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 September 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)
|
FLORIDA |
|
59-2291344 |
|
(State
or other jurisdiction of |
|
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(858) 547-5700
(Registrant’s telephone number)
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
Check whether the registrant is an accelerated filed (as defined in Rule 12b-2 of the Act).
Yes o No ý
As of November 7, 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
(unaudited)
|
(In thousands of dollars) |
|
September
30, |
|
December
31, |
|
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|
ASSETS |
|
|
|
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|
|
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Current assets: |
|
|
|
|
|
||
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Cash and cash equivalents |
|
$ |
3,676 |
|
$ |
3,620 |
|
|
Accounts receivable, less allowance for doubtful accounts of $3,008 and $2,783 at September 30, 2003 and December 31, 2002, respectively |
|
18,390 |
|
16,924 |
|
||
|
Other current assets |
|
1,918 |
|
3,064 |
|
||
|
Net assets of discontinued operations |
|
70 |
|
— |
|
||
|
Total current assets |
|
24,054 |
|
23,608 |
|
||
|
|
|
|
|
|
|
||
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Furniture, fixtures, equipment and software, net |
|
9,290 |
|
11,479 |
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||
|
|
|
|
|
|
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||
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Other assets: |
|
|
|
|
|
||
|
Intangible assets, net |
|
4,466 |
|
2,747 |
|
||
|
Investments in convertible preferred stock |
|
2,913 |
|
— |
|
||
|
Other assets |
|
903 |
|
2,262 |
|
||
|
Net assets of discontinued operations |
|
— |
|
1,350 |
|
||
|
Total assets |
|
$ |
41,626 |
|
$ |
41,446 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
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||
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|
|
|
|
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Current liabilities: |
|
|
|
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||
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Accounts payable |
|
$ |
6,467 |
|
$ |
7,017 |
|
|
Accrued liabilities |
|
22,757 |
|
18,090 |
|
||
|
Unearned revenue |
|
9,961 |
|
958 |
|
||
|
Revolving credit facility |
|
13,919 |
|
9,086 |
|
||
|
Notes payable – current portion |
|
1,816 |
|
2,987 |
|
||
|
Current portion of capital lease obligations |
|
2,660 |
|
2,714 |
|
||
|
Net liabilities of discontinued lease operations |
|
954 |
|
— |
|
||
|
Total current liabilities |
|
58,534 |
|
40,852 |
|
||
|
|
|
|
|
|
|
||
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Notes payable |
|
807 |
|
1,033 |
|
||
|
Notes payable to a related party |
|
33,483 |
|
30,058 |
|
||
|
Capital lease obligations |
|
2,331 |
|
4,146 |
|
||
|
Notes payable to a related party, to be converted into common stock |
|
32,196 |
|
29,282 |
|
||
|
Total liabilities |
|
127,351 |
|
105,371 |
|
||
|
|
|
|
|
|
|
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|
Contingencies (Note 12) |
|
|
|
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|
|
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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 September 30, 2003 and 769 at December 31, 2002, liquidation preference of $613 at September 30, 2003 |
|
6 |
|
7 |
|
||
|
Common stock, $.007 par value, authorized 300,000,000 shares, issued and outstanding 116,669,547 at September 30, 2003 and 116,547,547 at December 31, 2002 |
|
817 |
|
816 |
|
||
|
Additional paid-in capital |
|
129,618 |
|
129,553 |
|
||
|
Accumulated deficit |
|
(216,166 |
) |
(194,301 |
) |
||
|
Total stockholders’ deficit |
|
(85,725 |
) |
(63,925 |
) |
||
|
|
|
|
|
|
|
||
|
Total liabilities and stockholders’ deficit |
|
$ |
41,626 |
|
$ |
41,446 |
|
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 Nine Months Ended September 30, 2003 and 2002
(unaudited)
|
|
|
Three
Months Ended |
|
Nine
Months Ended |
|
||||||||
|
(In thousands of dollars, except per share amounts) |
|
2003 |
|
2002 |
|
2003 |
|
2002 |
|
||||
|
|
|
|
|
|
|
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Revenues: |
|
|
|
|
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||||
|
Telecommunication services |
|
$ |
35,002 |
|
$ |
19,834 |
|
$ |
101,364 |
|
$ |
63,630 |
|
|
Technology licensing and related services |
|
1,049 |
|
322 |
|
2,099 |
|
2,790 |
|
||||
|
Total revenues |
|
36,051 |
|
20,156 |
|
103,463 |
|
66,420 |
|
||||
|
|
|
|
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Operating costs and expenses: |
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|
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|
Telecommunication network expense (exclusive of depreciation and amortization shown below) |
|
20,073 |
|
11,197 |
|
67,141 |
|
36,707 |
|
||||
|
Selling, general and administrative |
|
13,981 |
|
7,389 |
|
42,822 |
|
23,236 |
|
||||
|
Provision for doubtful accounts |
|
1,466 |
|
1,119 |
|
3,772 |
|
3,726 |
|
||||
|
Research and development |
|
— |
|
317 |
|
— |
|
1,164 |
|
||||
|
Depreciation and amortization |
|
1,993 |
|
985 |
|
5,577 |
|
3,025 |
|
||||
|
Total operating costs and expenses |
|
37,513 |
|
21,007 |
|
119,312 |
|
67,858 |
|
||||
|
|
|
|
|
|
|
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|
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|
Operating loss |
|
(1,462 |
) |
(851 |
) |
(15,849 |
) |
(1,438 |
) |
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Other income (expense): |
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|
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Interest expense |
|
(2,061 |
) |
(1,777 |
) |
(6,380 |
) |
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