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Bottom line: Any company with $1.3M in cash & only $200K is liabilities that only burns like $20K a month in expenses is worth a roll of the dice down here. I'm in & believe its wise trade. 
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The first step in becoming an operating company..
AVGG.. Just go cheaper,, But
will AVGG survive.. I have according to the last 10Q figured that AVGG has at present over $0.50 per share in cash and about another $0.20 due.. The SEC says it now want's some and has frozen the assets of the company....AVGG's burn rate was at present less than $0.06 per year so interest should accont for half of it.. The charges below are for prior periods but the SEC has frozen the accounts of AVGG..
I hope the funds are still there and if so down the road we could see a reverse merger or dividend.. IMO the current management is gone and we have a clean shell.. How long it will take to workout is anyone's guess but I think 24 Mo's would be a good estimate for starters .. First thing to find out is how much cash is/could be left.. The SAGA is below.. I'm long well over 60K of AVGG after sales and purchases yesterday,, but had bought much of it below current prices during the past few years.. My DD was good but it's still almost impossible to guard against fraud if someone want's to commit it.. Not saying that fraud has occred here but it don't look good..hank
On June 22, 2010, the Securities and Exchange Commission (the "SEC") filed
a civil enforcement action in the United States District Court for the Southern
District of New York against Advanced Technologies Group Ltd. (the "Company"),
its Chief Executive Officer and President alleging violations of the Securities
Act of 1933, as amended in connection with certain securities offerings
conducted by the Company and its predecessors between 1997 and 2006 and [b][color=red]seeking
preliminary and permanent injunctive relief, disgorgement and civil monetary
penalties.[/b][/color] The SEC also seeks provisional relief in the form of an order
freezing the defendants' assets and prohibiting destruction, concealment or
altering of records pending final disposition of the action.
====================================================
From the most recent 10K..
Advanced Technologies Group, Ltd.
Consolidated Balance Sheets
As of January 31, 2010 and January 31, 2009
31-Jan-10 31-Jan-09
------------ ------------
ASSETS
Current assets:
Cash & cash equivalents $ 2,747,762 $ 134,918
Short term investments 6,220,498 0
Subordinated note receivable 5,666,667 0
Prepaid income tax 471,742 0
------------ ------------
Total current assets $ 15,106,669 $ 134,918
Other assets:
Subordinated note receivable- non current portion 6,611,111 0
Investment in FX Direct Dealer 5,000 2,407,058
Trademark- net 6,660 7,418
Fixed assets- net 2,420 0
------------ ------------
Total assets $ 21,731,860 $ 2,549,394
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable & accrued expenses $ 88,081 $ 3,450,547
Income taxes payable 156,576 0
------------ ------------
Total current liabilities 244,657 3,450,547
Deferred income taxes payable 5,346,422 0
Shareholder advance payable 9,872 48,423
------------ ------------
Total liabilities 5,600,951 3,498,970
Shareholders' equity (deficit):
Series A preferred stock, one share convertible to
one share of common; non-participating, authorized
1,000,000 shares at stated value of $3 per share,
issued and outstanding 762,081 shares 1,712,601 1,712,601
Series B preferred stock, one share convertible to
one share of common; non-participating, authorized
7,000,000 shares at stated value of $3 per share,
issued and outstanding 1,609,955 shares 4,384,754 4,384,754
Common stock - $.0001 par value, authorized 100,000,000
shares, issued and outstanding, 18,268,104 shares at
January 31, 2009 and 18,486,535 at January 31, 2010 1,849 1,827
Additional paid in capital 32,715,950 32,664,364
Accumulated deficit (22,684,245) (39,713,122)
------------ ------------
Total shareholders' equity (deficit) 16,130,909 (949,576)
------------ ------------
Total Liabilities & Shareholders' Equity (Deficit) $ 21,731,860 $ 2,549,394
============ ============
See the notes to the financial statements.
F-2
Advanced Technologies Group, Ltd.
Consolidated Statements of Operations
For the Years Ended January 31, 2010 and January 31, 2009
31-Jan-10 31-Jan-09
------------ ------------
General and administrative expenses:
Salaries and benefits $ 569,886 $ 515,398
Consulting 136,200 30,513
General administration 1,046,673 277,577
------------ ------------
Total general & administrative expenses 1,752,759 823,488
------------ ------------
Net loss from operations (1,752,759) (823,488)
Other revenues and expenses:
Interest income 1,291,979 71
Gain on sale of FXDD interest 23,597,942 0
Gain on short term investments 220,498 0
Consulting fees 0 254,451
Sub-lease income 0 30,892
------------ ------------
Net income (loss) before provision for income taxes 23,357,660 (538,074)
Provision for income taxes (6,280,425) 0
------------ ------------
Net income (loss) $ 17,077,235 $ (538,074)
============ ============
Basic & fully diluted net income (loss) per common share:
Basic income (loss) per share $ 0.93 $ (0.03)
Fully diluted income (loss) per share $ 0.83 $ (0.03)
Weighted average of common shares outstanding:
Basic 18,285,166 18,268,104
Fully diluted 20,657,202 18,268,104
See the notes to the financial statements.
F-3
Advanced Technologies Group, Ltd.
