<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Quarterly Period Ended March 31, 1999
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Transition Period From _______________ to
________________.
Commission file number 0-27560
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ACT Teleconferencing, Inc.
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(Name of small business issuer as specified in its charter)
Colorado 84-1132665
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1658 Cole Blvd., Suite 130, Golden, Colorado 80401
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(Address of principle executive (Zip Code)
offices)
(303) 235-9000 (303) 233-0895
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(Issuer's telephone number, including (Issuer's facsimile number, including
area code) area 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 March 31, 1999, 4,437,646 shares of the issuer's common stock were
outstanding.
This report contains 19 pages.
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ACT TELECONFERENCING, INC.
FORM 10-QSB
Table of Contents
<TABLE>
<CAPTION>
Part I. Financial information Page No.
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<S> <C>
Item 1. Financial statements 3
Consolidated balance sheets 3
Consolidated statements of shareholders' equity 4
Consolidated statements of operations 5
Consolidated statements of cash flow 6
Notes to consolidated financial statements 7
Item 2. Management's discussion and analysis of financial condition
and results of operations 8
Part II. Other information
Item 2. Changes in securities. 14
Item 6. Exhibits and Form 8-K reports 14
Signatures 16
</TABLE>
Page 2
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Part I -- Financial Information
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Item 1. Financial Statements
ACT Teleconferencing, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
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(unaudited) (unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 1,568,509 $ 369,408
Accounts receivable (net of allowances for doubtful accounts
of $44,698 and $32,644 in 1999 and 1998 respectively) 6,055,208 4,295,216
Prepaid expenses 741,419 571,597
Inventory 227,939 269,795
Available for sale marketable securities - -
------------------------------------------
Total current assets 8,593,075 5,506,016
Equipment:
Telecommunications equipment 6,458,834 5,840,969
Office equipment 4,645,981 4,205,347
Less: accumulated depreciation (2,281,032) (1,969,428)
------------------------------------------
Total equipment - net 8,823,783 8,076,888
Other Assets:
Goodwill (net of accumulated amortization of $162,757 and
$136,340 in 1999 and 1998, respectively) 1,505,216 1,537,321
Deferred loan fees 225,601 205,975
------------------------------------------
Total assets $ 19,147,675 $ 15,326,200
Liabilities and shareholders' equity
Current liabilities:
Notes payable $ 1,195,801 $ 686,691
Accounts payable 3,349,187 2,935,331
Accrued liabilities 2,166,118 1,814,877
Current portion of long term debt 570,131 1,111,126
Income taxes payable 321,521 215,895
------------------------------------------
Total current liabilities 7,602,758 6,763,920
Long-term debt (net of deferred interest cost of $389,219 and
$413,546 in 1999 and 1998, respectively) 4,824,644 4,949,051
Deferred income taxes (United Kingdom) 293,461 302,145
Minority interest 837,110 806,519
Shareholders' equity:
Preferred stock, no par value, 1,000,000 shares authorized;
none issued
Common stock, no par value; 10,000,000 shares authorized
4,437,646 and 3,755,633 shares issued and outstanding
in 1999 and 1998, respectively 10,809,613 7,463,931
Accumulated deficit (4,972,665) (4,846,194)
Accumulated other comprehensive loss (247,246) (113,172)
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Total Shareholders' equity 5,589,702 2,504,565
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Total liabilities and shareholders' equity $ 19,147,675 $ 15,326,200
==========================================
</TABLE>
See notes to consolidated financial statements
Page 3
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ACT Teleconferencing, Inc.
