The Company's offices are located at 111 Great Neck Road, Suite 604, Great Neck, New York 11021. This property consists of 2,026 square feet of offices and is subleased from Entertainment Financing Inc.("EFI"), an entity affiliated with the Chief Executive Officer of the Company, currently at approximately $6,000 per month. EFI's lease, and the Company's sublease on this space expires on May 31, 2002. EFI has agreed that for the term of the sub-lease the rent paid to it will be substantially the same rent that it pays under its master lease to the landlord.
JINI maintains an office in Philadelphia on a month to month basis.
PCI maintains an office in Boynton Beach, Florida on a month to month basis.
The Company's revenues increased to $727,000 in 2000 from $718,000 in 1999, representing a 1.3% increase.
Revenue related to the Healthcare segment decreased to $487,378 in 2000, from $581,000 in 1999, representing a 19% decrease. The decrease in revenue during 2000 was predominately attributed to PCI. This was the result of PCI's client pool of hospitals decreasing from seven in 1999 to five in 2000, and the discontinuance of a segment of PCI's product line.
Revenue related to entertainment and technology services increased to $240,000 in 2000 from $137,000 in 1999.
Operating costs increased to $265,000 in 2000 from $170,000 in 1999, a 56% increase. The Healthcare operating costs decreased to $72,000 in 2000 from $113,000 in 1999, a 36% decrease. As a percentage of revenue, operating costs for the Healthcare segment decreased to 15% in 2000 from 19% in 1999. The reduction in operating cost is attributable to better efficiency in field operations through automation.
Operating costs for Entertainment include film amortization and producers royalties. Where the Company acquires licensing rights through guaranteed payments, it records such guarantees on its balance sheet. The amortization of such licensing rights is calculated under the film forecast method. Film amortization represents amortization of the original acquisition price capitalized on the balance sheet. Producers royalties reflect current amounts due producer's for their share of current revenue for films with no minimum guarantee obligation.
The Company had negative working capital of $598,000 at December 31, 2000. The ratio of current assets to current liabilities was 0.48:1 at December 31, 2000. Cash flow used by operating activities during 2000 was $506,416.
The Company has no material commitments for capital expenditures or the acquisition of films. If cash flow permits, however, the Company plans to enhance its information and telecommunications system capabilities to more efficiently and effectively provide its entertainment, internet technology healthcare services and to acquire additional films during 2000.
During 2000, the Company raised approximately $684,000 for working capital and payment of debt through the sale of unregistered securities (convertible debentures, notes payable and common stock).
In 2001, the Company is searching for full time sales and marketing managers with expertise in the Internet and audio streaming industry and in the e-commerce technology. If cash flow permits, the Company plans to enhance its information systems capabilities and create a conduit for video and audio streaming of entertainment products to the Internet.