,483)
Accumulated other comprehensive income:
Currency translation adjustment (226,472)
----------
4,468,204
Treasury Stock, at cost 15,472
----------
Total Stockholders' Equity 4,452,732
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $7,208,044
==========
</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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30,
--------------------------------- ---------------------------------
1998 1999 1998 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUE
Revenues from services provided $ 239,400 $ 165,396 $ 634,800 $ 544,982
OPERATING COSTS AND EXPENSES:
Operating expenses - services 188,600 172,362 535,575 521,493
Operating expenses - development 25,800 26,429 123,500 93,981
General and administrative expenses 56,700 21,047 93,325 77,002
Interest expense 88,200 1,652 274,100 10,538
Depreciation and amortization 15,300 13,373 43,300 40,123
------------- ------------- ------------- -------------
Total Operating Expenses 374,600 234,863 1,069,800 743,137
(LOSS) FROM OPERATIONS (135,200) (69,467) (435,000) (198,155)
OTHER INCOME (EXPENSE):
Exchange rate fluctuations (47,700) -- (98,500) --
-- -- (18,400) --
------------- ------------- ------------- -------------
Total other (expense) - net (47,700) -- (116,900) --
------------- ------------- ------------- -------------
(LOSS) BEFORE MINORITY INTEREST AND (182,900) (69,467) (551,900) (198,155)
PROVISION FOR INCOME TAXES
MINORITY INTEREST 35,700 4,311 96,500 15,509
------------- ------------- ------------- -------------
(LOSS) BEFORE PROVISION FOR INCOME TAXES (147,200) (65,156) (455,400) (182,646)
PROVISION FOR INCOME TAXES (BENEFIT) -- -- -- --
------------- ------------- ------------- -------------
NET (LOSS) (147,200) (65,156) (455,400) (182,646)
Other comprehensive income:
Foreign currency translation adjustment 600 9,237 (8,400) 38,274
------------- ------------- ------------- -------------
COMPREHENSIVE (LOSS) $ (146,600) $ (55,919) $ (463,800) $ (144,372)
============= ============= ============= =============
PER SHARE INFORMATION
Weighted average number of shares 9,954,187 115,792,613 9,954,187 115,792,613
============= ============= ============= =============
Basic loss per share $ (.02) $ (.00) $ (.05) $ (.01)
============= ============= ============= =============
</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
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NINE MONTHS ENDED
1998 1999
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES: $ (22,500) $ (63,535)
--------- ---------
Net Cash Provided By Operating Activities (22,500) (63,535)
Cash flows from investing activities
Purchases of fixed assets (6,700) (9,700)
--------- ---------
Net Cash (Used In) Investing Activities (6,700) (9,700)
Cash flows from Financing activities
Increase in related party debt 45,000 --
Repayment of long term debt -- (15,286)
Payment of related party debt (14,600) --
--------- ---------
Net Cash Provided By (Used In) Financing Activities 30,400 (15,286)
EFFECT OF FOREIGN EXCHANGE ON CASH (6,700) --
--------- ---------
NET INCREASE (DECREASE) IN CASH (5,500) (88,521)
BEGINNING - CASH BALANCE 107,200 98,737
--------- ---------
ENDING - CASH BALANCE $ 101,700 $ 10,216
========= =========
</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
SEPTEMBER 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 September 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 nine months ended September 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 SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998
REAL ESTATE CONSULTING SERVICES
Revenues decreased for the three months ended September 30, 1999 totaling
approximately $165,400 as compared to approximately $239,400 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
$16,300. During the current period, revenues for residential and commercial
appraisals were $43,000 and $14,700 lower respectively from the comparable 1998
period.
Operating expenses for the three months ended September 30, 1999 were
approximately $172,400 compared to approximately $188,600 for the comparable
period in 1998. Of such expenses, domestic operations accounted for 100% in
1999. In 1998, domestic operations accounted for 86%, and foreign operations
accounted for 14% or $26,200 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 $110,400 in the current period compared to $124,000 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 $26,400 compared to $25,800 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
$21,000 compared to $56,700 in the 1998 period. The decrease in such expenses is
primarily attributable to the legal and other corporate reporting requirement
expenses, attributable to the Transaction in the 1998 period.