Consolidated Statements of Shareholders' Equity
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
other
Common Stock Accumulated comprehensive
Shares Amount Deficit income (loss) Total
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<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 3,612,758 $ 6,158,584 $ (2,729,069) $ (51,582) $ 3,377,933
Shares issued in connection with
exercise of 1994 private placement
warrants and 1996 IPO warrants 26,893 136,000 136,000
Exercise of employee stock 2,000 6,000 6,000
options
Issue of 330,967 Warrants 486,521 486,521
in lieu of interest
Shares issued in connection with
the acquisition of Advanced
Multi-Point Conferencing (AMC) Inc. 113,982 676,826 676,826
Comprehensive loss
Net loss (2,117,125) (2,117,125)
Other comprehensive loss, net of tax
Foreign currency translation
adjustment, net of tax of $20,941 (61,590) (61,590)
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Total comprehensive loss (2,178,715)
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Balance at December 31, 1998 3,755,633 $ 7,463,931 $ (4,846,194) $ (113,172) $ 2,504,565
Shares issued in connection with
1996 warrants 549,154 2,647,028 2,647,028
Shares issued in connection with
1999 private placement warrants 109,912 587,066 587,066
Shares issued in connection with
the employee stock purchase plan (ESP) 4,447 19,845 19,845
Shares issued in connection with
a Canadian service agreement 18,500 91,744 91,744
Comprehensive loss
Net loss (126,471) (126,471)
Other comprehensive loss, net of tax
Foreign currency translation (134,074) (134,074)
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Total comprehensive loss (260,545)
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Balance at March 31, 1999 4,437,646 $10,809,614 $ (4,972,665) $ (247,246) $ 5,589,703
=============================================================================
</TABLE>
See notes to consolidated financial statements
Page 4
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ACT Teleconferencing, Inc.
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
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<S> <C> <C>
Net revenues $ 6,842,467 $ 4,093,236
Operating Expenses:
Cost of Services (3,527,838) (1,800,402)
Sales, general and administration expense (1,883,165) (1,380,339)
Depreciation and amortization (334,219) (154,539)
Development cost (870,838) (604,513)
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Operating Income 226,407 153,443
Interest, net (172,800) (36,890)
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Income before income taxes and minority interest 53,607 116,553
Provision for income taxes (117,942) (168,007)
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Loss before minority interest (64,335) (51,454)
Minority interest in earnings of consolidated subsidiary (62,136) (108,704)
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Net loss for the quarter $ (126,471) $ (160,158)
============ ============
Net loss per share $ (0.03) $ (0.04)
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Weighted average number of shares outstanding 4,027,655 3,615,194
============ ============
</TABLE>
See notes to consolidated financial statements
Page 5
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ACT Teleconferencing, Inc
Consolidated Statements of Cash Flow
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
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<S> <C> <C>
Operating activities
Net loss $ (126,471) $ (160,158)
Adjustments to reconcile net income to net cash from
operating activities:
Depreciation 311,604 172,689
Amortization of goodwill 32,105 6,657
Deferred income tax - 1,487
Minority interest 30,591 117,663
----------------------------
Cash flow before changes in operating assets and liabilities: 247,829 138,338
Changes in operating assets and liabilities (Net of effect of
business combination):
Accounts receivable (1,749,991) (452,517)
Inventory 41,857 (238,261)
Prepaid expenses and other assets (169,822) (235,113)
Accounts payable 510,797 463,727
Accrued liabilities 351,242 107,347
----------------------------
Net cash used for operating activities (768,088) (216,479)
Investing activities
Property and equipment purchases (1,058,500) (409,916)
Short term notes redeemed (9,999) (58,850)
Disposal of marketable securities - 50,000
----------------------------
Net cash used for investing activities (1,068,499) (418,766)
Financing activities
Net proceeds (repayment) of debt (156,293) 2,700,290
Net proceeds from issuance of common stock 3,345,682 15,975
Deferred loan issuance costs (19,626) (66,620)
----------------------------
Net cash provided by financing activities 3,169,763 2,649,645
Effect of exchange rate changes on cash (134,074) (26,160)
----------------------------
Net (decrease) increase in cash and cash equivalents 1,199,102 1,988,240
Cash and cash equivalents, beginning of year 369,408 451,434
----------------------------
Cash and cash equivalents, end of year $ 1,568,510 $ 2,439,674
============================
</TABLE>
See notes to consolidated financial statements.
Page 6
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ACT Teleconferencing, Inc.
Notes to consolidated financial statements
(Unaudited)
Basis of presentation
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. 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 (consisting
of normal recurring accruals) considered necessary of a fair presentation have
been included. Operating results for the three-month period ending March 31,
1999 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1999. For further information, refer to the financial
statements and footnotes thereto included in our annual report on Form 10-KSB
for the year ended December 31, 1998.