Consolidated Statements of Cash Flows
For the Years Ended January 31, 2010 and January 31, 2009
31-Jan-10 31-Jan-09
------------ ------------
Operating Activities:
Net income (loss) $ 17,077,235 $ (538,074)
Adjustments to reconcile net income (loss) items
not requiring the use of cash:
Amortization 758 455
Depreciation 340 0
Salary expense 0 515,398
Rent expense 0 45,000
Impairment expense 60,250 0
Gain on sale of FXDD interest (23,597,942) 0
Changes in other operating assets and liabilities:
Accounts payable & accrued expenses (3,362,466) 1,029
Prepaid income tax (471,742) 0
Income taxes payable 156,576 0
Deferred income taxes payable 5,346,422 0
------------ ------------
Net cash provided by operations (4,790,569) 23,808
Investing activities:
Purchase of office equipment (2,760) 0
Purchase of MoveIdiot.com (57,000) 0
Investment in short term marketable securities (6,220,498) 0
Proceeds from note receivable 4,722,222
Proceeds from sale of FXDD investment 9,000,000 0
------------ ------------
Net cash used by investing activities 7,441,964 0
Financing Activities:
Advances received (paid) shareholders (38,551) 43,823
------------ ------------
Net cash provided (used) by financing activities (38,551) 43,823
------------ ------------
Net increase in cash during the year 2,612,844 67,631
Cash balance at February 1st 134,918 67,287
------------ ------------
Cash balance at January 31st $ 2,747,762 $ 134,918
============ ============
Supplemental disclosures of cash flow information:
Interest paid during the year $ 0 $ 0
Income taxes paid during the year $ 1,249,169 $ 0
Non-cash investing activities:
Note receivable $ 17,000,000 $ 0
Stock issued for purchase of MoveIdiot.com $ 3,250 $ 0
See the notes to the financial statements.
F-4
ADVANCED TECHNOLOGIES GROUP, LTD.
Consolidated Statement of Changes in Shareholders' Equity (Deficit)
For the Years Ended January 31, 2010 and January 31, 2009
Common Common Preferred Preferred Paid in Accumulated
Shares Par Value Shares Value Capital Deficit Total
------ --------- ------ ----- ------- ------- -----
Balance at January 31, 2008 18,268,104 $ 1,827 2,372,036 $6,097,355 $32,664,364 $(39,175,048) $ (411,502)
Net loss for the fiscal year (538,074) (538,074)
---------- ------- --------- ---------- ----------- ------------ -----------
Balance at January 31, 2009 18,268,104 $ 1,827 2,372,036 $6,097,355 $32,664,364 $(39,713,122) $ (949,576)
Purchase of MovieIdiot.com 25,000 3 3,247 3,250
Stock dividends paid preferred
holders 193,431 19 48,339 (48,358) 0
Net income for the fiscal year 17,077,235 17,077,235
---------- ------- --------- ---------- ----------- ------------ -----------
Balance at January 31, 2010 18,486,535 $ 1,849 2,372,036 $6,097,355 $32,715,950 $(22,684,245) $16,130,909
========== ======= ========= ========== =========== ============ ===========
See the notes to the financial statements.
F-5
Advanced Technologies Group, Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended January 31, 2010 and January 31, 2009
1. ORGANIZATION OF THE COMPANY AND SIGNIFICANT ACCOUNTING PRINCIPLES
Advanced Technologies Group, Ltd. (the Company) was incorporated in the State of
Nevada in February 2000. In January 2001, the Company purchased 100% of the
issued and outstanding shares of FX3000, Inc., a Delaware corporation, which
owned the rights to the FX3000 currency trading software platform. The FX3000
software program is a financial real time quote and money management platform
used by independent foreign currency traders.
In March 2002, the Company sold the FX3000 software program, for a 25% interest
in a joint venture with Tradition NA, a subsidiary of Compagnie Financiere
Tradition, a publicly held Swiss corporation. The Company and Tradition formed
FX Direct Dealer LLC (FXDD), a Delaware company that marketed the FX3000
software to independent foreign currency traders.
In March 2009, the Company sold its 25% interest in the joint venture to FXDD
for $26 million. See Note 9.
The Company's principal business activity at January 31, 2010 was the
development of the MoveIdiot.com website, which the Company acquired in July
2009 (see note 8 below). In addition, the Company has been seeking to acquire
and/or develop other new technologies and business opportunities and will also
consider investing in commercial real estate opportunities.
CONSOLIDATION- The accompanying consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary. All significant
inter-company balances have been eliminated.
USE OF ESTIMATES- The preparation of the consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make reasonable estimates and assumptions that affect the reported amounts of
the assets and liabilities and disclosure of contingent assets and liabilities
and the reported amounts of revenues and expenses at the date of the financial
statements and for the period they include. Actual results may differ from these
estimates.
CASH AND CASH EQUIVALENTS- For the purpose of calculating changes in cash flows,
cash includes all cash balances and highly liquid short-term investments with an
original maturity of three months or less.
SHORT TERM INVESTMENTS- Short term investments include investments in a
municipal bond fund. The investments are stated at market fair value at January
31, 2010.
F-6
BAD DEBT EXPENSE- The Company provides, through charges to income, a charge for
bad debt expense, which is based upon management's evaluation of numerous
factors in regards to the account receivable. These factors include economic
conditions, the paying performance of the account receivable, and an analysis of
the credit worthiness of the payee.
