May 21, 2001
IVG CORP (IVGG.OB)
Quarterly Report (SEC form 10QSB)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
FINANCIAL CONDITION
At March 31, 2001, the Company had current assets of approximately $4,595,000 and total assets of approximately $5,074,000. Current liabilities at March 31, 2001 were approximately $5,214,000 and total liabilities were approximately $7,396,000. The Company's stockholders' deficit at March 31, 2001 was approximately $2,238,000.
RESULTS OF OPERATIONS
Comparison of the quarter ended March 31, 2001 to March 31, 2000
Revenues increased to approximately $276,000 for the first quarter of 2001, compared to approximately $84,000 for the first quarter of 2000. The increase was attributable principally to increased product sales and interest income. Cost of goods sold increased to approximately $121,000 from $32,000 for the same period last year. This increase was primarily the result of higher prices for materials and higher direct costs associated with manufacturing.
Other expenses, consisting of selling, general, and administrative expenses, and sales and marketing expenses, increased to approximately $3,215,000 from approximately $242,000. This increase was due primarily to increased stock-based compensation and costs associated with acquisition activity.
The Company's net loss for the quarter ended March 31, 2001 was approximately $2,883,000, compared to a net loss of approximately $157,000 for the quarter ended March 31, 2000. The loss in 2001 is related primarily to increased stock-based compensation and consulting, legal and accounting fees incurred in connection with acquisition activity.
LIQUIDITY AND CAPITAL RESOURCES
Operations for the quarter ended March 31, 2001 were financed through cash acquired in the September 2000 Swan Magnetics, Inc. (Swan) acquisition, through $350,000 in loans from Swan, and through $1,100,000 in loans obtained in February 2001 from institutional investors. Previously, operations have been financed through private sales of common stock and loans from management and stockholders. In addition, in 2001 and 2000, the Company obtained services or paid expenses through the issuance of common stock.
Net cash used by operating activities was approximately $816,000 in the quarter ended March 31, 2001 and $24,000 in the quarter ended March 31, 2000. The Company had $4,054,000 in cash at March 31, 2001, of which $1,500,000 was restricted for payment of a promissory note to a vendor.
In February 2001, the Company raised $1,100,000 by issuing 6% convertible notes with warrants to purchase 275,000 shares of IVG common stock attached and has completed the acquisition of SES-Corp., Inc. and certain assets of Cheyenne Management Company, Inc., that management believes can provide additional cash for the Company's operations and be profitable in both the short and long-term. Management also intends to attempt to raise funds through private sales of the company's common stock. Although management believes that these efforts will enable the Company to meet its liquidity needs in the future, there can be no assurance that these efforts will be successful.
GOING CONCERN CONSIDERATION
The Company has continued losses from operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability of reported assets or liabilities should the Company be unable to continue as a going concern.
The Company has been able to continue based upon the financial support of certain of its stockholders, and the continued existence of the Company is dependent upon this support and the Company's ability to acquire assets by the issuance of stock. Management has recently been able to raise $1,100,000 from the issuance of 6% convertible notes with warrants attached from an investment group and has completed the acquisition of businesses that management believes can provide additional cash for the Company's operations and be profitable in both the short and long-term. Management also intends to attempt to raise additional funds through private sales of the Company's common stock. Although management believes that these efforts will enable the Company to continue as a going concern, there can be no assurance that these efforts will be successful.
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Recent filings: Apr 17, 2000 (Annual Rpt) | May 22, 2000 (Qtrly Rpt) | May 23, 2000 (Qtrly Rpt) | May 31, 2000 (Qtrly Rpt) | Aug 24, 2000 (Qtrly Rpt) | Nov 20, 2000 (Qtrly Rpt) | Jan 12, 2001 (form8-K) | Apr 17, 2001 (form8-K) | Apr 18, 2001 (Annual Rpt) | May 21, 2001 (Qtrly Rpt) |