Business
ACT Teleconferencing, Inc is engaged in the business of providing high-
quality audio, data, and video conferencing products and services to business
clients. We operate in the United States, Canada, the United Kingdom, the
Netherlands, Belgium, France and Australia.
Net earnings (loss) per share
Net earnings (loss) per share is computed based upon the weighted average
number of shares of common stock outstanding during the period. Options and
warrants are not included in the computations since their effect is presently
either anti-dilutive or not material. In February 1997, the Financial
Accounting Standards Board issued Statement No. 128, Earnings per Share, which
was adopted on December 31, 1997. Under the new requirements for calculating
primary earnings per share, the dilutive effect of stock options has been
excluded.
Comprehensive income (loss)
The difference between net loss and comprehensive loss solely relates to
foreign currency translation.
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Item 2. Management's discussion and analysis of financial condition and results
of operations
Introduction
Except for historical information, the following description of our
business contains forward-looking statements, which involve risks and
uncertainties. Our actual results could differ materially from those set forth
in these forward-looking statements as a result of a number of factors,
including the "Risk Factors" set forth in our registration statement, Amendment
No. 2 to Form S-3, incorporated by reference to this Form 10-QSB, filed with the
SEC on May 5, 1999, and any following amendments. Copies of the Form S-3 may
be obtained at www.sec.gov or upon request from us.
Overview
We completed an encouraging quarter in terms of revenue growth and profit
improvement. First quarter 1999 revenues of $6.8 million grew by 67% over the
first quarter of 1998, reflecting continued growth in the market for audio
teleconferencing services, additional market share gains made and revenues from
new international operations.
First quarter net loss after taxes and minority interest amounted to
$126,471, an improvement of $33,687 over the first quarter of 1998. We
anticipate continued significant forward growth in teleconferencing revenues in
our established operations in North America, the United Kingdom, and the
Netherlands, as well as new operations in France, Australia, and Hong Kong and
new product introductions in video, data, and internet conferencing. Development
expenses incurred in connection with the entry into the French, Dutch, Canadian,
and Australian markets as well as our new Internet and videoconferencing
products and technologies amounted to approximately $870,000 for the first
quarter 1999, a 44% increase from $604,000 for the comparable prior period.
In summary, in addition to very satisfactory revenue growth of 67%, our
first quarter performance included:
. A 47% growth in net operating income before interest, taxes, and minority
interest;
. A slow down in the growth of sales, general, and administrative expenses,
which grew by 36%;
. Satisfactory implementation of the agreement with Concert Global Networks
Limited;
. Completion of the groundwork for the opening of two additional offices, one
in Hong Kong and one in Dallas, Texas;
. Very satisfactory performance in Canada and Australia with strong volume
business in both locations;
. A tripling of net income in U.S. audio conferencing operations, following a
98% revenue growth rate;
. A disappointing performance in our video conferencing systems equipment
business requiring approximately $300,000 and contributing to our 1999
first quarter net loss, although this business accounted for less than 10%
of our total revenues; and
. Slow revenue growth in the U.K. and France resulting in an overall loss in
European operations.
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We have previously announced that we will be taking steps to limit our
exposure to the video conferencing equipment and systems business, our hardware
business, and will be concentrating on that which we do best, our services
business, which consists of the provision of audio, video, and data conferencing
bridging services.
We have built up a strong and solid reputation for good service quality
with a number of preeminent global clients and intend to continue to focus on
this positive area of growth.
In 1998 we announced a three-year outsource supply agreement with Concert
Global Networks Limited Concert, the British Telecom global services company,
for Concert Audioconferencing Service. This service commenced in the fourth
quarter of 1998, and is being provided by ACT centers in New York, Denver,
London, Paris, Amsterdam, and Sydney.
Concert, which is based in Reston, Virginia, provides an array of managed
voice, data, and Internet services to over 4,000 multinational companies in over
50 countries. Concert Audioconferencing Service, the world's first global
virtual private network-based conference service, offers a flexible, cost-
effective audioconferencing service to multinational companies via approximately
30 distributors worldwide including British Telecom and MCI.