SUBORDINATED NOTE RECEIVABLE- The subordinated loan receivable from FXDD results
from the sale of the Company's interest in the joint venture (see note 9). The
estimated fair value of the subordinated loan receivable from FXDD is based upon
the discounting of the future cash flows from the asset using a risk adjusted
lending rate from loans of similar in risk and duration. At January 31, 2010,
the fair value of the subordinated loan receivable was $13,079,000.
FAIR VALUE MEASUREMENT: Effective January 1, 2008, the Company adopted FASB ASC
820 (formerly Statement of Financial Accounting Standard No. 157, FAIR VALUE
MEASUREMENT), issued by the FASB. ASC 820 defines fair value as the price that
would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date and sets out a
fair value hierarchy. The fair value hierarchy gives the highest priority to
quoted prices in active markets for identical assets or liabilities (Level 1)
and the lowest priority to unobservable inputs (Level 3). Inputs are broadly
defined under ASC 820 as assumptions market participants would use in pricing an
asset or liability. The three levels of the fair value hierarchy under ASC 820
are described below:
* Level I--Quoted prices are available in active markets for identical
investments as of the reporting date. The type of investments in Level
I include listed equities and listed derivatives.
* Level II--Pricing inputs are other than quoted prices in active
markets, which are either directly or indirectly observable as of the
reporting date, and fair value is determined through the use of models
or other valuation methodologies. Investments which are generally
included in this category include corporate bonds and loans, less
liquid and restricted equity securities tnd certain over-the-counter
derivatives.
* Level III--Pricing inputs are unobservable for the investment and
includes situations where there is little, if any, market activity for
the investment. The inputs into the determination of fair value
require significant management judgment or estimation. Investments
that are included in this category generally include general and
limited partnership interests in corporate private equity and real
estate funds, funds of hedge funds, distressed debt and non-investment
grade residual interests in securitizations and collateralized debt
obligations.
FIXED ASSETS- Office and computer equipment are stated at cost. Depreciation
expense is computed using the straight-line method over the estimated useful
life of the asset. The following is a summary of the estimated useful lives used
in computing depreciation expense:
F-7
Furniture & lease improvements 7 years
Office equipment 3 years
Computer hardware 3 years
Software 3 years
Expenditures for major repairs and renewals that extend the useful life of the
asset are capitalized. Minor repair expenditures are charged to expense as
incurred.
LONG LIVED ASSETS- The Company reviews for the impairment of long-lived assets
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. An impairment loss would be recognized when
estimated future cash flows expected to result from the use of the asset and its
eventual disposition is less than its carrying amount.
INCOME TAXES- The Company accounts for income taxes in accordance with generally
accepted accounting principles which requires an asset and liability approach to
financial accounting and reporting for income taxes. Deferred income tax assets
and liabilities are computed annually for differences between financial
statement and income tax bases of assets and liabilities that will result in
taxable income or deductible expenses in the future based on enacted tax laws
and rates applicable to the periods in which the differences are expected to
affect taxable income. Valuation allowances are established when necessary to
reduce deferred tax assets and liabilities to the amount expected to be
realized. Income tax expense is the tax payable or refundable for the period
adjusted for the change during the period in deferred tax assets and
liabilities.
The Company follows the accounting requirements associated with uncertainty in
income taxes using the provisions of Financial Accounting Standards Board (FASB)
ASC 740, INCOME TAXES. Using that guidance, tax positions initially need to be
recognized in the financial statements when it is more likely than not the
positions will be sustained upon examination by the tax authorities. It also
provides guidance for derecognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition. As of January 31,
2010, the Company has no uncertain tax positions that qualify for either
recognition or disclosure in the financial statements. All tax returns from
fiscal years 2006 to 2009 are subject to IRS audit.
RECENT ACCOUNTING PRONOUNCEMENTS-
Financial Accounting Standards Board ("FASB") Accounting Standard Codification
("ASC") 820, FAIR VALUE MEASUREMENTS AND Disclosures ("ASC 820" and formerly
referred to as FAS-157), establishes a framework for measuring fair value in
GAAP, clarifies the definition of fair value within that framework, and expands
disclosures about the use of fair value measurements. ASC 820 is effective for
fiscal years beginning after November 15, 2007. ASC 820-10-65, TRANSITION AND
OPEN EFFECTIVE DATE INFORMATION, deferred the effective date of ASC 820, for
non-financial assets and liabilities that are not on a recurring basis
recognized or disclosed at fair value in the financial statements, to fiscal
years, and interim periods, beginning after November 15, 2008. The Company has
adopted the guidance within ASC 820 for non-financial assets and liabilities
measured at fair value on a nonrecurring basis at January 1, 2009 and will
continue to apply its provisions prospectively from January 1, 2009. The
F-8
application of ASC 820 for non-financial assets and liabilities did not have a
significant impact on earnings nor the financial position of the Company.
FASB ASC 810, CONSOLIDATION ("ASC 810"), ASC 810-10-65, TRANSITION AND OPEN
EFFECTIVE DATE INFORMATION ("ASC 810-10-65" and formerly referred to as FAS-160)
establishes accounting and reporting standards for the non-controlling interest
in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
non-controlling interest in a subsidiary is an ownership interest in the
consolidated financial statements. ASC 810-10-65 is effective for fiscal years
beginning after December 15, 2008. The application of ASC 810-10-65 did not have
a significant impact on earnings nor the financial position of the Company.
