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 MARCH 31, 1997
[ ] 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
incorporation or organization) Identification No.)
400 EMBASSY ROW
SUITE 570
ATLANTA, GA 30328
(Address of principal executive offices, zip code)
(770) 671-0600
(Issuer's telephone number)
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 March 31, 1997 the Registrant had 4,591,083 shares of Common Stock
outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
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ATLANTA TECHNOLOGY GROUP, INC.
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
ASSETS
(Unaudited)
As of
March 31, 1997
<S> <C>
CURRENT ASSETS
Cash $ 136,218
Accounts receivable-trade 182,800
Inventory 45,209
Marketable securities 30,579
Other current assets 13,453
_______
TOTAL CURRENT ASSETS 408,259
EQUIPMENT AND FIXTURES
Equipment and fixtures, net 104,766
OTHER ASSETS
Software development costs, net 659,368
Other non current assets 17,220
________
TOTAL ASSETS $1,189,613
<FN>
See notes to financial statements
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ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
As of
March 31, 1997
<S> <C>
CURRENT LIABILITIES
Notes payable $ 237,425
Notes payable to shareholders
and affiliates 56,087
Accounts payable - trade 230,825
Accrued liabilities 237,281
Other current liabilities 28,388
________
TOTAL CURRENT LIABILITIES 790,006
SHAREHOLDERS' EQUITY
Common stock 4,591
Additional paid-in capital 3,875,100
Retained earnings (deficit) (3,080,084)
Stock subscription receivable (400,000)
Total Shareholders' Equity 399,607
_________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,189,613
<FN>
See notes to financial statements.
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ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three-Months
Ended March 31,
1997 1996
<C> <C>
Revenues $ 413,127 $410,476
Cost of sales 148,772 162,134
_______ _______
Gross profit 264,355 248,342
Operating expenses 160,649 345,104
_______ _______
Income (Loss) from operations 103,706 (96,762)
Net earnings (loss) $ 103,706 $(96,762)
Weighted average number of
common shares outstanding 4,002,650 2,949,581
Earnings (loss) per share $.03 $(.03)
<FN>
See notes to financial statements
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ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months
Ended March 31,
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 103,706 $ (96,762)
Adjustments to reconcile net loss
to net cash provided (used)
perating activities:
Depeciation and amortization 22,954 93,157
Change in operating assets and liabilities:
Increase in accounts receivable (37,548) (34,534)
Increase in other current assets (6,434) (319)
Increase in current liabilities (78,589) 110,434
_______ _______
Net cash provided by operating activities 4,089 71,976
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in marketable securities 71,594
Additions to equipment and fixtures (1,089)
Additions to capitalized software
development costs (51,433) (113,199) Increase (decrease) in other noncurrent
Increase (decrease) in other
noncurrent assets (15,686) 12
_______ ___
Net cash used by investing activities 3,386 (116,499)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments received on stock subscriptions 260,000 -
Costs associated with proposed
common stock offering - (32,826)
(Payments on) proceeds from
notes payable (389,295) 73,400
Payments on notes to affiliates (52,000) (17,068)
Issuance of stock upon conversion of
debt and for purchase of stock warrants 144,455 -
_______ ______
Net cash provided by financing activities (74,840) 23,506
NET (DECREASE) INCREASE IN CASH (27,365) (21,017)
CASH AT BEGINNING OF PERIOD 163,583 53,187
CASH AT END OF PERIOD $136,218 $32,170
<FN>
See notes to financial statements
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ATLANTA TECHNIOLOGY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
MARCH 31, 1997
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles.
Accordingly, they do not include all of the information and footnoets required
by generally accepted accounting principles for complete finanical 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 Three
Months Ended March 31, 1997 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 two Georgia corporations, Time Value Corporation and Net City Inc.
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 two 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. Net City Inc. is not currently
conducting operations.
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Liquidity and Capital Resources
Working capital increased from $(835,534) at December 31, 1996 to $(381,747) at
March 31, 1997. This increase was the result of the Company realizing profits
on operations for the quarter as well as receiving payments on stock
subscriptions receivable.
In the first quarter of 1997, the Company received an additional $260,000 as
payment for stock subscriptions from Euro Pacific Securities Services GmbH Co.