Global presence and commitment to service excellence, innovation, and
quality were key factors in Concert's decision to award the contract to us. As
a result of the Concert contract, we plan to continue to expand our geographic
penetration over the next twelve months.
Components of revenue and expense
We derive revenues principally from fees charged to clients for audio and
video conference bridging services which connect multiple parties to a
conference call, from fees for enhanced services, and from the sale of
videoconferencing equipment units.
The costs of teleconferencing services consist of local and long-distance
telephone services, depreciation on equipment, salaries, benefits, and office
expenses of conference operators.
Selling, general, and administrative costs consist of salaries, benefits,
and office expenses of our administrative, market development, and sales
organizations. Development expenses consist of selling, general, and
administrative costs; depreciation; and interest incurred during the start-up
phase of new operations.
RESULTS OF OPERATIONS
Quarter ending March 31, 1999, compared to quarter ending March 31, 1998
Net revenues. Net revenues increased by 67% to $6.8 million for the quarter
ending March 31, 1999, compared to $4.1 million for the same period in 1998,
primarily due to the onset of the Concert outsourcing business, increased sales
of audio teleconferencing in new markets and the continued growth of existing
operations. Revenue growth resulted from repeat sales to established customers,
increased sales of enhanced services, sales to new customers, outsourcing
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business, the impact of acquisitions, and new operations increasing sales volume
by further market penetration. Established operations accounted for 85% of the
total revenue and increased revenue by 58% over the quarter ending March 31,
1998. New operations accounted for 15% of the total revenue and increased 119%
to $1.1 million over the quarter ending March 31, 1998.
Cost of sales. Cost of sales increased by 96% to $3,527,838 for the first
quarter of 1999, compared to $1,800,402 for the quarter ending March 31, 1998.
The gross profit percentage dropped from 56% in 1998 to 48% in 1999 reflecting
cost associated with the relocation of two major offices, low margins from video
systems equipment sales, and low volume recovery over fixed and semi fixed costs
in new operations.
Selling, general, and administrative costs. Selling, general, and
administrative expenses for the first quarter of 1999 were $1,883,165, or 28% of
revenue, compared to $1,380,339 or 34% of revenue for the first quarter of 1998.
The 36% increase in such expenses reflects an aggressive marketing focus towards
the developing business units in France, Australia, and Canada, as well as a
moderate marketing focus towards audio and video conferencing sales for
established operations.
Depreciation and amortization. Depreciation and amortization expense more
than doubled in the first quarter of 1999 to $334,219 compared to $154,539 for
the quarter ending March 31, 1998. This variance occurred due to 123% increase
in property and equipment purchased to accommodate last year's revenue growth of
86%.
Development costs. These costs for the first quarter of 1999 were $870,838
or 12.7% of revenue compared to $604,513 or 14.7% of revenue for the first
quarter of 1998 and grew by 44% over the first quarter of 1998. The 2% reduction
in development cost to revenue was due to our commitment to slow down our
expansion efforts to allow for the achievement of ongoing overall profitability
at operating income level. The 44% increase in costs compared to quarter ending
March 31, 1998 was due to the expansion of operations into Hong Kong and the
opening of two satellite offices in Adelaide, Australia, and Dallas, Texas in
the first quarter of 1999.
Net interest. Net interest for the first quarter was $172,800 compared to
$36,890 for the first quarter ending March 31, 1998. This three-fold increase
was due to a 60% increase in interest bearing debt taken on through the course
of 1998. This debt is carried at various interest rates, at an average weighted
cost of 14%, and was incurred to finance new operations as well as to
accommodate our continued growth. We plan to further strengthen our equity base
during 1999, thus reducing interest costs in year 2000 and forward.
Income before taxes and minority interest. Income before taxes and
minority interest amounted to $53,607 for the first quarter of 1999, compared to
$116,553 for the first quarter of 1998. The decline in income of $62,946 was
due to an increase in interest bearing debt and depreciation, low volume
recovery in new operations, and relocation expenses as described above.