FASB ASC 855, SUBSEQUENT EVENTS ("ASC 855" and formerly referred to as FAS-165),
modified the subsequent event guidance. The three modifications to the
subsequent events guidance are: 1) To name the two types of subsequent events
either as recognized or non-recognized subsequent events, 2) To modify the
definition of subsequent events to refer to events or transactions that occur
after the balance sheet date, but before the financial statement are issued or
available to be issued and 3) To require entities to disclose the date through
which an entity has evaluated subsequent events and the basis for that date,
i.e. whether that date represents the date the financial statements were issued
or were available to be issued. The adoption of FASB ASC 855, did not have a
material affect on the Company's financial position.
2. NET INCOME (LOSS) PER SHARE
Basic net loss per share has been computed based on the weighted average of
common shares outstanding during the years. Diluted net loss per share gives the
effect of outstanding preferred stock which are convertible into common stock.
The calculation for net income (loss) per share is as follows.
31-Jan-10 31-Jan-09
----------- -----------
Net income (loss) $17,077,235 $ (538,074)
=========== ===========
Basic shares outstanding (weighted average) 18,285,166 18,268,104
Preferred stock convertible into common shares 2,372,036 0
----------- -----------
Fully diluted shares outstanding (weighted average) 20,657,202 18,268,104
=========== ===========
Basic income (loss) per share $ 0.93 $ (0.03)
Fully diluted income (loss) per share $ 0.83 $ (0.03)
The effects of the convertible preferred stock in fiscal year 2009 was excluded
from the fully diluted loss per share calculation because their inclusion would
be anti-dilutive.
F-9
3. OPTIONS
All options granted are recorded at fair value using a generally accepted option
pricing model at the date of the grant. All options granted by the Company have
expired in fiscal year 2010.
Wgtd Avg
Wgtd Avg Years to
Amount Exercise Price Maturity
------ -------------- --------
Outstanding at January 31, 2008 3,835,690 $5 1.52
Issued 0
Expired 0
Exercised 0
-----------
Outstanding at January 31, 2009 3,835,690 $5 0.51
Issued 0
Expired (3,835,690)
Exercised 0
-----------
Outstanding at January 31, 2010 0
===========
4. PREFERRED STOCK
CLASS A PREFERRED STOCK: Class A preferred stock has a stated value of $3
per share. Holders of the Class A preferred stock are entitled to receive a
common stock dividend of 13% of the outstanding Class A shares on an annual
basis based on a value of $3 per share. The Class A preferred stock is
convertible into common stock at a conversion ratio of one preferred share
for one common share.
CLASS B PREFERRED STOCK: Class B preferred stock has a stated value of $3
per share. Holders of the Class B preferred stock are entitled to receive a
common stock dividend of 6% of the outstanding Class B shares on an annual
basis based on a value of $3 per share. The Class B preferred stock is
convertible into common stock at a conversion ratio of one preferred share
for one common share.
F-10
5. INCOME TAXES
Provision for income taxes is comprised of the following:
31-Jan-10 31-Jan-09
----------- -----------
Net income (loss) before provision for
income taxes $23,357,660 $ (538,074)
=========== ===========
Current tax expense:
Federal $ 676,298 $ 0
State 257,705 0
----------- -----------
Total $ 934,003 $ 0
Add deferred tax payable (benefit):
Long term capital gain (installment payable
over 3 years) 5,346,422 0
Tax loss carryforward 0 4,466,066
Allowance for recoverability 0 (4,466,066)
----------- -----------
Provision for income taxes $ 6,280,425 $ 0
=========== ===========
A reconciliation of provision for income taxes at the statutory rate to
provision for income taxes at the Company's effective tax rate is as follows:
Statutory U.S. federal rate 34% 34%
Statutory state and local income tax 13% 13%
Timing differences 0% -47%
----------- -----------
Effective rate 47% 0%
=========== ===========
For financial statement purposes, the gain on the sale of the FXDD interest is
included in fiscal year 2010. For tax return purposes, the gain on the FXDD sale
is being recorded as an installment sale and therefore the tax liability on the
gain is recognized as the proceeds from the sale over the next three years is
recognized.
6. COMMITMENTS AND CONTINGENCIES
The Company has executed employment contracts with the chief executive officer
and the president of the Company in April 2002. Under the terms of the
contracts, the two officers are to be paid $250,000 per year each through April
2011.
In purchasing MoveIdiot.com, as discussed more fully in Note 8, the Company has
agreed to issue an additional 50,000 restricted shares of its common stock to
MoveIdiot.com in the event certain revenue targets are met.
F-11
7. CONCENTRATION OF CREDIT RISK
The Company has substantially all of its assets in cash and the subordinated
note receivable from FXDD. In the event FXDD is adversely affect by future
economic conditions relating to its foreign currency dealing business, or in the
event FXDD should become bankrupt, the Company may only receive a pro rata share
of the amounts due it. In addition, in the event of bankruptcy, the Company's
claims against FXDD would be subordinate to the claims of the general creditors
of FXDD.
In addition, the Company has a substantial investment in short term marketable
securities on deposit with a bank which are not fully insured. In the event of
the financial insolvency of this bank, the Company may be limited to a pro rata
share of the amounts invested.
The Company has deposits at banks which may, from time to time, exceed insured
amounts.