Kg.
In January 1997, the Company repaid $249,100 in principal to certain noteholders
and exchangeed the balance of their notes for 213,244 shares of common stock.
The Company also exchanged 158,329 warrants for 525,000 shares of common stock.
The noteholders forgave approximately $80,000 of interest accrued on these
notes.
During the first quarter of 1997, the Company sold 50,000 shares of common stock
of Halis, Inc. and realized a gain of approximately $23,000.
ATG plans to derive its income from the sale of Time Value Corporation's
existing products, including products released or to be released in 1997. from
the sale of scannable forms and technical support fees. 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 private
placements will be sufficient to finance its subsidiaries' activities until
revenues are sufficient to fund such activities.
Results of Operations
Revenues for the first quarter ended March 31, 1997 were $413,127, an increase
of $2,651 from revenues of $410,476 for the first quarter ended March 31, 1996.
Revenues for the first quarter 1997 reflect sales of Time Value Corporation's
products only while revenues for 1996 included $70,981 generated by Silver Ridge
Software Inc. Time Value Corporation's revenues for the first quarter 1997 were
$413,127, an increase of $70,981 over revenues of $342,146 for the first quarter
of 1996. The increase for 1997 was the result of increased sales of forms used
with the Company's Documentplus software system. At the end of the first
quarter 1996, TVC had installed 280 systems in clinics primarily in the eastern
region of the US. At the end of the first quarter 1997, TVC had installed over
490 systems in clinics in the US, Canada and Australia.
<PAGE>
Gross profits for the first quarter ended March 31, 1997 increased to $264,355
from $248,342 for the same period of 1996. The primary reason for the increase
was the elimination of the expenses incurred by Silver Ridge Software Inc. in
the first quarter of 1996. TVC also lowered its cost of goods sold in the first
quarter of 1997 to 36% from 39.5% in the first quarter of 1996. The reason for
this was the increase of recurring form sales which carry a lower cost of goods
than system sales.
Operating expenses for the quarter ended March 31, 997 were $160,649, a decrease
of $184,455 from the $345,104 for the period ended March 31, 996. Operating
expenses for 1997 decreased due to reductions in interest expense, rent, labor,
legal and accounting fees. Also included is again of $23,000 on the sale of a
security and forgiveness of accrued interest of approximately $80,000.
Net earnings for the quarter ended March 31, 1997 were $103,706. This
represents an increase of $200,468 over the loss of $97,762 for the quarter
ended March 31, 1996. The reasons for this include increasing profits from
recurring forms and support revenue, the elimination of expenses incurred by
Silver Ridge Software Inc., the elimination of interest owed on notes payable,
the forgiveness of all accrued interest on these notes and the gain on the sale
of the security.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company may be subject, from time to time, to various legal proceedings
relating to claims arising out of its operations in the ordinary course of
business. 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
Not applicable.
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 March 31, 1997.
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ATLANTA TECHNOLOGY GROUP, INC.
Signatures
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, duly
authorized.
ATLANTA TECHNOLOGY GROUP, INC.
/s/ James E. Cassidy
____________________
James E. Cassidy
President
Chief Financial Officer
Date: May 15, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1997
<PERIOD-END> Mar-31-1997
<CASH> 136,218
<SECURITIES> 30,579
<RECEIVABLES> 214,800
<ALLOWANCES> 32,000
<INVENTORY> 45,209
<CURRENT-ASSETS> 408,259
<PP&E> 239,787
<DEPRECIATION> 135,021
<TOTAL-ASSETS> 1,189,613
<CURRENT-LIABILITIES> 790,006
<BONDS> 0
0
0
<COMMON> 4,591
<OTHER-SE> 395,016
<TOTAL-LIABILITY-AND-EQUITY> 1,189,613
<SALES> 413,127
<TOTAL-REVENUES> 413,127
<CGS> 148,772
<TOTAL-COSTS> 148,772
<OTHER-EXPENSES> 160,649
<LOSS-PROVISION> 20,000
<INTEREST-EXPENSE> 4,169
<INCOME-PRETAX> 103,706
<INCOME-TAX> 0
<INCOME-CONTINUING> 103,706
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 103,706
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