Taxes on income and minority interest. Taxes on income and minority
interest amounted to $180,078 for the first quarter of 1999, compared to
$276,711 for the first quarter of 1998. This decrease was due to lower earnings
from our 60% majority-owned United Kingdom
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operation. Reduced earnings resulted in lower United Kingdom taxes and a lower
charge to minority interest. A further reduction occurred due to an increase in
the loss before income taxes and minority interest from our 80% majority-owned
videoconferencing reseller operation located in the United Kingdom. In addition,
the United Kingdom, where we hold two majority-owned subsidiaries, has reduced
the income tax rate from 33% to 31% as of April 1, 1998.
Net loss. Net loss amounted to $126,471 for the first quarter of 1999,
compared to the net loss of $160,158 for the first quarter of 1998, a favorable
reduction in loss of $33,687. The decrease in loss was due mostly to
stabilizing selling, general, and administrative expenses; a reduction in taxes
and minority interest; and proportionately decreasing development cost to
revenue. The major contributing factor to our net loss was the $300,000 loss in
videoconferencing equipment sales.
Liquidity and capital resources (for the three months ending March 31, 1999)
During the first quarter of 1999, net cash increased by $1,199,102 from
December 31, 1998. At March 31, 1999, we had cash and cash equivalents of
$1,568,510 compared to cash and cash equivalents on hand on December 31, 1998 of
$369,408.
Cash generated though operating activities before funding net operating
assets amounted to $247,829 for the first quarter of 1999, compared to cash
generated of $138,338 for the first quarter of 1998. Cash after financing
operating assets and liabilities amounted to a net outflow of $768,088
reflecting mainly the significant growth in accounts receivable and prepaid
expenditures.
During the first quarter of 1999, we invested $1.1 million in additional
equipment to provide global capacity primarily for the Concert outsourcing
business, further expansion into Australia to service a major volume outsourcing
arrangement, the opening of a new office in Hong Kong, and for increasing
capacity in Canada. The gross cash outflow of $1.8 million, after capital
investment and before financing arrangements, was funded through proceeds from
the conversion of 549,154 warrants at $5.00 for $2,647,028, net of expenses; the
issuance of private placement units, shares and warrants, for $587,066; and
$156,293 net debt financing. Total net cash provided by financing activities
amounted to $3.2 million. Our overall financing resulted in a net cash inflow
of $1.3 million before the effect of the exchange rate changes.
We believe that, given the present rate of sales and profit growth in our
core audio conferencing business as well as indicated volumes from certain
contractual relationships, we will have access to sufficient cash resources to
meet our needs for the next twelve months. We have further plans for moderate
growth into new geographic locations, to expand capacity, and to develop our
videoconferencing and Internet conferencing businesses. These expansion plans
will be financed using a mix of lease financing for capital equipment and asset
based financing and bank lines of credit for working capital. We are also
prepared to make other equity financing capital arrangements to ensure we can
continue to build our audio, video, and data teleconferencing platform beyond
1999.
Year 2000 compliance
As the year 2000 approaches, many date sensitive computer applications may
fail because they are unable to process dates properly beyond December 31, 1999.
Businesses will be
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required to devote significant resources to convert their information systems to
meet year 2000 requirements. We are significantly dependent upon external or
third parties, including electrical utilities, telecommunications, banking and
financial services, airlines, and governmental agencies and institutions, to
provide services to us and to purchase services from us. Their failure to
provide services to us due to year 2000 problems could have a material adverse
effect on our business, results of operations, and financial condition.
Additionally, as these entities devote financial resources to comply with year
2000 requirements, the purchasing patterns of our customers may be affected as
they may have reduced funds available to purchase our services, which could
result in a material adverse effect on our business, results of operations, and
financial condition.
We are continually evaluating all our systems to identify year 2000
problems. Except as noted below, at this time, we are not aware of any issues
that require remediation. Our review of potential business interruptions has not
identified any likely interruptions. Such interruptions, if they occur, will
depend, in part, on the handling of year 2000 issues by our vendors and
customers.