8. PURCHASE OF MOVEIDIOT.COM
In July 2009, the Company purchased the intellectual rights to MoveIdiot.com for
$57,000 and 25,000 restricted shares of common stock. The Company used the
market price of the Company's common stock at the date of the purchase to value
the shares given in the transaction. The transaction value at the time of
purchase was $60,250. MoveIdiot.com enables individuals and businesses to keep
track of their property on-line. Users will be able to manage their possessions
on-line and print automatically generated labels that are sealable to be used in
the event of moving from one location to another. Management impaired the
$60,250 value of the transaction to expense at the date of the purchase of
MoveIdiot.com after concluding that future cash flows from the purchase could
not be assured.
As part of the purchase, the Company agreed to issue an additional 50,000
restricted shares of common stock to the sellers of MoveIdiot.com if certain
profitability levels are met. Management has concluded that the profitability
levels will not be met at the date of purchase and therefore assigned no value
to their contingent shares at the date of purchase.
9. SALE OF THE INVESTMENT IN FX DIRECT DEALER
In March 2009, the Company sold its 25% interest in the joint venture to FXDD
for $26 million. The Company received a subordinated note from FXDD for $17
million and $9 million in cash. The subordinated note receivable is unsecured
and subordinated to the claims of the general creditors of FXDD. The note
carries an interest rate of 10% and the principal is payable in 36 equal monthly
installments for the next three years, with interest. The subordinated loan
agreement provides the Company with an increased interest rate in the event of
late payments by the Purchaser and with the remedy of liquidation in the event
of a default. The initial payment of the $9 million was received in March 2009
and the monthly payments on the subordinated note began in April 2009. As a
result of the sale, the Company realized a gain of $23,597,942.
F-12
10. FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying amounts of cash and cash equivalents, short term investments,
shareholder advances, income tax payable, and accounts payable and accrued
expenses reported in the consolidated balance sheets are estimated by management
to approximate fair value at January 31, 2010.
11. COMPANY INVESTMENTS
The following table summarizes the valuation of the Company's investments by the
above FASB ASC 820 fair value hierarchy levels as of January 31, 2010.
Level I Level II Level III
---------- ---------- ----------
Investments:
Investment in municipal bond fund $ 0 $6,220,498 $ 0
---------- ---------- ----------
Totals $ 0 $6,220,498 $ 0
========== ========== ==========
12. SUBSEQUENT EVENTS
Management has evaluated subsequent events since January 31, 2010 and determined
the following requires disclosure:
In March 2010, the Board of directors approved the Equity Incentive Plan (EIP)
for the Company. Under the EIP, the Company has set aside 3 million shares of
common stock for issuance pursuant to awards granted under the EIP. The Board of
Directors or a Committee appointed by the Board is authorized to administer the
EIP.
The EIP will be used to recognize the superior performance of the Company's
officers, employees, consultants, and other key persons in furthering the
Company's business interests. Under the EIP, the Company issued 90,000
restricted shares of common stock to each officer and director (for an aggregate
of 270,000 shares) on March 5, 2010. The shares vest in three equal installments
on the first, second and third anniversaries of the date of grant.
From the 27-Jan-2010 10 Q/A
Net income (loss) before provision for income taxes 17,023,653 (256,717) 132,835 (137,320)
Provision for income taxes 0 0 0 0
------------ ------------ ------------ ------------
Net income (loss) $ 17,023,653 ($ 256,717) $ 132,835 $ (137,320)
============ ============ ============ ============
Basic income (loss) per share $ 0.94 $ (0.01) $ 0.00 $ (0.01)
------------ ------------ ------------ ------------
Fully diluted income (loss) per share $ 0.83 $ (0.01) $ 0.00 $ 0.01)
------------ ------------ ------------ ------------
Weighted average of common shares outstanding:
Basic 18,293,104 18,268,104 18,293,104 18,268,104
Fully diluted 20,650,250 18,268,104 20,665,140 18,268,104
=====================================================
Form 8-K for ADVANCED TECHNOLOGIES GROUP LTD
8-Mar-2010
Change in Directors or Principal Officers
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
ADOPTION OF 2010 EQUITY INCENTIVE PLAN
On March 5, 2010, the Board of Directors (the "Board") of Advanced Technologies Group, Ltd., a Nevada corporation (the "Company", "we", "us" or "our") adopted the Company's 2010 Equity Incentive Plan (the "Plan").
SHARES RESERVED FOR ISSUANCE. The Plan includes an initial reserve of 3,000,000 shares of our common stock that will be available for issuance under the Plan, subject to adjustment to reflect stock splits and similar events. Shares that are subject to issuance upon exercise of an option but cease to be subject to such option for any reason (other than exercise of such option), and shares that are subject to an award that is granted but is subsequently forfeited, or that are subject to an award that terminates without shares being issued, will again be available for grant and issuance under the Plan. The Plan provides for the grant of stock options, stock appreciation rights and restricted stock grants.
ADMINISTRATION. The Plan is administered by our Board of Directors or a Committee of directors selected by the Board (the "Committee"). The Plan authorizes the Committee to select those participants to whom awards may be granted, to determine whether and to what extent awards are granted, to determine the number of shares of common stock or other considerations to be covered by each award, to determine the terms and conditions of awards, to amend the terms of outstanding awards, and to take any other action consistent with the terms of the Plan as the Committee deems appropriate. Generally, awards may be granted to employees, officers, directors, consultants, independent contractors and advisors of the Company or its subsidiaries and the Committee may designate, subject to the parameters of the Plan, whether an award may be designated as an incentive award (subject to the requirement of stockholder approval of the Plan). The Committee also has the authority to interpret the provisions of the Plan.
