UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington 25, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR QUARTERLY PERIOD ENDED JUNE 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ______
Commission File No. 0-23062
ATLANTA TECHNOLOGY GROUP INC.
(Exact name of issuer as specified in its charter)
Delaware 58-2077053
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
400 EMBASSY ROW
SUITE 570
ATLANTA, GA 30328
(Address of principal executive offices, zip code)
(770) 671-0600
(Issuer's telephone number)
1117 PERIMETER CENTER WEST
SUITE N 316
ATLANTA, GA 30338
(Former address of principal executive offices, zip code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No []
As of June 30, 1996 the Registrant had 2,800,275 shares of Common Stock
outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [] No [X]
<PAGE>
<TABLE>
ATLANTA TECHNOLOGY GROUP, INC.
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
ASSETS
(Unaudited)
<CAPTION> AS OF
As of
June 30, 1996
<S> <C>
CURRENT ASSETS
Cash $ 25,710
Accounts receivable-trade 176,603
Inventory 28,345
Other current assets 11,378
_______
TOTAL CURRENT ASSETS 242,036
EQUIPMENT AND FIXTURES
Equipment and fixtures, net 119,370
OTHER ASSETS
Software development costs, net 583,479
Deferred offering costs 170,431
Other assets 2,901
_______
TOTAL ASSETS $1,118,217
<FN>
See notes to financial statements
</TABLE>
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<TABLE>
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
<CAPTION>
As of
June 30, 1996
<S> <C>
CURRENT LIABILITIES
Notes payable $ 715,600
Notes payable to shareholders and affiliates 210,792
Accounts payable - trade 317,547
Other current liabilities 172,420
_________
TOTAL CURRENT LIABILITIES 1,416,359
SHAREHOLDERS' EQUITY
Common stock 2,800
Additional paid-in capital 2,520,783
Retained earnings (deficit) (2,821,725)
___________
Total Shareholders' Equity (298,142)
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,118,217
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<CAPTION>
Six-Month Period
Ended June 30,
1996 1995
<S> <C> <C>
Revenues $711,844 $719,552
Cost of sales 319,801 228,912
________ ________
Gross profit 392,043 490,640
Operating expenses 554,823 687,580
________ _______
Loss before income taxes (162,780) (196,940)
Provision for taxes - -
________ _________
Net loss $(162,780) $(196,940)
Weighted average number of
common shares outstanding 2,949,537 2,797,775
Earnings (loss) per share $(.06) $(.07)
<FN>
See notes to financial statements
</TABLE>
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<TABLE>
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<CAPTION>
Three-Month Period
Ended June 30,
1996 1995
<S> <C> <C>
Revenues $301,368 $444,701
Cost of Sales 157,667 108,386
________ ________
Gross profit 143,701 336,315
Operating expenses 209,720 432,921
________ ________
Loss before income taxes (66,019) (96,606)
Provision for taxes - -
________ _________
Net loss $(66,019) $(96,606)
Weighted average number of
common shares outstanding 2,949,487 2,800,275
Earnings (loss) per share $(.02) $(.03)
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
Six-Month Period
Ended June 30,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(162,780) $(196,940)
Adjustments to reconcile net loss to
net cash provided (used) by
operating activities:
Depreciation and amortization 54,898 35,492
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable (10,122) 28,352
Decrease (increase)in other current assets (14,455) (2,075)
Increase in current liabilities 139,094 136,116
________ ________
Net cash provided by operating
activities 6,635 945
________ ________
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and fixtures (10,220) (21,432)
Additions to capitalized software
development costs (165,774) (103,586)
Decrease in other noncurrent assets 89,916 3,213
_________ _______
Net cash used by investing activities (86,078) (121,805)
_________ ________
CASH FLOWS FROM FINANCING ACTIVITIES:
Costs associated with proposed common
stock offering (63,406)
Proceeds from the issuance of common stock 15,000
Proceeds from the issuance of notes
payable, net 122,800
Borrowings from affiliates 42,572 110,000
Decrease in notes payable - noncurrent (50,000)
________ _______
Net cash provided by financing activities 51,966 125,000
______ _______
NET (DECREASE) INCREASE IN CASH (27,477) 4,140
CASH AT BEGINNING OF PERIOD 53,187 21,994
______ ______
CASH AT END OF PERIOD $25,710 $26,134
_______ _______
<FN>
See notes to financial statements.
</TABLE>
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ATLANTA TECHNOLOGY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
JUNE 30, 1996
(Unaudited)
1. Basis of Presentation:
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial statements. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (all of which are of a normal recurring nature) considered
necessary for a fair presentation have been included. The unaudited
Consolidated Statement of Operations for the Six Months Ended June 30, 1996
is not necessarily indicative of the results to be expected for a full year.
The unaudited financial statements should be read in conjunction with the
audited financial statement of the Company.
2. Organization and Intercorporate Relationships:
(A) The Company
Atlanta Technology Group, Inc. ("the Company") was incorporated under
the laws of the State of Delaware in October 1993. The Company is the parent
company of three Georgia corporations Time Value Corporation, Silver Ridge
Software Inc., and Net City Inc.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Atlanta Technology Group, Inc. ("ATG") is a holding company based in Atlanta,
Georgia with three subsidiaries in the information technology field. The
primary subsidiary is Time Value Corporation, a Georgia corporation ("TVC")
that was formed to develop, market and support a medical cost containment
system designed to reduce the clinical and administrative costs of
producing documentation, correspondence and record keeping for the medical
community. The medical cost containment system is known as Documentplus.
