| Delaware |
52-1309227 | |
| (State or Jurisdiction of |
(I.R.S. Employer | |
| Incorporation or Organization) |
Identification No.) |
| 4950 Communication Avenue, Suite 300 |
||
| Boca Raton, Florida |
33431 | |
| (Address of Principal Executive Offices) |
(Zip Code) |
| Pages | ||||
| Part IFinancial Information | ||||
| Item 1. |
Financial Statements |
|||
| 1 | ||||
| 2 | ||||
| 3 | ||||
| 4-8 | ||||
| Item 2. |
9-12 | |||
| Item 3. |
12 | |||
| Item 4. |
12 | |||
| Part IIOther Information | ||||
| Item 6. |
14 | |||
| 14 | ||||
| 15-16 | ||||
| September 30, 2002 |
December 31, 2001 |
|||||||
| (Unaudited) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
1,216,258 |
|
$ |
3,373,422 |
| ||
| Accounts receivable, net of allowance for doubtful accounts of $153,019 and $80,723, respectively |
|
11,706,869 |
|
|
15,358,920 |
| ||
| Unbilled receivables |
|
3,653,678 |
|
|
3,795,943 |
| ||
| Other assets, net |
|
2,090,206 |
|
|
2,286,600 |
| ||
| |
|
|
|
|
| |||
| Total current assets |
|
18,667,011 |
|
|
24,814,885 |
| ||
| Property and equipment, net |
|
4,453,243 |
|
|
10,114,449 |
| ||
| Intangible assets, net |
|
9,123,434 |
|
|
21,420,624 |
| ||
| Other assets, net |
|
53,677 |
|
|
1,181,570 |
| ||
| |
|
|
|
|
| |||
| Total assets |
$ |
32,297,365 |
|
$ |
57,531,528 |
| ||
| |
|
|
|
|
| |||
| LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK AND COMMON STOCKHOLDERS EQUITY (DEFICIT) |
||||||||
| Current liabilities: |
||||||||
| Current portion of indebtedness |
$ |
5,071,527 |
|
$ |
30,471,375 |
| ||
| Current portion of indebtednessrelated parties |
|
2,121,113 |
|
|
1,543,079 |
| ||
| Accounts payable and accrued expenses |
|
10,311,452 |
|
|
10,215,514 |
| ||
| Accrued interest and other related party expenses |
|
27,544 |
|
|
32,253 |
| ||
| Accrued salaries, wages and related benefits |
|
1,968,506 |
|
|
2,573,213 |
| ||
| Deferred revenue |
|
2,147,915 |
|
|
2,635,890 |
| ||
| Warrant payable |
|
|
|
|
1,321,326 |
| ||
| |
|
|
|
|
| |||
| Total current liabilities |
|
21,648,057 |
|
|
48,792,650 |
| ||
| Long-term portion of indebtedness |
|
47,641 |
|
|
3,951,973 |
| ||
| Long-term portion of indebtednessrelated parties |
|
6,485 |
|
|
1,724,292 |
| ||
| Other long-term liabilities |
|
341,834 |
|
|
350,405 |
| ||
| Mandatorily redeemable preferred stock, $.01 par value: |
||||||||
| 2,000,000 shares authorized, 40,000 shares issued and outstanding |
|
4,000,000 |
|
|
4,000,000 |
| ||
| |
|
|
|
|
| |||
| Total liabilities and mandatorily redeemable preferred stock |
|
26,044,017 |
|
|
58,819,320 |
| ||
| |
|
|
|
|
| |||
| Commitments and contingencies |
||||||||
| Common stockholders equity (deficit): |
||||||||
| Common stock, $.01 par value: voting: 20,000,000 shares authorized; 9,740,001 shares issued and outstanding
|
|
97,400 |
|
|
97,400 |
| ||
| Additional paid-in capital |
|
63,636,632 |
|
|
63,636,069 |
| ||
| Accumulated deficit |
|
(57,480,684 |
) |
|
(65,021,261 |
) | ||
| |
|
|
|
|
| |||
| Total common stockholders equity (deficit) |
|
6,253,348 |
|
|
(1,287,792 |
) | ||
| |
|
|
|
|
| |||
| Total liabilities, mandatorily redeemable preferred stock and common stockholders equity (deficit)
|
$ |
32,297,365 |
|
$ |
57,531,528 |
| ||
| |
|
|
|
|
| |||
| Three Months Ended September
30, |
Nine Months Ended September
30, |
|||||||||||||||
| 2002 |
2001 |
2002 |
2001 |
|||||||||||||
| Revenues |
$ |
11,246,562 |
|
$ |