TERMS OF OPTIONS. As discussed above, the Committee determines many of the terms and conditions of awards granted under the Plan, including whether an option will be an "incentive stock option" or a non-qualified stock option (subject to the requirement that we obtain stockholder approval of the Plan within the next 12 months if we intend to issue incentive stock options). An option designated as an incentive stock option is intended to qualify as such under Section 422 of the Code. Thus, the aggregate fair market value, determined at the time of grant, of the shares with respect to which incentive options are exercisable for the first time by an individual during any calendar year may not exceed $100,000. Non-qualified options are not subject to this requirement. Each option is evidenced by an agreement in such form as the Committee approves and is subject to the following conditions (as described in further detail in the Plan):
* VESTING AND EXERCISABILITY: Options become vested and exercisable, as applicable, within such periods, or upon such events, as determined by the Committee and as set forth in the related stock option agreement. The maximum term of each option is ten years from the date of grant.
* EXERCISE PRICE: Each stock option agreement states the exercise price, which may not be less than 100% of the fair market value of one share of our common stock on the date of the grant (and not less than 110% with respect to an incentive stock option granted to a 10% or greater stockholder).
* METHOD OF EXERCISE: The exercise price is typically payable in cash or by check, but may also be payable, at the discretion of the Committee, in other forms of legal consideration.
* TERMINATION OF EMPLOYMENT: Options cease vesting on the date of termination of service or the death or disability of the participant. Options granted under the Plan generally expire three months after the termination of the participant's service to us, except in the case of death or disability, in which case the awards generally may be exercised up to 12 months following the date of death or termination of service. However, if the participant is terminated for cause, the participant's options will expire upon termination.
* CHANGE OF CONTROL: In the event of a change of control (as defined in the plan), the buyer may either assume the outstanding awards or substitute equivalent awards. Alternatively, our Board may determine to permit all unvested options to immediately vest upon the change of control. If our Board does not make such a determination, all awards will expire upon the closing of the transaction unless the stock option agreement issued to the particular participant provides otherwise.
TERMS OF RESTRICTED STOCK AWARDS. Each restricted stock award is evidenced by a restricted stock purchase agreement in such form as the Committee approves and is subject to the following conditions (as described in further detail in the Plan):
* VESTING: Shares subject to a restricted stock award may become vested over time or upon completion of performance goals set out in advance, which may include the following types of criteria: (a) net revenue and/or net revenue growth; (b) earnings before income taxes and amortization and/or earnings before income taxes and amortization growth; (c) operating income and/or operating income growth; (d) net income and/or net income growth; (e) earnings per share and/or earnings per share growth; (f) total stockholder return and/or total stockholder return growth; and (g) individual business objectives.
* TERMINATION OF EMPLOYMENT. Restricted stock awards shall cease to vest immediately if a participant is terminated for any reason, unless provided otherwise in the applicable restricted stock purchase agreement or unless otherwise determined by the Committee.
* CHANGE OF CONTROL: Restricted stock awards shall be treated in the same manner as described under "Terms of Stock Options" above.
STOCK APPRECIATION RIGHTS. Stock appreciation rights, or SARs, are awards in which the participant is deemed granted a number of shares subject to vesting. When the SARs vest, then the participant can exercise the SARs.
Exercise, however, does not mean the number of shares deemed granted are issued. Rather, the participant will receive cash (or shares, if so determined by the Committee) having a value at the time of exercise equal to (1) the number of shares deemed exercised, times (2) the amount by which our stock price on the date of exercise exceeds our stock price on the date of grant. SARs expire under the same rules that apply to options.
MODIFICATION AND TERMINATION OF THE PLAN. The Committee may from time to time, in its discretion, amend the Plan without the approval of shareholders, except (a) as such shareholder approval may be required under the listing requirements of any securities exchange or national market system on which our equity securities are listed and (b) that if the Plan has been approved by stockholders, the Committee may not without the approval of the Company's shareholders amend the Plan to increase the total number of shares reserved for the purposes of the Plan. The Plan shall continue in effect until the earlier of its termination by the Committee or the date on which all of the shares of common stock available for issuance thereunder have been issued and all restrictions on such shares under the terms of the Plan and the agreements evidencing options granted under the Plan have lapsed.
ADJUSTMENTS. In the event any change is made to the common stock issuable under the Plan by reason of any stock split, stock dividend, combination of shares or recapitalization, appropriate adjustment will be made to the share reserve of the Plan and to the number of shares and the exercise price of the Common Stock subject to outstanding options.
GRANT OF STOCK OPTIONS.
On March 5, 2010, the Board granted 90,000 restricted shares of Common Stock (the "Restricted Stock") to each director (Messrs. Stelmak, Raskas and Mashov) on account of the fiscal year ended January 31, 2010. The Restricted Stock vests in three equal annual installments on the first, second and third anniversaries of the grant date.
ITEM 9.01 EXHIBITS
(d)
10.1 2010 Equity Incentive Plan
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ADVANCED TECHNOLOGIES GROUP, LTD.
