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 SEPTEMBER 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
incorporation or organization) Identification Number)
5535 STATE BRIDGE ROAD
ALPHARETTA, GA 30024
(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 [X] No []
As of September 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
September 30, 1998
CURRENT ASSETS
Cash $ 35.420
Accounts receivable-trade 142,900
Inventory 75,257
Other current assets 11,639
________
TOTAL CURRENT ASSETS 265,216
EQUIPMENT AND FIXTURES
Equipment and fixtures, net 73,740
OTHER ASSETS
Other assets 728
_______
TOTAL ASSETS $ 339,684
See notes to financial statements
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
As of
September 30, 1998
CURRENT LIABILITIES
Notes payable $ 135,530
Notes payable to shareholders and affiliates 123,087
Accounts payable - trade 268,091
Other current liabilities 216,047
________
TOTAL CURRENT LIABILITIES 742,755
Notes payable - noncurrent 122,335
SHAREHOLDERS' EQUITY
Common stock 5,735
Additional paid-in capital 5,131,581
Retained earnings (deficit) (4,287,726)
Stock subscription receivable ( 1,375,000)
Total Shareholders' Equity (525,406)
____________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $339,684
See notes to financial statements.
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Nine-Months
Ended Sept. 30,
1998 1997
(As restated)
Revenues $ 974,522 $ 985,295
Cost of sales 351,016 446,149
------- --------
Gross profit 623,506 539,146
Operating expenses 689,905 563,810
------- -------
Income(loss) from operations (66,399) (24,664)
Provision for taxes - -
_________ _________
Net profit (loss) $ (66,399) $ (24,664)
Basic weighted average common
shares outstanding 5,727,778 4,477,680
Basic earnings(loss) per share $ (.01) $ (.01)
See notes to financial statements
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months
Ended Sept. 30
1998 1997
(As restated)
Revenues $ 303,394 $268,303
Cost of Sales 98,103 129,282
------- -------
Gross profit 205,291 142,021
Operating expenses 212,278 166,376
-------- -------
Profit(loss) from operations (6,897) (24,355)
Provision for taxes - -
--------- --------
Net profit(loss) $ (6,987) $(24,355)
Basic weighted average common shares
outstanding 5,727,778 4,830,213
Earnings(loss) per share $.(01) $ (.01)
See notes to financial statements.
ATLANTA TECHNOLOGY GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months
Ended Sept. 30,
1998 1997
(As restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (66,398) $ (24,664)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation and amortization 10,694 21,086
Changes in operating assets and liabilities:
Increase(decrease) in accounts receivable 21,249 (96,814)
Increase(decrease) in inventory 11,771 (2,802)
Decrease (increase)in other current assets (7,652) 88,890
(Decrease)increase in accounts payable 16,070 (60,929)
(Decrease)increase in other current liabilities (55,318) (177,690)
------- --------
Net cash used by operating activities (69,584) (252,833)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and fixtures 3,870 ( 1,542)
(Increase) in other noncurrent assets (1,000)
------- ----------
Net cash provided (used) by investing activities 3,870 (2,542)
CASH FLOWS FROM FINANCING ACTIVITIES:
Conversions of notes payable and the issuance
of common stock 25,000 226,455
Proceeds from stock subscriptions receivable - 435,000
(Decrease) in notes payable - (498,082)
(Decrease)Increase in borrowings from affiliates 9,000 (75,000)
Increase (decrease) in long-term borrowing - 36,000
------- -------
Net cash provided by financing activities 34,000 124,452
NET (DECREASE) INCREASE IN CASH (31,714) (130,923)
CASH AT BEGINNING OF PERIOD 67,134 163,583
CASH AT END OF PERIOD $ 35,420 $ 32,660
See notes to financial statements.
ATLANTA TECHNOLOGY GROUP, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND NINE MONTHS ENDED
SEPTEMBER 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 Statement
of Operations for the Nine Months Ended September 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 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.
Liquidity and Capital Resources
Working capital decreased from $(450,705) at December 31, 1997 to $(477,539)
at September 30,1998. This decrease was the result of the Company incurring
losses on operations during the first and third quarters.
Results of Operations- Three Months Ended September 30, 1998
Revenues for the third quarter ended September 30,1998 were $303,394, an
increase of $35,091 from revenues of $268,303, as restated, for the third
quarter ended September 30, 1997. The primary reason for this increase was
the increase in recurring revenue generated from the sale of scannable forms,
and an increase in revenue from technical support.
Costs of sales during the third quarter ended September 30, 1998 were lowered
from 48%, as restated, to 32% due to a higher percentage of product sales
(forms) which carry a lower cost of sales than the sales of systems.
Gross profits for the third quarter ended September 30, 1998 increased to
$205,291 from $142,021 for the same period of 1997.
The Company incurred increased operating expenses rising from $166,376, as
restated, during the third quarter ended September 30,1997 to $212,278 for
the third quarter ended September 30,1998. Increased operating expenses were
accounted for primarily by increases in advertising, telephone, salaries and
professional fees which were partially offset by decreases in trade show
and insurance expenses.
Results of Operations - Nine Months Ended September 30, 1998
Revenue for the nine month period ended September 30, 1998 was $974,522, a
decrease of $10,773 from revenues of $985,295 for the nine month period ended
September 30, 1997. The reason for the decrease was the decrease in system
sales during the first quarter. Operating expenses increased from $563,810,
as restated, during the nine months ended September 30,1997 to $689,905, an
increase of $126,095 for the nine months ended September 30,1998.
Costs of sales during the nine month period ended September 30, 1998 decreased
from 48% to 36% primarily because the sales which were generated during this
period reflect the increase in form sales which carry a lower cost of sales
than sales of systems.
Gross profits for the nine months ended September 30, 1998 increased to
$623,506 from $539,146 for the same period of 1997. The primary reason for this
increase was the lowering of the cost of goods on sales during the
third quarter.
The Company incurred increased operating expenses rising from $563,810, as
restated, during the third quarter ended September 30,1997 to $689,905 for
the nine months ended September 30,1998. Increased operating expenses were
accounted for primarily by increases in advertising, professional fees, salary
expenses, and telephone which were partially offset by decreases in insurance
and trade show expenses.
Net loss for the nine months ended September 30, 1998 was $(66,399) an increase
of $41,735 over the loss of $(24,664) as restated for the nine months ended
September 30, 1997. This increase was due to increases in labor and interest
expenses during the nine month period.
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
None
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 filed a Report on Form 8-K during the period ended
September 30, 1998 to report the change in auditing firms.
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.
By:/s/ James E. Cassidy
James E. Cassidy
Chief Financial Officer
Date: December 15, 1998
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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