INTEREST EXPENSE, during the current period, was significantly reduced from
$88,200 in 1998 to $1,600 in 1999. The majority of interest expense in 1998 was
attributable to certain notes ($63,000) issued to DSC and Hemisphere in the
Transaction, and mortgage interest expense ($16,500) 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), consisted of exchange rate fluctuation
expenses for ($47,700) during 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 $9,237 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 $65,200 for the three
month period ended September 30, 1999 compared to a net loss of $147,200 for the
comparable 1998 period. The majority of the difference in the loss during the
1998 comparable period is attributable to accrued interest and Transaction
expense, as discussed above. Domestic operations performed by AGII had an
operating loss during the current period of ($8,500) compared to a $48,000
operating profit in 1998. The decrease in AGII profit between the periods is
attributable to decreases in both residential and commercial revenues, and
increases in appraisal operating expenses. Foreign operations performed by AGI
RT had an operating loss of $15,200 during the 1998 period.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1998
REAL ESTATE CONSULTING SERVICES
Revenues decreased for the nine months ended September 30, 1999 totaling
approximately $545,000 as compared to approximately $634,800 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 $599,500 for
the same period in 1998. Revenues from foreign operations performed by Appraisal
Group International, Rt. ("AGI Rt.") during the 1998 period were $35,300.
Residential appraisal revenues decreased by 17% compared to the previous period,
due to residential mortgage interest rate increases during the current period.
Commercial appraisal revenue increased 8% 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 nine months ended September 30, 1999 were
approximately $521,500 compared to approximately $535,600 for the comparable
period in 1998. Of such expenses, domestic operations accounted for 100% in
1999. In 1998, domestic operations accounted for 87% and foreign operations
accounted for 13% or $66,900 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 $338,000 in the current period compared to $322,600 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 $94,000, compared to $123,500 for the comparable period in
1998, for personnel, engineering, and other related expenses.
CORPORATE
Corporate general and administrative expenses for the current period were
$77,000 compared to $93,300 in the 1998 period. The decrease in such expenses is
primarily attributable to the audit, legal and other corporate reporting
expenses, associated with the Transaction during the 1998 period.
INTEREST EXPENSE, during the current period, was significantly reduced from
$274,100 in 1998 to $10,500 in 1999. The majority of interest expense in 1998
was attributable to the Notes ($191,000) issued to DSC and Hemisphere in the
Transaction, and mortgage and other interest expense ($64,200) for properties
located in Mexico. OTHER INCOME (EXPENSE) consisted of miscellaneous and
exchange rate fluctuation expenses of $116,900 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 $38,300 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 $182,600 for the nine
month period in 1999 compared to a net loss of $455,400 for the comparable 1998
period. The majority of the difference in the loss during the 1998 comparable
period is attributable to accrued interest and Transaction expense, as discussed
above. Domestic operations performed by AGII had an operating profit during the
current period of $18,700 compared to $103,300 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 $31,900 during the 1998 period.
Liquidity and Capital Resources:
CASH FLOWS FROM OPERATIONS. The Company incurred for the period ending September
30, 1999 a net loss of ($182,600) with a negative cash flow from operating
activities of ($63,500) compared to a net loss of ($455,400) with a negative
cash flow from operating activities of ($22,500) 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 were ($9,700) for the current period
compared to ($6,700) 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 $30,400 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 September 30, 1999, the Company had accounts
receivable totaling $1,403,500. Of this amount, $1,325,100 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 $78,500. As of September 30, 1999, the Company's liabilities
totaled $1,469,500, of which $628,000 is due to shareholders, 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 September
30, 1999, totaling $560,600, certain Mexican financial institutions are due
approximately $534,400, and $26,200 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 $226,500 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: DECEMBER 28, 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 SEPTEMBER 30,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 10,216
<SECURITIES> 0
<RECEIVABLES> 1,403,541
<ALLOWANCES> 0
<INVENTORY> 5,527,113<F1>
<CURRENT-ASSETS> 6,940,870
<PP&E> 277,247
<DEPRECIATION> (192,757)
<TOTAL-ASSETS> 7,208,044
<CURRENT-LIABILITIES> 1,469,507
<BONDS> 0
0
0
<COMMON> 115,792
<OTHER-SE> 4,336,940
<TOTAL-LIABILITY-AND-EQUITY> 7,208,044
<SALES> 0
<TOTAL-REVENUES> 544,982
<CGS> 0
<TOTAL-COSTS> 615,474
<OTHER-EXPENSES> 101,616
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,538
<INCOME-PRETAX> (182,646)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (182,646)
<EPS-BASIC> (.01)
<EPS-DILUTED> 0
<FN>
<F1>Inventory consists of real estate held for development or sale.
</FN>
</TABLE>
