UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, 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, 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 ROAD
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 June 30, 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
June 30, 1998
CURRENT ASSETS
Cash $ 27,518
Accounts receivable-trade 153,709
Inventory 80,135
Other current assets 11,714
_______
TOTAL CURRENT ASSETS 273,076
EQUIPMENT AND FIXTURES
Equipment and fixtures, net 78,151
OTHER ASSETS
Other assets 728
_____
TOTAL ASSETS $351,955
See notes to financial statements
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
As of
June 30, 1998
CURRENT LIABILITIES
Notes payable $ 135,530
Notes payable to shareholders and affiliates 123,087
Accounts payable - trade 271,063
Other current liabilities 218,360
_______
TOTAL CURRENT LIABILITIES 748,040
LONG TERM OBLIGATIONS (less current portion) 122,335
SHAREHOLDERS' EQUITY
Common stock 5,739
Additional paid-in capital 5,131,581
___________
Retained earnings (deficit) (4,280,740)
Stock subscription receivable (1,375,000)
Total Shareholders' Equity (518,420)
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 351,955
See notes to financial statements.
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Six-Month Period
Ended June 30,
1998 1997
(As restated)
Revenues $ 671,128 $ 716,992
Cost of sales 252,913 319,867
_______ _______
Gross profit 418,215 397,125
Operating Expenses 477,627 397,434
_______ ________
Income (loss) before income tax (59,412) (309)
Provision for income tax - -
__________ ___________
Net income (loss) (59,412) (309)
Basic weighted average common shares
outstanding 5,722,134 4,298,492
Earnings (loss) per share $(.01) $.00
See notes to financial statements
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Month Period
Ended June 30,
1998 1997
_____ ____
(As Restated)
Revenues $373,792 $ 303,865
Cost of Sales 139,453 136,618
_______ _________
Gross profit 234,339 167,247
Operating expenses 215,722 154,706
_______ ________
Income (loss) before income taxes 18,617 12,541
Provision for income taxes - -
_______ _________
Net income 18,617 12,541
Basic weighted average common shares
outstanding 5,738,883 4,591,083
Basic earnings per common share $.00 $.00
See notes to financial statements.
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six-Month Period
Ended June 30,
1998 1997
____ _____
(As Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income(loss) $ (59,412) $ (309)
Adjustments to reconcile net income(loss)
to net cash provided by operating activities:
Depreciation and amortization 5,128 12,817
Changes in operating assets and liabilities:
Decrease in marketable securities - 102,173
Decrease(omcreae)in accounts receivable 10,440 (56,936)
Increase in other current assets (834) (15,847)
Decrease in current liabilities (33,963) (185,834)
_________ __________
Net cash provided(used) by operating
activities: (78,641) (143,936)
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in equipment and fixtures 5,025 1,956
(Increase)decrease to other noncurrent
assets - (1,000)
_______ _________
Net cash provided by investing activities 5,025 956
CASH FLOWS FROM FINANCING ACTIVITIES:
Conversion of notes payable and issuance
of common stock for warrants 25,000 226,530
Borrowings(repayments)from affiliates 9,000 (60,000)
Decrease in notes payable - (472,045)
Proceeds from payment of stock
subscriptions - 360,000
________ _________
Net cash provided by financing
activities: 34,000 54,485
NET DECREASE IN CASH (39,616) (88,495)
CASH AT BEGINNING OF PERIOD 67,134 163,583
CASH AT END OF PERIOD 27,518 75,088
See notes to financial statements
ATLANTA TECHNOLOGY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED
JUNE 30, 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 Six Months Ended June 30, 1998 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 Delawaer in October 1993. The Company is the parent company of
two Georgia corporation, Time Value Corporation adn 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 compamy 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.
Liquidity and Capital Resources
Working capitl decreased from $(450,705) at December 31, 1997 to $(471,964)
during the six months ended June 30, 1998. This decrease was the result of the
Company incurring losses on operations during the first quarter 1998.
ATG plans to derive its income from the sale of its subsidiaries' existing
products, including products released or to be released in 1998, and from the
sale of scannable forms and technical support for the DocumentPlus system.
Until ATG's revenues are sufficient to finance its subsidiaries' operation, ATG
will need additional outside sources of capital to finance its subsidiaries'
operations and research and development activities. ATG anticipates that the
proceeds from private placements and the payment of the remaining stock
subscription receivable will be sufficient to finance its subsidiaries'
activities until revenues are sufficient to fund such activities.
Results of Operations - Three Months Ended June 30, 1998
Revenues for the second quarter ended June 30, 1998 were $373,792, an increase
of $69,927 from revenues of $303,865 for the second quarter ended June 30, 1997.
Operating expenses increased from $154,706 during the second quarter ended
June 30, 1997 to $215,722 for the second quarter ended June 30, 1998.
Gross profits for the second quarter ended June 30, 1998 increased to $234,339
from $209,197 for the same period of 1997. Cost of sales during the second
quarter ended June 30, 1998 increased by $2,835 primarily because of increased
sales of the hardware and software during the quarter.
Net earnings for the quarter ended June 30, 1998 were $18,617. This represents
an increase of $6,076 over earnings of $12,541 for the same period of 1997.
The increase was attributable to increased sales of the hardware, software and
forms.
Results of Operations - Six Months Ended June 30, 1998
Revenues for the six month period ended June 30, 1998 were $671,127, a decrease
of $45,865 over revenues of $716,992 for the six month period ended June 30,
1997. During this quarter, the Company incurred operating expenses of $477,627
an increase of $80,193 from $397,434 during the six months ended June 30, 1997.
Increased operating costs were accounted for primarily by increased travel
expenses for attendance at seminars.
Cost of sales during the six month period ended June 30, 1998 decreased by
$66,954 primarily because increased sales of the customized forms have allowed
the Company to purchase these forms in greater quantities which results in a
lower cost of sales.
Gross profits for the six months ended June 30, 1998 increased to $418,215 from
$397,125 for the same period of 1997. The primary reason for this increase was
increased sales in the second quarter of 198.
The Company incurred a net loss for the six months ended June 30, 1998 of
$(59,412). This compares to a loss of $309 for the six months ended June 30,
1997. This increase was due primarily to decreased sales of hardware and
software in the first quarter of 1998.
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, 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, thereunto duly
authorized.
ATLANTA TECHNOLOGY GROUP, INC.
/s/ James E. Cassidy
- -------------------
Chief Financial Officer
Datr: December 9, 1998
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