9,781,348 |
|
$ |
35,510,638 |
|
$ |
39,791,912 |
| ||||
| Cost of revenues |
|
6,849,312 |
|
|
6,551,901 |
|
|
22,474,875 |
|
|
27,371,753 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Gross profit |
|
4,397,250 |
|
|
3,229,447 |
|
|
13,035,763 |
|
|
12,420,159 |
| ||||
| Selling, general and administrative expenses |
|
4,321,703 |
|
|
3,402,360 |
|
|
12,889,203 |
|
|
10,972,474 |
| ||||
| Amortization expense |
|
60,534 |
|
|
532,489 |
|
|
181,602 |
|
|
1,598,529 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Income (loss) from operations |
|
15,013 |
|
|
(705,402 |
) |
|
(35,042 |
) |
|
(150,844 |
) | ||||
| Interest income |
|
9,532 |
|
|
9,923 |
|
|
26,189 |
|
|
37,707 |
| ||||
| Interest incomerelated parties |
|
|
|
|
317,331 |
|
|
197,484 |
|
|
1,019,100 |
| ||||
| Interest expenserelated parties |
|
(66,091 |
) |
|
(115,714 |
) |
|
(230,556 |
) |
|
(359,791 |
) | ||||
| Interest expense |
|
(107,397 |
) |
|
(1,645,995 |
) |
|
(401,420 |
) |
|
(4,048,728 |
) | ||||
| Other expense |
|
|
|
|
(60,000 |
) |
|
|
|
|
(60,000 |
) | ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Loss before income tax benefit |
|
(148,943 |
) |
|
(2,199,857 |
) |
|
(443,345 |
) |
|
(3,562,556 |
) | ||||
| Income tax benefit |
|
|
|
|
(387,796 |
) |
|
|
|
|
(704,078 |
) | ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Loss from continuing operations |
|
(148,943 |
) |
|
(1,812,061 |
) |
|
(443,345 |
) |
|
(2,858,478 |
) | ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Discontinued operations (Note 8): |
||||||||||||||||
| (Loss) income from discontinued operations, net of income tax (benefit) expense of $0, $(71,040), $(107,873) and
$17,178, respectively |
|
|
|
|
(222,128 |
) |
|
(467,838 |
) |
|
69,742 |
| ||||
| Gain on disposal of segments, net of income tax expense of $45,458 and $1,594,638 for the three and nine month periods
ended September 30, 2002, respectively |
|
97,543 |
|
|
|
|
|
8,451,760 |
|
|
|
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| |
97,543 |
|
|
(222,128 |
) |
|
7,983,922 |
|
|
69,742 |
| |||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Net (loss) income |
$ |
(51,400 |
) |
$ |
(2,034,189 |
) |
$ |
7,540,577 |
|
$ |
(2,788,736 |
) | ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Basic (loss) earnings per share of common stock: |
||||||||||||||||
| Continuing operations |
$ |
(0.02 |
) |
$ |
(0.19 |
) |
$ |
(0.05 |
) |
$ |
(0.29 |
) | ||||
| Discontinued operations |
|
0.01 |
|
|
(0.02 |
) |
|
0.82 |
|
|
0.01 |
| ||||
| Net (loss) income |
$ |
(0.01 |
) |
$ |
(0.21 |
) |
$ |
0.77 |
|
$ |
(0.29 |
) | ||||
| Weighted average common shares outstanding |
|
9,740,001 |
|
|
9,740,001 |
|
|
9,740,001 |
|
|
9,740,001 |
| ||||
| Diluted (loss) earnings per share of common stock: |
||||||||||||||||
| Continuing operations |
$ |
(0.02 |
) |
$ |
(0.19 |
) |
$ |
(0.05 |
) |
$ |
(0.29 |
) | ||||
| Discontinued operations |
|
0.01 |
|
|
(0.02 |
) |
|
0.82 |
|
|
0.01 |
| ||||
| Net (loss) income |
$ |
(0.01 |
) |
$ |
(0.21 |
) |
$ |
0.77 |
|
$ |
(0.29 |
) | ||||
| Weighted average common shares outstanding |
|
9,740,001 |
|
|
9,740,001 |
|
|
9,740,001 |
|
|
9,740,001 |
| ||||
| 2002 |
2001 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income (loss) |
$ |
7,540,577 |
|
$ |
(2,788,736 |
) | ||
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |
||||||||
| Depreciation and amortization |
|
1,365,057 |
|
|
||||