State of readiness. Our principal information technology systems have been
-------------------
developed intensively only over the last four years with desktop based year 2000
compatible software. From our incorporation in December 1989 to mid 1994, we
satisfied our major systems requirements using manual or semi-automated computer
and accounting systems. We are principally dependent on one of the leading audio
conferencing bridge manufacturers, Compunetix, Inc., for our teleconferencing
bridges. This manufacturer utilizes a non-information technology system. We have
requested Compunetix to verify and certify that all its embedded systems within
our bridges are year 2000 compliant. Compunetix has agreed to install year 2000
compliant software by no later than June 30, 1999. To the best of our knowledge,
we are not presently substantially dependent upon any other significant internal
non-information technology and/or embedded system which is not year 2000
compliant.
Costs to address year 2000 issues. We believe that our internal systems
----------------------------------
are substantially year 2000 compliant; and we have not incurred any material
costs for remediation for the year 2000. However, to address the impact of
acquisitions, new facilities, and other contingencies, we estimate that the
future costs to monitor, control, and remediate our systems to be year 2000
compliant are not likely to exceed either $500,000 in 1999 or an additional
$500,000 beyond year 2000. We will continue to review and reevaluate the
potential costs of remediation and business interruptions.
Risks of year 2000 issues. Our dependence upon external or third parties
--------------------------
is significant. The major areas where a year 2000 failure could have an effect
on our business would be a failure in one or more of the following major
industries or institutions on which we are dependent either as a supplier to us
or as a customer:
. electrical utilities
. telecommunications
. banking and financial services
. airlines
. government agencies and institutions
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Their failure to provide services to us due to year 2000 problems could
have a material adverse effect on our business, results of operations, and
financial condition. As these entities devote financial resources to comply with
year 2000 requirements, changes in their customary purchasing patterns could
result in a material adverse effect on our business, results of operations, and
financial condition. The consequences of our dependence on external or third
parties and changes in our customers' purchasing patterns is uncertain. We are
formulating a formal contingency plan further described below to analyze and
handle the uncertainty regarding any year 2000 issues.
Contingency plans. Our formal contingency plan for the year 2000 will
------------------
continue to monitor all major risks for us on a proactive basis. We believe that
we operate in a changing, high growth, volatile, and high risk environment, and
our management will continually assess and address all risks, not only year 2000
risks. Our market sector is a small niche component of the $700 billion annual
worldwide telecommunications industry. All of our major service providers and
most of our major customers are multinational entities that are substantially
larger than us. We are largely dependent on our major service providers and
customers. We intend to monitor our exposure and also take appropriate measures
to ensure that we are not unduly dependent upon one particular customer or
industry supplier. In anticipation of year 2000, the following contingency
plans are either being considered or implemented:
. Restrictions will be imposed on travel for personnel on airline
flights between December 15, 1999 and January 31, 2000.
. Our cash in banks will be in reasonable sums in at least two major
banks and in different corresponding banks overseas.
. Uninterrupted power supply will be installed to give additional
support to the operation of our bridges in all our locations.
. A minimum of two telecommunications network providers will be
connected at all major locations.
. Operations centers will be stocked with food, water, and bedding, as
they are currently for snowstorms, hurricanes, severe thunderstorms,
and other natural disasters.
. Vacations will be adjusted to make optimal use of downtime during this
period.
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Part II - Other information
-----------------
Item 2. Changes in securities.
On February 15, 1999, we received $604,516 for the sale of 109,912 units at
$5.50 per unit. A unit consisted of one share of common stock and one warrant.
The warrants are exercisable at $7.00 and expire December 31, 2003. The shares
and the shares underlying the warrants entitle the holder to piggyback
registration rights from June 30, 1999 through December 31, 2003. We sold the
units in a private placement only to current employees, directors, relatives of
directors, and business associates, or friends of directors or officers under
Rule 506 of the Securities Act of 1933. Our January 4, 1999 and January 15, 1999
Form 8-Ks further describe the private offering. Copies of the Form 8-Ks are
available at www.sec.gov or upon request from us.