Silver Ridge Software Inc. ("SRS") operates as a software engineering firm
which develops custom solutions for companies that need software design or
assistance with network support and training, systems evaluation, technical
writing or project management. SRS has been relatively inactive while the
Company's focus has been to concentrate on the development and marketing of
TVC's products. Net City Inc. is not currently conducting operations.
Liquidity and Capital Resources
Working capital decreased during the six months ended June 30, 1996
principally as a result of the Company borrowing funds on a short term basis
to fund operating expenses.
On January 12, 1996, the Company filed a registration statement with the
Securities and Exchange Commission to sell 1,610,000 shares of common stock at
$3.00 per share pursuant to a public offering of common stock.
In February 1996, the Company borrowed $24,000 from an unrelated third party.
This note carries no interest and was due in May 1996. Also in February 1996,
the Company borrowed $50,000 from an unrelated third party, bearing interest
at twelve percent per annum.This note was due August 12,1996. The terms of
these notes have been extended until the completion of the public offering.
In March, 1996, promissory notes in the amount of $400,000 became due. The
Company agreed to an increase in the interest rate on the notes to 12% per
annum in exchange for an extension of the term. All the noteholders agreed to
extend the term of the promissory notes until the public offering is completed.
ATG plans to derive its income from the sale of its subsidiaries' existing
products, including products released or to be released in 1996, and from the
sale of scannable forms. Until ATG's revenues are sufficient to fund its
subsidiaries' operations, ATG will need additional outside sources of capital
to finance its subsidiaries' operations and research and development
activities.ATG anticipates that the proceeds from the Offering will be
sufficient to finance its subsidiaries' activities until revenues are
sufficient to fund such activities.
<PAGE>
Results of Operations- Three Months Ended June 30, 1996
Revenues for the second quarter ended June 30,1996 were $301,368, a 32%
decrease from revenues of $444,701 for the second quarter ended June 30, 1995.
The reason for this decrease was primarily the fact that the Company
concentrated its efforts on the development of TVC's new products which are
scheduled to be launched in the later part of 1996 and did not seek outside
contracts which would generate increased revenue. During this time, the
Company was also able to cut operating expenses from $432,921 during the second
quarter ended June 30,1995 to $209,720, a savings of $233,201, or 52%, for the
second quarter ended June 30,1996. Lowered operating costs were accounted for
primarily by savings in labor, rent and travel expenses which were partially
offset by increases in advertising, tradeshow and interest expenses.
Costs of sales during the second quarter ended June 30, 1996 increased
by $49,281 primarily because the sales which were generated during this period
reflect product sales which carry a higher cost of sales than the consulting
and software engineering contracts.
TVC made presentations on Documentplus to doctors at more than 33 meetings
during the second quarter of 1996 compared to 11 meetings during the
same period in 1995. Attendance at these meetings ranged from 12 doctors to
over 500 doctors. The sales cycle for the Documentplus system ranges from one
to nine months after initial contact. At the end of the second quarter
of 1995, TVC had installed 100 systems in clinics, primarily in the eastern
region of the US. At the end of the second quarter 1996, TVC had installed
over 323 systems in clinics nationwide.
Gross profits for the second quarter ended June 30, 1996 decreased to $143,701
from $336,315 for the same period of 1995. The primary reason for this decrease
was the decrease in billings for consulting services which carried a
comparatively low cost of sales.
Net loss for the quarter ended June 30, 1996 was $66,019 a decrease of $30,587
from the loss of $96,606 for the quarter ended June 30, 1995. This decrease
was due to the increased level of business achieved by TVC without any
corresponding increase in expenses for facilities and personnel.
<PAGE>
Results of Operations - Six Months Ended June 30, 1996
Revenues for the six month period ended June 30,1996 were $711,844, a 1%
decrease from revenues of $719,552 for the six month period ended June 30,
1995. The reason for this decrease was primarily the fact that the Company
concentrated its efforts on the development of TVC's new products which are
scheduled to be launched in the later part of 1996 and did not seek outside
contracts which would generate increased revenue. During this time, the
Company was also able to cut operating expenses from $687,580 during the six
months ended June 30,1995 to $554,823, a savings of $132,757 for the six months
ended June 30,1996. Lowered operating costs were accounted for primarily by
savings in labor, rent and travel expenses which were partially offset by
increases in advertising, show and demo and interest expenses.
Costs of sales during the six month period ended June 30, 1996 increased
by $90,889 primarily because the sales which were generated during this period
reflect product sales which carry a higher cost of sales than the consulting
and software engineering contracts.
Gross profits for the six months ended June 30, 1996 decreased to $392,043
from $490,640 for the same period of 1995. The primary reason for this decrease
was the decrease in billings for consulting services which carry a very low
cost of sales.
Net loss for the six months ended June 30, 1996 was $162,780 a decrease of
$34,160 from the loss of $196,940 for the six months ended June 30, 1995. This
decrease was due to the increased level of business achieved by TVC and the
lowering of expenses during the six month period.
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The company is not currently a party to any legal proceedings the
result of which it believes could have a material adverse effect
upon its business, properties or financial condition.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to shareholders for a vote.
Item 5. OTHER INFORMATION
Not applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Not applicable
(b) The Company did not file any Reports on Form 8-K during
the period ended June 30, 1996.
<PAGE>
ATLANTA TECHNOLOGY GROUP, INC.
Signatures
In accordance with the requirements of Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ATLANTA TECHNOLOGY GROUP INC.
/s/ James E. Cassidy
By: ______________________________
James E. Cassidy
Chief Financial Officer