By: /s/ Alex Stelmak
Name: Alex Stelmak Title: Chief Executive Officer
Date: March 8, 2010
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Form 10-Q/A for ADVANCED TECHNOLOGIES GROUP LTD
27-Jan-2010
Quarterly Report
FORWARD LOOKING STATEMENTS
Some of the information contained in this Quarterly Report may constitute forward-looking statements or statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and projections about future events. The words "estimate", "plan", "intend", "expect", "anticipate" and similar expressions are intended to identify forward-looking statements which involve, and are subject to, known and unknown risks, uncertainties and other factors which could cause the Company's actual results, financial or operating performance, or achievements to differ from future results, financial or operating performance, or achievements expressed or implied by such forward-looking statements. Projections and assumptions contained and expressed herein were reasonably based on information available to the Company at the time so furnished and as of the date of this filing. All such projections and assumptions are subject to significant uncertainties and contingencies, many of which are beyond the Company's control, and no assurance can be given that the projections will be realized. Potential investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof. Unless otherwise required by law, the Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Important factors that could cause actual results to differ materially from our expectations ("Cautionary Statements") include, but are not limited to, those set forth under the heading "Risk Factors" in this Quarterly Report as well as in Item 1A of the Company's Annual Report on Form 10-K/A for the fiscal year ended January 31, 2009.
BACKGROUND
Advanced Technologies Group, Ltd. (the "Company," "we," "us" and "our") was incorporated in the State of Nevada in February 2000. In January 2001, the Company purchased 100% of the issued and outstanding shares of FX3000, Inc. (formerly Oxford Global Network, Ltd.), a Delaware corporation, the designer of the FX3000 currency trading software platform. The FX3000 software program is a financial real time quote and money management platform for use by independent foreign currency traders.
In March 2002, the Company transferred its FX3000 software program to FX Direct Dealer, LLC ("FX Direct") a joint venture company that markets the FX3000 software program. The Company received a 25% interest in the joint venture in return for the transfer. On January 26, 2009, the Company entered into a purchase and sale agreement (the "Purchase Agreement"), pursuant to which the Company agreed to sell (the "Sale") its approximate 25% membership interest (the "Membership Interest") in FX Direct to FX Direct. The Agreement provided that it was effective as of December 31, 2008, as a result of which the Company was not entitled to receive any allocations of profit, loss or distributions from FX on account of its Membership Interest after such date. On March 17, 2009, the Company completed the Sale of the Membership Interest to FX Direct.
The aggregate purchase price of the Membership Interest was approximately $26,000,000, of which $9,000,000 was paid in cash at the closing of the Sale and the remaining $17,000,000 is payable in 36 equal monthly installments of $472,222.22, bearing interest at the rate of 10% per annum and evidenced by a subordinated promissory note that was issued pursuant to a Cash Subordinated Loan Agreement ("Loan Agreement").
The Company intends to seek to acquire and/or develop new technologies and other business opportunities. In this regard, effective as of July 20, 2009, the Company entered into an Asset Purchase Agreement with Dan Khasis, LLC ("Seller"), pursuant to which the Company acquired all of the rights to Seller's website "moveidiot.com" and the related software for a purchase price of $57,000 plus the issuance to Seller of 25,000 restricted shares of common stock. In addition, Seller may receive up to an additional 50,000 restricted shares of common stock if certain membership goals for the moveidiot.com website are met in the 12 months following the closing. Moveidiot.com is an online website which helps people and businesses expedite their move from one place to another. The Company will also consider investing in commercial real estate ventures.
RESULTS OF OPERATIONS
The Company did not generate any revenues from software maintenance in the three and nine month periods ended October 31, 2009 or the three and nine month periods ended October 31, 2008, as the Company's software servicing and maintenance services for FX Direct were terminated in fiscal 2008 (which ended as of January 31, 2008) and there were no revenues generated by the Company from its other software products during any of these periods.
General and administrative expenses in the three and nine month periods ended October 31, 2009 increased to $346,593 and $1,217,832, respectively, as compared to $137,320 and $287,678, respectively, in the three and nine month periods ended October 31, 2008, primarily as a result of an increase in professional fees in connection with closing the Sale and in responding to a previously disclosed SEC investigation and increased compensation expenses.
The increase in other income (decrease in loss) in the three and nine month periods ended October 31, 2009 resulted from an increase in interest income and gains from short term investments with respect to a portion of the proceeds of the Sale.
The Company had a gain on sale of its interest in FX Direct in the nine months ended October 31, 2009 of $17,155,703.
As a result of the foregoing, the Company had net income of $132,835 and $17,023,653, respectively, in the three and nine months ended October 31, 2009 as compared to net losses of ($137,320) and ($256,717), respectively, in the three and nine months ended October 31, 2008.
LIQUIDITY AND CAPITAL RESOURCES
At October 31, 2009, the Company had cash and short term investments on hand of $7,978,320 as compared with cash of $134,918 at January 31, 2009.