Item 6(a). Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description
- --- -----------
<S> <C>
3.1/(2)/ Restated Articles of Incorporation of ACT dated April 15, 1996
3.2/(2)/ Bylaws of ACT, amended as of April 15, 1996
4.1/(1)/ Form of specimen certificate for common stock of ACT
10.1/(1)/ Stock Option Plan of 1991, as amended, authorizing 400,000 shares of common
stock for issuance under the Plan
10.2/(1)/ Form of Stock Option Agreement
10.3/(1)/ Form of common stock purchase warrant
10.10/(1)/ Split Dollar Insurance Agreement dated March 1, 1990, between ACT and Gerald
D. Van Eeckhout
10.11/(1)/ Service agreement dated April 10, 1992 between David Holden and ACT
Teleconferencing Limited
10.19/(4)/ Stock Option Plan of 1996, as amended
10.20/(5)/ Employee Stock Purchase Plan
10.22/(6)/ Loan and Security Agreement dated March 31, 1998 and Form of stock purchase
warrant with Sirrom Capital Corporation and Equitas L.P.
10.23/(6)/ Loan Agreement with Key Bank, N.A.
10.24/(7)/ Lease Commitment and Warrant with R.C.C. Finance Group Ltd.
10.25/(7)/ Contract for the Supply of Conferencing Services Design Development and
Information signed July 14, 1998 between ACT Teleconferencing Services, Inc.
and Concert Global Networks Limited
10.26/(7)/ Agreement for the Supply of Conferencing Services signed July 14, 1998
between ACT Teleconferencing Services, Inc. and Concert Global Networks Limited
10.27/(7)/ Agreement for Videoconferencing Equipment and Services (GTE Telephone
Operating Companies) dated October 1, 1998
27 Financial Data Schedule
</TABLE>
/(1)/ Incorporated by reference, attached as an exhibit of the same number to
our registration statement on Form SB-2 filed with the SEC on October 10,
1995, and amendments to our Form SB-2, File No. 33-97908-D.
Page 14
<PAGE>
/(2)/ Incorporated by reference, attached as an exhibit of the same number to
our Form 10-QSB for the quarter ending March 31, 1996 filed with the SEC
on May 15, 1996, File No. 0-27560.
/(3)/ Incorporated by reference, attached as an exhibit of the same number to
our Form S-8, filed with the SEC on July 2, 1998, File 0-27560.
/(4)/ Incorporated by reference, attached as an exhibit to our Schedule 14A
Information filed with the SEC on April 30, 1997, File No. 0-27560, and
amended and attached as exhibit 4.6 to our Form S-8 filed on July 2, 1998,
File 333-58403.
/(5)/ Incorporated by reference, attached as an exhibit to our Schedule 14A
Information filed with the SEC on April 15, 1998, File No. 0-27560.
/(6)/ Incorporated by reference, attached as an exhibit of the same number to
our Amendment No. 1 to Form 10-QSB for the quarter ending June 30, 1998
filed with the SEC on August 24, 1998 (originally filed under cover of
Form SE on August 14, 1998), File 0-27560.
/(7)/ Incorporated by reference, attached as an exhibit of the same number to
our Form 10-QSB for the quarter ending September 30, 1998, filed with the
SEC on November 16, 1998, File 0-27560.
Item 6(b). Reports on Form 8-K.
On January 4, 1999, we filed a Form 8-K to report the private offering
of a maximum of 250,000 units.
On January 15, 1999, we filed a Form 8-K to provide proforma estimated
consolidated financial statements for the private offering of the maximum of
250,000 units.
Copies of the Form 8-Ks are available at www.sec.gov or upon request
from us.
Page 15
<PAGE>
Signature
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.
ACT TELECONFERENCING, INC.
Date: May 14, 1999 By: /s/ Gavin J. Thomson
-----------------------------------
Gavin J. Thomson,
Chief Financial Officer
(Duly authorized officer and
Principal Financial Officer)
Page 16
<PAGE>
Index of Exhibits
- -----------------
All exhibits are filed electronically, unless incorporated by reference.
