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, 1998
[ ] 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)
5535 STATE BRIDGE RD.
ALPHARETTA, GA 30022
(Address of principal executive offices, zip code)
(770) 814-2442
(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 [ ] No [X]
As of March 31, 1998 the Registrant had 5,738,883 shares of Common Stock
outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
ATLANTA TECHNOLOGY GROUP, INC.
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
ASSETS
(Unaudited)
As of
March 31, 1998
CURRENT ASSETS
Cash $ 39,087
Accounts receivable-trade 121,399
Inventory 90,099
Other current assets 9,564
_______
TOTAL CURRENT ASSETS 260,149
EQUIPMENT AND FIXTURES
Equipment and fixtures, net 80,901
OTHER ASSETS 730
________
TOTAL ASSETS $ 341,780
See notes to financial statements
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
As of
March 31, 1998
CURRENT LIABILITIES
Notes payable $ 98,030
Notes payable to shareholders and affiliates 123,087
Accounts payable - trade 254,813
Accrued liabilities 239,852
Other current liabilities 40.700
________
TOTAL CURRENT LIABILITIES 756,482
LONG TERM OBLIGATIONS 122,335
SHAREHOLDERS' EQUITY
Common stock 5,739
Additional paid-in capital 5,131,581
Retained earnings (deficit) (4,299,357)
Stock subscription receivable (1,375,000)
Total Shareholders' Equity (537,037)
_________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 341,780
See notes to financial statements.
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three-Months
Ended March 31,
1998 1997
(As restated)
Revenues $ 297,336 $ 413,127
Cost of Sales 113,460 183,249
_______ ________
Gross profit 183,876 229,878
Operating expenses 261,905 269,034
________ ________
Loss from operations (78,029) (39,156)
Gain on sale of securities - 26,306
_________ ________
Net loss $ (78,029) $ (12,850)
Basic weighted average common shares
outstanding 5,738,883 4,002,650
Basic loss per share $(.01) $.00
See notes to financial statements
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
1998 1997
____ ____
CASH FLOWS FROM OPERATING ACTIVITIES (As Restated)
Net Income $ (78,029) $ (12,850)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and Amortization 7,403 5,998
Changes in operating assets and liabilities:
Decrease in accounts receivable 42,750 (37,549)
Decrease in other current assets (8,650) (6,434)
Increase in current liabilities 17,544 (22,589)
______ _________
Net cash used by operating activities (18,982) (73,424)
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in marketable securities - 71,594
Decrease in equipment, fixtures and
computers - (1,089)
Increase in other noncurrent assets - (15,685)
_________ _________
Net cash provided by investing activities - 54,820
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments received on stock subscriptions - 260,000
Payments on notes payable (43,065) (387,295)
Proceeds from notes to affiliates 9,000 (108,000)
Issuance of stock upon conversion of
debt and for purchase of stock warrants 25,000 226,534
______ _________
Net cash used by financing activities (9,065) (8,761)
_______ _________
NET (DECREASE)INCREASE IN CASH (28,047) (27,365)
CASH AT BEGINNING OF PERIOD 67,134 163,583
_______ _________
CASH AT END OF PERIOD $ 39,087 $ 136,583
See notes to financial statements
ATLANTA TECHNOLOGY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
MARCH 31, 1998
(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 Three Months Ended March 31, 1998 is not necesssarily
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 Company 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
documentaiton, corespondence and record keeping for the medical community. The
medical cost containment system is known as DocumentPlus. Net City, Inc. is not
currently conducting operations.
Liquidity and Capital Resources
Working capital decreased from $(450,705) at December 31, 1997 to
$(496,333) at March 31, 1998. The decrease was the result of the Company
incurring losses on operations for the quarter ended March 31, 1998.
In March 1998, the Company repaid a note to a certain investor and
exchanged the balance of the note for 137,800 shares of common stock.
ATG plans to derive its income from the sale of Time Value Corporation's
existing products, including products released or to be relesed in 1998, 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 opeerations and research
and development activities. ATG anticipates that the proceeds from private
placements will be sufficient to finance its subsidiaries' activities until
revenues are sufficient to fund such activities.
Results of Operations - Three Months Ended March 31, 1998
Revenues for the first quarter ended March 31, 1998 were $297,336 a
decrease of $115,791 from revenues of $413,127 for the first quarter ended
March 31, 1997. The decrease for 1998 was the result of decreased hardware and
software sales. Recurring revenue from form sales increased 18% over the same
period of 1997.
Gross profits for the first quarter ended March 31, 1998 decreased to
$183,876 from $229,878, as restated, for the same period of 1997. The primary
reason for the decrease was the decrease in sales of hardware and software. TVC
lowered its cost of goods sold in the first quarter of 1998 to 38% from 44% (as
restated) in the first quarter of 1997. The reason for this was the increase in
recurring form sales which carry a lower cost of goods than hardware sales.
Operating expenses for the quarter ended March 31, 1998 were $261,905, a
decrease of $7,129 from the $269,034 (as restated) for the period ended March
31, 1997. Operating expenses for 1998 decreased due to reductions in interest,
rent and labor expenses.
Net loss for the quarter ended March 31, 1998 was $78,029. This represents
an increase of $65,179 from the net loss of $12,850 (as restated) for the
quarter ended March 31, 1997.
PART II OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company may be subject, from time to time, in 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 t believes could have a material adverse effect upon its
business, properties or financial condition.
Item 2. CHANGES IN SECURITIES
In February 1998, the Company issued 137,800 shares of its common stock to an
investor in exchange for forgiveness of a note payable.
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 ending
March 31, 1998.
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
Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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