On March 17, 2009, the Company completed the Sale of its Membership Interest to FX Direct. The aggregate purchase price of the Membership Interest was approximately $26,000,000, of which $9,000,000 was paid in cash at the closing of the Sale and the remaining $17,000,000 is payable in 36 equal monthly installments of $472,222.22, bearing interest at the rate of 10% per annum and evidenced by a subordinated promissory note that was issued pursuant to a Cash Subordinated Loan Agreement ("Loan Agreement"). The Loan Agreement provides the Company with an increased interest rate in the event of late payments by the Purchaser and with the remedy of liquidation in the event of a default. The Company also received approximately $250,000 from the Purchaser in full satisfaction of amounts owed to the Company for providing certain services to the Purchaser.
The Company intends to retain the proceeds of the Sale for general working capital purposes and to engage in new business opportunities. The Company believes that the proceeds of the sale of its interest in FX Direct will be sufficient to fund its operations during fiscal 2010.
CASH FLOWS
For the nine months ended October 31, 2009 net cash provided by operating activities was $5,482,801 as compared to cash used in operating activities of ($119,003) for the nine months ended October 31, 2008. The substantial increase in cash provided by operating activities in the 2009 period reflected the proceeds of the Sale, which was partially offset by the reduction of an accounts payable of $3,328,562 primarily in connection with the payment of accrued compensation expenses.
For the nine months ended October 31, 2009, net cash used in investing activities was ($2,735,778), representing short-term investments, net of the gain from the Sale as compared to no net cash used in investing activities in the 2008 nine month period.
For the nine months ended October 31, 2009, net cash used in financing activities was ($38,551), representing repayment of shareholder advances as compared to net cash provided by financing activities of $91,786 in the 2008 nine month period, representing shareholder advances.
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Consolidated Balance Sheets
As of October 31, 2009 and January 31, 2009
Unaudited As Restated
31-Oct-09 31-Jan-09
------------ ------------
ASSETS
Current assets:
Cash & short term deposits $ 2,843,390 $ 134,918
Short term investments 5,134,930 0
Subordinated note receivable 5,666,667 0
------------ ------------
Total current assets 13,644,987 134,918
Other assets:
Subordinated note receivable- non current portion 8,027,778 0
Investment in FX Direct Dealer 5,000 2,407,058
Trademark- net 6,813 7,418
Fixed assets- net 2,567 0
------------ ------------
Total assets $ 21,687,145 $ 2,549,394
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable & accrued expenses $ 121,985 $ 3,450,547
Income taxes payable 414,826 0
------------ ------------
Total current liabilities 536,811 3,450,547
Deferred income taxes payable 5,063,135 0
Shareholder advance payable 9,872 48,423
------------ ------------
Total liabilities 5,609,818 3,498,970
Shareholders' equity:
Series A preferred stock, one share convertible to one share of common;
13% cumulative non-participating, authorized 1,000,000 shares at
stated value of $3 per share, issued and outstanding 762,081 shares 1,712,601 1,712,601
Series B preferred stock, one share convertible to one share of common;
6% cumulative non-participating, authorized 7,000,000 shares at
stated value of $3 per share, issued and outstanding 1,609,955 shares 4,384,754 4,384,754
Common stock - $.0001 par value, authorized 100,000,000 shares,
issued and outstanding, 18,268,104 shares at January 31, 2009 and
18,293,104 at October 31, 2009 1,830 1,827
Additional paid in capital 32,667,611 32,664,364
Accumulated deficit (22,689,469) (39,713,122)
------------ ------------
Total shareholders' equity (deficit) 16,077,327 (949,576)
------------ ------------
Total Liabilities & Shareholders' Equity $ 21,687,145 $ 2,549,394
============ ============
See the notes to the financial statements.
5
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Advanced Technologies Group, Ltd.
Consolidated Statements of Operations
For the Nine Months and Quarters Ended October 31, 2009 and October 31, 2008
Unaudited Unaudited Unaudited Unaudited
9 Months 9 Months 3 Months 3 Months
31-Oct-09 31-Oct-08 31-Oct-09 31-Oct-08
------------ ------------ ------------ ------------
General and administrative expenses:
Salaries and benefits $ 431,659 $ 106,533 $ 178,277 $ 97,719
Consulting 57,000 19,990 8,000 2,626
General administration 728,384 161,155 160,170 36,975
Depreciation 339 0 146 0
------------ ------------ ------------ ------------
Total general & administrative expenses 1,217,382 287,678 346,593 137,320
------------ ------------ ------------ ------------
Net loss from operations (1,217,382) (287,678) (346,593) (137,320)
Other revenues and expenses:
Gain on sale of FX Direct Dealer (net of
tax) 17,155,703 0 0 0
Interest income 949,202 69 343,298 0
Gain on short term investments 136,130 0 136,130 0
Sub-lease income 0 30,892 0 0
------------ ------------ ------------ ------------
Net income (loss) before provision for income taxes 17,023,653 (256,717) 132,835 (137,320)
Provision for income taxes 0 0 0 0
------------ ------------ ------------ ------------
Net income (loss) $ 17,023,653 ($ 256,717) $ 132,835 $ (137,320)
============ ============ ============ ============
Basic income (loss) per share $ 0.94 $ (0.01) $ 0.00 $ (0.01)
------------ ------------ ------------ ------------
Fully diluted income (loss) per share $ 0.83 $ (0.01) $ 0.00 $ 0.01)
------------ ------------ ------------ ------------
Weighted average of common shares outstanding:
Basic 18,293,104 18,268,104 18,293,104 18,268,104
Fully diluted 20,650,250 18,268,104 20,665,140 18,268,104