<TABLE>
<CAPTION>
Exhibit
- -------
No. Description
- --- -----------
<S> <C>
3.1/(2)/ Restated Articles of Incorporation of ACT dated April 15, 1996
3.2/(2)/ Bylaws of ACT, amended as of April 15, 1996
4.1/(1)/ Form of specimen certificate for common stock of ACT
10.1/(1)/ Stock Option Plan of 1991, as amended, authorizing 400,000 shares of
common stock for issuance under the Plan
10.2/(1)/ Form of Stock Option Agreement
10.3/(1)/ Form of common stock purchase warrant
10.10/(1)/ Split Dollar Insurance Agreement dated March 1, 1990, between ACT
and Gerald D. Van Eeckhout
10.11/(1)/ Service agreement dated April 10, 1992 between David Holden and ACT
Teleconferencing Limited
10.19/(4)/ Stock Option Plan of 1996, as amended
10.20/(5)/ Employee Stock Purchase Plan
10.22/(6)/ Loan and Security Agreement dated March 31, 1998 and Form of stock
purchase warrant with Sirrom Capital Corporation and Equitas L.P.
10.23/(6)/ Loan Agreement with Key Bank, N.A.
10.24/(7)/ Lease Commitment and Warrant with R.C.C. Finance Group Ltd.
10.25/(7)/ Contract for the Supply of Conferencing Services Design Development
and Information signed July 14, 1998 between ACT Teleconferencing
Services, Inc. and Concert Global Networks Limited
10.26/(7)/ Agreement for the Supply of Conferencing Services signed July 14,
1998 between ACT Teleconferencing Services, Inc. and Concert Global
Networks Limited
10.27/(7)/ Agreement for Videoconferencing Equipment and Services (GTE
Telephone Operating Companies) dated October 1, 1998
27.1 Financial Data Schedule
</TABLE>
/(1)/ Incorporated by reference, attached as an exhibit of the same number to
our registration statement on Form SB-2 filed with the SEC on October 10,
1995, and amendments to our Form SB-2, File No. 33-97908-D.
/(2)/ Incorporated by reference, attached as an exhibit of the same number to
our Form 10-QSB for the quarter ending March 31, 1996 filed with the SEC
on May 15, 1996, File No. 0-27560.
/(3)/ Incorporated by reference, attached as an exhibit of the same number to
our Form S-8, filed with the SEC on July 2, 1998, File 0-27560.
/(4)/ Incorporated by reference, attached as an exhibit to our Schedule 14A
Information filed with the SEC on April 30, 1997, File No. 0-27560, and
amended and attached as exhibit 4.6 to our Form S-8 filed on July 2,
1998, File 333-58403.
Page 17
<PAGE>
/(5)/ Incorporated by reference, attached as an exhibit to our Schedule 14A
Information filed with the SEC on April 15, 1998, File No. 0-27560.
/(6)/ Incorporated by reference, attached as an exhibit of the same number to
our Amendment No. 1 to Form 10-QSB for the quarter ending June 30, 1998
filed with the SEC on August 24, 1998 (originally filed under cover of
Form SE on August 14, 1998), File 0-27560.
/(7)/ Incorporated by reference, attached as an exhibit of the same number to
our Form 10-QSB for the quarter ending September 30, 1998, filed with the
SEC on November 16, 1998, File 0-27560.
Page 18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACT
TELECONFERENCING, INC.'S UNAUDITED MARCH 31, 1999 FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,568,509
<SECURITIES> 0
<RECEIVABLES> 6,099,906
<ALLOWANCES> (44,698)
<INVENTORY> 227,939
<CURRENT-ASSETS> 8,593,075
<PP&E> 11,104,815
<DEPRECIATION> (2,281,032)
<TOTAL-ASSETS> 19,147,675
<CURRENT-LIABILITIES> 7,602,758
<BONDS> 0
0
0
<COMMON> 10,809,613
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 19,147,675
<SALES> 6,842,467
<TOTAL-REVENUES> 6,842,467
<CGS> 3,527,838
<TOTAL-COSTS> 6,616,060
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 172,800
<INCOME-PRETAX> 53,607
<INCOME-TAX> (117,942)
<INCOME-CONTINUING> (126,471)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (126,471)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
