May 12, 1999
VIKING CAPITAL GROUP INC (VGCP)
Quarterly Report (SEC form 10QSB)
Management's Discussion and Analysis or Plan of Operations.
Material Changes in Results of Operations
During the three month period ended March 31, 1999, the Company continued in its efforts to secure capital and implement its proposed plan of business. In the course of its efforts to fulfill its strategic plan of operation it concluded the negotiations of a Strategic Joint Venture with Transaction Information Systems, Inc. (TIS). The agreement was signed in early 1998 with TIS for the building of a technical robust architecture capable of supporting the Company's long term strategic initiatives of creating an interactive enterprise insurance and retirement services website. During the periods ended March 31, 1999 and 1998, the company paid $250,000 and $100,000, respectively, of costs associated with such initiatives. Total costs incurred to date is $666,767; of which, $600,000 is paid. In addition to its telecommunications alliance previously announced with iXnet of New York which provides the ATM backbone for Viking Capital Financial Network(VCFN), the Company has signed additional alliances during the first quarter of 1999. The Company signed a strategic alliance with Pearse EFT, Inc. of Malta, NY for their Internet based remote banking software. The alliance allows Viking to provide remote banking software as a service on the Company's private network for banks wishing to provide their customers with remote or virtual banking services. This service is called IP Banker. The agreement also lead the way to a service bureau business model for remote banking which is named (Viking System) VS Banker's Service Bureau. The Company also signed two agreements for products to be made available which the Company believes will enhance customer satisfaction and use of its network. The first agreement is with Netnote International, Ltd. which will provide for the sale and distribution of a family of products called Webnote(TM) which is a sub-notebook size device with touch screen, color display and keyboard. The complete unit weighs about 2 lbs. The Webnote(TM) is also equipped with smart card technology to provide additional security which acts as a "web access key" providing a unique identifier. The second agreement is with MaxPC Technologies, Inc. of Dallas, TX. The agreement gives Viking the right to sell all MaxPC products via the Internet. The MaxPC product is a computer card with a processor operating at 3.6 billion operations per second and takes the burden of video processing away from the CPU. The technology offers full-motion, 2-way video communications over IP based connections (Internet, Extranet, Intranet) and is compliant with MPEG and streaming video/DVD standards. The card is capable of transforming most PCs into video communication stations. The Company anticipates using this technology in conjunction with its employee benefits administration services and making this technology available to others as a video conferencing tool.
In connection with its efforts to attract capital and implement its plan of business, the Company incurred general and administrative expenses of $475,547 and reported net losses of $488,338 for the three month period ended March 31, 1999.
Material Changes in Financial Condition, Liquidity and Capital Resources
The Company had a cash balance of $74,343 at March 31, 1999. During the first quarter of 1999, the Company raised $706,463 through private sale of stock and exercise of options.
With the receipt of $706,463 from these sources and expected additional funding , the Company believes it has sufficient funds to continue pursuing its plan of operations for the next twelve months, exclusive of insurance company acquisitions which constitutes the full plan of operations. The Company is currently evaluating various options to raise additional capital, including possible placements of debt and equity for the purpose of insurance company acquisitions. There is no assurance, however, that the Company will be successful in securing additional financing and, therefore, there is no assurance that the Company can implement its full plan of operations. If the Company is successful in implementing its plan of operations, the Company will be required to lease, acquire or construct significant additional facilities and equipment and hire substantial additional employees to carry out such operations.
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