UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
ý QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
OR
o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-17973
I-LINK INCORPORATED
(Exact name of registrant as specified in its charter)
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FLORIDA |
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59-2291344 |
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(State or other jurisdiction of |
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(I.R.S. Employer Identification No.) |
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9775 Business Park Avenue, San Diego, California 92131 |
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(Address of principal executive offices) |
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(858) 547-5700 |
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(Registrant’s telephone number) |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter time 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 ý No o
As of August 19, 2003, the registrant had outstanding 116,669,547 shares of $0.007 par value common stock.
PART I – FINANCIAL INFORMATION
Item 1 – Financial Statements
I-LINK INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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(In thousands of dollars) |
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June 30, 2003 |
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December
31, |
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(Unaudited) |
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(as restated) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
2,048 |
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$ |
3,620 |
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Accounts receivable, less allowance for doubtful accounts of $2,267 and $2,783 at June 30, 2003 and December 31, 2002, respectively |
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19,334 |
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16,924 |
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Other current assets |
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3,084 |
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3,064 |
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Net assets of discontinued operations |
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70 |
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— |
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Total current assets |
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24,536 |
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23,608 |
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Furniture, fixtures, equipment and software, net |
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9,443 |
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11,479 |
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Other assets: |
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Intangible assets, net |
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2,252 |
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2,747 |
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Investments in convertible preferred stock |
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2,791 |
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— |
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Other assets |
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3,472 |
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2,262 |
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Net assets of discontinued operations |
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— |
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1,350 |
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Total assets |
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$ |
42,494 |
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$ |
41,446 |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable |
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$ |
3,134 |
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$ |
7,017 |
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Accrued liabilities |
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24,430 |
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18,090 |
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Unearned revenue |
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10,265 |
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958 |
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Revolving credit facility and other current debt |
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18,524 |
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12,073 |
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Notes payable to a related party |
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30,985 |
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— |
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Current portion of capital leases obligations |
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2,773 |
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2,714 |
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Net liabilities of discontinued operations |
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1,166 |
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— |
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Total current liabilities |
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91,277 |
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40,852 |
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Notes payable |
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— |
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1,033 |
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Notes payable to a related party |
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— |
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30,058 |
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Capital leases obligations |
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2,818 |
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4,146 |
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Notes payable to a related party, to be converted into common stock |
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30,867 |
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29,282 |
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Total liabilities |
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124,962 |
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105,371 |
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Contingencies (Note 13) |
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Stockholders’ deficit: |
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Preferred stock, $10 par value, authorized 10,000,000 shares, issued and outstanding 619 at June 30, 2003 and 769 at December 31, 2002, liquidation preference of $613 (unaudited) at June 30, 2003 |
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6 |
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7 |
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Common stock, $.007 par value, authorized 300,000,000 shares, issued and outstanding 116,669,547 at June 30, 2003 and 116,547,547 at December 31, 2002 |
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817 |
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816 |
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Additional paid-in capital |
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129,618 |
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129,553 |
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Accumulated deficit |
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(212,909 |
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(194,301 |
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Total stockholders’ deficit |
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(82,468 |
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(63,925 |
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Total liabilities and stockholders’ deficit |
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$ |
42,494 |
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$ |
41,446 |
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The accompanying notes are an integral part of these consolidated financial statements
1
I-LINK INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the Three and Six Months Ended June 30, 2003 and 2002
(unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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(In thousands of dollars, except per share amounts) |
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2003 |
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2002 |
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2003 |
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2002 |
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(as restated) |
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Revenues: |
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Telecommunication services |
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$ |
35,995 |
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$ |
20,984 |
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$ |
66,362 |
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$ |
43,795 |
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Technology licensing and related services |
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1,050 |
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888 |
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1,050 |
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2,469 |
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Total revenues |
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37,045 |
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21,872 |
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67,412 |
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46,264 |
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Operating costs and expenses: |
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Telecommunication network expense (exclusive of depreciation and amortization shown below) |
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21,319 |
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12,237 |
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47,068 |
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25,510 |
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Selling, general and administrative |
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14,617 |
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7,147 |
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28,841 |
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15,847 |
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Provision for doubtful accounts |
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1,131 |
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1,250 |
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2,306 |
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2,607 |
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Depreciation and amortization |
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1,758 |
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1,019 |
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3,584 |
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2,040 |
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Research and development |
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